* Long-serving president faces youthful state governor
* Capriles taps into discontent over crime, corruption
* From Havana to Tehran, vote has implications abroad
By Daniel Wallis and Todd Benson
CARACAS, Oct 7 Venezuela's presidential election
looked headed for a close finish on Sunday with President Hugo
Chavez facing an unprecedented challenge to his socialist rule
from a young rival tapping into discontent over crime and
An energetic campaign by centrist state governor Henrique
Capriles, 40, has given the opposition its best chance in 14
years to unseat the popular president and take the reins of
South America's leading oil exporter.
Chavez has used record oil revenue to support ideological
allies around the world while taking a fiercely anti-American
stance in global diplomacy, so the election is being watched
eagerly from the United States and Cuba to Belarus and Iran.
With polling stations closing around 6 p.m. local time (2230
GMT), sources on both sides were predicting a narrow victory
based on their monitoring of the vote, while local analysts said
the ballot was looking too close to call.
Thousands of Chavez supporters lined the streets to welcome
him as he arrived at the school in a Caracas hillside slum where
he cast his vote. Some handed him flowers and one elderly woman
serenaded the president with a folk song in his honor.
"Today is a day of joy, a day of democracy, a day for the
fatherland," Chavez said, adding that a massive turnout meant
voting could take longer than expected.
In a show of vigor, Chavez - who underwent grueling cancer
treatment in the past year - shadow-boxed with U.S. actor Danny
Glover, who was on hand with other celebrity fans of the
Venezuelan leader to watch him vote.
In poor neighborhoods, where Chavez draws his most fervent
following, supporters blew bugles and trumpets in a predawn
wake-up call. In the run-down center of Caracas, red-clad
loyalists shouted "Long live Chavez!" from the back of trucks.
Despite his remarkable comeback from cancer, Chavez, 58,
could not match the energy of past campaigns - or the pace set
by his 40-year-old basketball-loving opponent.
Capriles, a boyish looking lawyer-turned-politician who has
never lost an election, has rallied support by focusing on the
day-to-day problems that worry voters most, such as high crime,
power blackouts and endemic corruption.
Sporting what he called his "lucky shoes," the superstitious
Capriles struck a conciliatory tone after voting. "Whatever the
people decide today is sacred," he said to applause from
supporters. "To know how to win, you have to know how to lose."
In wealthy enclaves of the capital, his supporters geared up
for the vote by banging pots and pans overnight.
"Today I'm doing my bit to build a new Venezuela," said
Francesca Pipoli, 26, walking to vote with two friends in a rich
Caracas district. "Capriles for president!" they sang.
In the United States, Venezuelan expats flocked to New
Orleans to vote - mostly for Capriles - after Chavez closed the
country's consulate in Miami earlier this year.
During the campaign, most well-known pollsters had put
Chavez in front. But two put Capriles just ahead, and his
numbers had been creeping up in others.
Voting appeared smooth with a high turnout some said could
reach 75 percent, but there was some worry there could be
violence if the result is contested. There are no formal
international observers, though a delegation from the UNASUR
group of South American nations is "accompanying" the vote.
Local groups were also monitoring the election and both
sides say they trust the electronic, fingerprint voting system.
The opposition deployed witnesses to all of the 13,810 polling
centers, from tiny Amazon villages to tough Caracas slums.
In a politically polarized country where firearms are common
and the murder rate is one of the world's highest, tensions have
risen in recent weeks. Three Capriles activists were shot and
killed by alleged Chavez loyalists on Sept. 29.
After voting, Chavez pledged to respect the election results
and called on the opposition to do the same. Some opposition
activists fear Chavez could refuse to step down if he loses.
A Capriles victory would unseat the most vocal critic of the
United States in Latin America, and could lead to new deals for
oil companies in an OPEC nation that pumps about 3 million
barrels a day and boasts the world's biggest crude reserves.
Capriles wants to copy Brazil's model of respect for private
enterprise with strong social welfare programs if he is elected
- but he would face big challenges from day one. For a start, he
would not take office until January 2013, and some worry the
Chavez camp might not cooperate with a Capriles transition team.
He would also have to develop a plan to tackle high
inflation, price distortions and an overvalued currency, while
surely butting heads with the National Assembly, judiciary and
state oil company PDVSA - all dominated by "Chavistas."
Another big task would be to figure out the real level of
state finances. Last month, a Reuters investigation found that
half of public investment went into a secretive off-budget fund
that is controlled by Chavez and has no oversight by Congress.
The president has denounced his foes as traitors and told
voters they plan to cancel his signature social "missions,"
which range from subsidized food stores to programs that build
houses and pay cash stipends to poor women with children.
The message resonates with his followers.
"If Chavez loses, it's all over. They're going to take away
our missions and our hope," said Elida Perez, a 50-year-old
housewife in Caracas.
If Chavez wins, he would likely consolidate state control
over Venezuela's economy and continue backing leftist
governments across Latin America, such as communist Cuba, which
receives Venezuelan oil at a discount.
Any recurrence of Chavez's cancer would be a big blow to his
plans, however, and could give the opposition another chance.
Investors who have made Venezuela's bonds some of the most
widely traded emerging market debt are on tenterhooks.
"There is a perception that a tight electoral outcome may
trigger social and political unrest and market volatility,"
Goldman Sachs said in a research note.
Results were due any time starting late on Sunday evening.
The electoral authority says it will only announce the
results once there is an "irreversible trend" and parties are
barred from declaring victory in advance of that announcement.