Boats in Villa Marina, Falcón State. Credit:Jujovar2010, CC BY-SA 3.0, via Wikimedia Commons

By Francisco R. Rodríguez
DENVER, Colorado, USA, Oct 23 2026 (IPS)

 
Money chase

So, if Venezuela claims to be importing from the rest of the world roughly as much as it was exporting during those years, and the rest of the world confirms Venezuela’s story, then where could those additional $11 billion that presumably ended up in the bank accounts of Maduro’s cronies be?

Technically, there are some ways in which a country could spend as much as it earns and still have large sums go missing. The first obvious one is if there were $11 billion lying around to steal. Except we know there weren’t, because the Venezuelan government was broke and had all its international accounts frozen. Even the Central Bank didn’t have access to most of its international reserves at the time. And remember, the Times is telling us that these $11 billion were coming out of unpaid receivables. In other words, the oil was being sold, it was being loaded into ships, and the owners of these ships were promising to pay Venezuela for that oil but, according to the Times, never did.

Another possibility is that Venezuela was accumulating assets because someone was lending it money. But that explanation doesn’t pass the smell test either. Nobody in their right mind would have lent $11 billion to Venezuela in 2021 and 2022. The country was sanctioned, barred from issuing any type of debt in the United States, and even non-US investment funds wouldn’t go near it with a 10-foot pole. The country didn’t even have access to bank accounts where a loan of that size could be wired.

And, quite frankly, if, say, China or Russia had lent Venezuela $11 billion and somehow gotten those dollars to Venezuela, don’t you think the New York Times, or Reuters, or the Wall Street Journal, would have written a story about that? And, by the way, where is that $11 billion creditor trying to get their money back? No other Venezuela creditors seem to know about them, which is quite odd for a country that has just announced that it’s about to start restructuring its debt.

In sum, nobody lent Venezuela $11 billion in 2021–22 because anyone deluded enough to do so wouldn’t have been lending the money; they would have been giving it away. The country already had a debt that was well in excess of its capacity to pay, and country risk premiums were through the roof. The expected return on any Venezuela debt issuance in those years would have been zero.

Digging in

Now here it is actually worth stopping for a minute and looking carefully at the numbers in the country’s current account, because what the balance of payments data allows us to do is not just look at how much the country receives and spends in foreign exchange, but also where that money comes from and where it goes. And here the story gets interesting because, oddly enough, what these numbers seem to tell us is that the Venezuelan government did borrow around $11 billion (or, more precisely, $10.4 billion) in those two years. They also tell us that it accumulated some $14 billion in accounts receivable, precisely the ones that the New York Times is telling us were not paid.

So, say you had just come down from Mars, knew nothing about Venezuela’s pariah status at the time, and looked at these numbers. You would say: well yes, Venezuela borrowed $10 billion in those years and at the same time accumulated $14 billion in accounts receivable (that is, promises to pay in the future) for its oil sales. And if then, on your short trip from Mars, you picked up a copy of the New York Times and read it, you would say: well, it looks like of those $14 billion, around $11 billion never got paid.

So why does the country’s current account data get us these numbers that are so strange? Herein lies what I think is the resolution of the issue.

Below is a slide from a presentation prepared by PDVSA in late 2022, where it reports all of the oil that was sold between 2020 and 2022.[1] Note that $13.3 billion in invoices were ceded to the Republic. That’s actually a bit higher than the Times’ $11 billion because it includes 2020. In other words, the government was paying for its imports through oil shipments because it could not use international bank accounts as a result of US sanctions. Normally, PDVSA would have sold the oil, received dollars in payment, and sold those dollars to the Central Bank. Then the government would have gone to the Central Bank and bought dollars from it to pay importers.

Exhibit 1: November 2022 PDVSA Presentation Shows Receivables Ceded to Republic

Source: Ministry of Popular Power for Oil.

Since that mechanism could not be used, the government resorted to paying in-kind. It went to the importers and said: look, if you bring this much in imports into the country, we’ll let you go and collect from the people who bought our oil and who owe us money.

In fact, if you look at the decomposition of the supposed borrowing that the government did, you’ll find $6.3 billion of portfolio investment securities being issued by the government. And that rhythm of roughly $500 million per quarter continues until the end of 2025. That’s not because the government is issuing bonds. Believe me, if the government had issued a single bond, we would know about it (and whoever had bought that bond would have become the laughingstock of the securities world). But if you look at the fine print of the IMF’s Balance of Payments Statistics Manual, you’ll find that what characterizes portfolio investment is the fact that securities have to be negotiable. And this is precisely what Venezuela was giving importers: negotiable IOUs that they could exchange for oil receivables entitling them to receive payment for oil that Venezuela had sold.

We find a very direct statement of this in another slide of the PDVSA 2022 presentation, where the board states, in discussing cases of cesión de facturas (assignment of invoices) corresponding to shipments requested by the National Executive, that these were used to compensate debts with providers of the Republic.

There it is: we’ve found our mystery lender: importers who were being issued debt so that they could exchange them for oil shipments. So, when you see the balance of payments accounts say that the government was accumulating receivables and issuing debt, what you are really seeing is the way in which balance of payments statistics handle a practice that is as old as humanity: barter.

Oil and prejudice

Reality is often much more prosaic than what we want it to be. Government cronies did not walk away with $11 billion in unpaid oil shipments. What really happened is something much simpler: Venezuela didn’t have a way to pay in cash for the imports it needed, so it ended up paying with oil. And because PDVSA, the state-owned oil company, is legally distinct from the Republic, it did not directly collect on the shipments but rather transferred them to the Republic in payment of its tax and royalty obligations.

American journalist Sydney Harris once wrote that “we believe what we want to believe, what we like to believe, what suits our prejudices and fuels our passions.” And yes, the idea that Maduro’s henchmen walked off with $11 billion in oil shipments feeds well into many stereotypes of Venezuela under Maduro. Even if it sits awkwardly with the fact that he doesn’t seem to have money to pay for his defense in a Brooklyn court, most of us are predisposed to believe it.

Yes, Maduro’s regime was highly corrupt. No one puts that in doubt. But there is a long distance between recognizing its corruption and claiming that regime insiders walked away with half of the country’s oil exports. That image may fit a lot of political stereotypes and be useful for many political narratives. It just doesn’t fit the facts.

Francisco R. Rodríguez is a senior research fellow at the Center for Economic and Policy Research (cepr.net) in Washington, DC and a professor and fellow at the University of Denver’s Korbel School of International Studies.

[1] I obtained this presentation two years ago from reporters who wrote stories on it and who asked me to see it to discuss their interpretation of it.

IPS UN Bureau

Estado Zulia - Venezuela. Credit: Breddyjgalvis, CC BY-SA 3.0 , via Wikimedia Commons

By Francisco R. Rodríguez
DENVER, Colorado, USA, Oct 21 2026 (IPS)

If you’ve been around Venezuelans for long enough, you know that we tend to speak in superlatives. We have the best baseball players, the most beautiful beaches, the tastiest arepas, and the wickedest dictators. But even being used to the scale of our superlatives didn’t quite prepare me for what I read in the May 5 edition of The New York Times, in a story called “In Venezuela, Trump Vowed to Show Accountability. Oil Deals Linger.” The story tells us that a network of shell companies controlled by Carlos Malpica (who is widely believed to be Maduro’s bagman) embezzled $11 billion of the country’s oil wealth in 2021 and 2022. In the Times’ words: “for every two dollars that Venezuela earned selling oil earlier this decade, one dollar was stolen, internal documents and official statistics show.”

Francisco R. Rodríguez

However, it is one thing to document the practice of corruption and another to argue that half of the country’s oil revenues were stolen. That conclusion is inconsistent with what we know about flows of currency into and out of Venezuela. Put simply, $11 billion of oil revenues could not have been stolen because if they had, Venezuela would not have been able to buy the goods that we know it purchased from the rest of the world.

The claim that half of oil revenues in 2021–22 were lost to corruption rests on a specific assumption: that if Venezuela’s state-owned oil company did not receive direct payment for its exports, the money must have been stolen. That interpretation misses one important fact. During this period, Venezuela was highly sanctioned, could not access bank accounts, and was paying for many of its imports directly with oil. That PDVSA did not directly receive cash payment on billions of dollars in receivables is not evidence of corruption; it is evidence of barter.

The mother of all kleptocracies

The claim that $11 billion were stolen is staggering because it would represent by far the largest corruption scandal ever uncovered. To take one example: the largest ever kleptocracy investigation, that for Malaysia’s 1MDB scandal, has been alleged to have diverted $4.5 billion over a seven-year period in a country whose GDP was approximately $270 billion a year. That works out to about 0.2 percent of Malaysian GDP over that period. Were the New York Times’ $11 billion figure correct, it would represent roughly 8 percent of Venezuela’s GDP over the period — approximately 32 times the size of the Malaysian graft relative to its economy. And if you take into account that estimates suggest that every dollar of oil revenue generates about 4 dollars of non-oil activity, you would reach the conclusion that the costs of Maduro’s alleged corruption was around 40 percent of Venezuelan GDP — several orders of magnitude higher than the cost of corruption found in numerous quantitative cross-national studies (and that[s even without counting the money other people were stealing). This would make Venezuela by far the mother of all kleptocracies.

The Times’ $11 billion number, if true, has major implications for the debates about Venezuela. For a long time, proponents of maximum pressure sanctions have argued that we shouldn’t worry about their detrimental effect on the country’s economy because the real cause of Venezuela’s collapse is corruption. That argument has always been strongly flawed: there’s no reason why corruption, mismanagement, poor policies and sanctions can’t all have contributed to the collapse. That said, if it were true that half of Venezuela’s oil income was being brazenly stolen, then the idea that external constraints are at most a secondary cause of Venezuela’s economic malaise acquires a greater ring of truth.

Reality check

Yet the story that Maduro’s henchmen stole $11 billion has a deep problem. If that money had really vanished, then Venezuela would not have been able to pay for the goods that it imported in those years.

In 2021 and 2022, Venezuela sold $26 billion in oil shipments, or an average of $13 billion a year. In addition, it generated another $11 billion in non-oil exports, of which a large part is mining, and received around $7 billion in remittances. That means the country received total foreign currency inflows of $44 billion in those two years. Now here’s the rub. We also know that the country was paying around $44 billion in imports of goods, services, and income payments to the rest of the world over the same two years. In fact, for 2021 and 2022 combined, the country’s foreign currency revenues exceeded its spending by just $0.04 billion. This difference, also known as the current account balance, was essentially zero. It means the country was spending as much money as was coming in, which makes sense for a country that had no assets to run down and no one to lend it money.

In sum in 2021–22, Venezuela was living paycheck to paycheck. And when you’re doing that, it’s very hard for half of your paychecks to go missing without you and everyone around you noticing.

Table 1: Venezuela Current Account Statistics, 2021–2022

Source: Own construction using balance of payments data from Venezuelan Central Bank.

Now you might say: wait a minute, if the money was stolen, then maybe it didn’t come in at all, and instead of those $44 billion we would have had $55 billion in foreign currency earnings. Except that the New York Times story tells us that the oil was sold and invoiced, and that PDVSA never directly received payment for it. But if that’s true, then we know they must have been registered as exports. That’s how balance of payments statistics are built: you count an export when it is sold and invoiced, not when it is paid for.

But what if the Central Bank is lying? What if it’s just claiming that Venezuela sold $26 billion in oil to hide evidence of the corruption? Or what if it’s inflating import numbers with the same purpose?

Certainly, that would not be beyond them. And, in fact, we know there are circumstances under which over-invoicing of imports distorts balance of payments statistics. But that tends to happen in different conditions — for example, when there are exchange controls and people claim to be importing more than they really are.

To check this, I put together data reported by Venezuela’s 31 most important trading partners. Scaling up to the economy’s total trade, I estimate total goods imports of $23 billion for 2021–22, quite close to the Central Bank’s $24 billion.[1] I also looked at estimates of exports from physical oil shipments constructed by independent agencies.[2] Again, the numbers match up with what the Central Bank is telling us.

Francisco R. Rodríguez is a senior research fellow at the Center for Economic and Policy Research (cepr.net) in Washington, DC and a professor and fellow at the University of Denver’s Korbel School of International Studies.

[1] The calculation assumes that the share of trade with these partners remained stable between 2012 and 2021.

[2] Average oil exports from Venezuela in 2021 and 2022 were 627,000 and 616,500 barrels per day, respectively, according to data from Reuters and Refinitiv Eikon. Using these export volumes, the BCV’s implied sales price for Venezuelan oil would be $47.0 and $68.1 per barrel in 2021 and 2022, respectively, implying a discount of 10 percent on average relative to OPEC’s Merey price for those years. This is consistent with evidence that Venezuela sold some of its oil at a lower price than that of the market reference reported to OPEC (see, e.g., this story based on internal PDVSA reports and this New York indictment in a corruption case with direct numbers reflecting discounts on PDVSA sales). For Venezuela to have had a sizable current account surplus, the BCV would have to be understating its oil exports — but this would imply either substantially higher export volumes than those calculated by Reuters/Refinitiv Eikon based on tanker loading data, or that Venezuela was selling its oil at a substantially higher price. Both appear highly implausible.

IPS UN Bureau