petrocaribe

Petrocaribe In Doubt

by caribbeantradelaw

petrocaribe1On June 29th 2005, fourteen of the Caribbean countries which met with the late President Hugo Chavez Frias in the beautiful northern Venezuelan port city of Puerto La Cruz signed an energy cooperation agreement which would seek to be a beacon of south-south cooperation and solidarity. Nearly eleven years after the ink has dried on the Agreement, a triad of developments has added fuel to the growing fire of concerns about the sustainability and viability of the Petrocaribe Agreement which provides beneficiary countries in the Caribbean and Central America with Venezuelan oil on very generous terms.

First, oil prices this month have continued their months-long slide, dropping to twelve year lows. In light of current geopolitical realities, a recovery in prices is unlikely any time soon. Secondly, in December last year the United Socialist Party of Venezuela (PSUV), the party of the late President Chavez and his successor President Nicolas Maduro, lost its majority in the Venezuelan National Assembly. The newly elected Opposition majority is calling for a review of Venezuela’s oil agreements. Thirdly, Venezuela’s continued economic turmoils have prompted President Nicolas Maduro to decree a 60-day economic state of emergency. This decree is currently being debated by the National Assembly, Venezuela’s unicameral legislature.

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45 Comments on “Petrocaribe In Doubt”

  1. caribbeantradelaw January 22, 2016 at 6:17 AM #

    @David, thanks. It is amazing how these preferential arrangements can be double-edged swords. They are an economic/financial lifeline but at the same time can entrench dependency.

    Like

  2. David January 22, 2016 at 6:28 AM #

    Many held the view to enter such an arrangement with Venezuela was fraught with problems. Late PM Arthur might yet proved to be a visionary although it must be stated our arrangement with T&T heavily influenced the decision.

    Like

  3. David January 22, 2016 at 6:34 AM #

    Blame Canada for Making the Oil Glut Worse

    Like

  4. caribbeantradelaw January 22, 2016 at 6:43 AM #

    @David, certainly that was the reason Barbados didn’t enter into Petrocaribe and I suspect that we may have also been a bit hesitant to associate ourselves too closely with Venezuela given the strained relationship between Caracas and Washington, which explains why we didn’t join ALBA. PC was a very generous deal though, hence its unsustainability now that Venezuela’s macroeconomic situation continues to deteriorate.

    Like

  5. David January 22, 2016 at 6:53 AM #

    @Alicia

    What it brings into play is the lack of a coherent one Caricom policy.

    Liked by 1 person

  6. Togetherness January 22, 2016 at 7:47 AM #

    The gas pipeline from Trinidad was the arrangement to move Caricom unity from dreams to reality. With ongoing connections to other islands the benefits were widespread. Cost of energy would have gone down to create increased disposable income to buy more of Trinidad’s products. Alas the insularity that is the hallmark of Caricom won the day. The gas pipeline is dead. Kamla Bisessar probably is the lead suspect. Dr. Estwick who swore it was a done deal is called on to give the eulogy. Petrocaribe died with Chavez.

    Like

  7. Vincent Haynes January 22, 2016 at 8:00 AM #

    David January 22, 2016 at 6:53 AM #

    Quite true……..Carifta was the beginning with noble and visionary ideas,sadly its child Caricom has only loads of paper to show……..we the Caribbean people have only ourselves to blame.

    Like

  8. Colonel Buggy January 22, 2016 at 12:24 PM #

    Maybe I am wrong, but about a year ago , did I hear the Leader of the Opposition of T&T,who is now the PM ,stated that Trinidad gas reserves would be exhausted in a decade?

    Like

  9. Colonel Buggy January 22, 2016 at 12:25 PM #

    http://www.guardian.co.tt/news/2014-10-12/tt-running-out-natural-gas

    Like

  10. Bush Tea January 22, 2016 at 10:24 PM #

    @ Colonel B
    Don’t pay Vincent and Togetherness much mind…
    Both Caricom and the mythical gas from Trinidad were figments of over-fertile, but sadly, deformed imaginations….
    Lotta shiite …from start to inevitable finish….

    Like

  11. Jeff Cumberbatch January 24, 2016 at 2:41 PM #

    Gepolitically, many regional states are “ketching our arses”!

    Like

  12. Hants January 24, 2016 at 2:54 PM #

    Venezuela is in trouble.

    http://www.ft.com/cms/s/0/d65d817c-c0ee-11e5-846f-79b0e3d20eaf.html#axzz3yBnfiuz6

    Like

  13. caribbeantradelaw January 24, 2016 at 3:04 PM #

    @David, thankfully Barbados isn’t on the list. One thing we in Bim could say for our governments over the years is that we have tended to be up to date with payments to international organisations of which we are a member.

    The DR’s inclusion there was a bit surprising. Venezuela’s, not so much given the economic turmoil there but it is quite unfortunate for them since they just got a spot on the Security Council. I note though that the majority of the 15 states on the list are SIDS and post-conflict/conflict zones e.g: Burundi and Libya. I guess their governments would argue it is all about priorities, even though I find that view short-sighted.

    Like

  14. Jeff Cumberbatch January 24, 2016 at 3:09 PM #

    Alicia, remember EWB’s injunction to the effect that we will not join the club if we cannot pay the membership subscription

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  15. David January 24, 2016 at 3:11 PM #

    As SIDs we claim to be able to represent on the world stage YET we have to suffer the embarrassment of not being financial. What are the amounts again?

    Like

  16. David January 24, 2016 at 3:12 PM #

    @Jeff

    Our comments crossed, had to suppress the urge to type great minds think alike.

    Like

  17. Hants January 24, 2016 at 3:21 PM #

    and fools seldom differ…… couldn’t resist Jeff….lol I know you and David can teka joke

    Like

  18. caribbeantradelaw January 24, 2016 at 3:22 PM #

    @Mr. Cumberbatch, indeed!

    @David, as far as I recall UN Member countries’ contributions are based on their assessed capacity to pay. It is assessed on a yearly basis. One thing I forgot to mention though, let’s not forget the US and several other states still owe the UN money in peacekeeping dues.

    Like

  19. Hants January 24, 2016 at 3:25 PM #

    @ Jeff,

    To be pellucid your “great minds” triggered a school days moment….like your “too besides” (english) and tobesides (Bajan).

    Like

  20. caribbeantradelaw January 24, 2016 at 3:26 PM #

    @Hants, they’ve been in trouble for a while. Economic/financial mismanagement exacerbated by the drop in oil prices. I saw that the IMF predicts their inflation rate to rise to something like 720% this year.

    Like

  21. Vincent Haynes January 24, 2016 at 4:41 PM #

    Together we rise and individualy we fall/fail.

    A federated Caribbean state would have one vote at the UN,one fee,one mansion,vehicle,maid&butler,etc,etc

    Is it worth the cost being able to sell your vote(s) by all accounts not…..our little kingdoms will not see out this century,we have to unite.

    Like

  22. David January 24, 2016 at 6:02 PM #

    @Vincent

    It is all about being a big fish in a small pond. It is interesting to note with the oil glut and a barrel of oil costing less than a bucket of KFC we have not seen an significant reduction in debt to GDP in our islands.

    Like

  23. caribbeantradelaw January 24, 2016 at 6:10 PM #

    @Vincent Haynes, as a fellow integrationist I support your view re pooling diplomatic resources. The OECS actually has a single diplomatic mission in Geneva, while other CARICOM countries like Barbados have their own missions. It saves the OECS money and helps pool technical skills/knowledge.

    In terms of a single CARICOM vote, don’t underestimate the power of leveraging 14 votes. Our 14 votes in CARICOM count. Even the EU which has UN observer status, does not have a collective vote. Its 28 members each has one vote.

    Re “selling votes”, all States (even the mighty US) use their votes in order to get desired political outcomes. We in CARICOM use our votes not just for development assistance, but also to get reciprocal support on issues important to us. Such is the art of diplomacy.

    Like

  24. caribbeantradelaw January 24, 2016 at 6:19 PM #

    @David, the difference would be more seen in the current account of the balance of payments since fuel imports comprise the bulk of our imports.

    Like

  25. caribbeantradelaw January 24, 2016 at 7:02 PM #

    In Jamaica lower oil price brings first current account surplus in a decade http://www.jamaicaobserver.com/business/Lower-oil-price-brings-first-current-account-surplus-in-a-decade_19218754

    Like

  26. David January 24, 2016 at 7:07 PM #

    Thanks Alicia, what is the health of our current account?

    Like

  27. Vincent Haynes January 24, 2016 at 7:17 PM #

    caribbeantradelaw January 24, 2016 at 6:10 PM #

    No disagreement with anything you have said……..why are our votes not reaping maximum rewards i.e. not being in the financial straits that we are in?

    Like

  28. caribbeantradelaw January 24, 2016 at 7:29 PM #

    @David, according to the CBB’s latest review, our current account deficit narrowed between 2014 to 2015 (from 776.5m to 461.7m, according to provisional data). Merchandise imports, which would include fuel imports, were lower in 2015 than 2014 which account mostly for the narrower CA deficit.

    Like

  29. caribbeantradelaw January 24, 2016 at 7:46 PM #

    @Vincent Haynes, to be honest our financial problems are more to do with external shocks and frankly questionable macroeconomic policies than with our diplomacy. Giving away millions of dollars in concessions and then dampening domestic consumption by taxing the life out of the middle class…I’m not an economist, but that doesn’t sound like a growth strategy to me…

    Like

  30. Vincent Haynes January 24, 2016 at 8:12 PM #

    caribbeantradelaw January 24, 2016 at 7:46 PM #

    Thank you….again I agree with your thinking…I have a difficulty with the science of economics and can see no difference between that and alchemy.

    Liked by 1 person

  31. Real Talk January 24, 2016 at 8:42 PM #

    @David January 24, 2016 at 2:36 PM #

    [A reality check.
    St.Vincent and the Grenadines, Venezuela among 15 countries stripped of voting rights at UN due… ]

    Ralph Gonzalves the PM of St. Vincent appeared on CBC last week to brag of the vast geothermal energy resources in his country . The fat man told his audience at UWI that Barbados will buy energy from St. Vincent so too Emera the operators of BL&P. No statement was issued by GOB to support Ralph Gonzalves claim.

    The news that St. Vincent cannot pay a small fee at UN to retain important voting rights contradicts the boast of the comrade. The name and shame by the UN of St. Vincent brings into question if SVG is broke or bankrupt.

    BU or the Bushman give us a true picture of St. Vincent’s plight.

    Like

  32. David January 26, 2016 at 1:55 AM #

    Gonsalves said that while falling oil prices are good for the Vincentian economy, “at the same time, if the piece is higher, the proportion [of the monies from oil imported under PetroCaribe] which will come to the government on the funding aspect over the 20 to 25-year period would have been higher is the prices were higher, clearly."

    2016 Estimates to reflect falling PetroCaribe earnings, says PM Gonsalves

    Like

  33. caribbeantradelaw January 26, 2016 at 5:37 AM #

    Thanks David!

    Like

  34. balance January 26, 2016 at 5:52 AM #

    “@David January 24, 2016 at 2:36 PM #

    [A reality check.
    St.Vincent and the Grenadines, Venezuela among 15 countries stripped of voting rights at UN due… ”
    It might be a good thing because it is waste of money by these largely ignored so called small states including Barbados in these forums anyhow. Who knows Barbados might be paying her contributions at the expense of free tertiary education or the iniquitous taxes imposed on the backs of the vulnerable.

    Like

  35. David January 26, 2016 at 6:28 AM #

    @balace

    You obviously have not read the comments above, being a member creates the opportunity to ‘deal’ with the big guns come voting time.

    Like

  36. Real Talk January 26, 2016 at 7:51 AM #

    balance January 26, 2016 at 5:52 AM #

    [It might be a good thing because it is waste of money by these largely ignored so called small states including Barbados in these forums anyhow. Who knows Barbados might be paying her contributions at the expense of free tertiary education or the iniquitous taxes imposed on the backs of the vulnerable.]

    The hypocrisy of yard fowls knows no bounds. If Bdos defaulted on UN fee payment as St. Vincent did the condemnation of the government would deafen. The likely scene -Calls for government to leave office. The woman of scarves marches a crowd to Bay Street to demand resignation of the Prime Minister. Newspaper and BU headlines crying shame on Froon and on and on.

    Like

  37. Bush Tea January 26, 2016 at 8:00 AM #

    @ Real Talk
    LOL … But to be honest, it does not take any default at the UN to justify calls for the government to leave office. The woman of scarves …… etc

    Shiite man…. CLICO alone justifies that…
    as does CAHILL
    ..and this other shady Canadian Solar Deal
    ..and the Bizzy shiite tax fiasco…
    ..and the Stolen $5M from CLICO in the Central bank…
    ..and the Water mess in the North…
    ..etc etc
    Even honest DEMS must now be crying shame on Froon and Stinkliar….

    Like

  38. David January 26, 2016 at 9:37 AM #

    Real Talk aka waiting: DLP yardfowl

    Like

  39. Vincent Haynes January 26, 2016 at 10:49 AM #

    David

    Any idea when the next sitting of parliament is or have we put it oneside for our 50th?

    Like

  40. David January 26, 2016 at 11:16 AM #

    @Vincent

    Does anyone care? It should be in the Parliament website some where.

    Like

  41. Vincent Haynes January 26, 2016 at 12:16 PM #

    David January 26, 2016 at 11:16 AM #

    You have made an excellent point the populli could not care less about that or our recolonisation as being discussed now on brasstack by a caller,sighting that the advent of tourism is responsible,to which I would subscribe to.

    Like

  42. Vincent Haynes January 26, 2016 at 12:34 PM #

    Parliament is sitting……Agard has requested leave due to illness……Domestic violence bill now being debated.

    Like

  43. greenmonkey March 15, 2016 at 9:56 PM #

    The collapse/ death of the petrodollar system is nearer than you think, Venezuela is one of the first casualties. Barbados needs to cash out before it falls.

    Like

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