TIME: Venezuela Votes

By Tim Padgett

The panic set in on Sunday evening when news started to trickle out of Venezuela's National Election Commission, which is dominated by allies of President Hugo Chávez. Referendum returns indicated that Chávez's package of constitutional changes, including the elimination of presidential-term limits, would narrowly lose. Inside the Miraflores presidential palace in Caracas, Chávez--who had yet to lose an election since winning the presidency in 1998--was initially furious. But soon enough, he accepted the loss. And his calm concession did Venezuela--in fact, a whole continent whose leaders have had a habit of defying the will of the public--a service.

What will Chávez do now? The loss should prod him to focus on the problems of his nation that need fixing before he leaves office in 2013 instead of on his incessant, globetrotting socialist and anti-U.S. crusades. That way, Chávez stands a chance of leaving a record as the man who finally set Venezuela and Latin America on a real course toward solving terrible inequality and not as just another overweening Latin leftist who stayed too long. Chávez insisted to TIME last year that "capitalism is the way of the devil." But while Chávez has used his oil windfalls to reduce poverty, Venezuelans suggest they want to increase satanic capitalist investment to solve their nagging unemployment.

Some adversaries had good words for Chávez. "There's no doubt he brought necessary changes to a very corrupt Venezuela," says Juan Mejía, a head of the student movement that led the opposition to Chávez at the referendum. Indeed, it was Chávez's electrifying emergence that paved the way for the election in this decade of other leftist heads of state, like Brazil's Luiz Inácio Lula da Silva, Argentina's Néstor Kirchner and Chile's Michelle Bachelet, even if Chávez affects to disdain their moderate, market-oriented socialism. Sunday's humbling results will make Chávez a less swaggering figure on the hemispheric scene, yet a little humility on his part may make his neighbors more receptive to his initiatives. Latin America--and the rest of the world--has not heard the last of him.