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Tobías Nóbrega

The Venezuelan Minister of Finance, Tobías Nóbrega indicated that the payments of capital and interests of the foreign debt have dropped from 30% to 21% of the 2005 budget, thanks to the debt refinancing program.

The Minister explained that there is a deep lack of knowledge on issues regarding debt refinancing and restructuring, since in the 80’s Venezuela restructured its debt, which implied renegotiating capital and interests.

Refinancing is only done on the capital, that is, Venezuela extended the terms of amortization known as the principal.

The state reduced the weight of the payments on the budget, and therefore, more refinancing will be made in 2005, in order to anticipate operations that make the maturity of the debt lighter with time.

Maza Zavala: the payment quotas are not high

Compared to other Latin American countries, the percentage of the national 2005 budget that Venezuela pays for its debt, is not as high as some claim, said Maza Zavala , director of the Central Bank of Venezuela. Some countries pay 50% of their total income and expenditures, he noted. Brazil is the first debtor in Latin America. Mexico and Argentina also have a great debt.

Venezuela has a great internal debt, which despite its size, is still within the acceptable international parameters. The percentage of the budget allocated to debt payments has dropped from 30% to 21% of the budget of the next fiscal year, thanks to the refinancing policy, and not to restructuring. “My comment does not refer to the amount of the debt itself, but to what its corresponding loan has been used for, and thus whether a debt is justified or not will depend on its use; if it is used to pay current expenses, it is wrong”, he explained.

“The debt payment quotas are not enormous; what I have said is that it is necessary to inform about the application (use of the loan) of such debt. As a tax-paying citizen, I would like to know how the borrowed resources have been used, since we tax-payers are the ones who afford the debt payments,” he reassured. “Whichever way the debt is paid, our taxes finance it. No debt is too high if the borrowed money has been well invested”, he concluded.

Published in Quantum N.38