On National Heroes and Nationally-Owned Enterprises

In 1975, Venezuela nationalized its oil industry - an important step in the long and eventfulrelationship between the country and its oil supplies. A gold coin commemorates the event. Itis one of the rarest pieces of Venezuelan numismatics.

In auction 371 Künker offers a great rarity of Venezuelan coinage as lot No. 2421. The 500-Bolívares gold coin was minted in 1975 on the occasion of the nationalization of the country'soil industry, the mintage figure amounted to as few as 100 specimens. On one side, we cansee two oil towers. The other side features a portrait of Simón Bolívar, the great freedomfighter of South America who is still admired in Venezuela and other parts of the continenttoday. What is the relationship between the national hero and the nationalization of the oilindustry? The coin throws us right into the complex history of Venezuela.

Venezuela, Republic: 500 Bolívares 1975. Nationalization of the oil industry. Only 100specimens minted. Proof. Estimate: 10,000 euros. From Künker auction 371 (22 to 24 June2022), No. 2421.

Venezuela and Its Oil: A Boon and a Bane
For more than 100 years, the rich oil deposits under the Maracaibo Basin have played a keyrole for the fate of Venezuela. In 1917, oil was found in the South American country for thefirst time ever. Only 10 years later, Venezuela had become the world's second-largest oilexporter. Many people made a lot of money thanks to the oil, especially the foreigncompanies that extracted and refined it.

Obviously, Venezuela would have liked to have a bigger share of the pie for itself. And thisbrings us to the mid-1970s. We recall this period as the time of the oil crisis. In Germany,everybody remembers the car-free Sundays of 1973, when people could go for a walk on theAutobahn. The situation was due to a cutback in production in the Arab world as a reaction tothe Yom Kippur War. The oil price shot up to unprecedented levels. It was a good time foroil-rich Venezuela and the foreign companies that were involved in the country's oil production. Their revenues increased further and further.

President Carlos Andrés Pérez nationalized Venezuela's oil industry on 1 January1976.

In this context, the moderate socialist Carlos Andrés Pérez came to power in 1974. Henationalized the entire oil sector and its huge revenues - and this is the occasion on which thecoin offered by Künker was issued. In the following years, Venezuela became one of thewealthiest countries in South America. Between 1973 and 1983, the revenues made from theexport of crude oil totaled astounding 240 billion dollars, the equivalent of 696 billion dollarstoday. The boom continued until the early 1980s. The state-owned oil company Petróleos deVenezuela, Petroven for short, even expanded abroad. They bought refineries in the USA andEurope and became the world's third-largest oil company.

But then the tide turned - not for the first time in Venezuela's history. After all, oil is adouble-edged sword that does not only bring wealth. Do you know the term ?Economists use it to describe a complex phenomenon. It can be summarized as follows:countries that make very high profits from exporting commodities experience slumps in othereconomic sectors. Venezuela is considered a prime example of this phenomenon. When theoil price started to collapse in 1983, the country couldn't compensate for the missingrevenues. The boom was followed by a severe, long-lasting economic crisis. That's why theoil industry was reopened to foreign participation in the 1990s - and then Hugo Chávez cameto power in 1999. The socialist, who was considered rather problematic by many othercountries, got lucky - in 2007 the oil price rose again to unprecedented heights. Under the battle cry , President Chávez nationalized the country'soil industry once again in 2007.

Simón Bolívar, called (the Liberator), is considered the great freedomfighter against Spanish colonialism in South America. Painting by Ricardo Acevedo Bernal.

El Libertador
Chávez referred to his reforms as a revolution. And he gave it a revealing title: The BolivarianRevolution. In this way, Chávez linked his measures to a man whom he considered his greatrole model in the fight against foreign countries and who enjoyed greatpopularity as a national hero in Venezuela: Simón Bolívar - the man we see on the reverse ofthe 1975 gold coin.

Bolívar (1783-1830) is an icon of Latin America. In the early 19th century, he led thecontinent's war of independence against Spanish colonial forces, and he is considered anational hero of many South American countries that owe their independence to him. Bolívaris seen in that way in Bolivia, which was named after him, and in Venezuela, whose bordersinclude his birthplace - much to the pride of the Venezuelan people.

The fact that Bolívar's death in 1830 was perceived more as a liberation and a relief by hiscontemporaries didn't interest anyone anymore just a few years later. To this day, he isadmired, revered, and transfigured. All political camps like to refer to Bolívar. Accordingly,he often appears on the coins of Venezuela and other South American countries.

Another Venezuelan coin commemorating Bolívar from Künker's current auction sale:10,000 Bolívares 1987. Proof. Estimate: 1,250 euros. From Künker auction 371 (22 to 24 June2022), No. 2423.

Would Bolívar have approved of this nationalization of the oil industry? Well, since he diedin 1830 - long before the combustion engine was invented - he obviously never said anythingabout this. From a socialist point of view, however, the nationalization can be perfectlyinterpreted as a decolonization and a liberation à la Bolívar given that the act prevents foreigncountries from making money with Venezuelan oil. That might be the reason why his portraitis depicted on the 1975 coin. By the way, the Venezuelans also named their currency afterhim, and this name hasn't been changed since 1879: the Bolívar.

A building of the state oil company Petroven with a Chávez poster.

The nationalization of the oil industry in 1975 was an important moment in Venezuela'shistory and brought great prosperity to the country. The second nationalization in 2007incidentally had a completely different outcome. Since urgently needed investments failed tomaterialize and massive mismanagement prevailed, the oil industry - and with it the whole ofVenezuela - fell into a downward spiral. To this day, the country is struggling with anongoing economic crisis and is no longer one of the continent's richest but one of thecontinent's poorest countries. Every few years, a few zeros are removed from the Bolívar tofight the never-ending inflation: in 2018 it was five zeroes, in 2021 six.