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Despite Challenges Venezuela's Chavez Moves Ahead on Socialist Path in 2007

In 2007, Venezuela's President Hugo Chavez opened new fronts in his efforts to transform the oil-producing nation into a socialist state. The former paratrooper failed to win approval for constitutional reforms that included ending term limits on the presidency. But he succeeded in taking greater control over Venezuela's oil sector and television media, despite criticism from the United States and foreign groups. VOA's Brian Wagner has this report on the past year in Venezuela.

Soaring oil prices in 2007 generated windfalls for Venezuela, like most oil-producing nations. President Chavez has used booming government revenues to finance a host of social programs in Venezuela, and he has pursued aid projects and international alliances in the region and with Iran.

To ensure future revenues, Mr. Chavez ordered all foreign oil companies operating in the South American nation to negotiate new contracts that give the government more control over their businesses. The move stirred fears of an aggressive nationalization drive and prompted two foreign companies, Conoco Philips and Exxon, to abandon their operations in the country.

Energy analysts say the re-negotiations will force Venezuela to make costly pay outs to assume majority shares in the private companies.

Analyst David Pumphrey, of the Center for Strategic and International Studies in Washington, says it also drove away crucial international expertise that Venezuela may need as it develops new oil fields in coming years.

"It is a little bit early to know exactly what that is going to mean," he said. "It did mean that two U.S. companies could not accept the terms and have walked away from the projects they made there and are negotiating on their exit."

In May, Venezuela's government faced harsh criticism from foreign leaders and human rights groups about the decision to end the broadcasting license of the nation's largest private television station. President Chavez accused Radio Caracas Television of backing a failed coup against him in 2002 and ordered a new state-run channel to take its place.

U.S. officials and other groups expressed concern the move would harm press freedom in Venezuela. Carlos Lauria of the New York-based Committee to Protect Journalists said the group believes the decision against RCTV was made for political reasons.

"It is clearly discriminatory against the station that is critical, very critical, of the government [and] has opposition views," he said.

Opinion polls show most Venezuelans disagreed with the decision against RCTV, which aired several highly popular soap operas. But, general support for Mr. Chavez remained strong, especially among the nation's poor majority who have benefited from health, education and other social initiatives launched by the president.

A research fellow at Britain's University of Bradford, Julia Buxton, says the government has nurtured that political support.

"As this revolutionary process has become more radical, the core support base has become the poor people, those people living in the barrios [poor neighborhoods]," she said. "And the government has deliberately targeted its social policy agenda and its policy platform on consolidating the support of those people."

President Chavez put that support to the test in December when the government called a referendum on constitutional reforms that he said would advance the nation's progress toward socialism. The measures included plans to end term limits on the presidency, lower the voting age to 16, and create new forms of community-owned property.

Opposition groups denounced the reform plan as a power-grab, and some university students led marches to oppose the proposals.

Voters rejected the reforms in a narrow vote, which was the first election defeat for Mr. Chavez since he took office in 1999. The president said the nation was not ready for the socialist reforms, but he vowed to pursue them again in the future. Mr. Chavez said the government failed to show voters how the reforms are a step on the nation's path to socialism.

A political scientist at Metropolitan University in Caracas, Anibal Romero, said the vote may mark a political shift. He says the vote was a rejection of Chavez's anti-democratic style and his authoritarian reform proposals. He said the president should take it as a lesson.

Election data shows that turnout was low in many traditionally pro-government communities, partly due to the complex nature of the reform. Analysts say the vote also reflected the people's frustration about ongoing problems, such as high inflation, security concerns and food shortages.

Julia Buxton says the government may have lost its focus on crucial domestic priorities.

"I think what the government needs to focus on now is providing better, targeted support to that core sector of the electorate, the poor, those people who really are at the bottom of the Venezuelan social ladder," she said. "If you are going to help those peoplehave to help them properly."

Oil prices will likely remain high in 2008, allowing Venezuela's government to continue its social spending programs at home and abroad. Analysts say President Chavez and other top officials will need to spend wisely in the coming year to ensure their political support remains strong.