Venezuela: Failed State in Latin America?Venezuela is at the mercy of its fluids.
For a country that depends on oil for 95 percent of its exports, the prolonged drop in the price of crude has been a serious financial blow.
If nothing else, though, Venezuela should be able to use its oil resources to keep the lights on and the factories going. After all, Venezuela has the largest proven oil reserves in the world. It has more than Saudi Arabia. It has more than Africa, Eurasia, and Asia combined. Only Russia and Iran are sitting on more overall energy resources.
But most of Venezuela’s energy is slated for export or is hard to access. Not to worry: Some years ago, the country diversified its electricity supply to rely more on renewables. Hydroelectric power now supplies 60 percent of the country’s energy.
Ordinarily, diversifying away from fossil fuels is a smart move.
But not when there’s a drought, which the country experienced in 2010 and again even more devastatingly this spring. Thanks to a combination of El Nino and global warming, the dams are dry. The result: widespread power outages.