Rumors over Chavez absence reach frenzy in Venezuela

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Rumors over Chavez absence reach frenzy in Venezuela

By Cawthorne | Reuters – 11 minutes ago

CARACAS (Reuters) - The guessing game over Venezuelan President Hugo Chavez's

health took new twists on Tuesday with rumors ranging from a possible takeover

push by his brother to a homecoming by the end of this week.

Chavez's June 10 operation in Cuba and disappearance from public view have

convulsed the volatile and politically polarized South American OPEC member of

29 million people.

Utterly dominant on Venezuela's political stage since 1999, Chavez has far

advanced sweeping socialist reforms including nationalization of large swathes

of South America's biggest oil producer. The 56-year-old aspires to re-election

next year.

But now some are asking if he can make it to the vote.

The government says he had surgery for an abscess in the pelvis and is

recovering fine. But it has given no more medical details nor a clear timetable

for his homecoming.

That, combined with the normally garrulous and ever-present president's silence,

has led to speculation he may have a much more serious problem.

" We are not going to comment on rumors, lies and falsehoods. The president is

recovering well and we will have him here soon, " Information Minister Andres

Izarra said in the latest official rebuttal of the crescendo of rumors.

Well-known Venezuelan journalist Bocaranda reported on Tuesday in

opposition-leaning El Universal newspaper that Chavez had lost 10 kilograms and

was digesting liquids only at Havana's Cimeq hospital during treatment for

prostate cancer.

Despite that, he would have an 80 percent survival chance and plans to return on

Friday for more treatment in Venezuela, Bocaranda said, quoting unidentified

medical sources.

BACK FOR FRIDAY?

Other local media also quoted army sources as saying Chavez would be back in

time for a military ceremony on Friday.

One new rumor is that Chavez's older brother Adan, governor of the Andean state

of Barinas and ideological mentor to the socialist president, is preparing to

try to take the reins should the seat of power be vacated.

Outraging the opposition, Adan Chavez was widely quoted at the weekend as citing

a phrase by Argentine revolutionary Ernesto " Che " Guevara that the " armed

struggle " was a legitimate means of winning power if elections failed.

U.S.-based intelligence think tank STRATFOR said that Adan and other factions

may begin positioning themselves to fight for succession if Chavez's situation

does turn out to be serious.

" Though Adan is someone the president is more likely to trust, he would have

difficulties building broader support, " said STRATFOR in a report, noting that

he, like other senior allies, lack the president's charisma and national appeal.

Should Chavez be incapacitated, Vice-President Elias Jaua would in theory take

over for the rest of his six-year period, until January 2013, under Article 233

of the constitution.

Such talk, Chavez allies say, is absurd and destabilizing.

" VAMPIRES "

" You have the look of vampires, " prominent government legislator Celia

rebuked local journalists.

Bond traders have so far viewed the possibility of a major health problem for

Chavez positively, assuming it would lead to a transition of power to a more

market-friendly government.

Some analysts, however, say that could be wishful thinking given that a Chavez

demise could usher in a period of chaos for Venezuela, as allies of the

president and the opposition all jostle for power.

A deadline of sorts is looming on July 5 when Chavez would love to be home for a

regional summit and the 200th anniversary of Venezuela's independence. Some

media reports say he is arguing with his doctors over that in Havana.

One theory doing the rounds is that Chavez is deliberately allowing the furor to

build up so he can fly home triumphant to the acclaim of supporters in a

political deus ex machina.

The coffee-swilling and baseball-loving president has always been a shrewd

handler of his own image, ensuring high popularity levels, most recently

hovering at about 50 percent.

In his absence, ministers look somewhat bemused and opposition parties have

continued to fail to articulate a clear alternative to the nation beyond

anti-Chavismo.

" The leadership vacuum in Venezuela is becoming acute and the political

situation is lurching. The opposition and the government alike appear

directionless, " UK-based LatinNews think-tank said.

Venezuela's benchmark, dollar-denominated 2027 global bond rose a further 0.500

point, or 0.68 percent, in price on Tuesday to bid 74.000, offering a yield of

13.164.

That followed a 2.8 percent rally of that bond on Monday, as investors took

kindly to possible bad news for Chavez.

Overall, returns on Venezuelan global bonds rose 2.66 percent on Tuesday,

according to J.P. Emerging Markets Index Plus (EMBI+) index after a 2.36

rise on Monday.

" All things equal of course a weakened Chavez is a positive for the credit, but

Venezuela's political situation will be chaotic in either scenario, " said

Standard Chartered bank analyst Bret Rosen.

(Additional reporting by Simon in Bogota; Editing by Jack Kimball and

Doina Chiacu)