Hello, and welcome back to the Latin America Weekly newsletter. In this issue: Ecuador’s president visits China in hope of debt relief. Argentina has its own debt woes, as a deal with the IMF is ripping the government apart. Hunger a huge issue in Haiti, Colombia, and Honduras.
Lasso’s tough mission in China
Ecuador’s President Guillermo Lasso headed to China this week aiming to renegotiate the terms of his country’s debt with the Asian giant, which amounts to over USD 5.1 billion. Beyond lowering amounts due and rescheduling maturities, what Mr. Lasso really wants to do is decouple almost half the debt from crude oil sales, which over the past decade has given China a de facto monopoly over Ecuador’s oil exports.
Why it matters. Since 2008, Ecuador has signed 16 oil-backed loans with China, which pays for the crude in advance. As is, the Andean country has over 160 million barrels pledged to Chinese companies until 2024.
- This oil can then be traded anywhere in the world, with most being shipped to the U.S. Meanwhile, Ecuador is left with scraps to sell on the spot market.
- If crude prices go up, Ecuador will be losing money due to...