Pro-default populism in Venezuela, por "boz":
Venezuela is tens of billions behind in payments to various foreign companies who have provided food and other imported goods. The country owes China billions, much of which is being paid in oil. There is about $10 billion in payments due this year between sovereign debt and Pdvsa bonds. (...)
In the past in Latin America, there has occasionally been support for strategic default by populists, usually from the political left, who believe that bankers and bondholders deserve to not be paid for the unethical way they have treated countries. Looking back at Argentina's default in the early 2000s, the Kirchners and their political allies certainly played up the narrative of default being both the proper economic strategy as well as the ethical thing to do as they fought the "vulture funds" who tried to profit from Argentina's loss.
The interesting part of what we're about to see in Venezuela is that the populist and moral case for defaulting on unethical debt is about to be made by the right leaning side of the political spectrum. They will argue that the banks, bondholders and Chinese who have profited from the Venezuelan government's poor economic policies deserve to lose the money they have invested as the cost of propping up the Chavez and Maduro governments. (...)
Meanwhile, the Maduro government continues to insist it will pay Wall Street and China first and second, even at the expense of rising poverty and food scarcity in the country. That is not exactly the most revolutionary or socialist of policies.
No comments:
Post a Comment