(Jamaica Observer) Montego Bay, St James — JAMAICA and the Caribbean need to prepare stress tests that include the halt of the PetroCaribe oil arrangement with Venezuela, said the International Monetary Fund (IMF).
Experts think that the dip in the price of oil from US$100 to its current US$82.70 a barrel can remain for 2015. That could result in the oil exports from Venezuela declining by US$15 to US$20 billion annually, reasoned Alejandro Werner, director, Western Hemisphere department, International Monetary Fund (IMF), at the 2014 High Level Caribbean Forum under the theme “Unlocking Economic Growth,” in Montego Bay on Thursday.
“That might trigger obviously either an important policy adjustment in Venezuela that might imply some adjustment with PetroCaribe,” he explained.
Already,Venezuelan President Nicolas Maduro is under pressure to re-examine the PetroCaribe arrangement. The Bolivar Fuerte currency declined sharply against its US counterpart, inflation is even higher than usual and US based Standard & Poor’s downgraded Venezuelan bonds to junk status.
Maduro’s government has imposed food shortages and foreign currency restrictions in an attempt to achieve economic stability but this only angered citizens to protest.
“In the case in which there is more volatility in Venezuela there might be disruptions in the programme and countries should continue to prepare contingency plans in this event,” Werner said.
Since 2005, Governments across the region entered into the PetroCaribe arrangement, a deferred oil payment deal with oil-producing Venezuela.