What Broke Venezuela’s Economy and What Could Fix It

Venezuela’s economic situation is unthinkably bad, especially for what was once South America’s richest nation. Hyperinflation, plunging oil production and unpayable debts will confront whoever wins the current struggle for control between Nicolas Maduro and Juan Guaido, both of whom claim to be president. But recovery plans are already being drafted inside and outside the country. Here’s a look at how Venezuela fell and at some of the ideas for getting it back on its feet.

Crude accounts for 98 percent of Venezuela’s exports and funds the social welfare programs that once formed the core of the government’s agenda. A decline in output that started under previous President Hugo Chavez has accelerated in the past few years, with production falling to a seven-decade low of 1.3 million barrels a day in 2018, from about 3 million barrels a day when Chavez came to power in 1999. This collapse has helped sink the broader economy, which is estimated to have shrunk by about half over the past five years.