Venezuela Economic Conditions

By | December 16, 2021

The economic and social organization of Venezuela depends to a very large extent from oil, of which Venezuela is one of the main world producers and exporters, and from its price fluctuations. Since the exploitation of the fields began (1922), the traditional agricultural economy, based on plantation crops and extensive farming, has reduced its role, also depressing the political and economic weight of landowners, one of the traditional components of Creole oligarchy. The 121 million tons of oil extracted (2007) represent about one third of the GDP and 80% of the country’s exports; over half of the oil is sold to the US despite rather strained diplomatic relations. Oil production was nationalized in the 1970s, then reopened to foreign capital, in 2007 brought back under the control of the state oil company (PDVSA). offshore, and near Falcón and Monagas ; the most significant reserves (estimated at 1300 billion barrels), however, have recently been identified in the Orinoco valley floor. The refining activity is significant, even if the oil is exported mainly in the crude state. Venezuela is also rich in other mineral resources: gas (28.5 billion m3), iron (20 million t in 2007), whose largest deposit is in Cerro Bolívar, bauxite (5.5 million t), gold, diamonds. For Venezuela economics and business, please check

● Agriculture, set up for centuries according to a typically colonial scheme, suffers from structural problems that make it a sector with very little capitalization and consequently a very modest productivity: 13% of assets realize just under 4% of GDP. In the country there have been various timid agrarian reforms, aimed at dividing the large estates, but the results have been irrelevant,tierras templadas. Reclamation and communication routes have opened other lands to agricultural colonization, in the llanos (fertile and theoretically arable) and in the tierras calientes, but the arable land still does not reach 4% of the surface (compared to 21% used for pasture). Corn, rice, sorghum, potatoes and vegetables are the main products, which however, in the face of the increase in population, have become insufficient to cover internal demand, for which foodstuffs are imported; for export, mainly tropical fruit is produced and then sugar cane, coffee and cocoa, that is traditional plantation products. Forests would occupy 54% of the territory, but the data is disputed by the environmentalist side, which considers it overestimated; the exploitation of forest resources (6 million m3 of wood produced in 2007) is relatively modest, even if pure and simple deforestation – to obtain building or arable land – is not irrelevant. On the other hand, at least formally almost a third of the surface of the Venezuela is protected for naturalistic purposes. The breeding counts on 16.6 million cattle, conducted according to extensive and poorly efficient practices, since they do not allow the exploitation of milk.

● In addition to hydrocarbons, Venezuela has an extraordinary water potential, which guarantees about three quarters of electricity production. The rich energy and mining availability would allow the country a balanced and varied industrialization, while apart from the petrochemical and metallurgical sectors, only limited industrial productions with low added value (textiles, food, cement factories) are carried out.

● Tourist flows are still modest (much less than one million entries per year), especially concentrated on the Caribbean coast, almost without investing the Amazonian interior or the Andean region. The trade balance is generally in surplus, as is obvious for a country that lives mostly on the export of valuable raw materials. The United States accounts for about one third of Venezuela’s overall external trade. The immense Venezuelan territory does not have efficient communication routes, even if the road network extends for about 96,000 km (one third of asphalted). The plane is the most used means of transport for medium and long-range internal travel (5.9 million passengers in 2007).

Venezuela Economic Conditions


In the northern part of Venezuela there are cultures dating back to the Paleo-Indian (corresponding to the Paleolithic), Meso-Indian (Mesolithic) and Neo-Indian (from 1000 BC to the discovery of America) periods: among the most interesting are the dabajuroide (Dabajuro, near Coro) with production of ceramics in the Meso- and Neo-Indian period, the barrancoide (Los Barrancos on the lower Orinoco) with evidence that goes back to the Neo-Indian period (ceramics, human figures, pipes with anthropo- and zoomorphic stoves), the saladoide (Saladero at Los Barrancos) from the Neo-Indian period, with bell-shaped vases with curvilinear incisions and geometric designs in white on a red background. Characteristic are the mounds (mounds) and the calzatas(causeways), typical of an alluvial land.