CARACAS, Venezuela (AP) — Even before President Hugo Chavez announced he was fighting cancer, Venezuela was one of Latin America's most troubled nations.

The country of 28 million people had been wracked by energy shortages and rolling blackouts despite claiming to have the globe's biggest oil reserves. It suffers the world's second-highest rate of inflation, and one of the worst rates of crime.

Now the 56-year-old president has returned home from surgery in Cuba, insisting he is back in control and hinting he's ready to run for re-election next year. Many of his compatriots, however, wonder how their leader will tackle problems that he wasn't able to solve before falling ill.

Chavez's success in raising incomes for the poor and bringing social services across the nation's slums have helped keep him maintain his status as Venezuela's most popular politician. Recent polls show about half of Venezuelans approve of his administration, despite its shortcomings. Although that is down from the 63 percent who re-elected him in 2006, sympathy for his suffering could boost his ratings again.

But the voluble leader, who has woven close ties with communist Cuba, seems likely to be a weakened man as he carries his campaign for a socialist Venezuela into next year's election season. Inflation has eroded the income of his most fervent supporters among the poor, while inefficiency, over-promising and alleged corruption have undermined populist promises to build vast developments of public housing, span the continent with gas pipelines and build up industry in a nation now dependent on oil exports.

Even his gift of gab has been reined in. He is under doctors' orders to limit his famed, folksy marathon speeches, although on Thursday, he still managed a post-op hour and a half.

Angel Oropeza, a social psychologist and political analyst at the Andres Bello Catholic University in Caracas, said the president's illness could give the government an excuse for not taking care of the country's growing problems.

"They'll justify the inefficiency with the illness," Oropeza said.

Supporters of Chavez also say a weakened president might be less active, but it's something they dread.

"I think that if Chavez isn't out front like he has been, things can get worse," said taxi driver Luis Morales.

He has been watching closely for hints about Chavez's health as a window into the nation's future: "You could see yesterday, for example, that he almost didn't talk" while addressing the military parade on live television from across town in the presidential palace.

Chavez has said he had a cancerous tumor removed from his pelvic region on June 20 but hasn't specified what kind of cancer treatments he will receive.

Outside doctors and analysts agree that, at the very least, recovery and treatments mean Chavez's famously unflagging energy is likely to be limited for months.

Chavez's charisma and unchecked access to public funds will remain his most useful weapons heading toward the December 2012 election. Those long-unsolved problems may be his biggest challenge to re-election.

A 2010 study by the watchdog group Transparency International ranked Venezuela as the 12th most corrupt country out of 178 surveyed, based on the perceptions of business and good government groups and experts in development banks. Venezuelan authorities insist the ranking doesn't reflect reality.

Even under a robust Chavez, his government has seemed to focus on grand socialist plans and provocative geopolitics rather than on nuts-and-bolt governance. Promised housing has gone unbuilt. Promised upgrades to power plants have been delayed. The worst prison riot in years has broken out after years of unmet vows to fix the country's prisons. Once-profitable farms and factories have struggled after being nationalized. Government debt has soared despite a river of profits from $100 a barrel oil.

Worse for Chavez's political chances, inflation fed by heavy public spending has undercut the progress that many impoverished Venezuelans had made in the first years of his government, when poverty and unemployment were roughly halved.

Inflation is running at 24 percent a year. Venezuela's economy shrank by 3.3 percent in 2009 and by 1.4 percent last year, even as much of the rest of Latin America was booming out of the global economic slump and oil prices were rising. Purchasing power for average Venezuelans has fallen by 14.5 percent over the last four years.

For many, the country's energy crisis has come to symbolize the reasons for the woes.

Chavez's critics say he replaced engineers and other technicians with unqualified military personnel and socialist party cadres at key government utilities, resulting in poor maintenance and a failure to build capacity for the future. The government has insisted that a quicker-than-expected rise in demand for energy is to blame.

The government imposed stiff taxes and restrictions on heavy energy use after a series of blackouts last year that it blamed on a drought affecting the nation's key hydroelectric dam. This year, despite rising water levels, the country suffered three major blackouts in less than three months, prompting Chavez's government last month to announce another strict conservation plan requiring consumers to reduce their energy use by at least 10 percent.

"Venezuela's problems have nothing to do with the health of President Chavez," said Henrique Capriles, governor of the central state of Miranda and a possible challenger to Chavez next year. Even before Chavez's illness, Capriles said, the country had suffered from "a profoundly inefficient government."

Still, Chavez is trying to project the image of a chief executive in charge, one who remains eager to lead Venezuela into the future.

Cameras were called in for a live national broadcast of a Cabinet meeting on Thursday.

"Here is the government, demonstrating what it's capable of," Chavez said. "We're moving toward 2021," he added, a strong indication he plans to seek re-election in 2012 and beyond.

Chavez has weathered countless crises before, from a 2002 coup attempt to a months-long oil industry strike later that year. In those cases, though, he could count on his seemingly boundless energy and his renowned powers of communication.

Construction manager Camilo Gonzalez, 58, said he was bracing for a rough year.

"Here, truly, Venezuela's problems with Chavez sick or Chavez normal are going to keep getting worse," he said. "This is the real situation of this country. I believe it and I live here and I feel it every day."