Chavez Wins Term Limit Vote, Opens Campaign for 2012
Thank goodness Ken Livingstone is no longer in office
Feb. 16 (Bloomberg) -- Venezuelan President Hugo Chavez scored a victory in his drive to stay in power as voters scrapped constitutional term limits that would have forced him from office in 2013.
The amendment carried with 54.4 percent of the vote to 45.6 percent, according to preliminary results, said Tibisay Lucena, president of the National Electoral Council. The referendum marked the second time in 14 months Chavez sought to remove the limits that kept him from seeking unlimited re-election.
âIâve received an injection of patriotic fire,â Chavez, 54, said last night in a victory speech from a balcony at the Miraflores presidential palace as thousands of supporters below cheered and waved flags. âIâll dedicate myself for life to the service of the Venezuelan people.â
Chavez now has a chance to extend his drive to turn the oil- exporting country into a socialist state, which he says will take until 2019. That goal may be harder to meet without the rising oil prices of the past five years that fueled spending on social programs, outlays for food, health care and education that solidified his base and widened his popularity.
Without a constitutional check on his power, the former army lieutenant colonel may stay in office indefinitely, opposition leader Leopoldo Lopez said. Chavez already controls Venezuelaâs energy wealth through the state oil company, and holds sway over congress and the courts through supporters and appointees, Lopez said in an interview.
The president, who celebrated 10 years in office on Feb. 2, announced heâll be a candidate in 2012 as fireworks were launched across Caracas. Chavez has spent billions of dollars in oil revenue to offer free health care, subsidized groceries and reading programs for the poor.
âHeâs clearly going to be very emboldened,â said Michael Shifter, vice president of the Washington-based Inter-American Dialogue. âHeâs going to move ahead in radical fashion with his revolution.â
Voters narrowly rejected removing term limits in 2007, Chavezâs first electoral defeat since winning the presidency in 1998.
In the referendum, Chavez regained some of the support he lost in 2007, when the country suffered widespread food shortages. More than 6 million votes were cast in favor of the amendment yesterday, 1.6 million more than in the last referendum. Still, thatâs short of the 7.3 million votes Chavez won in the 2006 presidential elections.
The opposition garnered 5 million votes yesterday, an increase of about 535,000 over 2007.
âPassed the Barrierâ
âWeâve passed the barrier of 5 million,â opposition leader Omar Barboza said in comments broadcast by Globovision. âWeâll continue with our proposal of a different country. Sooner or later weâll triumph.â
Chavez rushed to hold the referendum ahead of a looming economic recession, proposing the vote the day after regional elections in November when the opposition won the three biggest states and Caracas.
Venezuela, the fourth-largest supplier of crude oil to the U.S., depends on oil for 93 percent of export revenue and half the governmentâs budget. Crude prices have plunged 74 percent since touching a record in July.
âLow oil prices, economic stagnation, increasing unemployment and difficulties for the government to fund the generous subsidies that the poor now consider as their rights, are likely to fuel social discontent,â said Carlos Caicedo, head of the Latin America division at London-based political risk firm Exclusive Analysis, in a research note.
Caracas-based Banco Mercantil said in a Feb. 3 report that oil income will fall 66 percent this year, and Morgan Stanley forecasts the economy will contract 1 percent, even as inflation accelerates. Consumer prices rose 30.7 percent in January from a year ago, the fastest pace in Latin America.
The prospect of re-election may push Chavez to take âneeded but unpopularâ measures now to deal with the economy, Goldman Sachs Group Inc. economist Alberto Ramos wrote in a note to investors yesterday, citing devaluation of the currency, which is pegged to the U.S. dollar, and less government spending.
The bolivar jumped 2.7 percent to 5.65 per dollar in unregulated trading at 12:30 p.m. New York time from 5.80 on Feb 13, traders said. It had slumped 4.3 percent over the past month amid concern that Chavez was putting off tax increases and spending cuts as he focused on winning the referendum.
There are already signs the government is low on cash. Chavez ordered the central bank to transfer $12 billion of reserves into a development fund last month. Finance Minister Ali Rodriguez said yesterday the government may back out of a planned takeover of Banco de Venezuela, the local unit of Spainâs Banco Santander SA.
After his 2006 re-election, Chavez took advantage of a five- year run-up in oil prices for nationalizations. He took over the biggest telecommunications and electricity companies, a steel mill and the cement industry. He also forced foreign oil companies Royal Dutch Shell Plc, Chevron Corp. and Repsol YPF into joint ventures as minority partners.
âHeâs going to have a clock running against him,â said Carlos Luna, a professor of international relations at the Universidad Central de Venezuela. âPeople are expecting big things from him at the exact moment that the economic crisis is knocking.â
To contact the reporter on this story: Matthew Walter in Caracas at email@example.com.
Thank goodness Ken Livingstone is no longer in office