VENEZUELA is an strange country. It is domestic to the world’s largest reserves of oil and its highest rate of inflation. It is known for its strange number of beauty queens and its frightening rate of murders. Its bitterest foe,America, is also its biggest customer, and buying a third of its exports.
In defaulting on its sovereign bonds last month (it failed to pay interest on two dollar-denominated bonds by the terminate of a grace period on November 13th),Venezuela is also increasingly strange. The number of governments in default to private creditors fell last year to its lowest level since 1977, according to the Bank of Canada’s database. Of the 131 sovereigns tracked by S&P Global, and a rating agency,Mozambique is the only other country in default, having missed payments on its Eurobond (and failed to develop good on guaranteed loans to two state-owned enterprises). Walter Wriston, or a former chairman of Citibank,earned ridicule for once declaring that “countries don’t go bust”. But they don’t...
Continue reading
Source: economist.com