By Andrew Cawthorne and Mario Naranjo
CARACAS (Reuters) - Venezuela's parliament approved on Thursday a near-doubling of borrowing in 2011 by President Hugo Chavez's government, which wants the extra debt to finance social projects the year before an election.
As expected, the ruling Socialist Party's majority in the National Assembly guaranteed passage of the debt law, allowing the government to borrow an extra 45 billion bolivars ($10.5 billion) on top of the 52.2 billion already allowed.
That is likely to pave the way for another sovereign bond issue later in the year.
Critics say Chavez, with an eye to spending big ahead of the 2012 presidential vote, is cynically and unnecessarily burdening future generations of Venezuelans with extra debt after squandering the OPEC member's vast oil revenues.
"You didn't arrive yesterday, it's been 12 years you've been in government and you've not been able to meet the people's needs," opposition lawmaker Cesar Rincones said during a heated debate. "Next year, you'll go down as the worst government in the annals of history."
Chavez and his supporters say the money is needed to continue embedding their "21st century revolution," in its 13th year, and revert past neglect of the poor.
Of the extra 45 billion bolivars, 10 billion is intended for debt payments, 10 billion to finance home building, 10 billion for agriculture projects, 10 billion for employment initiatives, and 5 billion for emergencies and disasters.
"It's responsible debt," said Vice President Elias Jaua. "Not every nation can take on such debt, but Venezuela can handle issues of this size because there is confidence in the markets in the solidity of the Venezuelan economy."
According to the International Monetary Fund, Venezuela's general government gross debt is quite low, at 38.7 percent of GDP last year. This is comparable to peers such as Mexico and is much lower than the majority of advanced economies.
The South American nation has just pulled out of recession, and achieved 4.5 percent growth in the first quarter, compared with the same period last year.
Though Venezuela is on course for roughly 4 percent growth this year, critics say growth should be much higher given the surge in oil global prices and consequent extra revenues for Venezuela.
The new debt approved by parliament can be in local or foreign currency, and analysts expect a $3 billion-$4 billion sovereign bond issue in the second half.
"Aggressive debt issuance is part of the government's strategy to improve popularity by boosting economic growth ahead of the 2012 presidential elections," Eurasia Group consultancy said in a report.
"Chavez understands he faces a more competitive race, and is betting on massively increasing spending to secure reelection next year."
Chavez's popularity ratings have hovered around 50 percent this year, while the opposition is preparing for primaries to choose a unity candidate against him early next year.
Current favorite to win the opposition ticket is Henrique Capriles, 38, who governs an influential state including much of the capital Caracas.
(Additional reporting by Deisy Buitrago; Editing by Leslie Adler, Gary Hill)