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This is a battle for a cache of gold securely kept in one of the world’s largest and most secure safes, but this is no 18th century pirate novel or bank robbery movie.
This is the situation facing the Venezuelan government, which is trying to overcome political turmoil and the aftermath of last month’s devastating twin earthquakes.
The city of Caracas is asking the Bank of England to return 31 tonnes of gold it deposited in the country in 2008, the United Nations Development Program said, as the city needs funds to recover from the disaster that killed thousands of people and devastated the country’s economy by 6% of gross domestic product (GDP).
It’s not unusual for the British central bank to hold gold reserves from other countries, but in this case there’s a problem with one of the world’s largest vaults, which holds around 400,000 bars, including bars from dozens of other countries.
The fate of Venezuelan gold bullion – estimated to be worth up to US$4 billion in today’s money – has remained in limbo for years, amid a years-long conflict involving the British government and former Venezuelan president Nicolas Maduro.
The bank froze the money after Britain, along with the United States and many other countries, refused to recognize Maduro as the winner of Venezuela’s disputed 2018 presidential election.
The funds have since been the subject of a lengthy legal battle, but Caracas believes it has a chance to get the funds back because Mr. Maduro was captured by the U.S. military in January and is currently in custody in New York.
Since Maduro’s arrest, his former vice president, Delcy Rodriguez, has become acting president and has begun restoring diplomatic relations with the United States. He is working to open the country’s oil sector to U.S. investment, release some political prisoners and align the government with regional projects in Washington.
Now she is hoping for a similar resolution to the conflict with Britain.
“That money belongs to our people and should be used to deal with the horribly tragic consequences of these two earthquakes,” Rodriguez said on state television this month. “Venezuela has the resources to recover and get back on its feet,” she added.
It is difficult to know what percentage of Venezuela’s total gold reserves the 31 bars represent. About 20 years ago, it was known that there were about 300 tons of gold in the country, but now that number is believed to be much lower. The World Gold Council recently put the figure at 161 tonnes.
As a constitutional monarch, Rodriguez does not get involved in political disputes, but he wrote a letter to King Carlos III asking him to release money to be used for reconstruction efforts.
It remains to be seen whether the British government itself will listen. In the days after Maduro’s ouster, Britain’s then foreign secretary, Yvette Cooper, said Britain still did not recognize the Venezuelan government.
When asked specifically about the release of gold by British MPs, Cooper said: “While the Bank of England must make decisions independently, our principles are focused on maintaining and promoting stability and the transition to democracy.”
However, it is too early to know what position her successor, Ed Miliband, will take on the issue, as Cooper has been replaced as foreign secretary after Britain appointed new prime minister Andy Burnham this week.
Still, there is some good news for Mr. Rodriguez in terms of winning over skeptics, with his seven-year freeze on relations with the International Monetary Fund recently lifted. The move enabled Venezuela to secure $346 million from its own reserves this month to fund reconstruction efforts.
It remains to be seen whether she can achieve similar success at the Bank of England. At the time of publication, neither the Bank of England nor the Central Bank of Venezuela had responded to CNN’s questions about the status of the gold dispute.
For now, at least, it appears that all that glitters remains trapped overseas.
