Chavez Leaves Venezuela with a Glut of Oil, But Financially Ailing
Venezuela’s oil wealth fueled Hugo Chavez’s socialist programs at home and policies abroad, but the world’s largest petroleum reserves were never enough to deliver prosperity in his 14-year rule.
One of Chavez’s final acts, ordered last month from his hospital bed, was to cut the price of the national currency by a third—the seventh devaluation of his presidency—in an attempt to narrow a staggering deficit with a hike in the cost of living for Venezuelans. He died yesterday at the age of 58, leaving behind a nation struggling with shortages of housing, food, goods, and electricity, along with high inflation and rampant crime.
In the economic isolation that Chavez imposed, development of the nation’s vast oil reserves languished, most outside observers agree. Venezuela’s oil production has declined 25 percent since 2001. Crude exports to Venezuela’s long-time chief customer, the United States, have fallen roughly to the level seen before Chavez took office. Indeed, after a deadly explosion last year in its main refinery, Venezuela was forced to rely on gasoline imports from the United States to keep its economy moving.
Now, in addition to electing a new leader, Venezuela must choose a path for managing its immense resources—either staying the course that Chavez plotted in support of his “Bolivarian revolution,” or attempting to forge a future that better realizes the value of its natural treasure.