The Bolivarian government has moved forward implementing a comprehensive economic recovery plan since the beginning of the year, establishing a coherent strategy directed by a coordinating committee that includes the country’s highest leadership, specialists, and researchers chosen by President Nicolás Maduro as his Economic Team.
The increase in domestic production; the reorganization of natural resources and their distribution – including some basic food items; the conducting of energy surveys; support to small and large businesses; as well as openings created for foreign investment, in alliance with important suppliers and investors in friendly countries, have allowed for recovery and stabilization despite the ferocious economic war to which the nation is subjected.
The launching of the Petro cryptocurrency, its recognition and use internationally, the control and management of the country’s finances, and at the same time, sustained investment in social projects and defense of the gains made by the Bolivarian Revolution, continue to be critical and allow the government to assert that 2019 will be the year of the economic prosperity.
Nonetheless, the U.S. government recently announced a new package of sanctions to attack Venezuela, this time directed toward companies and citizens of both countries interested in investing or trading with the developing gold industry here – not surprising since this administration is bent on destroying the Bolivarian process, with economic war as its main weapon. The question remains: Why the gold industry? What does the U.S. really fear?
THE GOLD PLAN & ITS IMPLEMENTATION
All evidence indicates that Venezuela possesses the world’s second largest gold reserves, with 32 certified fields, allowing the government to advance its Gold Plan that will allow for development of the Orinoco Mining Arc in 2019, and generate income on the order of five billion dollars.
Within the framework of this plan, the Sarrapia gold ore processing plant was recently inaugurated in the state of Bolívar, which, according to experts, will be able to process 90 kilograms of gold a month next year, as part of a plan for 54 such plants that will allow for better organization and development of the industry in Venezuela.
During a recent meeting of the Economic Team, President Maduro stated that this effort will contribute to gradually diversifying the economy, and is being implemented through “an eco-sustainable, eco-socialist plan to move forward in the Orinoco Mineral Arc, so that, with national and international capital, these goldfields are put to the service of vivir viviendo (better living conditions for the population).”
He announced that the entire world will be able to invest in Venezuelan gold, and that a third production line at the new plant is projected, which should generate 370 new jobs directly, and 580 indirectly.
In this regard, this past October 31, just hours before the new U.S. sanctions were announced, Maduro held a meeting which included economic experts, the country’s deputy minister of Finances, Russian advisors, and invited guests from the Center for Development Research affiliated with the People’s Republic of China’s Council of State, to share ideas on how strategies to perfect the country’s new productive model can be strengthened, and economic independence consolidated.
Shortly thereafter, Maduro noted that the U.S. sanctions are part of Washington’s hostile policy directed toward the Venezuelan people, and affect everyone, including the private sector, saying, “If anyone is hurt by the sanctions it is businesspeople… They are pursued, their accounts closed, transactions and financial activity hampered.”
He insisted that the Venezuelan people and state defend themselves and will continue to do so, and that businesspeople may be pursued and threatened, but the determination to overcome these difficulties will not be stymied.
GOLD & NEW WORLD TRENDS
Much has being said recently about the use and sales of gold, especially the recent worldwide trend to employ it in transactions and to hold savings. According to experts, it appears that a new stage of global economic instability is developing, in which the U.S. economy and the dollar will be among the most affected.
Beyond speculation on the issue, it is known that for several weeks now, world banks have increased their reserves in gold at an unprecedented pace, some even preferring it to the dollar. Although this is a new development, information from the World Gold Council indicates that over the last three months, central banks have acquired more than148 metric tons of the metal (worth 5.82 billion dollars) 22% more than in the same period last year.
Russia was the country buying the most, 92 tons, reaching total reserves of more than 2,036, with a market value of 78 billion dollars.
Among the most active buyers during these months were Turkey and China, countries whose relations with the U.S. have deteriorated, while their ties with Venezuela have been strengthened.
According to Russia Today, in mid-October, economist Ulf Lindahl, chief operating officer of A.G. Bisset Associates, a specialized company that conducts research of the currency market, said that the dollar is about to collapse, and that over the next five years could depreciate 40% with respect to the euro. When the fact is added to the picture that the U.S. stock market is at risk - as a result of the trade war the Trump administration has unleashed against Russia and China - the assertions made by analysts appear increasingly credible, and the reason Venezuela is being targeted with sanctions and distortions increasingly clear.
WHAT IS A CRYPTOCURRENCY?
These are virtual currencies that can be exchanged or used like traditional currency, but are beyond the control of financial institutions. There are many available that use cryptography techniques to protect their security. With each unit having a key that allows for its use, falsification is practically impossible.
THE PETRO, A VENEZUELAN CRYPTOCURRENCY
- The first sovereign cryptocurrency backed by the nation’s natural resources.
- Sales began March 25 this year.
- It began to operate as a currency in commercial transactions related to the Bolivarian Republic’s international activities on October 1, 2018.
WHAT IS ITS PRICE?
- Its price is based on the sales value of the country’s resources, raw materials, and primary goods on the international market. In the case of Venezuela, this means energy resources.
- Oil is the country’s most important raw material and accounts for the greatest portion of exports. The remaining 50% includes gold (20%); iron (20%); and diamonds (10%).
Given this combination, the value of the Petro should not vary significantly, thus assuring the country’s economic stability
- As of October 31, the Petro was valued at 3,600 Bs.S (sovereign bolivars), equivalent to 418.09 yuan (People’s Republic of China); 3,975.70 rubles (Russia); 52.78 euros; or 60 U.S. dollars.
- President Nicolás Maduro called on Venezuelans to join the Petro savings Plan, a mechanism created to improve the economies of families and strengthen the nation’s public accounts.
(Prensa Presidencial de Venezuela)