Everything you need to know about the crisis in Venezuela

The decision to send two opposition leaders back to jail raised tensions again.

ByABC News
August 1, 2017, 7:58 PM

— -- The decision to send two prominent Venezuelan opposition leaders back to prison this morning in the wake of a controversial vote over the weekend has once again ratcheted up tensions in the South American country.

Leopoldo López, a former presidential candidate, and Antonio Ledezma, the former mayor of Caracas, were both taken from their homes Tuesday morning, where they had been under house arrest, according to their families.

The arrests come one day after the Trump administration's decision to sanction Venezuelan President Nicolas Maduro, and two days after a vote to hold a national constituent assembly to rewrite the country's constitution-- the final version of which will have to be approved in a national vote.

Venezuela's Supreme Court said in a statement that the decision to transfer Ledezma and López back to prison came because Lopez violated the conditions of his house arrest by engaging in political campaigns, and Ledezma had violated the conditions of his house arrest by making statements to the media. The court also said both posed a flight risk.

On Friday, days before López's detention, Vice President Mike Pence had spoken by phone with him.

In a statement released Wednesday, President Trump condemned the decision to send the men back to prison.

"The United States condemns the actions of the Maduro dictatorship," the statement read. "Mr. Lopez and Mr. Ledezma are political prisoners being held illegally by the regime. The United States holds Maduro -– who publicly announced just hours earlier that he would move against his political opposition –- personally responsible for the health and safety of Mr. Lopez, Mr. Ledezma, and any others seized. We reiterate our call for the immediate and unconditional release of all political prisoners."

Venezuelan opposition members denounced the decision as an attempt to round up their leaders after Sunday's controversial vote, which they boycotted.

"The detention of Ledezma and López -- and the detentions of others, because there will be others -- is a provocation, both for the opposition and the international community," Orlando Molina, president of the Latin American Institute for Strategic Studies and a member of the opposition, told ABC News on Tuesday.

But while Venezuela has experienced months of protest that have left more than 100 people dead, the roots of the crisis extend further back. Here's what you need to know about the situation in Venezuela:

Economic troubles

Venezuela has been an oil producer since 1914 and is currently a member of the Organization of Petroleum Exporting Countries (OPEC). According to OPEC, 95 percent of Venezuela's export earnings come from oil. But for decades, the country's oil wealth mostly benefited the country's elite. Former Venezuelan President Hugo Chávez was elected in 1998, partly on the promise to use some of that oil money to help the country's poor.

Chávez used oil money to fund many of his infrastructure and housing projects, which saw vast improvements in the quality of life for some of the poorest Venezuelans, according to Gregory Wilpert, a sociologist and author of "Changing Venezuela by Taking Power: The History and Policies of the Chávez Government."

"Inequality in Venezuela declined significantly and poverty declined significantly in many areas," Wilpert told ABC News from Caracas. "The problem was that this relied precisely on the oil wealth and at the time, it was assumed that the price of oil would continue going up. That was a very faulty assumption, which we have learned since then."

In countries that export large amounts of oil or other natural resources, it's not uncommon for other industries to be underdeveloped in what economists call the "Dutch Disease." Oil is such a commodity in the global economy that some producers rely on it for nearly all their revenue, importing most of their other goods.

But falling oil prices upset that balance. Currency devaluation then led Venezuela to have less buying power when it came to imports. Economic decisions by Maduro to continue subsidizing food and other goods also played a role in the deepening crisis.

"On the part of the Maduro government, he made mistakes in terms of economic management, mainly by subsidizing food products so massively, which was a legacy of the Chávez government," Wilpert said. "But the subsidies kept getting bigger and bigger, so it became much more profitable to smuggle these products out of the country. That's one of the reasons you have so much scarcity. So the actual policy of supporting and redistributing wealth is actually working against many of the people it is supposed to benefit."

Many food and medicine products have been hard to find for the last couple of years. This, along with rising crime and skyrocketing inflation, has contributed to the protests as well as a decline in Maduro's popularity. "The real drama of this regime is hunger and the economy," Molina, a member of the opposition Social Christian Party (COPEI), said. "It's not the politics that are going to take this government down, it's the economy, it's the hunger. The economy in Venezuela is being strangled."

Presidential elections are scheduled to be held in 2018, but some in the opposition, including Molina, want Maduro to step down and a provisional government to take over now.

Other analysts said the opposition would do better to wait for scheduled elections to avoid destabilizing the country further.

"That's one thing I think is so disappointing about the opposition is that they have a very good opportunity to use the institutions rather than to sabotage the institutions," George Ciccariello-Maher, an associate professor at Drexel University and the author of “Building the Commune: Radical Democracy in Venezuela," told ABC News. "They won a decisive victory in the National Assembly elections, and the economy has not gotten any better. Now, under any other circumstances, they would be guaranteed victory in the presidential election, but the opposition is also unpopular because it represents the most conservative, elite, white sectors of Venezuela. So as a result, you see opposition polling above Maduro but not by a whole lot."

But opposition groups say that the National Assembly has been stripped of its powers and the institutional route has failed to bring about the change they want. Opposition groups *chose to boycott the July 30 vote entirely, but earlier in July held a symbolic referendum in which more than 7 million people voted against rewriting the constitution.

Additionally, there is gridlock among the branches of government: The opposition currently controls the National Assembly -- which has now been stripped of its power -- while Maduro's party controls the Supreme Court and the executive branch.

Worsening U.S. relations

Venezuela's government has had a frosty relationship with the U.S. for years, Ciccariello-Maher said.

"The Trump administration is definitely pushing a hard line against the Venezuelan government, but this is not exactly new. From Bush to Obama and Hillary Clinton when she was at the State Department, the underlying policy has not changed very much, although the language is getting sharper," he said.

Trump's decision to sanction Maduro on Monday, in addition to other members of his government, has already escalated tensions. Maduro responded in a televised address Monday night, calling the sanctions a sign of Trump's "helplessness, his desperation and his hatred." The U.S. may also be considering further sanctions against Venezuela's oil industry.

But the sanctions could backfire by making dialogue between the government and the opposition even less likely, according to Alexander Main, a senior associate for international policy at the Center for Economic Policy and Research.

"These new sanctions and threats of sanctions can only have negative, possibly disastrous results," Main told ABC News via email. "In Venezuela, these actions will lead to a hardening of positions in both camps and a 'nothing to lose' attitude, greatly undermining prospects for dialogue. The U.S. would also almost certainly be affected by economic sanctions targeting Venezuela, as they would likely trigger an increase in global oil prices and a major wave of emigration of Venezuelans that would reach the U.S."

Diego Arria, a member of the Venezuelan opposition living in the U.S., praised the Trump administration's decision.

"Inaction on Venezuela is the only thing that could hurt us. Trump's actions contribute to legitimizing our demands for freedom and rights. More forceful actions together with other willing partners would make an even greater impact," Arria told ABC News via email.

Trump could do that by working cooperatively with other Latin American countries, Molina said.

"If President Trump's decision isn't united with similar decisions from the presidents of other Latin American countries, it won't do anything," Molina said. "Because there's a distinction between what President Trump can do unilaterally and what Trump can do with the leaders of Colombia, Chile, Peru et cetera."

But other analysts say that Trump's support could backfire against a government that has frequently denounced the U.S. as an imperialist power meddling in its affairs.

"The problem for the Venezuelan opposition is that whenever the U.S. weighs in, it hurts the opposition because they don't want to be seen as the sort of sell-outs and imperial lapdogs," Ciccariello-Maher said. "Especially when it's someone like Trump, who is so widely hated. If you have Trump on your side, it hurts you quite a lot in terms of popular support."

"The question is if those sanctions in any way will hurt the Maduro government or if they will provide more support or more reason for people to stand up against any sort of foreign or imperial intervention," Ciccariello-Maher added.

Avoiding a coup or civil war

Many on both sides are worried that the situation in Venezuela could deteriorate into a coup or a civil war. A 2002 coup attempt against Chavez, which declassified documents show the U.S. knew about beforehand, is still fresh in the minds of many Venezuelans, who want to see the crisis negotiated peacefully.

In announcing the sanctions against Maduro, U.S. Treasury Secretary Steve Mnuchin did not answer a reporter's question on Monday about whether the Trump administration would rule out supporting a coup or an uprising against Maduro that led to a new government.

"We are focused on the democratic process, and that's what we're focused on right now," Mnuchin responded.

But Arria believes that if part of the military were to overthrow the Maduro government, the Trump administration would be supportive.

"They will absolutely support the coup of institutional army officers to get rid of an illegal regime that Maduro has installed," Arria said.

"I don't call it a coup, I call it the recovery of the institutionality of Venezuela," Arria added.

But many Venezuelans on both sides don't want to see a return to military rule, which the country lived through between 1948 and 1958 and in which many suffered torture, murder and incarceration.

Ultimately, it's up to both sides -- and international players -- to ease tensions and urge the parties to come to the negotiating table.

"The problem is that it's not just the government and the opposition. Outside forces have a major impact on what is happening in Venezuela, specifically the U.S. government and the international media," Wilpert said.

"There are still opportunities to step back from outright confrontation, the question is whether the two sides will take it," he added.

Main agreed: "For the country to avoid civil war, dialogue is the only way forward."