Light shed on Turkey’s propping up of Maduro with gold-for-consumer-goods exchange

Light shed on Turkey’s propping up of Maduro with gold-for-consumer-goods exchange
Proceedings inside Venezuela's Supreme Court during Maduro's second inauguration in January this year.
By bne IntelliNews February 10, 2019

A Reuters investigation has shed light on Turkey’s role in helping to prop up the Maduro administration in Venezuela by buying much of the output of a primitive network of gold-mining camps in the southern parts of the country.

With Venezuela’s economy in meltdown, an estimated 300,000 fortune hunters are thought to have descended on a mineral-rich jungle area to earn a living pulling gold-flecked earth from makeshift mines. Since 2016, Maduro’s administration is said to have purchased 17 tonnes of gold worth around $650mn from so-called artisan miners, according to the most recent data from the nation’s central bank.

The investigation quoted insiders as saying that Venezuela sells most of its gold to Turkish refineries, then uses some of the proceeds to buy consumer goods from Turkey. Turkish pasta and powdered milk are reportedly now staples in Maduro’s subsidised food programme. Trade between the two nations grew eightfold last year.

Maduro’s gold programme has developed in tandem with his deepening relationship with fellow strongman Turkish President Recep Tayyip Erdogan, who has been outspoken in his opposition to the US call for his counterpart to step aside in favour of National Assembly head Juan Guaido as interim president.

Ankara has assured the US Treasury that all of Turkey’s trade with Venezuela is in accordance with international law.

Turkish Airlines “carrying more than passengers”
Venezuela in December 2016 announced a direct flight from Caracas to Istanbul on Turkish Airlines, with the development surprising given low demand for travel between the two nations, the Reuters report observed, adding: “Trade data show those planes are carrying more than passengers. On New Year’s Day, 2018, Venezuela’s central bank began shipping gold to Turkey with a $36 million air shipment of the metal to Istanbul. It came just weeks after a visit by Maduro to Turkey. Shipments last year reached $900 million, according to Turkish government data and trade reports.”

Venezuela’s central bank has been selling its artisan gold directly to Turkish refiners, two senior Venezuelan officials were cited as saying. Proceeds are said to go to the Venezuelan state development bank Bandes to purchase Turkish consumer goods.

Gold buyers include Istanbul Gold Refinery, or IGR; and Sardes Kiymetli Madenler, a Turkish trading firm, according to a person who works in Turkey’s gold industry as well as a Caracas-based diplomat and the two senior Venezuelan officials, who were all cited in the report.

In an interview with Reuters, IGR CEO Aysen Esen denied the company has been involved in any Venezuelan gold deals. In a written statement, she said she met with Venezuelan and Turkish officials in Istanbul in April to offer her views on compliance with international regulations. Esen reportedly said she advised the Turkish government that working with Venezuela “would not be right for leading institutions or the state”.

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