Nationalization of Oil in Venezuela

Venezuela has been one of the leading proponents of a new international economic order. As a major oil producer it was instrumental in the creation of OPEC. It has also realized a basic element of a NIEO — the nationalization of basic economic resources. The oil industry was nationalized on January 1, 1976, while the second-ranking export industry, iron and steel, had been expropriated one year earlier.In this paper the effects of oil nationalization in Venezuela are studied to establish whether the previous structure of foreign dominance has been fundamentally altered. A set of dominance indicators is defined and applied to Venezuela before and after nationalization. The main conclusion is that dominance structures persisted, but with some differences between indicators. The expected long-term effect of increased oil prices, oil nationalization and the new development strategy, is that the degree of mono-production will be reduced, whereas economic and technological penetration as well as dependence on foreign trade will actually increase. This points to the need for more fundamental changes in power relation ships inside the country. Nationalization alone does not guarantee a development in the interests of the majority.