Venezuela hit by major earthquake and inflation, government seeks to reclaim $4 billion in gold from the UK

After experiencing the double blow of two devastating earthquakes and runaway inflation, the Venezuelan government is now turning its eyes towards underground vaults far away in London, attempting to recover gold reserves worth approximately $4 billion that have been frozen for years by the Bank of England.

On Wednesday, Jorge Rodriguez, President of the Venezuelan National Assembly, made it clear that the government and the legislature have reached consensus, and that future efforts will focus on post-disaster reconstruction. This includes repairing damaged homes, improving healthcare capacity, restoring electricity supply, and clearing earthquake debris. To support these massive livelihood projects, Venezuelan authorities plan to concentrate efforts on reclaiming international assets held at the Bank of England.

This batch of 31 tons of gold reserves has sparked a protracted cross-border legal battle. Previously, the Bank of England had repeatedly refused to release the assets, citing "non-recognition of the Maduro government’s legitimacy" as grounds. However, after Maduro was forcibly removed by the US in January this year, Venezuela’s political landscape underwent significant change.

According to Reuters, the current acting President Rodriguez has formally submitted a request to King Charles III of the United Kingdom, hoping to facilitate the gold’s return through diplomatic and legal channels. She emphasized that "this gold belongs to the people of Venezuela" and should be prioritized for addressing the catastrophic aftermath of the earthquakes. Meanwhile, several members of the UK Parliament have also put forward an early motion, urging the prompt release of the gold reserves to support reconstruction in the face of humanitarian disaster.

Venezuela is currently facing extremely challenging circumstances. At the end of June this year, the country was hit by two successive strong earthquakes, taking the lives of more than 6,000 people. The earthquakes not only destroyed infrastructure, but also directly cut off critical supply chains for essential goods, resulting in wild price volatility. According to assessments from organizations such as the United Nations Development Programme, the economic impact of the disaster is equivalent to about 6% of the country’s GDP.

According to the latest figures released by the Central Bank of Venezuela, in July this year, the monthly inflation rate in Venezuela surged to 19.9% from June’s 13.8%. Based on Reuters’ calculations using official data, the country’s annualized inflation rate currently stands as high as 575.9%, painting a grim picture for economic recovery.

Although the central bank's official forecast expects inflation to slow in August, the massive funding gap required for reconstruction remains difficult to bridge. In addition to the gold held by the Bank of England, Venezuela is also trying to unfreeze other overseas assets such as Special Drawing Rights at the International Monetary Fund (IMF). Recently, the country has successfully obtained about $346 million from the IMF for post-disaster rebuilding, indicating increased recognition by some international organizations of the current authorities.

For Venezuela, this gold, frozen in London’s vaults, is not only a symbol of national sovereignty, but also an essential "lifeline" for alleviating the suffering of disaster survivors and stabilizing its electricity and medical systems. For now, the final ownership of this gold still awaits further judgment from the UK courts.