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Wednesday, Jul. 22, 2020

Has nationalization and mismanagement of the oil industry contributed to Venezuela’s collapse?

Samuel Henning, Gigafact
yes

In 1975, long before the avowedly socialist government of Hugo Chávez was elected in 1999, the country nationalized its oil industry. Chávez, who ruled until 2013, nationalized much more of the economy, including a number of oil and gas development projects. Mismanagement of those assets, along with other nationalizations and macroeconomic policies, have contributed to a "collapse of really unique proportions" under his successor Nicolás Maduro, says Ricardo Hausmann, a Venezuelan economist.

Venezuela's economy since 2015 has suffered from plunging oil revenues and poor policy responses that have resulted in hyperinflation, massive poverty and worsening relations with the U.S., formerly its main oil buyer. Economic output fell 35% in 2019.

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