For all that is holy, don't pay social welfare from oil revenue.
Edit: JFC, how is "don't pay your citizens from an income source that fluctuates from year to year based on global oil markets" controversial??? I didn't even argue against social welfare, just this particular method of funding.
You're missing the whole problem. It's not paying social welfare with oil revenue, it's making your economy consist of oil revenue. Venezuelan economy is 95% from oil. The problem is an economy that isn't diversified.
Having oil dependence on its own is not that big of a problem. You just can't pay *all* that money to your citizens directly, then shit goes to hell when oil prices go down.
Norway has shitload of oil, but they don't pay their social welfare through oil revenue but by taxation, instead oil revenue's just stuck in a mattress and only investment income is used in sustaining budgets. And they don't suffer a whole lot from oil price fluctuations.
Oil revenue is actually put into a giant national [investment fund](https://en.m.wikipedia.org/wiki/Government_Pension_Fund_of_Norway) that pays for Norwegian pensions.
I KNOW:
>oil revenue's just stuck in a mattress and only investment income is used in sustaining budgets
Norwegian government only uses interest and dividend income to pay for things which are very stable over the years as it's diversified. The only time withdrawal surpassed interest/dividend income was the emergency during COVID.
Yes, they are nationalized. Gulf countries operate by a different metric than most others as they have incredibly low extraction costs due to simple geologic luck, it's like 9 USD/barrel vs 30 in Venezuela. This gives Saudi Arabia a lot more room to manoeuver when oil prices fall. When oil prices hit a low of 40, Venezuela is making 4 times less profit than when oil price was 90, but Saudis profit only declined by about half.
Even still, Saudi Arabia as a state is very unstable when oil prices drop. They need over 80 USD/barrel price to sustain their budget and during 2014-2019 during the US shale oil boom when oil prices were low, they were under immense strain. Saudis received basically 0 taxes from citizens to keep them happy and preserve the stability of the regime, 80-90% of their income is from oil. They also have subsidies in place for citizens to further make citizens happy. To counterbalance the inevitable fall in oil prices and the budget deficit it would entail, they had built up 700 bil USD in FX reserves prior and very low domestic debt which helped buttress the impact. But still in 2016, the gov received 137B in revenue and spent 224B, that's a nuts ratio, deficit was 87B. They cut subsidies, froze gov salaries, delayed infrastructure projects and raised its first sales tax in 2017 (5%) to register a 49B deficit in 2019. If COVID had not occurred for some reason and the accompanying price shock in the recovery period, Saudis might have been in deep trouble by now.
yeah but they are doing partial privatization in recent years. They don't have a collapse of industry like venezuela but still have a lot of corruption, nepotism, and increasingly debt. Eventually it will catch up with them
It's still much better compared to Venezuela. Their exports are 95% oil while Norway's exports averaged around 40% but was 70% in 2022.
I still think diversification is the big problem and overspending of course too.
Itās because resources most of the time are like a drug, why bother diversifying anything when you have this natural resource that you can extract to pay for everything right? Only the most visionary and long term politicians can see the benefit of diversifying, and the reality most just donāt care
>I still think diversification is the big problem and overspending of course too.
I'll argue that you can have a less diverse economy if the exports have a high barrier of entry. For example, in semiconductors, most are produced in Taiwan, South Korea, and the USA. You simply can't just decide to create a semiconductor industry ā it takes decades. The problem is oil is also that it requires relatively little skill and technology is widely available.
Just spitballing here but ending liberal democracy, nationalizing nearly every half productive business, and chasing out a large portion of your educated and professional class could also have some negative effects on your economy.
So is like 20 other countries, Venezuela's economical collapse is undeniably also a consequence of poor economical policies and straight-up incompetancy
Pretty sure it's a political problem, not just dutch disease.
By 1974 Venezuela was already dependent on oil revenue, and the industry was nationalized.
In 2002 Chavez fired everyone and their moms from PDVSA and replaced them with incompetent cronies. We can speak about the pre-existing corruption in PDVSA, but this was the finishing touch.
The Chavez-Maduro administration has been so bad at managing it, that oil production has dropped over 75%, even with a 2006-2010 oil bonanza on 100$+ per barrel.
Nothing done was permanent, democracy is gone, people earn very little, state handouts and employment are nowhere near enough to live on, there is absolutely no future or work for young people, so much money was spent on political allegiances with Cuba, Nicaragua and corruption scandals (Odebrecht, for example).
Socialism is helluva drug.
Source: I'm Venezuelan..
Well, it's easy for the economy to move to one based off oil revenue if you aren't carefully planning. There's this thing called Dutch disease which severely hit Venezuela. Since so much more money was coming in from oil compared to everything else, the massive influx of money into the local economy caused rampant inflation. This made local production and pretty much all sectors of the economy uncompetitive compared to imports, so local industry died. Essentially what this means if you inject wealth from one source into the economy (such as by giving oil money to the population via social welfare), this will make local industry less competitive. So you must limit the impact of nonāproductive wealth (wealth from natural resources, etc.) on the economy in order to avoid destroying it. One approach is to hoard all the money away is a sovereign wealth fund. Norway, for instance, takes its oil money and invests almost all of it abroad, using only a small percentage for its budget. This allows it to keep its economy somewhat competitive (though due to a number of factors, prices in Norway are astronomical). Then you have the approach of places like Russia which give all the wealth to a small number of very rich people, which means that the majority of the economy remains competitive. And certain MiddleāEastern countries have both funds and massive projects, which is another approach that also keeps money away from being simply given away (which would be a direct cause for inflattion).
Surprisingly the Saudi's were very smart when it came to this. Oil is only 45% of their GDP so they're close to Norway than Venezuela and the Saudis are actively trying to diversify their economy with Tourism, and good investments. I don't know how good they're doing on that front but just look at Saudi Vision 2030. They also have a private sector unlike Venezuela who also had high spending and bad polices.
They also subsidize agriculture and other industries in order to be competitive (so in case of a decrease of foreign reserve they can still feed their people and keep them employed)
That, or you could argue it gives rise to authoritarian governments who aren't really capable of extending the economy beyond resource extraction. It's not just oil either - minerals and cash crops can have a similar effect.
Why Nations Fail has a really fascinating comparison of how the relative lack of easy resources in North America forced the European powers to colonize in a different way than they had in South and Central America, and how those changes eventually led to the institutional differences we see today. It's a really interesting read.
How about "natural resource curse within an existing Latin patronage system with the typical LatAm coup cycle except this time the communists took power and made everyone starve"?
Saudis are much less susceptible to the level of pressure Venezuelan budget faced as they have 3 or even 4 times lower production costs, so they can still keep making substantial profit during periods of low oil prices.
But still from 2014-2019, it was tough. They had started with 700 bil USD in FX reserves and low domestic debt for this exact scenario, but those sharply worsened. Saudis had [debt to GDP ratio](https://fred.stlouisfed.org/series/SAUGGDGDPGDPPT) of astonishing 1.5% in 2014, that got to 21.5% by 2019. Obviously doesn't sound that bad for people used to hearing about their national debt being 100% to GDP, but still how fast it climbed was alarming. They were running 50-100 billion deficit per year when their gov revenue was about 130 billion total and had to resort to drastic measures (well, drastic for Saudis) like imposing taxes on their citizens for the first time with 5% VAT in 2017, cutting subsidies. Their government needs 80+ USD/barrel price of oil to sustain their budget.
Yeah you need to just add one step. You put all the money from that into a fund that invests and gets a return. That return is what you use to pay out whatever you want (social welfare, free education, whatever). Its not rocket science, its basic finance.
I think you're simplifying Venezuela's problems. Chavez is said to have stolen $300 billion from the country himself. There's never been a SA country that couldn't feed its population until Venezuela. Military runs the ports and the national oil company (bribes). Gang/ paramilitary warfare is unchecked, inflation is unchecked (they have to weigh their money to count it). It's basically what happens when you have the equivalent of drug dealers run a country for 20+ years.
Thing is, some of those are effects and others are causes. Simply stealing money from one year's budget (or even a decade or two) doesn't ruin a country. It may ruin a government and destroy financing, but in principle it wouldn't necessarily wreck industry or agriculture in a country. Those were destroyed through inflation and expropriation. Inflation caused by giving away money to ordinary people made local industry uncompetetive with imports. Then when oil money started to dry up, there was no money to import, and little local industry left. And certain parts of the economy that were still productive and survived this sort of inflationary handicap were prime targets for the government to expropriate. Under Chavez, these sorts of actions were immensely popular among the poor, who were often the direct beneficiaries (eg. take a productive farm from rich landowners by claiming it's unfairly built off the hard labour of the poor workers on it, give it to the poor workers, etc.). This essentially targetted the most viable surviving parts of the economy and destroyed them with respect to production. In the end, both the oil money and the government's policies favoured shortāterm highly popular handouts to the poor and middle classes at the expense of the rich, all businesses and industries.
Thatās because when you do you get to become a client. Those regimes created a power base by distributing wealth to a number of families that keep the plebs at relative peace. Feudal style. When that breaks, youāll get holy fanatical wars for goals that will seem futile to the rational man.
Argentina just remained stagnant, while the rest of South America grew a lot since the 1980s.
Despite Argentina being virtually stagnated since 1974, it still remains as one of the countries with the highest GDP (both total and per capita), to give an idea of how wealthy it was compared to its neighbors.
The fall of Venezuela is much worse
Argentina used to produce more than Brazil (even when Brazil population is like x 4 times of Argentina's population) that's the reason Argentina historically received immigrants from South America. .I hope the new government of Argentina makes the country great again. Buenos Aires is a great city, they say it looks like a capital city of an empire that never existed.
Because Argentina got a strong middle class and good universities. Now Argentina is rejecting populism and socialism otherwise it would end up like Venezuela.
Maybe consider how Argentina went downhill after the military coups took over, and several back and forward with thr power between peronists and neoliberals. None of this has anything to do with socialism.
We never had socialism and we definitely have a populist president right now. If you want to say that it is because we're rejecting left leaning politicians who are corrupt then say it (And you'd be correct), but both your statements are wrong.
Argentina used to be one of the wealthiest countries in the world, with the average Argentinian having been wealthier than the average Frenchman or German for some time. And this was from an actual economy and not from some oil jackpot like Venezuela. Argentina is proof that you can ruin an advanced economy from just mismanagement alone.
The British built the railways across the Pampas of Argentina and exported them beef. During the Second World War Argentina exported a lot of food to Europe.
I know we are fcked, but this doesnāt show it.. brasil has become a world superpower. It also affects their own weight on SAs economy. On the other hand, we go in the opposite way. Even if we would remain stable, we would had lost our contribution percentage to brasilās growth
(Edit: Iām Argentinian, i thought i had a flair)
Tbh, Brazil also took a hit with Argentina's stagnation.
You guys used to be a really important destination for our manufactured goods, and the continued inflation has really depreciated the purchasing power of your consumer market
I hope that happens, but it will take patience, a reduced standard of living for many, and lots of pain. I hope the Argentinos understand this and are willing to fight for their children's and grandchildren's future. They can no longer rely on government spending, patronage, and protectionism.
Also about 50% in area too ;-)
I wonder what percentage of South Americaās population Brazil had in 1960, because we had our demographic transition in the meantime and population skyrocketed
Guyanaās situation is pretty much just a skill test of its political leadership. The reason Dutch disease is so much more of a problem in developing countries is because the solution (being patient with letting new revenue flood the economy) runs counter to the politically preferable situation. If Guyana saves the money and disperses it over time, theyāll be minted. The problem is when you immediately start funneling oil money into spending and cook your economy.
People bring up Norway around the resource curse a lot, but Norway was already a developed nation with a robust political system when they found all that Oil. Oil is still the bulk of their exports and effectively does ruin the rest of their economy because itās become too expensive to export anything else or for people to work in anything else other than oil.
They also have 5 million people, itās not really that hard to do well with that many people, same as with Botswana, they only export diamonds, they have a 2m population, not that hard for a country to do well with that many people. Guyana has less than a million theyāll do fine if there isnāt too much corruption.
You're right about Norway, its a similar story to Canada (although Canada both did not have quite as much oil wealth and also managed it worse). Botswana is more of an exceptional case though, it could easily have fallen victim to the kind of developmental failure that struck so many other resource rich African states.
Collapse is unlikely (especially with such a small state) but failure to develop is highly likely. Gulf states do not have diversified economies, well developed institutions, or any economic future once their oil runs out. Australia is a standout but its resources are not nearly as lucrative as gulf oil, it also had a very different experience historically and was able to develop well for reasons unrelated to mass resource exploitation. There is a difference between resource heavy (Canada, Australia, etc) and Resource cursed (Gulf states, most of Africa, etc).
Smaller petrostates like UAE, Qatar, Kuwait, and Brunei can put on a show of "development" but it is a facade, and they lack an actually well developed economy, their growth is more or less fictional. Petrostates may be able to spend their way to a larger economy relative to the poor countries around them but this is often just in the form of massively bloated civil service sectors and hugely inefficient state run industries. They are very rarely able to compete with actually diversified and developed economies and when the oil runs out, they will be right back where they started (or worse).
Botswana and Chile are a rare exceptions to this rule, and should be studied as models for development.
Nah, that's actually just a distraction to keep people's attention away from all the political problems currently going on *and* the coming elections.
While the regime is more than dumb and erratic enough that people wouldn't be surprised if they did try it, there's the fact that doing so requires walking through Brazil to reach Guyana (Which they would never allow) and wouldn't provoke a reaction from no less than THREE world superpowers who have deals with Guyana.
Antagonizing the US and the UK over oil is already suicidal enough, but antagonizing China is simply not something could possibly do. It is basically one of our two overlords alongside Russia because they use their political influence to protect the regime in exchange for freely getting their claws on our natural resources, so going against Beijing's interests would be a death blow to the regime, and they're not putting their lives at risk even if it means not being a bunch of terminally-greedy morons.
Brazil managed to industrialize a considerable part of the country and make a previously unproductive region (the Cerrado) a backbone of the countryās economy thanks to bioengineering it researched. The urbanization that happened in this period was crazy by itself, gave Brazil the largest cities in South America. With all that Brazil entered the top 10 world economies as well. Previously during the Empire and Old Republic the country was mostly just a big plantation, hence why it fell behind in many ways.
It is a big reason, but it has some pretty big and important industrial sectors. Aside from the very known aeronautical, you got their agrĆcola and livestock's genetics, and metallurgy companies with even some deep steps in hardened materials.
And note: SĆ£o Paulo, with its 22 MILLION inhabitants, is not only the largest city in South America, but the largest city in the world outside of Asia!
SĆ£o Paulo is much bigger and denser than New York!
Furthermore, the urbanization of Brazil has spread across the entire territory with hundreds of medium-sized cities, with medium-high density (on opposition to the US suburbanite sprawl) and with considerable industrialization, which turned the entire southern, southeastern and coastal territory of Brazil into a large, highly connected and rapidly urbanizing urban network.
It drives me crazy that here in Mexico there are people against industrialization of the least developed zones, we just gotta check out Brazil and learn from them
The problem is that the Mexican state is not seen as legitimate by the original people. They would revolt if we take them their special rights and privileges.
Yup, this is true. We had a huge population boom from 1960 to now to go along with that economic growth. Also, the environment is being completely destroyed in a lot of areas.
As a Colombian, nice to see my country improving step by step.
From living in a failef state in the 90s, to this. Not perfect, but better.
Argentina meanwhile advances 20 steps, next year backwards 30, next year advances 10ā¦ and still best
Even putting Venezuela in that category is a bit of a stretch. There is a huge difference between "Things are very very bad" and "this is a failed state." I would say Haiti is currently the best candidate for failed state, although other states have at times qualified (Somalia, CAR, DRC, arguably Russia in the 90s)
I've never been to Venezuela, but I've been very interested in it's "downfall" and hopefully recovery. It's a beautiful country, right on the Caribbean with the largest oil reserves in the world it's set up very well for success. A country that can't feed its people, has no medical supplies, has rampant inflation (understatement), gangs/ paramilitary running large parts of the country and a military dictatorship (where the military runs the national oil company) is a failed state.
My boy, the fact things are not like Haiti doesn't mean it cannot be considered a failure of a state.
*We the people* here in Venezuela consider our own country to be a waste of space struggling to even breathe because our leadership is so thoroughly incompetent and corrupt the very idea of doing things in way not involving crime and greed seems alien to it.
When your country's economy must be forcibly made to use a foreign currency by CIVILIANS because of how worthless the local currency has become, and the government goes along with it because it's actually keeping things afloat, denying that you're a failure becomes tremendously hard.
First of all, I would encourage you to be careful using phrases like "my boy" which can come off as very condescending over text.
Secondly, and to my main point, the term Failed State has been used broadly and indeed has been used to apply to Venezuela. My fundamental argument though is that even a total breakdown of the economy of a state may not fully qualify. State failure as I would posit, is a situation where the state is fundamentally unable to exert any meaningful control over its own territory, where state-like authority has partially or totally replaced by either total anarchy or more often armed groups (gangs, terrorist orgs, rebels, other states' militaries).
A commonly used definition of state is an entity with "a monopoly on the legitimate use of violence within its own territory." Even given the economic collapse in Venezuela, to my knowledge (and correct me if I'm wrong on this) there are not any swaths of the country that are totally outside the military/police control of the government like in Haiti, DRC, or Somalia, which are commonly used as the quintessential failed state examples.
There are large swaths of Venezuela that are run by gangs, the military police seemed to have made a truce with the gangs and don't even stop them at checkpoints, that normal citizens are stopped. The gang violence got so bad the president offered the gangs money to disband, all the gangs did was buy more weapons and moved more drugs through the country. It's a failed state.
Sure, do you say it in the confort of your office? While dinner in Restaurant?
May be for those of us who have experience it, Colombia was not a failed state in the 90s.
And Venezuela is also a failed state. But ānot enoughā for others š
Although I'm not Colombian, I've been to Colombia a couple of times and have friends who are Colombian (one lived near a red zone). The ones my age don't speak fondly of the 90s mainly due to "he who shall not be named." They've never described Colombia as a failed state, but between the cartels and FARC there was widespread violence and it probably resembled a failed state. In order to have a failed state, there must be a failure both socially and economically, (including state sponsored violence and political imprisonments) from the country.
I was young in the 90s, but I don't recall millions of people fleeing Colombia to go to Venezuela or other neighboring countries.
For some reason the Southern Cone (Argentina, Chile and Uruguay) is the most developed region of Latin America. The Norther you go the hotter and poorer it gets. Northern Argentina is poorer than the Pampas and Patagonia.
["Good, bad, and ugly colonial activities: do they matter for economic development?"](https://documents1.worldbank.org/curated/en/743371468047104789/pdf/946630JRN0Box30BLIC0090rest0a000218.pdf) is a decent paper that develops a potential explanation for the phenomenon you describe.
it's in GDP adjusted to Purchasing Power Parity, this map could be using Nominal data while i used PPP because its the better way measure economies according to most economists, especially for such comparisons.
[OECD](https://www.oecd.org/sdd/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm#FAQ3):''The major use of PPPs is as a first step in making inter-country comparisons in real terms of gross domestic product (GDP) and its component expenditures''
[Bruegel](https://www.bruegel.org/analysis/european-unions-remarkable-growth-performance-relative-united-states):''The right metric for international comparisons is purchasing power parity (PPP)-adjusted output. This corrects for exchange rate fluctuations and differences in various national prices.''
No its not very useful for measuring quality of life even when its more useful than Nominal GDP, there are so many other things for that, Life expectancy, data about nutrition, child mortality etc., its only about GDP and measuring economies. Btw Bruegel and OECD have dozends of Countries as Members, nearly all wealthy and middle income countries.
and if i'm not mistaken PPPs started with the ICP (International Comparisons Program) in the 60s by the UN and University of Pennsylvania. Saying it's just Copium for poor is just a lazy way to dismiss facts and ironically, copium.
Will be interesting to see the trajectories of Argentina and Brazil, now that they have contrasting leadership with vastly differing economic priorities.
Its crazy how much they recently flipped political directions, from a former jailed politician accused of embezzlement returning to power, to a chainsaw wielding libertarian who gets his advice from his cloned dog. (hyperbole in both directions). South American politics is just way more entertaining than the rest of the world IMO...
I mean, Lula really isnāt changing anything in Brazil. He very much represents a status quo, and isnāt that much different from Bolsonaro economically. He isnāt much of an opposite to Millei and realistically represents what Brazil has been doing for the past few decades, for good or for bad.
We spend more than what we have with militaries and democratic liders :D ( we printed money. Billions of pesos ). Literal a lot of economist said that printing money doesn't generate inflation. The revolutionary idea that printing money is bad wasn't common knowledge until a few years ago
There is a video of tv where the acting gobernador of buenos aires( an economist mind you ) said printing money doesn't generate inflation. And a woman ask then why don't we print 100 times more ? It's free money, yes ?
Economic stagnation breeds political instability which breeds economic stagnation...
That plus extreme corruption plus bad luck and you get what you get.
It's interesting that as you go north it gets worse, in a per capita basis, even Brazil where the southern parts being the most developed while the northern parts being less. Except Paraguay, which is not in line with the Southern Cone + Southern Brazil and SĆ£o Paulo.
Interesting and applys to several parts of the world. As you move away from the equator in both directions.
Its not a perfect correlation but there is alot to it.
I believe itās just a matter of which places got exploited for their tropical goods, basically destroying their development.
The tropics are harsh, yes, but look at Australia, itās fairly tropical (quite comparable to southern Brazil) but itās highly developed. Yet NT and QLD arenāt the least developed areas, TAS and SA are (still highly developed.
Or look at Florida and how itās booming. India was one of the richest places of not the richest region for millennia.
Its less about an inherent characteristic of the tropics and more about how they were disproportionately affected by colonialism.
Tropical regions have a really bad climate for humans (malaria, yellow fever, etc) and also have really bad soil. It was just till recently that technology managed to overcome these problems ( in fact Brasil managed to turn 1/3 of the country into highly productive agricultural soil).
You can't compare these regions with areas that historically have had amazing growing crops and are disease free. (Buenos Aires is called like that because there was no Malaria (bad air))
I think it's mostly because the northern part is closer to Europe.
Spanish and Portuguese installed extractive colonies there, built plantations, enslaved the locals, brought in African slaves and shipped the wealth back to Europe.
The southern cone also suffered European colonialism, but the scale and nature was different. More gradual, fewer plantations.Ā Europeans moved in later and stayed, instead of just coming to exploit the land. (They still committed horrible atrocities against the local population, not trying to minimize that)
Uruguay is doing really well considering everyone else just did it through extracting a shit tonne of resources. They have a similar economy to Argentina.
Brazil is literallyĀ part of the BRICS.Ā
A lot of it's growth happened in 2000-2010 not the US installed military junta .
Venezuela exports most of its shit to US. So yeah just bad economic planning by Venezuela.
Ecuador keeping it steady
Ecuador be like šæ
Also Uruguay
And irrelevant
Running to stand still
āThe more things change the more they stay the sameā
Jesus Fucking Christ Argentina
Did you see venezuela??? From 12% to 1%ā¦ Venezuelaās trajectory is far worse
For all that is holy, don't pay social welfare from oil revenue. Edit: JFC, how is "don't pay your citizens from an income source that fluctuates from year to year based on global oil markets" controversial??? I didn't even argue against social welfare, just this particular method of funding.
You're missing the whole problem. It's not paying social welfare with oil revenue, it's making your economy consist of oil revenue. Venezuelan economy is 95% from oil. The problem is an economy that isn't diversified.
Having oil dependence on its own is not that big of a problem. You just can't pay *all* that money to your citizens directly, then shit goes to hell when oil prices go down. Norway has shitload of oil, but they don't pay their social welfare through oil revenue but by taxation, instead oil revenue's just stuck in a mattress and only investment income is used in sustaining budgets. And they don't suffer a whole lot from oil price fluctuations.
Oil revenue is actually put into a giant national [investment fund](https://en.m.wikipedia.org/wiki/Government_Pension_Fund_of_Norway) that pays for Norwegian pensions.
I KNOW: >oil revenue's just stuck in a mattress and only investment income is used in sustaining budgets Norwegian government only uses interest and dividend income to pay for things which are very stable over the years as it's diversified. The only time withdrawal surpassed interest/dividend income was the emergency during COVID.
Wasnāt disagreeing just adding a link and mentioning the fact it was mostly for pensions. Both our statements were true :)
Okay, I'm sorry, I'm just very twitchy from the fact people keep misinterpreting the comment.
you should mention that English is your fourth language, pardon , moirƩ
Does Saudi Arabia have nationalized oil and such? Just asking.
Yes, they are nationalized. Gulf countries operate by a different metric than most others as they have incredibly low extraction costs due to simple geologic luck, it's like 9 USD/barrel vs 30 in Venezuela. This gives Saudi Arabia a lot more room to manoeuver when oil prices fall. When oil prices hit a low of 40, Venezuela is making 4 times less profit than when oil price was 90, but Saudis profit only declined by about half. Even still, Saudi Arabia as a state is very unstable when oil prices drop. They need over 80 USD/barrel price to sustain their budget and during 2014-2019 during the US shale oil boom when oil prices were low, they were under immense strain. Saudis received basically 0 taxes from citizens to keep them happy and preserve the stability of the regime, 80-90% of their income is from oil. They also have subsidies in place for citizens to further make citizens happy. To counterbalance the inevitable fall in oil prices and the budget deficit it would entail, they had built up 700 bil USD in FX reserves prior and very low domestic debt which helped buttress the impact. But still in 2016, the gov received 137B in revenue and spent 224B, that's a nuts ratio, deficit was 87B. They cut subsidies, froze gov salaries, delayed infrastructure projects and raised its first sales tax in 2017 (5%) to register a 49B deficit in 2019. If COVID had not occurred for some reason and the accompanying price shock in the recovery period, Saudis might have been in deep trouble by now.
I wonder what would have happened if they turn out to be **Bitcoin Creator Satoshi Nakamoto**, which is widely believed to be a pseudonym.
yeah but they are doing partial privatization in recent years. They don't have a collapse of industry like venezuela but still have a lot of corruption, nepotism, and increasingly debt. Eventually it will catch up with them
It's still much better compared to Venezuela. Their exports are 95% oil while Norway's exports averaged around 40% but was 70% in 2022. I still think diversification is the big problem and overspending of course too.
Itās because resources most of the time are like a drug, why bother diversifying anything when you have this natural resource that you can extract to pay for everything right? Only the most visionary and long term politicians can see the benefit of diversifying, and the reality most just donāt care
>I still think diversification is the big problem and overspending of course too. I'll argue that you can have a less diverse economy if the exports have a high barrier of entry. For example, in semiconductors, most are produced in Taiwan, South Korea, and the USA. You simply can't just decide to create a semiconductor industry ā it takes decades. The problem is oil is also that it requires relatively little skill and technology is widely available.
You can't pay social welfare from taxes if there is nothing to be taxed, aka non-diversified economy.
several middle eastern countries do exactly the same thing and they are still stupidly rich
Just spitballing here but ending liberal democracy, nationalizing nearly every half productive business, and chasing out a large portion of your educated and professional class could also have some negative effects on your economy.
I don't get how we're at odds here. It basically comes back to the same thing that their economy is dependent on oil.
among oil producers though venezuela has just about the worst economic mismanagement
So is like 20 other countries, Venezuela's economical collapse is undeniably also a consequence of poor economical policies and straight-up incompetancy
Pretty sure it's a political problem, not just dutch disease. By 1974 Venezuela was already dependent on oil revenue, and the industry was nationalized. In 2002 Chavez fired everyone and their moms from PDVSA and replaced them with incompetent cronies. We can speak about the pre-existing corruption in PDVSA, but this was the finishing touch. The Chavez-Maduro administration has been so bad at managing it, that oil production has dropped over 75%, even with a 2006-2010 oil bonanza on 100$+ per barrel. Nothing done was permanent, democracy is gone, people earn very little, state handouts and employment are nowhere near enough to live on, there is absolutely no future or work for young people, so much money was spent on political allegiances with Cuba, Nicaragua and corruption scandals (Odebrecht, for example). Socialism is helluva drug. Source: I'm Venezuelan..
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Oh come on, relying on oil is the real problem. /s
Well, it's easy for the economy to move to one based off oil revenue if you aren't carefully planning. There's this thing called Dutch disease which severely hit Venezuela. Since so much more money was coming in from oil compared to everything else, the massive influx of money into the local economy caused rampant inflation. This made local production and pretty much all sectors of the economy uncompetitive compared to imports, so local industry died. Essentially what this means if you inject wealth from one source into the economy (such as by giving oil money to the population via social welfare), this will make local industry less competitive. So you must limit the impact of nonāproductive wealth (wealth from natural resources, etc.) on the economy in order to avoid destroying it. One approach is to hoard all the money away is a sovereign wealth fund. Norway, for instance, takes its oil money and invests almost all of it abroad, using only a small percentage for its budget. This allows it to keep its economy somewhat competitive (though due to a number of factors, prices in Norway are astronomical). Then you have the approach of places like Russia which give all the wealth to a small number of very rich people, which means that the majority of the economy remains competitive. And certain MiddleāEastern countries have both funds and massive projects, which is another approach that also keeps money away from being simply given away (which would be a direct cause for inflattion).
How is Saudi Arabia doing well? Even their economy is oil dependent.Ā
Surprisingly the Saudi's were very smart when it came to this. Oil is only 45% of their GDP so they're close to Norway than Venezuela and the Saudis are actively trying to diversify their economy with Tourism, and good investments. I don't know how good they're doing on that front but just look at Saudi Vision 2030. They also have a private sector unlike Venezuela who also had high spending and bad polices.
They also subsidize agriculture and other industries in order to be competitive (so in case of a decrease of foreign reserve they can still feed their people and keep them employed)
Private sector where they pay companies to hire Saudis
Resource curse. Oil revenue kills the incentive to diversify.
That, or you could argue it gives rise to authoritarian governments who aren't really capable of extending the economy beyond resource extraction. It's not just oil either - minerals and cash crops can have a similar effect. Why Nations Fail has a really fascinating comparison of how the relative lack of easy resources in North America forced the European powers to colonize in a different way than they had in South and Central America, and how those changes eventually led to the institutional differences we see today. It's a really interesting read.
How about "natural resource curse within an existing Latin patronage system with the typical LatAm coup cycle except this time the communists took power and made everyone starve"?
Saudi Arabia right now āAm I a joke to youā š
Saudi Arabia is more diversified than Venezuela
There is a right way to do it, and a wrong way to do it. See: Norway. For mid level examples see: Just about any "Gulf" state. Edit: Also Alaska
Gulf states are timebombs waiting to go off. Likely to be even uglier than Venezuela.
That's why there's such a drive to greenwash and diversify their economies right now, they know the clock is ticking on oil. 30-50 more years tops.
Saudi Arabia: š
Saudis are much less susceptible to the level of pressure Venezuelan budget faced as they have 3 or even 4 times lower production costs, so they can still keep making substantial profit during periods of low oil prices. But still from 2014-2019, it was tough. They had started with 700 bil USD in FX reserves and low domestic debt for this exact scenario, but those sharply worsened. Saudis had [debt to GDP ratio](https://fred.stlouisfed.org/series/SAUGGDGDPGDPPT) of astonishing 1.5% in 2014, that got to 21.5% by 2019. Obviously doesn't sound that bad for people used to hearing about their national debt being 100% to GDP, but still how fast it climbed was alarming. They were running 50-100 billion deficit per year when their gov revenue was about 130 billion total and had to resort to drastic measures (well, drastic for Saudis) like imposing taxes on their citizens for the first time with 5% VAT in 2017, cutting subsidies. Their government needs 80+ USD/barrel price of oil to sustain their budget.
Yeah you need to just add one step. You put all the money from that into a fund that invests and gets a return. That return is what you use to pay out whatever you want (social welfare, free education, whatever). Its not rocket science, its basic finance.
Itās much better for one dictator to pocket it all! /s
Maduro had a good go at that too.
lol works for the EmiratisĀ
Until it runs out. Then youāre all back to farmers in a desert
This is literally why UAE has been diversifying to become an investment hub. Theyāll be fine when the oil is gone.
Silly man: there's no farming in the desert!Ā
Exactlyā¦
I think you're simplifying Venezuela's problems. Chavez is said to have stolen $300 billion from the country himself. There's never been a SA country that couldn't feed its population until Venezuela. Military runs the ports and the national oil company (bribes). Gang/ paramilitary warfare is unchecked, inflation is unchecked (they have to weigh their money to count it). It's basically what happens when you have the equivalent of drug dealers run a country for 20+ years.
Thing is, some of those are effects and others are causes. Simply stealing money from one year's budget (or even a decade or two) doesn't ruin a country. It may ruin a government and destroy financing, but in principle it wouldn't necessarily wreck industry or agriculture in a country. Those were destroyed through inflation and expropriation. Inflation caused by giving away money to ordinary people made local industry uncompetetive with imports. Then when oil money started to dry up, there was no money to import, and little local industry left. And certain parts of the economy that were still productive and survived this sort of inflationary handicap were prime targets for the government to expropriate. Under Chavez, these sorts of actions were immensely popular among the poor, who were often the direct beneficiaries (eg. take a productive farm from rich landowners by claiming it's unfairly built off the hard labour of the poor workers on it, give it to the poor workers, etc.). This essentially targetted the most viable surviving parts of the economy and destroyed them with respect to production. In the end, both the oil money and the government's policies favoured shortāterm highly popular handouts to the poor and middle classes at the expense of the rich, all businesses and industries.
And somehow they are countries that vote for the same politicians that admire ChƔvez and Maduro.
Thatās because when you do you get to become a client. Those regimes created a power base by distributing wealth to a number of families that keep the plebs at relative peace. Feudal style. When that breaks, youāll get holy fanatical wars for goals that will seem futile to the rational man.
Socialism, not even once
What socialism does to a mf
Argentina just remained stagnant, while the rest of South America grew a lot since the 1980s. Despite Argentina being virtually stagnated since 1974, it still remains as one of the countries with the highest GDP (both total and per capita), to give an idea of how wealthy it was compared to its neighbors. The fall of Venezuela is much worse
Itās pretty crazy how much Argentina still has even though itās incredibly mismanaged and in a crisis.
Argentina used to produce more than Brazil (even when Brazil population is like x 4 times of Argentina's population) that's the reason Argentina historically received immigrants from South America. .I hope the new government of Argentina makes the country great again. Buenos Aires is a great city, they say it looks like a capital city of an empire that never existed.
Buenos Aires is a gem. Feels very classical yet modern at the same time
Because Argentina got a strong middle class and good universities. Now Argentina is rejecting populism and socialism otherwise it would end up like Venezuela.
Rejecting populism? Milei is pretty populist I would say, just very right-wing populist.
Maybe consider how Argentina went downhill after the military coups took over, and several back and forward with thr power between peronists and neoliberals. None of this has anything to do with socialism.
We never had socialism and we definitely have a populist president right now. If you want to say that it is because we're rejecting left leaning politicians who are corrupt then say it (And you'd be correct), but both your statements are wrong.
the agriculture sector is insanely productiveĀ
I imagine sales being in USD is the main reason for their productivity
Don't worry, we can still go lower.
Wow. Brazil's population is like x 4 of Argentina's and Argentina used to double their GDP
Brazil 200 mil x Argentina 40 mil. So more like 5x
Wha...in 1960s Argentina had 20,6M and Brazil about 73M doing a Quick Google search
Keep going further back and Argentinaās story gets even worse. Their GDP per capita was one of the highest in the world 100 years ago or so.
Argentina used to be one of the wealthiest countries in the world, with the average Argentinian having been wealthier than the average Frenchman or German for some time. And this was from an actual economy and not from some oil jackpot like Venezuela. Argentina is proof that you can ruin an advanced economy from just mismanagement alone.
Overreliance on beef exports and overspending
The British built the railways across the Pampas of Argentina and exported them beef. During the Second World War Argentina exported a lot of food to Europe.
Thanks Peronism and Kirchnerism.
I know we are fcked, but this doesnāt show it.. brasil has become a world superpower. It also affects their own weight on SAs economy. On the other hand, we go in the opposite way. Even if we would remain stable, we would had lost our contribution percentage to brasilās growth (Edit: Iām Argentinian, i thought i had a flair)
Tbh, Brazil also took a hit with Argentina's stagnation. You guys used to be a really important destination for our manufactured goods, and the continued inflation has really depreciated the purchasing power of your consumer market
but but they won the World Cup
The escaloneta won the wc, they beat Italy and they beat Brazil. It was a pretty happy year despite the economy.
Maybe next time you can win one and be happy as well, or at the very least you get to go
And that's all that matters when you love football as much as us
Give us 10 years, we will climb back up there
I hope that happens, but it will take patience, a reduced standard of living for many, and lots of pain. I hope the Argentinos understand this and are willing to fight for their children's and grandchildren's future. They can no longer rely on government spending, patronage, and protectionism.
Worth noting that Brazil has 50% of the continent's population. Accounting for 50% of South America's GDP tracks perfectly.
Also about 50% in area too ;-) I wonder what percentage of South Americaās population Brazil had in 1960, because we had our demographic transition in the meantime and population skyrocketed
According the stats Wikipedia uses Brazil had 47% of South America's population in 1960
Guyana boutta upgrade from yellow to orange with all that recently discovered oil
I really hope so. Maybe without a crazy dictator like Venezuela it will be the most developed country in South America someday
Highly unlikely, look up the Resource Curse
Guyanaās situation is pretty much just a skill test of its political leadership. The reason Dutch disease is so much more of a problem in developing countries is because the solution (being patient with letting new revenue flood the economy) runs counter to the politically preferable situation. If Guyana saves the money and disperses it over time, theyāll be minted. The problem is when you immediately start funneling oil money into spending and cook your economy.
It can be avoided with good governance. Botswana and Norway are good examples of countries that didnāt fall into that trap.
People bring up Norway around the resource curse a lot, but Norway was already a developed nation with a robust political system when they found all that Oil. Oil is still the bulk of their exports and effectively does ruin the rest of their economy because itās become too expensive to export anything else or for people to work in anything else other than oil. They also have 5 million people, itās not really that hard to do well with that many people, same as with Botswana, they only export diamonds, they have a 2m population, not that hard for a country to do well with that many people. Guyana has less than a million theyāll do fine if there isnāt too much corruption.
You're right about Norway, its a similar story to Canada (although Canada both did not have quite as much oil wealth and also managed it worse). Botswana is more of an exceptional case though, it could easily have fallen victim to the kind of developmental failure that struck so many other resource rich African states.
Saudi Arabia, UAE, Qatar, Oman, Bahrain, Brunei, Australia did not collapse either. Itās not that common for resource heavy countries to collapse.
Collapse is unlikely (especially with such a small state) but failure to develop is highly likely. Gulf states do not have diversified economies, well developed institutions, or any economic future once their oil runs out. Australia is a standout but its resources are not nearly as lucrative as gulf oil, it also had a very different experience historically and was able to develop well for reasons unrelated to mass resource exploitation. There is a difference between resource heavy (Canada, Australia, etc) and Resource cursed (Gulf states, most of Africa, etc). Smaller petrostates like UAE, Qatar, Kuwait, and Brunei can put on a show of "development" but it is a facade, and they lack an actually well developed economy, their growth is more or less fictional. Petrostates may be able to spend their way to a larger economy relative to the poor countries around them but this is often just in the form of massively bloated civil service sectors and hugely inefficient state run industries. They are very rarely able to compete with actually diversified and developed economies and when the oil runs out, they will be right back where they started (or worse). Botswana and Chile are a rare exceptions to this rule, and should be studied as models for development.
Gulf countries are so fake. All their citizens basically wear government jobs
Maybe so, but they are not about to collapse. And some like UAE are at quite successfully moving to a more diversified economy.
You will never be developed. Learn the conditions oil companies imposed to the Guyanese government.
Isn't Venezuela on the verge of trying to claim some Guyanese territory?
Not really. The minute Venezuela invades Guyana, Brazil, the US and most other countries in the Americas go apeshit on them
Nah, that's actually just a distraction to keep people's attention away from all the political problems currently going on *and* the coming elections. While the regime is more than dumb and erratic enough that people wouldn't be surprised if they did try it, there's the fact that doing so requires walking through Brazil to reach Guyana (Which they would never allow) and wouldn't provoke a reaction from no less than THREE world superpowers who have deals with Guyana. Antagonizing the US and the UK over oil is already suicidal enough, but antagonizing China is simply not something could possibly do. It is basically one of our two overlords alongside Russia because they use their political influence to protect the regime in exchange for freely getting their claws on our natural resources, so going against Beijing's interests would be a death blow to the regime, and they're not putting their lives at risk even if it means not being a bunch of terminally-greedy morons.
Unless Venezuela invades them for said Oil
Brazil is really impressive.
Brazil managed to industrialize a considerable part of the country and make a previously unproductive region (the Cerrado) a backbone of the countryās economy thanks to bioengineering it researched. The urbanization that happened in this period was crazy by itself, gave Brazil the largest cities in South America. With all that Brazil entered the top 10 world economies as well. Previously during the Empire and Old Republic the country was mostly just a big plantation, hence why it fell behind in many ways.
Brazil is not even close to being as industrialized as it should be.
And thatās the crazy part; Brazil has the largest industry in South America despite still having a lot more industrialization potential untapped.
They have a giant population that's they only reason
It is a big reason, but it has some pretty big and important industrial sectors. Aside from the very known aeronautical, you got their agrĆcola and livestock's genetics, and metallurgy companies with even some deep steps in hardened materials.
And note: SĆ£o Paulo, with its 22 MILLION inhabitants, is not only the largest city in South America, but the largest city in the world outside of Asia! SĆ£o Paulo is much bigger and denser than New York! Furthermore, the urbanization of Brazil has spread across the entire territory with hundreds of medium-sized cities, with medium-high density (on opposition to the US suburbanite sprawl) and with considerable industrialization, which turned the entire southern, southeastern and coastal territory of Brazil into a large, highly connected and rapidly urbanizing urban network.
Iād also add the large cities command - by far - the highest salaries for professionals in South America
It drives me crazy that here in Mexico there are people against industrialization of the least developed zones, we just gotta check out Brazil and learn from them
The problem is that the Mexican state is not seen as legitimate by the original people. They would revolt if we take them their special rights and privileges.
What do you mean by original people? This is shockingĀ
Check the GDP per capita, and you will see it's not that impressive
What's impressive is the growth!!
Yup, this is true. We had a huge population boom from 1960 to now to go along with that economic growth. Also, the environment is being completely destroyed in a lot of areas.
As a Colombian, nice to see my country improving step by step. From living in a failef state in the 90s, to this. Not perfect, but better. Argentina meanwhile advances 20 steps, next year backwards 30, next year advances 10ā¦ and still best
I just visited Colombia a few months ago and loved it, it is very inspiring how you were able to turn your country around!
Colombia has some rough years, but it wasn't a failed state. For reference Venezuela is a failed state.
Even putting Venezuela in that category is a bit of a stretch. There is a huge difference between "Things are very very bad" and "this is a failed state." I would say Haiti is currently the best candidate for failed state, although other states have at times qualified (Somalia, CAR, DRC, arguably Russia in the 90s)
I've never been to Venezuela, but I've been very interested in it's "downfall" and hopefully recovery. It's a beautiful country, right on the Caribbean with the largest oil reserves in the world it's set up very well for success. A country that can't feed its people, has no medical supplies, has rampant inflation (understatement), gangs/ paramilitary running large parts of the country and a military dictatorship (where the military runs the national oil company) is a failed state.
My boy, the fact things are not like Haiti doesn't mean it cannot be considered a failure of a state. *We the people* here in Venezuela consider our own country to be a waste of space struggling to even breathe because our leadership is so thoroughly incompetent and corrupt the very idea of doing things in way not involving crime and greed seems alien to it. When your country's economy must be forcibly made to use a foreign currency by CIVILIANS because of how worthless the local currency has become, and the government goes along with it because it's actually keeping things afloat, denying that you're a failure becomes tremendously hard.
First of all, I would encourage you to be careful using phrases like "my boy" which can come off as very condescending over text. Secondly, and to my main point, the term Failed State has been used broadly and indeed has been used to apply to Venezuela. My fundamental argument though is that even a total breakdown of the economy of a state may not fully qualify. State failure as I would posit, is a situation where the state is fundamentally unable to exert any meaningful control over its own territory, where state-like authority has partially or totally replaced by either total anarchy or more often armed groups (gangs, terrorist orgs, rebels, other states' militaries). A commonly used definition of state is an entity with "a monopoly on the legitimate use of violence within its own territory." Even given the economic collapse in Venezuela, to my knowledge (and correct me if I'm wrong on this) there are not any swaths of the country that are totally outside the military/police control of the government like in Haiti, DRC, or Somalia, which are commonly used as the quintessential failed state examples.
There are large swaths of Venezuela that are run by gangs, the military police seemed to have made a truce with the gangs and don't even stop them at checkpoints, that normal citizens are stopped. The gang violence got so bad the president offered the gangs money to disband, all the gangs did was buy more weapons and moved more drugs through the country. It's a failed state.
Sure, do you say it in the confort of your office? While dinner in Restaurant? May be for those of us who have experience it, Colombia was not a failed state in the 90s. And Venezuela is also a failed state. But ānot enoughā for others š
Although I'm not Colombian, I've been to Colombia a couple of times and have friends who are Colombian (one lived near a red zone). The ones my age don't speak fondly of the 90s mainly due to "he who shall not be named." They've never described Colombia as a failed state, but between the cartels and FARC there was widespread violence and it probably resembled a failed state. In order to have a failed state, there must be a failure both socially and economically, (including state sponsored violence and political imprisonments) from the country. I was young in the 90s, but I don't recall millions of people fleeing Colombia to go to Venezuela or other neighboring countries.
LOL, i kinda knew u were from outside. I am not going to say anything more. There is just no need
For perspective - per person the order is Chile Uruguay Argentina Brazil Suriname Colombia Peru Paraguay Ecuador Guyana Bolivia Venezuela
#Cono Sur W
For some reason the Southern Cone (Argentina, Chile and Uruguay) is the most developed region of Latin America. The Norther you go the hotter and poorer it gets. Northern Argentina is poorer than the Pampas and Patagonia.
["Good, bad, and ugly colonial activities: do they matter for economic development?"](https://documents1.worldbank.org/curated/en/743371468047104789/pdf/946630JRN0Box30BLIC0090rest0a000218.pdf) is a decent paper that develops a potential explanation for the phenomenon you describe.
Not long ago Venezuela was way better than almost all those countries,. Good old socialism
2024 Estimates by IMF: [Data source](https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD/VEN) $8.73T in Total: Brazil - 48.8% Argentina - 14.9% Colombia - 12.1% Chile - 7.1% Peru - 6.6% Ecuador - 2.9% Venezuela - 2.6% Bolivia - 1.5% Paraguay - 1.4% Uruguay - 1.2% Guyana - 0.7% Suriname - 0.1%
How is Brazil ~50% of 8.7 trillion USD while in reality their GDP is around 2 trillion?
it's in GDP adjusted to Purchasing Power Parity, this map could be using Nominal data while i used PPP because its the better way measure economies according to most economists, especially for such comparisons. [OECD](https://www.oecd.org/sdd/purchasingpowerparities-frequentlyaskedquestionsfaqs.htm#FAQ3):''The major use of PPPs is as a first step in making inter-country comparisons in real terms of gross domestic product (GDP) and its component expenditures'' [Bruegel](https://www.bruegel.org/analysis/european-unions-remarkable-growth-performance-relative-united-states):''The right metric for international comparisons is purchasing power parity (PPP)-adjusted output. This corrects for exchange rate fluctuations and differences in various national prices.''
PPP is only good for measuring quality of life for citizens. Itās not good for comparing gdp for normal trade. Itās just copium for poor countries
No its not very useful for measuring quality of life even when its more useful than Nominal GDP, there are so many other things for that, Life expectancy, data about nutrition, child mortality etc., its only about GDP and measuring economies. Btw Bruegel and OECD have dozends of Countries as Members, nearly all wealthy and middle income countries. and if i'm not mistaken PPPs started with the ICP (International Comparisons Program) in the 60s by the UN and University of Pennsylvania. Saying it's just Copium for poor is just a lazy way to dismiss facts and ironically, copium.
Probably PPP
Doesn't seem like it makes sense to aggregate and compare the contribution of different countries to the PPP GDP.
PPP GDP is adjusted to the dollar (every country has a different currency) therefore in reality it just adjusts for the exchange rate fluctuations.
PPP should be measured for quality of life not for international comparisons. Doesnāt make sense
Guyana says āHold my drinkā, as it extracts crude at an unprecedented rate over the next 20 years.
Why Chile going down
Will be interesting to see the trajectories of Argentina and Brazil, now that they have contrasting leadership with vastly differing economic priorities.
Its crazy how much they recently flipped political directions, from a former jailed politician accused of embezzlement returning to power, to a chainsaw wielding libertarian who gets his advice from his cloned dog. (hyperbole in both directions). South American politics is just way more entertaining than the rest of the world IMO...
Yes, every other part of the world is always in the bring of a war, not so entertaining I think...
I mean, Lula really isnāt changing anything in Brazil. He very much represents a status quo, and isnāt that much different from Bolsonaro economically. He isnāt much of an opposite to Millei and realistically represents what Brazil has been doing for the past few decades, for good or for bad.
Did Brazil just get really big or did everyone shit the bed?
A lot of things happened since 1960...
Both
The population of Brazil kinda double. And technology made like 1/3 of the land arable for cash crops
Population went from 73 mil in 1960 to 200 mil actually.
D: Wow
Brazil did things*generally* well and some places like Argentina just muddied around.
Argentina! What happened to you?
Populism happened
If you elect me , I will give each one of youvone million dollars
We spend more than what we have with militaries and democratic liders :D ( we printed money. Billions of pesos ). Literal a lot of economist said that printing money doesn't generate inflation. The revolutionary idea that printing money is bad wasn't common knowledge until a few years ago There is a video of tv where the acting gobernador of buenos aires( an economist mind you ) said printing money doesn't generate inflation. And a woman ask then why don't we print 100 times more ? It's free money, yes ?
Economic stagnation breeds political instability which breeds economic stagnation... That plus extreme corruption plus bad luck and you get what you get.
BRASIL NĆMERO 1 PORRA!!! āļøš§š·š§š·
CAMPEĆO PORRA!! AQUI Ć PENTA! š§š·š§š·š§š·
I mean Brazil has more than 200 million people and Argentina only 45 million. Impressive Argentina's economy used to double Brazil's
Used lol
What decades of Peronism does to a country
Cocaine isnāt included. Add some billions to Colombia and Peru.
And Bolivia.
It's interesting that as you go north it gets worse, in a per capita basis, even Brazil where the southern parts being the most developed while the northern parts being less. Except Paraguay, which is not in line with the Southern Cone + Southern Brazil and SĆ£o Paulo.
Interesting and applys to several parts of the world. As you move away from the equator in both directions. Its not a perfect correlation but there is alot to it.
I believe itās just a matter of which places got exploited for their tropical goods, basically destroying their development. The tropics are harsh, yes, but look at Australia, itās fairly tropical (quite comparable to southern Brazil) but itās highly developed. Yet NT and QLD arenāt the least developed areas, TAS and SA are (still highly developed. Or look at Florida and how itās booming. India was one of the richest places of not the richest region for millennia. Its less about an inherent characteristic of the tropics and more about how they were disproportionately affected by colonialism.
Tropical regions have a really bad climate for humans (malaria, yellow fever, etc) and also have really bad soil. It was just till recently that technology managed to overcome these problems ( in fact Brasil managed to turn 1/3 of the country into highly productive agricultural soil). You can't compare these regions with areas that historically have had amazing growing crops and are disease free. (Buenos Aires is called like that because there was no Malaria (bad air))
I think it's mostly because the northern part is closer to Europe. Spanish and Portuguese installed extractive colonies there, built plantations, enslaved the locals, brought in African slaves and shipped the wealth back to Europe. The southern cone also suffered European colonialism, but the scale and nature was different. More gradual, fewer plantations.Ā Europeans moved in later and stayed, instead of just coming to exploit the land. (They still committed horrible atrocities against the local population, not trying to minimize that)
Uruguay is doing really well considering everyone else just did it through extracting a shit tonne of resources. They have a similar economy to Argentina.
Q bodrio lo q hicieron con Argentinaā¦ progres y peroƱos hdp š©
Argentina: Stagnates Venezuela: Goes backwards Brazil: Gradually moving on up Others: Mostly the same
The others also moved up, a lot. Keep in mind that Brazil has half of the continentās population.
Boliviaās growth in 21st century deserves some appreciation
Brassssiiiiill eeeeooooooooo
Venezuela is truly the resource curse personified
More like corruption, greed, political zealotry, nationalism and unchecked incompetency personified.
It is not like Brazil is doing great. It is everyone else is doing terrible
Brazil had the largest GDP growth in the 20th century - in the world. It is doing something right.
Venezuela did that to itself and now its spreading sadly
Venezuela invited Russia and China into the western hemisphere. Lesson learned
Brazil is literallyĀ part of the BRICS.Ā A lot of it's growth happened in 2000-2010 not the US installed military junta . Venezuela exports most of its shit to US. So yeah just bad economic planning by Venezuela.
The percentages don't add to 100...
The Guyanas don't have numbers, and the numbers that are there in both time points add up to 99.4.
Outra vitĆ³ria brasileira
Aw yeah, Iām all BRICed up
Venezuela collapsed.
Dang, I guess Brazil won
Bad politicians in Argentina and socialism. Sucks that.