The recent announcement from the Venezuelan Central Bank that it is sending gold to Turkey to be refined has not received enough attention amid the diplomatic row between Turkey and the United States. The spat started with growing frustration over Turkey’s detention of American pastor Andrew Brunson and has now ramped up with both sides imposing tariffs.
But in the midst of all this Venezuelan authorities decided to begin refining gold in Turkey, something they were previously doing in Switzerland. Venezuela exported $779 million of gold (20.15 tons) to Turkey in 2018, all of which will ultimately return to Venezuela to become part of the Central Bank’s portfolio of assets.
This gold exchange is occurring at a time in which the Maduro government is facing a lot of international criticism and rising sanctions, including from Canada, the EU and the United States. At the same time, the gold transaction from Venezuela to Turkey intersects in dangerous ways with the tension between the Turkish and U.S. administrations.
Turkish officials have claimed that the cooperation between Venezuela and Turkey should be considered a step towards the “destruction of the hegemony of the dollar.” In other words, Turkey and Venezuela are seeking to get away from dollar-centric systems as each country experiences severe economic crises and its own sanctions from the United States.
Amid increased international pressure on the Maduro regime and an escalating diplomatic row between Turkey and the U.S., such a controversial transaction between Ankara and Caracas is noteworthy, especially given how little attention the recent rapprochement between the two countries has received. In this case, it may be not unrealistic to see Russia’s hand behind this as it attempts to create a potential alternative global alliance and has close ties (and influence) over both Venezuela and Turkey.
The shadow of Russia over Venezuela and Turkey
Since Venezuela’s President Maduro cemented his grip on power in farcical May 2018 elections, the Trump administration has been confronted with the difficult question of how to push for a transition of power in Venezuela. For years now, the U.S. has levied sanctions on dozens of top Venezuelan officials, including Maduro himself, over allegations of corruption, drug trafficking and human rights abuses. The Trump administration has recently imposed further stiff financial sanctions that limit the government of Venezuelan President Nicolás Maduro from raising needed capital in the United States.
While the Maduro government continues to desperately search for ways to stem the collapse of the economy, Russia has played the biggest role in keeping the regime afloat. At a time when Venezuela is experiencing further sanctions and isolation from the U.S. and the region, strong support from President Putin provides Maduro with a degree of international legitimacy and room to maneuver through different mechanisms. In helping the Maduro regime stave off collapse, Putin aims to preserve its widespread strategic interests in Venezuela, in the Western Hemisphere, and beyond.
By the same token, the influence of Russia over Turkey appears to have grown stronger and more effective in recent years. The political ties between Russia and Turkey are now closer than ever, as Turkey’s relations with its Western allies worsen over issues of democracy and human rights. Indeed, the failed coup attempt against Turkish President Recep Erdogan in 2016 has created the opportunity for increased Russian-Turkish cooperation by straining Ankara’s relations with the United States and Europe. Since that time, President Erdogan’s steady descent into authoritarianism and increasingly erratic foreign policy has forced the Western Alliance to keep Turkey at arm’s length. The attenuation of transatlantic ties paves the way for Russia to emerge as an alternative ally for Turkey.
Turkey’s warming relations with isolated Venezuela has coincided with the growing influence of Russia in Turkey. Indeed, Turkey’s recent coziness with Russia has prepared Ankara for an opening with Caracas. After the 2016 coup attempt in Turkey, bilateral cooperation on finance, energy, tourism, and aviation have reached unprecedented levels. The gold transaction is only the latest step towards an unlikely full-fledged alliance.
From the Venezuelan perspective, the Maduro government is cognizant of Turkey’s limited capacity and is aware that working with Turkey is a long-term project with few prospects for short-term gain—though for now, for a country in need of a friend, Turkey is there. Appearing at the inaugural ceremony of Turkish President Erdogan in Ankara, President Maduro hailed the Turkish president as a “friend of Venezuela and leader of the new multi-polar world”. The Venezuelan government increasingly seems to rest on the assumption that Turkey, detaching itself from the west and tilting towards Russia, will be a reliable ally .
The impact of the complicated balancing game that Russia has undertaken in world politics is helpful in understanding the recent love-fest between Turkey and Venezuela. The nascent partnership is fully compatible with the Russian efforts to create a potential alternative alliance structure built around like-minded countries such as China, Venezuela, and Turkey.
As Putin seeks to split the Western alliance, bringing estranged-NATO ally Erdogan closer to Western Hemisphere-pariah Maduro counts as a twofer.