AFTER winning at least 17 of 22 states in elections on Sunday, Venezuela's President Hugo Chavez could accelerate left-wing reforms and try to change the law to allow his reelection in the oil-exporting nation. But Chavez was weakened by the loss of the populous state of Miranda and the capital Caracas, giving the opposition its second boost in a year after defeating reform proposals in 2007 that would have given the president more power. Here is what can be expected from Chavez and the opposition in the coming months, along with some challenges Venezuela will face if oil prices keep falling. Reelection Chavez's allies still hold a large majority of states, but a large percentage of the population now lives in areas to be governed by his opponents. Despite the sour taste the loss of Caracas and Miranda will leave Chavez, he will likely push ahead with his plan to seek constitutional changes to allow him to run for reelection in 2012. Chavez was defeated last year in a referendum on ending term limits and extending his powers to deepen socialist reforms. Under the current rules Chavez must step down at the end of his term in 2013. The opposition Venezuela's opposition is made up of a number of small parties and has been bedeviled by infighting for years. They can use their wins in Miranda, Zulia and Caracas to prepare for the 2012 presidential elections but still have no strong single leader. Chavez's main rival is Manuel Rosales, currently governor in the oil-rich state of Zulia, who lost to Chavez in the 2006 presidential elections. Rosales, who is likely to become mayor of Zulia's capital Maracaibo next year, is under investigation for alleged money-laundering. Chavez has threatened to jail him. Turning left Chavez slowed the pace of his socialist drive and focused on resolving problems like food shortages after the defeat last year of his reform proposals. Despite Sunday's mixed results, he is impatient to speed things up again. Next year could see more nationalizations or a revival of a stalled program of seizing large farms considered idle and giving land to the poor. Chavez will also inject billions more dollars into community-run banks in 2009, a vote winning project that bypasses sluggish ministries. Radicalization brings political risks to Chavez, who lost the 2007 referendum partly because of worries among his poor supporters that he was moving too fast and against private property. With Sunday's results, Chavez seems to have lost the confidence of a large part of Venezuela's urban voters who are sick of filthy streets and a wave of homicides that make Venezuela one of the world's most dangerous countries. Oil price danger The price for Venezuelan oil is at its lowest level in about three years, near $40 per barrel, presenting a sobering economic outlook for Chavez, who has grown accustomed to world oil prices as high a $147 a barrel. A sustained dip in oil prices could add to Chavez's woes and limit his more grandiose plans, such as major public works. The government is likely to trim the budget unless prices rebound soon, and even though it will not cut back on politically sensitive welfare programs, it risks angering voters if it can not meet its promises to build train lines and bridges. If oil prices stay low, Chavez will come under increasing pressure to devalue the bolivar currency, which has been set at 2.15 to the dollar since 2005. He has in the past suggested that a dual currency rate may be an acceptable solution to the overvalued currency.
