Yes, Hugo Chavez should focus on the private sector, because developing the private sector builds wealth. The government cannot create wealth. The government can only redistribute what other people have made. If the government encourages the private sector, there will be more taxes from which to find a tax base. Growing the private sector allows social spending because everyone involved will be wealthier.
Hugo Chavez is right to focus on social spending because that is what will support the greater portion of the population, thereby improving the economy and ultimately creating a better investment climate. The private sector is only concerned with hoarding resources to improve their own profits and since the economy is made up of the entire population that is a harmful practice for the nation overall.