Chavez nationalizations push Venezuela further left

CARACAS, Jan 10 (Reuters) Emboldened by a landslide re-election, Venezuelan President Hugo Chavez has vowed to nationalize utilities, consolidating his power and setting a Cuba-inspired radical course for his new six-year term.

The anti-US former soldier, who for eight years has coupled revolutionary rhetoric with market economy policies, took his boldest step on Monday toward entrenching in this OPEC nation what he calls ''21st century socialism.'' The push shows Chavez is ready to move his administration even further to the left during his next term, which starts today, by exerting more control over the economy and centralizing power in the office of the president.

''It is clearly the opportunity for him to forge ahead with his revolution,'' said Michael Shifter, a Latin America expert at the Inter-American Dialogue in Washington.

Chavez, who hopes to rule for decades, announced a broad plan on Monday to nationalize Venezuela's telecommunications and power utilities, end central bank autonomy and request congressional approval to rule by decree.

Counting on wide support in the courts, Congress, and the giant state oil company, the president had already decided against renewing a license for a critical TV channel, which would take it off the air. That drew international condemnation for restricting media freedoms.

He has also disbanded political parties that supported him in order to form a single bloc, which the opposition says smacks of Cuba's one-party communism.

While political analysts caution Chavez cannot turn Venezuela into another Cuba, Monday's nationalization move scared investors into dumping Venezuelan assets. The Caracas stock exchange lost nearly a fifth of its value yesterday.

Chavez over last two years has boosted state control of the oil industry and allowed some land expropriations. But the move to nationalize in utilities appeared to mark a clean break with his previous strategy of keeping investors happy despite often railing against private property.

''I think he feels that the risks associated with these moves are less than the benefits in terms of the consolidation of his own power over the government and the economy,'' said Cynthia Arnson, director of the Latin America program at the Woodrow Wilson Center in Washington.

The administration of US President George W Bush, whom Chavez labeled the devil at the United Nations, called the nationalization plan a failed economic recipe and demanded fair compensation for any American companies affected.

LONG WAY FROM CUBA? Chavez, who calls President Fidel Castro his mentor, has done little to quell fears of encroaching Cuban-style rule by appointing a member of the Communist party to his cabinet and jokingly saying he was a follower of Soviet dissident Leon Trotsky.

But political analysts said Venezuela, with a virulently critical press and fervent consumerism, is far from becoming another Castro's Cuba -- a system most Venezuelans oppose.

''We're not in the presence of a Cubanization of the country or a massive expropriation of goods,'' said Luis Vicente Leon, director of the public opinion firm Datanalisis.

''The nationalizations will not be justified through communist (ideology) but rather as recovery of public services that were previously owned by the state,'' he said.

Reuters AKJ DB1007