FACTBOX - What challenges to Venezuela's Chavez?

Oct 27 (Reuters) - A bitter debate between Venezuela's government and opposition over President Hugo Chavez's flagship health project "Barrio Adentro" has signaled the start to the battle for 2010 legislative elections. [ID:nN27508065]

With Chavez firmly controlling local politics and still enjoying high popularity ratings during his 11th year in office, what challenges are there to his grip on power?

OPPOSITION

* Still smarting from defeat in a February referendum that lifted the constitutional limit on presidential terms, opposition parties see National Assembly elections expected in December 2010 as their next chance to rally and harm Chavez.

* Having abstained from the last assembly vote, opposition leaders have decided against a boycott this time, saying they can win a majority. Analysts say the opposition has strong pockets of urban support, but Chavez still dominates in the countryside, and electoral law and constituency boundaries are skewed in his favor.

* Though they have tried to unite under one umbrella group, the "Mesa de Unidad", and hope to field consensus candidates for parliament, the parties and their leaders admit they remain divided. They have also not yet come up with a clear political agenda of their own, other than wanting to end Chavez' rule.

* The opposition is hampered by indictments against some of its best-known figures, such as former Chavez minister-turned-dissident Gen. Raul Baduel, who is in jail charged with illicit enrichment. Others, such as former governor of oil-rich Zulia state Manuel Rosales, have fled abroad into exile. And some, such as Caracas mayor Antonio Ledezma, have simply had their power stripped away.

ECONOMY

* Analysts agree Venezuela's economy -- it is heading for a decline this year for the first time since 2003 -- could pose a far more serious threat to Chavez.

* Venezuela's 28 million people endure one of the highest inflation rates in the world, projected to be in the high 20s this year and probably something near that in 2010. A McDonald's hamburger costs around 30 bolivars - that is $14 at the official exchange rate, or $6 at the black market rate.

* Rising oil prices will enable the government to spend in the run-up to next year's elections, but with local demand far outstripping supply, and national non-oil industries in the doldrums, it is hard to see how the government can protect Venezuelans from high prices for many goods, analysts say.

* The government, however, says social indicators show it has made great strides against poverty.

UNITED STATES

* Having called former U.S. leader George W. Bush everything from a drunk to the devil, Chavez has been more controlled toward President Barack Obama -- polite to him in personal comments, but still vitriolic about U.S. foreign policy.

* Like his mentor Fidel Castro, in Cuba, used to do, Chavez frequently invokes the possibility of a "Yankee" intervention in Venezuela, perhaps using Washington's main ally Colombia as a springboard. Most diplomats and analysts, however, see this as a near-impossible scenario, and just rhetoric from Chavez.

* Despite their deep political differences, Washington and Caracas both know that oil speaks louder than words in their relationship. The United States remains the main buyer of OPEC member Venezuela's crude.

SOCIAL PROBLEMS

* The dozens of murders every weekend in Caracas are just the tip of a crime problem that polls show is Venezuelans' main daily concern. Rampant kidnappings, theft and violence -- sometimes with police complicity -- make the capital and country one of the world's most dangerous.

* Venezuelans appear loathe yet to blame Chavez for high crime, but their patience may be wearing thin, some analysts say. The opposition says the government has been neglecting its main social programs, such as the "Barrio Adentro" network of free clinics in poor neighborhoods. But Chavez's popularity appears to be still rooted, in part, on those projects.

* A relatively new problem is electricity and water cuts, which have become chronic in some rural areas and are now starting to affect big cities too. Chavez has urged Venezuelans to do their bit by limiting showers to three minutes.

MILITARY

* There are always rumors in Venezuela of possible stirrings in the military ranks. But few of those who evoke the specter of a possible coup against Chavez appear to have any hard facts to justify that position.

* Still, a bungled opposition coup in 2002, and Chavez' own abortive coup attempt in 1992, are a reminder of the risk.

* Chavez has jailed his former defense minister, Baduel, and appointed loyalists to key positions in the armed forces. But analysts say there may still be rank-and-file disagreement with his brand of radical socialism. (Writing by Andrew Cawthorne; Editing by Patrick Markey and Kieran Murray)