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Economy of Venezuela

The petroleum sector dominates the Venezuela's mixed economy, accounting for roughly a third of GDP, around 80% of export earnings, and more than half of government revenues. The oil sector operates through the government-owned Petroleos de Venezuela (PDVSA), which among other things owns the US-based distributor CITGO and its more than 14,000 retail gasoline outlets. Despite the significant oil wealth, 50% of the population live in poverty[5], and thousands are unemployed.
The Venezuelan 50,000 bolívar banknote.Venezuela is also highly dependent on its agricultural sector. Sectors with major potential for export-led growth are production of both coffee and cocoa crops. At one time, Venezuela ranked close to Colombia in coffee production, but in the 1960s and 1970s, as petroleum temporarily turned Venezuela into the richest country in South America, coffee was relegated to the economic back burner. Today, Venezuela produces less than 1% of the world's coffee, most of it consumed by the domestic market. However, Venezuelan coffees are again entering the North American specialty markets. Venezuela's cocoa industry has decayed since the days of Spanish colonialism, when African slaves worked on cocoa estates. The focus of cocoa cultivation has long since moved to tropical West Africa. In recent years, there has been an attempt to resuscitate this industry, as its rare variety of cacao, known as Chuao, is considered the finest and most aromatic in the world and is used in certain single-origin chocolates. The largest Venezuelan fine chocolate producer is El Rey, though some companies such as Savoy (Nestlé) also manufacture chocolate from Venezuelan cacao and export it to Europe.

Venezuela is one of the five founding members of OPEC, the international oil cartel. The initiative of Juan Pablo Pérez Alfonzo, OPEC was proposed in 1960 as a response to low domestic and international oil prices. Since 2005, Venezuela has been a member of Mercosur, joining Brazil, Argentina, Paraguay, and Uruguay; it has yet to gain voting rights.

 

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