Chavez says Venezuela needs to restructure foreign debt

Read Source By Associated Press, 3/26/2003 15:31

CARACAS, Venezuela (AP) President Hugo Chavez said Venezuela needs to restructure its $23 billion foreign debt as it struggles with a severe cash crunch in the wake of a devastating general strike.

''Venezuela needs to restructure its external debt, which is very heavy,'' Chavez said Wednesday in a speech to business owners. He did not elaborate.

Venezuela's foreign debt amounts to 37 percent of its $63 billion economy. The country faces payments of $5 billion this year to service its foreign debt, Chavez said.

The president also urged the Central Bank to lower interest rates, which he said averaged 50 percent. He said he would ask the Supreme Court to order the Central Bank to act if it didn't do so on its own.

Venezuela lost $6 billion during an unsuccessful two-month strike to demand Chavez's resignation or early elections, according to government estimates.

The walkout paralyzed Venezuela's oil industry, the world's fifth largest exporter and source of half of public revenue. Tax collection, the source of most of the remaining government income, also fell as thousands of businesses and the stock market closed.

Oil production is recovering. The government estimates production is more than 3 million barrels a day almost normal while strike leaders put it at 2.4 million barrels.

Private economists estimate Venezuela's economy could shrink up to 40 percent in the first three months of the year. It contracted almost 9 percent in 2002.