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Geography, agriculture and the economy

The Bolivarian Republic of Venezuela lies in the northern part of the continent of South America, on the Caribbean Sea and the Atlantic Ocean. It shares land borders with Brazil, Colombia and Guyana. The country has a total area of about 912,000 km² and a population of about 26 million, which is growing at an estimated annual rate of 1.4 per cent and is highly urbanized. The climate is tropical and the terrain varies from high mountains in the Andes to wide valleys and tropical forest. The country has one of the world's most massive oil deposits, and its rich mineral resources include coal, iron ore, bauxite and gold. Irresponsible mining operations threaten the rainforest ecosystem and endanger indigenous peoples. In general, the land is subject to floods, rockslides, mudslides and periodic droughts. In December 1999 and January 2000 disastrous floods swept through coastal areas, causing loss of life, heavy property damage and environmental problems. One of the areas hardest hit was the Barlovento region, where an IFAD-financed project is currently working to reduce poverty. 

Agriculture

The agricultural sector in the Bolivarian Republic of Venezuela generates less than 5 per cent of gross domestic product and satisfies about 40 per cent of internal demand for agricultural produce. The country has about 2.65 million ha of arable land, which represents only about 3 per cent of its land area. Only about 250,000 ha of land are irrigated, and they are owned by large-scale commercial farm owners. Much agricultural production is concentrated in rainfed and dryland areas, in the hands of small farmers who are vulnerable to variations in climatic conditions. In recent years legislators have addressed the problem of revising land reform laws of the 1940s and 1960s that created a complex land tenure structure, hindering sustainable development. For many decades agriculture has depended on government subsidies, and the government has usually been responsible for deciding what to produce and where to invest in the sector. The collapse of agricultural credit institutions in the early 1990s left farmers with limited financial support services. In 2000 the country had the lowest per capita food production in the South American region.

Economy

The country's economy has been heavily dependent on the petroleum sector, which accounts for about one-third of gross domestic product (GDP) and about 80 per cent of export earnings. In 2004 GDP  totalled US$109.3 billion, and gross national income per capita was US$4,020. Political, social and economic unrest in the recent past included a disastrous two-month long national oil strike in 2002-2003 that almost paralyzed the country's economic activities.

The government has adopted economic policies to pare back public expenditures and public enterprises and increase public-sector revenues. Still, Venezuelans are facing progressive impoverishment, manifest in rising unemployment, depressed wages and inflation. Lower incomes are having an adverse effect on levels of nutrition, education and labour productivity.

Source: IFAD