Venezuelan Default Suggested by Harvard Economist
As Venezuela racks up billions of dollars of arrears with importers that are fueling the worst shortages on record, one of the nation’s top economists is questioning the government’s decision to keep servicing its foreign bonds.
A “massive default on the country’s import chain” is part of what has allowed the nation to keep paying its foreign bonds, Ricardo Hausmann, a former Venezuelan planning minister who is now director of the Center for International Development at Harvard University in Cambridge, Massachusetts, said by phone from Boston. “I find the moral choice odd. Normally governments declare that they have an inability to pay way before this point.”
While Hausmann declined to say if he’s specifically recommending a default, he said he found “no moral grounds” for the government and state-owned oil company Petroleos de Venezuela SA to make $5.3 billion of bond payments due in October. With foreign reserves at an 11-year low and arrears to importers growing, Venezuelans are struggling to find everything from basic medicines to toilet paper. And prices are surging on the goods that they can buy, saddling the country with the world’s highest inflation rate.
Saluons au passage le NPD qui a toujours eu un faible pour les politiques d’Hugo Chavez…