Venezuellian socialism: the issue of overdependency on oil export

The expulsion of foreign companies led to a technological backlog in the oil industry. Venezuela's internal financial resources are insufficient for the development of the backward oil industry at the present level, and the "oil on credit" option will only increase the country's external debt, but will not be a key to solve the problem of developing the oil industry. Therefore, in case if the country cannot restore the oil industry on its own, attracting foreign capital and rationally allocating the income share of the Venezuelan government and foreign companies can help Venezuela survive difficult economic times. It is in the government's interest to protect the interests of foreign companies to some extent and to offset the losses of some foreign investors through oil subsidies.It is necessary to establish a rational distribution of oil revenues. In order to enlist the support of the population, the Chavez administration pursued a policy of "high welfare" for a long time, selling imported goods to the population at a very low price, distributing housing and other social benefits among the population free of charge. The distortion of the price policy undermined the enthusiasm of domestic entrepreneurs, which led to the decline of the national industry, thus country became heavily dependent on imported goods. Such high welfare policies may persist in an era of high oil prices, but they are not permanent. Therefore, it is very important to allocate oil revenues wisely in order not only to invest in the oil industry, but also to invest oil revenues in other industries, especially agriculture and light industry, thus. diversifying the national economy and gradually raising employment and the standard of living of the population.How Politics and oileconomycontributed to the eventualeconomiccrisisVenezuela, with the world's largest oil reserves, fell under the "resource curse" and faced a serious economic crisis. The oil industry plays a key role in the economy and politics of Venezuela. In such conditions, the oil industry is highly dependent on oil prices and investment, while the amount of investment determines the volume of oil production.The relationship between the Venezuelan government and the oil industry can be seen as a cyclical process, with the rise and fall of world oil prices. Based on the characteristics of the Venezuelan oil economy, the government has made the industry a powerful regulatory tool. When the world price of oil is high, the policy is to nationalize the industry and increase control over the oil industry, thereby generating high tax revenues, and as a means of enhancing the country's own international political and economic status and security. When the world price of oil falls, the government changes policy, re-attracting foreign and domestic private capital through various preferential measures to develop the oil industry, which was in decline after nationalization.After two nationalizations of the oil sector, the Venezuelan government must avoid repeating the negative impact on the oil industryof the nationalizations of the 1970s, while avoiding the problem of excessive squandering of oil revenues, as was the case under the rule of Chavez.For sustainable economic development, the government should pay attention to the implementation of effective policy guarantees in two aspects: continue to attract foreign investment and change the existing development model of the oil industry. In the process of nationalization, policy adjustments ensure that the oil industry does not suffer from the loss of large amounts of investment, ensure the stability of investments in the process of nationalization, and optimize the structure of the oil industry as soon as possible, and seriously upgrade and restructure the country's oil industry. It should focus on the development of high technologies for the production of high value-added petrochemicals, LNG, gas chemical products, providing investors with a higher return on investment, and in turn, promote the development of new industries: agriculture, light industry, etc.ConclusionIn our research, various aspects of the Venezuelan version of socialism, as well as the country's energy course, were considered. Based on the work done, the following conclusions can be drawn.Venezuela's social productivity is low and this state could only rely on the oil industry to develop its economy. Under the rule ofChavez, the government of Venezuela received large incomes from the oil industry, having formed a “tax dependence” on it. At the same time, the government used the oil industry's revenues to subsidize welfare programs, making other industries unable to receive sufficient financial subsidies.In order to generate more revenue, the government continued to vigorously develop the oil industry, ignoring the development needs of other industries, which exacerbated the imbalance in the country's macroeconomic structure. 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