the evolution of Economics in Venezuela over the last 30

Running Head : Economics and Venezuela

By

____________________

The transformation of the Venezuelan economy has been substantial , the process is far from complete . The development of domestic industry is still in the embryonic stage . Many years must elapse before a satisfactory communications network is constructed . The modernization of agriculture is only beginning . Despite some diversification an exaggerated dependence upon oil still prevails . Though the current trends are clear , the end of the process of economic change and development is nowhere in sight . Whether Venezuela in the future will be able

to build a modern , viable , and more self-sufficient economy is still an open question

Since the industrial revolution in England , a sizable number of nations have attained relatively high levels of income per capita . International trade and related international factor movements usually have played an important role in the economic development of these countries . In fact international contacts seem to have acted as a mechanism through which economic growth was transmitted from the more developed nations to those less developed . A great number of today 's advanced nations experienced development processes in which the export sector was predominant , or at least contributed significantly to economic growth . In many cases , these exports were primary products . But most of the present peripheral countries , which were more or less integrated in the international economy , were not successful in achieving such goals . These countries have still not attained comparable levels of economic advancement or per capita income , even though their exports seem to have expanded quite significantly

During the period from 1974 to 1985 , the contribution of the oil industry in Venezuela 's external commerce was greater than at any other time in its history and even surpassed , in relative importance , its performance in the prosperous years of the 1950s

The world shortage of petroleum , resulting from the Arab-Israeli Yom Kippur War and the Middle East tensions that continued thereafter , and from the growth of worldwide demand for oil , caused prices of crude oil to more than triple in 1974 (from 3 .42 to 10 .35 per barrel . At the same time , after growing at an annual rate of 5 .4 percent from 1974 to 1978 , the average price of crude oil increased rapidly in 1979 , and ultimately reached a level of 19 .88 per barrel . The increase in oil prices of the later 1970s led to increases in non-OPEC sources of supply as well as declines in world demand . The mid-1980s were therefore characterized by significant declines in the world market price of crude oil . The volume of petroleum exports declined during the 1974-85 period and as world prices fell during the latter part of this period so did the value of petroleum exports . Venezuela 's current account revenues on a gross basis for the petroleum sector appear in the table1 given below .1 .Exports , Foreign Exchange Inflows , and the Terms of Trade , 1973-85 (millions of dollars

Year

1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985

Oil Exports 4...