Venezuela: The Oil Problem

Venezuela: The Oil Problem

Venezuela President Nicolás Maduro‘s decision to grant pardon to over 100 political opponents and activists has drawn suspicion from critics, who have been protesting against his regime for years. The episode is a manifestation of the turnaround of the country’s fortunes, once considered the wealthiest Latin nation due to oil reserves in the country, to now being a center of hyperinflation and extreme poverty. Let us have a look at the history of Venezuela with respect to oil.

Crux of the Matter

Venezuela And The Oil Problem

  • Venezuela was the leading exporter of oil in the world before World War II.
  • It became a founding member of the Organization of the Petroleum Exporting Countries (OPEC) in 1960-61.
  • Following the ‘Arab-Israel’ War of 1973, Venezuela tripled its oil prices. Consequently, the country witnessed a booming economy in the subsequent years, as witnessed in the fact that Venezuela had the highest ‘per capita income’ in Latin America at the time.
  • Late 1970s and 80s: Oil prices fell across the world – pushed Venezuela into recession and increased inflation.
  • 1992: Lieutenant Colonel Hugo Chávez imprisoned after a failed coup attempt.
  • 1998: Venezuela was in dire straits as annual inflation reached 30%. Hugo Chávez was elected as the President that year.
  • Chávez implemented socialist policies and took an anti-US stance.
  • 2001: He implemented wealth redistribution measures in the country.
  • 2007: The nationalization of the petroleum sector was initiated by the Government, which removed US oil companies Exxon Mobil and ConocoPhilips from the Orinoco Belt (large oil source).
  • 2013: Chávez died due to cancer, after which Maduro assumed the Presidency.

Also Read: Venezuela: Election Controversy

  • United States of Banana is a postmodern geopolitical tragicomedy by the Puerto Rican author Giannina Braschi. The book dramatizes the global war on terror and has Hugo Chávez as a heroic character in it. 
  • Colectivos are irregular, leftist Venezuelan community organizations that support Nicolás Maduro and the Bolivarian government. Colectivo has become an umbrella term for armed paramilitary groups that operate in poverty-stricken areas and attack individuals, engaging in “extortion, kidnapping, drug trafficking and murder”.
  • Popular Will is a political party in Venezuela founded by former Mayor of Chacao, Leopoldo López. The party describes itself as progressive and social-democratic and was admitted into the Socialist International in December 2014.