Venezuela election: Hugo Chávez's largest challenge yet

Venezuelan President Hugo Chávez is facing his biggest electoral challenge in years as opponents seek to gain seats in the legislature amid recession, and Venezuelans confront a crime wave that has touched most families.

"I don't know who I'm voting for," Erika Alvarez says while on a lunch break from her job as a vehicle finance assistant. "I support the president, but we need new deputies who do their job."

Citizens who have traditionally voted with the president are giving opposition leaders hope that they can win at least a third of the legislature's seats during Sunday's parliamentary election. While Mr. Chávez's approval rating hovers at 50 percent after almost 12 years in office, critics aim to capitalize on voter dissatisfaction and unify around opposition candidates – a shift in strategy from their 2005 election boycott, which merely handed power to Chávez allies. The half-dozen major opposition parties will likely use any wins to start jockeying to pick a challenger to take on Chávez in 2012.

Crime and the economy come up time and again in conversations with both supporters and opponents of the self-proclaimed revolutionary socialist. For Ms. Alvarez, the crime wave came close to home last year, when her neighbors were murdered. The neighborhood erected a wall and security gates, but she no longer goes out to enjoy the tropical nights after 8 p.m. "One of the main things the assembly has to look into is a plan to reduce violence," she adds. "Many of my friends have been robbed, and there's no justice."

Socialist domination

Venezuela's legislature is dominated by the United Socialist Party of Venezuela, or PSUV, which controls 138 of the legislature's 163 seats. Its allies have another eight seats. For years, the legislature has rubber-stamped presidential proposals to nationalize industries, increase presidential control over social spending and local government, and expand alliances with Cuba and other leftist governments.

Chávez's side has dominated all but one nationwide election since 1998, including three presidential races. His only loss was in 2007, when he proposed a constitutional overhaul that would have centralized power. The setback was short-lived: His favored candidates took most of the country's mayoral and gubernatorial seats in 2008, and last year he won a referendum to end presidential term limits.

But the PSUV is facing a strong challenge here in the capital of Lara State, where many former Chávez supporters have followed the lead of Gov. Henry Falcon.

Mr. Falcon switched to the Fatherland For All party after Chávez ordered the nationalization of warehouses in Barquisimeto's industrial area, something Falcon said would hurt employment.

Despite the defections, Chávez retains support. "The number of hard-core Chávez supporters in the past was much bigger than today, but it's still a relevant group," says Luis Vicente Leon, a Caracas-based pollster.

Disillusioned supporters may not necessarily turn to opposition parties, he says, and the electoral system itself adds to unpredictability. Because of how districts are drawn, it may be possible to win up to 70 percent of the legislature with only 50 percent of the popular vote, Mr. Leon says. Jesse Chacon, Chávez's former information minister and now a pollster, has said pro-Chávez candidates could take three-quarters of the seats with 54 percent of the popular vote if the district breakdown is similar to historic trends.

Recession fallout

Fallout from the recession is also hard to gauge. The Central Bank said the economy shrank 3.5 percent in the first half of 2010, though the left-leaning Center for Economic and Policy Research in Washinton says it may be starting to expand. Inflation is the highest in the Americas, but goods shortages have declined to the lowest levels since 2006, according to the Central Bank. Unemployment is in single digits.

Such positive signs haven't made it to the dusty edge of Venezuela's fourth-largest city, where Dora Lopez sells empanadas for 35 cents apiece from a rented storefront with scuffed yellow walls.

"I'm on the edge of closing," she says, gesturing at her empty restaurant. "People don't buy much. They get an empanada and a glass of water and move along." Pulling meat off a boiled chicken, she says she may have to sell empanadas on the street instead, saving on rent, and avoiding sales taxes. The troubles have pushed her from Chávez, whom she supported when he came to power.

"I'm worried for my grandchildren. I don't want them to grow up in something like Cuba. That leads to hunger."

Chávez, however, is banking on loyalty. A mural in Barquisimeto proclaims, "We don't pardon treason – with Chávez everything! Without Chávez nothing!"