Harvard’s Hausmann Calls Chinese Loans to Venezuela a ‘Disgrace’

[Demeter]

http://www.bloomberg.com/news/articles/2015-09-28/harvard-s-hausmann-calls-chinese-loans-to-venezuela-a-disgrace--if47489t?cmpid=yhoo

The billions of dollars China loans to Venezuela in exchange for oil are a “disgrace” and used for corrupt purposes that go undisclosed to the general public, said Harvard professor Ricardo Hausmann.

Venezuela, which has tapped China for more than $45 billion over the last decade, is increasingly reliant on the world’s second-biggest economy for cash because of its unwillingness to comply with the requirements of the International Monetary Fund, Hausmann wrote in a Sept. 28 opinion piece for Project Syndicate. Those loans have become more important than ever as the nation’s international reserves tumbled with oil prices to a near 12-year low.

“The Chinese have not required that Venezuela do anything to increase the likelihood that it regains creditworthiness,” wrote Hausmann, a former Venezuelan planning minister. “They merely demand more oil as collateral. Whatever the IMF’s faults,” China Development Bank “is a disgrace.”

The loans have “built-in privileges for Chinese companies” in sectors including telecommunications, appliances, cars and oil drilling, Hausmann said. An e-mail to the bank seeking comment, sent after business hours, wasn’t immediately returned....

SO WHAT?

[COLGATE4]

1. Maduro is feverishly mortgaging what's left of Venezuela in

a futile attempt to kick the can down the road and stave off complete economic collapse.

[99th_Monkey]

2. This guy was a big-time banker in pre-Chavez Venezuela

which maybe tells us something. Oh noes. Two commie nations are actually communicating & cooperating.
in their trade & economic activity.

Is this a "Red scare" piece, or what?

What I didn't get, is why these are "loans" to Venezuela, "in exchange for oil". I don't get why China isn't
BUYING the oil, rather than "loaning" money in exchange for it.

[MisterP]

5. in 1994 the bank owners got the state to bail them out, and then fled with all the money

in their private jets, leaving Caracas doubly-indebted since they'd had to back all the accounts: Caracas had paid for the same accounts twice
https://en.wikipedia.org/wiki/Venezuelan_banking_crisis_of_1994
Caldera was ... displeased

[Judi Lynn]

6. Unbelievable chicanery. Someone made out like bandits in Venezuela with this operation.

I hope to find out more about this after seeing your post.

It's really amazing how right-wing money men manage to take off, time after time, after time, with national resources, with contents of the national treasuries, plundering every space they occupy. They are complete maggots.

Did not know this fell on Rafael Caldera, who pardoned Hugo Chavez. What a load of crap was dropped at his feet with this banking flim-flam.

Venezuela had to pay twice then? Holy smokes.

You have done people a real favor by adding this material for our enlightenment. Chances are very few US Americans ever heard about this.

After seeing your information I had to rush to take a look to find out when Jeb Bush was working for Texas Commerce Bank in Caracas, remembering how the Bushes have always seemed to wind up around strange banking crises, as in Silverado.

Thank you for opening another window for us.

[MisterP]

7. interestingly the old party system--of AD and the moment's opposition party fighting (even machine-

gunning lawyers and reporters getting too close) over the oil wealth--had ended with the caracazo

like several other liberal leaders Caldera got cornered into neoliberal policy (as opposed to those like Menem and Perez Andres who had damned the IMF while always planning to enforce their brutalities

[Judi Lynn]

8. It's a shame about Caldera. At times he seemed like a decent guy.

Menem and Perez Andres were both nasty people, and both beloved of George H. W. Bush. Birds of a feather, apparently.

Isn't it a shame there have been so many of these similarly bent, somewhat human-shaped entities?

[bemildred]

3. It would seem to me that if the Chinese are loaning them boatloads of money, then

by that fact itself they have "creditworthiness". Perhaps what he means is creditworthiness with the IMF, which is a different matter. Then it is a matter of whose demands (the IMF or the Chinese) ought to be complied with, which is what the disagreement is really about. Hausmann is upset that Venezuela is ignoring IMF demands and getting away with it by getting in bed with the Chinese instead.

[Demeter]

4. Thanks for the background

Given the IMF's record, I'd try out China, too. Sour grapes!

[bemildred]

9. The Chinese don't seem to have our faith in the efficacy of regime change.

I would wager that, at least for the time being, the Chinese are a lot safer to deal with.