In the 1970s, Venezuela was one of the richest countries in the Americas. Its oil paid for modern highways, universities, hospitals, and a middle class that shopped, traveled, and lived much as middle-class families did in the United States or Europe. Visitors to Caracas found a confident, oil-rich capital, and Venezuelans themselves believed, with good reason, that their country’s wealth would last. Half a century later, that same country became a byword for economic collapse. Supermarkets stood empty, hospitals ran out of medicine, the currency lost almost all its value, and millions of people left their homes in the largest migration in modern Latin American history. This film traces that journey from riches to rags, and it asks a question that still divides economists, historians, and ordinary Venezuelans: how did a country sitting on the world’s largest proven oil reserves end up unable to feed itself? The answer begins with oil, and with the blessing and the curse that oil can be. Venezuela’s economy was built on a single export, and for decades that export paid for almost everything. When oil prices were high, the government could spend generously, and most Venezuelans felt the benefits. When oil prices fell, the money stopped, and the country discovered how little else it produced. That dependence was not created by one leader or one party. It was the product of decades of choices, and it left Venezuela dangerously exposed to a commodity price it did not control.
Oil Wealth, and the Trap It Built
Hugo Chavez, who came to power in 1999, promised to use oil wealth differently. He argued that earlier governments had wasted the country’s riches, that the poor had been left behind, and that the state should take control of the oil industry and spend its revenues on the people. For a time, during the oil boom of the 2000s, that promise seemed to work. Oil prices rose sharply, the government expanded health clinics, schools, and housing programs, and poverty fell. Millions of Venezuelans who had never had access to a doctor or a decent home suddenly did, and Chavez became a hero to the poor, not only in Venezuela but across Latin America. His supporters point to those gains, and they are real. Health and education improved, and the poorest Venezuelans felt, for the first time, that the state was on their side.
At the same time, the government was making choices that would make the economy far more fragile. It imposed price controls on basic goods, it expropriated private businesses and farms, it fixed the exchange rate, and it used the state oil company, PDVSA, as a source of money for social spending and for political patronage. Each of those policies had a logic. Price controls were meant to keep food affordable, expropriations were meant to put land and factories in the hands of the people, and currency controls were meant to stop capital from leaving the country. In practice, they had the opposite effect over time. Price controls made it unprofitable to produce food, so farmers produced less. Expropriations frightened investors, so factories closed or were run badly. Currency controls created a black market for dollars, and access to cheap official dollars became a source of corruption for those close to the government. The oil company, once one of the most efficient in the world, lost skilled staff, investment, and production, because its revenues were diverted and its management was chosen for loyalty rather than competence.
Chavez, Maduro, and the Political Choices
Chavez died in 2013, and his successor, Nicolas Maduro, inherited the system Chavez had built, along with its debts and its vulnerabilities. Within a year, oil prices collapsed, falling from more than one hundred dollars a barrel to less than a third of that price, and Venezuela’s revenues collapsed with them. The government, faced with a sudden loss of income, did not cut spending, reform the exchange rate, or seek help from international lenders. Instead, it printed money to pay for spending, it maintained price controls and subsidies it could no longer afford, and it borrowed heavily until lenders stopped lending. That decision turned a recession into a ruin. Printing money to cover a budget gap is a familiar path to hyperinflation, and Venezuela followed it. Prices doubled, then doubled again, until a monthly salary could not buy a week’s food, and until the bolivar became so worthless that people weighed banknotes rather than counting them.
The Collapse After 2014
After 2014, the collapse accelerated. Hyperinflation destroyed savings and salaries, and the country that had once imported almost everything discovered that it could no longer pay for imports. Shelves emptied, first of imported goods and then of basic staples such as flour, rice, and medicine. Hospitals, which depended on imported drugs and equipment, ran out of both, and doctors and nurses left the country in large numbers. Schools closed or lost teachers, and children who had once eaten a hot meal at school went hungry. The government blamed an economic war waged by the United States and by domestic opponents, and United States sanctions, which tightened after 2017, did make the situation worse by limiting the government’s access to credit and to oil markets. Most economists, however, argue that the core of the crisis came earlier, from the price controls, the printing of money, and the destruction of domestic production, and that sanctions deepened a collapse that was already underway.
Exodus, and the Lesson of the Fall
The most visible consequence of the collapse was migration. Millions of Venezuelans left, first to Colombia, Peru, Ecuador, and other Latin American countries, and then to the United States and Europe. It became the largest displacement crisis in the hemisphere, and one of the largest in the world. The people who left were not only the poor. They were teachers, doctors, engineers, and business owners, the very people Venezuela would need to rebuild. Their departure was a loss for Venezuela, and a strain on the countries that received them, but it was also a rational choice for families who saw no future at home. The lesson of Venezuela’s fall is not that oil wealth is a curse, or that social spending is wrong. Other oil-rich countries built funds and diversified economies that survived price swings. The lesson is that wealth must be used to build a productive economy, not merely to fund consumption and political loyalty, and that institutions matter. Price controls, expropriations, and currency games can work for a time, when oil prices are high, but they destroy the incentives to produce, to invest, and to save, and they leave a country helpless when the boom ends. Venezuela’s story is a cautionary tale for any country that depends on a single export, and for any government that believes it can set prices by decree and print money without consequence. The riches were real, and the rags are real too, and the distance between them was traveled one decision at a time.