Why Venezuela's Economy is so Terrible

Venezuela was once the 4th richest nation on Earth. It now stands as the largest economic collapse of any nation in modern history. It has the largest proven oil reserves on the planet yet its citizens are now starving. In many ways Venezuela's Economy and Citizens act in reverse to traditional economic theory. So what happened? Why is Venezuela's Economy so Terrible?


--Contents of this video--------------------------------
00:00 - The Strangest Economy on Earth
03:03 - Venezuela Strikes Oil
04:49 - The Dutch Disease
08:00 - The 4th Richest Nation on Earth
11:58 - Why Democracy Failed
12:54 - Too Much Money
15:19 - The Beginning of the End
18:38 - Hugo Chaves
19:46 - 21st Century Socialism
25:13 - The Worst Economic Collapse in History

--Sources used---------------------------------------------
- Crude Nation by Ral Gallegos
- Why Nation Fail by Daron Acemoglu and James A. Robinson
- Authoritarianism and the Rentier State - Venezuela and Nigeria Authoritarianism and the Rentier State - Venezuela and Nigeria
-Thomas, V. (2003). The economic history of Latin America since independence (2nd ed.). Cambridge, U.K.: Cambridge University Press.
- Colonialism in the land of Bolivar: An analysis of institutional persistence in Venezuela Stefan Martinez-Ruiz

#VenezuelaEconomy #Venezuela #LatinAmerica #Economics #SouthAmerica

[mikehurt]

Basically Venezuela is like a person who wins the lottery and spends and spends thinking that the money is never gonna end until it does and now they're at rock bottom with no savings

[enngoogle]

As someone who has the disgrace of existing in venezuela, let me praise you for being spot on. Most people, even world-class economists usually don't make the slightest mention about capital controls created during the bolivarian regime which easily is the principal cause of this disaster.

[ExxonMobilCompany]

Well with the economy and stocks at where it is now, I'd be disappointed if people weren't making any error on their portfolio at this time, it was much easier to navigate during the bull-run, regardless I still see and read articles of people pulling over $225k by the weeks in trades, how come?

[laabitres]

So a combination of corruption and bad economic practices is what made the country what it is today. Thank you for this, love your unbiased content

[geografisica]

As a Venezuelan myself, I can say that this is the most accurate video in English I’ve seen about my country’s economic reality during the XX and XXI Centuries. Thank you so much for showing our reality. Sadly, the World doesn’t understand the roots of our problems and always biased people prefer to say that it was the US the responsible of our failures, but NO!!! It wasn’t the US, We the Venezuelans are the only responsible of our failures but I have hopes that after this crisis, the new generations will finally do it better, forgetting oil and taking advantage of tourism because beside floating on oil, Venezuela was blessed with natural landscapes that are among the bests and most beautiful in the World.

[answerman]

Venezuela is an example of why giving everyone fish is not good in the long-term. Teaching people how to fish is the better long-term solution.

[jillpatton]

One correction. Venezuela isn't the poorest country in Western hemisphere. That distinction falls to Haiti.

[Dgarays]

As an 80’s born Venezuelan myself I lived through many of the things you mentioned in there. Very accurate video… everyone who took power in Venezuela basically got greedy beyond belief!
Chavez expropriated many business and sectors of the country to impose his own version of how it would be and in that process even destroyed what was left of our agriculture.
We rapidly became a rich country that could not even produce its owns vegetables!
We started having electricity and water service shortages (sometimes spent 2 months at at time without water) and power outages were a daily occurrence Why? Because as you mentioned, Chavez fired the people working in those companies to impose his loyalists who most of the time had no clue of what they were doing and could not run those companies correctly, instead they started taking and deviating money for the maintenance and running of those companies into their own pockets and Chavez government became even more corrupt than any other government we ever had!
Those are my memories of it! I fled like many others because life became unattainable.

[iszotic]

Hi, as a side note, the neighbor Colombia, a country with way fewer reserves, has actually more oil output than Venezuela now.

[keithng]

As a Singaporean I always loathe the fact that I am born in a country with absolutely no natural resources to speak of. This video really serves as a strong reminder that, having natural resources but not knowing how to use it properly is actually worse.

[Pheminon]

Learning about foreign politics has always been beyond my purview and never really interested me. But, whenever someone said "Oh Venezuela died because of Socialism" like that was the one and only reason, I knew that there had to be more to it than just that.
Thanks for being so thorough

[arquimedesrivero]

I left Venezuela 28 years ago. I left a great country with many opportunities. Now is a mess. Thank you, I think it is the best analysis of the contemporary Venezuelan history. We had the opportunity to have the best country on earth, yet we mess it up. Every Venezuelan has his or her quote of fault. I lost hope.

[mikehurt]

I seen a couple videos about Venezuela but you're the only that went back further than just the Chavez Era and shown that this has been an issue as well for decades before Chavez

[craiglongan]

Wow! Very interesting! I learned lots of things that I didn't know.

[petergohan]

Venezuela could've been like Japan, if only the politicians were better, they would use the oil money to invest heavily in education and incentives to entrepeneurs and inventors, this would create a lot of big companies that could diversify the economy, and then, when the oil prices dropped, they wouldn't feel it so heavily as they have. They became slaves to oil, and not used it to their own benefit.

[octapusxft]

The main problem seems to be the consequence of letting all the economy depend on the crude oil exports. If a good amount of the excess wealth was instead being invested on making the country productive in many other sectors, perhaps things would had been different.
Being able to be self sufficient is the key to get by at the harder times.
Of course the inept government and corruption did not help things

[nagel]

fun fact, the refinerys in houston are the only ones in the world that have the equipment to extract the extremely high sulfur content from the oil

[jesusrafaelpadrondleon]

You forgot to mention the fact that the economy is de facto Dollarized now and that gas and public services subsidies have been slowly disappearing. I think we are now finally understanding how hard we have to work for every dollar. I’m a Venezuelan that lives in Venezuela, lucky enough to be part of the small, self made GEN Z middle class that made its way thanks to freelancing and tech related jobs. This country lived in a mirage, and now it’s my generation which is paying the price, quite literally.

[Duck-wcde]

With a strong currency, if they had an highly educated population, they could have evolved into an economy based on high-value-added industries (that import cheap products, tranform them and sell the final product), and atracting the brightest people from all around the world?

I would also create a regulatory system that would atract financial services and created a national sovereign fund.


South america was blessed with lots of resources, but cursed with a very corrupt system, with a broken social escalator, partially due to their 17th century Iberian systems that they didnt ( nor wanted to ) evolve, even after their independence, since it benefited the governing elites, beeing them more or less democratic, more or less socialist, more or less corrupt.

[eargue]

Excellent analysis and content, I am from Venezuela, and would like to get a torch with the creator about making a Spanish version mama I can’t help myself as I had done some voice over and used to do translations also
I can collaborate for free .