by Dan Miller.

Venezuela is in the news this month owing to very large and violent demonstrations in Caracas and other parts of the country. The immediate causes of unrest are: 1) worsening inflation and a scarcity of basic goods, both the result of government mismanagement of the economy, and 2) ever tightening restrictions on public access to independent news sources.

It isn’t clear how to resolve the impasse between President Nicolás Maduro, whose party still enjoys substantial support because of its populist record of aid to the poor, and an opposition divided between advocates of democracy and supporters of a restored oligarchy. However one issue that will have to be addressed no matter who ends up in control is the appropriate use of Venezuela’s oil revenues. Venezuela is a perfect example of “the resource curse.” It has the largest proven petroleum reserves of any nation on earth which should make it one of the richest and happiest.  However as has happened in many other places, the gusher of money has been used by governments of both left and right to reward friends, buy off opponents, fund projects without regard to their sustainability or popular support, and in general corrupt the political system. Other sad examples include Nigeria, Sudan, and several oil rich states of the Middle East.

Maduro’s quixotic predecessor, Hugo Chávez, spent lavishly but not always wisely on public projects in poor neighborhoods and to create an anti-U.S. diplomatic bloc in South America. Chávez’s oligarchic predecessors spent the oil money more cautiously, but only in ways that benefitted the middle and upper classes. Until Venezuelans agree on the proper use of the nation’s oil revenue, it’s likely that Maduro’s government, and any government that succeeds his, will struggle with the curse of oil.

To find out more about the background to the protests: “What lies behind the protests in Venezuela?” (BBC)

Get the latest news: “Venezuela – Chronology of Coverage” (New York Times)

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Professor Daniel Miller has been a member of the Calvin History Department since 1983. He regularly teaches a survey of Latin American history and has taken students there on several January Interim trips. His research interests include the history of Protestantism in Latin America and U.S.-Mexican relations.