Venezuela's secret debt: Maduro left the country with record liabilities

Venezuela is facing a staggering hidden debt of $240 billion, a figure that dwarfs its entire economy and is nearly 2.5 times its total worth. The nation is now preparing for what is anticipated to be the largest debt restructuring in global history, with the ultimate goal of re-entering international capital markets.

Vice President Delcy Rodriguez, who has been leading the country since Nicolas Maduro's capture by U.S. special forces in January, is spearheading this massive debt restructuring effort. This initiative follows an audit of public finances. During Maduro's 13-year tenure, Venezuela's economy has contracted by almost four times, and its debt has ballooned to more than 2.5 times its economic value.

The Maduro regime ceased publishing economic statistics in 2015. In the latter half of the last decade, the policies of Maduro and his predecessor, Hugo Chávez, combined with a sharp decline in oil prices, plunged the country into an economic catastrophe. By 2018, inflation reportedly reached nearly 1.7 million percent, according to estimates from the opposition-controlled parliament at the time.

Amidst improving relations with the U.S. following Maduro's capture, Rodriguez has opted for debt restructuring. To this end, Caracas has engaged the American investment bank Centerview Partners. Sources familiar with the government's plans indicate that creditors will be presented with a comprehensive overview of the state's financial situation in the coming weeks. Centerview estimates Venezuela's public debt at $240 billion, significantly higher than previous market estimates of $150-200 billion. The country's economy is valued at approximately $100 billion, a stark contrast to $370 billion in 2012, the final year of Chávez's presidency. This brings Venezuela's public debt-to-GDP ratio to 240%, a figure unmatched by any other country globally, surpassing even Japan's projected 206.5% in 2025.