Previous Year Question
Consider the following statements:
Statement-I: Recently, Venezuela has achieved a rapid recovery from its economic crisis and succeeded in preventing its people from fleeing/emigrating to other countries.
Statement-II: Venezuela has the world’s largest oil reserves.
Which one of the following is correct in respect of the above statements?
Both Statement-I and Statement-II are correct and Statement-II explains Statement-I.
Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I.
Statement-I is correct, but Statement-II is incorrect.
Statement-I is incorrect, but Statement-II is correct.
Correct Answer: D
Detailed Solution
Statement-I is incorrect. Although Venezuela recorded limited improvements in indicators such as real GDP growth and the pace of inflation during certain years, these changes did not amount to a broad and rapid economic recovery. The country remained affected for a prolonged period by:
Extremely high inflation and currency depreciation;
A major decline in oil production;
Shortages of food, medicines and other essential commodities;
Deterioration in public services and employment opportunities;
Political and institutional instability.
Migration provides the most decisive evidence. According to the R4V Platform associated with UNHCR and IOM, by 2024, more than approximately 7.7 million Venezuelan refugees and migrants had left the country. Therefore, the assertion that Venezuela had succeeded in preventing its people from emigrating was factually incorrect.
Statement-II is correct. Venezuela possesses the world’s largest proved crude-oil reserves. International official datasets place its proved reserves at approximately 303 billion barrels.
A major part of these reserves is located in the Orinoco Oil Belt. Much of the oil is heavy or extra-heavy crude, requiring greater technology, capital, specialised refining facilities and diluents. Consequently, possessing enormous reserves does not automatically ensure high production or economic prosperity.
Actual production depends on factors such as:
Investment and technology in the petroleum sector;
Production and refining infrastructure;
The operational capacity of the state-owned oil company PDVSA;
International sanctions;
Global oil prices;
Administrative and economic policies.
This explains why Venezuela continued to experience a serious economic crisis and large-scale outward migration despite possessing the world’s largest proved oil reserves.
Current status (2026)
Venezuela remains listed by OPEC as a founding member and continues to hold one of the largest oil-reserve endowments in the world. Large-scale Venezuelan displacement has also not ended. Thus, the situation in 2026 does not support Statement-I’s claim that the country has successfully prevented emigration.