Analysis: Chavez uses Colombia feud, oil threat before vote

CARACAS (Reuters) - A threat to cut oil shipments to the United States and warnings of an armed attack from Colombia shift attention from Venezuelan President Hugo Chavez's domestic woes, but are not guaranteed to win votes for his party in the fall elections.

Venezuelans will cast ballots for new legislators on September 26, and while Chavez's socialist party is expected to retain a majority in parliament, economic problems have dented the former paratrooper's popularity.

Chavez's reaction to charges last week by Bogota that his OPEC nation harbors Colombian leftist rebels has been typically fierce. He instantly broke off relations with the Andean neighbor and said war would erupt if Venezuela was attacked.

Then, to cheers from red-clad party activists at a stadium rally on Sunday, Chavez said he would end oil sales to the United States in case of any Colombian aggression.

Most analysts agree the prospect of war is distant and that Chavez is unlikely to cripple Venezuela's economy with an oil embargo. But by claiming he had intelligence showing a planned cross-border raid, he has found a useful rallying cry to mobilize supporters ahead of September's polls.

"I am sad to say the threat of armed aggression against Venezuela from Colombian territory is now more probable than, I would say, in the last 100 years," he said at the rally.

He went on to jab at opposition leaders he said could be accused of treason if they were seen to be siding with Bogota in the dispute, branding them as unpatriotic.

Top Chavez officials have led protests on the border with Colombia, calling for "respect," while state oil company PDVSA has gone on "yellow alert" and instructed its 80,000 workers to prepare themselves and their families for an attack.

While Venezuela has sent about 1,000 extra national guard soldiers to patrol the border, Colombia says it has no intention of further militarizing the zone. Venezuela's fears are not entirely unfounded. In 2008 Colombia bombed a FARC guerrilla camp in Ecuador, touching off the current crisis.

'SCARY SITUATION'

The dispute with Colombia, and indirectly the United States, is classic fare for Chavez, who has cast himself as one of the world's leading opponents of "Yankee imperialism" and a defender of Venezuela's sovereignty against outside aggressors.

The feud helps draw the public eye away from problems like a deep recession, power shortages and annual inflation of about 30 percent. It also deters Colombia from military action against rebels in Venezuela.

At the same time, confrontation with Colombia is consistently unpopular in opinion polls, and the fear that Chavez could lead Venezuela into war may work against him at the voting booths.

"The advantage from an electoral point of view is that there is discontent as a result of the electricity shortages," said Steve Ellner, author of "Rethinking Venezuelan Politics." "It does help divert attention from the more mundane problems.

"But on the other hand, it's a very scary situation and Venezuelans in particular are not accustomed to war-like situations," he added.

Venezuela is home to some 4 million Colombian immigrants, about 10 percent of the population, who fled civil war and sought work. Many are traditional Chavez supporters worried about their status in the country.

"There are a large number of Colombians who live in Venezuela and a large number with dual nationality," said Edgardo Lander, a Latin American studies professor at Venezuela's Central University. "This situation produces uncertainty and worry among them."

The latest argument between the neighboring Andean nations began on Thursday when Colombia revealed what it says is evidence guerrilla commanders live in comfort in Venezuela.

Colombia's outgoing President Alvaro Uribe appeared to be looking to provoke Chavez -- his envoy to the Organization of American States not only showed photos of camps, but launched a diatribe saying the Venezuelan's had wasted oil wealth.

Venezuelan opposition politicians are furious with Uribe's timing, saying it undermines their hope of winning a majority in parliament.

"Uribe helped Chavez, freeing him from internal problems to involve him in an international conflict where the tyrant moves like a fish in water," said Enrique Ochoa, a leader of the UNT party.

Venezuela's opposition accuse Chavez of being an authoritarian who plans to install a Cuban-style Communist dictatorship. Chavez says his vision of "21st Century Socialism" is democratic. He has won numerous elections.

Most analysts predict his Socialist party will win a majority in the National Assembly, but a scandal over food left to rot in government warehouses and anger over electricity and water shortages this year hurt Chavez's popularity and buoyed opposition hopes of taking most seats.

The elections are seen as an important barometer of support for Chavez and the opposition ahead of a presidential vote in 2012, when he will run for another term.

(Editing by Daniel Wallis and Stacey Joyce)