Canny Chavez tactics lead Venezuela's "revolution"

CARACAS, Feb 14 (Reuters) Venezuelan President Hugo Chavez has displayed canny brinkmanship in his nationalization drive toward Cuba-inspired socialism despite his image as an impulsive Latin American revolutionary.

The firebrand former soldier and declared enemy of both capitalism and Washington has put up 1.4 billion dollar in the last week to take over US companies' assets in his push to exert increasing state control over the OPEC nation.

Highlighting Chavez's combination of bluster and pragmatism, the pacts with blue chip companies such as telecom giant Verizon surprised investors who had feared an outright seizure by the protege of Cuba's Fidel Castro.

Share prices in Caracas jumped this week as markets took short-term consolation from the deals.

''I think it shows he's picking his battles,'' said Miguel Tinker-Salas, a Latin American studies professor at Pomona College in California. ''This is the military man in Chavez understanding that you don't fight a forward battle and a rear battle at the same time.'' Still, Chavez is extending a squeeze of private investment from Venezuela and consolidating his own power in a self-styled revolution whose course he has vowed never to reverse.

Despite molding himself on Latin American icons such as Che Guevara, since taking office in 1999, Chavez has avoided the pitfalls of others revolutionaries by keeping relative peace with international markets while pushing his leftist agenda.

Unlike ally Ecuadorean President Rafael Correa, Chavez has not threatened to cut off debt payments to Wall Street creditors and shirked the tactic of Bolivian President Evo Morales of backing nationalizations with troop deployments.

Chavez has also avoided an immediate collision with energy giants like Exxon Mobil that operate multi-billion dollar projects in Venezuela, seeking a state majority as mandated by law instead of sending soldiers to force them out.

Without the distractions of such head-on fights, Chavez has armed himself with the ability to legislate by decree and can focus on consolidating power by clipping central bank autonomy and use redistricting to shape Venezuela's electoral map.

ART OF WAR Early in his presidency, the bombastic populist showed he could choose when to duck a fight.

When one legislator at a congressional ceremony launched into a diatribe against Chavez, the president refused to take the bait and instead sat calmly behind his vitriolic critic, flipping through Sun Tzu's ''Art of War'', one of the oldest and most famous studies of strategy.

Years later, the Chinese strategist's advice is still helping Chavez move toward a socialist state.

Humberto Njaim, a political science professor at Universidad Metropolitana in Caracas, says Chavez would have preferred to seize assets in his takeovers without negotiating but realized the international outcry would be a liability.

''He knows he's in a special situation, that this isn't Cuba in the 1960s,'' said Njaim.

Despite his condemnation of Washington, Chavez has built his popularity among the majority poor by spending on clinics and schools with funds from oil sales to the United States.

After beating out a botched coup and a two-month oil industry walkout in 2002, Chavez allies now control 100 per cent of the legislature and the purse strings of the nation's 85 billion dollar state oil company.

Venezuela's fractured opposition slams Chavez's efforts to concentrate power, but can do little to stop the socialist reforms because its only representation in government is limited to a handful of municipal mayors.

''This is not someone to underestimate or to simply envision as a prototypical tin-horn dictator,'' Tinker-Salas said.

Reuters AD VP0250