Venezuelans march for, against Chavez amid shortages

CARACAS (Reuters) - Thousands of Venezuelans marched for and against President Hugo Chavez on Saturday amid political and economic tensions fueled by a currency devaluation and shortages of water and power.

The marches were the first since Chavez sharply devalued the bolivar currency and deployed soldiers to stop retailers hiking prices and the start of water rationing and electricity outages stemming from a drought that has drained dams.

They come as the country gears up for heavy campaigning for legislative elections in which Chavez faces losing his near-total control over the OPEC nation's Congress.

"This march shows we are tired of bad management by the government," said Erik Marteau, 26, a businessman. "This country is filled with riches but bad administration has left us with corruption and waste."

A group of thousands of opposition sympathizers marched toward the Caracas slum of Petare, once a stronghold of Chavez support where an opposition mayor took power in 2008.

One demonstrator carried a sign saying: "If they take your water and they take your electricity, they take your life."

Chavez launched four-hour blackouts in Caracas in an effort to save power but quickly scrapped them after his supporters protested, though many in the capital and around the country still complain of patchy access to power.

INFLATION CONCERN

Facing financial pressure from falling oil prices, Chavez devalued the bolivar currency by as much as 50 percent in a two-tiered system that was praised by Wall St. for easing some economic distortions -- but also risks worsening inflation.

The marches officially commemorate the anniversary of the 1958 collapse of Venezuela's last dictatorship, but the festive spirit of the demonstrations has been overshadowed by the partisan politics of a polarized society under Chavez.

SEA OF RED

On the other side of town, Chavez rode in caravan through a sea of thousands of supporters dressed in signature red T-shirts and dancing to salsa tunes honoring the anti-U.S. stalwart's self-styled socialist revolution.

"Tremble, you oligarchs -- this is the joy of the patriotic revolution," Chavez thundered from a stage downtown. "The streets no longer belong to the oligarchs."

Chavez still commands strong support within the country's sprawling shanty-towns and in isolated rural hamlets where millions have benefited from oil-financed health and education initiatives.

"Chavez is the leader who defends our democracy and helps us participate in all the decisions that help the people," said Maberlyn Duran, a housewife who participates in a social program for poor mothers that Chavez created.

He also has strong control over key state institutions including state oil company PDVSA and the judicial system.

Chavez took complete control over the legislature in 2005 after opposition candidates boycotted the elections, giving him effectively a rubber stamp Congress for laws that including a strong bill that makes it easier to nationalize businesses.

This would make it more difficult for him to win Congressional approval to pass laws via decree, a tactic he has used to advance his most aggressive legal overhauls.

(Writing by Brian Ellsworth; Editing by Eric Walsh)