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Historically, Venezuela has been categorized as one of the most successful countries (at least, economically speaking) in Latin America specifically during its democratic period between 1958 and 1999.[1] As the wealthiest country in this region and an OPEC member, Venezuela has been more frequently a donor than a recipient of foreign assistance.[2] Its economic dependency on oil resources was (and still is) the main reason why this reputation reached the international public sphere.[3] The effectiveness of oil revenues has had a huge impact on public expenditure and, as a result, a double-sword mechanism for the government to choose between an effective role for this institution towards a welfare state and clientelism.[4]
A UNESCO diagram demonstrating the amount Education focused aid provided to Venezuela in 2015
The golden years started from 1914 with discovery of the first fully exploitable oilfield -called Mene Grande- under the military regime of Juan Vicente Gomez. Since then, oil represented the main asset for the government to acquire consistent resources to accomplish specific plans related to modern infrastructure. Former Venezuelan President Rómulo Betancourt (president during the period 1958-1964) said in his book Venezuela: Oil and Politics[5] that "(...) Gomez was something more than a local despot, he was the instrument of foreign control of the Venezuelan economy, the ally and servant of powerful outside interests." This is in reference to Royal Dutch Shell and Standard Oil's appeasement of the dictator in return for exploration rights to the country's oil fields.
In the mid-1960s, Venezuela's bilateral economic relations were characterized by technical cooperation agreements, student exchange programs, or commercial arrangements similar to those signed by the major industrial nations.[6] Its oil wealth in the 1970s, however, did allow the country to become a major provider of bilateral and multilateral financing.[6] From 1974 to 1981, the nation contributed US$7.3 billion to international development, 64 percent of which went to multilateral sources, such as the United Nations Special Fund, the Andean Reserve Fund, the OPEC Fund, the Coffee Stabilization Fund, the Caribbean Development Bank, and the Central American Bank for Integration, among others.[6] In addition, Caracas was the headquarters of the affiliates or institutes of many regional and international organizations.[6] Total annual contributions in the late 1970s averaged 1.88 percent of GDP, above the 1 percent level suggested by the United Nations for developed countries.[6] Most bilateral assistance, funneled through the FIV, went to Andean nations, Central America, and the Caribbean.[6] Venezuela used this oil wealth to enlarge its profile in regional and international affairs, a prestige it aggressively sought.[6]
As its prosperity eroded in the 1980s, Venezuela saw its role as a donor, particularly as a bilateral one, wane.[6] The country's most prominent economic assistance during the decade was dispensed through the joint San José Accord that it administered along with Mexico in order to provide subsidized oil to the Caribbean Basin region.[6] Throughout the decade, Venezuela remained disposed to intervene in Central America.[6] After supporting the Sandinista National Liberation Front (Frente Sandinista de Liberación Nacional—FSLN) against the Somoza dictatorship in Nicaragua in 1979, the Venezuelan government also provided financial assistance to the Sandinistas' opposition, the National Opposition Union (Unión Nacional Oppositora—UNO), in its successful bid for power in 1990.[6] Some minimal bilateral funding through the FIV continued in the early 1990s, mainly to promote the country's commercial interests.[6]
In the 1980s, however, Venezuela sought funds from the major multilaterals, such as the World Bank and the IMF, after more than a decade of detachment.[6] The World Bank was active in Venezuela from 1961 to 1974, disbursing thirteen loans worth US$340 million.[6] Because of its high per capita income, however, Venezuela did not become eligible for World Bank financing until 1986.[6] In 1989 it received over US$700 million in the form of a structural adjustment loan and a trade reform loan.[6] Venezuela also used its large and previously untapped reserves at the IMF in 1989, when the IMF disbursed the first installment of a threeyear Extended Fund Facility in the amount of US$4.8 billion.[6] These new funds helped ease the country's painful transition to a more open economy, a transition undertaken largely on the advice of the IMF and the World Bank.[6] Another multilateral agency, the Inter-American Development Bank (IDB), also continued to fund Venezuela's development in highway construction, forestry programs, water and sanitation projects, mining, and other infrastructure projects.[6] In cumulative terms, the IDB provided approximately US$1.3 billion from 1961 to 1990.[6]
Finally, in the context of South-South cooperation, Cuba is a special case of foreign aid from Venezuela. This is cooperation based on Venezuela’s regional programs such as the Bank of the ALBA, the Bank of the South, PetroAmerica, PetroCaribe, and the San Jose Oil Agreement;[7] it is also based on bilateral programs channeled through state institutions and excluding or minimizing the participation of multilateral organizations, the private sector, cooperatives, and non-government organizations (NGO). As a result, state and non-state actors manipulate Venezuelan aid (a geopolitical revenue) in the form of favors, donations, transfers, third-party payments, direct aid, debt forgiveness, financing, and non-returnable investments.[7] From a general point of view, total aid to Havana from Caracas in 2008 was about US$ 9.970 billion: US$5.6 billion in payments for professional services; US$2.5 billion in subsidies for oil sold at a fixed price of US$27 and US$1.87 billion in other bilateral cooperation projects. It is important to highlight that accumulated aid since 1999 is calculated to be about US$18 billion[7]
The economic reforms begun by the Pérez administration in 1989 tracked with the prevailing liberal orthodoxy of international economics, but flew in the face of traditional Venezuelan state intervention.[6]
Since then, and especially from 1999 (under the Hugo Chávez administration) Venezuela started to use oil revenues to assure evident strategic international partnership with other countries.
Venezuela as a recipient
In the ongoing political and economic crisis in Venezuela, Russia has been a steadfast and powerful ally, repeatedly expressing open support for the Venezuelan government of Nicolás Maduro “[creating] a network of mutual support that has allowed [Maduro] to survive despite having driven more than a fifth of Venezuela’s population into exile”.[8] Furthermore, Russia has developed its relationship with the Maduro government, employing various foreign policy instruments such as mutual open and tacit support in multilateral fora, foreign aid, debt payments, support for oil trading activities and military support[9]
Venezuela represents a strategic position of anti-hegemonic US power in the Western Hemisphere and provides essential access to significant oil and mineral resource wealth. In this sense, controlling petroleum production and logistics is also some of the most significant factors that guide and impinge on Russian strategy towards Venezuela[9]
On the other hand, China’s posture in Venezuela is often misunderstood. Although the People’s Republic of China’s (PRC) government does want access to Venezuela’s oil and markets and wants to be repaid for its loans, only about $20 billion of the $62 billion it loaned to Venezuela’s leftist populist government since 2008 is still outstanding, and its companies are in control of the oil that it uses to repay itself.[10]
During the COVID-19 pandemic three main destinations of Chinese donations (Venezuela, Brazil, and Chile) accounted for 61.4 per cent of total donations. In this sense, if measured in USD per capita, the greatest impact of such donations was in the Caribbean countries and Venezuela (Table 1). The fact that Venezuela was the largest recipient of aid from China is not surprising given the humanitarian emergency that the country was experiencing after the economic crisis that began in 2015, which led millions of people to emigrate.[11]
The world of development assistance is being shaken by the power shift occurring across the global economy after the pandemic occured. Emerging economies are quietly beginning to change the rules of the game. China, the United Arab Emirates, Saudi Arabia, Korea, Kuwait and Brazil, among others, have been increasing their aid to poorer countries.[13] At the head of this group of emerging donors is China, combining loans, credits and debt write-offs with special trade arrangements and commercial investments. Common to most of these donors is a quest for energy security, enlarged trading opportuni ties and new economic partnerships, coupled with rapidly growing strength and size in the global economy.[13]
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The economy of Venezuela is based primarily on petroleum. Venezuela is the 25th largest producer of oil in the world and the 8th largest member of OPEC. Venezuela also manufactures and exports heavy industry products such as steel, aluminum, and cement. Other notable manufacturing includes electronics and automobiles as well as beverages and foodstuffs. Agriculture in Venezuela accounts for approximately 4.7% of GDP, 7.3% of the labor force and at least one-fourth of Venezuela's land area. Venezuela exports rice, corn, fish, tropical fruit, coffee, pork and beef. Venezuela has an estimated US$14.3 trillion worth of natural resources and is not self-sufficient in most areas of agriculture. Exports accounted for 16.7% of GDP and petroleum products accounted for about 95% of those exports.
The economy of Yemen has significantly weakened since the breakout of the Yemeni Civil War and the humanitarian crisis, which has caused instability, escalating hostilities, and flooding in the region. At the time of unification, South Yemen and North Yemen had vastly different but equally struggling underdeveloped economic systems. Since unification, the economy has been forced to sustain the consequences of Yemen's support for Iraq during the 1990–91 Persian Gulf War: Saudi Arabia expelled almost 1 million Yemeni workers, and both Saudi Arabia and Kuwait significantly reduced economic aid to Yemen. The 1994 civil war further drained Yemen's economy. As a consequence, Yemen has relied heavily on aid from multilateral agencies to sustain its economy for the past 24 years. In return, it has pledged to implement significant economic reforms. In 1997 the International Monetary Fund (IMF) approved two programs to increase Yemen's credit significantly: the enhanced structural adjustment facility and the extended funding facility (EFF). In the ensuing years, Yemen's government attempted to implement recommended reforms: reducing the civil service payroll, eliminating diesel and other subsidies, lowering defense spending, introducing a general sales tax, and privatizing state-run industries. However, limited progress led the IMF to suspend funding between 1999 and 2001.
Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to measure foreign aid. The DAC first adopted the concept in 1969. It is widely used as an indicator of international aid flow. It refers to material resources given by the governments of richer countries to promote the economic development of poorer countries and the welfare of their people. The donor government agency may disburse such resources to the government of the recipient country or through other organizations. Most ODA is in the form of grants, but some is measured as the concessional value in soft (low-interest) loans.
Development aid is a type of foreign/international/overseas aid given by governments and other agencies to support the economic, environmental, social, and political development of developing countries. Closely related concepts include: developmental aid, development assistance, official development assistance, development policy, development cooperation and technical assistance. It is distinguished from humanitarian aid by aiming at a sustained improvement in the conditions in a developing country, rather than short-term relief. Development aid is thus widely seen as a major way to meet Sustainable Development Goal 1 for the developing nations.
In international relations, aid is – from the perspective of governments – a voluntary transfer of resources from one country to another.
Japan emerged as one of the largest foreign aid donors in the world during the 1980s.
The Swiss Agency for Development and Cooperation (SDC) is an office-level agency in the federal administration of Switzerland, and a part of the Federal Department of Foreign Affairs. Together with other federal offices, SDC is responsible for overall coordination of Swiss international development activities and cooperation with Eastern Europe, as well as humanitarian aid.
Mali is heavily dependent upon foreign aid and is a major recipient of both multilateral and bilateral aid.
Haiti—an island country 600 miles off the coast of the U.S. state of Florida—shares the Caribbean island of Hispaniola with the Dominican Republic. Haiti has received billions in foreign assistance, yet persists as one of the poorest countries and has the lowest human development index in the Americas. There have been more than 15 natural disasters since 2001 including tropical storms, flooding, earthquakes and hurricanes. The international donor community classifies Haiti as a fragile state. Haiti is also considered a post-conflict state—one emerging from a recent coup d'état and civil war.
US$43 billion in International Monetary Fund (IMF) aid in 2003 was sent as foreign aid to Indonesia, and this assistance has traditionally been an important part of the central government's budget. From 1967 to 1991, most aid was coordinated through the Inter-Governmental Group on Indonesia (IGGI) founded and chaired by the Netherlands; since 1992, without the Netherlands, the organization has been known as the Consultative Group on Indonesia (CGI). Although Indonesia terminated its IMF aid program in December 2003, it still receives bilateral aid through the CGI, which pledged US$2.8 billion in grants and loans for 2004. Japan and the Asian Development Bank also have been key donors.
The World Bank’s assistance program of foreign aid to Vietnam has three objectives: to support Vietnam's transition to a market economy, to enhance equitable and sustainable development, and to promote good governance. From 1993 through 2004, Vietnam received pledges of US$29 billion of Official Development Assistance (ODA), of which about US$14 billion, or 49 percent, has been disbursed. In 2004 international donors pledged ODA of US$2.25 billion, of which US$1.65 billion was disbursed. Three donors accounted for 80 percent of disbursements in 2004: Japan, the World Bank, and the Asian Development Bank. During the period 2006–10, Vietnam hopes to receive US$14 billion–US$15 billion of ODA.
Nepal relies heavily on foreign aid, and donors coordinate development aid policy through the Nepal Development Forum, whose members include donor countries, international financial institutions, and inter-governmental organizations. Japan is Nepal's largest bilateral aid donor, and the World Bank and Asian Development Bank are the largest multilateral donors. Donors have been reported as losing confidence in Nepal as a result of political interference and corruption in poverty relief efforts as well as the country's apparently poor capacity to utilize aid. According to World Bank figures, official development assistance increased from US$8.2 million in 1960 to US$369 million in 2003 and then fell to US$177 million in 2004. According to Nepal's Ministry of Finance, total foreign aid committed in fiscal year (FY) 2003 was US$555 million, with 63.3 percent in grants and 36.7 percent in loans. In FY2004, total foreign aid committed was US$320 million, of which 37.7 percent was grants and 62.3 percent, loans. In June 2004, active World Bank credits totaled US$302 million, with the greatest portions allocated to the financial sector and to energy and mining. By the end of 2012, the outstanding World Bank IDA loan totaled $ 1.48 billion.
An international financial institution (IFI) is a financial institution that has been established by more than one country, and hence is subject to international law. Its owners or shareholders are generally national governments, although other international institutions and other organizations occasionally figure as shareholders. The most prominent IFIs are creations of multiple nations, although some bilateral financial institutions exist and are technically IFIs. The best known IFIs were established after World War II to assist in the reconstruction of Europe and provide mechanisms for international cooperation in managing the global financial system.
Relations between Angola and China predate the former's independence. Today, they are based on an emerging trade relationship. As of 2021, Angola was China's third-largest trading partner in Africa. The two countries announced a comprehensive strategic partnership in 2024.
The Chiang Mai Initiative (CMI) is a multilateral currency swap arrangement among the ten members of the Association of Southeast Asian Nations (ASEAN), the People's Republic of China, Japan, and South Korea. It draws from a foreign exchange reserves pool worth US$120 billion and was launched on 24 March 2010. That pool has been expanded to $240 billion in 2012.
China–Venezuela relations are the international relations between the People's Republic of China and the Bolivarian Republic of Venezuela. Formal diplomatic relations between both countries were established in August 1944 and switched recognition to the PRC in 1974. Before 1999 only one sitting president, Luis Herrera Campins, had visited China. Cooperation began growing significantly during the Presidency of Hugo Chávez of the Bolivarian Republic of Venezuela and the tenure of Jiang Zemin and Hu Jintao as the leader of the People's Republic of China. In 2016, China-Venezuelan trade amounted to $7.42 billion, with $4.9 billion coming from Venezuelan exports and $2.52 billion coming from Chinese exports.
Chinese foreign aid may be considered as both governmental (official) and private development aid and humanitarian aid originating from the People's Republic of China.
The Inter-Governmental Group on Indonesia (IGGI) was established in 1967 as an international consortium of official donors to coordinate the provision of foreign assistance to Indonesia. IGGI was the lead official grouping of donors to Indonesia from 1967 until early 1992 when it was abolished and replaced by the Consultative Group on Indonesia (CGI). For the 25 years up to 1992, IGGI was a key regional institution in Southeast Asia. It helped provide strong international support for Indonesia's economic recovery after the economic difficulties in Indonesia during the period of the Sukarno presidency in 1950s and 1960s.
Debt-trap diplomacy is a term to describe an international financial relationship where a creditor country or institution extends debt to a borrowing nation partially, or solely, to increase the lender's political leverage. The creditor country is said to extend excessive credit to a debtor country with the intention of extracting economic or political concessions when the debtor country becomes unable to meet its repayment obligations. The conditions of the loans are often not publicized. The borrowed money commonly pays for contractors and materials sourced from the creditor country.
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