Why Venezuela needs the EITI
How transparency in Venezuela's oil and mining sectors can help rebuild trust, attract investment and support long-term recovery
Recent developments in Venezuela have renewed global attention on a country endowed with the world’s largest proven oil reserves, alongside vast deposits of natural gas and minerals, including gold. In 2023, Venezuelan exports were more than 80% from oil, including derivatives, with another 6% from other minerals. Oil production is currently estimated at around 1m barrels a day, approximately 1% of global production.
Venezuela stands at a critical juncture, facing a range of possible political, social and economic trajectories. While the direction of change remains uncertain, one fact is undeniable: the country’s future prosperity hinges to a large degree on how effectively and responsibly it manages its natural resource wealth.
The EITI core vision is that resource wealth is for the benefit of citizens. The EITI’s founding principles underscore that natural resource wealth can drive sustainable economic growth and poverty reduction – but only when managed responsibly. Conversely, weak governance can exacerbate economic decline and social hardship. For Venezuela, where living standards have deteriorated sharply and poverty rates have soared, the stakes could not be higher.
Any future political scenario in Venezuela will be shaped by a significant deficit of trust. This reflects not only longstanding political tensions, but also persistent opacity in how oil, gas, and minerals are managed. Limited transparency around revenues, contracts and decision-making has constrained public debate and weakened accountability. Opaque management practices in the natural resource sector exacerbate the risk of corruption.
Rebuilding Venezuela’s oil and mining sectors will require substantial investment. Investors will seek strong guarantees and predictability to mitigate risk, while citizens will expect greater openness about how natural resources are governed and how revenues are used. Key transparency issues include:
- Ownership of extractive rights and the terms and conditions governing them
- Sales of oil and gas in the international and domestic markets
- Government revenue from resource exploitation
- Allocation and use of resource revenues, including payments related to accumulated claims and commitments
- Production and revenue projections for oil, gas, and mining sectors
- Environmental management practices and compliance standards
Learning from practice
Transparency in commodity trading provides a useful illustration of how these issues can be addressed in practice. The EITI’s reporting guidelines for companies buying oil, gas and minerals from governments offer a practical framework for systematic, timely and reliable disclosure of payments and volumes in oil trading. The EITI also works with partners, including the OECD, to promote transparency in gold supply chains.
While Venezuela’s situation is unique, there are relevant lessons from other countries that have faced difficult governance and institutional challenges. Iraq – a country that faced an uncertain transition and high risk of misusing oil revenues – offers one such example. Through EITI reporting, Iraq has published data on oil sales, including volumes sold, revenues received at market-linked prices and transfers of proceeds to the national treasury. For the first time, citizens, parliamentarians, journalists and oversight institutions could see how much oil was sold at what price and how revenues flowed to the state.
The lesson is not that transparency alone resolves political challenges, but that informed decision-making and accountability are difficult to achieve without it.
The lesson is not that transparency alone resolves political challenges, but that informed decision-making and accountability are difficult to achieve without it. The EITI has, over the past two decades, been implemented in more than 50 countries, including many in complex political transitions with weak institutions, limited trust and constrained civic space.
These lessons are relevant for Venezuela. Even where implementation has been uneven, EITI reporting has helped shed light on revenues, licensing and contracts, revenue distribution, and, increasingly, social and environmental management. These experiences demonstrate that progress on transparency is possible even in complex and challenging contexts.
EITI transparency could therefore play a critical role in shaping how Venezuela’s natural wealth contributes to sustainable growth, which the country urgently needs. Aligning extractive sector governance with international standards of transparency and accountability could help rebuild confidence, support investment decisions and lay the foundation for long-term recovery.
The EITI is not a silver bullet. It will not resolve political fragmentation or economic instability on its own, nor will it replace broader reforms or democratic processes. What it can offer, however, is something Venezuela urgently needs: a shared and credible set of facts about the extractive sector to inform public debate and policy choices.
At a time of uncertainty, transparency and accountability can help lay the groundwork for rebuilding trust in institutions. The EITI provides a practical, established approach to begin that process.
Связанные материалы
