Paraguay's economy is at risk from Venezuela's demands
Healy Consultants Group PLC
24 June, 2016
We all hear about the Venezuelas economic crisis. The cash-strapped country is struggling with food shortages and civil unrest. Also, the oil rich OPEC country of around 30 million individuals is reeling from sustenance deficiencies, elevated inflation, long lines for essential commodities, and a number of other large socio-economic issues.
Paraguay's state-run oil firm, Petropar, announced earlier this month that Venezuelan state oil maker PDVSA has set a 10-day due date for the Paraguayan organization to pay off $287 million of long-standing obligation, which is probably part of Venezuelas strategy to overcome the crisis.
Petropars president, Eddie Jara, held a press conference this week and informed state media that he got a letter from PDVSA requesting the whole obligation installment to be paid as soon as practical "in indiscreet and disagreeable terms."
He added that Paraguay was willing to pay the obligation in the long run, but its current financial plan does not permit it to settle the obligation in ten days.
This raises red flag to foreign investors looking to expand their energy business in Paraguay, knowing that the sector may be at financial risk.
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