Pakistan secured a massive $27.2 billion in foreign financing during FY2025-26, keeping its fragile economy afloat for another year. The total includes $16 billion in fresh loans, $2.2 billion from the IMF, and crucial debt rollovers, $5 billion from Saudi Arabia and $4 billion from China. Nearly 88% of this money went straight into budget support, debt repayments, and building foreign exchange reserves, with only $3.4 billion actually funding development projects. 


How Saudi and Chinese cash kept Pakistan's economy afloat this year

Sri Lanka's Supreme Court has allowed proceedings of a case filed by a rights group against the Rajapaksa clan, alleging that the members of the powerful family were directly responsible for the country's foreign debt and the worst economic crisis.

Sri Lanka top court permits proceedings against Rajapaksas

Sri Lanka has decided to temporarily suspend foreign debt payments. Will this decision lead to default? Molly Gambhir brings you a report

Gravitas: Has Sri Lanka defaulted on its entire $51 billion debt?

Pakistan Prime Minister Imran Khan said that the rising foreign debts coupled with low tax recovery had become a "national security" issue because the government did not have enough money to run the nation.

Pakistan PM Imran Khan says rising foreign debt a 'national security' issue

Argentina is entering a crucial period this month for a precarious debt-restructuring process that will determine whether or not the country falls into default for a third time in just two decades.

After months of negotiations, the South American country made a proposal in April to restructure $65 billion of its foreign debt. This offer expires on May 8, while a grace period for paying interest on three dollar bonds ends on May 22.

Argentina's leaders are racing to win over wary creditors, who have already rejected the initial offer, with bankers and investors increasingly concerned that no deal will be reached - at least not in time.

"The two sides are so far further apart than we imagined at this stage, leading to bonds underperforming our earlier expectations," Morgan Stanley said in a note in late April, adding an agreement was still possible later in the year.

"We still believe that a deal will be found but the timing is now much more uncertain."

The investment bank said it calculated the current offer's net present value (NPV) - a key metric for creditors - at around 33 cents on the dollar, which it said would need to be improved to around 40-45 cents with likely higher coupon payments.

Argentine officials, meanwhile, have indicated the offer on the table is a take-it-or-leave-it deal. It involves a three-year payment halt, maturities pushed back until the next decade and a 62% reduction in coupon payments.

The major grains producer also owes a large amount to the International Monetary Fund (IMF), which has supported the country's debt negotiations, and is trying to delay a $2.1 billion payment to the Paris Club due on May 5.

"My instinct is that they do want to get a deal, but even though they have the support of the IMF and others, there is a sense that it is not going to happen," said Jay Auslander, a partner at Wilk Auslander who worked previously with creditors in a case against Argentina.

&nbsp;&nbsp;&nbsp; "I think the likelihood is they are going to default and it will be their ninth default, so it is nothing new to them."

Argentina suffered a major default in late 2001, which led to over a decade of litigation with creditors, and a smaller partial default in 2014. By some counts, it has previously defaulted eight times, a number the government disputes.

A default would hurt, even as Argentina grapples with recession, inflation and a major hit from the coronavirus outbreak that will likely cause a large economic contraction this year.

&nbsp;&nbsp;&nbsp;&nbsp;"There is already enough turbulence in the context of the pandemic, with exchange rate pressures, and that will be sharpened further with a default scenario," said Fernando Baer from consultancy Quantum Finanzas.

&nbsp;&nbsp;&nbsp;&nbsp;"Everything would get even worse," he added.

A parallel, if smaller, debt drama is playing out in Argentina's largest province, Buenos Aires, which is looking to restructure over $7 billion in foreign debt. Its proposal to bondholders has also been knocked back by creditors.

&nbsp;

Debt deadlines

&nbsp;&nbsp;&nbsp;&nbsp;May 5: Argentina faces a $2.1 billion payment to the Paris Club group of lenders. The government has asked the group to postpone the payment for a year.

&nbsp; &nbsp; &nbsp;May 8: The current national debt restructuring proposal expires for creditors to accept or reject the offer. The government may choose to extend the deadline.

&nbsp;&nbsp;&nbsp;&nbsp;May 11: A grace period ends for a debt payment by Buenos Aires, which could see the province enter default if payment is not made or no restructuring deal is reached.

&nbsp;&nbsp;&nbsp;&nbsp;May 22: The 30-day grace period ends for a $500 million group of interest payments on three foreign law sovereign bonds. If no deal is reached and payment is not made, this could see Argentina default.

Argentina is entering a crucial period this month for a precarious debt-restructuring process that will determine whether or not the country falls into default for a third time in just two decades.

Argentina is entering a crucial period this month for a precarious debt-restructuring process that will determine whether or not the country falls into default for a third time in just two decades. After months of negotiations, the South American country made a proposal in April to restructure $65 billion of its foreign debt. This offer expires on May 8, while a grace period for paying interest on three dollar bonds ends on May 22. Argentina's leaders are racing to win over wary creditors, who have already rejected the initial offer, with bankers and investors increasingly concerned that no deal will be reached - at least not in time. "The two sides are so far further apart than we imagined at this stage, leading to bonds underperforming our earlier expectations," Morgan Stanley said in a note in late April, adding an agreement was still possible later in the year. "We still believe that a deal will be found but the timing is now much more uncertain." The investment bank said it calculated the current offer's net present value (NPV) - a key metric for creditors - at around 33 cents on the dollar, which it said would need to be improved to around 40-45 cents with likely higher coupon payments. Argentine officials, meanwhile, have indicated the offer on the table is a take-it-or-leave-it deal. It involves a three-year payment halt, maturities pushed back until the next decade and a 62% reduction in coupon payments. The major grains producer also owes a large amount to the International Monetary Fund (IMF), which has supported the country's debt negotiations, and is trying to delay a $2.1 billion payment to the Paris Club due on May 5. "My instinct is that they do want to get a deal, but even though they have the support of the IMF and others, there is a sense that it is not going to happen," said Jay Auslander, a partner at Wilk Auslander who worked previously with creditors in a case against Argentina. "I think the likelihood is they are going to default and it will be their ninth default, so it is nothing new to them." Argentina suffered a major default in late 2001, which led to over a decade of litigation with creditors, and a smaller partial default in 2014. By some counts, it has previously defaulted eight times, a number the government disputes. A default would hurt, even as Argentina grapples with recession, inflation and a major hit from the coronavirus outbreak that will likely cause a large economic contraction this year. "There is already enough turbulence in the context of the pandemic, with exchange rate pressures, and that will be sharpened further with a default scenario," said Fernando Baer from consultancy Quantum Finanzas. "Everything would get even worse," he added. A parallel, if smaller, debt drama is playing out in Argentina's largest province, Buenos Aires, which is looking to restructure over $7 billion in foreign debt. Its proposal to bondholders has also been knocked back by creditors. Debt deadlines May 5: Argentina faces a $2.1 billion payment to the Paris Club group of lenders. The government has asked the group to postpone the payment for a year. May 8: The current national debt restructuring proposal expires for creditors to accept or reject the offer. The government may choose to extend the deadline. May 11: A grace period ends for a debt payment by Buenos Aires, which could see the province enter default if payment is not made or no restructuring deal is reached. May 22: The 30-day grace period ends for a $500 million group of interest payments on three foreign law sovereign bonds. If no deal is reached and payment is not made, this could see Argentina default.

Deal or no deal? Argentina faces make-or-break May to avoid default

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.

<div class="ui-state-default" contenteditable="false"><img alt="" draggable="false" src="http://s.wionews.com/photos/file-20171114-26426-4er2ac-20171115063417.png" />
<div class="media-description">
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.

<div class="ui-state-default" contenteditable="false"><img alt="" draggable="false" src="http://s.wionews.com/photos/file-20171114-26429-10u0f9q-20171115062643.png" />
<div class="media-description">
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.

<div class="ui-state-default" contenteditable="false"><img alt="" draggable="false" src="http://s.wionews.com/photos/file-20171114-26465-1ga8tcj-20171115062229.png" />
<div class="media-description">
Venezuela&rsquo;s foreign public debt, in US$ million, is at an all-time high. (Venezuelan Central Bank) (Others)
</div>
<a class="close-mark close-div" href="javascript:void(0)" id="jqclosemark">&times;</a></div>

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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