By Andrew Cawthorne
CARACAS (Reuters) - Venezuela's ruling Socialist Party began a six-day congress on Saturday with President Nicolas Maduro seeking to fire up militants and quell dissidents who say he is failing to fix the economy or end graft.
It was the party's third congress since formation in 2008, but the first without its charismatic founder, former president Hugo Chavez who died last year of cancer after ruling the South American OPEC nation for 14 years.
"This congress will be unforgettable for the future of the fatherland," Maduro told the 537 delegates, dressed in socialist red, at a Caracas theater. "All of us together have to be Chavez, we must not fail the giant. We are his heirs."
By sheer force of personality, Chavez was able to hold together the ruling party's competing factions, from Marxist ideologues to military officers and pragmatic businessmen.
But Maduro, 51, a former bus driver who rose to be Chavez's vice-president, has been unable to replicate his political grip and faces a dilemma in preserving his predecessor's political legacy while rectifying deepening economic problems.
Venezuela has the highest inflation rate in the continent at 62 percent in the 12 months to June.
A Byzantine currency control system, with official rates ranging from 6.3 to 50 bolivars to the dollar and a black market level of 80, is creating price distortions, stymieing private business and earning huge sums for those playing the system.
POWER AND WATER CUTS
Shortages of basics continue across the nation, while electricity and water cuts are angering Venezuelans.
"Working people's daily life has become a long suffering," said the disgruntled 'Chavista' group Socialist Tide, lambasting "scandalous" graft and government policy paralysis.
"There is confusion and pessimism over the future."
The frustrations and fissures in government circles came into the open last month when Maduro pushed out of government Jorge Giordani, a long-time Chavez minister, Marxist academic and architect of Venezuela's economic controls.
The party then suspended a director who backed Giordani's departing criticism of Maduro for failing to stem multi-billion-dollar fraud with the currency controls.
Despite that high-profile affair and the grumbling at grassroots level, there was no sign of a revolt at the carefully-choreographed party congress.
CHAVEZ NAMED 'ETERNAL LEADER'
A low turnout at delegate elections favored cabinet-backed candidates with superior mobilizing capacity.
The delegates' first move was to name Chavez their "eternal leader" and Maduro the new party president. "He has shown himself to be a worthy son of Chavez," the resolution said.
The meeting included lengthy tributes to the deceased Chavez. Maduro wiped away tears when a recording of Chavez singing the national anthem was played.
Veteran Venezuela analyst David Smilde of Tulane University said the government had managed to "domesticate" the high-profile congress but divisions would not go away.
"They are going to sidestep the difficult questions. Then in August they will do what they have to. What they have in mind is slow change, like turning a big ship," he said.
Maduro's vice-president for economy, Rafael Ramirez, has said the three currency control levels will likely be unified.
That would effectively bring a devaluation, create further price pressure, and risk more ire from grassroots party hardliners who do not want to see Chavez's model changed.
Then there is the hugely sensitive move to raise gasoline prices that are currently the cheapest in the world.
Officials have for months been trying to prepare Venezuelans to pay more for fuel, and the government could do with the extra revenue, but they seem to be baulking at passing the measure due to the risk of social unrest.
"Of course there are problems. But how many more were there in 1998?" said Socialist Party vice-president Diosdado Cabello, listing welfare advances, from literacy campaigns to wider pension coverage, in the 15 years since Chavez won power.
Venezuela's opposition parties, meanwhile, are licking their wounds after traumatic events earlier this year when hardline leaders spurred three months of street protests and barricades that led to 43 deaths in daily clashes between demonstrators, government supporters and security forces.
The unrest shook but failed to topple the government, and split the opposition between radicals and moderates, leaving the Democratic Unity coalition as fissured as the government.
That is a relief to Maduro, who only narrowly beat the coalition's candidate Henrique Capriles in last year's election to replace Chavez. Maduro's term lasts until 2018.
"Enough of childish fights," said Roberto Enriquez, head of opposition party Copei. "Changes are coming to Venezuela, it's not the time for personal projects but for unity."
Venezuela's poor failed to join this year's protests that were largely a student and middle-class affair. And while slum-dwellers are often critical of the Maduro government, they do not seem ready to throw their support behind his foes.
(Additional reporting by Diego Ore; Editing by Richard Borsuk)