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Venezuelans Reject Chavez's Plans for Constitution (Update4)
By Matthew Walter and Helen Murphy
Dec. 3 (Bloomberg) -- Venezuelan President Hugo Chavez suffered his
first electoral loss in nine years as voters turned down his plan to
revamp the constitution and cement his power.
Chavez conceded the outcome today, while saying his ideas are ``still
alive.''
``This is a democracy,'' the president said in Caracas. ``For me, this
isn't a defeat. This is for now.''
The loss signals waning support for Chavez's drive to bring socialism
to the region's fourth-biggest economy by concentrating power in his
hands and ramping up state control of private lives. Voters refused to
abolish presidential term limits or allow government censorship during
declared emergencies. Chavez also sought to shorten the work day and
end central bank autonomy.
``This is the first significant setback that Chavez has ever had,''
said Adam Isacson, director at the Center for International Policy in
Washington. ``He has lost popular support. He has lost support of some
of the army and the poor.''
He has also lost confidence of investors. The government's 9 1/4
percent dollar bond due in 2027 tumbled 22 percent this year, with
almost half the loss coming in the month before the referendum.
Oil Fuels Growth
Chavez's 69 proposed changes to the constitution were grouped into two
blocks. The first set was rejected 50.7 percent to 49.3 percent, the
second block 51.1 percent to 48.9 percent. About 8.88 million people
voted, or 56 percent of those eligible, according to a statement on
the election agency's Web site.
Venezuela's 9 1/4 percent bond due in 2027 rose 4.10 cents on the
dollar at 8:27 a.m. New York time, according to JPMorgan Chase & Co.
The bond's yield fell 0.45 percentage point to 8.92 percent from 9.37
percent on Nov. 30.
Chavez's use of the words ``for now'' in his concession speech echo a
statement he made after his failed attempt to overthrow the government
in 1992. After that, ``for now'' became a rallying cry for his
supporters.
``I wouldn't be surprised if in the next few months he pushes most of
the ideas through the National Assembly,'' said Daniel Linsker, who
heads the Americas desk for Control Risks, a London-based business
risk consulting company. ``He comes out looking like a democrat;
Chavez is now legitimate and still looking for a way to remain in
office.''
`Empowered'
While oil exports fueled annual economic growth of more than 8 percent
over the past four years, the South American country has a credit
rating below investment grade. Its annual inflation rate, 17.2
percent, is the highest in the region.
``The opposition will emerge from its vote more energized and
empowered,'' said Gianfranco Bertozzi, a senior Latin America
economist for Lehman Brothers in New York. ``If handled carefully the
event could even herald a crumbling of the Bolivarian revolution,
although it's still early.''
Cheers, fireworks and the banging of pots and pans could be heard in a
mostly anti-Chavez Caracas neighborhood after the results were
announced. Supporters of the changes tore down posters that read ``Si
con Chavez.''
``The reform has just faded away, but our president is still with
us,'' said Yenier Bedoya, 22, a student and a nurse.
Four months after Chavez unveiled his plan to write a constitution
that would quicken his so-called Bolivarian socialist revolution, some
polls showed the referendum too close to call.
`Over the Top'
Opposition parties, student groups and some former allies, most
notably Chavez's ex-Defense Minister Raul Isaias Baduel, the general
who returned him to power after a 2002 coup, campaigned against the
proposal.
Their contention that the new constitution was a power grab resonated
with some of Chavez's supporters.
``President Chavez has given us much, but this time he's gone over the
top,'' Darwin Rodriguez, 23, a glass blower, said in an interview in
Caracas.
Baduel said after the results were announced that Chavez may continue
to push for the reforms he sought.
``We should be alert to the possibility that these changes will be
imposed through a different route than the constitution,'' he said in
comments broadcast by Globovision.
Demonstrations
Demonstrations turned violent at times over the past three months as
police regularly used tear gas and water cannons to control crowds of
protesters.
Chavez sought to fire up his backers with escalating attacks on the
U.S., foreign investors and the media in his final speeches before the
vote.
He told tens of thousands of supporters at a Nov. 30 rally that he was
prepared to cut off exports of oil to the U.S., Venezuela's biggest
trading partner, should the U.S. government try to stir up violence in
the country after the referendum. He also said he may nationalize
Spanish banks operating in the country to defend the ``dignity'' of
Venezuela, after Spanish King Juan Carlos I told him to ``shut up''
earlier this month.
Economists said the proposed changes to the constitution would curb
private investment and slow growth in Venezuela, South America's third-
biggest economy and its biggest oil exporter.
``The ball is in Chavez's court,'' said Teodoro Petkoff, a former
planning minister and editor of opposition newspaper Tal Cual, in
comments broadcast by Globovision. ``He can send a message to the
country: enough division, enough blaming, enough saying that if
someone is against him that person is against the world, a coup-
monger, a snake.''
Chavez said last week that if voters approve his plan, he's prepared
to stay in power until 2050.
``It's still too early for me to go,'' the former army lieutenant
colonel said Nov. 30. ``I'll give my life for Venezuela until the last
day.''
-----------------------------------------------------------------------------------------------------------
The Lieberals need to be paying attention since they love more
government and more socialist programs.
By Matthew Walter and Helen Murphy
Dec. 3 (Bloomberg) -- Venezuelan President Hugo Chavez suffered his
first electoral loss in nine years as voters turned down his plan to
revamp the constitution and cement his power.
Chavez conceded the outcome today, while saying his ideas are ``still
alive.''
``This is a democracy,'' the president said in Caracas. ``For me, this
isn't a defeat. This is for now.''
The loss signals waning support for Chavez's drive to bring socialism
to the region's fourth-biggest economy by concentrating power in his
hands and ramping up state control of private lives. Voters refused to
abolish presidential term limits or allow government censorship during
declared emergencies. Chavez also sought to shorten the work day and
end central bank autonomy.
``This is the first significant setback that Chavez has ever had,''
said Adam Isacson, director at the Center for International Policy in
Washington. ``He has lost popular support. He has lost support of some
of the army and the poor.''
He has also lost confidence of investors. The government's 9 1/4
percent dollar bond due in 2027 tumbled 22 percent this year, with
almost half the loss coming in the month before the referendum.
Oil Fuels Growth
Chavez's 69 proposed changes to the constitution were grouped into two
blocks. The first set was rejected 50.7 percent to 49.3 percent, the
second block 51.1 percent to 48.9 percent. About 8.88 million people
voted, or 56 percent of those eligible, according to a statement on
the election agency's Web site.
Venezuela's 9 1/4 percent bond due in 2027 rose 4.10 cents on the
dollar at 8:27 a.m. New York time, according to JPMorgan Chase & Co.
The bond's yield fell 0.45 percentage point to 8.92 percent from 9.37
percent on Nov. 30.
Chavez's use of the words ``for now'' in his concession speech echo a
statement he made after his failed attempt to overthrow the government
in 1992. After that, ``for now'' became a rallying cry for his
supporters.
``I wouldn't be surprised if in the next few months he pushes most of
the ideas through the National Assembly,'' said Daniel Linsker, who
heads the Americas desk for Control Risks, a London-based business
risk consulting company. ``He comes out looking like a democrat;
Chavez is now legitimate and still looking for a way to remain in
office.''
`Empowered'
While oil exports fueled annual economic growth of more than 8 percent
over the past four years, the South American country has a credit
rating below investment grade. Its annual inflation rate, 17.2
percent, is the highest in the region.
``The opposition will emerge from its vote more energized and
empowered,'' said Gianfranco Bertozzi, a senior Latin America
economist for Lehman Brothers in New York. ``If handled carefully the
event could even herald a crumbling of the Bolivarian revolution,
although it's still early.''
Cheers, fireworks and the banging of pots and pans could be heard in a
mostly anti-Chavez Caracas neighborhood after the results were
announced. Supporters of the changes tore down posters that read ``Si
con Chavez.''
``The reform has just faded away, but our president is still with
us,'' said Yenier Bedoya, 22, a student and a nurse.
Four months after Chavez unveiled his plan to write a constitution
that would quicken his so-called Bolivarian socialist revolution, some
polls showed the referendum too close to call.
`Over the Top'
Opposition parties, student groups and some former allies, most
notably Chavez's ex-Defense Minister Raul Isaias Baduel, the general
who returned him to power after a 2002 coup, campaigned against the
proposal.
Their contention that the new constitution was a power grab resonated
with some of Chavez's supporters.
``President Chavez has given us much, but this time he's gone over the
top,'' Darwin Rodriguez, 23, a glass blower, said in an interview in
Caracas.
Baduel said after the results were announced that Chavez may continue
to push for the reforms he sought.
``We should be alert to the possibility that these changes will be
imposed through a different route than the constitution,'' he said in
comments broadcast by Globovision.
Demonstrations
Demonstrations turned violent at times over the past three months as
police regularly used tear gas and water cannons to control crowds of
protesters.
Chavez sought to fire up his backers with escalating attacks on the
U.S., foreign investors and the media in his final speeches before the
vote.
He told tens of thousands of supporters at a Nov. 30 rally that he was
prepared to cut off exports of oil to the U.S., Venezuela's biggest
trading partner, should the U.S. government try to stir up violence in
the country after the referendum. He also said he may nationalize
Spanish banks operating in the country to defend the ``dignity'' of
Venezuela, after Spanish King Juan Carlos I told him to ``shut up''
earlier this month.
Economists said the proposed changes to the constitution would curb
private investment and slow growth in Venezuela, South America's third-
biggest economy and its biggest oil exporter.
``The ball is in Chavez's court,'' said Teodoro Petkoff, a former
planning minister and editor of opposition newspaper Tal Cual, in
comments broadcast by Globovision. ``He can send a message to the
country: enough division, enough blaming, enough saying that if
someone is against him that person is against the world, a coup-
monger, a snake.''
Chavez said last week that if voters approve his plan, he's prepared
to stay in power until 2050.
``It's still too early for me to go,'' the former army lieutenant
colonel said Nov. 30. ``I'll give my life for Venezuela until the last
day.''
-----------------------------------------------------------------------------------------------------------
The Lieberals need to be paying attention since they love more
government and more socialist programs.
