Venezuela is home of the world’s largest known oil reserves, but sales are plummeting ©Federico Parra/Getty Images
Venezuela is home of the world’s largest known oil reserves, but sales are plummeting ©Federico Parra/Getty Images

Country spotlight: Venezuela

10 May 2019

Population

32,713,166

Area

916,445km²

The helicopter view

The country, officially the Bolivarian Republic of Venezuela, is on the northeast coast of South America, bordering Brazil, Colombia and Guyana. Most inhabitants live in the north, especially the capital, Caracas. Venezuela has the world’s largest known oil reserves.

Economic outlook

In 2018, Venezuela saw overseas oil sales fall to the lowest levels in almost three decades. Top exports are crude and refined petroleum and acyclic alcohols. However, it is facing an economic and humanitarian crisis, compounded by US financial sanctions, while creditors have sought to seize assets including oil cargoes.

Biggest investors

The Foreign Direct Investment (FDI) flow towards Venezuela has decreased in past years, according to Santander Trade analysts. Venezuela is listed 188th out of 190 countries in the 2019 Ease for Doing Business ranking, established by the World Bank.

Supply chain issues

Initiatives appear to depend on developments in the crisis the country has faced since the death of president Hugo Chavez in 2013. Around 150 multinationals maintain their presence. Reports from Bloomberg say they have interrupted production and laid off workers, while providing them with a minimum wage.

Challenges

Hyperinflation, political instability, US sanctions, corruption and price explosions mean the economy is expected by the IMF to contract by almost a fifth this year.

Bottom line

The country is suffering an economic crisis, and a lot is now riding on politics. Having claimed victory over one coup attempt already this year, president Nicolas Maduro’s future remains uncertain.

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