Why Venezuela Is So Poor Despite Having So Much Oil

Venezuela has the largest deposits of oil in the world. More than Saudi Arabia, more than Iraq, more than Canada. Despite this, the country has been in economic free-fall for the last few years. And its production of oil has dropped from about 3.5 million barrels per day to less than 600,000. Here's why Venezuela is so economically poor despite having so much oil.

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[scunit]

I was married to a Venezuelan and her father was an engineer in the oil industry. They left shortly after Chavez came to power. Why? Chevez used the military to take over private companies, which led to large multinational companies to flee the country. He installed unqualified cronies, who were loyal to him, into extremely technical jobs, which caused entire refineries to fail catastrophically. On top of all this, as Geoff mentioned, Chave won the election by promising things to the poor that, even when the country was flush with oil revenues, simply weren't possible. Despite not delivering on the outrageous promises, Chavez was giving the extremely poor small amounts of cash, just enough so they would vote for him time and time again. To make sure he won the elections, he killed or jailed any opposition, and took control over all state media. (Noticing a trend here?) Maduro was his "Vice President" and when Chavez died, Maduro took power and used the military to ensure there were not fair elections. It's extremely heartbreaking, as the standard of life for Venezuela was very high before Chavez and Venezuelan expatriates love their country very much, but know they can't go home with things the way they are.

[Alexis-lnhp]

You didn't mention that a lot of Venezuelans have also left to go to the West Indies as well. My family's from Guyana, right next door to Venezuela, so now that Guyana's discovered oil back in 2015, Guyana has been in development, and there are jobs to be had. They are now fleeing to Guyana for work and to live. So many are moving there that we've now incorporating the Spanish language into school curriculum, and is being used as a second language as they are, so many of them are living there. Even Trinidad, they are migrating too.

[magnuszerum]

Some people did a study on what makes a country rich or poor and found that government policy was the #1 impact on that. More than natural resources, geographic opportunities, or history. Special economic zones were the real world result of those studies. Given the large number of climate and natural resource advantages the country has, the only real reason that can be so poor is that they have chosen a terrible government.

[ttban]

I'm Colombian and I'm glad we don't have that much oil, otherwise we would be in the same situation as Venezuela.

[HHIVR]

I have several Venezuelan friends living in Caracas.Ive been there several times back in the 90's.Its an amazingly beautiful country.
The government is the reason life is so difficult there.
Socialism doesnt work.

[douglaswhite]

We lived in Venezuela in 2017, the issue is political. There is lots of money available, it all goes into personal accounts of Government leaders.

[sanguinj]

I am a Venezuelan Petroleum Engineer, coming from a family with lack of resources. However I was benefit from the government (democratic ) in 1974 with an scholarship to study in the US. I worked in Pdvsa (By the way the blue logo not the red as shown by you) from 1979 to 1995 when I left Venezuela. The reason my country is where’s it is due to the strategy led by international socialist /Communist countries with Fidel Castro in the leadership. Chavez and his party PSUV took over the country and today is a regime for more over 25 years in power. I would appreciate you make a more realistic history video on my country since is highly misleading the reality. The beginning of the story, yes I think it was well explained. I ‘ll be glad to help you in your future versions.

[mauriciogrego]

they can not sell oil to other nation because of the US embargo and restrictions

[HarryWHill-GA]

Venezuela contrasts with Norway which VERY carefully managed its North Sea oil wealth avoiding all of these problems.

[thewb]

Economic mismanagement from two inept corrupt dictators.

[Chatterbox-]

My wife is from Venezuela. She and my brother in law have told me about the horrors of the humanitarian crisis. Chavez was nothing more than a wolf in sheep’s clothing.

[yodorob]

It's so sad how Venezuela fell from being Latin America's richest country per capita in and around the 1960s/1970s to being just about its poorest today, on the same level as Honduras, Nicaragua, etc.

[marcuscole]

Even though Venezuela has inferior fossil fuel to other countries, with proper management and an investment in a diverse economy, they could have trived. Corruption at its finest is what derailed the Venezuelan economy. Pure greed and those that wanted to control it for their own sake. Greed, pure greed.

[gmo]

Venezuelan here. Don’t underestimate the way Chavez destroyed the national industry. Since the 1970s the economy had its ups and downs due to oil prices but the overall economy was relative fine. Chavez decided to take over most of the industries and give it to their military loyalists friends who would ruining these. Then Chavez suffocated other industries by not allowing access to USD for companies to trade and therefore had to close. Then enter the low oil prices that normally happen and this time the effect is massive as nothing was being produced locally and still importers couldn’t get access to USD without depletion of the central bank currency. This lead to the massive inflation as little products where being chased by too much consumares.
Ironically the way that Venezuela was one for the riches countries in the world is because of socialism/state owned company invested in other industries and infrastructure. Once Chavez took over the and he decided to steal the money and let his loyalists steal others companies meant that Venezuela turned into a dictator lead kleptocracy.
Oh, btw- the country recently stabilized because everyone bought/brought over USD and now the American dollar is the unofficial currency.

[livanoguerrero]

Venezuela has abundant raw materials, but its goverment lacks the most important raw material: grey matter...

[AFFK]

I'm from Brazil. One day, I took a uber. The driver was an old man from Venezuela and told me his story. He had a factory of soap. He didn't produce the quantity demanded by the government, so they took it from him. This is socialism. It can turn poor the richest country in oil in the world.

[jeromebarry]

It wasn't oil that caused Venezuela to become poor. It was Greed. The daughters of Chavez are the richest women on Earth, because the wealth of Venezuelan oil was taken by Chavez and passed to his daughters.

[Sorenose]

Norway also nationalized their oil but the reason why Venezuela suffers for doing the same thing is that Norway has a functioning democracy. Both countries have nationalized their oil industry, have huge social programs, and yet only one has suffered not because of “socialism” but due to Venezuela having a corrupt government who didn’t diversify and having major powers put sanctions on them

[dreamingwolf]

It bears stating that not all oil is created equal, and the oil pumped in Venezuela has the highest sulpher concentration found anywhere- meaning additional refining has to be done to make it a usable industrial product, and therefore not as economically viable as oil from just about anywhere else.

[renatoe]

Venezuela is poor cause of Chaves and his policías, you can have oíl and turn like norway or the gulf states