Venezuela has long been dependent on oil revenues, and the Bolivarian revolution of Hugo Chavez did not fundamentally alter that situation,” explains Jo-Marie Burt, an associate professor of political science and Latin American Studies at the Schar School of Policy and Government at George Mason University. “The decline of oil prices, the massive social spending of the Chavez and Maduro governments, U.S. sanctions, and a combination of economic mismanagement and corruption at the top have contributed to the economic collapse.”
Venezuela's crisis has been deepened by U.S. sanctions against the Venezuelan oil industry. In March, it also sanctioned the Venezuelan gold mining industry, and in April, it also imposed sanctions against the Central Bank of Venezuela, cutting off that institution's access to U.S. currency and limiting its ability to conduct international transactions, to put even more pressure upon Maduro's regime.
Here are some of the key moments in that saga.
An undated photograph of the derricks in Maracaibo oil fields in Venezuela.
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1922: Oil Is Discovered
An oil well in the Maracaibo basin of western Venezuela begins gushing 100,000 barrels of oil per day, indicating the massive reserves beneath the nation’s surface. Then-dictator Gen Juan Vicente Gomez allows more than 100 foreign oil companies into Venezuela and, by 1928, Venezuela becomes the world’s second-biggest petroleum exporter.
The influx of oil revenues enriches Venezuela’s military regime, especially after it enacts a 1943 law requiring foreign oil companies to turn over half their profits. But the money only offers a band-aid on the nation’s underlying problems.
“Even before the rise of the oil industry Venezuela did not have a highly productive agricultural sector,” says Miguel R. Tinker Salas, professor of Latin American studies and history at Pomona College in California, and author of Venezuela: What Everyone Needs to Know and The Enduring Legacy: Oil, Culture, and Society in Venezuela. “Land was monopolized by a handful of powerful families, infrastructure was lacking and the country lacked a nationally integrated economy.” But, Salas explains, oil and the rise of cities such as Caracas enabled people to flee rural poverty.
Venezuelan President Romulo Betancourt, circa 1958.
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1958: Venezuela Elects President Betancourt
After the overthrow of brutal, corrupt Venezuelan dictator Marc
