Online regional news agency Caribbean News Now posted an interesting item on November 26. The International Monetary Fund (IMF) has said that four Caricom countries (Belize, Haiti, Jamaica and Guyana) are taking steps to reduce their dependency on PetroCaribe oil, in view of Venezuela’s big question marks over the sustainability of the programme that provides concessionary oil to Venezuela’s regional allies.
According to the IMF, Belize is using PetroCaribe financing to strengthen external buffers; Haiti, which owes Venezuela the equivalent of 15 per cent of its GDP, is strengthening fiscal policies to increase government deposits; and Jamaica is boosting international reserves to hedge against a potential reduction in Venezuelan aid, with Central Bank Governor Brian Wynter saying in a recent interview that they are seeking to “build a resilience in the economy, restore the buffers and reserves, diversify from fuel oil, increase renewables and do something on conservation,” so that Jamaica’s “dependency is less” on PetroCaribe.
The IMF claimed that Guyana is using the programme to reduce debt and increase savings. Presumably, the IMF sifts through data from central banks and finance ministries and scrutinises official statements in order to arrive at well-informed assessments. But whilst Finance Minister Dr Ashni Singh had stated in his March 2014 budget presentation that Guyana had concluded three rice-for-oil agreements with Venezuela, specifically in respect of PetroCaribe debt compensation, it is not clear how the IMF could have reached this conclusion regarding Guyana’s overall debt burden, in addition to the more sweeping view that Guyana is taking steps to reduce its dependency on PetroCaribe oil.
True, Guyana does not have, in Agriculture Minister Dr Leslie Ramsammy’s words, “absolute dependency” on PetroCaribe; we are only supposed to be sourcing 50 per cent of our oil needs through the facility. And, as we reported on November 14, although the government “had not provided a response” to the IMF’s warning that PetroCaribe might be in danger, there “were signs… that the warning had not gone unnoticed by the authorities,” with the Guyana Rice Development Board apparently seeking to expand international rice sales away from excessive dependence on the Venezuelan market.
One would hope that this is a sign that there is a strategy to wean the country off PetroCaribe oil and, indeed, it would be in everyone’s interest here to know what specific actions are being contemplated. The government may not, however, want to upset the delicate sensibilities of its ideological ally, the Bolivarian Republic of Venezuela, which seemingly lurches from one crisis to another.
That said, President Nicolás Maduro continues to talk a good game, buoyed by a US$4 billion loan from China, announcing on November 18, 28 measures aimed at restoring growth. Venezuela is also working to reassure PetroCaribe members of the “long term” viability of the agreement, with Foreign Minister Rafael Ramírez, former CEO of state oil company PDVSA, telling a ministerial meeting in Caracas on November 20, that his country remained “firmly committed” to the initiative.
Venezuela was, moreover, pushing hard for a cut in production and a price of US$100 a barrel at the OPEC meeting in Vienna yesterday, with crude oil prices at a four-year low. At the time of writing, however, there was not much optimism regarding Venezuela’s chances, as there appeared to be little sympathy in OPEC for what are considered to be Venezuela’s self-inflicted economic woes.
In the region, in the face of Venezuelan diplomatic activity aimed at retaining friends and influencing others, it is perhaps understandable that countries like Guyana and most of Caricom (only Barbados and Trinidad and Tobago remain outside PetroCaribe) would view participation in the mechanism as a delicate balancing act, especially in light of the slow pace towards finding realistic alternatives.
What is puzzling, however, is that, in a separate but obviously related development, it was reported on November 22 that Grenada and St Kitts and Nevis are to join the Bolivarian Alliance for the Americas (Alba), at a summit in Havana, on December 14, when the regional bloc will celebrate its tenth anniversary. It is puzzling because it is difficult to discern what additional benefits will be gained by these countries now joining Caricom partners, Antigua and Barbuda, Dominica, St Lucia and St Vincent and the Grenadines, along with Bolivia, Cuba, Ecuador, Nicaragua and Venezuela, beyond what they already enjoy in PetroCaribe.
One doubts that there is any sort of popular attachment in those islands to the woolly ‘Bolivarian’ ideals espoused by the late Hugo Chávez and one wonders, moreover, just how these small countries, now belonging to more international bodies than they have foreign service officers, can meaningfully participate in Alba. More pertinently, what are the implications for Caricom and its much vaunted foreign policy coordination of more of its members being sucked into the Venezuelan sphere of influence? It can hardly be that with a numerical advantage, these small Caricom states will determine the future direction of the Venezuela-sponsored Alba.
