Venezuela calls in oil debt it once traded away for literal beans

financialpost.com:

At the height of Venezuela’s oil go-go days, tankers fanned out across the Caribbean, handing out 200,000 barrels a day to a constellation of small, mostly poor, islands. The fact that those countries racked up huge debts and paid part of the bill with things like black beans and peanuts mattered little to Hugo Chavez as he parlayed the bonanza into global fame as the leader of what he called 21st century socialism.

Two decades later, impoverished and desperate for cash, Venezuela is trying to collect old debts from the Petrocaribe program. Last month, it received a US$500-million payment from Haiti — the poorest country in the hemisphere — to cancel what had been a US$2.3-billion debt, according to documents seen by Bloomberg and people familiar with the matter. It’s working on similar transactions with other nations, the people said.

The deal with Haiti came together after the United States Treasury granted the country a licence to transfer the money from an escrow account through the international banking system. For Haiti, a chronically crisis-torn country, clearing the debt helps it move forward with the International Monetary Fund on a potential loan package.

Representatives for Venezuela, Haiti and various agencies involved in the deal didn’t respond to messages seeking comment. A spokesperson for the U.S. Treasury said the Office of Foreign Assets Control doesn’t comment on individual licenses.

For Venezuela and its current leader, Nicolas Maduro — who took over after Chavez died in 2013 — the agreement marks another step in its effort to regain international recognition after years of economic collapse and international isolation. The government and its state-owned oil company have themselves been in default for