Economic background information:  With the oil industry making up morethan half of government revenue ( 1/3 of GDP, 80% of money earned through exports), the government of Venezuela relies heavily on one resource.  Other industries are not well developed in Venezuela and much of its population is below the poverty line (69% according to www.cia.gov). This poor population has shown support of economic and social reform and strongly supports Hugo Chavez and his boasts to address these issues.  In 1999, spending was equivalent to about 22 billion dollars, while revenue was only about 15 billion.  Chavez's largely impoverished supporters demonstrate a need for different approaches to the economic and social concerns of Venezuela.
 
 

With oil substantiating such a large part of Venezuela’s economy, Chavez has looked to changes in this industry to help boost the status of the economy.  Relations between Venezuela and the US are largely based on oil.  As Chavez attempted to strengthen Venezuela’s position in OPEC, and tried to maintain privatization of Venezuela’s largest oil compan, Petroleos de Venezuela, the US has had mixed reactions.  In some ways Chavez’s attempt to create a stable price for oil (within OPEC guidelines) would be positive, but the US cannot support high prices because of its level of consumption.  Chavez aims at boosting oil prices and continuing control over PDVSA in order to establish Venezuela as a prominent actor in the world economic arena.
 

Chavez has focused on increasing investment foreign and domestic investment in Venezuela to help build the economy. “Both foreign investment and foreign technology are essential factors for achieving a sustained economic revolution that can bring about social prosperity in our nations,” says Juan de Jesus Montilla ( 2000 - minister of production and trade).  Trade and investment create a flow of money that would strengthen Venezuela’s economy.  However, the people of Venezuela have trepidation when it comes to investing.  Officials acknowledge that information is very important in investing.  By making business opportunities and investments known, people may feel more comfortable and familiar with their options.  Giving incentives to foreign investors when they invest in a Venezuelan company represents Venezuela's attempt at create more economic activity as well.