According to the Financial Times, it will be the world’s largest debt restructuring.[a]

Venezuela's economy has been a disaster for many years.[b] Surely I'm not the only one wondering:

Where did all that borrowed money go? If any of it had been spent to buy goods and services inside Venezuela, it would have led to at least some business formation and activity. Instead, there's only been business destruction and constant crisis. It's kind of incredible that the country has nothing to show for all the money it borrowed.

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[a] https://www.ft.com/content/b7f25ca2-827c-40f9-ab1a-57067d8ec... (paywalled)

[b] https://en.wikipedia.org/wiki/Crisis_in_Venezuela

“Investors have previously estimated that Venezuela also owes $30bn-$50bn to oil companies and trade creditors for unpaid invoices and more than $20bn in legal claims awarded to companies after Chávez’s regime expropriated their property.

Venezuela has also been estimated to owe $10bn-$20bn to China in debts that Caracas previously paid from oil exports but is believed to have stopped servicing, about $6bn to Russia, and $4bn to development banks” (FT).

Venezuela had one of the largest government sectors compared to their GDP. Their solution to every economic problem was create lots of government busywork jobs funded by oil exports and loans.

Their crude is really only valuable to a handful of countries, the US being the main one. They could really not afford to have worsening relations with the US right as the fracking boom took off.

As their domestic industry shrank, they had to import more and more resources from other countries.

Into the pockets of the leaders. The people will pay for it through a cut of oil profits for the foreseeable future.

It’s not only the money borrowed, it was also the biggest oil windfall it ever had during the Chavez early years.

Where did it go? They stole it.

Corruption.

In a dictatorship, the money goes to the dictator and his friends.

It’ll be hard to know where it goes, but there’s a reason why people like Putin are billionaires. They siphon off funds from the state to themselves. And no one is in a position to stop them or even look into what’s going on.

Venezuela was allegedly planning to invade a resource rich neighbor before the Trump administration’s actions, as part of a long standing territorial dispute, and I think that was partly so Maduro could keep the support of the population but also partly to deal with the financial problems. So their leaders definitely knew these issues were building up.