By Esteban Israel
CARACAS (Reuters) - While President Hugo Chavez struggles to revive the battered bolivar, in a hillside slum overlooking his palace, die-hard supporters are talking about getting rid of the Venezuelan currency altogether.
Welcome to the 23 de Enero barrio, home to about 100,000 people and something of a laboratory for Chavez's nationwide socialist experiment. Here you find dogs named "Comrade Mao", and even a "revolutionary car wash."
"We are creating a popular bank and are going to issue a communal currency: little pieces of cardboard," says Salvador Rooselt, a soft-spoken 24-year-old law student and community leader who often quotes Lenin and Marx.
Some 20 militant groups sometimes described as Chavez's "storm troopers" run this urban jungle in western Caracas, where hulking concrete buildings daubed with colorful murals -- one depicting Jesus Christ brandishing an AK-47 rifle -- show off the neighborhood's radical tradition.
"We are giving capitalism a punch in its social metabolism," said Rooselt, of the Alexis Vive group, wearing its trademark bandana with the image of guerrilla icon Ernesto Che Guevara around his neck.
A deeply-rooted socialist ideology, absolute territorial control and financing from the government have allowed Alexis Vive to put into practice some of the ideas Chavez is struggling to implement in the rest of Venezuela.
Socialist stores sell milk and meat from recently nationalized producers at about a 50 percent discount. Residents do voluntary work, kids are encouraged to steer clear of drugs, and some youths have even joined a pioneer organization modeled on similar groups in Communist Cuba.
"I'm sure President Chavez supports our initiatives and seeks to implement them at a national level," Rooselt said.
Alexis Vive spreads its message via Radio Arsenal, an underground FM station Rooselt says was inspired by Vladimir Lenin's experience with a political newspaper a century ago.
They are also turning their hands to urban agriculture and fish farming to feed locals, and say that the future communal bank will extend micro-credit to foster economic independence.
Despite being a stronghold of the "chavista" movement with a massive electoral muscle that has helped the president win votes for more than a decade, 23 de Enero's radicalism has often proved a political liability for Venezuela's leader.
A series of attacks targeting opposition symbols such as the Globovision television station, and even the Roman Catholic Archdiocese, have led Chavez to publicly distance himself from these groups in the past -- although some neighbors think they still take direct orders from "Comandante Presidente."
George Ciccariello-Maher, a social scientist with a PhD from the University of California, Berkeley who has studied Venezuela's radical movements, calls it a "tense alliance" between the president and the barrios.
"Chavez depends on the radical sectors for support, but neither side truly trusts one another ... If he were to destroy them, he would be destroying his own base as well," he said.
Gone are the days when local groups proudly displayed their automatic weapons in front of visiting reporters. Militants from Alexis Vive say their armed struggle is over.
"Ever since the revolutionary process started there haven't been any weapons. We joined the Bolivarian militias," said Rooselt, referring to a 35,000-strong armed force recently launched by Chavez to defend his socialist revolution.
But other more belligerent groups within 23 de Enero appear to be still armed to the teeth.
In January, one of the groups released a video to the media showing its members dressed in military attire and brandishing automatic weapons and a rocket-propelled grenade launcher.
They called on Chavez to clean his government of corrupt "false socialists."
Security in 23 de Enero remains tight. Rooselt's told Reuters he received a call by cell phone the moment two reporters were spotted in the neighborhood.
That might explain why crime rates here have dropped by 95 percent, according to the militants, who say they have turned it into one of the safest places in crime-ridden Caracas.
"SPEARHEAD OF THE REVOLUTION"
Known in the past as "Little Vietnam," 23 de Enero has a long history of left-wing radicalism. The neighborhood's name refers to January 23, 1958, the date on which military dictator Marcos Perez Jimenez was toppled.
The community, mostly made up of rural workers attracted to the capital by Venezuela's oil boom, played a key role in the 1989 riots known as the "Caracazo," which claimed scores of lives when the army shelled buildings in the area for days.
Alexis Vive, for instance, honors community leader Alexis Gonzalez, who was killed by the police in 2002.
Berkeley's Ciccariello-Maher calls 23 de Enero an example of "alternative sovereignty" beyond the control of the state.
"The neighborhood and movements it nurtures represent both the laboratory and spearhead of the Bolivarian Revolution ... It is in 23 de Enero that the most radical forces are located, forces which drive the process forward," he said.
The government is finding new ways of supporting 23 de Enero. In a plot behind a local market, neighbors in Che Guevara bandanas are building a state-funded brick factory equipped with Iranian-technology.
Not far from there, a group of former paratroopers who joined a failed coup d'etat by Chavez in 1992 have set up a "revolutionary car wash" next to a wall displaying a huge picture of the late Colombian guerrilla commander Marulanda.
"Here in 23 de Enero we are committed to take this process to the very end," said cooperative member Martin Campos, a 38-year-old retired soldier sporting a yellow baseball cap with a red star. "We are chavistas. Red, very red."
(Editing by Daniel Wallis and Anthony Boadle)