Venezuela inches closer to default

CNN moneyThe country, which is engulfed in crisis, owes $251 million to bondholders on Monday. The payment comes after a weekend in which the attorney general was kicked out of office, a controversial legislature took power, and the military thwarted an alleged attack by a small paramilitary group.

Experts anticipate that Venezuela will make the payment to bondholders. But it has other payments coming due in the near future and could fall short on those if the economy continues to tailspin and the United States hits it with heavy sanctions.

“This model is broken, and default is inevitable,” says Siobhan Morden, an expert in Latin American bonds at Nomura Holdings. Oil “sanctions will probably arrive sooner and force default sooner.” …

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During the last several decades, the United States has invested billions of dollars in trying to help the governments of Latin America and the Caribbean deliver better lives for their citizens. This has meant helping them increase internal security by combating the illicit growing and trafficking in narcotics and the activities of terrorist groups, as well as helping them to shore up their democratic and free market institutions.

Unfortunately, in recent years, continued progress in these areas has been threatened, not least by the elections of radical populist governments in Venezuela, Bolivia, and Ecuador. These governments have instituted retrograde agendas that include the propagation of class warfare, state domination of the economy, assaults on private property, anti-Americanism, support for such international pariahs as Iran, and lackluster support for regional counter-terrorism and counter-narcotics initiatives.

We are a group of concerned policy experts that fear the results of these destructive agendas for individual freedom, prosperity, and the well-being of the peoples of the region. Our goal is to inform American policymakers and American and international public opinion of the dangers of these radical populist regimes to inter-American security.