Venezuela won't halt foreign debt payments, finance ministry says
<a href=www.sfgate.com>More
Thursday, March 27, 2003
(03-27) 07:23 PST CARACAS, Venezuela (AP) --
Venezuela won't stop paying its foreign debt obligations despite a severe cash crunch stemming from a crippling two-month strike, the finance ministry said.
"Venezuela completely dismisses the possibility of moratorium, halt of payments or forced restructuring of public foreign debt," the ministry said in a statement released late Wednesday.
The statement came after President Hugo Chavez announced in a speech to business owners that Venezuela may have to restructure its foreign debt. Chavez did not provide details.
The Finance Ministry said Venezuela planned to propose a voluntary bond swap, among other measures, to deal with the cash crunch. Venezuela's foreign debt amounts to about $23 billion, or 37 percent of its $63 billion economy. The country faces $5 billion in debt payments this year.
Last week, the government swapped maturing local debt worth more than 160 billion bolivars ($100 million) for new bonds with terms of up to two-and-a-half years. Since last year, the government has extended maturities on 3.8 trillion bolivars ($2.4 billion) in local debt, the finance ministry said.
The South American country lost $6 billion during a strike to force Chavez's resignation or early elections. The walkout hobbled the world's fifth-largest oil exporting industry and source of half of public revenue for Venezuela. Tax collection, the source of most of the rest of government income, also fell as thousands of businesses and the stock market closed.
The strike fizzled last month with Chavez solidly in power.
Ali Rodriguez, president of the government oil monopoly, said Thursday oil production reached 3.1 million barrels a day. Exports are 2.8 million barrels a day, Rodriguez told state news agency Venpres. Executives fired from Petroleos de Venezuela SA for leading the strike say output is 2.4 million barrels a day.
Private economists predict gross domestic product could shrink more than 20 percent this year. GDP contracted 9 percent in 2002.