The Oil Economy Report

Running head : OIL ECONOMY REPORT

Oil Economy Report

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Venezuela 's Oil-Based Economy

Cesar J Alvarez (2009 . Council on Foreign Relations Summary

Venezuela oil reserves are among the top ten in the world . Oil export contributes to 80 of her export and contribute one third of her GDP Much of the oil from Venezuela is exported to US . The government in this country owns 60 shares in the oil production projects in the country . It was in 2006 President Hugo Chavez announced nationalization

br of oil fields which were previously run by foreign companies . However this economy has been experiencing some political instability (e .g . 2002 failed military coup ) and strike in state owned oil company PDVSA (Petruleos de Venezuela , S .A ) However rising of oil prices has helped this economy to recover . This economy registered a growth rate of 8 .4 in 2007 . Venezuela has increased her social spending which has greatly reduced unemployment and poverty . On the other hand inflation has increased to more than one digit . Income inequality has also increased Financial crisis and drop in oil prices did not spare the oil sector in this economy . PDVSA lost a 5 billion line of credit . The country is rated poorly as far as transparency in spending the oil money is concerned . This country also supports many Caribbean countries by offering oil at preferential price . Her military spending has also been relatively high . The country produces approximately 2 .4 million barrels per day . Venezuela is...