Maduro’s visit, PetroCaribe and Guyana/ Venezuela relations

A day is much too brief a period in which to undertake any substantive discussions and sign on to any new, significant agreements so that, in large measure, tomorrow’s  one-day visit here by Venezuelan President Nicholas Maduro simply follows a symbolic pattern between the two countries in which the respective Heads of State put in a presence in each other’s capitals.

Besides symbolism such visits serve to provide a measure of reassurance in both capitals that the territorial controversy between the two countries does not stand in the way of strengthening relations in economic and social spheres. Indeed, the fact that Venezuela still has an active claim to three-fifths of Guyana that has seen instances of sabre-rattling on the Venezuelan side has not stopped the two countries from signing a slew of bilateral agreements over the years. Some of them, in areas of culture and education, for example, have never been fully pursued though, for Georgetown, the reassurance that relations with Guyana are more or less on even keel, provides more than sufficient comfort.

In 2005 the late Venezuelan President Hugo Chavez threw Guyana and several other Caribbean territories an economic lifeline. The oil-producing powerhouse offered the region oil at concessionary prices with – in the case of Guyana – oil supplies being paid for in part with paddy and rice produced locally.

Chavez’s death earlier this year and assessments of the Venezuelan economy which suggested that, among other things, the country was facing food shortages, raised questions as to whether the Maduro administration would sustain the oil-for-rice deal. Early in May those concerns were put to rest when Georgetown and Caracas signed on to an agreement that extended the rice facility. At the same time the two countries signed another agreement to fight cross-border crimes, a purely symbolic gesture in Guyana’s case, given its virtually non-existent capacity even to keep order in the country’s interior mining communities far less effectively secure its borders.

Economic links between Guyana and Venezuela go beyond PetroCaribe. Cross-border relations extend to gold-mining, with Venezuelans known to frequently cross the border into Guyana to pursue what, frequently, are illegal mining activities. That, some local miners say, has not been bad for Guyana since the mining industry here has actually benefitted from technical support arising out of the Venezuelan presence in the sector.

With gold prices having fallen steadily in recent months the Guyana Gold and Diamond Miners Association (GGDMA) has put proposals to the Government of Guyana aimed at bringing a measure of relief to the miners which include the prospect of the mining industry importing its own fuel directly from Venezuela.

Still, it has to be said that the PetroCaribe agreement has been the most significant economic agreement ever to be concluded between Guyana and Venezuela because it involves the supply of oil to Guyana at prices which allow for continued expansion of the country’s economic growth without the headache of being hostage to volatile world market prices. After the death of Chavez earlier this year there was a brief interregnum of worry as to whether the deal may not have died with him.

President Maduro has now sent a definitive signal that he intends to embrace his predecessor’s foreign policy of reaching out to the rest of the Caribbean and Latin America and  the Petro Caribe agreement is certainly at the heart of that policy. Those assurances will hold good assuming that domestic economic pressures do not push the government in Caracas to revisit PetroCaribe. Indeed, not only in Guyana but in the rest of the Caribbean, watchers have wondered aloud as to whether some of the economies in the region may not have left themselves too vulnerable to such uncertainties as inhere in what they see as a nexus between Venezuela’s short to medium-term political and economic fortunes and the retention of the PetroCaribe facility.

Whatever exchanges ensue during tomorrow’s stopover by President Maduro – and even these cannot possibly embrace the gamut of issues that comprise relations between Guyana and Venezuela – both sides will be aware that the PetroCaribe oil deal has opened up new and significant economic vistas  in the wider relationship between them.

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