What would you as a bare minimum call creditors knowingly financing a government that in itself constitutes a brutal violation of human rights? Odious?

Sir, John Paul Rathbone, Robin Wigglesworth and Jonathan Wheatley, with respect to the surrealistic debt-restructuring initial steps in Venezuela quote Hans Humes of Greylock Capital, who is forming an investor committee with “Ultimately, there is going to be more money made in Venezuela than even in Argentina”. But the authors also rightly conclude in “The geopolitical and humanitarian consequences are likely to be larger still”, “Caracas plays its last cards” November 22.

Sir, “Food is in short supply” does not even begin to describe the tragedy.

Look at Venezuela as a prison. The food and medicines supplies it receives should be more than enough to keep all inmates healthy, but, since the guards have stolen so much of it, many prisoners, many children among them, are dying. And, in order to be able to steal more, the guards also took on huge debts in the name of the prison. And now the original creditors, or those who bought in at a later stage, and who all had all the possibilities of knowing very well what was going on, but that turned a blind eye to it when the interest rates offered by the guards were so irresistibly juicy, they want to be repaid. Will the guards do so? Will the prisoners allow that?

I have for decades called for Venezuela’s oil revenues, lately around 97% of all Venezuela’s exports, to be shared out to all its citizens, as the only way to guard against any odious or just plain dumb exercises of centralized statist power.

So what would happen if now the Venezuelans agree, in a referendum, on doing just that and then proceed to carry out the necessary changes in its constitution; and asks the IMF or the World Bank, with the assistance of other banks, to set up an oil revenue distribution system that keeps all oil exports invoiced in the name of Venezuela’s 30 and so million citizens? I am no lawyer but would a judge in New York approve the embargo of Simoncito’s part of oil, that if received would help to feed and keep Simoncito healthy?

Desperate times calls for desperate solutions, but perhaps some desperate solutions carry the potential of turning into magical solutions. For an oil cursed nation like Venezuela, that might just be what opens up its future to a much better tomorrow.

But the rest of the world could also benefit immensely. We quite frequently hear about the need for a sovereign debt restructuring mechanism, SDRM. If such mechanism started by clearly establishing the fact that most odious debts have its origins in odious credits. There often is prohibition against usury, but even more important for all us citizens all around the world, and especially for those generations of citizens coming after us, to have some sort of mechanism that disincentive the award of odious credits to governments.

In reference to that I am begging Venezuela’s National Assembly to request that Venezuela’s Supreme Court of Justice in exile initiates a process destined to carefully revise the origin of all Venezuela’s credits to see if they can be deemed legitimate or not.

https://perkurowski.blogspot.com/2014/05/risk-premiums-and-ethic-ratings.html

@PerKurowski

Jockeying for position to currently advise Venezuela on its debt restructuring could have serious legal, or at least reputational consequences

Sir, Robin Wigglesworth, with respect to Venezuela’s debt writes: “Any restructuring will be a Herculean task, given US sanctions” “Debt restructuring battle brews over Venezuela” November 21.

It is not only the US sanctions. Since many, or probably most Venezuelan consider those debt origination in odious or at least totally non-transparent credits we have not the faintest trust in that negotiators helping the government to restructure is helping us.

So any negotiator now would have blacklisted himself, for those restructuring negotiations that can only begin in earnest when the Maduro government is gone.

Also I cannot understand that, for instance one of the prime renegotiation advisors you mention like the “mysterious art-loving Mexican billionaire called David Martinez”, can be so naïve so as to believe that the threat of US sanction to Americans will not be extended to anyone substituting for Americans.

In summary you do not advise governments that are violating basic human rights without the possibility of facing very serious consequences for that. As a minimum they should be aware that many of us Venezuelan will, when we can, try to recoup any odious restructuring fees paid to them… and keep them away forever from Venezuela

Personally I am much in favor of the Venezuelan Supreme Court of Justice in exile, requested by the Venezuelan National Assembly, initiates the first stage of any debt restructuring, namely classifying all those debts in bona-fide, dubious or odious. 

https://teawithft.blogspot.com/search?q=Venezuela+debt

@PerKurowski

The Venezuelan National Assembly, the real not the fake, needs to be careful it does not legitimize odious credits

Sir, Henry Foy, Robin Wigglesworth and Gideon Long report on how “Venezuela [Maduro] has invited international bondholders to negotiations over its foreign debt as Caracas seeks to mitigate the impact of US sanctions and survive a deepening economic crisis.” “Venezuela sets up talks on foreign debt” September 9.

Legitimate debt/credit, sort of legitimate debt/credit, more dubious debt/credit and clearly odious debt/credit composes Venezuela’s public debt. It behooves Venezuela, as well as all citizens in the world who could in the future face similar challenges, to make sure that in any negotiations here referred to, there are true representatives of the Venezuelan citizens, in order to make sure that differentiation occurs, and that there is no legitimation of debts that do not entirely merit it.

In this respect I hope the Venezuelan National Assembly, by voting, not by some finger-pointing appointments, selects who are going to represent it in any of these negotiations; and then formally notifies all interested parties of their names, that including all officials of the Paris Club.

Clearly those Venezuelan citizens representatives must present no conflicts of interest with either creditors or with those in government that have been involved with the “contracting” of such debt.

PS. What’s “sort of legitimate debt/credit”? That which is legitimate in legal but not in moral terms.

http://unsustainabledebtsustainability.blogspot.ca/2015/10/we-must-not-allow-vulture-funds-to.html

@PerKurowski

What’s 100% political correct has not even to be close to real feelings on Main Street

Sir, Gideon Long strangely thinks it is important to quote one obscure member of an unconstitutional assembly that represents perhaps less than 15% of Venezuelans with “If you think of invading us we’ll make [the] Vietnam [war] look small,” and then to describe that this member’s shouts “earned him a rapturous standing ovation”. “Trump threat ‘lets Maduro blame US for his woes’” August 14.

To reaffirm the validity of that Long refers to a poll in which “9 per cent of respondents felt the crisis would only be resolved by foreign military intervention”.

Suppose instead a poll asking: “If foreign military intervention was the only way to get rid of the current regime, (as Long quotes a Venezuelan woman believing) would you approve of it?” The way I read the feelings in my homeland (albeit from a foreign land), that question would be responded affirmative by a majority of Venezuelans.

Of course if that would happen, once the necessity has been removed, Venezuela’s Main Street would most probably, sort of thanklessly, again align itself to more political correct attitudes and blame Yankee imperialism for much. C'est la vie! 

PS. The way Gideon Long transmits information about Venezuela makes me think he might be one of those who can't resist a lefty talking purty.

@PerKurowski

Could the Venezuelan National Assembly sue Goldman Sachs on behalf of Venezuelans for aiding and abetting a dictator?

Sir, Mitu Gulati writes: “a judge could find that the holders of Maduro bonds must have known that they were transacting with an unrepresentative or illegitimate agent of the people… Agency law goes beyond merely voiding the contract between the principal and the third party; a third party who suborns a betrayal of trust by the agent may be answerable in tort to the principal”, “Maduro bonds” Alphaville July 8.

So, could the Venezuelan National Assembly sue Goldman Sachs on behalf of Venezuelans for aiding and abetting a dictator and the violation of human rights?

Gulati also writes: “It is the Constituent Assembly itself and all of its works that the post-Maduro government must argue are unauthorized, invalid and illegitimate. And the longer that the Constituent Assembly stays in power, and makes the laws of the country, the more it begins to look like the real legislature”

That begs the question, if a President of USA, like Donald Trump had managed to create something as odiously farcical as Venezuela Constituent Assembly, how long would it take for it to begin to look like the real legislature? 100 years?

PS. A simple but complex question from a humble Venezuelan economist to an outstanding Venezuelan international lawyer

@PerKurowski