Venezuela's market economy is dominated by its principal natural resource: oil. Venezuela's oil reserves were discovered in 1914, and swiftly transformed the country from a poor nation into one of the richest in South America. The biggest boom came in the 1970s when OPEC, an organization co-founded by Venezuela, effected a four hundred per cent increase in oil prices which quadrupled the country's income. GNP grew rapidly, and a steady stream of jobseekers flowed into the country from neighboring nations. In 1982, oil revenue reached its peak. With earnings of US$19.3 billion, it accounted for more than 95 per cent of the country's total exports.
However, amidst the global recession of the 80s, oil prices collapsed. Venezuela's export revenue plummeted, leaving the government with little means to repay the substantial sums borrowed from foreign banks to finance imports in the 70s. GNP declined, and the economy became weak and unstable. Only in 1997 did it begin to show some signs of recovery.
With the singular importance of oil as a source of income, other sectors of the economy were overlooked. The fisheries have yet to be fully developed, although the recent introduction of technology within the fishing industry is improving yield and encouraging growth. Anchovies are the main catch, followed by tuna, shrimp and sardines. Agriculture has never been particularly important; only 4% of the total land area is allocated for farming, of which one-third lies uncultivated. Although agriculture employs almost 12 per cent of the labor force, Venezuela is not self-sufficient and imports most of its foodstuffs. Major domestic crops include bananas, maize, sugarcane, coffee, cocoa and tobacco.
There is an abundance of natural resources other than oil in Venezuela, and over the last 20 years there has been considerable progress in the mining industry. Large amounts of iron ore are mined, as well as diamond, coal, bauxite and gold. Heavy industry has also been expanded, thanks to the availability of local raw materials and cheap energy.
Undoubtedly, the most beneficial industry after oil is tourism. With its tropical climate and diverse landscape, Venezuela has become a popular destination with foreign visitors, and the numbers of tour operators and travel agents within the country are rapidly increasing. The majority of visitors to Venezuela come from Germany, Holland, England, Belgium and Canada.
For decades, Venezuela has enjoyed a positive trade balance. It exports mainly to the US, Puerto Rico, the Netherlands and Germany, and imports mostly from the US. Major imports are machinery, transport equipment and chemicals, and the chief export is crude oil.
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