Maduro hopes to become Venezuela’s Deng Xiaoping

For years, the Venezuelan economy has been little more than a horror show, losing more than 80 percent of its GDP in the Nicolás Maduro era, an economic catastrophe rarely seen outside of wartime. Empty shelves, hunger, and hyperinflation became the norm — and pushed millions to flee the country.

In the months before the pandemic, however, the country was showing some signs of economic recovery — albeit a very unequal one. And with the worst of the Covid-19 crisis hopefully in the rearview mirror, economic consultancies critical of the regime are now forecasting a full year of economic growth for the first time in the Maduro era — something they see as likely to continue through 2023 as well.

Venezuela’s battered local oil industry already doubled its output in 2021, while President Maduro said this week that the problem of hyperinflation was now under control, after the country posted a third consecutive month of single-digit price hikes, with Mr. Maduro hinting that December would see the positive streak continue. 

All encouraging signs in a country that has had little reason for optimism over the past decade.

So, what changed?

According to Mr. Maduro’s latest interview, the key moment for the turnaround was August 2018, when the government introduced a basket of economic reforms to “adapt to the economic war that was being waged against Venezuela.” Analysts not linked to the administration, on the other hand, see it as a correction to the failed policies instituted over the previous years, which had led to unprecedented levels of economic misery.

The most notable change was the unification of the country’s multiple exchange-rate system, a source of massive economic inefficiency and corruption. The...