LAB’s Sue Branford witnessed the failure of successive Venezuelan governments to use the country’s resource wealth wisely to invest in skills and diversify from dependency on a single commodity — oil.
When I was in Venezuela in 1999, the country’s ‘curse of plenty’ was surprisingly evident. Until then, I had assumed that the more resources a country had, the more likely it was to be wealthy.
At the time, Brazil’s Landless Movement (MST) had sent activists to the country to help President Hugo Chavez, regarded as a fellow left-winger, to carry out a radical programme of agrarian reform to divide up the large estates.
But, despite all their wealth of experience, the MST activists were struggling. They confided that very few Venezuelans were up for the challenge of taking over a plot of land to produce food for their families and to sell the excess on the market.
One exasperated Brazilian activist confided that Venezuelans were just too deeply enmeshed in a pervasive system of patronage, which provided them with free handouts, without them having to work hard to get them.
Soon after my visit, the MST’s collaboration with the chavistas collapsed. Ironically it was renewed in September 2025, and one month later the MST’s João Pedro Stédile announced that popular movements across Latin America are coordinating to send brigades of activists to Venezuela in solidarity with the country’s government and people, amid growing threats of a possible U.S. military intervention
Back then, though, the experience made me think for the first time whether having plentiful natural resources helps promote the well-being of the whole of the population.
Economists widely recognize that countries with an accessible system of education and a basic welfare system will create conditions for the sustainable welfare of the population.
But the vast majority of countries with a glut of resources fail to use their wealth in this way. Norway and Botswana are among the exceptions.
Norway used part of the money generated by its oil and gas exports to set up a sovereign wealth fund to invest in education and welfare. Similarly, Botswana used money from its diamond exports to form partnerships with the private sector to invest in health and education and to promote diversification.
These successes were only possible because both countries have strong regulatory frameworks and sound governance. Without these, economies become vulnerable to the ‘paradox of plenty’, when a country becomes excessively reliant on a single sector, neglecting the development of other sectors and becoming vulnerable to economic stagnation, corruption and conflict.
Botswana’s recent experience, however, demonstrates the fragility of its efforts to escape dependency. Diamonds still account for 70 per cent of its total exports, while a collapse in the price they command on world markets and the rapid growth in sales of synthetic diamonds led to the economy contracting by 3.1 per cent in 2024. A 15 per cent Trump tariff on Botswanan diamond exports was an additional blow.
Venezuela, meanwhile, along with Angola, was severely affected by the ‘paradox of plenty’. With few jobs available outside the oil industry and the service sector it generated around it, living standards plummeted by 74 per cent between 2013 and 2023, representing one of the largest declines in modern history outside of war. Over seven million Venezuelans fled the country, seeking better opportunities abroad.
Donroe vulnerability
In such dire straits, Venezuela became vulnerable to the imposition of what has been dubbed the Donroe Doctrine. That of course does not in any way justify the US military invasion and kidnapping of a head of state. ‘Donroe’ is a play on words on the old 19th century Monroe Doctrine. This was a key US foreign policy statement made by President James Monroe on December 2 1823. It warned European powers against interfering of the western hemisphere. In varying forms it became the justification for innumerable arbitrary and illegal US interventions in the region over the next two centuries.
‘The Monroe Doctrine is a big deal, but we’ve superseded it by a lot, by a real lot,’ Trump said during a press conference at his Mar-a-Lago club in Florida in the early hours of Saturday 3 January, just after he’d ordered an impressively efficient military mission to illegally kidnap Maduro. ‘They now call it the “Donroe Doctrine”. American dominance in the Western Hemisphere will never be questioned again.’
‘Welcome to 2026, and under the Trump administration, America is back,’ US Secretary of Defense Pete Hegseth added at the same press conference. ‘Under our new national security strategy, American dominance in the Western Hemisphere will never again be questioned. For decades, other administrations neglected – or even contributed to – growing security threats in our hemisphere. Under the Trump administration, that has stopped. We are now reasserting American power in our region in the most powerful way.’
For Trump, ‘the future will be determined by the ability to protect the trade, territory, and resources that are central to our national security… These are the iron laws that have always dictated global power,’ he concluded. Indeed, he has said explicitly that the US ‘will run the country’ and oil corporations will be ‘very much involved’.
