Amid a bid for reelection, Venezuelan President Hugo Chávez's oil subsidy and antipoverty programs may be on the chopping block.
The sharp drop in oil prices is imperiling those ambitions, analysts said Tuesday, a day after the Venezuelan government announced that it's suspending free heating oil to poor people in the US. Oil accounts for 93 percent of the government's export income and some 50 percent of its overall income.
"Hemispheric politics are suddenly becoming too expensive for Chávez," said Carlos Alberto Lopez, an energy consultant in Bolivia. "He will have to allocate his dwindling resources to sustaining his political position in Venezuela."
Mr. Chávez is facing a crucial political test in the near term. He's asking Venezuelan voters to lift term limits so he can seek reelection once again in 2012. The national referendum could be held as soon as Feb. 15.
Polls show that Chávez trails by 20 or so points and can't risk reversing his enormous expansion of government spending aimed at the poor, his core group of supporters.
That puts oil subsidies and other foreign assistance programs throughout Latin America and the Caribbean on the chopping block.