Venezuela Economy

The economy of Venezuela is based in large part on oil. The petroleum sector dominates the economy, accounting for roughly a third of GDP, around 80% of export earnings, and more than half of government operating revenues. Venezuela is the fifth biggest member in OPEC. From the 1950s to the early 1980s the Venezuelan economy was the strongest in South America. The continuous growth during that period attracted many immigrants. During the collapse of oil prices during the 1980s the economy contracted. With the recent rise in oil prices and rising government expenditures, Venezuela's economy grew by 9% in 2007. However, there is still considerable income inequality. Although commonly thought to be a command economy, government spending as a percentage of GDP in Venezuela in 2007 was 30%, smaller than other capitalist countries such as France (49%) and Sweden (52%) ^[3]. According to official sources, the percentage of people below the national poverty line has decreased significantly during the Chavez years, from 48.1% in 2002 to 30.2% in 2006.