By Brian Ellsworth
CARACAS (Reuters) - Venezuela's opposition front-runner to face President Hugo Chavez in an election next year said on Wednesday he hopes Chavez recovers quickly from cancer so he could be beaten in the 2012 vote.
Henrique Capriles Radonski, governor of Venezuela's second most populous state Miranda, said the nation should focus on resolving problems such as high crime and soaring prices rather than fixate on the president's health.
"Government spokespeople say the president is in a process of recovery -- God willing, that's the case," Capriles told a media conference in Caracas.
"The best thing that can happen for Venezuela, the best thing that can happen for the region, is for President Chavez to be the candidate and for him to lose the elections."
Chavez, 56, returned from Cuba this week after undergoing surgery to remove a cancerous tumour, receiving adoration from his supporters and a warm welcome from government allies who appeared relieved he was home.
Though doubts remain about the severity of his condition and his capacity to govern, Chavez's health had not altered the day-to-day functioning of the government, Capriles said.
"The government is profoundly inefficient, but it is functioning," he said. "Venezuela's problems have nothing to do with the president's health."
Opposition leaders have struggled to take advantage of Chavez's illness to advance their campaign. They want to avoid appearing to relish his misfortune.
Polls show Capriles leading a clutch of opposition figures who will compete in a primary scheduled for February that will decide who will be the opposition unity candidate in 2012.
Chavez's mix of state-centric economic policies, heavy social spending and aggressive rhetoric against the United States has sustained his popularity for more than a decade and help him win a string of elections and referendums.
Appearing pale but defiant, the president saluted his people on Tuesday on their 200th anniversary of independence, but he did so from inside the presidential palace instead of attending the celebrations in person.
RUMORS OF RESHUFFLE
But the inability to resolve intractable problems such as the lack of affordable housing, chronic electricity outages and periodic shortages of staple foods have weakened his support base among Venezuela's poor majority and made the 2012 race appear to be his most challenging yet.
Markets had interpreted the socialist leader's sickness as positive news for investors, hoping it meant a change to more business-friendly leadership in the OPEC nation. His return from Havana curbed sharp gains by its debt.
Wall Street is focussed on rumours of a forthcoming cabinet reshuffle that could give clues as to who might be the ruling Socialist Party's candidate at next year's presidential election in the event that Chavez could not run. Allies have said they are confident he will be the ruling party candidate.
A reshuffle might suggest Chavez recognizes his illness will limit his government role or crimp his energetic, hands-on style, RBS Emerging Markets Strategy said in a note, but also indicated some paralysis or status quo on policy management.
"Perhaps the replacement of some key managers (namely the vice president) could show President Chavez wants to surround himself with closer confidantes that would better reflect his ideology and public image with the voters," it said.
Following big gains last week after Chavez said he had undergone surgery to remove a cancerous tumour, the benchmark dollar-denominated 2027 global bond rallied to bid up 0.125 point at 75.500 with a 12.885 percent yield.
The charismatic but authoritarian former soldier needs "strict" medical treatment but has vowed to win his health battle. One source close to the president's medical team told Reuters Chavez could have colon cancer in an advanced condition that would require chemotherapy for several months.
His doctors recommend that he be treated in Venezuela, the source said, where a wing of the Military Hospital has been prepared for him. The chemotherapy would start once Chavez was fully recovered from the operations, the source added.
There was no official confirmation of that, and the only official details of his condition have been given by Chavez.
(Additional reporting by Dan Wallis; Editing by Pascal Fletcher and Philip Barbara)
