With an economy dominated by oil production, Venezuela has enjoyed the highest standard of living in Latin America. Despite the success in the oil sector, agriculture and manufacturing also play an important role in the Venezuelan economy. With this in mind, it would appear that Venezuela's economic status has flourished. Rather, it has suffered the effects of political influence, corruption and economic mismanagement. The distribution of wealth across Venezuela has benefited elites at the expense of workers. This is mainly due to the economic and political structure of the country. Even with the abundant resources that Venezuela possesses, it is constantly threatened by political instability, changes in global markets and social challenges. Representing 90% of export earnings, approximately 50% of federal budget revenues, and approximately 30% of GDP, oil has had a rather substantial impact on Venezuela's economy. This is not surprising, considering that Venezuela has the largest oil reserves outside the Middle East. From 1929 to 1970, Venezuela was the world's largest oil exporter. Of this, approximately 54% was exported to the United States. Despite all the success brought by the oil industry, the government wanted to increase its control and in 1975 the oil industry was nationalized. PDVSA, the holding company of four major oil producers, was created in 1977 as a result of the new nationalization of the oil industry. During the 1980s, fluctuating oil prices and Venezuela's deteriorating domestic financial situation triggered the seizure of $6 billion in oil company profits to help offset debt problems. This action virtually eliminated sovereignty…half of the paper…and major attempts to address and resolve these issues, which still have a large impact on the Venezuelan economy. From 1960 to 2008, Venezuela's GDP increased overall, as shown in Figure 4. This increase can be used to measure the overall standard of living in the country. Major improvements in Venezuela's economy have allowed them to diversify many of their industries. However, this country's economic potential is still hampered by political instability, changes in global markets and social challenges. With an effective stimulus package implemented in the coming years, Venezuela's economy could still see some major improvements. Even this, however, will not help resolve the mistrust that Venezuela has created around the world in its attempt to achieve a better economic system. This is something that can only be solved by generations to come.