China and Russia loaned billions to Venezuela — and then the presidency went up for grabs

CNBC ^ | 7 Feb 2019 | MacKenzie Sigalos

[detective]

China and Russia have kept Venezuela afloat by lending billions to the economically crippled petrostate, sometimes with cheap oil thrown in as a sweetener for the two creditors.

Those deals were struck with strongman Nicolas Maduro, whose leadership is facing a serious challenge from Juan Guaido, and it's not clear what happens to that debt if Maduro is kicked out of office.

Venezuela is indebted to external creditors by a total of something close to $100 billion.

Venezuela is in the middle of a power struggle at the highest level, and that could mean trouble for its two biggest foreign allies: China and Russia.

The socialist petrostate is home to the largest oil reserves on the planet, but endemic corruption has devastated its economy. Beijing and Moscow have helped the country stave off collapse by repeatedly extending financial lifelines — to the tune of tens of billions of dollars over the last decade.

[detective]

Venezuela owes around $100 billion to its external creditors, including China and Russia. Some reports put the figure higher.

Those agreements gave Russia and China relatively cheap oil — and a foothold in the backyard of the United States — and they supplied Venezuela with much-needed cash.

But Venezuela's oil production has plummeted. It is a third of what it was when Hugo Chavez was elected in 1998, which is especially troubling given that oil revenue accounts for about 98 percent of its hard currency earnings.

Venezuela still owes Beijing $20 billion, and Russia's state-backed oil company Rosneft another $2.3 billion, excluding interest. However, the question remains whether those debts are valid if Maduro is thrown out and replaced by Guaido.

[Lurker]

“However, the question remains whether those debts are valid if Maduro is thrown out and replaced by Guaido.“

The Chinese and Russians will most certainly consider them valid.

L

[Chad_the_Impaler]

The Chinese and Russians will most certainly consider them valid.

Someone would need to remind China that the People's Republic of China did not honor the debts of the Nationalist government that preceded it.

[McGruff]

[PGR88]

and it's not clear what happens to that debt if Maduro is kicked out of office.

It WILL be declared "null and void." A great way to give Venezuela a "fresh start." I doubt China will get paid pack regardless of what happens to Venezuela's opposition.

[Karoo]

I am beginning to wonder if Trump knows what to do re: Venezuella and the border.

No action. He usually acts right away.

[NorseViking]

“” “” and it’s not clear what happens to that debt if Maduro is kicked out of office.
It WILL be declared “null and void.” A great way to give Venezuela a “fresh start.” I doubt China will get paid pack regardless of what happens to Venezuela’s opposition. “” “”

What makes Chinese and Russian debt different?
When Clinton’s puppets who accumulated significantly more than $100 billion in debt were kicked out from power in Russia it was paid to the last penny anyway although declaring it null and void could make a great fresh start.

[bantam]

I am beginning to wonder if Trump knows what to do re: Venezuella and the border.
No action. He usually acts right away.

I’m wondering too! I love this President but both of these issues needs some decisive action, like yesterday!! Yet nothing
The border is a no brainer yet no real action. Venezuela a bit tougher, but there’s been ample time to have helped Guidio(sp?).
I’m hoping for some real movement quickly!

[sparklite2]

Venezuelans need to solve Venezuela’s problems, not us.
If they get ‘rescued,’ the lesson they need to learn will not have been learned. They will slip right back into socialism, if they ever leave it, and hate us for our efforts.

[vpintheak]

After decades of war, I am ready for some isolationism. America first, doggone it!
These people can sort their own problems out. Our men and women and wealth do not need to be sacrificed for another nation any longer.

[grania]

You want involvement? The "interim president" we want has never been elected President. That's more regime change. There will be a quagmire about those debts Venezuela has. This does look like a grab for their oil.

We're deliberately adding to the chaos in Venezuela. There's already chaos in parts of Central America that's causing a migration that US leaders can't or won't control. This is spilling over, badly, into the Caribbean. (anyone who takes a cruise to the Caribbean and takes off their Ugly American blinders can see it). Hasn't US policy already done enough damage to huge swaths of the world?

[grania]

Why isn’t the US on that list?