Venezuela's political, economic and social development in the twentieth century has been unique in Latin America. In 1900, Venezuela was a poor and caudillo-dominated Caribbean country. Export agriculture based on coffee and cacao produced some modest wealth for the planter class, but neither the Andean nor the coastal hacendados could be said to constitute a national modernizing elite. Poor communications and regionally based rural economies meant that national loyalties remained weak. Moreover, the nineteenth-century civil wars had played havoc with hopes for economic prosperity, national integration and even political stability as successive regional politico-military cliques came to power in Caracas.

Economic growth accelerated around the turn of the century. Under the dictatorship of the Táchira caudillo Cipriano Castro (1899–1908) foreign companies intensified asphalt exploitation; and from 1914, under the dictatorship of another Tachira caudillo, Juan Vicente Gomez (1908–1935), Venezuela's economy began to undergo a singular transformation with the discovery of rich oil fields in the western province of Zulia and in the eastern coastal region. However, the impact of the oil industry upon Venezuela would not be fully evident until after Gómez's death. Moreover, political life changed little before 1936, except for an expansion of government jobs and a very modest strengthening of central government. Economic patterns and class structure also registered only slight shifts. Many of Gómez's cronies entered the elite by selling concessions to foreign oil companies, and a larger and more affluent middle class arose as Venezuelans found professional employment with the oil companies and in the growing public sector.