Venezuela's Hugo Chavez dies from cancer

By Andrew Cawthorne and Daniel Wallis

CARACAS | Tue Mar 5, 2013 6:35pm EST

(Reuters) - Venezuelan President Hugo Chavez died on Tuesday after a two-year battle with cancer, ending 14 years of tumultuous rule that made the socialist leader a hero for the poor but a hate figure to his opponents.

The flamboyant 58-year-old had undergone four operations in Cuba for a cancer that was first detected in his pelvic region in mid-2011. His last surgery was on December 11 and he had not been seen in public since.

"We have just received the most tragic and awful information. At 4.25 p.m. (03.55 p.m. EST) today March the 5th, President Hugo Chavez Frias died," Vice President Nicolas Maduro announced in a televised address, his voice choking.

"It's a moment of deep pain," he said in the address, in which he appeared with senior ministers.

Chavez easily won a new six-year term at an election in October and his death will devastate millions of supporters who adored his charismatic style, anti-U.S. rhetoric and oil-financed policies that brought subsidized food and free health clinics to long-neglected slums.

Detractors, however, saw his one-man style, gleeful nationalizations and often harsh treatment of opponents as traits of an egotistical dictator whose misplaced statist economics wasted a historic bonanza of oil revenues.

Chavez's death opens the way for a new election that will test whether his socialist "revolution" can live on without his dominant personality at the helm.

VICE PRESIDENT MADURO FAVORITE TO WIN ELECTION

The vote should be held within 30 days and will likely pit Maduro against Henrique Capriles, the centrist opposition leader and state governor who lost to Chavez in the October election.

One recent opinion poll gave Maduro a strong lead.

Maduro is Chavez's preferred successor, enjoys support among many of the working class and could benefit from an inevitable surge of emotion in the coming days.

But the president's death could also trigger in-fighting in a leftist coalition that ranges from hard-left intellectuals to army officers and businessmen.

Venezuela has the world's largest oil reserves and some of the most heavily traded bonds, so investors will be highly sensitive to any signs of political instability.

A defeat for Maduro would bring major changes to Venezuela and could also upend its alliances with Latin American countries that have relied on Chavez's oil-funded largesse - most notably with communist-led Cuba, which recovered from financial ruin in the 1990s thanks largely to Chavez's aid.

Chavez was a garrulous figurehead for a global "anti-imperialist" alliance stretching as far as Belarus and Iran, and he will be sorely missed by anti-U.S. agitators.

Maduro said he would ensure the future of Chavez's work.

"We call on all compatriots to guarantee the peace. We, his civil and military compatriots, assume the legacy of Hugo Chavez," Maduro said.

"His project, his flags will be raised with honor and dignity. Commander, thank you, thank you so much, on behalf of these people whom you protected."

After the cancer was diagnosed in June 2011, Chavez went through several cycles of disappearing from the public eye for weeks at a time for treatment in Havana, only to return just as his adversaries were predicting his demise.

His health weakened severely just after his re-election on October 7, possibly due to his decision to campaign for a third term instead of stepping aside to focus on his recovery.

HUMBLE ROOTS

Chavez was raised by his grandmother in a house with a mud floor in rural Venezuela and evoked almost religious passion among poor supporters who loved his folksy charm, common touch and determination to put the nation's oil wealth at their service.

He burst onto the national scene by leading an attempted coup in 1992. It failed and he was imprisoned, but he then formed a political party on his release two years later and swept to power in a 1998 election.

It was the first of four presidential election victories, built on widespread support among the poor.

But Chavez alienated investors with waves of takeovers and strict currency controls, often bullied his rivals, and disappointed some followers who say he focused too much on ideological issues at the expense of day-to-day problems such power cuts, high inflation and crime.

Chavez built a highly centralized political system around his larger-than-life image and his tireless, micro-managing style created something close to a personality cult. He was particularly adept at exploiting divisions within a fractious opposition.

Chavez was briefly toppled in a coup in 2002, but returned triumphantly after his supporters took to the streets.

Apparently realizing the end was nigh, Chavez named Maduro his successor in December, just before his fourth operation, which followed months of grueling chemotherapy and radiation treatment.

MADURO'S PROSPECTS

On February 18, Chavez made a surprise pre-dawn return from Cuba and was taken to a ninth-floor suite of a military hospital in Caracas, surrounded by tight security.

The government published a handful of pictures of Chavez lying in a hospital bed while he was still in Havana - the only time he was seen since the latest surgery. Supporters held tearful vigils around the country to pray for his recovery.

Maduro, 50, will now focus on marshalling support from Chavez's diverse coalition, which includes leftist ideologues, businessmen, and radical armed groups called "colectivos".

Seeking to knock down rumors of tensions at the top of the ruling Socialist Party (PSUV), Maduro has stressed the unity between him and Diosdado Cabello, a powerful former army buddy of Chavez who heads the National Assembly.

Maduro is a former bus driver who rose from union activist to foreign minister and then to president-in-waiting. He won Chavez's confidence by meticulously echoing his vitriolic rhetoric and never airing a dissenting opinion.

Maduro has mimicked Chavez's rabble-rousing style in appearances in recent weeks, peppering speeches with insults aimed at adversaries.

Capriles, Maduro's likely opponent, is a 40-year-old governor of Miranda state who led a hard-fought campaign against Chavez in the October election.

There are clear ideological differences between the 20 or so groups in the opposition's Democratic Unity coalition and without their enmity to Chavez to bind them, the alliance could splinter.

Until recently, polls had shown Capriles would beat any of Chavez's proteges. But the naming of Maduro as Chavez's heir, and the outpouring of emotion that will accompany Chavez's death, have changed the picture.

A survey carried out by local pollster Hinterlaces between January 30 and February 9 gave Maduro 50-percent support, compared to 36 percent for Capriles.

Wall Street investors, who would like to see a more pro-business government in Caracas but have been keen buyers of high-yielding Venezuelan bonds, will be watching closely.

Tributes began pouring in from abroad.

U.N. Secretary-General Ban Ki-moon offered his "deepest condolences" to the people of Venezuela, while Russia's U.N. ambassador Vitaly Churkin told reporters:

"It's a tragedy. He was a great politician."

(Additional reporting by Girish Gupta, Mario Naranjo, Marianna Parraga and Patricia Velez in Caracas, David Adams in Miami, Louis Charbonneau and Daniel Bases in New York; Editing by Kieran Murray, Sandra Maler and David Brunnstrom)