With the start of oil exploitation in the early 20th century, companies from the United States began establishing operations in Venezuela, bringing with them U.S. citizens. By the 1960s and 1970s, Venezuela was a comparatively prosperous country and gladly received millions of immigrants from Spain, Italy, Portugal, Colombia, Ecuador, Peru, and other European and South American countries. With the economic prosperity driven by the oil industry, Venezuela was a destination for both Americans and Europeans.
However, the nationalization of the oil industry in 1976, while initially leading to increased government revenue, also sowed the seeds for future economic problems. The focus of the government should have been on furthering good economic performance by diversifying the economy instead of relying solely on oil revenues. But with the good times came a failure to invest in the oil industry’s infrastructure and human capital to ensure its long-term viability.