Petro Caribe oil deal on shaky ground

Feb 21, 2014 News

…as violence continues in Venezuela

As international pressure continues to mount over escalating violence in neighbouring Venezuela, there is worry of the future of Guyana’s lucrative oil-for-rice deal with the Spanish-speaking country.
Over the past week, at least five persons have died from clashes with Government forces, with multiple injuries and arrests being reported. The protestors, a majority of them students, are accusing the President Nicolas Maduro’s administration for food shortages, crackdown on opposition, inflation and high crimes.
Guyana would be eyeing the situation there closely as the two countries have been increasing ties in recent years.
Under former President Hugo Chavez, a lucrative oil-for-rice deal was signed which allowed Guyana and 17 other countries to delay payments for a number of years. Under the deal, rice is exported to Venezuela with the oil payments used to offset the shipments. However, the oil arrangements may be under threat now and CARICOM states participating would especially be concerned.
The unthinkable loss of the cheap oil offered by Venezuela will have ripple effects for the economy of Guyana as it accounts for a significant portion of the country’s foreign spending. It will also affect the rice industry, number two among the country’s top earners, as farmers have been happy with the assured market, a big problem in the past.
With inflation in the ‘50s and the Bolivar (currency) sliding, President Maduro is facing pressure to stabilize the economy.
Already, over the weekend, the Guyana government had issued a statement on the Venezuela situation, calling for peace and standing in solidarity with the Maduro administration.
According to the Government, it “fully supports” the efforts of the Venezuela administration in “withstanding acts of destabilisation”.
The Caribbean Community (CARICOM) this week too expressed concerns over the confrontations. Backing President Maduro, CARICOM noted that in all democracies, citizens have the right to air their views and differences.
“However, this must be done within the constitutional framework and not through violent demonstrations. No democratic society can reasonably pursue disorder or any unwarranted subversion of democratic institutions.”
Locally, the Progressive Youth Organisation (PYO), an arm of the ruling People’s Progressive Party, said it respects the right to protest but such actions should be done within certain parameters.
“While all is not perfect in Venezuela, the administration should be credited first under Hugo Chávez for dismantling Venezuela’s peaceful coexistence with poverty, inequality, and social exclusion. The Government placed the poor at the centre of the national conversation, this whole concept was imprinted into the nation’s psyche and even exported to neighbouring countries and beyond. Moreover, their ability to make the poor feel that one of them was in charge has no precedent.”
The Federation of Independent Trade Unions of Guyana (FITUG) also extended solidarity with the “democratically elected” Government of President Maduro, condemning the violence.
“We are aware that the violence unleashed is caused by groups of the right-wing opposition and seek to discredit the policies of the elected revolutionary Government.
On Wednesday, US President Barack Obama called on Venezuela to release protesters detained and for attention to be paid to the many “legitimate grievances”. Opposition leader Leopoldo Lopez, one of the main persons in the protests, was arrested with murder charges dropped yesterday.
Since Petro Caribe was created in June 2005, 17 member countries have enjoyed an annual interest rate between 1% and 2%. Venezuela exports an average of 180,000 barrels per day to Petro Caribe nations. It was reported last year that Petro Caribe countries’ debt for oil purchases has risen to US$5.7B.
Finance Minister, Dr. Ashni Singh, last year said that towards the end of 2012, Guyana signed its first debt compensation agreement with Venezuela which reduced the Petrocaribe debt owed to that country by US$100.8 million, equivalent to the value of rice and paddy shipped from December 2009 to July 2011.
At the end of 2012, Guyana reportedly owed Venezuela US$364M.

Latest News

Petro Caribe oil deal on shaky ground

Related

Similar Articles

The Glenn Lall Show | November, 15th, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Hauls from Persaud and Farley highlight MVP Sports Girl’s U11...

Windies chase 219 for first win of T20 series...

Motie joins Amazon Warriors Squad for GSL

CWI announces West Indies Test Squad for Home...

𝗗𝗖𝗕 U𝟭𝟱50-overs ‘Next...

Glasgow sets new scoring record as Golden Jaguars...

Features/Columnists

The PPP is in the grip of the bourgeoisie

Rising Gun Crimes in the Caribbean: Urgent Action required by all

Excellency Ali soke – he must produce

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

Petro Caribe oil deal on shaky ground

Share this:

Related

Similar Articles

The Glenn Lall Show | November, 15th, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Features/Columnists

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]