This highlights Venezuela’s real problem: Governance. Venezuela’s Governance rank is the fourth-lowest in the world, down 13 places since 2007. From judicial independence to rule of law, every variable in this sub-index is in decline.
Venezuela—the world’s biggest prosperity loser
From the 2016 Prosperity Index:
Venezuela has seen the biggest decline in prosperity over the past decade, falling in all but two sub-indices.
Having prioritised oil over the development of other industries and now finding itself in an era of structurally lower oil prices, Venezuela has seen its Economic Quality drop by 20 percent since 2007. A coup d’état in 2002 was followed by a national strike in 2003, which caused GDP to fall by 27 percent, and in 2014 there were violent protests triggered by corruption and hyperinflation.
Venezuela’s experience offers other countries an important lesson. It is good governance, and not just the existence of resources, that is critical for the creation and distribution of prosperity.
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