There are just a handful of countries as blessed as Venezuela. It has the largest oil reserves of any country on Earth. It has abundant reserves of natural gas, coal, timber, and gold. And as if this weren’t enough, it also has miles of fertile land and an ideal geographical location to export all of its blessings. Yet, there is a popular joke around here that says: “Why was God so generous to us? He gave us everything, even perfect weather, and beautiful beaches. Well, because he also gave us our politicians and a society that has not been capable of taking care of its nation.”
Personally, I have always found this “joke” dangerously misleading, because it implies that Venezuela is a rich country in the first place. Countries are not rich because of their natural resources. Developed nations are rich because they have dynamic economies, with innovative private sectors, an impressive stock of human capital, and institutions that incentivize people to become responsible and productive citizens — plus governments willing to complement the market by providing infrastructure, collective security, a well-functioning educational system, and other public goods that are essential for economic development. In Venezuela, unfortunately, we have neither markets nor a well-designed and efficient public sector. This, rather than the gross mismanagement of our natural resources, is the reason we are undeveloped.
One need not look far for the proof. This year, Venezuela officially became the first resource-rich nation without fuel, in a crisis that has paralyzed the country like never before. Currently, fuel can only be procured on the black market, at a staggering price of nine dollars a gallon. This would be a worrisome situation for any country. But Venezuela’s minimum wage is less than five dollars a month, meaning virtually no Venezuelans can afford fuel. It’s the latest indignity in a years-long political crisis that has seen the country grow accustomed to daily power blackouts, an unreliable water supply, and chronic shortages of food and medicine.
[Read It All]
