Venezuela has already run short of milk, sugar, and even toilet paper, and now supplies of drinking water have fallen dangerously low. Drought and poor infrastructure are the usual culprits, but the socialist paradise also owed tens of billions to international bondholders, and the Chávistas couldn’t afford to finance their debts and also import bottled water. So which did they choose? Venezuela, fearful that foreign creditors would seize its oil shipments, elected to pay $2.8 billion dollars in interest on foreign debt.
Blaming a drought caused by El Niño, the state-owned water company, Hidrocapital, began rationing tap water in Caracas in May. The Table of Democratic Unity (MUD) opposition party was having none of it, noting “the lack of responsibility and improvisation with which the government acts, postponing investments, maintenance, and opportune decisions.”
MUD may have a point. Although in May the government began to pay down some of its bills, it still has over $25 billion dollars of debt outstanding to foreign companies that provide its medicine, operate its telephones, and import its food. Remain calm, however. Fervently denying that the temple of Bolivarian Socialism has credit problems, the Economy Vice President stated, “Venezuela doesn’t have debt with anyone. What we have are pending foreign-exchange liquidations, which we are reviewing.”
American college grads, rejoice: you’re not crushed by student debt. You just have a few pesky education-exchange liquidations to clear up.