Guyana’s debt to Venezuela for oil obtained under the PetroCaribe arrangement currently stands at over US$160M, President Bharrat Jagdeo says.

“The resources so far have been about (US)$160 something million dollars”, he said when questioned on the issue during a press conference at the Office of the President yesterday. The Head of State said that because of the rice agreement that Guyana has with Caracas, in which the debt is used to pay for rice exported to that country following which the Venezuelans would then cancel the promissory note, the debt is being reduced.

“So the debt portion that was accumulating, say it was US$165M and we then use US$30M or US$35M for their importation of rice. They import rice up to US$35M, so they will cancel US$35M of the debt so our debt obligation falls from US$165 to US$130”, explained Jagdeo. “We see this as a way of reducing the debt further”, he said.

Questioned on whether small countries like Guyana could be compromised by the size of the debt accumulated through PetroCaribe, the President said that in this country’s case, no. “The money is being accumulated. We’ve used very little of it. It’s when you spend all of the money that’s when the problem arises,” he said.  He explained that if money is borrowed at 1% interest and there is 23 years to repay, then if it is invested and earning 2% interest and the money is not used, then the money garnered from investing the resources can be used to service the debt. “We have not used significant parts of those resources”, Jagdeo emphasized.

He pointed out that some Caribbean countries, because of the financial crisis, as soon as the money was available, they used it. The president said that Guyana is in a good position now to finance a lot of initiatives. “It’s on our book as debt but it’s still lying in an account”, he said.

Meantime, he confirmed that Guyana will become an observer to the Venezuela-led regional grouping, the Bolivarian Alternative for the Peoples of the Americas (ALBA). “This entitles us to increase the amount of oil that we receive from Venezuela through the PetroCaribe arrangement”, he said. “We may not accede to the credit facilities for all of the oil”, the President added.  He said that aviation fuel will not be purchased through the PetroCaribe arrangement. “I’ve made it clear that we’re not asking to buy this through the PetroCaribe arrangement so there’ll be no debt component arising out of the import of the aviation fuel”.

Quizzed on other benefits of Guyana being an observer at ALBA, Jagdeo responded that this country can access the ALBA Bank and Fund. “We’re not sure we will do that but those are specific benefits”, he said.