Trump pledges U.S. investment in Venezuela, but oil and politics cloud prospects

After the audacious U.S. capture of Nicolás Maduro early this month, President Trump promised tens of billions of dollars of American capital would pour into Venezuela and said the intervention was "already making Venezuela rich and safe again," The New York Times reported. The paper observes that history suggests foreign capital alone is unlikely to guarantee success.

Venezuela’s economy has tended to do best when investment came together with high oil prices and a government responsive to public anger over corruption and inequality — factors Mr. Trump cannot control, experts in the article say. The article traces cycles in Venezuela’s recent past: oil nationalization in the 1970s coincided with a boom when prices were high, then left a bloated state and corruption that made the country vulnerable to price drops.

Reforms and foreign investment in the 1990s revived business activity until an oil-price collapse in 1998 helped propel Hugo Chávez to power; rising oil revenue later under Chávez was distributed more broadly, but falling prices and policy failures eventually eroded that momentum.

Today, the piece notes, Venezuela has endured more than a decade of wide-scale corruption and hardship and oil trades around $60 a barrel. Secretary of State Marco Rubio has said the United States will control future oil revenue to ensure it benefits the Venezuelan people, but some experts are skeptical that increased oil production under the current leadership would lift the poor.

Key Topics

Business, Venezuela, Donald Trump, Nicolas Maduro, Hugo Chavez, Oil Prices