Princess of China


El Nacional continues with its reporting on the push to get China to provide new financing for the Bolivarian Revolution. In a rambling article by Andrés Rojas, we learn, among other things, that:

  1. Hugo Chávez originally wanted a whopping US$120 billion, but got $20 billion instead.
  2. Aside from the usual suspects (Giordani, Ramírez, etc.), the point person for the day-to-day handling of the China deal is an obscure chavista bureacrat, BANDES President Edmeé Betancourt. So many billions of dollars flying around with no transparency – must be good to be Edmeé.
  3. The Chinese are livid because oil production in the Orinoco has not ramped up as promised. PDVSA was simply too busy handing out shoddy apartments.
  4. Rafael Ramírez denies that a new loan was even on the table, but even if it was, it would be “for the benefit of the people.”
  5. Oh, and to top it all off, CITGO renewed its contract to give low-cost heating oil to 1.7 million people in New England, thanks to the haggling of a Kennedy.

So let me get this straight. The Venezuelan government basically:

  • asks people for money, and gives the fabulous returns to their investments;
  • needs increasing amounts of people to lend them ever-growing amounts of money just to continue its operations;
  • has no transparency; and
  • its investors know this can’t last, which is why the risk premiums for our debt are so high.

En dos platos, the Chávez government is a Ponzi scheme.