Opposition attacks bank for backing Nicolás Maduro’s ‘dictatorial regime’ as it makes ‘a quick buck off the suffering of the Venezuelan people’

This article is more than 3 years old

This article is more than 3 years old

Goldman Sachs has confirmed it has bought $2.8bn worth of bonds from Venezuela’s crisis-torn government in a move opposition leaders have decried for propping up the country’s “dictatorial regime”.

The Wall Street Journal first reported on Sunday that the bank had bought $2.8bn worth of bonds held by the country’s central bank.

“Goldman Sachs’s financial lifeline to the regime will serve to strengthen the brutal repression unleashed against the hundreds of thousands of Venezuelans peacefully protesting for political change in the country,” Julio Borges, head of Venezuela’s opposition-controlled congress, said in a public letter to the bank’s chief executive, Lloyd Blankfein.

“It is apparent Goldman Sachs decided to make a quick buck off the suffering of the Venezuelan people,” he wrote. “I also intend to recommend to any future democratic government of Venezuela not to recognize or pay on these bonds.”



According to the Journal, Goldman paid just $865m for bonds valued at $2.8bn issued by the state oil company Petróleos de Venezuela (PDVSA) – paying about 31 cents on the dollar for the bonds. Borges said the “fire sale nature” of the deal showed the embattled president, Nicolás Maduro, did not have the country’s best interests in mind when he agreed to the transaction.



Why is there unrest in Venezuela? • At the heart of the crisis is a cratering economy and acute shortages of medicine and food, coupled with rising anger at a soaring crime rate and an increasingly authoritarian government

• The president, Nicolás Maduro, won a general election in 2013 on a platform of continuing his predecessor Hugo Chávez's socialist policies of using the country's oil riches to reduce inequality and lift people out of poverty, but falling oil prices have forced the government to curtail social programmes • Opposition activists have been staging unrelenting protests against the government. On 26 June a wave of lawlessness that began in the city of Maracay marked the first time that street clashes have spread into more generalised anarchy

Late on Monday, the bank confirmed the deal – if not the details.



“We bought these bonds, which were issued in 2014, on the secondary market from a broker and did not interact with the Venezuelan government,” Goldman wrote in a statement.

“We recognize that the situation is complex and evolving and that Venezuela is in crisis. We agree that life there has to get better, and we made the investment in part because we believe it will.”

Venezuela on the brink: a journey through a country in crisis Read more

Venezuela is in the midst of the worst financial crisis in its history and has been rocked by months of violent demonstrations that have led to at least 55 deaths.

Inflation has soared past 400%, there are widespread shortages of essential supplies including food and medicines, a quarter of the country is unemployed and infant death rates, malaria cases and maternal mortality have all soared in the face of a mounting public health crisis.



Last week, Maduro unveiled plans to redraft the country’s constitution and delay elections until the end of the year, plans that met with a furious response from his political opposition and led to more violent clashes on the streets of Caracas.