A day after Pakistan announced <a href="http://www.wionews.com/south-asia/saudi-arabia-offer-3-billion-defers-oil-payments-to-ease-crisis-pakistan-173067">Saudi's assent&nbsp;to provide rescue aid to it</a>, the country on Wednesday clarified that it still plans to seek a bailout from the International Monetary Fund (IMF).

"Yes, we are going ahead into program negotiations with (IMF) in first week of November," Noor Ahmed, spokesman for Pakistan's finance ministry, told Reuters.

Islamabad on Tuesday said that Saudi Arabi had agreed to give Pakistan $3 billion in foreign currency support for a year and a further loan worth up to $3 billion in deferred payments for oil imports to help revive the country looming under economic crisis.

The agreement was announced as the&nbsp;<a href="http://www.wionews.com/pakistan/pakistan-is-desperately-looking-for-loans-imran-khan-at-saudi-investment-conference-172963">new Pakistani Prime Minister Imran Khan </a>attended a Saudi investment conference in Riyadh on Tuesday.

The conference had been&nbsp;boycotted by several other leaders over the killing&nbsp;of Saudi journalist&nbsp;Jamal Khashoggi at the country's consulate in Istanbul.

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Pakistan Prime Minister Imran Khan had said earlier that the country was "desperate"&nbsp;for the financial assistance.&nbsp;

In an interview to journalists on October 20, PM Imran Khan was reported as saying that even though Pakistan was concerned about the death of Saudi journalist Jamal Khashoggi, they were "desperate" for financial help from Saudi Arabia.

The existence of the&nbsp;interview was however <a href="http://www.wionews.com/south-asia/imran-khans-aide-denies-interview-where-the-pm-said-desperate-for-help-from-saudi-173113">later denied by&nbsp;the special&nbsp;assistant</a> to Pakistan's Prime Minister, Naeem ul Haque.

Khan who is currently in Riyadh is on his second visit to Saudi Arabia in just over a month.

A day after Pakistan announced Saudi's assent to provide rescue aid to it, the country on Wednesday clarified that it still plans to seek a bailout from the International Monetary Fund (IMF).

A day after Pakistan announced Saudi's assent to provide rescue aid to it, the country on Wednesday clarified that it still plans to seek a bailout from the International Monetary Fund (IMF). "Yes, we are going ahead into program negotiations with (IMF) in first week of November," Noor Ahmed, spokesman for Pakistan's finance ministry, told Reuters. Islamabad on Tuesday said that Saudi Arabi had agreed to give Pakistan $3 billion in foreign currency support for a year and a further loan worth up to $3 billion in deferred payments for oil imports to help revive the country looming under economic crisis. The agreement was announced as the new Pakistani Prime Minister Imran Khan attended a Saudi investment conference in Riyadh on Tuesday. The conference had been boycotted by several other leaders over the killing of Saudi journalist Jamal Khashoggi at the country's consulate in Istanbul. × Pakistan Prime Minister Imran Khan had said earlier that the country was "desperate" for the financial assistance. In an interview to journalists on October 20, PM Imran Khan was reported as saying that even though Pakistan was concerned about the death of Saudi journalist Jamal Khashoggi, they were "desperate" for financial help from Saudi Arabia. The existence of the interview was however later denied by the special assistant to Pakistan's Prime Minister, Naeem ul Haque. Khan who is currently in Riyadh is on his second visit to Saudi Arabia in just over a month.

Will seek IMF bailout in Nov, Pak finance ministry says despite Saudi financial assistance

Pakistan may not have to approach the IMF for loans as it has received "positive" responses from some "friendly countries", Prime Minister Imran Khan has said, days after Islamabad formally approached the global lender for a bailout to tide over the economic crisis.

Talking to a delegation of senior editors on Wednesday, Khan said his government was in touch with some "friendly countries" and has sought cooperation to address the mounting balance of payments deficit and dwindling foreign currency reserves.

Though he did not name any countries, Pakistani media has reported that the government was consulting allies like China and Saudi Arabia for financial help.

"Their response is positive. I am quite hopeful that we will not have to approach the International Monetary Fund for our economic needs," he was quoted as saying by The News.

Khan's comments come after tough talking by IMF Managing Director Christine Lagarde and the US on Pakistan's bailout plan, demanding absolute transparency on the country's debts, including those owned by China under the China-Pakistan Economic Corridor (CPEC) projects.

Apart from selling off surplus luxury cars, Prime Minister Khan's proposals include turning state-owned buildings into universities, dispensing with VIP security protocol and cutting air conditioning in government offices to keep the economy afloat.

Khan has vowed to steer Pakistan out of a looming balance-of-payments crisis, saying it needs US $10 to $12 billion.

He said Pakistan's economy has been badly hit. He said the previous governments borrowed so much that it has become hard for his government to repay the loans.

"Had the former government not received loans or the amount so received was utilised properly, the economy of the country would have been in a good shape," he said.

Pakistan Finance Minister Asad Umar met IMF chief Lagarde on the sidelines of the IMF and World Bank annual meetings in Bali, Indonesia on October 12 and formally requested a "stabilisation recovery programme".

Umar said that a team of the IMF will arrive in Pakistan on November 7.

He said the government doesn't want to fully rely on the IMF and would do anything to bring improvement in the economy. He said the loan programme with the IMF is almost final, but the government will have to see that the IMF does not place any undoable conditions for Pakistan in return.

Lagarde has made it clear to&nbsp;Umar that the IMF would require absolute transparency on Pakistan's debts, including those owned by China under the multibillion dollar CPEC.

The CPEC is a network of infrastructure projects that are currently under construction throughout Pakistan that will connect China's Xinjiang province with Gwadar port in Pakistan's Balochistan province. It is the part of Chinese President Xi Jinping's ambitious Belt and Road initiative.

The US has said that the huge Chinese debt was responsible for the economic challenges facing Pakistan, adding that it will review Islamabad's bailout plea to the IMF from all angles, including the country's debt position.

Umar said the Pakistan government was also exploring other options to avoid problems if the IMF programme did not materialise.

Pakistan may not have to approach the IMF for loans as it has received "positive" responses from some "friendly countries", Prime Minister Imran Khan has said, days after Islamabad formally approached the global lender for a bailout to tide over the economic crisis.

Pakistan may not have to approach the IMF for loans as it has received "positive" responses from some "friendly countries", Prime Minister Imran Khan has said, days after Islamabad formally approached the global lender for a bailout to tide over the economic crisis. Talking to a delegation of senior editors on Wednesday, Khan said his government was in touch with some "friendly countries" and has sought cooperation to address the mounting balance of payments deficit and dwindling foreign currency reserves. Though he did not name any countries, Pakistani media has reported that the government was consulting allies like China and Saudi Arabia for financial help. "Their response is positive. I am quite hopeful that we will not have to approach the International Monetary Fund for our economic needs," he was quoted as saying by The News. Khan's comments come after tough talking by IMF Managing Director Christine Lagarde and the US on Pakistan's bailout plan, demanding absolute transparency on the country's debts, including those owned by China under the China-Pakistan Economic Corridor (CPEC) projects. Apart from selling off surplus luxury cars, Prime Minister Khan's proposals include turning state-owned buildings into universities, dispensing with VIP security protocol and cutting air conditioning in government offices to keep the economy afloat. Khan has vowed to steer Pakistan out of a looming balance-of-payments crisis, saying it needs US $10 to $12 billion. He said Pakistan's economy has been badly hit. He said the previous governments borrowed so much that it has become hard for his government to repay the loans. "Had the former government not received loans or the amount so received was utilised properly, the economy of the country would have been in a good shape," he said. Pakistan Finance Minister Asad Umar met IMF chief Lagarde on the sidelines of the IMF and World Bank annual meetings in Bali, Indonesia on October 12 and formally requested a "stabilisation recovery programme". Umar said that a team of the IMF will arrive in Pakistan on November 7. He said the government doesn't want to fully rely on the IMF and would do anything to bring improvement in the economy. He said the loan programme with the IMF is almost final, but the government will have to see that the IMF does not place any undoable conditions for Pakistan in return. Lagarde has made it clear to Umar that the IMF would require absolute transparency on Pakistan's debts, including those owned by China under the multibillion dollar CPEC. The CPEC is a network of infrastructure projects that are currently under construction throughout Pakistan that will connect China's Xinjiang province with Gwadar port in Pakistan's Balochistan province. It is the part of Chinese President Xi Jinping's ambitious Belt and Road initiative. The US has said that the huge Chinese debt was responsible for the economic challenges facing Pakistan, adding that it will review Islamabad's bailout plea to the IMF from all angles, including the country's debt position. Umar said the Pakistan government was also exploring other options to avoid problems if the IMF programme did not materialise.

Pakistan may not seek IMF bailout; seeking help from 'friendly countries': Imran Khan

IMF chief Christine Lagarde met with Pakistani officials Thursday and said a team would visit Islamabad for talks on a possible bailout of its shaky economy.

Pakistan Finance Minister Asad Umar, who is attending the Fund's annual meeting in Bali, announced earlier this week that the government would seek talks with the IMF on a "stabilisation recovery programme".

Lagarde earlier Thursday said the IMF had yet to receive anything formal from Islamabad but that she would meet with the Pakistani delegation in Bali.

"During the meeting, they requested financial assistance from the IMF to help address Pakistan's economic challenges," Lagarde said in a statement.

"An IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic programme." Prime Minister Imran Khan on Wednesday vowed to steer the country out of a looming balance-of-payments crisis, saying it needs US $10-12 billion.

"We will get out of this. I will take (the country) out of this," he said.

Khan's new administration took office in August vowing to weigh up whether to seek an IMF bailout as it sought other avenues of financing.

He has sought loans from friendly countries, promised to recover funds stolen by corrupt officials, and embarked on a series of populist austerity measures.

But help has been in short supply and economists' warnings have grown increasingly urgent.

Pakistan has gone to the IMF several times since the late 1980s. The most recent was in 2013, when Islamabad got a $6.6 billion loan to tackle a similar crisis.&nbsp;

IMF chief Christine Lagarde met with Pakistani officials Thursday and said a team would visit Islamabad for talks on a possible bailout of its shaky economy. Pakistan Finance Minister Asad Umar, who is attending the Fund's annual meeting in Bali, announced earlier this week that the government would seek talks with the IMF on a "stabilisation recovery programme".

IMF chief Christine Lagarde met with Pakistani officials Thursday and said a team would visit Islamabad for talks on a possible bailout of its shaky economy. Pakistan Finance Minister Asad Umar, who is attending the Fund's annual meeting in Bali, announced earlier this week that the government would seek talks with the IMF on a "stabilisation recovery programme". Lagarde earlier Thursday said the IMF had yet to receive anything formal from Islamabad but that she would meet with the Pakistani delegation in Bali. "During the meeting, they requested financial assistance from the IMF to help address Pakistan's economic challenges," Lagarde said in a statement. "An IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic programme." Prime Minister Imran Khan on Wednesday vowed to steer the country out of a looming balance-of-payments crisis, saying it needs US $10-12 billion. "We will get out of this. I will take (the country) out of this," he said. Khan's new administration took office in August vowing to weigh up whether to seek an IMF bailout as it sought other avenues of financing. He has sought loans from friendly countries, promised to recover funds stolen by corrupt officials, and embarked on a series of populist austerity measures. But help has been in short supply and economists' warnings have grown increasingly urgent. Pakistan has gone to the IMF several times since the late 1980s. The most recent was in 2013, when Islamabad got a $6.6 billion loan to tackle a similar crisis.

Pakistan finance minister meets IMF chief to seek bailout

Pakistan has not yet formally approached the International Monetary Fund for financial assistance, but if bailout talks get underway this week, the goal will be to help Pakistan reach its full potential, the IMF’s chief economist said on Tuesday.

Addressing a news conference at the IMF and World Bank annual meetings in Bali, the IMF’s Maurice Obstfeld cautioned that increased Chinese involvement in Pakistan’s economy could bring both benefits and risks.

Obstfeld said Pakistan is facing financing gaps as it has been hit by a large fiscal and current account deficit, a low level of reserves and a currency he described as “too rigid” and over-valued.

Finance Minister Asad Umar said on Monday the government would seek to open talks with the IMF in Bali this week for emergency financial assistance. 
&nbsp; 
Prime Minister Imran Khan had earlier sought alternatives to a second bailout programme in five years from the IMF as it impose austerity and limit his vision of an Islamic welfare state.

Obstfeld said that if the IMF does enter into talks with Pakistan this week on a possible new financing programme, the goal would be reforms that would help Pakistan reach its “immense potential” without providing specific details.

“The government has expressed its desires to enact deep structural reforms that might break the cycle of Pakistan needing financial support from the Fund,” he said.

Infrastructure needs

Pakistan needs more infrastructure development, Obstfeld added, and the country could benefit from China’s role in supporting its project financing.

But China’s involvement could also bring potential risks, he said.

“It is important that the design of the projects... be solid and excessive debts which cannot be repaid are avoided,” the IMF chief economist said.

Islamabad has cut the size of the biggest Chinese “Silk Road” project in Pakistan, a reconstruction of the main rail line between the port city of Karachi and Peshawar in the northwest by $2 billion, citing government concerns about the country’s debt levels.

The changes are part of Islamabad’s efforts to rethink key Belt and Road Initiative projects in Pakistan, to which China has pledged about $60bn in financing.

The Trump administration has been critical of China’s Belt and Road initiative, saying that it has saddled some developing countries with debts they cannot afford to repay.

In July, US Secretary of State Mike Pompeo said there was “no rationale” for an IMF bailout of Pakistan that pays off Chinese loans to Pakistan.

Chinese officials have rejected criticism that the so-called China-Pakistan Economic Corridor projects have burdened Pakistan with unsustainable debts. Instead, the Chinese maintain, they have boosted the country’s economic growth and provided 70,000 jobs.

Pakistan has not yet formally approached the International Monetary Fund for financial assistance, but if bailout talks get underway this week, the goal will be to help Pakistan reach its full potential, the IMF’s chief economist said on Tuesday.

Pakistan has not yet formally approached the International Monetary Fund for financial assistance, but if bailout talks get underway this week, the goal will be to help Pakistan reach its full potential, the IMF’s chief economist said on Tuesday. Addressing a news conference at the IMF and World Bank annual meetings in Bali, the IMF’s Maurice Obstfeld cautioned that increased Chinese involvement in Pakistan’s economy could bring both benefits and risks. Obstfeld said Pakistan is facing financing gaps as it has been hit by a large fiscal and current account deficit, a low level of reserves and a currency he described as “too rigid” and over-valued. Finance Minister Asad Umar said on Monday the government would seek to open talks with the IMF in Bali this week for emergency financial assistance. Prime Minister Imran Khan had earlier sought alternatives to a second bailout programme in five years from the IMF as it impose austerity and limit his vision of an Islamic welfare state. Obstfeld said that if the IMF does enter into talks with Pakistan this week on a possible new financing programme, the goal would be reforms that would help Pakistan reach its “immense potential” without providing specific details. “The government has expressed its desires to enact deep structural reforms that might break the cycle of Pakistan needing financial support from the Fund,” he said. Infrastructure needs Pakistan needs more infrastructure development, Obstfeld added, and the country could benefit from China’s role in supporting its project financing. But China’s involvement could also bring potential risks, he said. “It is important that the design of the projects... be solid and excessive debts which cannot be repaid are avoided,” the IMF chief economist said. Islamabad has cut the size of the biggest Chinese “Silk Road” project in Pakistan, a reconstruction of the main rail line between the port city of Karachi and Peshawar in the northwest by $2 billion, citing government concerns about the country’s debt levels. The changes are part of Islamabad’s efforts to rethink key Belt and Road Initiative projects in Pakistan, to which China has pledged about $60bn in financing. The Trump administration has been critical of China’s Belt and Road initiative, saying that it has saddled some developing countries with debts they cannot afford to repay. In July, US Secretary of State Mike Pompeo said there was “no rationale” for an IMF bailout of Pakistan that pays off Chinese loans to Pakistan. Chinese officials have rejected criticism that the so-called China-Pakistan Economic Corridor projects have burdened Pakistan with unsustainable debts. Instead, the Chinese maintain, they have boosted the country’s economic growth and provided 70,000 jobs.

IMF warns Pakistan against ‘excessive loans’ from China

The International Monetary Fund has called on Pakistan’s new government to act fast to stabilise its teetering economy, warning growth will likely slow and inflation rise, but made no mention of a new bailout deal.

Former cricketer Imran Khan’s new administration had vowed to decide by the end of September if it would seek an IMF bailout to shore up the economy as it faces a balance-of-payments crisis and dwindling reserves.

However, it has yet to announce a deal as its seeks other arenas of financing and launched a highly publicised austerity drive that has included auctioning off government-owned luxury automobiles and buffaloes.

The IMF said in a statement released late Thursday that Pakistan was in need of significant external financing in the near term and recommended upping gas and power tariffs while also pushing for exchange rate “flexibility” and monetary policy tightening.

“These steps would help reduce current account pressures and improve debt sustainability,” said the fund in a statement.

But it warned that tough days may lay ahead as higher oil prices and tightening financial conditions for emerging markets will likely add to Pakistan's economic woes.&nbsp;

"In this environment, economic growth will likely slow significantly, and inflation will rise," said the IMF.&nbsp;

Pakistan has gone to the IMF repeatedly since the late 1980s. The last time was in 2013, when Islamabad got a $6.6 billion loan to tackle a similar crisis.

For months analysts have warned Khan’s new government must act quickly to stem a new current account crisis, which could undermine its currency and its ability to repay billions in debts or purchase imports.

The US, one of the IMF's biggest donors, has raised fears Pakistan could use any bailout money to repay mounting loans from China, sparking criticism from Islamabad.

Pakistan’s budget deficit has climbed steadily over the past five years, and foreign currency reserves have declined. The rupee has been repeatedly devalued in the past year, fuelling inflation.

Khan has vowed to improve trade with India, increase the ease of doing business and boost tax collection but since taking office in August is yet to roll out a comprehensive plan aimed at tackling the country’s economic fortunes.

The state of Pakistan's finances could also undermine one of Khan's most popular promises to construct an "Islamic welfare state" based on increased spending on education and health.

The IMF's warnings come days after the Asian Development Bank said Pakistan’s economy could shrink by one per cent in the current fiscal year.&nbsp;

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&nbsp;

The International Monetary Fund has called on Pakistan’s new government to act fast to stabilise its teetering economy, warning growth will likely slow and inflation rise, but made no mention of a new bailout deal.

The International Monetary Fund has called on Pakistan’s new government to act fast to stabilise its teetering economy, warning growth will likely slow and inflation rise, but made no mention of a new bailout deal. Former cricketer Imran Khan’s new administration had vowed to decide by the end of September if it would seek an IMF bailout to shore up the economy as it faces a balance-of-payments crisis and dwindling reserves. However, it has yet to announce a deal as its seeks other arenas of financing and launched a highly publicised austerity drive that has included auctioning off government-owned luxury automobiles and buffaloes. The IMF said in a statement released late Thursday that Pakistan was in need of significant external financing in the near term and recommended upping gas and power tariffs while also pushing for exchange rate “flexibility” and monetary policy tightening. “These steps would help reduce current account pressures and improve debt sustainability,” said the fund in a statement. But it warned that tough days may lay ahead as higher oil prices and tightening financial conditions for emerging markets will likely add to Pakistan's economic woes. "In this environment, economic growth will likely slow significantly, and inflation will rise," said the IMF. Pakistan has gone to the IMF repeatedly since the late 1980s. The last time was in 2013, when Islamabad got a $6.6 billion loan to tackle a similar crisis. For months analysts have warned Khan’s new government must act quickly to stem a new current account crisis, which could undermine its currency and its ability to repay billions in debts or purchase imports. The US, one of the IMF's biggest donors, has raised fears Pakistan could use any bailout money to repay mounting loans from China, sparking criticism from Islamabad. Pakistan’s budget deficit has climbed steadily over the past five years, and foreign currency reserves have declined. The rupee has been repeatedly devalued in the past year, fuelling inflation. Khan has vowed to improve trade with India, increase the ease of doing business and boost tax collection but since taking office in August is yet to roll out a comprehensive plan aimed at tackling the country’s economic fortunes. The state of Pakistan's finances could also undermine one of Khan's most popular promises to construct an "Islamic welfare state" based on increased spending on education and health. The IMF's warnings come days after the Asian Development Bank said Pakistan’s economy could shrink by one per cent in the current fiscal year. ×

IMF calls for more action in Pakistan, but no word on bailout

Venezuela, the South American country convulsed by economic and humanitarian catastrophe, has defaulted on some of its debt after missing an interest payment due in October.

Even as investors meet in Caracas to discuss restructuring US$60 billion in foreign debt, the country is in urgent need of international financial assistance.

Yet few nations are rushing in to offer financial assistance to the ailing country. Under the authoritarian regime of Nicol&aacute;s Maduro, Venezuela is isolated in Latin America, and the United States, Canada and the European Union have all imposed sanctions against Venezuelan officials. Maduro has at times suggested he would not even accept humanitarian aid.

Still, no indebted nation is totally alone in this world. As a financial analyst, I know there are always international players who see opportunity in the problems of others. And for Venezuela, my home country, all hope of a bailout rests with China, Russia and the International Monetary Fund.

Will they do anything to help?

Venezuela&rsquo;s debt: By the numbers

Before exploring a possible Venezuela rescue, it is useful to understand how the country&rsquo;s debt became such a burden.

In 1998, the year before the late Hugo Ch&aacute;vez came into power, Venezuela was rich. It produced roughly 60 barrels of oil per inhabitant per year.

By late 2017, my projections &ndash; based on data compiled from Venezuela&rsquo;s National Statistics Institute and BP&rsquo;s World Energy Report 2017 &ndash; show that production will have dropped to 20 barrels per capita. That&rsquo;s a 66 per cent drop in 20 years.

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Oil output per capita in Venezuela has dropped significantly in the past several decades. Henkel Garcia/BP Statistical Review of World Energy 2017/National Statistics Institute (Others)
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Even as output steadily shrank, Ch&aacute;vez benefitted from relatively high oil prices, which allowed him to boost revenue from petroleum exports. And as oil sales rose, so did government expenditures, as well as imports of food and other goods.

Eventually, excess spending took a toll on Venezuela&rsquo;s international reserves. Rather than cut expenditures and imports, the Ch&aacute;vez regime piled up foreign debt.

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As exports (US$ per capita) rose, so too did government spending and imports. Banco Central de Venezuela, FRED (Federal Reserve Bank of St. Louis), National Statistics Institute and Econom&eacute;trica. (Others)
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Then, in late 2014, international oil prices began to plunge. Today, estimates indicate that Venezuela&rsquo;s public sector debt tops $184.5 billion, including $60 billion in foreign debt, though the Venezuelan Central Bank claims it&rsquo;s much lower.

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Venezuela&rsquo;s foreign public debt, in US$ million, is at an all-time high. (Venezuelan Central Bank) (Others)
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To service this debt, the government must pay $16 billion to $20 billion a year through at least 2022. Shouldering that huge expense has meant slashing imports, causing food and medicine shortages. As a result, almost 54 per cent of Venezuelan children are malnourished.

To ensure its citizens&rsquo; basic well-being, Venezuela must be able to import, on average, $1,000 a year per inhabitant &ndash; or roughly $33 billion a year. My data show it&rsquo;s currently bringing in about half that.

No Chinese largess

As an oil producer, Venezuela&rsquo;s desperation rouses geopolitical interests.

Venezuela owes $28.1 billion to China and $9.1 billion to Russia, its main creditors. In recent years, both countries have been eager to prop up the Maduro regime, with little concern for its authoritarian tendencies.

China, at least publicly, has remained decidedly mum on Venezuela&rsquo;s political crisis. According to a spokesperson from the Chinese Ministry of Foreign Affairs in October, Beijing &ldquo;believe[s] that the government of this country is able to appropriately handle its domestic affairs within the law, maintaining stability and prosperity.&rdquo;

So far, though, Chinese financial institutions have not further opened their coffers. They have, however, granted Venezuela a grace period of at least 18 months to pay off the debt it owes them. This modest concession gives the government a bit of breathing room.

China has also allowed Venezuela to use shipments of crude to pay off some of its debt, revealing China&rsquo;s main interest in Venezuela: its oil.

But, in my view, Venezuela shouldn&rsquo;t count on Beijing for significant additional financial help. For China to issue new loans, insiders have told me, Maduro&rsquo;s government would have to show clear signs of fiscal discipline. Nothing indicates it is capable of that.

I believe a more likely next step is that Venezuela will bring in much-needed cash by selling off existing stakes in oil companies and resource-extraction ventures it co-owns with China.

Putin to the rescue?

Russia has been somewhat more generous with Venezuela, and its geopolitical interests here are clear.

The Kremlin benefits from having a trustworthy ally on this side of the world &ndash; especially one that is avowedly anti-U.S. and ranked as the 11th-largest oil producer worldwide.

Plus, Russia already has many oil interests in the country, including joint exploration projects with Petr&oacute;leos de Venezuela, the state-owned oil company.

Indeed, Russia and its state-funded oil venture, Rosneft, have already helped the country avoid default at least twice, providing Caracas with $10 billion in financial assistance. In an Oct. 29 New York Times article, oil expert Francisco Monaldi said Russia is &ldquo;the only country that can toss Venezuela a lifeline.&rdquo;

In my opinion, even its public declarations defending Venezuela&rsquo;s politics are more incisive than China&rsquo;s. Russia&rsquo;s Foreign Ministry has called international sanctions against Venezuela &ldquo;unacceptable.&rdquo;

Still, thus far, Russia has agreed only to restructure its bilateral debt with Venezuela. While the terms weren&rsquo;t disclosed, I don&rsquo;t believe anything like a real bailout is on offer.

Last resource

This could lead Venezuela to its last resort: the International Monetary Fund. In my opinion, this global lender would be the most appropriate source of a bailout.

Neither China nor Russia is willing or able to offer the huge sum Venezuela needs to stay afloat, at least $30 billion. Nor is any country likely to match the super-low 2 per cent interest rate that the IMF offers to emerging economies in crisis.

Bondholders typically look askance at this type of financial assistance. Countries receiving support from the IMF and other multilateral lenders are generally &ldquo;advised to renegotiate foreign debt,&rdquo; which can leave investors with empty pockets.

And today, Venezuela has no official relationship with the organisation. The Ch&aacute;vez administration loved to disparage the IMF, saying it should &ldquo;close down&rdquo; or &ldquo;vanish.&rdquo;

Even so, there are signs that the IMF is sketching out a possible rescue plan for the country. Bank officials have expressed concern with both Venezuela&rsquo;s humanitarian crisis and the possible spinoff effects of its economic collapse on other Latin American economies.

Since the multilateral organisation is unlikely to bail out the current regime &ndash; which has previously rebuked its possible intervention &ndash; the IMF probably hopes to work with some future transition government that&rsquo;s more democratic and open to international aid. If so, help may be a long time coming.

This article was originally published on <a href="http://theconversation.com" rel="nofollow" target="blank">The Conversation</a>. Read the <a href="https://theconversation.com/nobody-is-going-to-bail-out-venezuela-87428" rel="nofollow" target="blank">original article</a>.

China, Russia and the International Monetary Fund are among those contemplating a Venezuela bailout. But help for this debt-stricken nation seems far from assured.

Venezuela, the South American country convulsed by economic and humanitarian catastrophe, has defaulted on some of its debt after missing an interest payment due in October. Even as investors meet in Caracas to discuss restructuring US$60 billion in foreign debt, the country is in urgent need of international financial assistance. Yet few nations are rushing in to offer financial assistance to the ailing country. Under the authoritarian regime of Nicolás Maduro, Venezuela is isolated in Latin America, and the United States, Canada and the European Union have all imposed sanctions against Venezuelan officials. Maduro has at times suggested he would not even accept humanitarian aid. Still, no indebted nation is totally alone in this world. As a financial analyst, I know there are always international players who see opportunity in the problems of others. And for Venezuela, my home country, all hope of a bailout rests with China, Russia and the International Monetary Fund. Will they do anything to help? Venezuela’s debt: By the numbers Before exploring a possible Venezuela rescue, it is useful to understand how the country’s debt became such a burden. In 1998, the year before the late Hugo Chávez came into power, Venezuela was rich. It produced roughly 60 barrels of oil per inhabitant per year. By late 2017, my projections – based on data compiled from Venezuela’s National Statistics Institute and BP’s World Energy Report 2017 – show that production will have dropped to 20 barrels per capita. That’s a 66 per cent drop in 20 years. Oil output per capita in Venezuela has dropped significantly in the past several decades. Henkel Garcia/BP Statistical Review of World Energy 2017/National Statistics Institute (Others) × Even as output steadily shrank, Chávez benefitted from relatively high oil prices, which allowed him to boost revenue from petroleum exports. And as oil sales rose, so did government expenditures, as well as imports of food and other goods. Eventually, excess spending took a toll on Venezuela’s international reserves. Rather than cut expenditures and imports, the Chávez regime piled up foreign debt. As exports (US$ per capita) rose, so too did government spending and imports. Banco Central de Venezuela, FRED (Federal Reserve Bank of St. Louis), National Statistics Institute and Econométrica. (Others) × Then, in late 2014, international oil prices began to plunge. Today, estimates indicate that Venezuela’s public sector debt tops $184.5 billion, including $60 billion in foreign debt, though the Venezuelan Central Bank claims it’s much lower. Venezuela’s foreign public debt, in US$ million, is at an all-time high. (Venezuelan Central Bank) (Others) × To service this debt, the government must pay $16 billion to $20 billion a year through at least 2022. Shouldering that huge expense has meant slashing imports, causing food and medicine shortages. As a result, almost 54 per cent of Venezuelan children are malnourished. To ensure its citizens’ basic well-being, Venezuela must be able to import, on average, $1,000 a year per inhabitant – or roughly $33 billion a year. My data show it’s currently bringing in about half that. No Chinese largess As an oil producer, Venezuela’s desperation rouses geopolitical interests. Venezuela owes $28.1 billion to China and $9.1 billion to Russia, its main creditors. In recent years, both countries have been eager to prop up the Maduro regime, with little concern for its authoritarian tendencies. China, at least publicly, has remained decidedly mum on Venezuela’s political crisis. According to a spokesperson from the Chinese Ministry of Foreign Affairs in October, Beijing “believe[s] that the government of this country is able to appropriately handle its domestic affairs within the law, maintaining stability and prosperity.” So far, though, Chinese financial institutions have not further opened their coffers. They have, however, granted Venezuela a grace period of at least 18 months to pay off the debt it owes them. This modest concession gives the government a bit of breathing room. China has also allowed Venezuela to use shipments of crude to pay off some of its debt, revealing China’s main interest in Venezuela: its oil. But, in my view, Venezuela shouldn’t count on Beijing for significant additional financial help. For China to issue new loans, insiders have told me, Maduro’s government would have to show clear signs of fiscal discipline. Nothing indicates it is capable of that. I believe a more likely next step is that Venezuela will bring in much-needed cash by selling off existing stakes in oil companies and resource-extraction ventures it co-owns with China. Putin to the rescue? Russia has been somewhat more generous with Venezuela, and its geopolitical interests here are clear. The Kremlin benefits from having a trustworthy ally on this side of the world – especially one that is avowedly anti-U.S. and ranked as the 11th-largest oil producer worldwide. Plus, Russia already has many oil interests in the country, including joint exploration projects with Petróleos de Venezuela, the state-owned oil company. Indeed, Russia and its state-funded oil venture, Rosneft, have already helped the country avoid default at least twice, providing Caracas with $10 billion in financial assistance. In an Oct. 29 New York Times article, oil expert Francisco Monaldi said Russia is “the only country that can toss Venezuela a lifeline.” In my opinion, even its public declarations defending Venezuela’s politics are more incisive than China’s. Russia’s Foreign Ministry has called international sanctions against Venezuela “unacceptable.” Still, thus far, Russia has agreed only to restructure its bilateral debt with Venezuela. While the terms weren’t disclosed, I don’t believe anything like a real bailout is on offer. Last resource This could lead Venezuela to its last resort: the International Monetary Fund. In my opinion, this global lender would be the most appropriate source of a bailout. Neither China nor Russia is willing or able to offer the huge sum Venezuela needs to stay afloat, at least $30 billion. Nor is any country likely to match the super-low 2 per cent interest rate that the IMF offers to emerging economies in crisis. Bondholders typically look askance at this type of financial assistance. Countries receiving support from the IMF and other multilateral lenders are generally “advised to renegotiate foreign debt,” which can leave investors with empty pockets. And today, Venezuela has no official relationship with the organisation. The Chávez administration loved to disparage the IMF, saying it should “close down” or “vanish.” Even so, there are signs that the IMF is sketching out a possible rescue plan for the country. Bank officials have expressed concern with both Venezuela’s humanitarian crisis and the possible spinoff effects of its economic collapse on other Latin American economies. Since the multilateral organisation is unlikely to bail out the current regime – which has previously rebuked its possible intervention – the IMF probably hopes to work with some future transition government that’s more democratic and open to international aid. If so, help may be a long time coming. This article was originally published on The Conversation. Read the original article.

Who is going to pay for Venezuela's oil debt

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