The populist government is reorganizing the country's colossal oil industry, taking a bigger share from private multinationals. Planners are reorganizing the banking system, placing stringent restrictions on lending while creating state banks. Venezuela is also developing a state-to-state barter system to trade items as varied as cattle, oil and cement as far away as Argentina and as near as Cuba, its closest ally.
"It's impossible for capitalism to achieve our goals, nor is it possible to search for an intermediate way," Mr. Chávez said a few months ago, laying out his plans. "I invite all Venezuelans to march together on the path of socialism of the new century."
According to many mainstream economists, the change is simply a mix of plans taken from the protectionist policies of the 1960's and others adopted from Cuba and countries of the former Soviet bloc. It may not be communism - as detractors contend it is - but it mixes socialism with capitalism and what some call improvisation.
Many of the president's grandest plans are put into practice at the year-old Ministry for the Popular Economy. Planners there have already created 6,840 cooperatives that employ 210,000 people nationwide, many producing for the state………….***
Chavez said he would take the message that Washington's "capitalist, imperialist model" was responsible for exploiting developing economies and ruining the global environment to this week's summit in Argentina, also to be attended by U.S. President George W. Bush.
"We don't need American imperialism to live," Chavez said at a ceremony announcing Venezuela's plan to launch a telecommunications satellite with the help of China.
Chavez accused the U.S. of breaking a contract to supply parts for Venezuela's fleet of 21 F-16 fighters and pressuring other countries from helping to maintain them. Israeli media reported last month that Israel canceled a lucrative deal to upgrade the warplanes under American pressure.
"We can do whatever we want with the planes. Maybe we'll send 10 to Cuba, or maybe to China so that they can see the technology. I say with whatever country that can use them," said Chavez, a close ally of Cuban leader Fidel Castro.
Venezuela originally purchased its fleet of F-16s in 1983 for US$615 million. Until Chile acquired a fleet in 2003, Venezuela was the only Latin American country to possess the warplanes made by Lockheed Martin.
Chavez said he would remind leaders from other Latin American and Caribbean countries at the summit in Mar del Plata of other threats posed by the U.S.
"In Mar del Plata, I will say that Venezuela is free," Chavez said. "The capitalist, imperialist model threatens to destroy life on this planet ... it destroys waters, rivers, lakes, seas, contaminates the environment. It's a system that generates misery, poverty, death."
He also criticized U.S.-backed free-trade policies that he said make poor nations poorer while keeping them trapped in cycle of crippling debt payments.
"They make us slaves," said Chavez, pledging to oppose the U.S. plan for a Free Trade Area of the Americas and saying it would be "buried" at the summit.
Chavez, who says he is leading a socialist "revolution," has used Venezuela's oil wealth to push for regional solidarity, offering fuel with preferential financing to various Caribbean and Latin American countries. ........***