The convergence of multiple serious economic problems, including food shortages, spiraling price increases, chronic power outages, and the limited availability of precious U.S. dollars, is contributing to a sense of disenchantment with the government. In addition, the population is troubled by a rising tide of deadly crime and deep-seated corruption; suspicions that high-ranking officials are profiting from exploitation of the distortions in the currency market are spreading fast.

This all creates something of a no-win situation for President Nicolás Maduro. The seeds of Venezuela’s current problems were planted and nurtured over a period of more than a decade by Maduro’s mentor, Hugo Chávez, who handed Maduro responsibility for sustaining his project of “socialism for the 21^st century” before succumbing to cancer in March 2013.

Unfortunately, the new president possesses neither the iconic status that helped to shield Chávez from criticism over the poor results of his government’s policies, nor the authority that might enable him to order a change in course without provoking a negative (and possibly violent) response from sections of his own party’s base. There is no reason to expect that Maduro will attempt a significant course correction in the immediate near term, as attention will be focused on upcoming municipal elections.

The opposition is framing the vote as a referendum on Maduro’s presidency.

The opposition is framing the vote as a referendum on Maduro’s presidency, which has raised the stakes of the outcome. Even if the governing PSUV wins the most mayoral posts and city council races, failure to win a majority of the national vote would likely trigger the initiation of preparations for a presidential recall campaign.

The president’s inclination to embrace populism rather than reform was underscored in early November, when Maduro announced an “early Christmas” in Venezuela. The chief practical result is that workers will receive their annual bonuses on December 1, rather than during the year-end holiday week. That this means bonuses will be distributed before, rather than after, the municipal elections.

Whether such measures affect public sentiment will be made evident in the results of the upcoming municipal elections. What is already clear is that divisions are opening up within the governing PSUV between hard-line Chávistas and reformers who are convinced that changes are necessary to address the dysfunction in the economic system, a development that points to political troubles for Maduro, regardless of the outcome of the upcoming elections.

Officials have hinted that more aggressive policy action is under consideration, with possible moves including another devaluation of (or perhaps even floating) the bolivar. The hard-liners oppose any further devaluation of the currency, but Rafael Ramirez, the new vice president for the economy, supports a devaluation, which would increase the value of state-owned PDVSA’s dollar-denominated oil earnings. On current trends, the indefinite maintenance of the status quo would appear to be untenable, and devaluation is likely in the near term.

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