Did you know that there is a country in the world whose story is unbelievable?
Once the world's fourth-richest country, it has three times more oil than Russia, more than Iran and Iraq combined, and not even Saudi Arabia, which has the most oil reserves in the world. Not only that, but it also has other abundant resources, such as high-quality iron ore, large gold mines and natural gas, all ranked in the top ten in the world. However, the country is poor, and the people's monthly income is only one or two dollars, which is millions in local currency, but this money cannot buy anything, even toilet paper costs 2.6 million. This country is Venezuela shrouded in strange curses, and today we will talk about the story of this strange country.
Originally a farming agricultural country, Venezuela is located in the north of South America, bordering Colombia, Brazil and Guyana, and mainly makes money by exporting cocoa beans and coffee beans. These agricultural products are popular in the European market and bring Venezuela a certain amount of wealth, but they are only small troubles. In 1878, they built their first refinery and began to venture into the oil industry. At that time, the mainland was still an agricultural country when it was still in the Qing Dynasty, and they had already begun to play with oil.
However, their technical level is very low, there are no oil pipelines, and they can only use tanks to transport oil. This is very inefficient and dangerous, and it is easy to cause environmental pollution. At that time, the most advanced technology was in Europe and the United States, where the second industrial revolution was underway. So, by 1908, Venezuela was completely open to foreign oil companies. Just as neighboring Mexico was making a revolution, British and American oil companies poured into Venezuela. They brought advanced equipment and technology that allowed Venezuela's oil production to grow rapidly. However, their oil production at that time was not much, only more than 1.4 million barrels a year. By comparison, Saudi Arabia's oil production at that time had reached 10 million barrels a day.
The story of Venezuela's oil began in December 1922. That year, Shell drilled an earth-shattering injection outlet at Los Barossos 2 in Maracaibo. The injection port lasted for nine days and spewed out nearly a million barrels of crude oil, making Maracaibo the oil capital.
Saudis in the 30s
Since then, Venezuela's oil production has soared. In six years, annual exports jumped from 1.4 million barrels to 100 million barrels, and Venezuela went from a poor agricultural country to a rich oil country, directly from poor farmers to local tycoons. At that time, Saudi Arabia was still a barren desert, and the Saudi tycoons were still a group of indigenous people who did not wear clothes. It wasn't until 1938, when Mobil discovered a large amount of oil in Dammam, that Saudi Arabia rose. But with oil, there is not the same as wealth.
Venezuela and Saudi Arabia face a problem: they do not have their own oil technology and rely on European and American companies from extraction to processing. For example, in Venezuela, in 30 years, American companies have taken 70% of production, Shell has taken 26%, and Venezuelans can only drink some scraps and cold searing. The Americans are still making a mess on their land, and Venezuelans can only watch. So both Venezuela and Saudi Arabia want to blast foreign companies away. However, they took a very different approach.
The relationship between Saudi Arabia and the United States is a long-term game, with both interests and strategic compromises. Saudi Arabia understood its advantages from the beginning and constantly put pressure on the United States, both to express its demands and to demonstrate its strength. Finally, the opportunity came. In 1971, the United States abandoned its fixed exchange rate against gold, leading to the collapse of the Bretton Woods system. This presents Saudi Arabia with a rare opportunity. In 1972, the United States agreed to involve Saudi Arabia in the management of oil companies. In 1973, Saudi Arabia controlled a quarter of the oil company. In 1974, this increased to 41 per cent. In 1976, Saudi Arabia bought the oil company outright, spending a total of $4 billion, and paid off the debt in installments in 1980. Most importantly, he agreed to the condition that all oil transactions be settled in dollars only. In this way, Saudi Arabia has dominated the global oil market, while the United States has also gained a stable supply of oil and a strong currency.
Venezuela, by contrast, has not been so lucky. The president of Venezuela at the time, called Peres. Perez, like the Saudis, saw that the huge profits were mainly flowing into the pockets of the Americans, and he wanted to drive out this group of oil sellers and buy and sell it himself. Perez first raised the taxes of these enterprises, then demanded high dividends, these foreign companies still did not leave, Perez finally made a big move, directly "nationalized" and forced the acquisition of these enterprises. Only $1.1 billion was compensated. This made the Americans feel very angry and humiliated. In particular, most of Venezuela's oil is sold to the United States, which undoubtedly challenges the interests and dignity of the United States. It doesn't hurt much, it's extremely insulting. Taking advantage of the Americans, can he finish with you? So, since then, the United States and Venezuela have been in a state of antagonism and hostility, sanctioning and interfering with each other, and they have not stopped until now.
For what reason, Perez did not hesitate to offend the United States and lay hidden dangers for the future of Venezuela?
The reason is simple, Perez lacks money. Venezuela is a country with an electoral system, the president is elected by the people, in order to compete for the throne, the presidents will give the voters the greatest temptation during the election campaign, greatly increase welfare, spread money to the people, in exchange for the support of the people, including free medical care, free education, free housing for the poor and a series of other measures.
The South American nation is a not very rational nation, 66% of the population of Venezuela is mixed-race, the people do not care where the government's money comes from, the public does not have too strong a sense of struggle, there is no sense of crisis, like to enjoy life, keen on beauty pageants, sex is open to the first in the world, whoever gives benefits is elected, Perez got money by forcing the nationalized oil company, and then used the money, won the love of the people of the whole country. High welfare has also led to many social problems in Venezuela that does not have the support of high-tech industries and only sells oil, making a good life without hard work, resulting in laziness and corruption, inefficiency of the state, and corruption and incompetence within oil companies.
Perez was fortunate that when he was in power in the 70s, it was when oil prices began to rise. President Peres has made a fortune on soaring oil prices, offering the Venezuelan people as ancestors.
Unfortunately, the good times did not last long, and by the end of the 80s, oil prices plummeted, and the ability to rely on oil to feed the people was no longer effective, and the economy began to decline. When the oil price is high, you give money lavishly, but once the oil price falls, you still send it, and you have to starve to death, because the people have developed a habit for so many years. If you suddenly don't send it, as soon as people vote, you have to get out of the way, so you squeeze toothpaste desperately, and he doesn't dare to stop and catch his breath. But in 1993 Peres was impeached for corruption.
Venezuela welcomed Chávez, the second great man after Bolivar, and eventually succeeded in ruining the Venezuelan economy. Interestingly, Chavez, who opposed Perez, ended up being an upgraded version of Perez. After Chávez came to power, he first changed the constitution so that the president could be re-elected indefinitely, and second, he greatly increased the level of welfare throughout the country, and guaranteed the welfare of the people from beginning to end from the inside out.
He was the savior of the poor, and he built 1 million houses for free. Subsidize gasoline, so that oil prices are cheaper than water, company employees have a bunch of various subsidies, dismissal employees to pay high compensation, short-term leave without deduction of wages, relatives at home can be reimbursed by the company if they are sick, use the dollars sold from oil to buy back a large number of daily necessities, and then sell them to the people at a price below cost, other products must be set according to the government, set prices privately or hoarded without selling, directly send the army to auction on the spot, forcibly lower prices. Large tracts of landlords' land were confiscated and distributed free of charge to the poor, and a large number of foreign-funded enterprises were nationalized.
In early 2011, the Venezuelan government issued new rules: when oil prices exceed $70 per barrel, companies must hand over 80% of excess revenue to the government; When oil prices exceed $80 per barrel and $90 per barrel, the handover ratio reaches 90% and 95% respectively. These moves by the Chávez government have led to a sharp decline in investment and production in Venezuela's oil industry, with seismic exploration and exploratory well work plummeting to 20 percent of the 1990s average, and 60 percent of the rigs completed in 2009 as it did in 2005. Despite rising oil prices, Venezuela's cumulative economic growth since 1999 has been the lowest among the seven largest economies in South America, according to the United Nations.
Venezuela is a country rich in resources, not only the world's largest oil reserves, but also a large amount of gold. Unfortunately, the country's political leaders do not know how to manage the economy. After Chávez came to power, he relied on high oil prices to distribute benefits to the people and won the support of the people. In spite of the opposition of the international community, he carried out socialist reform at home and supported anti-American forces abroad. When he died of cancer in 2013, the people will miss this good president with sufficient benefits. But unbeknownst to me, the country is almost finished.
Maduro, a former bus driver, took over Chávez's mess in 2013. Only a year after taking office, the stall exploded. Maduro's way of governing the country is simple, there is no way. Chávez pays benefits, and I continue to pay benefits. But it is facing a collapse in oil prices.
Venezuela's oil is heavy and expensive to refine, and when the oil price falls below $40 a barrel, it collapses. Maduro has no money to continue being a heroic savior. What to do? I heard that there is a brother called Zimbabwe in distant Africa, and the same recipe has the same taste, and it is printed directly.
But the matter of printing money, often you don't know if you don't print, and when you print it, you find that the speed of printing money is far from keeping up with the speed of inflation. As soon as the money was printed, someone else told you: "The money is finished, you pay the printing fee." "How much?" "It's just that you printed these words for me, and it's almost there."
In 2018, inflation in Venezuela reached a staggering one million percent. People have money in their hands worthless and can't buy anything. Eighty-seven per cent of the country's population is mired in extreme poverty, eating only one meal a day and losing an average of 11 kilograms of weight. People can only search for food in garbage dumps or flee to neighbouring countries to seek refuge. The country has descended into chaos and panic. But in this environment, Venezuela has another surprising achievement: beauty pageants. Venezuela has won the most beauty pageants in the world, more than all other countries combined. You say that the country has both resources and beauties, how did it become like this? What a shame.