ABSTRACT

This chapter examines the factors and the context that contributed to the formulation and implementation of the nationalisation policy in Venezuela. It argues that the nationalisation policy was largely devised by the political elite, and that the role played in this process by managers of the oil industry was of limited significance. Despite the measures implemented to minimise the negative effects of the oil windfall, a policy of great spending, subsidies and non-restricted foreign borrowing was the result of the oil economic boom. President Caldera’s experience had demonstrated that, despite the ever-demanding taxation schemes that the successive Venezuelan governments had been able to impose on the foreign companies, the presence of the Multinationals in the national soil had for a long time fed the nationalist feelings of the political leadership. The favourable combination between context and historical factors, both at the domestic and international levels, rendered unnecessary the implementation of too radical an action.