The Long and Winding Road to a Haircut

While the government and PDVSA owe about $60 billion to foreign bondholders, these entities reportedly owe a comparable (if not larger amount) to Russia and China. According to the International Monetary Fund’s most recent World Economic Outlook, Venezuela’s real per capita GDP has contracted nearly 40% since 2008. By 2022, the cumulative toll is expected to leave per capita income at about half its level a decade ago. Such an economic collapse, rare outside wartime, understates the extent of human suffering implied by the prolonged food and medicine scarcities that plague the country. More…