Chavez wins re-election, but Venezuela faces economic limits
Hugo Chavez promises to deepen the public aid programs and reforms that have formed his vaunted 21st century socialism.
Caracas (Venezuela): During his re-election campaign, Venezuela President Hugo Chavez promised to deepen the public aid programs and reforms that have formed his vaunted "21st century socialism." That message won him a surprising 11-percentage point win on Sunday in what many had seen as a tight race.
Still, he`s set to start a fourth presidential term under the toughest circumstances he`s faced with the prospect that his government`s free-spending days may be over. That will likely limit how much Chavez can expand the government programs that have helped make him so popular.
In the coming years, the country of 29 million people must defuse economic time bombs such as rapidly expanding public debt, one of Latin America`s highest inflation rates and a weakening currency.
Experts say Chavez will need to make hard economic choices in the coming years, including whether to devalue the currency, the bolivar, which would make the money in Venezuelans` pockets suddenly worth a lot less.
"He`s going to have to deal with some very basic, mundane capitalist things, like reducing inflation," which stands at 18 per cent, said Eduardo Gamarra, a Latin American studies professor at Florida International University in Miami.
"Investment in social issues is great, but he needs to do other things as well that are going to make that economy more productive."
Making Chavez`s task harder is an opposition that, for the first time in his nearly 14 years in power, includes nearly half of all voters, who cast on Sunday for challenger Henrique Capriles.
Although Chavez won by 11 percentage points, it was his smallest margin of victory ever and less than half of his lead in the last election in 2006. Meanwhile, with about 97 per cent of ballots counted the opposition had gained about 2.2 million more votes than it did in 2006, compared to about 735,000 more votes that Chavez won.
"It`s not a formidable defeat for the opposition, nor is it a big triumph for Chavismo," said Mariana Bacalao, a political science professor at Central University of Venezuela. "Never has the opposition been so strong."
Even as he celebrated victory before tens of thousands of jubilant supporters early yesterday, Chavez appeared to acknowledge he has let down some Venezuelans. Polls say many people are worried about everyday ills such as soaring homicide rates, power blackouts and crumbling infrastructure.
"I pledge to you, I repeat, to every day be a better president than I`ve been," he said, while also promising greater effectiveness and efficiency from a government whose payroll has bloated to at least 2.4 million people.