ELI5: How come Venezuela is in such a poor state if it has nearly 300 Bn barrels of proven oil reserves?

Well imagine that countries were kids. Venezuela is a kid that has the best venue to make parties and the best stuff for party making. He has an arcade, would have a live band playing, etc.

The problem is that, a while ago, Venezuela started saying he was being taken advantage by other kids and then started being mean with all of them. He would kick them out of his house. He would ask for a trade but then back out once he got what he wanted. He even shunned a lot of his closest friends and even family.

Now Venezuela is all alone, and has no friends to organize a party. He has all the potential for a party, but no one will go for it. Other kids are still afraid of forgiving Venezuela because, well, he has screwed a lot of people before and they're afraid it'll happen again. Until Venezuela proves it, he'll remain alone. To make it worse, some people (who want to take advantage of Venezuela) are waiting until Venezuela gets real lonely so that he'd agree to do all sort of things for friendships he never would have.

Now just like a party makes you a lot of friends, but needs some friends to begin with, pumping and selling oil makes you a lot of money, but needs some friends to begin with. Venezuela has screwed so many people/companies/countries with money, that no one wants to help it sell oil, or buy oil from it. And just like with the party there are people who want to take advantage of Venezuela's error, some are waiting until things get so bad in Venezuela they'll do anything for help, even if long-term it's a bad idea.

/r/explainlikeimfive Thread