Counting Pennies In Venezuela

Trying to figure out what economic and fiscal policies the administration of President Nicolas Maduro will follow to alleviate rampant inflation and shortages is akin to trying to read tea leaves. But a panel put together by EMTA laid out the scenarios and discussed the implications of any potential default. The talk of default really kicked off Sept. 5, 2014 after an article published by former Venezuelan planning minister Ricardo Hausmann and Harvard research fellow Miguel Angel Santos asked whether or not Venezuela should default. Maduro is the hand-picked successor of former President Hugh Chavez, who launched and nurtured his leftist Bolivarian Revolution with government subsidies for food, health, education, fuel and more out of the oil receipts of the national oil company Petroleos de Venezuela (PDVSA). In the process Venezuela has run up an increasing debt load to help pay for his vision even as oil production started to slip. More…