Venezuela's Chavez celebrates 10 years in power

CARACAS (Reuters) - Venezuela's President Hugo Chavez marked 10 years in power on Monday, declaring a national holiday to celebrate as he seeks to win a referendum this month that could help him govern for another decade or more.

Chavez, an ex-paratrooper who once led a failed coup before winning power at the ballot box, hosted Latin American allies at the anniversary ceremonies, burnishing his credentials as an inspiration for a wave of leftist governments in the region.

Presidents of poor countries that receive cheap oil from the OPEC nation such as Nicaragua, Bolivia and Honduras joined Chavez at a giant rally and at the tomb of Simon Bolivar, his 19th century hero who ejected Spain from the region.

"Ten years ago, Bolivar -- embodied in the will of the people -- came back to life," Chavez said. "Today we celebrate 10 years since the start of a new era in Latin America and the Caribbean."

Large crowds of supporters dressed in signature red shirts thronged to the events, taking advantage of the day off that Chavez declared just hours before the anniversary.

Businesses and schools were closed after scrambling to tell employees and students to stay home. Chavez's decree, and threats to fine companies failing to comply, showed his sometimes arbitrary leadership, but was also popular with many Venezuelan workers.

Chavez has repeatedly won elections in his 10 years in office and has overcome a coup, a national strike and a recall referendum. He remains popular among Venezuela's majority poor for spending oil wealth on clinics and schools and typically draws cheers at rallies for his speeches condemning the "evil empire" of the United States.

COUNTRY POLARIZED

Chavez is a close friend of Cuba's veteran revolutionary, Fidel Castro, although he has not taken Venezuela as far to the left as the communist Caribbean island.

He has scared investors with nationalizations and aggressive rhetoric against capitalism, but the country's oil industry still works with foreign companies.

At a rained-on rally on Monday, Chavez punched the air and yelled, "From here Fidel your sons and daughters salute you."

His rise to power helped blaze the way for a string of left-leaning governments in Latin America to break with Washington-led free market policies.

But many Venezuelans complain that Chavez has amassed so much power he is a dictator-in-the-making.

That sentiment has eroded some of Chavez's appeal. After an overwhelming re-election victory in 2006, he narrowly lost a referendum in 2007 to change the constitution and allow his re-election. In November, he also lost some influential posts in regional elections to the opposition.

Pollsters say public opinion is divided over his attempt in this month's referendum to win the right to stay in power as long as he keeps winning elections.

If he loses the referendum, he should leave office in 2013 at the end of his six-year term.

Whether or not Chavez wins, 2009 will be a challenging year. He has been used to lavishing oil wealth from one of the world's top exporters on the poor, but Venezuela's income has fallen in recent months.

The state oil company -- the financial engine for Chavez's social programs -- has piled up debts with contractors, raising doubts about how long Chavez can sustain his programs of food handouts and free doctor visits.

"Chavez has promised Venezuelans paradise but that paradise, which he calls socialism, depends on oil above $120," said Alberto Barrera, who has written a Chavez biography.

World oil prices were around $40 a barrel on Monday, more than $100 below their peak in July.

Chavez says his revolution will survive the global economic crisis, which he blames on U.S.-prescribed capitalism.

The opposition says tirades against perceived foreign foes are meant to distract from problems such as violent crime.

Analysts say one of Chavez's lasting marks on Venezuela has been to make the poor feel politicians should champion them.

Chavez believes he has enough backing from his traditional supporters to win this month's referendum.

The opposition has had some success in recent years winning over voters in Chavez strongholds such as shantytowns, but a former, long-serving vice president, Jose Vicente Rangel, lauded Chavez for his connection with the poor.

"Perhaps the most important achievement in Chavez's 10 years of government is how he has rescued millions of citizens from anonymity," he said in a speech at Bolivar's tomb.

(Additional reporting by Enrique Andres Pretel; editing by Kieran Murray and Mohammad Zargham)