Sinking in the Devil's Excrement: A 367-Page Book on Oil and Underdevelopment in Venezuela

Juan Pablo Pérez Alfonzo argued that oil can be a curse when its excess weakens a country's productive economy. He called this relationship the "Venezuela effect".

## Oil as a curse

**Juan Pablo Pérez Alfonzo**, a founder of **OPEC**, argued that oil can be a curse. The huge inflow of money from a non-renewable natural resource can create the illusion that the country has grown rich, even though that wealth does not come from a diversified productive economy.

His concern was not only how much oil was produced, but how much money was coming in and the country's real capacity to absorb it productively. The result could be inflation, excessive imports, economic distortions and waste.

## The "Venezuela effect"

Pérez Alfonzo called this phenomenon the "**Venezuela effect**" or "oil indigestion". With oil revenues available, it becomes easier to import goods than to produce them domestically. This can weaken agriculture, industry and other activities, making the country increasingly dependent on oil.

His book runs to **367 pages** and tells the direct story of the link between excess oil and underdevelopment in Venezuela, according to the summary by **albaciudad.org**.

## Nationalization was not enough

Pérez Alfonzo supported greater sovereignty over hydrocarbons, but warned that changing the ownership of companies did not automatically solve the problem. The fundamental question was what to do with the resource and with the income it generated.

He was critical of **Venezuela's oil nationalization in 1976**, considering it insufficient. For him, oil had to be regarded as a **depletable asset**. Extracting it quickly to finance growing consumption meant turning a finite natural wealth into current spending.