Venezuelan President Nicolas Maduro instructed the attorney general and public prosecutor to take “actions” against Harvard Professor Ricardo Hausmann, saying the economist sought to destabilize the country by suggesting the government default on its debt.
Maduro lashed out at Hausmann during a televised address last night, calling him a “financial hitman” and “outlaw” who forms part of a campaign “that has been initiated around the world against Venezuela.” He didn’t specify what actions he had asked the attorney general and prosecutor to take.
Venezuelan bonds tumbled earlier this week after Hausmann co-wrote an opinion piece on Sept. 5 with a Harvard colleague arguing the country should consider defaulting because it had already racked up billions of dollars of arrears with importers that were causing widespread shortages in the economy and imposing hardship on Venezuelans.
“Normally governments declare that they have an inability to pay way before this point,” Hausmann, a Venezuelan native who served as planning minister in the 1990s under the government that Maduro’s mentor and predecessor, the late Hugo Chavez, tried to topple in a coup attempt, said in a phone interview from Boston after the opinion piece came out.
The country’s benchmark bonds due 2027 sank 3.6 cents to 70.08 on the dollar on Sept. 8, driving their yield up to a six-month high of 14.4 percent, as Hausmann’s comments added to investor concern about a nation that saw its foreign reserves sink to an 11-year low last month.
Venezuela’s debt has rebounded the past three sessions, with the benchmark securities closing yesterday above 74 cents, as Maduro sought to reassure creditors. On Sept. 10, he told a television audience that the government would meet its “international obligations completely, down to the last dollar.”