The first big move in the wrong direction was in 1976, when Venezuela\u2019s government decided to nationalize all foreign oil companies in the country. In turn, the acquired new oil businesses were broadly placed under the already state-owned oil company Petr\u00f3leos de Venezuela, S.A. (PDVSA).\u00a0<\/p>\n
Yet perhaps surprisingly, the economy didn\u2019t initially crash. “What kept it up was they were still producing oil,” Robert Wright, a visiting professor of history at the University of Austin, told FOX Business. “It takes a while even for a socialist to screw it up.”<\/p>\n
AFTER MADURO, VENEZUELA FACES HARD CHOICES TO REBUILD ITS SHATTERED ECONOMY<\/a><\/p>\n President Nicol\u00e1s Maduro speaks during a meeting with ministers in Caracas, Venezuela, on Dec. 17, 2016. (Miraflores Palace\/Handout via Reuters \/ Reuters)<\/p>\n Going full-on socialist<\/p>\n The next change came with the election of Hugo Chavez<\/a>, in 1998. A year later, he introduced “Plan Bolivar,” which contained goals that involved “an antipoverty program that includes road building, housing construction, and mass vaccination,” according to the Council on Foreign Relations. The government’s desires might seem compassionate, but in reality, Chavez was about to go full-on socialist.<\/p>\n Crony corner<\/p>\n In 2002, the Chavez government fired the top executives at PDVSA and another 18,000 workers, many of whom were highly skilled in petroleum extraction. And a significant portion of those laid off emigrated to other countries. The issue now was who would get hired to run the oil business? It turned out that many appointments at PDVSA went to political cronies<\/a> rather than skilled petroleum extraction experts.\u00a0<\/p>\n Oil pumps operate near Lake Maracaibo in Venezuela, on July 12, 2024. Decades of mismanagement, underinvestment and sanctions contributed to the decline of Venezuela\u2019s once-dominant oil industry. (\u00a0 \/ Getty Images)<\/p>\n Without suitably skilled oil industry workers, the state-owned business declined; at first slowly, then very fast. “They didn\u2019t run it like a business, and they did not reinvest in the company to keep it going,” Steven Blitz, chief global macro strategist at GlobalData TSLombard, told FOX Business. Recently, production was 1.1 million barrels a day compared with 3.7 million in 1970, according to data from Statbase.org.<\/p>\n Hyper Inflation Crushes the Country<\/p>\n Nicol\u00e1s Maduro<\/a> took over Venezuela\u2019s presidential role in 2013 and made things worse.<\/p>\n US OIL GIANTS MUM AFTER TRUMP SAYS THEY\u2019LL SPEND BILLIONS IN VENEZUELA<\/a><\/p>\n Cuban President Fidel Castro, left, talks with President Hugo Chavez during their meeting in Campo Carabobo, Venezuela, on Oct. 29, 2000. (Adalberto Roque\/AFP via \/ Getty Images)<\/p>\n To placate the population, the government provided services to the country. But there was a flaw. “They paid for it by printing money, which, of course, led to hyperinflation,” Wright said. It began in 2016 and peaked at 375,000% in 2019, according to Trading Economics data.<\/p>\n There were other issues. “The government took the oil industry over, thinking it was going to be a cash cow,” Blitz said. “Eventually, the revenues fell.” And at that point, there was nothing else for the country to lean on; no major banks, no other significant sectors other than the sole-trader self-employed. Says Wright: “They never developed the economy.”<\/p>\n An oil pumpjack and a tank with the corporate logo of state oil company PDVSA in Lagunillas, Venezuela, Jan. 29, 2019. (Isaac Urrutia \/ Reuters Photos)<\/p>\n Over the past decade, Venezuela has been subject to multiple sanctions from the U.S<\/a>. These sanctions are varied but primarily aimed to hamper the country\u2019s rulers by imposing a multitude of bans, including prohibiting people from entering into financing arrangements with Venezuela\u2019s government.<\/p>\n During the Maduro years (2013 through early 2026), the number of Venezuelans living in other countries<\/a> jumped. In 2015, there were a mere 700,000, but that had jumped to approximately 7.9 million last year, according to the International Organization for Migration. It\u2019s likely that at least some of those fleeing would have been the highly skilled workers, the ones that the country needs now.<\/p>\n![\"Former](\"https:\/\/www.newsbeep.com\/ca\/wp-content\/uploads\/2026\/01\/2016-12-27T153849Z_2_LYNXMPECBQ0L7_3_VENEZUELA-ECONOMY.jpg\")
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