The Governor of one of Venezuela’s most populous states as well as a panel of Venezuelan economists and journalists are of the view that a government of national unity is the best option for arresting the rapid decline of the economy and the social degradation currently confronting their country. With inflation at 20 per cent per month these Venezuelan experts are worried that the present crisis will get worse with hyper-inflation which would see inflation at over 30 per cent per month.
And the trump card of a national unity government for stabilization of the economy and an eventual turnaround is oil, including reserves in Guyana’s territory and maritime space, which one panelist told me “could be jointly exploited for the mutual benefit of both countries.” Of course, he and the others maintain the validity of their country’s claim, but this one panelist, economist Francisco Rodriguez, co-author of the book Venezuela before Chávez told me “whenever oil is involved the parties will be insistent on their respective positions, but I think we could find a peaceful and mutually beneficial approach, like Venezuela sharing in the exploitation of those reserves.”
Governor Henri Falcón of the State of Lara and a panel of experts including Rodríguez, Orlando Ochoa of the Andrés Bello Catholic University, Caracas, and Francisco Toro, executive editor of the Caracas Chronicles were the main speakers Thursday evening at a forum hosted by the Americas Society/Council of the Americas in New York City.
According to Governor Falcón the situation in Venezuela is getting worse daily with rapidly collapsing domestic production, chronic shortages of food and medicines, rising unemployment, malnutrition especially among infants, looting and more. The panel agreed that Venezuela needs an injection of about US$50 billion over the next 48 months which could come from a combination of sources, including the local private sector and international institutions such as the IMF, although certain sections of the political landscape in Venezuela would have objections to the IMF’s involvement in the economy. The panel also agreed that three current levels of engagement with China would have to be revisited, particularly the Oil Fund.
These experts are of the view that Venezuela’s situation is different from many countries: “We have significant oil reserves which we must leverage” to turn around the current situation, they concluded.
Now, there is no doubt that Venezuela is counting Guyana’s oil among its reserves and that these reserves will be key to that country’s negotiations and efforts to stabilize and turn around the economy. The panel agreed that Venezuela has good relations with all the important oil companies globally except two, and that the relationship with these two can be reignited with the right approach which would be expected of a government of national unity.
So what does this mean for Guyana’s efforts to pursue our oil exploitation and for the preferred process of a judicial settlement of the Venezuelan claim that the award of 1899 was null and void? My initial thinking is that the current Maduro regime and subsequent Venezuelan governments will not subscribe to a judicial settlement of its nullity claim which if pursued is most likely to uphold the validity of the 1899 Arbitral Award and rule in Guyana’s favour. Guyana has a lot of work to do as it looks for a lasting solution to this controversy