Nobody is going to bail out Venezuela – Henkel Garcia

Nobody is going to bail out Venezuela

Venezuela – Click to enlarge

Venezuela, the South American country convulsed by economic and humanitarian catastrophe, has defaulted on some of its debt after missing an interest payment due in October. Even as investors meet in Caracas to discuss restructuring US$60 billion in foreign debt, the country is in urgent need of international financial assistance.

Yet few nations are rushing in to aid the ailing country. Under the authoritarian regime of Nicolás Maduro, Venezuela is isolated in Latin America, and the United StatesCanada and the European Union have all imposed sanctions against Venezuelan officials. Maduro has at times suggested he would not even accept humanitarian aid.     READ MORE

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  • Rosaliene Bacchus  On 11/16/2017 at 1:02 pm

    Valuable lessons to learn about handling oil wealth.

  • Ron Saywack  On 11/16/2017 at 1:56 pm

    “To service this debt, the (Venezuelan) government must pay $16 billion to $20 billion a year through at least 2022.”

    By comparison, the U.S. will have to shell out more than $650 billion annually by 2022 to service its monstrous debt.

    There is a real possibility that both of these basket-case nations could one day completely default on their national debt. A U.S. default, conceivably, will have a major ripple effect akin to a high tsunami rolling around the globe in epic, Darwinian-like proportions.

  • Gigi  On 11/17/2017 at 6:51 pm

    Defaulting on ones debt is not the end of the world. Countries have done so in the past. It all depends on the country and who is in their corner. Argentina did several years ago and we saw what happened. The vulture funds who were set to lose big, backed by the US govt instigated a “soft” coup deposing Cristina Elisabet Fernández de Kirchner. A court case was also filed in the US by these vultures against Argentina. The US govt is working in myriad ways to depose the Venezuelan govt, however, it will have to contend with other major players who have skin in the game.

    Indeed, it is a valuable lesson to learn Ms Bacchus, but the lesson ought to include beware foreign companies can and will sue (and win) a sovereign country not only in their home country but with the full backing of their govt. See
    US Judge Rules Against Argentina in Vulture Fund Case:

  • Clyde Duncan  On 11/18/2017 at 5:11 pm

    Dear readers,

    Focusing your brain on the things that matter is hard to do. Especially in a toxic environment where there are just too many things going around distracting you. Sometimes you need a jump-start.

    This week’s shock therapy treatment was provided by Doctor Juan Carlos Gabaldón. A few days ago he tweeted about a patient of his, a five year-old child, who was taken to the hospital and diagnosed with diphtheria. Yes, diphtheria, a disease that’s had a vaccine since the 1920s and that had been completely eradicated decades ago. You can imagine how the rest of the story goes, but he wrote a powerful piece that deserves attention and exposure.

    And yes, this is all terrible, but in the end, the story that clearly shows the most terrible consequences of chavismo’s insane policies and restrictions and the one we should be paying attention to is that of the little girl killed by a disease that chavismo helped spread.

    Stay focused, my friends.

    Raúl Stolk
    Caracas Chronicles

  • Clyde Duncan  On 11/18/2017 at 5:27 pm

    What Suffering Means

    Dr. Juan Carlos Gabaldón – Medical Student | Caracas Chronicles

    It’ll be fine, I thought. Just another night shift, like the dozens before and the hundreds to come. I’ll sit in Merida’s Hospital Pediatric Emergency Evaluation Room with Gabriel, Patricia and Nay, we’ll take care of asthma crisis with a sole bottle of bronchodilators and we’ll stabilize diarrheas that can’t be properly treated in small hospitals. You know, the usual dose of underdevelopment we’ve gotten used to.

    Little did I know; my night was about to turn into a parade of Sub-Saharan diseases.

    It started before 8:00 p.m. with a 20-month-old girl named Lucía, from a small town south of Lake Maracaibo. Her mom arrived after a three-hour bus ride because Lucía’s legs were swollen. She had diarrhea two weeks ago, received intravenous rehydration and now the 20-something mom feared her girl may have gotten too much liquid.

    A quick look proved her wrong: Lucía’s heart and lungs were ok, like her blood pressure. She was scared and started crying, so I rubbed her head until a patch of thin, fragile hair stayed in my hand. I took a new look and realized how her ribs were pushing through the skin of her chest.

    We see so many skinny kids nowadays that sometimes it goes unnoticed. I took her to our weighing scale and my stomach squirmed. It said she was 8 kg (about 18 pounds). That’s the weight she should have… if she were nine months younger!

    This girl was badly malnourished and her swollen legs were a sign.

    “Severe malnutrition, type Kwashiorkor” I wrote as presumptive diagnosis.

    Kwashiorkor, which literally means “the sickness the baby gets when the new baby comes” in Ghana’s tongue, is a form of malnutrition provoked by insufficient protein intake. People in Ghana realised it usually appeared in older brothers as their mothers reduced their rations to feed newborns. Low protein levels cause water from blood vessels to escape the neighbouring tissues, swelling them. The disease became famous in the 60’s, when it was commonly seen in Nigeria during the Biafran War. I read about it, heard the news about it, but I was emotionally unprepared for that tiny baby in front of me.

    “What do you eat in your house, ma’am?”

    I hadn’t finished the question when I was already afraid of the answer.

    The closest they got to eating meat was the beef broth they could afford once every two weeks. Other than that, it was arepas and homemade cheese from the farm where her husband worked. She was happy because at least they could eat three times a day – and she should be, one third of Venezuelans aren’t that lucky.

    A nurse took Lucía to her new bed, next to an 18-month-old baby who got malaria after a trip to the Bolívar mines, where his parents were illegally mining to sustain themselves. A perfect third world combo, pues. [so.]

    We were almost done with Lucía’s entry form when 10-year-old José crossed the wooden door on a gurney. He had been vomiting for hours, after telling his mom about a headache. Now he couldn’t even talk, his neck was rigid and he had a 40°C (104°F) fever. Textbook meningitis. This disease is traditionally linked to poverty but, most importantly, it can be prevented with vaccines.

    In Venezuela, most meningitis is caused by bacteria and vaccine exists against the three more common strains (Streptococcus pneumoniae, Haemophilus influenzae and Neisseria meningitidis). The local vaccine against H. influenzae comes in the same vial as the one against diphtheria, so it’s easy to see how deficient vaccination propels both diseases at once. The vaccines against S. pneumoniae are also included in the national vaccination scheme, but have recently disappeared from most public institutions and are sold privately for up to $100.

    Vaccines against N. meningitidis were available through private practitioners, since they’ve never been included in the state-sponsored scheme. There’s no need to tell you how that’s going today.

    We transferred José to his bed and started the antibiotics he needed immediately

    There were a couple of vials left in the hospital. I guess miracles do happen.

    At 2:00 AM, when I thought I could get some sleep, I heard the characteristic sound of an ambulance parking and my colleague Gabriel’s words “that’s definitely for us” were a little too ominous for the pain we were about to face.

    María, 5 years old, came in the hospital in her mother’s arms. She had a fever, could barely breathe and her neck looked like a football. Her mom told us it all started the night before, when she said she had a sore throat and refused dinner.

    The next day she couldn’t even drink water. She was taken to a Barrio Adentro consultory where some Médico Integral Comunitario told her she had a common cold.

    Patricia asked the girl to open her mouth and all we could see was pus.

    “Common cold my ass,” she whispered as we felt the smell coming from her tiny mouth. It was like something died in there. We cleaned it with water and we saw it, a grayish bleeding membrane sticking to her swollen throat, obstructing most of her airway.

    “That’s diphtheria” I thought, scared, looking for a disposable mask. There were none.

    Diphtheria: a disease eradicated in the 80’s. It’s been over a year since the current outbreak started in Bolívar, and things have only gotten worse. María is the third case I seen in the last month, and now we have reports from alleged well-being oasis like El Hatillo of another infected patient. Meanwhile, our Health Minister called the situation a “media scam.”

    In less than twelve hours, I had seen three patients with diseases that most doctors around the world only read about. Three patients who shouldn’t be sick and who represent all that’s wrong with Venezuela.

    They don’t care about bondholders or defaults. For them, it’s just suffering.

    Things calmed down after María arrived and we managed to sleep a couple of hours before waking up at 6:00 AM, to get things ready for a new day of socialist paradise. A new day with more Only in Revolution stories.

    After four days of brave struggle, María died on November 13th, 2017, at the ICU. She was a victim of a perfectly preventable disease for which a vaccine exists since 1920. Her death is inexcusable.

    This is Venezuela, South America

  • Clyde Duncan  On 11/19/2017 at 3:16 am

    Ten Million Percent Later

    Frank Muci | Caracas Chronicles

    The Republic and PDVSA’s failure to make recent debt payments on time won’t trigger legal action from bondholders if the regime keeps dishing out the petro-dollars to Wall Street, even if late. And while everyone is distracted, the bottom is falling out of Venezuela’s currency and oil sector.

    The black-market rate blew past 60,000 today. It’s now up over ten million percent since Chavez became president in February 1999. That’s a one with seven zeros and a % sign: 10,000,000%.

    The black-market rate is up by a factor of 10x since May 18th this year.

    All the while, the government’s putting the pedal to the metal with the monetary accelerator, fueling an unprecedented expansion in the supply of bolívares.

    The government will try to engineer a consumption boom for municipal elections scheduled for December 10th. That plus the usual year-end Christmas bonuses will likely make November record breaking for money printing and push monthly inflation past the traditional 50% threshold for hyperinflation.

    As the economy tanks and the government funds more and more of its spending with monopoly money from the BCV, base money will grow faster and faster and faster, locking in hyperinflation.

    If nothing changes, all prices but especially food prices will continue to rise at an accelerating rate and outpace wages, fewer and fewer price controlled goods will be available, the cash shortage and problems with electronic payments will intensify, and life for Venezuelans will become yet more chaotic and desperate.

    Things are horrible now, but they can and will get worse.

    And it’s not just the domestic situation that’s deteriorating: oil production at PDVSA is falling faster than pessimists thought possible just a year ago.

    So far in 2017, in addition to crude quality declining, production is down 14% to under two million barrels according to OPEC, the lowest level in three decades.

    Secondary sources say production is even lower. And it is oil from PDVSA’s solely operated fields that’s falling the most, not the joint-ventures where production has been at least holding steady. So the decline in PDVSA’s production of cash-generating barrels is bigger than 14%.

    The price of Venezuela’s oil export basket is up 30% this year versus 2016, but it’s not enough. Between the lower production, higher debt service and depletion of financing sources, there’s still less money left over for imports.

    Less money to invest to curb PDVSA’s production decline, less money for critical production inputs for the private sector, and less money to import food and medicine keep people from starving and dying. On the plus side, there’s also fewer dollars left to steal.

    Production is down 14% to under two million barrels according to OPEC, the lowest level in three decades. Secondary sources say production is even lower.

    Sometimes, I’m tempted to think the regime doesn’t understand how damaging its policies are. But that’s naïve: THEY JUST DO NOT CARE.

    Maduro brushes off Venezuela’s misery just like he gave the world the middle finger by appointing a U.S.A. designated drug kingpin to lead debt restructuring negotiations.

    Oceanic corruption and total impunity are not just features of Chavez and Maduro’s clientelist politics, they are its lifeblood. The crackpot economic distortions, authoritarianism and dysfunction are central for military and narco support.

    Quite frankly, Maduro could not give a damn that the country is going into hyperinflation, he just crushed the opposition in regional “elections”.

    Every day without a change the country’s suffering deepens. If three quarters of Venezuelans lost, on average, almost 9 kg of weight involuntarily in 2016 according to the ENCOVI survey, I can’t imagine what ghastly weight loss figures the survey will turn up this year.

    If 82% of Venezuelans were income-poor in 2016, how much farther into poverty will Venezuela have fallen in 2017?

    If 93% of Venezuelans reported not having enough food for their family to eat last year, how hungry must people be at this very moment?

    How many have left the country for good? 100,000? 200,000?

    Who knows…

    Things look bleak for Venezuela. It’s too late for the country to climb out of the hole it’s in without concerted effort from the international community. Whatever the E.U. and Latin American countries are doing, whatever the government and what’s left of the opposition are negotiating, whatever the U.S.A. is plotting by sanctioning most high-ranking regime officials but not Diosdado Cabello, I hope it works. It has to work. It needs to work.

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