Economic history of Venezuela
Venezuela is a country on the northern coast of South America with very large oil reserves. It was one of the richest economies in Latin America from the 1950s to the 1980s, because oil became the main source of wealth. Oil was first drilled commercially in 1917, and the booming 1920s—helped by World War II—made Venezuela very rich. This wealth encouraged farming and other industries to be neglected, a problem called Dutch Disease.
Venezuela helped form OPEC in 1960. In the 1970s, oil prices rose and government revenue grew. The government moved to take more control of the oil industry and, in 1976, fully nationalised it, creating PDVSA. The era saw strong spending aimed at developing other industries, but the economy stayed highly dependent on oil.
When oil prices fell in the mid-1980s, the government faced debt and high inflation. In 1989, austerity measures sparked protests known as the Caracazo. In the 1990s, reformers led by Hugo Chávez rose to power. He was elected in 1998, pushed for a new constitution, and created the Bolivarian Republic of Venezuela. His government expanded social programs funded by oil revenue and increased state control over the economy.
Hugo Chávez died in 2013 and was followed by Nicolás Maduro. Since 2014 Venezuela has faced hyperinflation, shortages of food and medicine, and political unrest. Sanctions and falling oil prices reduced revenue, and millions have left the country. The economy shrank dramatically as the country struggled to cope with these problems.
Today Venezuela remains rich in oil but grapples with inflation, shortages, and political conflict. The path forward will depend on stabilising the economy, easing shortages, and reducing dependence on oil.
This page was last edited on 3 February 2026, at 16:26 (CET).