CARACAS (Reuters) - An empty balcony at Miraflores presidential palace told Venezuela’s latest election story.
When polls shut after a parliament vote that President Hugo Chavez’s party was confident of winning handsomely, officials ushered supporters and media toward the palace to await their man’s traditional triumphant appearance.
But as the hours ticked by into Monday morning, Socialist Party officials’ smiles evaporated while opposition euphoria rose at the realization they had won a crucial one-third of National Assembly seats and probably the overall popular vote.
The balcony -- which Chavez has made famous from past election celebrations -- remained empty through the night and the crowd outside finally trickled home.
Though the government kept a majority, officials had repeatedly said their goal was two-thirds of the Assembly, so the results felt more like defeat and the mood was similar to Chavez’s only actual vote loss in a 2007 referendum.
“This chips away at the aura of invincibility Chavez has had for so long,” a Western diplomat in Caracas said.
The result will, indeed, rejuvenate an opposition movement used to being defeated over and over again by Chavez.
Opposition leaders have proved that unity pays and have reason to believe they now have a decent shot at winning the 2012 presidential election if they can unite behind a single candidate and produce a policy platform that goes beyond simply being anti-Chavez.
“There are two clear messages: one that most of the country is not with President Chavez, and two, that it is clear the government used a perverse electoral system to have fewer votes but more legislators,” opposition leader Stalin Gonzalez said.
Analysts agree that changes in electoral districts skewed the parliamentary poll in the government’s favor.
Only a fool, however, would write Chavez off.
The resilient and charismatic 56-year-old former soldier has bounced back from far darker days than Sunday’s election -- including a brief coup against him in 2002, an oil industry strike in 2003 and the referendum defeat three years ago.
“President Hugo Chavez is only slightly bruised, and will use the result to rebuff those critics who accuse him of undermining democracy,” U.K-based LatinNews newsletter said.
“There is no doubt Chavez will relish the chance to make the next two years a long campaign ahead of the presidential race. There is absolutely nothing he enjoys more.”
Amid the opposition’s jubilation, it is worth remembering that Chavez still has a majority in parliament.
And if he reaches three fifths -- the Socialists had 94 of the 99 seats needed for that by Monday morning, with some results still due -- he can simply bypass the lawmakers by asking for special decree powers.
Furthermore, the new parliamentarians do not take their seats until January, so Chavez has a compliant Assembly for three months more to push through legislation.
Chavez knows, though, that Sunday’s election, where the opposition say they won 52 percent of the votes cast, has laid bare the discontent of many with the direction of Venezuela.
His frequently-invoked inspiration from former Cuban President Fidel Castro goes down badly among many Venezuelans, including his own supporters, while shocking crime levels, a second year of recession and untamed inflation weigh heavily.
Chavez’s first reaction came from his Twitter account where he put on a brave face. “We must continue strengthening the Revolution. A new victory for the people,” he wrote.
All eyes will be on his further statements, with some speculating that he could radicalize further in response to advances by an opposition he despises and regularly calls a corrupt bourgeois elite acting as puppets for Washington.
“It’s now that Chavez is dangerous,” said local analyst Luis Vicente Leon.
Goldman Sachs analyst Alberto Ramos said he would not be surprised if Chavez radicalized policy in response to the election. “The Chavez administration still has a very strong grip on power and will continue to set the agenda.”
Chavez has been unabashed about telling Venezuelans he wants to eliminate all traces of capitalism.
Having nationalized two dozen banks and brokerages over the last year, he may have his eye on making further inroads into the financial sector, and has also threatened to take over leading brewer and food manufacturer Polar.
On the political front, Chavez is determined to give more power to grass-roots, neighborhood groups where loyalty to him is more assured than in the new National Assembly.
Wall Street views the peaceful nature of the election, and the advance of the opposition, as positive. The benchmark global bond due in 2027 soared 3.5 percent.
RBS Securities analyst Siobhan Morden said that while the election raised market hopes of a transition in 2012, the opposition still had plenty of problems, including the lack of a clear leader and ideology.
“Despite these hurdles, these results still represent a market positive,” she said in a research note.
Additional reporting by Frank Jack Daniel, Eyanir Chinea and Enrique Andres Pretel; editing by Hugh Bronstein and Kieran Murray
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