In Venezuela’s El Dorado, residents weigh gold to buy daily groceries

El Dorado, a mining town in Venezuela’s Bolívar state, sees gold being used as daily currency due to the collapse of Venezuela’s formal economy and severe currency depreciation.

Key Points:

• Gold Instead of Cash:
  Residents pay for groceries using small flecks of gold, weighed on scales by shopkeepers.
  Example:

  • 0.02g = maize meal

  • 1g = full grocery kit (worth $85–100)

• Daily Life and Economy:

  • Most of El Dorado’s 5,000 residents are engaged in legal or illegal mining.

  • With limited banking access, people store gold in pill bottles or paper wrappers.

  • Gold retains value, unlike the bolívar (Venezuela currency) which lost 50% of its value in a year.

• Historical & Geopolitical Context:

  • The town originated as a military outpost amid the 1895 Essequibo dispute between Venezuela and Britain (now with Guyana).

  • Region rich in gold, diamonds, bauxite, iron, and coltan — leading to exploitation and violence.

• Challenges:

  • Environmental degradation and “ecocide” from unregulated mining.

  • Use of toxic mercury in gold separation poses health hazards.

  • Violence and extortion by organized crime groups; 217 killed in gang clashes (2016–2020).

• Living Conditions:

  • Despite natural wealth, poverty is widespread.

  • Hard work yields minimal returns — often just 1 gram of gold for a day’s labor, used to buy basic food.

For Mains:

• Case study on informal economies, resource curse, illegal mining, and alternative currencies

• Relevant for GS Paper III (Economy, Environment), GS Paper II (Governance and International Relations)

• Demonstrates the impact of hyperinflation, state collapse, and natural resource mismanagement.