Venezuela's path from 4th to 82nd wealthiest nation

Despite having the world's largest oil deposits at about 1.3 trillion barrels, Venezuela has taken socialism's path downward from the 4th to the 82nd wealthiest nation on Earth.

Venezuela in 1950 had the fourth largest domestic GDP per capita at $7,424 per capita versus $9,573 for the United States as the world's leader.  The United States is still the world's leader 2019 at $65,061, but Venezuela has collapsed to just $3,100.

Oil was discovered in Venezuela's Orinoco Belt at the beginning of the twentieth century.  A 44-mile-wide deposit zone stretching for 375 miles along the Orinoco River toward the Atlantic Ocean has the world's largest proven reserves at 302 billion barrels.

The shallow depth deposits can be open-pit mined with steam shovels.  By adopting the superheated "Steam Assisted Gravity Drainage" (SAGD) that has been employed in Alberta, Canada could double reserves to about 652 billion barrels.

With world oil consumption at 35 billion barrels a year and a price of $60 a barrel, Venezuela's "proven reserves" would be worth $18 trillion and satisfy world demand for almost nine years.  With SAGD investment, Venezuela oil would be worth $39 trillion and satisfy world demand for two decades.  But annual production peaked in 1997 at 1.2 billion barrels, and last year was down to 500 million barrels, $30.7 billion revenue.

The sad decline began with the election of Colonel Hugo Chávez in 1997 as Venezuela's president.  Winning with 56 percent of the vote, he blamed exploitation by the rich to push through a constitutional restructuring to create a true socialist state.

Over the next 15 years, he dictatorially nationalized huge swaths of the Venezuela economy, including $30-billion stakes in five Orinoco Belt oil projects, then forced ExxonMobil Corp., ConocoPhillips, France's Total SA, and Norway's Statoil Hydro ASA to abandon operations and file arbitration claims.

Chevron Corporation and Britain's BP PLC accepted their ownership diluted to minority interests, but Chávez then implemented a windfall tax of 50 percent for oil prices over $70 per barrel and 60 percent on oil over $100.  He later nationalized a natural gas field from Williams Company worth about $420 million and seized eleven U.S.-owned oil rigs.

Implementing a 2001 law giving the state the right to take unproductive farms or those that lacked proper titles, Chávez expropriated millions of acres of farmland, including 494,000 acres of land owned by British meat-producer Vestey Foods.  Chávez also nationalized Cargill's rice mill and two large nitrogen fertilizer plants.

Chávez also took over banks, like Spain's Banco Santander Venezuela operations, and nationalized international-owned cement, glass, and other industrial factories.

With redistribution of farms and free housing and food coupons for the poor, inflation under Chávez averaged 23 percent per year until he died in office in 2013.  Under his heir, Nicolás Maduro, inflation jumped to 240 percent through 2016, then 830,000 percent in late 2018, and is currently trending at about 10 million percent.  

At least 2.3 million people, about one in 12 residents, are estimated to have fled Venezuela since 2015.  Local people have reported children starving to death, as government food boxes under the "CLAP" program are often limited to sugar, pasta, and powdered milk.

Following a request from opposition leader Juan Guaidó, who declared himself interim president, the United States announced on February 1 that it will aid President Guaidó by mobilizing and transporting humanitarian aid in distribution centers in neighboring border towns for the people of Venezuela.

Maduro is accusing Guaidó of mounting a U.S.-backed coup and requested support from Iran, China, and Russia.  But with tens of thousands of protesters in the streets of the Caracas, Guaidó claimed he has had secret meetings with the military.

Democrat 2020 presidential contenders who advocate America becoming a socialist nation, reportedly drew the wrath of Miami's immigrant community that is fully aware of the dire economic disaster in Venezuela by voicing support for Maduro.

Vermont's Sen. Bernie Sanders tweeted that the United States "has a long history of inappropriately intervening in Latin American nations; we must not go down that road again."  Hawaii Rep. Tulsi Gabbard tweeted: "The United States needs to stay out of Venezuela.  Let the Venezuelan people determine their future.  We don't want other countries to choose our leaders – so we have to stop trying to choose theirs."

But Florida's Democratic Party tried to calm Hispanic outrage by tweeting: "Florida Democrats stand in support of the people of Venezuela marching today to demand an end to the illegitimate Maduro's [sic] regime and the restoration of democracy.  We denounce the ... legitimacy of the Maduro's regime and his efforts to remain illegally in power."

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