Paying Off Debts in South America

A tombstone, the inscription carved in Portuguese.

I set a single white chrysanthemum on the stone.

"You damn bastard."

The moment I read the name cut into the granite, a dry, empty laugh slipped out of me. In a way, he was the one who had dragged my life all the way to this point.

No matter how many times I turned it over, that had never been a free drink. We got close because of those nights, and I ended up falling for his pitch and boarding a plane to San Marcos.

And then, on top of everything else —

"What kind of man shoves someone this far out and then leaves first?"

He had dumped every last bit of this on me and died.

I crouched down and ran my hand across the gravestone. The cold of the stone seeped into my fingertips.

"So. Is it comfortable there?"

There was, of course, no answer.

"Thanks to you dying first, I became president."

If he were still alive, he would have clutched his stomach and ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠cackled. I knew you'd pull it off! he would have crowed, loud enough for the whole cemetery to hear.

"I wanted to retire before I turned forty. Thanks to you, it looks like I'm working another seven years. What are you going to do about that?"

I took out a cigar, lit it, and set it on the stone.

"This is a San Marcos cigar. They say the quality's pretty good. An American tobacco company even reached out about distribution. Should be a real help to farm incomes going forward. Oh, and the highway's almost in its final stretch. The oil refinery is running beautifully, too. Just..."

I let the silence sit for a moment.

"Everything's running well. So don't worry."

The quiet that came back instead of an answer made ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠me smile, bitter and thin, as I got to my feet.

"So watch in peace. I'll work hard."

A gust of wind came through and scattered the cigar smoke. That was enough of a farewell to the past.

"Shall we go, Chief?"

"Yes."

I straightened my clothes and walked down from the National Cemetery.

The first cabinet meeting of my presidency. Wearing the title officially now, I could feel it in the air — something had shifted.

"Everyone, please take your seats."

At a single word from me, the senior secretaries sat down in perfect unison. Tension and excitement sat together on every face.

"First of all, you all worked hard through the campaign. I was elected as smoothly as I was because of you."

"Not at all, Your Excellency! It was the wise choice of the people!"

"It is the fruit of Your Excellency's achievements!"

"We did nothing! It was accomplished by Your Excellency alone!"

A chorus of hymns poured in from every direction. I raised a hand and cut them off.

"That's enough gold leaf on my face. Let's get to work. The election is over — now comes the real job."

I tossed a prepared sheet of paper onto the table.

"This is the first item of national business I am setting since taking office."

Every pair of eyes locked onto the document. A single sentence was written there.

Silence settled over the room. The first to react, as expected, was Finance Secretary Ricardo.

"Your Excellency, debt? San Marcos currently has no outstanding debt..."

"No. There is. A very old one. One we've been looking away from."

That was all it took. Ricardo's face changed as the realization landed.

"Would this be... the loan we received from the former Soviet Union?"

"That's right. As you all know, in the late 1980s we borrowed three hundred million dollars from the Soviet Union under the banner of economic development. After the USSR collapsed, Russia demanded repayment. We answered with silence."

The loan itself, if you thought about it, was a joke. Where was San Marcos? Two hundred kilometers off the Florida coast — a three-hour boat ride from the United States. Would the Soviet Union, locked in a Cold War with America, have extended a loan to a country sitting on America's doorstep out of the goodness of its heart?

Not a chance.

I would have to raise former President Juan from the dead to get the full story, but my guess was obvious enough. The Soviets had used the loan as a leash, trying to get their hands around the throat of a country parked on America's nose. They might even have entertained some deranged fantasy about parking nuclear missiles here. Former President Juan, for his part, had probably decided that hitching himself to Moscow paid better than hitching himself to Washington.

And then — what do you know? From the late eighties the Soviet Union started to list. By '91 there was a coup.

That was when Juan would have thought it:

If I play this right, I can just skip out on the whole thing.

And in December of 1991, the Soviet Union actually dissolved. President Juan told them they could go ahead and try to collect, and walked away.

What former President Juan had failed to consider, however, was this.

"That is why San Marcos was branded a deadbeat in the international financial markets. Issuing sovereign bonds became a pipe dream."

We had eaten three hundred million dollars and wiped our mouths. Who in their right mind would lend to a country like that? And if such a country issued bonds, who would buy them? The sovereign credit rating had been stamped at C — effectively junk, on par with Venezuela, whose economy had recently imploded and whose president had been arrested.

If we don't fix this, there is no future.

Korea and the United States were extending loans and aid, yes — but that was a product of a special relationship. To walk into the international bond market, we had to restore our credit by any means necessary. Until now there had been no budgetary room, and more to the point, I had been an acting president, in no position to clean up the previous regime's sins. That was no longer the case.

Better to scrape this off now, a hundred times over.

Ricardo's face tightened.

"B-but Your Excellency. That was more than forty years ago. Russia isn't even pressing for repayment. Do we really need to go picking at old scabs..."

"They haven't forgotten. They've just been sitting on it because they couldn't see a way to collect. But now?"

I didn't leave any room in my voice.

"We have the means to pay. Russia knows it, too. The only reason they're quiet is the war. The moment that war is over, they will come for the money. That much is certain."

"Continuing to ignore it, as we have until now, is also an option."

"No. It isn't."

I shook my head.

"We need to come into the light now. We cannot do that with a deadbeat brand still stamped ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠on our forehead. This has to be resolved before any greater leap is possible."

The table held its silence. Then Isabella opened her mouth, her voice as cold and even as ever.

"Your Excellency, before we proceed, I would like to raise a practical matter."

"By all means."

"When the loan was issued in 1989, the interest on the principal of three hundred million dollars was four percent."

"Remarkably cheap, given the era."

"That is correct. However, the terms change in the event of default. The agreement stipulated payment at eight percent — double the annual rate. Calculated in reverse, with interest compounding upon interest, the sum owed approaches approximately nine billion dollars."

The room erupted.

"N-nine billion dollars?!"

"Where would we even find that kind of money..."

"Your Excellency, please reconsider. Nine billion dollars — even if we emptied every available budget, it would be impossible!"

The senior secretaries practically foamed at the mouth in opposition. I couldn't blame them. For all that San Marcos's economy had shot straight up, nine billion dollars was a fifth of GDP — an astronomical figure. Spending that kind of money to settle a fossilized debt was, on its face, insane.

Except.

"Who said we were paying all of it?"

I had never had the slightest intention of paying the whole sum.

"I beg your pardon?"

"Nine billion is a number on a ledger. Figures change depending on how you run the calculation, don't they?"

"You mean..."

"Right now Russia is occupied with the war in Ukraine. Global sanctions have them in terrible shape."

No one spoke.

"Butin must be sweating blood. When the war ends he is going to be handed a bill that will bury him. In that situation, if a forgotten debtor from the other side of the planet shows up offering to pay — what do you think happens?"

"Ah... we could settle it for cheap."

Isabella's eyes lit with genuine admiration.

"Exactly. If we keep pretending we don't know it exists, that nine-billion-dollar claim is toilet paper. But if we walk in holding cash, the story changes."

I let that hang.

"When they are at their most desperate. When they need it most. This is a chance to wipe a nine-billion-dollar debt off the books for pocket change."

The air in the room shifted.

"Chief Isabella."

"Yes, Your Excellency."

"Find a way to contact the Russian government. Senior Secretary Sophia, inform the United States of our intention to repay the Russian loan, and find a method of repayment that stays inside the sanctions. The rest of you, support them."

I stood.

"My first directive as president is to restore San Marcos's credit. Keep that in mind, and move."

We had no overseas hotline of our own, so we decided to run the negotiation with Russia through Korea. The man who came to help was —

"It's been a while, Mr. President."

Moon Sung-moon, of the National Intelligence Service.

"It really has. Almost two years?"

"The last time I saw you was at the founding of Tortilla Energy, so yes — about that long."

"Wow. Has it already been that long?"

I held out my hand. He took it in both of his.

"Congratulations on your landslide victory."

"Thank you."

I offered him a seat and went straight to the point.

"Sorry to jump to business after you came all this way. What's the Russian response?"

"On orders from the Blue House, we activated the Moscow line. As expected, their reaction was extremely enthusiastic."

"Of course. The war must be draining them dry."

"Correct. An official they call Butin's purse-keeper has taken personal charge. I am told he is preparing to enter San Marcos in complete secrecy."

"And what conditions do they want?"

Moon Sung-moon hesitated, then spoke with care.

"The official position is to collect the full nine billion dollars as a matter of principle. Not a single penny off, they say."

"That's a bargaining line. They'll have a real number they actually want."

He didn't answer with words. He held up three fingers.

"A minimum of thirty percent. That is ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠the figure the purse-keeper himself named."

"Two-point-seven billion. That's quite a gap between us."

Cheap next to nine billion, certainly. By my standard, it was still absurd.

"From Russia's point of view, cutting a nine-billion-dollar claim to less than a third looks like a rather generous offer. Or so they seem to think."

"Generous? It's a claim that's already toilet paper."

"I take it you have no intention of giving them what they're asking."

"We're not the ones who need this."

"And if the negotiations fall through?"

"Then..."

I set my teacup down without hurry.

"I-I see."

There is a saying. Borrow a little, and you are the weaker party. Borrow a lot, and you become the one in charge.

I intended to be the one in charge with Russia.