Weekly Report - 16 June 2011 (WR-11-24)

VENEZUELA | Racking up debt. The national assembly has approved a law almost doubling the amount of public debt that can be issued this year. President Hugo Chávez ratified the law, under which the government will be able to issue an additional BF45bn (US$10.4bn) of debt, to add to the BF52bn already approved this year. The government claims that some US$2.33bn will be used to cancel and to service debt, while the remainder will finance its ambitious housing programme, job creation and the new Misión AgroVenezuela, which provides assistance to farmers to boost agricultural production.
Vice-President Elías Jaua said the government could issue this level of debt because there was confidence in the economy. The opposition coalition Mesa de la Unidad Democrática (MUD) denounced the debt issuance as dangerously profligate. It claimed that high oil prices should be sufficient to cover government spending: the budget was predicated on an oil price of US$40 per barrel; it is currently around US$100 per barrel. The MUD complained that the government was losing its grip on reality, and ramping up public spending in an effort to buy its way to re-election in December 2012.

End of preview - This article contains approximately 196 words.

Subscribers: Log in now to read the full article

Not a Subscriber?

Choose from one of the following options

• Subscribe
• Sign up for a one-time, 14-day trial