(Jamaica Gleaner) With speculation rife over whether Venezuela would continue the PetroCaribe arrangement if Hugo Chávez is replaced as president, Jamaica’s energy minister says willpower such as the ailing leader’s is a necessary ingredient to the survival of the deal.
“I think there is commitment on the part of the administration (to continue it), but because there was opposition domestically. It does require a strength of character that President Chávez has to see it through, cause it what it will,” Energy Minister Phillip Paulwell told The Gleaner yesterday.
Chávez, 58, was due to be sworn in for a fourth term today. However, his inauguration has been postponed due to his ill health.
First diagnosed with cancer in June 2011, Chávez was re-elected last October by a significant margin over Henrique Capriles.
Vice-President Nicolas Maduro, who was named by Chávez as his preferred successor before the president travelled to Cuba last month for more cancer surgery, is now in charge of the Venezuelan government.
Yesterday, Paulwell said “PetroCaribe is absolutely essential to Jamaica” and reiterated the Government’s “support and prayers for his (Chávez’s) full and speedy recovery”.
The energy minister was due to meet with Venezuela’s ambassador to Jamaica last evening. He said it would be insensitive to raise the issue of the preservation of the PetroCaribe agreement at this stage.
“They are really hurting, their preoccupation now is not the benefits that we are deriving, but rather to see the restoration of full health to their president,” Paulwell said.
Under the PetroCaribe arrangement, Jamaica pays Venezuela only 60 per cent of the cost of the oil it receives. The remainder is set aside as a loan, which is payable over 20 years at an interest rate of one per cent.
The Government last October estimated that there would be a US$600-million annual impact on Jamaica’s balance of payments if Venezuela discontinued its deferred financing arrangement of the PetroCaribe Energy Cooperation agreement at that time.
Jamaica is currently exploring a barter system as part of a move to honour its debt obligations when they become due.
“We are looking to take advantage of the trade compensation mechanism, which will enable Jamaica to repay its debt (with) goods and services from Jamaica,” Paulwell said. “We are looking at a number of commodities that we can trade to offset and to pay down the debt.”
Among the items that the Government is considering are cement and water.
“It is just like any bartering arrangement … . We are going to try to find goods that we will export to them for that value to take care of that payment. We would pay (local suppliers) for those goods in local currency, and those goods will be shipped to Venezuela,” Paulwell added.
Chávez has proposed that Caribbean and Latin American nations swap bananas and sugar cane.
“We propose adding to the financed portion of the oil bill a method of payment that includes the supply of a series of local products and services,” a Reuters report quoted Chávez as having said during a PetroCaribe summit in Cuba in 2007.
Paulwell yesterday said the Government would be instituting the mechanism to act on that proposal.