During a televised address this afternoon, Maduro spoke on the highly-anticipated debt restructuring meeting set for tomorrow in Caracas. The meeting, in which Maduro hopes to reach an agreement to restructure $60 billion worth of debt, is scheduled to take place with foreign investors at 2:00 PM in Caracas.
Maduro assured Venezuelans today that the country “will never” enter default, a bold statement given the worsening economic crisis and dwindling foreign reserves. Blaming regime enemies for the crisis, Maduro said:
They’re betting that Venezuela will declare default. Never. Default will never come to Venezuela. Venezuela will always have a clear strategy, and our strategy now is to renegotiate and refinance all of our debt.
On November 2, Maduro announced that he was “declaring” the restructing of all of the country’s foreign debt. The announcement caused confusion among financial analysts, investors and other commentators, since debt restructure is not something that can simply be declared since it is dependent on the ability and willingness of the creditor to agree to the terms.
Maduro launched into a disjointed tirade about the country’s economic woes, touting the fact that despite the country’s money problems his regime had never missed a debt payment. Maduro said:
From 2014 until today–and I say this almost in tears from the pain, because it’s been the hardest 36 months of the economic war and the fall of oil prices to worthlessness where they grabbed us by the throat to try to choke us, but they haven’t been able to and they will not be able to because no one chokes Venezuela… 36 months of blood, sweat and tears in which we’ve paid the the pittance that is $73.350 billion dollars without even a second of delay.
A central pillar of the Maduro regime’s world view rests on the assertion that the country’s foreign and domestic enemies are waging an “economic war” on the country by manipulating every facet of the economy to his detriment.
During the same address, Maduro said that 91% of investors holding PDVSA bonds will attend the debt restructuing meeting in Caracas tomorrow, totaling 414 individuals.
Maduro: Socialism Is The Only Way
Maduro’s address took a dogmatic turn as he spoke on the role that socialism has in the country’s future, asserting that it alone provided the only path forward for Venezuela. Maduro began his lecture by stressing that “Christ is our inspiration for the socialism that we want to build” before continuing to an summary of how socialism sprouted in Venezuela:
Socialism did not come to Venezuela as part of an international agreement, an imposition from who knows which superpower. No. Socialism was born and developed as an idea, the hope for millions of men and women in this part of the world. Socialism came by the hand of a giant-sized leader: Commander Hugo Chavez Frias. Socialism took root here in its own brand, its own dream, its own hope.
Looking to the future, Maduro said that there could be no other way forward for Venezuela but the “socialism of the 21st century”, that which Hugo Chavez created in Venezuela. Maduro said:
The only path forward into the future is to build socialism, the socialism of the 21st century. Capitalism offers a barbaric path, a path towards the destruction of the planet, of human culture, of exploitation and oppression.
According to Maduro, the socialism that he is helping to create in Venezuela is “liberating, democratic, profoundly popular, Latin Americanist and Caribbean”.
Economist: Debt Restructure is Impossible
The head of the Ecoanalitica firm, Asdrubal Oliveros, said during an interview today that it is impossible to restructure the country’s debt as Maduro claims to want to do because it is an impressively complex process that requires international arbitrage and coordination on a scale beyond the regime’s reach.
Aside from the inherent complexity of the matter, Oliveros said that the context in which the country’s financial collapse is taking place is important as well. Citing the continued fall in oil production and the inflationary crisis, Oliveros said:
We have a very aggressive fall [in oil production]. In the last two years it has fallen by almost 700,000 barrels per day. Moreover, we have an exchange problem. We’re about to enter a hyperinflationary cycle. There’s an extremely high fiscal deficit. Without presenting a plan to resolve these imbalances, it is very difficult for someone to sit down with bond holders to get better conditions when it comes to the debt.
Oliveros said that the regime has shown no willingness whatsoever to correct the economic problems that led to the current crisis, a fact that will not instill confidence in investors. Oliveros said:
When you tell a creditor, “I can’t pay you because I’m having cash flow problems”, they will offer you an extension and also ask you where you’re going to get the money from to pay in the future.
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