Naim: Venezuela’s Treacherous Recovery

Waving Venezuelan flags during a rally in Caracas, Venezuela, March 2026 – Gaby Oraa / Reuters

MOISÉS NAÍM is a Distinguished Fellow at the Carnegie Endowment for International Peace, an internationally syndicated columnist, and the author of The Revenge of Power: How Autocrats Are Reinventing Politics for the 21st Century.

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Venezuela may soon experience something it has not seen in years: a surge of economic growth and activity. Although the removal of President Nicolás Maduro by U.S. forces in January left his deputy, Delcy Rodríguez, in place, it has nonetheless opened possibilities that for decades seemed out of reach. Political prisoners are slowly being released, exiles are considering returning home, investors are exploring new opportunities, and countries are reopening their embassies in Caracas. Venezuelans’ long-suppressed hopes are flaring back to life. And so far, the country has avoided the chaos that many thought might follow the downfall of its dictator.

A degree of skepticism remains warranted; Venezuelans still face rampant poverty, hunger, corruption, repression, illegal detentions, and malfunctioning public services. Many of the top figures of the past decades of authoritarian rule remain embedded in the armed forces, intelligence services, civilian ministries, state-owned companies, regulatory agencies, and courts. Their power may now be restrained, particularly by the decisions and policies of the Trump administration, but it has not disappeared. An unusual arrangement has taken shape: a form of power sharing between Washington and an interim caretaker government headed by Rodríguez, one of the most prominent leaders of the Maduro regime.

That arrangement reflects the Trump administration’s interests. For now, Washington seems to care far more about the fortunes of Venezuela’s economy, notably its oil industry, than those of its democracy. Yet those priorities have placed Venezuela in a paradoxical situation. The same forces that could revive its economy—oil and mining revenues, private investment, and the returning capital and entrepreneurship of the diaspora—could also destabilize its political transition. If institutions remain weak and the gains of future economic growth are spread unevenly, then Venezuelans will lose faith in the new dispensation.

Many Venezuelans have great expectations for what the future might hold. Should the state fail to deliver, it could plunge the country into chronic political instability. The only way to guarantee that an economic recovery serves all Venezuelans is to also ensure a political recovery, one in which institutions can once again constrain executive power and in which the will of the public finally finds expression in elections that are genuinely free and fair. 

THE RESOURCE PURSE

After the U.S. military captured Maduro and his wife, the focus in Washington quickly shifted from regime change to how to exploit Venezuela’s hydrocarbon resources. Venezuela has the greatest proven oil reserves in the world. But under the mismanagement of the Maduro regime, the country’s oil industry crumbled and grew dilapidated. Oil production fell from more than three million barrels per day in 1998 to roughly 900,000 barrels per day in 2024, dropping even lower in some years. The collapse was largely self-inflicted. Corruption, political interference, and mismanagement hollowed out Petróleos de Venezuela, the national oil company, which was once considered among the world’s top energy players. An illustrative example of the rot was the massive explosion in August 2012 that rocked the Amuay refinery, killing 48 people, injuring more than 150, and damaging over 1,600 homes nearby. Today, the Amuay refinery operates at a fraction of its original capacity. Foreign powers contributed to the debacle. In 2017, during Trump’s first term, the White House imposed economic sanctions on Venezuela. Two years later, it directly sanctioned Petróleos de Venezuela, limiting the company’s access to international financial markets and clients abroad.

Any path to prosperity and stability in Venezuela will run through the resurrection of the oil and gas industry. But such a revival will be a costly and complex undertaking. Francisco Monaldi, an oil expert at Rice University, has estimated that restoring production could require more than $100 billion in investment and at least a decade of sustained effort. It will also require the restoration of the rule of law, which will take some doing: Venezuela now ranks last among the 143 countries monitored by the World Justice Project Rule of Law Index.

How exactly the Venezuelan oil industry gets back on its feet remains to be determined. U.S. President Donald Trump announced in January that the United States would “run” Venezuela until a “safe, proper, and judicious transition” could be ensured. U.S. officials then stated that proceeds from Venezuelan oil sales—now managed through U.S.-controlled accounts—would be distributed for the benefit of the American and Venezuelan people. The precise breakdown of that distribution has not yet been disclosed, and Washington retains substantial influence over how the funds will be allocated. Within weeks of Maduro’s capture, the Trump administration imposed a new regulatory framework governing all oil and gas activities. The National Assembly, presided over by Jorge Rodríguez, the new president’s brother, approved this framework in a law liberalizing the oil sector and dismantling many of the restrictions that had been in place since the nationalization of the oil industry in 1976.

Venezuelans’ long-suppressed hopes are flaring back to life.

Venezuela’s oil industry may never regain the heights it reached in the late 1990s and early 2000s, when production exceeded 3 to 3.5 million barrels per day. But abundant reserves, conducive geology, new technologies, access to capital markets, and close U.S. supervision could still create a powerful growth engine. Beyond oil, the Trump administration has also moved quickly to revive Venezuela’s mining sector, which has enormous economic potential: large gold reserves that rank among the world’s largest, as well as major deposits of bauxite, iron ore, coal, and critical minerals.

In March, U.S. Interior Secretary Doug Burgum led a delegation of more than two dozen mining executives to Caracas. Jorge Rodríguez pledged to accelerate the approval of a new mining law designed to liberalize the sector and reduce regulatory barriers. Venezuela’s state gold mining company, Minerven, has signed a U.S.-backed agreement to sell between 650 and 1,000 kilograms of gold bars to international traders supplying American refineries, according to reporting by Reuters and Axios. That amount—roughly one metric ton—would represent about ten percent of Venezuela’s officially reported gold production in 2025, a modest but symbolically important step in reconnecting the country’s mining sector to formal global markets. If sustained and widened, such deals could do far more than generate export revenue. They could begin to shift gold production away from criminal networks into regulated channels. That would provide the Venezuelan state with a new source of income, allowing it to maintain environmental oversight of mining operations and helping it better integrate into the global economy.

Yet even if Venezuela’s oil and mining sectors experience tremendous new growth, their success could pose problems for the country. Venezuela has experienced oil booms before. What it has never sustained is a political system strong enough to prevent those booms from becoming instruments used by autocratic elites to stifle political competition and entrench their own power. Old practices—cronyism, opaque deals, self-serving decisions, and political favoritism—could persist even under U.S. tutelage. Indeed, if the dictatorship is left largely intact, that outcome is altogether likely. The shadow economy that grew under Maduro is deeply embedded in the country and is still active, with strong ties to a global network of crime syndicates.

Without institutions capable of limiting discretionary power and enforcing rules, the surge in oil, gas, and mineral production could benefit a sliver of Venezuelans while spreading disillusionment among the public. In other words, a roaring economy could aggravate political instability rather than eliminate it.

THE POWER OF THE DIASPORA

Another potential source of renewal for Venezuela is its people, especially those who have fled. The Venezuelan diaspora is now one of the largest in the world. Nearly eight million Venezuelans—more than a quarter of the country’s population—have left since 2014. No other country in the Western Hemisphere has experienced such rapid emigration in recent decades. Remittances already sustain millions of families inside the country. Venezuelans abroad send home an estimated $4 billion to $5 billion each year, totals that rival some of the country’s remaining export revenues.

But the diaspora represents far more than remittances. It includes petroleum engineers in Houston, entrepreneurs in Miami, logistics specialists in Bogotá, and financial professionals in Madrid. Many have acquired the skills, savings, and international contacts that Venezuela has lost. Some will never return. Others will bide their time before coming back. But even a small burst of return migration could have a powerful economic impact. If just ten percent of the diaspora returned with modest capital—say, $50,000 per household—that alone would represent tens of billions of dollars flowing back into the economy. Even without resettling permanently, many members of the diaspora have the money, knowledge, and connections needed to launch businesses and strengthen existing ones.

The shadow economy that grew under Maduro is deeply embedded in the country.

Early signs of these possibilities are already visible. Since Maduro’s ouster, Venezuelan entrepreneurs abroad have been exploring investments in the country’s retail, logistics, telecommunications, food processing, and tourism sectors. International firms are studying opportunities in infrastructure, energy services, and construction, which were all devastated by the country’s prolonged collapse. Private investment will be indispensable in rebuilding Venezuela’s electric grid, water systems, transportation networks, housing stock, and digital infrastructure. The state lacks the resources and managerial capacity to address these challenges on its own.

But capital rarely spreads evenly. It gravitates toward sectors that offer quick returns and where the risks are manageable. Early investments could concentrate on Caracas and a few commercial hubs while much of the rest of the country remains stagnant. If the recovery appears to benefit insiders—with state assets sold off cheaply to friends and shady international financiers while wages continue to stagnate and public services lag—Venezuelans will lose confidence in the political legitimacy of the transition.

The economic recovery is not just about engineering growth. It is about who benefits, and whether citizens believe the distribution of those benefits is fair. Investments must translate into visible improvements in daily life: reliable electricity, working water systems, functional transportation, and safer streets. Without tangible public gains, economic growth may end up fueling frustration rather than stability.

GREAT EXPECTATIONS

After years of scarcity, repression, and mass emigration, Venezuelans may not expect immediate prosperity. But they will demand progress: functioning hospitals, affordable food and medicine, jobs and wages that sustain families, and security delivered by the government and not an array of unaccountable armed militias. These expectations are modest for a country with Venezuela’s vast natural resources, but they remain difficult to satisfy quickly.

Venezuelans may grow impatient with the pace of change. Institutions recover slowly—through the development of new rules, habits, and greater administrative capacity—but the expectations of people can rise much faster. The return of Venezuelans who had left in the Maduro years, the flood of capital into the economy, and the opening of Venezuela to international markets could all raise hopes beyond what any transitional government can deliver.

That asymmetry between expectations of rapid change and the reality of slow institution building is the central challenge of Venezuela’s next phase. Washington appears to believe that dismantling Venezuela’s leadership structure too quickly could trigger fragmentation inside the armed forces, security services, state bureaucracy, and local governments. In fragile states, preserving parts of the existing command structure can sometimes prevent immediate disorder and mitigate chaos.

But the strategy carries its own danger. If economic normalization advances faster than institutional reform, those who control early revenue flows may consolidate power before meaningful constraints exist. The challenge is not simply to restore growth but also to ensure that growth does not once again create a political class insensible to the demands of the broader public and beyond the constraints of institutions.

VENEZUELA’S OPPORTUNITY

Venezuela is now in a better place than it was in the 27-year span of the Hugo Chávez and Maduro dictatorships. Its next oil boom is already beginning. Oil revenues are rising, private investment will follow, and the expectations of Venezuelans will surge. This boom is certain to test the country’s new political system as well as its economy.

The task ahead is daunting. The needs are enormous, and the state has only limited capacity to satisfy them. Inevitably, conflicts between old and new political players and jockeying for power will ensue. Shortsighted political mistakes, such as the pursuit of seductive but unrealistic policies, can provoke paralyzing social strife.

Two forces could help stabilize Venezuela: boundless natural resources for which the world has an insatiable appetite, and the Venezuelan people’s desire to live in an electoral democracy. Revenues from oil exports are beginning to provide the funds that the government desperately needs. But elections remain a fraught subject.

It is clearly in Delcy Rodríguez’s interest to delay elections as much as possible, thus prolonging her tenure. Trump and U.S. Secretary of State Marco Rubio are too distracted by the war in Iran to pressure Caracas to hold elections any time soon. Trump is satisfied with Rodríguez’s handling of the situation and seems convinced that with her at the helm, chaos will be kept at bay.

Venezuelans abroad send home an estimated $4 billion to $5 billion each year.

María Corina Machado, the leader of the democratic opposition to Chávez, Maduro and the current interim government, disagrees. She wants free and fair presidential elections as soon as possible as part of a democratic transition. She has spoken about preparing for a “new and gigantic electoral victory.” According to a February 2026 survey by the Caracas-based polling firm Meganálisis, Machado would receive 82.4 percent of the vote in a head-to-head race against Delcy Rodríguez, who would garner just 4.8 percent, underscoring the scale of the opposition’s potential advantage.

Venezuela now faces three plausible paths toward elections. The first is a rush to stage them quickly, say, by the end of this year; that would be politically tempting and symbolically powerful, but such a move almost always proves to be destabilizing when a country’s institutions remain feeble. The second path is a managed transition in which limited but consequential reforms—legalizing parties, freeing jailed political leaders, restoring basic electoral safeguards, allowing exiled Venezuelans to vote, granting opposition candidates equal access to media, and welcoming credible international monitoring of the polls—precede any vote. The third path is drift: a drawn-out stalemate in which entrenched networks adapt, delay, and ultimately shape any election to their advantage.

The real danger is not that Venezuela will fail to hold elections, but that it will hold them too soon and present the result as proof of a democratic overhaul. Only the second path holds real promise. In Venezuela, as elsewhere, elections do not produce democracy unless democracy, however fragile and defective, already exists. That will require resisting shortcuts, insisting on credible rules, and accepting that legitimacy cannot be improvised but comes only from a voting process with integrity.

If those conditions take hold, the next election could be more than pageantry. It could be the moment when freedom and political change become durable in Venezuela—and when, at last, the will of its people begins to matter.