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The surreal drama continues. Venezuelans and the rest of the world wait and watch to see what happens with Hugo Chavez. Rumors about his health have been rampant, but when vice president Nicolas Maduro says that Chavez is “battling for his life,” it is important to take note.

Although a recent poll found that 58% of Venezuelans believe that Chavez will recover, both the government and the opposition are preparing for a post-Chavez period. In the absence of such a charismatic figure able to hold together the diverse factions that make up Chavismo, there is great uncertainty about what direction the nation will take.

In the short-term, Chavismo has the upper hand. Its diverse groups have benefited in different ways from being in power over the past 14 years. Together, they control all key institutions. For now, they will put aside disagreements for the sake of remaining in charge.

Apart from Maduro — Chavez’s chosen successor with ties to Cuba — other factions are headed by national assembly president and former military official Diosdado Cabello and PDVSA chief Rafael Ramirez. Maduro is no Chavez, but he will likely get the support he needs to win the next election.

Maduro will benefit from the “compassion effect” in a society in which there is a strong sentimental connection with Chavez. Both for reasons of emotion and interest – thanks to higher oil prices and increased social spending, most Venezuelans are better off than they were in the late 1990s – Chavez is popular, and will remain so after he dies. The regime and movement he created will get a boost once he leaves the scene.

Any opposition candidate will have a hard time competing with Maduro over the next several months. The opposition has become demoralized and fragmented after two electoral losses in October and December. Like Chavismo, it, too, is heterogeneous, and faces the difficult task of coming up with a strategy and leadership in short order. Henrique Capriles is a logical choice as the opposition candidate, but some factions have criticized his presidential campaign last year.

Over the medium and longer term, however, the situation could well become more complicated. Venezuela’s governance problems are profound and are likely to get worse. The economic crisis is severe, as is the security situation. The recent devaluation of the Bolivar was not enough. Another devaluation, and rise in already high inflation, is expected.

In that context, the power-sharing arrangement within Chavismo will be strained. The infighting among the different factions will be fierce, as resources become increasingly scarce. The compassion effect for Chavez will eventually fade.

In such a sharply polarized society, the path forward will require modest, incremental changes and compromise on both sides. Otherwise, the prospects for avoiding great turmoil and mending the social fabric will be at risk.