Chavez, PetroCaribe and Caricom

Jun 16, 2009 Editorial

The kudos heaped last week by Jamaican Prime Minister, Bruce Golding, at the Sixth PetroCaribe Ministerial Council Meeting of Energy Ministers and the Sixth Summit of the Heads of State and Governments in Basseterre, St. Kitts on Venezuela and the Venezuelan people in general and President Chavez in particular, contrasted sharply with the tone and words he directed at some fellow heads of Caricom recently. And with good reason.

In a time of crisis and economic decline, Golding has not been very amused by the action of Trinidad to deny entry to a shipment of Jamaican beef patties on some very suspect grounds. Restraint of trade, of course, vitiates the very raison d’etre of the now 36-year-old Caricom integration movement, especially the Caribbean Single Market and Economy that is supposed to be its latest expression.
That the Jamaicans themselves have played similar games with rice from Guyana, and Barbados is presently conducting a search-and-deport mission on Guyanese, Vincentian and Jamaican citizens, only emphasise the success of the PetroCaribe initiative launched by Chavez only four years ago, when compared to the disarray of Caricom.

PetroCaribe’s centrepiece is Venezuela’s willingness to supply petroleum to the signatories of the agreement by financing forty percent and over (depending on the level of the market price) of purchases at one per cent interest over twenty-five years. It has been estimated that this concession represents a grant element of some forty-two percent, which goes a long way towards maintaining the fiscal viability of the membership, which are all developing countries.
The terms are so attractive that Nicaragua, which produces its own petroleum, applied for membership and was accepted last year. Everyone expected that when the bottom dropped out from the oil market and prices plummeted from over US$140 to below US$50 a barrel last year, Chavez would have been forced to back off the Petro-Caribe commitments, when his own pro-poor programmes within Venezuela were put under pressure.

As Golding pointed out, Chavez never wavered, and promised again in St Kitts that he never would. But one has to appreciate that behind the oil-flow from PetroCaribe, Chavez had broader aims that he has never hidden: aims that inevitably involved his bête noir, the US.
As the self-proclaimed heir to the socialist revolutionary path carved out by his hero, Fidel Castro, Chavez has made it clear that his socialist “Bolivarian Revolution” is not going to be confined to Venezuela. The Bolivarian Alternative for the Peoples of our America (ALBA) – as an alternative to the Free Trade Area of the Americas (FTAA) and comprising of Venezuela, Cuba, Bolivia, Nicaragua, Honduras and Dominica – is the more direct expression of his aim. Ecuador’s application for membership has been approved and Chavez announced that an ALBA summit will be held next week to officially accept that “socialist brother” state.

PetroCaribe has been the vehicle to work with neighbouring states that Chavez hopes can be influenced, eventually be encouraged to join ALBA (one Caricom member, Dominica, has already done so) but in the meantime can be encouraged to support “progressive” initiatives pushed by Venezuela.
The recent readmission of Cuba to the OAS is against the background of Venezuela’s efforts leading up to the recent Summit of the Americas. Another sign of influence was the application of Costa Rica, traditionally very close to the US, for membership in PetroCaribe.

At St Kitts, Chavez jubilantly announced that, “The doors are open to whoever willing to join Petrocaribe.”
Signalling his ultimate goal, in his closing speech, Chávez proposed creating a single currency, “the “Petro”, to facilitate trade among the member countries and to start getting free from the dollar tyranny.”
Interestingly, he claimed that all of the member countries endorsed the plan. “Only Guyana asked for some more time for consultations with the President.” What does this mean for Caricom and CSME?”

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