Dec. 3 -- Venezuelan President Hugo Chavez suffered his first electoral loss in nine years as voters turned down his plan to revamp the constitution and cement his power.
Chavez conceded the outcome today, while saying his ideas are ``still alive.''
``This is a democracy,'' the president said in Caracas. ``For me, this isn't a defeat. This is for now.''
The loss signals waning support for Chavez's drive to bring socialism to the region's fourth-biggest economy by concentrating power in his hands and ramping up state control of private lives. Voters refused to abolish presidential term limits or allow government censorship during declared emergencies. Chavez also sought to shorten the work day and end central bank autonomy.
``This is the first significant setback that Chavez has ever had,'' said Adam Isacson, director at the Center for International Policy in Washington. ``He has lost popular support. He has lost support of some of the army and the poor.''
He has also lost confidence of investors. The government's 9 1/4 percent dollar bond due in 2027 tumbled 22 percent this year, with almost half the loss coming in the month before the referendum.
Oil Fuels Growth
Chavez's 69 proposed changes to the constitution were grouped into two blocks. The first set was rejected 50.7 percent to 49.3 percent, the second block 51.1 percent to 48.9 percent. About 8.88 million people voted, or 56 percent of those eligible, according to a statement on the election agency's Web site.
Venezuela's 9 1/4 percent bond due in 2027 rose 2.10 cents on the dollar to 101.00 at 10:07 a.m. New York time, according to JPMorgan Chase & Co. The bond's yield fell 0.23 percentage point to 9.14 percent from 9.37 percent on Nov. 30.
Chavez's use of the words ``for now'' in his concession speech echo a statement he made after his failed attempt to overthrow the government in 1992. After that, ``for now'' became a rallying cry for his supporters.
``I wouldn't be surprised if in the next few months he pushes most of the ideas through the National Assembly,'' said Daniel Linsker, who heads the Americas desk for Control Risks, a London-based business risk consulting company. ``He comes out looking like a democrat; Chavez is now legitimate and still looking for a way to remain in office.''
`Empowered'
While oil exports fueled annual economic growth of more than 8 percent over the past four years, the South American country has a credit rating below investment grade. Its annual inflation rate, 17.2 percent, is the highest in the region.
``The opposition will emerge from its vote more energized and empowered,'' said Gianfranco Bertozzi, a senior Latin America economist for Lehman Brothers in New York. ``If handled carefully the event could even herald a crumbling of the Bolivarian revolution, although it's still early.''
Cheers, fireworks and the banging of pots and pans could be heard in a mostly anti-Chavez Caracas neighborhood after the results were announced. Supporters of the changes tore down posters that read ``Si con Chavez.''
``The reform has just faded away, but our president is still with us,'' said Yenier Bedoya, 22, a student and a nurse.
Four months after Chavez unveiled his plan to write a constitution that would quicken his so-called Bolivarian socialist revolution, some polls showed the referendum too close to call.
`Over the Top'
Opposition parties, student groups and some former allies, most notably Chavez's ex-Defense Minister Raul Isaias Baduel, the general who returned him to power after a 2002 coup, campaigned against the proposal.
Their contention that the new constitution was a power grab resonated with some of Chavez's supporters.
``President Chavez has given us much, but this time he's gone over the top,'' Darwin Rodriguez, 23, a glass blower, said in an interview in Caracas.
Baduel said after the results were announced that Chavez may continue to push for the reforms he sought.
``We should be alert to the possibility that these changes will be imposed through a different route than the constitution,'' he said in comments broadcast by Globovision.
Demonstrations
Demonstrations turned violent at times over the past three months as police regularly used tear gas and water cannons to control crowds of protesters.
Chavez sought to fire up his backers with escalating attacks on the U.S., foreign investors and the media in his final speeches before the vote.
He told tens of thousands of supporters at a Nov. 30 rally that he was prepared to cut off exports of oil to the U.S., Venezuela's biggest trading partner, should the U.S. government try to stir up violence in the country after the referendum. He also said he may nationalize Spanish banks operating in the country to defend the ``dignity'' of Venezuela, after Spanish King Juan Carlos I told him to ``shut up'' earlier this month.
Economists said the proposed changes to the constitution would curb private investment and slow growth in Venezuela, South America's third-biggest economy and its biggest oil exporter.
``The ball is in Chavez's court,'' said Teodoro Petkoff, a former planning minister and editor of opposition newspaper Tal Cual, in comments broadcast by Globovision. ``He can send a message to the country: enough division, enough blaming, enough saying that if someone is against him that person is against the world, a coup-monger, a snake.''
Chavez said last week that if voters approve his plan, he's prepared to stay in power until 2050.
``It's still too early for me to go,'' the former army lieutenant colonel said Nov. 30. ``I'll give my life for Venezuela until the last day.''
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