Powerful Leader Has Ability to Bounce Back

Hugo Chávez has suffered a stinging defeat, but it will pause rather than stop his self-styled socialist revolution.

The scenes of a jubilant opposition and a crestfallen government mask the fact that Venezuela's president remains immensely powerful and has the ability to bounce back.

He has five years left in office, controls a state awash with petro-dollars and enjoys wide support in the slums where most Venezuelans live. "Uh, ah, Chávez no se va," his supporters cried in defiance yesterday. They were right. Chávez is not going anywhere.

He is a masterful communicator and tactician who has learned from previous setbacks. If he concludes he strayed too far, too fast ahead of his supporters he will tack back and talk more about the price of bread than why everybody should read Noam Chomsky.

In conceding defeat Chávez's tone was unusually conciliatory, but he was steadfast in the drive to turn South America's energy power into a socialist state. With oil at record prices and the national assembly, courts, central bank and state-owned companies under his control, Chávez remains a colossus.

But now there is a crack at the base. The opposition, a loose and fragmented coalition of students, small political parties and civic society groups, is galvanized and could mount a stern challenge in next year's assembly elections.

Much will hinge on its ability to shed a middle-class image and reach out to those in the barrios who still revere "mi commandante" but are disillusioned by inflation, corruption and sporadic shortages of staple foods.

Even if oil prices stay high there are signs of a looming crunch: galloping inflation, investment flight and a yawning gap between the official and black market exchange rate. If the wheels fall off the economy the government will have no one to blame.