Venezuela’s Crisis: Can Gold Save Them? Probably Not


Venezuela's President Nicolas Maduro

“Nothing and no one will stop us!” – Nicolás Maduro

Venezuela’s President Nicolás Maduro believes he has an answer to the socioeconomic crisis facing his country: gold. Venezuela has been known for supplying the world with oil for generations. However, in the last five years, the reserves have dwindled dramatically, reducing the country’s revenues by 50%. The drop in revenue has created a huge crisis for the country’s 30 million people, many of which are without food, jobs, or hope. The IMF estimates the inflation rate may hit 1 million percent by the end of the year. Approximately 3 million people have fled the country in the last 3 years, citing starvation. Many people ask, “When will Venezuela collapse?

Unpopular Choices

Maduro is not a popular president, in fact most call him a dictator. It has been stated that his election was less than honorable, and the man has carried out his predecessor’s agenda. He is routinely criticized as human rights and liberties have all but disappeared for Venezuelan citizens. Venezuela’s socialism has deteriorated the country to the point that some see it as a failed state. Now Maduro’s plan to excavate gold from the jungle known as the Orinoco Arc is creating another problem – murder.

Gold mining is dangerous for many reasons. The terrain is rugged and often unexplored. The chemicals and tools used to mine the gold are extremely dangerous, particularly when there are no regulations or safeguards in place, and the prospect of easy money at another’s expense is too tempting to pass up for some.

Upon hearing Maduro’s plans to excavate gold, wildcat miners and impoverished citizens flooded the Orinoco Arc en masse hoping to get jobs and support their families. Battles over mine ownership ensued between Colombian guerrillas, crime syndicates, and Venezuelan security forces. The International Crisis Group calls the outcome “a spate of mass killings.” Media reports state that 10 people have been killed in the past two months. Chances are the number is much higher, but people are afraid to talk.

“These miners have no labor rights at all,” says ICG senior analyst Phil Gunson. “They’re not protected from any of the dangerous elements — for example, the mercury that’s used in the mining.”

Gunson adds that miners are “also severely at risk of being shot dead: Mining communities have phenomenally high homicide rates, even by the extraordinarily high levels that we see in the rest of Venezuela.”

Gold Hungry

The Orinoco Arc is a band of heavily forested terrain that runs across the center of the country. Its 43,000 square mile span is located south of the Orinoco River and runs from Guyana to Colombia. In 2016, Maduro declared a “Strategic development zone” within the arc, stating that the area likely contains over 7,000 metric tons of gold. Maduro hopes that mining the gold and other resources could pull the country out of its economic slump. Currently, most of the gold exported from Venezuela is done so illegally. As a result, Maduro has brought in the military.

Aside from the Venezuela’s political and humanitarian issues facing miners and citizens, environmental groups are expressing great concerns. It is not surprising that the government ignores environmental protocol. In 2016, the area was devastated when 84,000 acres in the arc suffered from deforestation.

Enemies and Allies

The problem for Venezuela is finding a buyer for the newly extracted gold. On November 1, Donald Trump placed sanctions against Venezuela, banning U.S. entities from participating in the country’s quest for gold. Maduro responded with defiance, planning to enlist Turkey, a Venezuelan ally, to buy the gold. In recent years, Turkey has become one of the largest purchasers of gold in the world. In 2018, Turkey purchased over 23 tons of gold from Venezuela, worth approximately $900 million.

Marshall Billingslea, Assistant Secretary for Terrorist Financing at the United States Treasury Department, clarified the President’s stand on the issue by stating that Maduro has “turned to the wholesale, rampant destruction of the environment through strip mining on a massive scale of gold and other precious metals in the Orinoco Belt.”

Billingslea added: “We need to express moral outrage over what’s being done to the environment, what’s being done to the indigenous populations, and the fact that this gold is being removed from the country without any of the customary safeguards on it that would ensure that the funds are accounted for and properly cataloged as belonging to the Venezuelan people.”

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