ANALYSIS - Venezuela private sector woes new Chavez headache
By Frank Jack Daniel
CARACAS (Reuters) - A collapse in private sector investment and output is pushing Venezuela into recession and spells trouble for President Hugo Chavez's state-driven growth model ahead of elections next year.
South America's top oil exporter on Tuesday reported an unexpectedly high 4.5 percent economic contraction, largely caused by double digit drops in private sector activities.
While other countries, are recovering from recession, Venezuela is just entering it.
Chavez promised his socialist policies would protect Venezuelans from global recession and likely faces months of negative economic news. That will compound public anger at poor public services and shortages of water and electricity.
Venezuela's opposition is still divided and without an obvious leader but hopes to take a number of seats during September 2010 elections for legislators in the National Assembly, where Chavez currently has a vast majority.
"They are very worried that the economic problems combined with all the other weaknesses could spell some real political difficulties for them in next year's elections," said Michael Shifter of Washington-based analysts Inter-American Dialogue.
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