Contemporaneously with the drastic fall of oil prices, Caribbean states found themselves, towards the end of January, required to be in Washington to attend what was referred to as the First Caribbean Energy Security Summit, a multilateral meeting attended by the other major Western donors, Britain and Canada. And at this First Caribbean Energy Security Summit, the opportunity was taken by the major Caricom oil and gas producing country, in the person of Prime Minster Kamla Persad-Bissessar of Trinidad & Tobago, to propose a major initiative, a Caribbean Energy Thematic Fund, to ensure the continuing availability of energy products to Caricom states which have, for some time now, found themselves floating in a boisterous sea of constantly changing prices.
It is a fact, of course, that the notion of an Energy Security Initiative precedes the collapse of oil prices, and indeed one of its original motivations stems from the continued ascent of prices in recent times. For as a United States Fact Sheet put it in June of last year, “the high cost of energy diverts resources away from economic development, reduces competitiveness, and renders the energy sectors of the Caribbean nations vulnerable to supply shocks.” And Trinidad & Tobago itself has had a long cognizance of the situation in which fellow Caricom states have to face continuing price rises.
But almost contemporaneously with the conference, Trinidad & Tobago itself has had to face an opposite effect – declines of such rapidity and depth that, as Prime Minister Persad-Bissessar explained recently to her own Parliament, in the face of such events the budgetary process of the country becomes a major difficulty, and programmes have to be suspended or abandoned. So as she arrived at a conference designed to ensure stability in oil supplies largely for countries in the Caribbean which do not possess petroleum resources, her own government has suddenly had to come to terms with the difficulty of insufficient resources to provide promised goods and services for the population.
Contemporaneous until recently with the continual ascent of oil prices, the major Western donor countries would appear to have also had another consideration for the Energy Security Initiative. For Vice-President Joe Biden, as the host Chairperson of the meeting, made sure, no doubt, to make reference to another motivation for it, specifically what the United States has felt to be an over-dependence of Caricom states on the Venezuelan initiative, PetroCaribe and its attendant wider organizational frame, Alba.
Biden made sure to refer to the fact that the sudden and rapid decline in oil prices was also having a major effect on that country’s budgetary process, and the inference from that he also made clear. For, as if beneficiary countries of PetroCaribe, and participating members of Alba were not aware, he sought to drive home the point that the present price decline could have such momentous financial implications, that they could be left with a ceasing of both Venezuela’s subsidising and aid programmes, consequent upon a drastic deficit in anticipated oil revenues. But this, of course, will certainly have entered the minds of the recipient countries, and even that of the Government of Trinidad & Tobago, long familiar, as a Caricom donor state, with the economic deficit problem of the region’s member-states. For Trinidad would be well aware that a prolonged high-price energy crisis would leave them unable to remain as meaningful markets for its products.
Consequently, the US Government and other major donors need to be cognizant of the fact that what is present in the minds of Caricom governments is a long-term issue of energy availability and security, as distinct from both the current highs and lows of the petroleum situation, and the geopolitics of the Region particularly as this relates to Venezuela, clearly a significant issue in the minds of the Americans.
We have little previous public information on the follow-up steps to the Energy Security Initiative. But the impulses for the initiative would appear to come from a major consideration, to quote a US Fact Sheet of June last year on the matter, that the “high cost of energy divests resources away from economic development, reduces competitiveness, and renders the energy sectors of the Caribbean nations vulnerable to supply shocks.” And the focus of American policy in that regard, must be, in their view, on a series of preconditions, namely, first, “Increasing access to finance, good governance and diversification”; secondly, “transforming the Caribbean, one island at a time” which presumably, means island rather than regional responsibility, and thirdly, no doubt as an expected consequence, “maximizing the impact of existing donor efforts.”
How each country in practice approaches the design and mode of cooperation with the Energy Security Initiative is left to be seen, and we can expect that between the Caribbean Development Bank and the Caricom Secretariat, there will be further details beyond the Joint Statement issued, as to how specific countries, given the geographic diversity of the region, can cooperate in the venture. As the US Fact Sheet observes, “the region has access to an abundance of renewable and other energy resources”; so the implication must be that there will be, as it were, a multidisciplinary focus, in which each country is allowed to participate in such a way as to maximize its comparative advantage as far as available energy-producing resources are available.
It is instructive, and should no doubt prove beneficial to the Caricom Region, that the membership of the summit went beyond the geographic Caribbean and countries with direct European sovereignty interest in the area like France and Britain, and included countries such as Germany, Canada and New Zealand. And it is certainly useful that, no doubt with the prompting of the smaller entities of the Region, the summit recognized the results and proposals from the September 2014 Third International Conference on Small Island Developing States (SIDS).
