Austrian Economics Wiki
Country summary




Brazil 2,200 km, Colombia 2,050 km, Guyana 743 km

Government type

federal republic


26,814,843 (July 2010 est.)[1]

Population growth

1.508% (2010 est.)[1]

Life expectancy

73.61 years[1]


7.9% (2009 est.)[1]

Index of Economic Freedom


Corruption Perceptions Index


Doing Business ranking


Venezuela was one of three countries that emerged from the collapse of Gran Colombia in 1830 (the others being Ecuador and New Granada, which became Colombia). For most of the first half of the 20th century, Venezuela was ruled by generally benevolent military strongmen, who promoted the oil industry and allowed for some social reforms. Democratically elected governments have held sway since 1959. Hugo CHAVEZ, president since 1999, seeks to implement his "21st Century Socialism," which purports to alleviate social ills while at the same time attacking capitalist globalization and existing democratic institutions. Current concerns include: a weakening of democratic institutions, political polarization, a politicized military, drug-related violence along the Colombian border, increasing internal drug consumption, overdependence on the petroleum industry with its price fluctuations, and irresponsible mining operations that are endangering the rain forest and indigenous peoples.[1]

Price controls[]

A January 10, 2006, BBC article reported that since 2003, President Hugo Chavez has been setting price ceilings on food, and that these price ceilings have caused shortages and hoarding.[5] The military was ordered to keep people from smuggling across scarce, price-controlled items like milk and seized about 750 tons of food and 9,000 gallons of fuel. Venezuelan farmers who attempt to smuggle milk or other foods into Colombia seeking a higher profit could have their properties expropriated by the state.[6]

In April, 2008, Chavez ordered the nationalization of the cement industry in response to the industry exporting its products to receive higher prices outside the country.[7]

In February, 2009 Chavez ordered the military to temporarily seize control of all the rice processing plants in the country. He accused some firms of overcharging by refusing to produce rice at prices set by the government.[8]

By 2009, a country that has claimed the world’s biggest oil reserves and is home to its fourth-mightiest river, the Orinoco, has been forced to ration both water and electricity. What has been declared the government’s failure to plan, maintain and invest in the necessary infrastructure, was in 2007 compounded by nationalising what remained of the private power industry. While there have been several national blackouts, the demand for electricity has grown by an annual average of 4.5%. The thermal plants cannot be used to take up the slack. They have been neglected. Meanwhile, the utility rates have been frozen for most of Mr Chávez’s time in office.[9]

In October, 2010, president Hugo Chavez signed a decree to expropriate a leading farm-supply business, promising to bring down prices of seeds and fertilizers as his government takes control. Also, the government planned to increase seizures of farmland deemed underused in order to aid small farmers. An additional 250,000 hectares (more than 600,000 acres) in the coming month should be seized.[10]

Economical characteristics[]

  • Currency: Bolívar fuerte (ISO code: VEF)
  • Central bank discount rate: 33.5% (31 December 2008)[1]
  • Commercial banks lending rate: 22.37% (31 December 2008)[1]
  • Stock of money (M1): $78.09 billion (31 December 2008)[1]
  • Quasi money (with M1 makes M2): $10.69 billion (31 December 2008)[1]


Statistic / Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
GDP (million USD)[11] 97 974 117 148 122 910 92 890 83 529 112 452 145 513 184 509 228 071 314 150
Govt. debt (% of GDP)[12]
Govt. revenue (% of GDP)[13] 18.960 21.179 21.728 22.842 24.028 24.647 28.262
Govt. expenses (% of GDP)[14] 19.973 21.639 24.083 23.322 25.155 24.707 25.066
Debt to revenue (years)


Note: statistical data was rounded. Different sources may use different methodologies for their estimates. Debt to revenue is calculated by dividing the two variables from their original ('unrounded') values. It represents how long it would a government take to repay its entire debt if it used its whole revenue for this purpose.

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 CIA - The World Facebook. "Venezuela", from The World Facebook. Referenced 2010-09-28.
  2. Heritage Foundation. "Venezuela", Economic Freedom Score. A lower ranking is better; but please be careful when comparing between different countries or years. Referenced 2010-09-28.
  3. Transparency International. "Venezuela", Corruption Perceptions Index 2009. A lower ranking is better; but please note that the numbers cannot be compared between countries or years due to different methodology. Referenced 2010-09-28.
  4. Doing Business. "Venezuela", Doing Business 2010 (part of The World Bank Group). A lower ranking is better; but please be careful when comparing between different countries or years. Referenced 2010-09-28.
  5. Greg Morsbach. "Venezuelan shoppers face food shortages", BBC, January 10, 2006. Referenced 2010-10-31.
  6. Fabiola Sanchez. "Venezuelan troops crack down on smuggling along Colombian border", Associated Press, January 22, 2008. Referenced 2010-10-31.
  7. The Associated Press. "Hugo Chavez Nationalizes Cement Industry", CBS News, April 4, 2008. Referenced 2010-10-31.
  8. BBC. "Chavez sends army to rice plants", BBC, 1 March 2009. Referenced 2010-10-31.
  9. The Economist. "Venezuela's energy shortage: Losing power", November 2009. Referenced 2010-10-31.
  10. The Associated Press. "Chavez Decrees Expropriation of Farm Business", "Venezuela's Chavez decrees expropriation of farm supply company, promises lower prices", ABC News, October 2010. Referenced 2010-10-31.
  11. World Bank. "Venezuela: GDP", from World Bank Data. Referenced 2010-09-28.
  12. World Bank. "Venezuela: government debt", from World Bank Data. Referenced 2010-09-28.
  13. World Bank. "Venezuela: government revenue", from World Bank Data. Referenced 2010-09-28.
  14. World Bank. "Venezuela: government expenses", from World Bank Data. Referenced 2010-09-28.

External links[]