The Venezuelan leader faces a referendum that could force him out of office. Michael McCaughan looks at his precarious position

When Venezuelan President Hugo Chavez was swept into office by a landslide vote in December 1998 his campaign pledge to implement a "peaceful, democratic revolution" looked like just another electoral strategy designed to win votes from the poor.

Latin America's political hopefuls often sound like Che Guevara on the campaign trail, denouncing the growing gap between rich and poor, promising a war on corruption and swearing blind that they will bend neither knee to any foreign power. Once victory has been assured, the bold candidate shrinks back to pre-campaign size, jumps on a plane to Washington DC and reassures the US government that it will be business as usual. The message is delivered in English by a team of advisers who probably attended Yale or Harvard, an old boys' network which powers a regional agenda driven by US investment ambitions.

The Venezuelan leader insisted that his administration would follow through on campaign pledges: "Venezuela is a ticking time bomb," said Chavez, "and I have been elected to defuse it." The campaign trail revealed one telling detail: one in four Venezuelan voters feared the rise of Chavez so much that they would have considered any alternative, however drastic, to prevent him winning office.

It wasn't difficult to guess what section of society harboured fears about the charismatic rabble-rousing, populist: Venezuela's media and business leaders who have controlled state power for the past 40 years, dispensing jobs, cash and favours to a loyal clique of followers. Since Chavez assumed office, Venezuela's mainstream media has fabricated a version of reality that feeds hungrily into middle-class panic over possible loss of privilege and wealth. The pattern has hardened over time, making it difficult to find a common language with which to initiate dialogue between government and opposition. The daily news diet provides a steady drip of poison as freedom of speech becomes incitement to hatred. There is nothing the opposition would like more than to see Chavez shutting down TV stations, giving them an opportunity to become worthy victims before the international community.

Venezuela is endowed with the greatest oil deposits outside the Middle East, a key factor in mitigating the type of social unrest that has turned neighbouring Colombia into a deadly war zone for the past 50 years. The flow of black gold produced revenues that funded development projects and welfare programmes, trickling benefits down to the poor. In 1989, excessive borrowing and a drop in oil prices forced President Carlos Andres Perez to adopt an austerity package dictated by the International Monetary Fund (IMF). The result was a spontaneous social uprising, an orgy of looting subdued by a punitive military expedition that left 1,000 dead.

In ideal conditions, Chavez's task would be overwhelming: a five-year deadline to deliver peace and prosperity to 24 million people, 80 per cent of them living in some degree of poverty.

In his first two years in office, Chavez laid down a legal framework for radical reform; a new constitution was approved by referendum, guaranteeing healthcare, food and education, while anyone aged 18-25 would be entitled to a plot of land in the countryside. Women's work was recognised as "adding value" to the economy and pension rights were promised. There was a mood of optimism on the streets of Caracas as ordinary people debated the future of their country but wealthy families, fearing an uncontrollable outburst of class warfare, packed their children off to the US and Europe.

Chavez put his political leadership to the test in July 2000, once more winning a landslide victory.

In November 2001, Chavez approved a package of 49 laws which paved the way for educational reform, land distribution, rural resettlement and an overhaul of the oil industry. The Chavez project had reached the point of no return. In April, 2002 a combined media, business and military heave briefly ousted Chavez before an unstoppable popular reaction restored him to power. This failed coup was captured on film as it unfolded by the Irish company Power Pictures in its award-winning Chavez documentary.

The culprits were never punished for subverting the democratic order and within six months they struck again, leading a general strike which targeted the oil industry. Chavez survived the 65-day siege but the economy was severely damaged and it took all last year simply to get the economy back to where it was before the strike began.

Just over five years after Chavez assumed office, the social situation is still critical; Venezuela's capital city, Caracas, is falling apart as thieves filch metal from metro elevators, remove street lamps, dismantle apartment intercoms, steal electricity cables and pickaxe cement barriers separating car lanes on the city highway.

Chavez's administrative inexperience has been reflected in the alarmingly high turnover of cabinet staff, a game of musical chairs which has seen nine people occupy the post of communications chief alone in the past five years. Chavez has also scored some significant victories as literacy and health programmes transform life in the hillside barrios while land reform gives farmers new hope.

However most Venezuelan citizens appear more concerned with the daily struggle to put food on the table than the long-term battle to achieve an egalitarian society. Such citizens know one or two incontrovertible truths: consumer prices have risen 27 per cent in the past year, and violent crime has spiralled upwards, claiming 13,500 lives in the same period. These citizens also know that while Chavez has the tenacity required to stay in office, the opposition has the capacity to sabotage his government.

President Chavez now faces the likelihood of a recall referendum which could force him out of office by next June. The new constitution has a clause whereby a petition signed by 20 per cent of the electorate (2.4 million people) can force a recall vote halfway through the presidential period. Venezuela's electoral council is currently verifying an estimated three million signatures collected in November. Government and opposition are gearing up for the recall vote, anticipated for May, as Chavez once more finds himself diverting energy from pressing social matters at hand.

President Chavez has every right to fight to the last vote in defence of his political project, but the best outcome might be a short-term defeat and temporary retirement from office. If Chavez survives the recall vote, the opposition will most likely continue to bleed the nation dry until the president's term ends in 2006. After eight years in office, Chavez will then have little to show for his efforts, making it highly unlikely that he will ever be restored to office.

If Chavez jumps off the speeding train then the opposition will be forced to take the helm, an overwhelming task for a loose collection of individuals lacking an alternative political vision. By the year 2006, the country might then be clamouring for the return of Hugo Chavez, like a prize fighter dispatched prematurely from the ring, then rested, revitalised and ready for action.

The Battle of Venezuela by Michael McCaughan (£7.99 in UK) is published today by Latin America Bureau. Available in bookshops and at www.lab.org.uk