Get this from a library! Bases cuantitativas de la economía venezolana, [Asdrúbal Baptista]. Get this from a library! Bases cuantitativas de la economía venezolana [Asdrúbal Baptista]. Baptista, Asdrubal. Bases cuantitativas de la economia venezolana 1 l Caracas: Comunicaciones Corporativas. Baptista, Asdrubal.

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However, economic processes in such oil-exporting economies deserve deeper theoretical investigation to overcome the misunderstanding of oil rent as their main source of income.

In Venezuela, declining oil rent alone may not explain the economic crisis of this oil-exporting economy—the mismanagement of oil rent due to the ambiguous conception of oil rents into the GDP strongly contributes. The Venezuelan economy is experiencing a very complex crisis. Misguided economic policies have created profound distortions throughout the whole economy. Exchange rate parity has led to drastic reductions in foreign currency and a deterioration of the productive sectors, with damaging effects on the ability to import.

This has resulted in crises in production and distribution of goods. But declining oil rent alone may not explain the economic crisis of this oil-exporting economis. As I will argue, oil rents are neither a blessing nor a curse.

Oil rent is just a peculiar income stream that deserves a specific status in the GDP of oil-exporting economies [1]. The extraordinary profit observed in the global oil sector is due to the presence of very significant rents in the international oil market. These rents reflect fundamental differences econmoia geological endowment of each oil producer, showing significant and systematic divergence from the average cost of production between countries.

Table 1 shows that in the productivity ofwells located in the USA was This was significantly less than the productivity in Saudi Arabia of 2, In addition, the price of oil is not determined by the average of production costs between all wells in the world.

This means wells located in the US determine world prices. Bxses differences between regional productivities allow the most productive regions to take advantage of their low production costs in the form of rents. This is what economic theory has called Differential or Ricardian rents.

Thus, oil rent is widely accepted as an inevitable and specific remuneration from any oil business. In azdrubal terms, national oil companies, major oil companies, national states and private owners have struggled for control of oil rents. Ever sincewhen Venezuela started to export crude, oil rents have historically provided recurrent income for Venezuela. However, oil rents remain absent in accounting for the national GDP. This invisibility is perhaps one of the main reasons for historic mismanagement of oil rents in the past.


Indeed, the absence of the specific account for this income makes impossible the control by citizens and policy-makers of the way in which this rent is being spent. The problem becomes bigger when the entire economy bases its plans and policies both in the oil and non-oil sectors on oil rents as if these resources were a stable and more or less inexhaustible part of national income.

Crisis occurs in an oil rent-dependent economy when oil prices fall below the commitments made in the national budget. If the government and private sectors did not set funds aside in the form of savings as protection against episodes of decreases in oil prices, and if the economic system is not prepared for such fluctuations in oil rents, the crisis will always have the size of the commitment acquired.

The national government is still far from initiating a plan of national economic recovery that could boost production. On the contrary, the fall in oil rents has led the government to look for other sources of rents, exacerbating the extractive condition of the base. At present, the government is trying to recover revenues through xsdrubal indebtedness using a cryptocurrency called Petro.

This only commits further, future barrels of oil into private hands and reverses rights obtained in with the Hydrocarbons Law.

From nations to a single world economy

In addition, the government cuantiitativas created the Econmia Mining Arc as a new source of rent for the exploitation of gold and other minerals, placing more than half of the southern province of Guayana at the disposal of large transnational mining corporations. In Venezuela, the public discussion about the uses of oil rents in national development started in and is still ongoing.

However, the ambiguous conception of oil rents into the GDP has prevented a consensus on the uses of oil rents, leading to indebtedness and mismanagement of this income.

Given the fact that the Venezuelan economy has to deal with oil rents as recurrent and fluctuating income, it is important to prevent further mismanagement and to build an institutional framework based on solid political interest to given this issue public visibility. This public visibility will allow for greater accountability for uses of oil rents, and will certainly prevent the historical mismanagement that this country has witnessed. Blas Regnault is a Venezuelan sociologist and PhD researcher at the ISS, devoted to the study of global oil price cycles and its impact on the sustainable development in oil exporting economies.


No other oil producer has suffered the results of the drop in oil prizes as Venezuela were the results are of catastrophic propportions …why?? Also the income was wasted in unsustainable subsidiesin giving oil to other countries on terms so generous that they amounted to a giftor on so called grand patriotic projects handled with such mismanagement and corrupion that they were never finished or produced very poor results…….

If Venezuelans oil wealth had been managed with the same prudence than any other oil producing counttry Venezuela could have avoided the terrible crisis which now engulfs its life.

April 26, December 27, Admin. What are oil rents? What is the problem with oil rent in the Venezuelan economy? Why do falling oil venezolzna create a crisis for the Venezuelan economy?

Prof. Asdrubal Baptista gifts his new book to the University of Aruba – University of Aruba

However, the current Venezuelan crisis has three additional characteristics: The national oil industry has suffered a significant deterioration in its productive capacity [2] ; The non-oil sector, also dependent on oil rents, has suffered very serious damage to its productive capacity; and The inefficiency in internal fiscal accounts and unsustainable exchange rate parity create profound distortions throughout the economy non-official estimates indicate that inflation was near 2, per cent in Non-productive solutions for the massive economic crisis.

How to prevent mismanagement of oil rents? Build oil rents accountability. Caracas, Volumen 4 — No.

How oil rent contributes to Venezuela’s economic crisis by Blas Regnault

Mansoob Revisiting the Resource Curse. Neither a blessing nor a curse: National Accounts for oil-exporting economies The Venezuelan case. Email Twitter Facebook LinkedIn. One comment No other oil producer has suffered the results of the drop in oil prizes as Venezuela were the results are of catastrophic propportions …why?? Comment anonymously or log in Cancel reply. Sorry, your blog cannot share posts by email.