Page 91 - Azerbaijan State University of Economics

Iurii Korobeinikov: Dutch disease and Venezuelan economics in retrospective

manufacturing (UN International Standard Industrial Classification of All Economic Activities,

2014) it can be found that oil sector is out of the consideration. Although there might be other

industries which are not counted in manufacturing sector, it is possible to assume that among the rest

of industries oil and gas extraction will be the major contributor to GDP of Venezuela. But, it should

be taken into account that petroleum refining is considered as manufacturing.

As it was assumed that sector “others” is mainly formed by natural resources industry from

the Fig.7 it can be noticed that:

- Resource extraction sector was in a decline after the 1980 following the price trend of oil;

later it has grown till the pike in 1990;

th
- Decline in oil prices in the 1990 is followed by the decline of the resource sector in the

share of Venezuelan GDP;

th
- Rising trend of the oil prices in the beginning of 2000 is followed by the growing trend

of the resource sector;

- Fluctuations in the oil price after the beginning of World Economic Crisis in 2008 are

repeated by the resource sector of Venezuela.

- There is additional evidence that Venezuelan export is mainly dependent on the resource

extraction sector. Fig.8. shows that resource sector and exports of the country are in pro-cyclical

relation. At the same time, manufacturing performs rather counter-cyclical correlation with

exports trends. Growth of resource sector is always accompanied with the decline of

manufacturing contribution to GDP. (Services and agriculture are not considered for the

following reason: services are usually consumed domestically and agriculture clearly shows

stable low fluctuations in the contribution to country’s GDP – see Fig.7);

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