Potential Economic Relief for Venezuela Following US Operation to Capture Maduro
Wall Street Journal’s Allysia Finley weighs in on California’s welfare spending, Minnesota Gov. Tim Walz ending his re-election bid, and the left’s response to the Maduro capture on Varney & Co.
The audacious U.S. special forces raid to capture Venezuelan leader Nicolás Maduro and bring him to the U.S. to face charges related to drugs and weapons trafficking could potentially lead to economic relief for average Venezuelans struggling under the regime’s socialist economic policies.
Venezuela’s economy is heavily reliant on oil exports and has experienced a sharp downturn over the last decade. Mismanagement of the state-owned oil company has caused production to plummet, while the broader economy has struggled under sanctions and socialist policies.
From 2014 through 2020, the Venezuelan economy contracted annually in terms of real gross domestic product (GDP), with declines exceeding 15% in 2016, 2017, and 2018, and staggering drops of 27% or more in both 2019 and 2020, according to data from the International Monetary Fund.
Jorge Jraissati, president of the Economic Inclusion Group, told FOX Business that these dynamics have created extremely challenging economic conditions for average Venezuelans. He stated, “Average wages in Venezuela are extremely low in real terms. The official minimum wage remains frozen at 130 bolivars per month, equivalent to less than $1 per month at common exchange rates.”
CAPTURED VENEZUELAN DICTATOR MADURO PLEADS NOT GUILTY BEFORE JUDGE CUTS OFF OUTBURST
Venezuela’s economy faltered under the Maduro regime amid a decline in oil production. (Javier Campos/NurPhoto/Getty Images)
“Even when combined with government bonuses such as food or hardship stipends, many public sector workers only reach roughly $160 per month, while private sector employees often earn around $230-$240 per month on average,” Jraissati explained.
“Household surveys also show average family income clustered in the low $200s per month in many regions,” he added. “These levels sit well below the cost of a basic food basket and essential goods. This is why 70% of people are in poverty.”
Jraissati emphasized that Venezuela’s economic struggles in recent decades starkly contrast with the economic dynamism the country experienced for much of the last century before Hugo Chávez’s regime rose to power in 1998, implementing socialist economic policies over the ensuing decade.
AFTER MADURO, VENEZUELA FACES HARD CHOICES TO REBUILD ITS SHATTERED ECONOMY
Average Venezuelans have faced rampant inflation and poverty amid the economic decline of recent decades. (Federico Parra / AFP via Getty Images)
“For much of the 20th century, Venezuela was not a poor country,” Jraissati noted. “Between 1920 and 1980, it was the fastest-growing economy in the world, with GDP per capita expanding at an average of 6.4% per year, placing it among the 20 richest nations globally.”
“Living standards reflected this reality. Broad access to consumer goods, rising wages, and sustained middle-class expansion were the norm. That trajectory was reversed by socialist economic policies,” he added.
Chávez died in 2013 and was succeeded by Maduro, who consolidated power to establish a dictatorship through fraudulent and undemocratic elections.
MADURO’S CAPTURE PUTS CUBA’S VENEZUELAN OIL-DEPENDENT ECONOMY AT RISK
Venezuela’s oil production fell amid mismanagement of the state-owned oil company by the Maduro regime. (Bloomberg/Getty Images)
The dire economic conditions have fueled an exodus of Venezuelans over the last decade, as rampant hyperinflation led to shortages of necessities like food and medicine. Inflation peaked at over 130,000% in 2018, though it slowed to 190% as of 2023, according to the central bank.
“Since 2013, Venezuela has lost roughly 70% of its GDP, the largest peacetime economic collapse in the modern history of the western hemisphere,” Jraissati stated. “Hyperinflation, expropriations, price controls, and currency controls destroyed productive capacity and household purchasing power.”
Venezuela’s oil industry has experienced a significant decline over the past 20 years. Jraissati added that broader economic collapse “occurred despite an extraordinary windfall” from oil exports.
“Between 2003 and 2013, the country received close to $1 trillion in oil revenues,” he noted. “Today, more than 80% of Venezuelans live in poverty, and extreme poverty affects roughly half the population. This does not even count the 8 million people who left.”
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Data from the Organization of the Petroleum Exporting Countries (OPEC) shows that Venezuelan production of crude oil was consistently above 2 million barrels per day from 2005 through 2016, when it began a marked decline—dipping below the 1.5 million barrel threshold in 2018 and falling under 1 million barrels in 2019.
Wall Street Journal’s Allysia Finley weighs in on California’s welfare spending, Minnesota Gov. Tim Walz ending his re-election bid, and the left’s response to the Maduro capture on Varney & Co.
The audacious U.S. special forces raid to capture Venezuelan leader Nicolás Maduro and bring him to the U.S. to face charges related to drugs and weapons trafficking could potentially lead to economic relief for average Venezuelans struggling under the regime’s socialist economic policies.
Venezuela’s economy is heavily reliant on oil exports and has experienced a sharp downturn over the last decade. Mismanagement of the state-owned oil company has caused production to plummet, while the broader economy has struggled under sanctions and socialist policies.
From 2014 through 2020, the Venezuelan economy contracted annually in terms of real gross domestic product (GDP), with declines exceeding 15% in 2016, 2017, and 2018, and staggering drops of 27% or more in both 2019 and 2020, according to data from the International Monetary Fund.
Jorge Jraissati, president of the Economic Inclusion Group, told FOX Business that these dynamics have created extremely challenging economic conditions for average Venezuelans. He stated, “Average wages in Venezuela are extremely low in real terms. The official minimum wage remains frozen at 130 bolivars per month, equivalent to less than $1 per month at common exchange rates.”
CAPTURED VENEZUELAN DICTATOR MADURO PLEADS NOT GUILTY BEFORE JUDGE CUTS OFF OUTBURST
Venezuela’s economy faltered under the Maduro regime amid a decline in oil production. (Javier Campos/NurPhoto/Getty Images)
“Even when combined with government bonuses such as food or hardship stipends, many public sector workers only reach roughly $160 per month, while private sector employees often earn around $230-$240 per month on average,” Jraissati explained.
“Household surveys also show average family income clustered in the low $200s per month in many regions,” he added. “These levels sit well below the cost of a basic food basket and essential goods. This is why 70% of people are in poverty.”
Jraissati emphasized that Venezuela’s economic struggles in recent decades starkly contrast with the economic dynamism the country experienced for much of the last century before Hugo Chávez’s regime rose to power in 1998, implementing socialist economic policies over the ensuing decade.
AFTER MADURO, VENEZUELA FACES HARD CHOICES TO REBUILD ITS SHATTERED ECONOMY
Average Venezuelans have faced rampant inflation and poverty amid the economic decline of recent decades. (Federico Parra / AFP via Getty Images)
“For much of the 20th century, Venezuela was not a poor country,” Jraissati noted. “Between 1920 and 1980, it was the fastest-growing economy in the world, with GDP per capita expanding at an average of 6.4% per year, placing it among the 20 richest nations globally.”
“Living standards reflected this reality. Broad access to consumer goods, rising wages, and sustained middle-class expansion were the norm. That trajectory was reversed by socialist economic policies,” he added.
Chávez died in 2013 and was succeeded by Maduro, who consolidated power to establish a dictatorship through fraudulent and undemocratic elections.
MADURO’S CAPTURE PUTS CUBA’S VENEZUELAN OIL-DEPENDENT ECONOMY AT RISK
Venezuela’s oil production fell amid mismanagement of the state-owned oil company by the Maduro regime. (Bloomberg/Getty Images)
The dire economic conditions have fueled an exodus of Venezuelans over the last decade, as rampant hyperinflation led to shortages of necessities like food and medicine. Inflation peaked at over 130,000% in 2018, though it slowed to 190% as of 2023, according to the central bank.
“Since 2013, Venezuela has lost roughly 70% of its GDP, the largest peacetime economic collapse in the modern history of the western hemisphere,” Jraissati stated. “Hyperinflation, expropriations, price controls, and currency controls destroyed productive capacity and household purchasing power.”
Venezuela’s oil industry has experienced a significant decline over the past 20 years. Jraissati added that broader economic collapse “occurred despite an extraordinary windfall” from oil exports.
“Between 2003 and 2013, the country received close to $1 trillion in oil revenues,” he noted. “Today, more than 80% of Venezuelans live in poverty, and extreme poverty affects roughly half the population. This does not even count the 8 million people who left.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Data from the Organization of the Petroleum Exporting Countries (OPEC) shows that Venezuelan production of crude oil was consistently above 2 million barrels per day from 2005 through 2016, when it began a marked decline—dipping below the 1.5 million barrel threshold in 2018 and falling under 1 million barrels in 2019.
