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Venezuela, officially the Bolivarian Republic of Venezuela, is a country located on the northern coast of South America. It is known for its large proven oil reserves. Before oil was discovered, Venezuelan production was primarily agriculture, such as coffee and cocoa. After the first commercial drilling for oil in 1917, oil production increased drastically due to the oil boom of the 1920s and was later furthered by World War II, as Venezuela supplied oil to the United States. From 1958 to 1989, democratic leaders attempted to use the large oil revenues to invest in other industry through various policies such as import substitution and other programs designed to diversify the Venezuelan economy away from a highly specialised export range. These attempts, for the most part, were unsuccessful as Venezuelan government revenues continued to be highly volatile due to the fluctuating price of oil, which was reflected especially throughout the 1980s due to the oil price crash. After struggling with fiscal debts due to a variety of trade protection measures and other policies, the President of 1989, President Andrés Pérez, worked with the International Monetary Fund in an attempt to rectify some of the issues plaguing the Venezuelan government. Perez was eventually unsuccessful due to political instability due to proposed austerity measures, and Hugo Chávez was later elected in 1998, after a defeat of both major political parties. The Chávez government begun enacting various socialist programs, such as free education and healthcare. These programs would continue up until Chávez's death in 2013. President Nicolás Maduro, Chávez's successor, was elected on 14 April 2013 and pledged to continue Chávez's work. However, due to hyperinflation, shortages of food and medicine and political instability, about 3 million Venezuelans have fled the country since 2015. Economic and political events from 1913–2002 1913–1958: Military rule, beginning of oil production In 1913, Dictator Juan Vicente Gomez issued a concession to explore twelve of the twenty Venezuelan states for oil to the Royal Dutch-Shell Oil Company. The first commercial drilling for oil in Venezuela occurred in 1917, however the existence of oil was known before this. Along with the oil boom of the 1920s, World War I was important in triggering Venezuelan oil production[1]. Shortly after this, the oil boom of the 1920s meant Venezuela became the wealthiest state in Latin America. Investment and oil exports increased tremendously during the period from 1920 to 1935. The share of oil exports on total exports in Venezuela increased from 1.9% to 91.2% this period due to the commercialisation of Venezuelan oil. During this period, agricultural production declined drastically, resulting in an economic phenomenon known as ‘The Dutch Disease’, where a commodity increases income for one sector of the economy to the detriment of other sectors due to a strong currency. In 1936, the Venezuelan government first introduced the idea named ‘Sembrar el petróleo’, meaning ‘to sow the oil’. The idea of this was that oil revenues were fleeting, and so reinvesting oil income into agriculture and other industry would benefit Venezuela. This ended up having limited effects in the economy as World War II broke out and Venezuela continued supplying large amounts of oil to the United States. Through the 1950s, the Venezuelan economy grew at a healthy rate despite rampant corruption and deceit for foreign companies and the indifferent stance of the government. 1958–1989: Democracy, creation of OPEC In 1958 Venezuela elected President Rómulo Betancourt in a presidential election after a military coup ousted the first democratically elected president of Venezuela, President Rómulo Gallegos. Rómulo Betancourt's government founded the Central Office of Coordination and Planning (also known as Cordiplan) which issued multiyear plans with broad economic development objectives Throughout his tenure, the government pursued social projects such as improving health, education and access to potable water, an effort propelled by the Democratic Action Party that Rómulo Betancourt belonged to. These efforts were mainly focused on improving education and health in an attempt to diversify Venezuelan exports away from oil to encourage other industry to develop. Despite these efforts, the government made little progress towards diversifying its own revenue streams, passing reforms of its oil policy with the Hydrocarbons Act of 1943. The Hydrocarbons Act changed the basis of oil income from concessions and customs revenue to taxes based on income from mining. Coupled with Venezuela's oil revenues and thus an increasing dependence on them, this act led to a heavy reliance on government oil revenues rather than conventional revenues such as income tax. As well as this, in 1960 the Organisation of the Petroleum Exporting Countries (OPEC) was created. Venezuela, along with Iran, Iraq, Kuwait and Saudi Arabia were its founding members. Despite the creation of OPEC in 1960, they only began setting the oil price in 1973. To do so, the member countries seized their domestic production of oil to control the price and quantity at which oil was exported at in each member country. In Venezuela, the government resolved to stop giving out concessions, and later semi-nationalised its oil and steel industries in 1973. From 1972 to 1974, world oil prices rose drastically and almost quadrupled Venezuelan government revenue. During this period President Carlos Andrés Pérez was elected and pledged to make Venezuela a developed country within a few years, known as 'La Gran Venezuela', through policies revolving around financing state-owned and enterprise-led industrialisation in order to facilitate heavy import substitution as a rebirth of the ‘sow the oil’ campaign as well as price controls, income increases and fighting poverty. Import substitution industrialisation (ISI) was a popular method of industrialisation in the 1970s, especially in Latin America. It, ideally, would stimulate economic growth and development through establishing (and protecting) domestic production of goods that were otherwise imported. To further the ‘sowing of the oil’, government spending increased by 26 per cent per year and established many new state-owned businesses as well as purchasing private ones in an effort to stimulate economic growth and development, and further the policy of import substitution. In 1976, the government fully nationalised the Venezuelan oil industry with the creation of 'Petróleos de Venezuela' (Oils of Venezuela, or PDVSA). In its first year of operation, Petróleos de Venezuela had three affiliates known as Lagoven, Maraven and Corpoven. Together, Petróleos de Venezuela produced a total of 2.3 million barrels of oil a day in its first year. Despite the oil boom of the 1970s greatly benefiting Venezuela in terms of export revenues and development, due to large government pr.... Discover the Iselin Asedotter Stronen popular books. Find the top 100 most popular Iselin Asedotter Stronen books.