Venezuela is one of the largest states in the South American continent. It consists of several islands in the Caribbean, the largest of which is called Margarita. A country with an area of 916 thousand square meters. km borders with Brazil and Colombia. At the beginning of 2017, the population barely reached 31 million people.
The federal republic, led by President Nicolas Maduro, has 21 states. The majority of the population is Venezuelans (descendants of Indians and Spaniards) - 67%, Europeans - 21%, blacks - 10%.
Climate and environmental conditions
The central part is represented by a lowland plain territory with the Orinoco River. From the north to the west stretches the Caribbean Andes, the ridge of the Cordillera de Merida, in the southeast rises part of the Guinean plateau.
The climate is hot subequatorial. For most of the year, the north of the country suffers from drought, while in the central regions rainy seasons are not uncommon.
The vegetation cover is rich and diverse: mangroves, xerophytic-succulent woodlands, dry tall grass savannas, deciduous rainforests, gilea, etc.
Venezuelan economy development
Few people know that the described country of Latin America is the first oil exporter. In the 16th century, the first barrel of black gold crossed half the world on its way to Madrid. In the XVII-XVIII centuries, the main export items were indigo and sugar, a little later - cocoa and coffee. In 1922, one of the largest oil fields was discovered near Lake Maracaibo in the village of Cabimas, which marked the beginning of the oil boom and made dramatic changes in the Venezuelan economy.
The location of the fields in close proximity to the sea, the low standard of living of the population (cheap labor) and the high potential of the wells provoked the active interest of oil companies. During the Second World War, new deposits were discovered and put into operation, a few years later their total area reached 68 thousand square meters. km
In the lower reaches of the Orinoco River, the largest deposits of iron ore were discovered, the development of which was immediately intercepted by American monopolists. As of 1970, the volume of foreign investment in the development of the Venezuelan economy amounted to 5.5 billion dollars. 11% of this amount belonged to the United States.
From 1975-1980 The state has been a leader in economic development in Latin America. Actively began to develop infrastructure.
The crucial step towards independence and national sovereignty was the nationalization of the oil and iron ore industries. In the foundations of the economy of Venezuela now lay complete state control. In most industries, foreign companies were asked to transfer 80% of the shares to citizens of the country within three years.
Import and export
Experts say that 50% of the Venezuelan economy is foreign trade. The lion's share of sales is in oil and related products, iron ore is in demand. The export list includes coffee, cocoa, asbestos, gold, sugar, bananas, rice, skins, cattle, forest.
The priority import items are high-tech equipment, vehicles and components, raw materials for oil pipelines, and industrial consumer goods. Every year, food imports are increasing, because agriculture is in decline and is not able to meet the needs of the population. Most of the cost of procurement falls on the United States - more than $ 3.5 billion per year.
Mining industry
The main products of the mining industry are iron ore. In large deposits of El Pao, San Isidro and Cerro Bolivar, fossil is mined by open pit mining and contains up to 70% of iron. Its annual production is 15-17 million tons, 90% of this amount is exported to America and Europe.
Manganese ore is mined in the Upati region (Guiana Plateau). In the Caribbean Andes, nickel, lead, zinc, asbestos, and silver are mined in small quantities. In the suburban area of San Cristobal, phosphate rock is being mined.
Gold is being mined in El Callao. Here, diamond production is actively gaining pace (700-800 thousand carats per year). A large deposit of precious stones was discovered in the Kuchivero River Basin and was accompanied by diamond rush. For several years in a row, Venezuela held the position of the largest supplier of diamonds among Latin American countries.
Manufacturing industry
According to the general information on the economy of Venezuela, until 2013, its oil refining, chemical and engineering industries developed at a rapid pace. Nevertheless, more than 50% of the gross product cost comes from the textile, food, woodworking and leather and shoe industries.
The development of the largest iron ore deposits gave impetus to the development of the metallurgical industry. On the territory of the state there are several full-cycle plants with electric blast furnaces, aluminum smelters, etc.
Production
At the heart of the development of mechanical engineering is the auto assembly industry. The economy of Venezuela can be briefly described as receiving the support of agricultural equipment factories, tractors, construction equipment, tools, etc. Television and radio equipment companies are developing. Large-scale construction in the mining, oil and manufacturing industries stimulates the creation of production sites for the production of building materials.
Livestock
Cattle breeding determines the value of agricultural products by 55%. Farms are concentrated in Llanos.
The territory of dairy farming is the Caracas Valley, the basins of the Valencia and Maracaibo rivers. In the same areas, bird harvesters supply cities with eggs and meat. The arid Caribbean coast (Lara state) is famous for the largest goat and sheep farms. Over the past 15 years, the livestock sector has significantly succeeded in comparison with the crop industry. The mass share of large farms using modern methods of raising and caring for animals has increased.
Fishing is developed in the northern part of the country (coast of Venezuela, Lake Maracaibo). Today, tiger prawns, the most valuable and gourmet-esteemed product, have a positive impact on the Venezuelan economy.
Forestry is not given much importance. The procurement of tannins, vanilla, guayaba resin and rubber used in perfumery and pharmacology is carried out in minimal quantities.
Plant growing
The state has a record amount of land suitable for cultivation in Latin America. Only one third of them are processed. According to the latest information from the Venezuelan economy, crop production is recognized as the most backward industry.
Agriculture provides 45% of the value of agricultural products. 2/3 of arable land is concentrated in the north of the country. In Llanos, crop production is developed along the rivers and at the foot of the Andes. The area's problem is severe droughts. In order to solve the problem, the government has developed a plan to create water management for the next 30 years with the construction of dams and the organization of an irrigation system for 2 million hectares of land.
A fifth of the area is occupied by the main export crops - cocoa and coffee. The raw material for an aromatic invigorating drink grows in the mountain states in the northwest. Raw materials for most chocolates in the world are collected in the states of the Caribbean. Crops of cotton, tobacco and sisal have grown in Llanos over the past 8–10 years.
Transport
Throughout Venezuela, communication lines are unevenly distributed. The maximum concentration of highways and railways is in the north. The latter are short, unconnected lines with a length of 1.4 thousand km. Passenger and ¾ freight traffic is carried out by road.
The Orinoco River is the main inland waterway, shipping links are maintained along the lakes Maracaibo and Valencia. The lack and low quality of land routes is compensated by coastal shipping by sea. By scale, the ocean merchant fleet is one of the three leaders in South America. 23 ports are equipped for the export of oil and related products, and another 8 are equipped for the export and import of other goods.
Of particular importance for the economy of Venezuela is the organization of air communication with remote southern and eastern regions. Regular airlines connect the capital with major cities, oil fields and mining centers.
Economic crisis
2013 was a fateful year for the Venezuelan economy. The crisis has affected all spheres of state life. Only high prices for the main exported commodity, oil, were saved from default. At the beginning of the year before Maduro came to power, the country's national debt was 70% of GDP with a budget deficit of 14%. At the end of 2013, inflation was 56.3%. In this situation, the parliament gave the new president extraordinary powers. To meet the expectations of millions of voters, the guarantor announced an economic offensive, within which a limit on the profit of private enterprises of 30% was introduced. The country faced an acute shortage of essential goods - sugar, oil, toilet paper. Government officials unanimously stated that the cause of the collapse of the Venezuelan economy was corruption, speculation, sabotage, and the ongoing financial war against the state. Maduro initiated a program to combat speculation. After a month of the new service, the Daka sales network was nationalized. For setting a margin on goods in 100% instead of the permissible 30%, the property and the management of supermarkets were arrested.
2015: falling oil prices
In 2014, the Venezuelan economy, which was successfully moving towards overcoming the crisis, was shocked by another blow. World oil prices have plummeted. Compared to the previous year, the income from export of black gold decreased by 1/3. In an attempt to reduce the budget deficit, the Central Bank issues more notes, which leads to inflation of 150% (official data as of September 2015). Making another attempt to contain inflation, the government is developing a complex system of foreign exchange. A week later, the official dollar exchange rate exceeded the market by more than 100 times. Adhering to the ideology of Chavism, the parliament, headed by the president, limited food prices, which provoked a total shortage of essential goods.
2016: situation worsens
In January, left-wing socialist Luis Salas is appointed as head of the Ministry of Economy. To match the other members of the administrative apparatus of Maduro, the official sees the cause of the problems of the Venezuelan economy in the conspiracy and financial war of Europe against his homeland.
According to IMF estimates, in 2016 the level of GDP decline is approaching 20%, unemployment is growing rapidly - 25%, the budget deficit is 18% of GDP. 550% inflation combined with external debt in excess of $ 130 billion pushes the Venezuelan economy to default every day.
The banknote of the greatest denomination - 100 bolivars costs 17 US cents. Hyperinflation nullifies the purchasing power of citizens. According to the local Documentation and Analysis Center (Cendas), a basic family food basket costs eight minimum wages.
