Venezuela’s most significant natural resources are petroleum and natural gas, iron ore, gold, and other minerals. It also has large areas of arable land and water.
Venezuela has a market-based mixed economy dominated by the petroleum sector, which accounts for roughly a third of GDP, around 80% of exports, and more than half of government revenues. Per capita GDP for 2016 was estimated to be US$15,100, ranking 109th in the world. Venezuela has the least expensive petrol in the world because the consumer price of petrol is heavily subsidized. The private sector controls two-thirds of Venezuela’s economy.
Manufacturing contributed 17% of GDP in 2006. Venezuela manufactures and exports heavy industry products such as steel, aluminum and cement, with production concentrated around Ciudad Guayana, near the Guri Dam, one of the largest in the world and the provider of about three-quarters of Venezuela’s electricity. Other notable manufacturing includes electronics and automobiles, as well as beverages, and foodstuffs. Agriculture in Venezuela accounts for approximately 3% of GDP, 10% of the labor force, and at least a quarter of Venezuela’s land area. The country is not self-sufficient in most areas of agriculture. In 2012, total food consumption was over 26 million metric tons, a 94.8% increase from 2003.
Since the discovery of oil in the early 20th century, Venezuela has been one of the world’s leading exporters of oil, and it is a founding member of OPEC. Previously an underdeveloped exporter of agricultural commodities such as coffee and cocoa, oil quickly came to dominate exports and government revenues. The 1980s oil glut led to an external debt crisis and a long-running economic crisis, which saw inflation peak at 100% in 1996 and poverty rates rise to 66% in 1995 as (by 1998) per capita GDP fell to the same level as 1963, down a third from its 1978 peak. The 1990s also saw Venezuela experience a major banking crisis in 1994.
The recovery of oil prices after 2001 boosted the Venezuelan economy and facilitated social spending. With social programs such as the Bolivarian Missions, Venezuela initially made progress in social development in the 2000s, particularly in areas such as health, education, and poverty. Many of the social policies pursued by Chávez and his administration were jump-started by the Millennium Development Goals, eight goals that Venezuela and 188 other nations agreed to in September 2000. The sustainability of the Bolivarian Missions has been questioned due to the Bolivarian state’s overspending on public works and because the Chávez government did not save funds for future economic hardships like other OPEC nations; with economic issues and poverty rising as a result of their policies in the 2010s. In 2003 the government of Hugo Chávez implemented currency controls after capital flight led to a devaluation of the currency. This led to the development of a parallel market of dollars in the subsequent years. The fallout of the 2008 global financial crisis saw a renewed economic downturn. Despite controversial data shared by the Venezuelan government showing that the country had halved malnutrition following one of the UN’s Millennium Development Goals, shortages of staple goods began to occur in Venezuela and malnutrition began to increase.