Venezuela’s Economic Boom Buoys Chávez
Supporters waited in Caracas on Tuesday to greet Hugo Chávez, who is seeking re-election as president of Venezuela, as his motorcade passed.
By SIMON ROMERO
CARACAS, Venezuela, Dec. 2 — To understand why Hugo Chávez seems set for victory in Sunday’s presidential election and a strengthened mandate for what he calls a socialist revolution, consider the vigor here of that most capitalist of institutions: the stock exchange.
Housed in El Rosal, an upscale district with new skyscrapers and hotels, the 59-year-old Caracas stock exchange was the site of frenzied trading this week. Its main index climbed to a record high of 46,741, topping off a 129.2 percent rise this year that has made it one of the best performing markets in the world. On Friday, the index climbed 8 percent for its biggest daily gain in four years.
“For all of Chávez’s faults, his government has been extremely pragmatic in economic terms,” said José Guerra, a former chief of economic research at Venezuela’s central bank. “State-supported capitalism isn’t just surviving under Chávez,” he said. “It is thriving.”
Often lost in the campaigning between Mr. Chávez and his electoral challenger, Manuel Rosales, is that Venezuela, with the largest conventional petroleum reserves outside the Middle East, is having one of the most significant oil booms in its history. Economic growth this year is set to pass 10 percent, making Venezuela the fastest-growing economy in the Americas.
The Chávez government, while wrapping itself in socialist imagery — like red clothing — and deepening its alliance with Fidel Castro’s Cuba, has made this expansion possible by quietly working with Venezuela’s banking system. The rush of petrodollars into the economy has led bank deposits to climb 84 percent in the past 12 months, according to Softline Consultores, a financial consulting business here.
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http://www.nytimes.com/2006/12/03/world/americas/03venezuela.html?ex=1322802000&en=ba76b40e5c8230be&ei=5088&partner=rssnyt&emc=rssTyler Hicks/The New York Times
Mr. Chávez was cheered on by supporters in the streets of Caracas during a campaign rally Tuesday.