The single most important issue that faces the Venezuelan economy today is its dependence on oil. Fluctuations in oil revenue have led to a predictable cycle of deficit spending, currency devaluation , inflation, recession, and unemployment. Venezuela is rich in natural resources and has a concerned citizenry, which can bolster the government's efforts to promote economic stability through privatization and the discipline of the marketplace. Though there is promise for Venezuela, the road ahead is fraught with difficulties.
The adoption of a new constitution in 1998 and the nationwide federal and local elections held in 2000 have ensured the legitimacy of the government. Now that government must continue to encourage growth in non-oil related industries. Telecommunications and power generation hold great promise for growth in the coming years, as do petroleum-related industries. Should the economy remain fairly strong, construction should also gain strength. Venezuela's future looks bright if it can spur similar growth in other, export-oriented industries, while maintaining its strengths in oil production.