martes, 24 de septiembre de 2013

Three views on the new China Loan

Russ Dallen
Latin American Herald Tribune
I have attached our latest Weekly Report on Venezuela (attached pdf), in which we cover the lack of good news on the economic front in Venezuela (aside from the $5 billion credit line China just granted Caracas, which we also cover).

Dallen sees the loan as “good news”.

Francisco Toro
Caracas Chronicles

We may hate to admit it, but Nicolás Maduro’s Chinese junket has, as far as we can tell, been a success. He gets to leave with a headline figure of $20 bn. dollars worth of new deals with the Chinese.

Toro also considers the loan as a “success” , although he goes on to warn us  about the use of the money.

Robert Bottome

….What is the need for Maduro to take a trip to China amid an economic and social crisis, just to sign a transaction within the Chinese-Venezuelan Fund agreement aimed at requesting a loan payable in oil for a third time? From that point of view, the trip is a sign of weakness and it only has the single explanation on a possible reluctance from the Chinese government to keep giving American dollars to a country that has not complied with previous agreements.

Another sign of weakness is the fact that the Government had awarded China-based investment group CITIC Group a concession for Las Cristinas, one of the world’s largest gold mines, which has been subject to a series of political mismanagements including a “nationalization” decreed by late President Hugo Chávez from Belarus

Will the Government disclose the real cost of the $5 billion loan, thus ending all the secrecy surrounding the Chinese-Venezuelan Fund?
Bottome does not see the new loan as good for Venezuela.
I would tend to side with Bottome. The conditions  China impose on their financial support will tend to render Maduro and the nation pretty helpless. What will be considered as a success by the government looks like a new nail in the coffin for the country. Venezuela is now like a dying man on artificial support. The family will have to foot the bill after he dies.