10 ECONOMIC ACTIVITIES OF VENEZUELA - ECONOMY - 2024

Some of the most important economic activities in Venezuela are oil, mining, agriculture, livestock and fishing. Economic activities are all actions carried out in a society, region or country with the objective of producing goods or offering services necessary for their livelihood and generating wealth.

Each country, according to its geographical situation, climate and social characteristics, develops different economic activities. Although most of the nations of the world are inserted in a capitalist economic model, their economic activities vary not only between one country and another, but also between the various regions of the same country, and also change according to the historical moment in which they are called. cross.

Farmers collect vegetables in Chirgua (Bejuma)

Wars, regional economic crises, natural disasters, good or bad governments and technological advances are some of the factors that affect the emergence or decline of certain economic activities in a given country.

Main economic activities of Venezuela

Primary activities

1- Oil

According to the BCV's Balance of Payments 2015 report, during 2015 94.26% of FOB (Free On Board) goods exports were oil. And the International Energy Agency (IEA) reports that until August 2015, the South American country produced 2.4 million barrels per day.

But this story began in 1875, when the presence of fossil fuel was first discovered at Hacienda La Alquitrana in the border state of Táchira, after which the Compañía Petrolera del Táchira was founded.

By 1914, with a refinery from which kerosene and diesel were obtained, the Sumaque well burst and commercial oil exploitation reached large scales. In fact, in 1920 Venezuela was considered the second largest oil producing country.

Venezuela has an economy based almost exclusively on the exploitation and refining of oil both for domestic consumption and for export, which represents 90% of the country's total exports.

The Venezuelan territory is settled, almost literally, on a large oil field of excellent quality and relative ease of extraction.

This caused that from the end of the 19th century its exploitation began. The wars and the growing demand for oil worldwide gave the country great economic income and this caused the rest of the activities to be neglected.

With the fall in oil prices from the 80s, the economic problems of the South American country began, being almost exclusively dependent on fluctuations in this area. Inflation soared, the country went into debt and entered a spiral from which it has not been able to get out.

However, for 2011 and according to figures from the International Monetary Fund, Venezuela was ranked 34 of the largest economies on the planet.

Unfortunately this has changed a lot in the last 5 years; Currently many other world and Latin American economies surpass it and Venezuela occupies, sadly, the first places only in dire statistics such as inflation (475% only in 2016).

2- Mining

Venezuela has important deposits of iron, aluminum and coal, as well as cement and gypsum. It also exploits gold and salt flats for the production of salt for human consumption.

Iron industry

Venezuela is among the nations with the largest iron reserves in the world and the company in charge of its extraction and processing is Siderúrgica del Orinoco Alfredo Maneiro (SIDOR).

The first iron deposits were discovered in the Pao and Bolívar hills of Bolívar State in 1926 and 1947, respectively.

Between the late 1950s and early 1960s, the Corporación Venezolana de Guayana (CVG) was created to supervise the production and processing of the mineral.

In 1975, the plant reached 4.8 million tons of installed capacity and in 2002, it reached a record of 2.3 million tons in exports.

Later, they are privatized and after a history of success and growth, labor conflicts arise that lead to their nationalization in April 2008, after which production is reactivated to less than half of its installed capacity.

Since then, production has progressively decreased, affecting the national economy and that of that state in southern Venezuela.

Aluminum industry

Bauxite reserves, that element so important to extract aluminum, are also large in Venezuela.

Aluminio del Caroní (Alcasa), is the state industry that is responsible for the supervision of all processes related to this metal, under the tutelage of the National Aluminum Corporation (Corpoalum).

This industry, with an installed capacity to produce 430 tons per year, is responsible for producing extrusion cylinders, soft sheets, paper and aluminum ingots for internal consumption and export.

The latter stopped doing it between 2013 and 2014, to resume it in 2015 on a very low scale and by mandate of the national government.

It is an industry with low production costs because it works with hydroelectric energy and with prices that have suffered a consistent decline since 1991, but which represents the second Venezuelan export product.

3- Agriculture

Most of the agricultural production is for domestic consumption. The main products grown are corn, rice, coffee, tobacco, sugar cane and cocoa, this being of excellent quality and it is even exported for the manufacture of Swiss chocolates.

4- Livestock and fishing

Mainly cattle and pigs are raised, as well as poultry such as chickens and their derivatives.

By having a very large coastal area, Venezuela also has an important participation in the extraction of various products from the sea.

Primary activities represent 4% of GDP.

Secondary activities

5- Cement

Venezuela has an important cement industry, currently almost entirely stopped, mainly due to the state's price regulation policies.

6- Food and drinks

The main private industry is dedicated to the production of food from the basic food basket, as well as alcoholic beverages, the most important being beer and rum.

Coffee growing

Venezuela is a country with the ideal climatic conditions and soil for growing coffee.

Traditionally, it was the export crop par excellence, however this situation has changed in recent years for various reasons, which means that the domestic demand for this product is not satisfied today.

The current income from coffee exports is around 10 million dollars.

The main states of the country where coffee is grown are: Portuguesa, Lara, Táchira, Mérida, Trujillo, Monagas, Sucre, Yaracuy and Guárico.

Cocoa cultivation

Cocoa was the first item of production and export of the Venezuelan economy between the last years of the 16th century and the first of the 19th century.

In 1631, more than 2 thousand bushels of cocoa (100 thousand kilograms of dried almonds) were exported, and the internal demand was met (estimated in the same quantity).

Over the years, external demand increased and cocoa prices improved, so Venezuela increased its production and exports.

But then, with the increase in coffee exports and the decrease in the labor force that came with the abolition of slavery, the value of cocoa exports was between 6-9% of the total value of exports of cocoa. Venezuela.

Between 1995 and 2007, the average cocoa production was 16,811 tons per year.

The Great Depression of the 1930s and the rise of the oil industry diminished the attention given to this crop, despite being recognized even today as one of the best cocoas in the world.

Corn crop

The precipitation and radiation that Venezuela receives during the year are two decisive factors to make it a fertile territory for the cultivation of corn, especially in its western Plains.

Venezuela was self-sufficient in this area until 2007. In 2012, it was only possible to produce 55% of the internal demand (about 773 tons).

Currently, these figures could be much lower given the conditions of scarcity and / or shortage of the item in the domestic market.

7- Metallurgical, steel and petrochemical industries

These industries allowed the socioeconomic development of the south of the country. They had their peak from the 70s of the last century.

Currently they are very deteriorated and their productive capacity reduced to a minimum.

8- Hydroelectric industry

Venezuela has important hydroelectric and thermoelectric power plants. However, its plants lack adequate maintenance, so the electricity supply of the population is of poor quality.

Secondary activities represent 35% of GDP.

Tertiary activities

9- Central government products and services

In an increasingly centralized State, the administration in the public sector is growing by absorbing functions that do not correspond to it and that go through the production and distribution of food, basic public services and transportation.

10- Tourism

The tourism sector that was once important, since Venezuela has all types of unique climates and landscapes, is practically paralyzed due mainly to the high rate of insecurity that discourages foreign tourism and the difficult economic situation that also complicates internal movement.

Tertiary activities represent 61% of GDP.

Fortunately, the landscapes and natural riches of this beautiful country remain intact despite the erratic policies of nefarious governments. Venezuela has a long way to go towards the recovery of its economy.

Primary, secondary and tertiary economic activities

Primary economic activity is understood to be all that which uses natural resources. The main and most common are agriculture and livestock, fishing, mining and forestry; Wind, hydroelectric or solar power generation can also be included in this group.

Secondary activities include all those that are derived or are a consequence of the previous primary activity.

That is, the conversion that is made to what is obtained by cultivating the land, raising livestock, operating a mine or selling energy. In short, the secondary activity transforms raw materials into manufactured products.

Tertiary activities are the services provided to carry out primary and secondary activities; They are very numerous, but one can mention transportation, sales, administration, accounting jobs, advertising, insurance companies, banks, telephone and internet services, and so on.

Under these initial premises, we will then comment on which are the main economic activities of Venezuela.

But above all, we must take into account the situation of political, social and economic crisis that the country has been going through for a decade and that is currently facing its highest point. Although the main economic activities are discussed below in theory, one must be aware that in practice the reality is overwhelmingly adverse.

The lack of official figures, both internal and from international organizations, makes it difficult to obtain current and objective information on the Venezuelan economic situation.

But it is known that the oil industry, the country's main economic supporter, has reduced its crude oil production and export capacity by approximately a quarter.

References

1. Economy of Venezuela. Recovered from es.wikipedia.org
2. Venezuela Economic Activity Map. Recovered from gifex.com
3. Aura Acosta and others (2015). History of oil. Origin and development in Venezuela. Recovered from es.scribd.com
4. Humberto García Larralde (2000). Limitations of the current economic policy: the economic ideology in the deterioration of the Venezuelan welfare. Published in the Venezuelan Journal of Economics and Social Sciences Vol. 6 N ° 1, pp. 85-153. Recovered from s3.amazonaws.com
5. Pedro Palma (2011). Risks and consequences of rentier economies. The case of Venezuela. Recovered from scielo.org.mx.