CARACAS (Reuters) -- Outgoing Venezuelan President Rafael Caldera
                  bade an emotional farewell to active political life on Thursday, a few days
                  before transferring power to a man half his age who is promising radical
                  change.

                  Caldera, who at 83 is Latin America's oldest head of state, delivered the
                  final annual address to Congress in his five-year term, saying one of his main
                  achievements was "to hand over a country at peace and in democracy."

                  Viewed by many as the grandfather of Venezuelan politics, Caldera ran in
                  six of the nine presidential elections held since the return to democracy in
                  1958 and won twice, in 1969 and 1993.

                  In a rambling and at times emotional 80-minute speech that he delivered
                  haltingly, Caldera said he would leave a "stable economy" in a better shape
                  than he received it in 1994 when half the banking system collapsed in a
                  financial crisis.

                  Inflation, he said as an example, fell in 1998 to its lowest level in a decade,
                  yet still a high 29.9 percent and the second-highest rate in Latin America
                  after Ecuador.

                  Caldera's supporters say his second term, during which he grew increasingly
                  frail to the point of infirmity, brought relative political stability to Venezuela.
                  The country had been buffeted by 1989 price riots, two 1992 military coup
                  attempts and the 1993 dismissal of a president who later was tried and
                  convicted on corruption charges.

                  Caldera's successor is Hugo Chavez, who Caldera ordered released from
                  prison in 1994, two years after he led the Feb.

                  4, 1992 abortive coup. Chavez, who was elected in a landslide last month
                  on a nationalist platform that appealed to millions of poor, takes office next
                  Tuesday.

                  Chavez, 44, is a dynamic and youthful-looking former paratrooper who will
                  bring about a generational change and different style of government.

                  He has pledged to rid Venezuela of entrenched corruption and what he calls
                  antiquated political patronage. Chavez also is pushing a quick referendum to
                  create a popular assembly empowered to rewrite the constitution and reform
                  the judicial system.

                  Caldera, in his only reference to Chavez's plans, called the 1961 constitution
                  "excellent" and categorically rejected accusations at home and abroad that
                  Venezuela remains among the most corrupt countries in the world.

                  Caldera's critics argue that he fell short on his promises to restructure and
                  modernize an inefficient state apparatus.

                  They note that he presided over two devaluations in the past three years and
                  leaves Latin America's fourth-largest economy in deep recession, with
                  perhaps adequate foreign reserves of $15 billion but an overvalued currency
                  and a gaping fiscal deficit estimated at 9 percent of gross domestic product.

                  Hit by the worst oil price crash in over a decade, the economy, dependent
                  on oil exports, contracted 0.7 percent in 1998. Economists say it will shrink
                  by at least double that this year.

                  Leading VenEconomy consultancy blasted Caldera's economic policies in its
                  latest weekly instalment released on Wednesday.

                  While acknowledging some solid accomplishments, including a successful
                  opening of the oil sector and the backing of the state-oil company's
                  expansion, it said Caldera's five years would enter the history books as "the
                  lost lustrum."

                   Copyright 1999 Reuters.