Chapter 4
Risk versus Reward
China Development Bank in Venezuela
The more important metric is the debt service capability, not necessarily the absolute amount of debt or debt-to-GDP. . . . Oil is very simple to drill. You drill a hole, put in a pipe and it comes out! And then you ship it. So Venezuela’s debt service ability is very strong.
—China Development Bank Advisor Liu Kegu, Interview, March 20121
The revision of the Outlook to Negative reflects Venezuela’s weakening policy framework, which has resulted in increased vulnerability to commodity price shocks and deterioration in fiscal and external credit metrics as well as rising political uncertainty related to the 2012 political cycle.
—Erich Arispe, Fitch Ratings report, April 2012
Einstein ...
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