Rumours over Chavez frenzy in Venezuela

2011-06-28 22:27

Caracas - The guessing game over Venezuelan President Hugo Chavez's health took new twists on Tuesday with rumours ranging from a possible takeover push by his brother to a homecoming by the end of this week.

Chavez's June 10 operation in Cuba and disappearance from public view have convulsed the volatile and politically polarised South American OPEC member of 29 million people.

Utterly dominant on Venezuela's political stage since 1999, Chavez has far advanced sweeping socialist reforms including nationalisation of large swathes of South America's biggest oil producer. The 56-year-old aspires to re-election next year.

But now some are asking if he can make it to the vote.

The government says he had surgery for an abscess in the pelvis and is recovering fine. But it has given no more medical details nor a clear timetable for his homecoming.

That, combined with the normally garrulous and ever-present president's silence, has led to speculation he may have a much more serious problem.

"We are not going to comment on rumours, lies and falsehoods. The president is recovering well and we will have him here soon," Information Minister Andres Izarra said in the latest official rebuttal of the crescendo of rumours.

Well-known Venezuelan journalist Nelson Bocaranda reported on Tuesday in opposition-leaning El Universal newspaper that Chavez had lost 10kg and was digesting liquids only at Havana's Cimeq hospital during treatment for prostate cancer.

Armed struggle legitimate

Despite that, he would have an 80% survival chance and plans to return on Friday for more treatment in Venezuela, Bocaranda said, quoting unidentified medical sources.

Other local media also quoted army sources as saying Chavez would be back in time for a military ceremony on Friday.

One new rumour is that Chavez's older brother Adan, governor of the Andean state of Barinas and ideological mentor to the socialist president, is preparing to try to take the reins should the seat of power be vacated.

Outraging the opposition, Adan Chavez was widely quoted at the weekend as citing a phrase by Argentine revolutionary Ernesto "Che" Guevara that the "armed struggle" was a legitimate means of winning power if elections failed.

US-based intelligence think tank STRATFOR said that Adan and other factions may begin positioning themselves to fight for succession if Chavez's situation does turn out to be serious.

"Though Adan is someone the president is more likely to trust, he would have difficulties building broader support," said STRATFOR in a report, noting that he, like other senior allies, lack the president's charisma and national appeal.

Should Chavez be incapacitated, Vice-President Elias Jaua would in theory take over for the rest of his six-year period, until January 2013, under Article 233 of the constitution.

Such talk, Chavez allies say, is absurd and destabilising.

Vampires

"You have the look of vampires," prominent government legislator Celia Flores rebuked local journalists.

Bond traders have so far viewed the possibility of a major health problem for Chavez positively, assuming it would lead to a transition of power to a more market-friendly government.

Some analysts, however, say that could be wishful thinking given that a Chavez demise could usher in a period of chaos for Venezuela, as allies of the president and the opposition all jostle for power.

A deadline of sorts is looming on July 5 when Chavez would love to be home for a regional summit and the 200th anniversary of Venezuela's independence. Some media reports say he is arguing with his doctors over that in Havana.

One theory doing the rounds is that Chavez is deliberately allowing the furore to build up so he can fly home triumphant to the acclaim of supporters in a political deus ex machina.

The coffee-swilling and baseball-loving president has always been a shrewd handler of his own image, ensuring high popularity levels, most recently hovering at about 50%.

In his absence, ministers look somewhat bemused and opposition parties have continued to fail to articulate a clear alternative to the nation beyond anti-Chavismo.

"The leadership vacuum in Venezuela is becoming acute and the political situation is lurching. The opposition and the government alike appear directionless," UK-based LatinNews think-tank said.

Venezuela's benchmark, dollar-denominated 2027 global bond rose a further 0.500 point, or 0.68%, in price on Tuesday to bid 74.000, offering a yield of 13.164.

That followed a 2.8% rally of that bond on Monday, as investors took kindly to possible bad news for Chavez.

Overall, returns on Venezuelan global bonds rose 2.66% on Tuesday, according to JP Morgan Emerging Markets Index Plus (EMBI+) index after a 2.36 rise on Monday.

"All things equal of course a weakened Chavez is a positive for the credit, but Venezuela's political situation will be chaotic in either scenario," said Standard Chartered bank analyst Bret Rosen. 

- Reuters