Chavez Return to Venezuela Fuels Speculation He’ll Quit

Venezuelan President Hugo Chavez was rushed to a military hospital early this morning after returning home from two months of cancer treatment in Cuba.

“We have returned to the Venezuelan fatherland. Thank you my God, thank you my beloved people,” Chavez wrote on his Twitter account. “I’m clinging to Christ and trust in my doctors and nurses.”

Chavez arrived in Caracas at 2:30 a.m. local time and was immediately taken to the hospital near the capital’s downtown to continue treatment, government officials said.

Government supporters massed outside the hospital to celebrate Chavez’s arrival even as the leader’s surprise return touched off speculation he’ll soon step down and hand power to his preferred successor, Vice President Nicolas Maduro. Apart from photos released last week and today’s Twitter messages, Chavez hasn’t been seen or heard from since traveling to Cuba Dec. 10 for his fourth surgery in 20 months.

“It’s possible this return will be the beginning of a transition process,” Margarita Lopez Maya, a historian at Central University in Caracas, said in a phone interview. “From the photos it’s clear that he isn’t in a condition to govern.”

Political Uncertainty

Officials have been struggling to run affairs in South America’s biggest oil exporter since Chavez missed a scheduled Jan. 10 swearing-in ceremony, plunging the nation into a period of legal and political uncertainty. Now back home, Chavez is likely to take the oath in a private ceremony, clearing the way for him to hand power to Maduro while elections are organized within 30 days, as mandated by the constitution, Lopez Maya said.

“We wanted him back so bad,” Susana Velasco, a 56-year-old radiology student, said outside the military hospital as she waved a Venezuelan flag. “The opposition wanted him to return in a coffin, but here he is. We haven’t seen him but we know he’s back.”

About 100 people gathered across the street from the military hospital in Caracas to celebrate Chavez’s return with chants and vuvuzelas. Hundreds of supporters also gathered in Caracas’s Plaza Bolivar central square.

“I want him to hit the streets and put people on alert, let them get to work,” said Fanny Gutierrez, a 57-year-old former store owner, who wore a Chavez pin on a necklace around her neck. “If he hasn’t died, then he’s going forward. If God sent him again, it’s for a reason. He came here because he’s advancing.”

Maduro Support

Maduro had 50 percent support compared with 36 percent for opposition Governor Henrique Capriles Radonski, according to a survey by Caracas-based polling company Hinterlaces published today on the front-page of state-run newspaper Correo del Orinoco.

The poll, whose margin of error is 2.9 percentage points, was taken Jan. 30 to Feb. 9. That’s mostly before the 32 percent devaluation of the bolivar on Feb. 8, a move that aims to close a budget deficit larger than that of the U.S. but which also entails risks for Maduro as he tries to solidify support with Chavez’s base among the poor. Economists expect the devaluation to pressure inflation, already running at 22 percent, and worsen shortages of goods from toilet paper to cars.

Chavez’s absence and deteriorating health triggered a 35.4 percent rally on Venezuelan dollar bonds over the past year as investors boosted bets he’ll be unable to complete another term, opening the door for a new regime that will introduce more market-friendly policies.

Bonds Gain

Venezuela’s bonds had the third-best performance among emerging markets in the past 12 months, after the Ivory Coast and Belize, according to JPMorgan Chase & Co’s EMBIG index. U.S. markets are closed today for the Presidents’ Day holiday.

“It’s hard to know what’s next,” David Smilde, a sociologist at the University of Georgia who wrote a book about Chavez’s rule, said in a phone interview. “Chavez supporters may think it’s a new stage in his recovery while the other side may think that Chavez has come back for his last weeks.”

Before flying to Cuba, Chavez urged Venezuelans to vote for Maduro, a 50-year-old former bus driver and union leader, should he die or step down because of ill health.

Riding Roughshod

Maduro has been running affairs in Chavez’s absence amid charges by the opposition that the government is riding roughshod over the constitution, which it says requires National Assembly President Diosdado Cabello to serve as a caretaker until Chavez is able to resume his duties.

“It would be disingenuous to think that Chavez is in a full recovery because he came back to Caracas,” Evans said. “His health continues to be delicate.”

The government on Feb. 15 released pictures of Chavez in a hospital reading the Cuban Communist party Granma newspaper with two of his daughters. Information Minister Ernesto Villegas said on the same day that Chavez is suffering from a “delicate” respiratory infection that has left him speechless and requires the use a tracheal tube.

Unlike the government’s procedure after past medical visits to Cuba, no images of Chavez’s return to Venezuela have been released or broadcast.

Devaluation Decision

The president is in communication with Cabinet members by writing and made the decision to devalue the currency this month, Technology Minister Jorge Arreaza, who is also his son-in-law, said Feb. 15.

“Hopefully the president’s return means that Mr. Maduro and his ministers can get to work,” Capriles wrote in a Twitter message today. “There are thousands of problems to resolve.”

Maduro said in a phone call to state television today that Chavez’s health “battle continues.”

“Chavez’s return significantly increase the possibility of elections,” Diego Moya-Ocampos, a political risk analyst at IHS Global Insight and a former top aide in the attorney general’s office under Chavez in 2000, said in a phone interview from London. “Elections are a given this year.”

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