Bloomberg
July 12, 2012
By Charlie Devereux

Courtesy of: AFP

Venezuela‘s President Hugo Chavez is hitting the campaign trail today in an attempt to persuade voters his battle with cancer hasn’t diminished his vitality ahead of what’s shaping up to be his toughest election.

Chavez will attend a rally today in the oil producing state of Anzoategui on Venezuela’s northeastern coast and plans to hold a similar event in Barquisimeto in central Lara state July 14. The rallies are the first since the former tank commander marked the official start of campaigning July 1 with a caravan and speech in Maracay, 50 miles west of Caracas.

Chavez, 57, said July 9 that he’s “totally free” of a cancer whose exact type and location he’s refused to reveal. The comment echoes similar remarks in October 2011 that he later retracted after the discovery of a second tumor in February saw him travel to Cuba for surgery and radiation treatment.

“He’s definitely still going to have to prove it,” said Gregory Weeks, director of Latin American studies at the University of North Carolina in Charlotte. ‘He’s going to have to show by his actions that he’s healthy.”

His challenger, Henrique Capriles Radonski, a 40-year-old former governor of Miranda state, has sought to mark a contrast with Chavez by visiting remote towns on a daily basis, preaching the need to unite the polarized country and saying that the economy is stagnant after 13 years of socialist government rule.

Public Spending

Venezuela’s economy grew 5.6 percent in the first quarter from a year ago, the fastest rate in nearly four years, as the government increases public spending and imports ahead of the elections. The country’s money supply has risen 53 percent in the last 12 months on the back of outlays, while annual inflation stood at 21.3 percent in June.

Venezuela’s jobless rate fell to 7.4 percent last month, the lowest in June since Chavez took power in 1999, the National Statistics Institute said today in an e-mailed report.

The percentage of export revenue derived from oil has risen to 95 percent from 80 percent when Chavez took office in 1999, according to central bank data. The price for

Venezuela’s oil export basket has averaged $106.90 this year, according to the Oil Ministry.

Capriles has sought to accentuate the contrast between himself and Chavez by highlighting his youth and vigor in day- long, house-by-house visits across the country. He has taunted Chavez by saying the campaign will be a battle between Wile E. Coyote and The Road Runner, a reference to the Warner Bros. Entertainment Inc. cartoon created in 1948.

Forgotten Villages

“I’m going to go to those villages that have been forgotten by those in power,” Capriles said July 2 in comments carried on Globovision. Capriles toured Cojedes state today.

Since returning from Cuba in May, Chavez has gradually increased the frequency and duration of his public appearances through televised events in which he’s hosted foreign leaders such as Iranian President Mahmoud Ahmadinejad and Belarus’ President Aleksandr Lukashenko and promoted military officers. The former paratrooper said last week that his presidential duties have kept him too busy to campaign until now and that he’ll need to juggle his schedule.

“We’re starting the campaign and will travel throughout the country not just to do the tours, but to explain our new six-year government plan,” Chavez said yesterday on state television. “We’re going to seek to guarantee our votes on October 7 and achieve the great victory that’s already been written but which we have to work for every day.”

Varying Polls

Recent opinion polls have varied widely. Chavez had 45.9 percent support against 45.8 percent for Capriles in a Consultores 21 poll of 1,000 people taken between June 15 and June 26. The survey had a margin of error of 3.2 percentage points. In a June poll by Caracas-based Datanalisis, Chavez had a 14 percentage-point lead.

Chavez first revealed in June 2011 that doctors had removed a tumor from his pelvic area that he later described as baseball-sized. He returned from a fourth bout of chemotherapy treatment in Cuba Oct. 20 and declared himself “free of illness.” In the months that followed he resumed some of his daily rhythm, even speaking for more than 9 hours in an address to the National Assembly in January, before announcing he would need further surgery after doctors discovered a second 2- centimeter (0.8-inch) tumor in the same area.

Trips to Cuba

His subsequent absences from the public spotlight as he shuttled back and forth between Cuba and Venezuela to receive several rounds of radiation treatment sparked a rally in Venezuelan bonds as investors speculated that Chavez’s battle with cancer would accelerate a change in government that would reverse his capital controls and nationalization policies.

Venezuelan dollar bonds have returned 17 percent year-to- date, the most among emerging markets after the Ivory Coast and Belarus, according to JPMorgan Chase & Co.’s EMBI Global index.

The yield on Venezuela’s benchmark 9.25 percent securities due in 2027 rose two basis points, or 0.02 percentage point, to 11.69 percent at 1:30 p.m. in Caracas, according to data compiled by Bloomberg. The price fell 0.11 cents to 82.81 cents on the dollar.

“Thank God I’m feeling better every day, and I don’t believe that physical limitations, as you put it, will be a factor in the campaign,” Chavez said July 9 during a press conference when asked if his illness could affect his re- election bid.

Chavez’s latest declarations on his health “take the wind out of the sails” of reports that have predicted his imminent death, said Weeks. While any sign that his cancer has worsened would damage his prospects of winning in October, Venezuelans will give him some leeway as he recuperates and won’t expect him to campaign with the same vigor as in the past, he said.

“People understand he had treatment for cancer so they’re not expecting the Chavez of the past who is giving 8-hour presentations and singing and dancing,” Weeks said.

To contact the reporter on this story: Charlie Devereux in Caracas at [email protected].

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