Chavez forges socialist economy with laws offensive

By Eyanir Chinea and Frank Jack Daniel - Analysis

CARACAS (Reuters) - An avalanche of laws being written to regulate business and promote "Marxist trade" in Venezuela marks a new push by President Hugo Chavez to build a socialist economy in the shopping-mad oil-exporting nation.

Chavez, a close ally of Cuba's communist leaders, has steadily increased the role of the state in Venezuela with a slew of nationalizations and tough controls on prices and foreign exchange.

Despite an economy weakened by lower oil income, Chavez has solid approval ratings and is now powering ahead with his plan to regulate and reduce the private sector in the OPEC country.

He plans to overhaul more than a dozen laws this year, with wide-ranging implications for the already tightly regulated business sector as well as labor relations and education.

"I ask you to speed up the debate and approval of revolutionary laws in all areas of national activity," Chavez told legislators in July, asking them that by December: "there is not a single counter-revolutionary law left. Not one!"

Chavez has won several elections since his first in 1998, and has vast powers that detractors say are authoritarian. They say that more than socialism, he wants to control all aspects of life in one of the United State's top oil suppliers.

He is in a rush to pass laws because he could lose his massive parliamentary majority in legislative elections next year. He is considering asking the parliament, dominated by his allies, to give him temporary powers to pass laws by decree, a mechanism he has used to rush through legislation in the past.

Legislators canceled their summer break, and key commissions will keep working through August.

Opposition parties boycotted the last legislative elections in 2005, giving Chavez a free hand to nationalize most of the oil industry and other key areas of the economy, and bolster the social spending that has won him the support of the poor.

Earlier this year he expropriated oil service companies and food mills and passed laws to reduce the powers of elected opposition officials. He has also lit a campaign against the media, closing 13 radio stations and threatening a TV channel.

The initiatives being discussed in the normally lethargic national assembly include a controversial overhaul of education, plans to cap company profits, new patent rules, limits on investment by foreign businesses, changes to property laws and labor legislation.

Analysts say the legal offensive represents a big push forward for the former lieutenant colonel's "revolution."

"Presidential re-election gave Chavez a legitimacy that allowed him to put his foot on the legislative accelerator," said Claudia Curiel, a Venezuelan analyst. "We are now seeing the point of no return for the president's project."

Chavez started overhauling the law books in 1999 with a new constitution and he got a huge boost when he won a referendum vote earlier this year that allows him to stay in power as long as he keeps winning elections -- perhaps for decades.

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