Published on and written by Cyril Jarnias
The Venezuela we know today – an oil-producing nation, experiencing an unprecedented economic and political crisis – is the culmination of a much longer and more complex history. Before becoming the Bolivarian Republic, this territory witnessed the birth of sophisticated indigenous cultures, was contested by European powers, served as a laboratory for Latin American independence, then as a democratic showcase during the Cold War, before transforming into the archetype of a failing “petro-state.”
Venezuela’s history is marked by a permanent tension between great abundance (resources, cultures, political projects) and vulnerability to external shocks, authoritarian figures (caudillos), dependence on subsoil rents, and authoritarian drift.
From First Inhabitants to Complex Indigenous Societies
Long before the Spanish, the territory of Venezuela has been inhabited for at least 13,000 years. Stone flake tools, spear points, and scrapers found on the terraces of the río Pedregal or at the El Jobo site in the west of the country bear witness to human occupations dating from the late Pleistocene. These hunter-gatherer groups coexisted with now-extinct megafauna, such as giant ground sloths (megatherium), glyptodonts, or toxodonts.
Gradually, communities became sedentary, adopted agriculture, and formed tribes. Archaeologists identify a long “Meso-Indian” period marked by the transition from hunting large mammals to a diversified exploitation of resources, and then by the appearance of pottery. This innovation is notably associated with the Saladoid people, an Arawak-speaking group established along the lower Orinoco between the last millennium BCE and the 6th century CE.
Over the centuries, several cultural waves succeeded each other along the river: the Barrancoid, then the Arauquinoid after the collapse of the former. In the Venezuelan Andes, a particularly complex society developed: the Timoto‑Cuicas. They planned permanent villages with irrigated agricultural terraces, built stone and wood houses with thatched roofs, cultivated potatoes and ulluco, wove plant-based textiles, and produced anthropomorphic ceramics. They did not leave great monuments, but they profoundly marked the food culture, being considered the inventors of the arepa, the corn cake that became a national culinary emblem.
Estimated number of indigenous people occupying Venezuelan territory on the eve of the European arrival.
These societies were already using the oil that naturally seeped to the surface, then called mene, as medicine, fuel, or sealing material for canoes. A reminder that black gold is rooted in local history long before the 20th-century global economy.
European Exploration, Colonization, and Early Resistance
The encounter with Europe begins in 1498, when Christopher Columbus sails along the country’s eastern coast on his third voyage. He names the Orinoco delta “Land of Grace” and spots the pearl-rich islands of Cubagua and Margarita, soon exploited to exhaustion between 1508 and 1531 at the cost of a demographic collapse of the local populations.
The following year, an expedition commanded by Alonso de Ojeda, accompanied notably by Amerigo Vespucci, travels along the northern coast. Upon discovering stilt houses around Lake Maracaibo, Vespucci mentions a “little Venice.” Hence the name “Venezuela”, although some scholars also point to a possible borrowing from an indigenous term.
Permanent colonization begins in the 16th century with Cumaná, the first Spanish settlement in South America. It evolves from missions and pearl exploitation to territorial control, with successive capitals: Santa Ana de Coro (1527), El Tocuyo, and then Caracas, founded in 1567 by Diego de Losada.
The German Interlude: The Aborted “Klein‑Venedig” Project
A little-known episode in the country’s history is the German colonization attempt between 1528 and 1546. Burdened with debt, Charles V granted the powerful Welser family of bankers the right to exploit the Province of Venezuela. The Germans named this territory “Klein‑Venedig” and hoped to discover the elusive El Dorado there.
Ambrosius Ehinger founds Maracaibo in 1529, his deputy Nikolaus Federmann explores the interior, and Philipp von Hutten continues the adventure. But the colony accumulates failures, clashes with local populations, and faces Spanish ambitions. Upon his return to Coro in 1546, Hutten is executed on the order of Spanish governor Juan de Carvajal, as is Bartholomé Welser. The king then revokes the concession: the German attempt is over, and the territory returns to direct crown control.
A Peripheral Colonial Regime, Between Slavery and Cocoa
Compared to Mexico or Peru, colonial Venezuela long remained a periphery of the Spanish empire. Gold mines – notably in Yaracuy from 1632 – and the cattle herds of the Llanos formed the backbone of an economy dominated by a quasi-feudal system, where large Spanish landowners managed mestizos and indigenous people on horseback. Enslavement first affected the native populations, then widely extended to deported Africans to work in mines and plantations.
In the 18th century, cocoa became the region’s main wealth, cultivated along the coast thanks to a massive influx of African slaves. The Real Compañía Guipuzcoana de Caracas obtained a monopoly on trade with Europe and stimulated production, but this privilege granted to this Basque company fueled local resentment.
Administratively, the territory first fell under the Audiencia of Santo Domingo, then was integrated into the Viceroyalty of New Granada in 1717, before gaining greater autonomy with the creation of the Captaincy General of Venezuela in 1777. This reform strengthened Caracas as a political center and further opened ports to trade with British, Dutch, and French Caribbean islands, exposing Creole society to the Enlightenment, the French Revolution… and ideas of independence.
Indigenous Societies in Retreat and Southern Missions
As colonization advanced, many indigenous peoples migrated south, beyond the Orinoco River, where Franciscan, Capuchin, or Jesuit missionaries attempted to structure reductions (settlements). In the Guayana region, the mission of San Tomé became a major center. The clergy compiled grammars and lexicons of local languages, but epidemics, war, and enslavement led to massive demographic decline.
Percentage of the Venezuelan population represented by indigenous peoples, according to the 1999 Constitution which recognizes specific rights for them.
From Revolutionary Ferment to Independence
By the end of the 18th century, the Creole elite – the mantuanos – felt increasingly constrained by a system that reserved high offices for peninsulars born in Spain. Inspired by the French and American Revolutions, some took the step of conspiracy.
In 1797, Manuel Gual and José María España organized the first serious attempt to overthrow the colonial order. They widely disseminated texts on human rights and radical republican projects. But this program, deemed too subversive, frightened even part of the Creole elites, who collaborated in the repression. Gual goes into exile and dies hunted by the Spanish; España is captured, tortured, executed, and dismembered, his remains displayed in Caracas as an example.
Napoleon’s invasion of Spain in 1808 and the deposition of kings Charles IV and Ferdinand VII, followed by the installation of Joseph Bonaparte on the throne, triggered the Spanish War of Independence. This crisis created a vacuum of political legitimacy in the American colonies, accentuated by the formation of a Supreme Central Junta in Spain governing in the name of the captive king, deeply dividing allegiances.
The news reached La Guaira in July 1808 aboard the French brig Serpent. In Caracas, part of the mantuanos then attempted to imitate the defiant Spanish provinces by forming their own junta, but Captain General Juan de Casas repressed this movement.
On April 19, 1810, a new turning point occurs: the cabildo of Caracas dismisses Captain General Vicente Emparán and establishes a Supreme Junta that formally maintains loyalty to Ferdinand VII, but severs the link with the Regency government in Cadiz. Other cities – Barcelona, Cumaná, Mérida, Trujillo – follow. At this stage, the official objective is not yet independence, but autonomy. However, for young Creoles like the 27-year-old Simón Bolívar, it is the prelude to a definitive break.
The Declaration of Independence and the First Republics
A Congress convenes in Caracas in early 1811. Under pressure from the Patriotic Society founded notably by Bolívar and Francisco de Miranda, the debate gradually shifts towards complete separation. On July 5, 1811, seven of the ten provinces of the Captaincy General proclaim independence. The “Act of Declaration of Independence,” drafted by Juan Germán Roscio and Francisco Isnardi, is approved by 40 votes. The young state first names itself the “American Confederation of Venezuela”: this is the First Republic.
But it is fragile. The provinces of Coro, Maracaibo, and Guayana remain loyal to the crown and receive military support from Puerto Rico and Cuba. Many conservative Whites, mestizos, and part of the colored population distrust the republicans, whom they see as dominated by the great mantuano landowners. The Church and the earthquake that devastates Caracas on March 26, 1812 – interpreted by many as divine punishment – further erode the new Republic’s credibility. The royalist troops of Captain Juan Domingo de Monteverde advance rapidly. Miranda, appointed Generalissimo, eventually capitulates and signs the Armistice of La Victoria in July 1812. A few days later, he is handed over to the Spanish by a group of officers, including Bolívar, and dies imprisoned in Spain in 1816.
Bolívar, the “Admirable Campaign,” and All-Out War
Exiled in Cartagena, New Granada, Simón Bolívar writes the “Cartagena Manifesto” at the end of 1812, a harsh analysis of the mistakes of the First Republic – excessive federalism, culpable tolerance towards enemies, inability to mobilize the popular classes – and a call to New Granadan neighbors to launch a counterattack. With their support, he leads the “Admirable Campaign” starting in May 1813: in a few months, he crosses the Andes, liberates Mérida, Trujillo, and then Caracas, where he is acclaimed as “Libertador.”
In this context of total war, he pronounces in Trujillo his famous “Decree of War to the Death,” promising the execution of any Spaniard not supporting the patriot cause, while Americans – meaning natives of the continent – are amnestied. This radicalization also aims to rally the popular masses by playing on the opposition between Creoles born on American soil and peninsulars.
Simón Bolívar, Libertador
The Second Republic, proclaimed in August 1813, nonetheless clashes with the rise of a decisive actor: the llaneros, mestizo and Black horsemen of the plains, mobilized by the royalist caudillo José Tomás Boves. He federates a large-scale social insurrection against the white elites, whether royalist or patriot. His troops, known for their extreme brutality, inflict defeat after defeat on the republicans. In 1814, the Second Republic collapses, Caracas is evacuated in a dramatic exodus to the east, and Bolívar retreats once more to New Granada, then Jamaica and Haiti, where he finds support and a demand: President Alexandre Pétion provides him with weapons and ships on the condition that he commits to abolishing slavery in the territories he liberates.
The Birth of Gran Colombia and Lasting Independence
Starting in 1816, after several landings from Haiti and complex alliances with other patriot leaders from eastern Venezuela, Bolívar manages to establish a solid base at Angostura, on the Orinoco (present-day Ciudad Bolívar). The patriots control the river from 1817, opening a strategic corridor into the continent’s interior.
It is from here that the Liberator conceives a bold plan: to liberate New Granada by crossing the Andes via a route deemed impassable. In 1819, at the head of an army mixing Venezuelans, New Granadans, llaneros, and European volunteers from the British Legions, he crosses the mountains in extreme conditions, losing a significant part of his men. On August 7, 1819, the victory at Boyacá confirms the Spanish rout in New Granada and opens the way to Bogotá, which Bolívar occupies shortly after.
The same Congress assembled at Angostura, informed of these successes, decrees on December 17, 1819 the creation of the Republic of Colombia – soon known as Gran Colombia – comprising Venezuela, New Granada and, by design, Quito (future Ecuador). Bogotá becomes its capital, and Bolívar its president.
Carabobo, Maracaibo, Puerto Cabello: The End of Spanish Power
The task remained to definitively liberate Venezuelan territory. Taking advantage of the metropolis’s weakness, gripped by a liberal revolt since 1820, Bolívar concludes with the royalist general Pablo Morillo an armistice and a treaty of “War Regularization” negotiated notably by Antonio José de Sucre: for the first time, both sides commit to respecting certain rights of prisoners and civilians, ending the logic of war to the death.
The decisive confrontation of the Venezuelan War of Independence took place on the savanna of Carabobo. The Colombian army, reinforced by the cavalry of José Antonio Páez’s *llaneros* and foreign battalions, defeated the Spanish forces of General Miguel de la Torre there. This victory opened the road to Caracas, occupied shortly after, although royalist resistance persisted in Maracaibo, Coro, and the fortress of Puerto Cabello.
The final act plays out at sea with the battle of Lake Maracaibo, on July 24, 1823, won by the republican squadron of José Prudencio Padilla. In November, Páez finally seizes Puerto Cabello: Spanish domination over Venezuela is over.
The human toll is heavy: tens of thousands dead in a country of about one million inhabitants, devastated countryside, a disorganized economy. But Bolívar’s dream is not limited to Venezuelan independence: he wants a great confederation capable of counterbalancing the United States and the old European powers.
From Gran Colombia to the Independent Venezuelan State
Gran Colombia adopts a Constitution at Cúcuta in 1821, confirming the centralized structure of the new state. Bolívar is president, Francisco de Paula Santander vice president. Very quickly, however, tensions rise between the regions, particularly in Venezuela, where Páez and other notables chafe under decisions made in Bogotá.
In 1826, the separatist movement ‘La Cosiata’ in Venezuela weakens the consensus for a unitary state. After the failure of the Ocaña Convention in 1828, an assassination attempt against Bolívar, and the progressive secession of the departments, Gran Colombia dissolves between 1830 and 1831.
Venezuela then proclaims itself an independent State, with José Antonio Páez as the dominant figure. Simón Bolívar, ill and disillusioned, retreats towards the Colombian Caribbean coast. He dies near Santa Marta in December 1830, convinced he had “plowed the sea.”
19th Century: Caudillos, Civil Wars, and State-Building
The young Venezuelan state inherits a devastated territory, a weakened agricultural economy, and a society deeply divided by war and the racial question. The 1830 Constitution proclaims a representative regime but maintains a censitary suffrage, the death penalty for certain political offenses, and slavery, which would not be abolished until 1854. The Church loses some fiscal and educational privileges, without being marginalized.
For most of the 19th century, the country is dominated by regional caudillos – warlords turned local potentates – who vie for central power. José Antonio Páez embodies this first period: he occupies the presidency multiple times, influences political choices, and does not hesitate to resort to arms to maintain his influence. While the 1830s‑1840s see relative stability and some economic progress, the political scene remains marked by the personalization of power and the exclusion of large segments of the population.
In the 1840s, the emergence of the Liberal Party, which demanded the expansion of suffrage and the abolition of slavery, created new polarities. The Monagas brothers, José Tadeo and José Gregorio, themselves caudillos, embodied a transition phase: José Tadeo broke with the conservatives, while José Gregorio abolished slavery and the death penalty in 1854. However, their attempts to extend their terms triggered uprisings.
The Federal War and the Federalism Question
Between 1859 and 1863, Venezuela is ravaged by the Federal War, one of the bloodiest conflicts in its history. The federalist liberals – led notably by Ezequiel Zamora – face the centralist conservatives. Beyond ideological rhetoric, this war also expresses the struggle of different regions for control of state revenue and apparatus, as well as the frustrations of rural populations. At the conflict’s end, the 1864 Constitution renames the country “United States of Venezuela” and formally adopts a federal model, with each state enjoying greater autonomy.
After the Federal War, power remains in the hands of caudillos like Falcón and Monagas, in a ruined country. Starting in 1870, Antonio Guzmán Blanco restores central authority through an authoritarian modernizing project, including the expansion of primary education, limitation of Church privileges, confiscation of religious property, and major infrastructure works. However, these reforms remain highly personalized, and the succession at the end of the century is unstable, marked by intrigue and revolts.
International Crises and Diplomatic Assertion
The end of the 19th century is also marked by a border dispute with British Guiana, concerning a vast territory west of the Essequibo. In 1895, the government of Joaquín Crespo appeals to the United States, invoking the Monroe Doctrine. Washington, through its Secretary of State Richard Olney, sends a very firm note to London. The crisis nearly escalates into armed conflict before Great Britain accepts international arbitration. The 1899 verdict largely satisfies London, fueling lasting resentment in Caracas. But for the United States, this affair marks the first successful application of the Monroe Doctrine against a major European power.
Internally, the country fails to stabilize its institutions. The “free” elections of 1894 are followed by power grabs. In 1899, an Andean caudillo, Cipriano Castro, marches on Caracas with the support of his comrade-in-arms Juan Vicente Gómez. The era of the “Andinos” begins.
20th Century: Dictatorships, Oil, and Democratic Transition
The Venezuelan 20th century is inseparable from oil. But before black gold transformed everything, the country goes through a new phase of personal rule. Cipriano Castro assumes the presidency starting in 1899, accumulates debts, and faces a major international crisis in 1902‑1903 when Great Britain, Germany, and Italy impose a naval blockade to obtain debt repayment. The Roosevelt administration refuses military intervention but is concerned about the European presence, leading to the “Roosevelt Corollary” to the Monroe Doctrine, justifying U.S. intervention to prevent other foreign interference.
Weakened by illness, Castro leaves the country in 1908 for treatment in Germany. His vice president, Juan Vicente Gómez, takes the opportunity to seize power, bars his return, and inaugurates a dictatorship that will last until 1935. He relies especially on the national army, which he strengthens, and on the growing power of a new resource: oil.
The Emergence of Black Gold and the “Dutch Disease”
The first commercial drilling dates back to 1917, but it is the spectacular “blowout” of the Barroso No. 2 well in Cabimas in 1922 – with a gusher of 100,000 barrels per day – that propels Venezuela into oil modernity. Within a few years, dozens of foreign companies, dominated by Royal Dutch Shell, Gulf, and Standard Oil, set up in the Lake Maracaibo basin. By the late 1920s, the country is already the world’s second-largest crude producer after the United States, and the leading exporter.
This windfall profoundly transforms the economy:
| Key Indicators of the Oil Boom | Around 1920 | Around 1935 |
|---|---|---|
| Oil’s share of exports | 1.9% | 91.2% |
| World ranking as producer | — | 3rd |
| Agriculture’s share of GDP | ~33% | < 10% |
Within a few decades, the once-dominant agriculture collapses, non-oil industry struggles to emerge, and the economy restructures around rents. This is a classic illustration of the “Dutch Disease”: the influx of foreign currency appreciates the local currency, makes non-oil products less competitive, draws labor to cities and services, while accustoming the state to living off subsoil resources rather than citizen taxes.
Under Gómez, oil concessions are generously distributed, often to cronies who later resell them to international majors. The dictator, however, allows the state to pay off its debts, builds a modern army, and develops some infrastructure. He nonetheless leaves a highly unequal country, with low literacy, and a regime based on repression. When he dies in 1935, the population remains largely rural and poor, while he himself is believed to have accumulated a colossal fortune.
From the Rentier State to the Democratic Laboratory
Gómez’s successors – Eleazar López Contreras and then Isaías Medina Angarita – timidly begin an opening: malaria control, legalization of parties, creation of a first public oil company (Corporación Venezolana del Petróleo), and most importantly, the adoption of the 1943 Hydrocarbons Law. This law, imposing a 50/50 profit-sharing split from crude exploitation, multiplies state revenues sixfold in a few years and becomes a model adopted elsewhere.
After World War II, the country establishes itself as a major oil supplier for the United States, while undergoing rapid urbanization. But the establishment of a real democracy would take time. A first attempt, between 1945 and 1948, under the aegis of the Acción Democrática party and the novelist-president Rómulo Gallegos, is brutally interrupted by a military coup. This is followed by the dictatorship of Marcos Pérez Jiménez, another modernizing general who invests heavily in infrastructure but rules through fear, censorship, and torture. He benefits from oil revenues, which explode again during the first 1973 oil shock.
After the fall of Pérez Jiménez in 1958, Venezuela’s main democratic parties (Acción Democrática, COPEI, and URD) concluded the Punto Fijo Pact. This unprecedented agreement provided for power-sharing, respect for electoral results, the exclusion of political extremes (notably communists), and the use of oil rent to stabilize society.
For several decades, Venezuela thus becomes one of the few stable democracies in Latin America, while its leaders participate in founding OPEC (1960) and implementing ambitious social policies.
Nationalization and the “Great Venezuela”
In 1973, the Arab embargo quadruples the price of oil. For Venezuela, public revenues quadruple in two years. President Carlos Andrés Pérez then launches the “Great Venezuela” program, combining import-substitution industrialization, massive extension of the entrepreneurial state, and ambitious social policy. In 1976, the oil industry is nationalized: PDVSA becomes the state-owned company in charge of managing the sector, presented as technically efficient and relatively autonomous from political power.
But this period of abundance also hides a mountain of fragilities: inflation, growing debt, endemic corruption. Estimates suggest up to $100 billion was embezzled between 1972 and 1997. When oil prices collapse in 1986, the edifice cracks.
Economic Crisis, Caracazo, and the Rise of Chávez
The 1980s see the country mired in debt, inflation, and stagnation. Despite several adjustment plans, the economy fails to diversify. In 1989, the return to power of Carlos Andrés Pérez is marked by austerity: at the IMF’s request, he eliminates gasoline subsidies and increases transport fares. The popular reaction is immediate: the “Caracazo” – massive riots in Guarenas and then Caracas – is bloodily repressed. Official estimates speak of fewer than 300 dead, but many sources cite a figure of at least 2,000 victims.
This rupture shatters the myth of a prosperous, peaceful democracy. Trust in traditional parties erodes. In 1992, a lieutenant colonel, Hugo Chávez, attempts a military coup against Pérez. The operation fails, but the brief televised address he secures to call his troops to cease combat – concluded with a famous “for now” – propels him to the forefront. Imprisoned, he is pardoned in 1994 by President Rafael Caldera.
Lieutenant Colonel Hugo Chávez
During the 1990s, the economy continues to deteriorate, the power-sharing system of the Punto Fijo Pact appears emptied of meaning, and the population yearns for a refoundation. In this context, Chávez’s anti-corruption, anti-party, and nationalist discourse finds a growing echo.
The “Bolivarian Revolution”: Institutional Refoundation and Increased Dependence
In 1998, Hugo Chávez wins the presidential election with over 56% of the vote. He promises to sweep away the old system, refound the state on a participatory basis, and put oil rents at the service of the poor. A Constituent Assembly is elected in 1999, dominated by his supporters, which drafts a new Constitution adopted by referendum. The country officially takes the name “Bolivarian Republic of Venezuela.” The text strengthens presidential power, institutes a six-year term renewable twice consecutively, creates a unicameral National Assembly, and introduces a novel mechanism for a recall referendum.
This refoundation is accompanied by an increasing politicization of PDVSA. While nationalization dates from the 1970s, Chávez now intends to “retake control” of a company he accuses of being a state within a state, too close to the majors and elites. A new hydrocarbons law in 2001 increases taxation on foreign companies and asserts public majority control in all projects.
Oil Boom and Social Policies
The conjuncture of the 2000s is very favorable: crude prices soar again, aided by OPEC’s production reduction strategy, in which Chávez actively participates, and by Chinese demand. The state sees its resources explode, especially as it increases the share of rent captured at the expense of PDVSA, now heavily used to finance social programs.
The “Bolivarian missions,” such as literacy programs, community healthcare (Barrio Adentro), housing, and subsidized food distribution, succeeded in reducing poverty and extreme poverty in their early years. Simultaneously, Cuban doctors were deployed in Venezuelan working-class neighborhoods in exchange for oil deliveries to Cuba, and the government launched the Petrocaribe energy diplomacy to provide aid to Caribbean countries.
Social indicators indeed improve between 2003 and 2007, with a notable decrease in monetary poverty. But these advances rely almost entirely on oil rents, without durable reform of the economic structure. The productive private sector is weakened by nationalizations, exchange and price controls, and a climate of legal uncertainty.
Polarization, Power Grabs, and Institutional Control
Politically, the “Bolivarian revolution” deeply fractures society between chavistas and the opposition. In April 2002, a massive protest against the appointment of regime loyalists to head PDVSA escalates. Shots fired leave 19 dead in Caracas, part of the army turns against Chávez, who is briefly overthrown. A businessman, Pedro Carmona, dissolves the institutions, but this de facto government lasts only 48 hours: the Presidential Guard and popular sectors return Chávez to the presidential palace. The episode, in which the Bush administration is suspected of having been at least informed in advance, strengthens Caracas’s anti-imperialist rhetoric.
In response to a strike in 2002, the Venezuelan government fired approximately 18,000 employees, considered the technical backbone of PDVSA, replacing them with politically loyal managers. While production rebounded in the short term, many analysts believe it never regained its pre-2002 level and that this loss of expertise had lasting consequences.
Chávez also relies on enabling laws that allow him to legislate by decree for extended periods, on electoral reforms, and on the co-optation of the Supreme Court and other public powers. While his electoral victories are numerous – he wins 15 out of 16 votes between 1999 and 2012 – observers note a gradual erosion of checks and balances. The 2007 closure of the critical channel RCTV illustrates the hardening stance towards media.
The Maduro Era: Economic Collapse and Humanitarian Crisis
When Hugo Chávez dies in 2013, the model rests on already weakened pillars: disproportionate public spending, near-total dependence on crude exports (about 96% of export revenue), deficits in agricultural and industrial production, a multiple exchange rate system prone to corruption. His designated successor, Nicolás Maduro, narrowly wins the ensuing election with about 50.6% of the vote.
Shortly after, oil prices plummet starting in 2014, falling from over $100 per barrel to less than $30 in 2016. For a state whose income depends more than half on black gold, this is a violent shock. Instead of adjusting spending, the government multiplies money printing. Inflation skyrockets, then becomes hyperinflation: over 130,000% in 2018 according to the IMF. The currency, the bolívar, loses most of its value, forcing several reconversions (the appearance of the “sovereign bolívar” in 2018, removing five zeros).
Year of Venezuela’s default, a consequence of its progressive exclusion from international markets and its over-indebtedness.
| Recent Years | Macroeconomic Indicator | Estimate |
|---|---|---|
| 2014‑2021 | Cumulative GDP decline | ~‑75% |
| 2012‑2020 | Per capita income drop | ‑72% |
| 2018 | Annual inflation | >130,000% |
| 2023 | Estimated annual inflation | ~190% |
National surveys like ENCOVI show that by 2021, 95% of Venezuelans live below the monetary poverty line, including 77% in extreme poverty. Hospitals lack medicines, electricity, and basic equipment. Previously contained diseases – malaria, diphtheria, measles – reappear. NGOs and UN agencies describe a dramatic deterioration in infant and maternal mortality indicators, while the government stops publishing health statistics and punishes officials – like Minister Antonieta Caporale, dismissed after releasing an alarming report.
Food aid programs (CLAP boxes) and medical aid (Barrio Adentro) are denounced as irregular, insufficient, and used as political pressure tools, with distributions conditioned on electoral support or delayed until votes.
Growing Authoritarianism and Paralyzed Institutions
Politically, the legislative election of 2015 marks a turning point: the opposition grouped within the Democratic Unity Roundtable (MUD) obtains a large majority in the National Assembly. In response, the executive and judicial powers seek to neutralize this counterweight. The Supreme Court annuls or blocks most of the laws passed, new magistrates are hastily elected by the outgoing Assembly, and in 2017, the same Court announces it will directly assume legislative functions, before backtracking under international pressure.
Rather than organizing a recall referendum – provided for by the 1999 Constitution, for which the opposition collected 1.8 million validated signatures – the National Electoral Council suspends the process in 2016. The following year, Maduro convenes a Constituent Assembly, elected under a system of representation favorable to organizations close to the government. This body arrogates legislative powers, effectively marginalizing the Parliament elected in 2015.
The presidential elections of 2018, brought forward, are boycotted by most of the opposition. Several of its leaders are ineligible, imprisoned, or exiled. Maduro’s re-election is widely considered irregular by many countries and international organizations. In 2019, the President of the National Assembly, Juan Guaidó, proclaims himself interim president, invoking constitutional articles. About sixty countries, including most American and European states, recognize him as such. But the military apparatus and state structures remain in the hands of the chavista camp, diplomatically and economically supported by countries like Russia, China, Cuba, Iran, or Turkey.
Over the years, UN reports, Human Rights Watch, and other NGOs document excessive use of force during protests (over 150 deaths in 2017), extrajudicial executions attributed to the Special Action Forces of the police, arbitrary arrests, and a climate of impunity. International indices – The Economist’s Democracy Index, Freedom House reports – classify Venezuela among authoritarian regimes from the 2010s onward.
Mass Exodus and Recent Reconfigurations
One of the most visible markers of the crisis is the mass exodus of the population. According to UN agency estimates, over 7 million Venezuelans have left the country since the mid-2010s, about a quarter of the population. Most head to neighboring countries – Colombia, Brazil, Peru – or other destinations in Latin and North America. It is one of the largest refugee movements in recent history outside a declared war context.
After hitting rock bottom, the economy begins to timidly stabilize around 2021‑2022. The government eases some price and exchange controls, tolerates de facto dollarization, and attempts to revive the declining oil industry. However, international sanctions, notably American ones, targeting officials, PDVSA, and the financial sector, severely complicate access to markets.
Temporary easing of sanctions are negotiated starting in 2022‑2023, notably with the possibility for Chevron to resume certain activities, in exchange for government commitments to hold more open elections. But the steps of this “roadmap” are the subject of constant controversy, and the votes remain contested.
The 2024 presidential election is contested: the opposition claims victory for Edmundo González Urrutia, while the National Electoral Council proclaims Maduro’s re-election. The lack of publication of detailed results prompts accusations of fraud. Despite international criticism, the Supreme Court validates the incumbent’s proclamation.
A Long Trajectory, Structural Constants
Running through this history are several constants spanning the centuries.
In 2012, 90% of Venezuela’s export revenue came from oil, illustrating the economy’s extreme dependence on this rent.
First, the extreme dependence on a single resource, from mene for indigenous peoples to petroleum for the 20th and 21st centuries. The “rentier state” model, where public finances rely on external income rather than domestic taxation, explains both phases of rapid enrichment and brutal collapse.
Next, the weight of personalistic leaders – military caudillos of the 19th century, Andean dictators of the early 20th, or charismatic leaders like Chávez at the turn of the 21st – in building institutions. These figures have sometimes served as vectors of modernization or cohesion, but at the cost of weakening the impersonal mechanisms of the rule of law.
Finally, the tension between openness and autonomy. From the appeal to the United States during the border dispute with Britain to the creation of OPEC, from alignments during the Cold War to the “Bolivarian” diplomacy hostile to Washington, Venezuela oscillates between integration into global circuits and a desire to assert itself as a sovereign actor, sometimes leaning on new extra-continental partners.
Venezuela’s factual history shows that neither abundant natural resources nor a long period of democratic stability are enough to guarantee sustainable development if institutions remain vulnerable to rent economic cycles, power conflicts, and social exclusion. It also reveals the resilience of a society that, despite crises, has been the stage for major political experiments in Latin America, from Gran Colombian independence to the “Bolivarian revolution.”
Understanding this trajectory, from Timoto‑Cuica societies to oil megacities, from the battles of Carabobo to the protests in Caracas, illuminates one of the world’s most striking examples of the promises and pitfalls of a state built on the abundance of a single product: oil.
Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
