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Jamaica's Petro Caribe fund should be used as I've said before to underwrite the transformation of our education system and upgrade our inner cities.... that will provide the best return for the investment.... this is the way to higher growth rates and more rapid development... invest more in people... that will give us a return greater than any airline, port, sugar company or refinery.
GOJ has an unprecedented opportunity to transform the country through upgrading our vast and now minimally productive cohort of urban and rural poor using this 1% money ... minimum investment of US$250m/year for 10 years (properly allocated of course through a social partnership agreement).
We can't afford it? Hogwash! We can't afford not to do it.
This is a Golding opportunity to make a difference starting now .... Hugo won't be around forever.
Unfortunately it will probably be more of the tepid BS we've come to expect from our creatively bankrupt political class and their apologists.
PetroCaribe, spreading influence and cheap credit:Upside, downside risks of Venezuela's oil-led foreign policy
published: Sunday | July 27, 2008
David Jessop, THIS WEEK IN EUROPE
In the past week, Venezuela has clearly emerged as by far the Caribbean Basin's single- most important global-development partner.
Driven largely by rising oil prices, growing domestic political pressure to contain inflation, and the growing cost of food subsidies, governments across the region are seeing an expansion of their economic relationship with Venezuela as central to their long-term stability.
The implication is that, over time, this will reorient regional relationships, not for any ideo-logical reason, but on the basis of economic reality, and come to reduce significantly the remaining leverage exercised by partners in both Europe and North America.
At a meeting in Marcaibo held on July 13, the Venezuelan president, Hugo Chávez, not only announced significantly improved terms for countries purchasing oil under the PetroCaribe Agreement, but proposed exploring a number of new regional initiatives relating to food security, fertiliser and financing.
On energy pricing, the new arrangements will enable the 18 Caribbean and Central American nations that are PetroCaribe members to obtain oil on even more preferential terms than was previously the case.
new proposal policies
Under the new proposal, Venezuela will, when crude prices are higher than US$100 per barrel - the figure is currently around US$ 145 per barrel - receive payment for 40 per cent of the cost in 90 days, with the remaining 60 per cent being repaid in 25 years at an annual average interest rate of one per cent.
It was further agreed that if oil prices were to reach US$150, PetroCaribe signatory countries would pay 30 per cent of their bill within 90 days, with the remaining 70 per cent being subject to special financing terms.
Moreover, these long-term arrangements continue to be linked to a development fund which can be used by participating govern-ments for social or infrastructure projects.
Notwithstanding, the latest agreement potentially goes much further, as it appears that up to 50 per cent of the bill could be paid for with agriculture products, services, including tourism, or in other ways.
At the meeting, it was also announced that an oil block in the Orinoco belt would be assigned to PetroCaribe's member countries.
In the case of Cuba, the arrange-ment is more significant still, involving investments that include a refinery and the enlargement and construction of new petro-chemical and other facilities.
Among these are a project to enlarge the Camilo Cienfuegos plant, in central Cuba, in which US$3.6 billion will be invested to increase its processing capacity to 150 million barrels of oil a day. There are also a wide range of other agreements that include the provision of medical and teaching services by Cuba, and Venezuelan support with financing of agricultural development in Cuba.
Elsewhere in the Caribbean, there are also other Venezuelan- backed projects under way. In [COLOR=orange! important][COLOR=orange! important]Jamaica[/COLOR][/COLOR], money is being provided for the enlargement of a refinery in Kingston for completion in 2012 to increase its capacity by 15,000 barrels a day.
Recent remarks by Jamaica's Minister of Finance Audley Shaw suggest that PetroCaribe develop-ment funds are now playing a key role in the economy, having been used as [COLOR=orange! important][COLOR=orange! important]loans[/COLOR][/COLOR] for Air Jamaica and to support Clarendon Alumina Partners, the Port Authority of Jamaica and the Sugar Company of Jamaica, and in future, for developing revenue-earning facilities.
meet growing energy demand
In Central America, in order to meet growing energy demands, US$4.41 billion is to be invested in the refinery El Supremo Sueño de Bolívar in Nicaragua. Other oil refineries are also to be constructed in Dominica and Haiti, involving an investment of US$340 million.
Elsewhere in the region, Venezuela is involved in the construction of infrastructure for the storage and transportation of oil and petroleum products and is considering the construction of a transregional gas pipeline and related facilities.
Although published figures vary, it is suggested that the [COLOR=orange! important][COLOR=orange! important]investment[/COLOR][/COLOR] in joint-venture companies to provide infrastructure for storage and distribution is costing US$550 million and that social funds for the region, excluding Cuba, may amount to US$100 million.
Reports from the Maracaibo meeting suggest that other initiatives are also possible if the price of oil and related products such as fertiliser remain high.
Caribbean government repre-sentatives attending discussed closer cooperation to expand their food supply and addressed the high cost of fertiliser. In order to take such initiatives forward, a council of agriculture ministers was created, which is to meet for the first time on July 30 in Tegucigalpa, Honduras.
According to a recent report in the London [COLOR=orange! important][COLOR=orange! important]Financial [COLOR=orange! important]Times[/COLOR][/COLOR][/COLOR], the total value of these arrangements is huge and set to rise. The paper recently noted that the PetroCaribe oil arrangement alone is equivalent to 43 per cent of the US$4.7 billion cost of the 59 million barrels of oil Venezuela has sent to PetroCaribe members since 2005. It also noted that members of the scheme have saved an estimated US$921 million through the spread between PetroCaribe's one per cent financing rate and the cost of raising money on the [COLOR=orange! important][COLOR=orange! important]credit[/COLOR][/COLOR] markets.
supply from Trinidad
Meanwhile, it is becoming apparent that Trinidad's role as a regional energy supplier is becoming ever-more marginal. Moreover, there are indications that Port-of-Spain may also have become less central to Venezuela's offshore gas plans. In 2007, President Chávez had provisionally agreed that gas from a new platform known as Deltana would be processed in Trinidad's LNG facilities; but sources suggest that this now is less certain. Coincidentally or otherwise, Barbados - like Trinidad, a previous critic of the PetroCaribe arrangement - appears to be subject to a claim that two of the 24 offshore blocks that it is planning to offer to foreign oil companies are in Venezuelan waters.
Outside the region, concern continues to be expressed about the political implications of the PetroCaribe arrangement, but such politically driven comments appear increasingly vacuous as no other nation is prepared to support Caribbean governments to the extent or in the practical ways that President Hugo Chávez is.
More potent potentially are concerns less frequently expressed about the destabilising effect on the region of any change of government in Caracas. So much so that the region's future economic fortunes now depend heavily on the continuation politically of President Chávez, as it is far from clear whether electoral change in Venezuela would produce a leader who would continue the same policies.
What all of this appears to mean is an increasing macroeconomic reliance in the Caribbean on Venezuela for energy and development support.
Fortunately for the rest of the region, there are signs that in Venezuela, Mr Chávez has moderated some of his more centralising tendencies and is placing greater emphasis on trying to deliver domestic social and economic programmes that will retain the support of the poor who placed him in office.
influencing cuba
Venezuela's President Hugo Chávez speaks during the opening ceremony of the PetroCaribe Summit in Maracaibo, Venezuela, July 13.- File
There are also indications that Cuba is encouraging the institutionalisation of the existing PetroCaribe arrangements.
Traditionally, Caribbean relations with Latin neighbours have not been easy. The implications and value of the positive and central role that Venezuela is playing underwriting almost all Caribbean economies needs to be better understood by those outside of the region, as do the downside economic risks by those who benefit from the PetroCaribe arrangement. David Jessop is director of the Caribbean Council. Email: david.jessop@ caribbean-council.org
GOJ has an unprecedented opportunity to transform the country through upgrading our vast and now minimally productive cohort of urban and rural poor using this 1% money ... minimum investment of US$250m/year for 10 years (properly allocated of course through a social partnership agreement).
We can't afford it? Hogwash! We can't afford not to do it.
This is a Golding opportunity to make a difference starting now .... Hugo won't be around forever.
Unfortunately it will probably be more of the tepid BS we've come to expect from our creatively bankrupt political class and their apologists.
PetroCaribe, spreading influence and cheap credit:Upside, downside risks of Venezuela's oil-led foreign policy
published: Sunday | July 27, 2008
David Jessop, THIS WEEK IN EUROPE
In the past week, Venezuela has clearly emerged as by far the Caribbean Basin's single- most important global-development partner.
Driven largely by rising oil prices, growing domestic political pressure to contain inflation, and the growing cost of food subsidies, governments across the region are seeing an expansion of their economic relationship with Venezuela as central to their long-term stability.
The implication is that, over time, this will reorient regional relationships, not for any ideo-logical reason, but on the basis of economic reality, and come to reduce significantly the remaining leverage exercised by partners in both Europe and North America.
At a meeting in Marcaibo held on July 13, the Venezuelan president, Hugo Chávez, not only announced significantly improved terms for countries purchasing oil under the PetroCaribe Agreement, but proposed exploring a number of new regional initiatives relating to food security, fertiliser and financing.
On energy pricing, the new arrangements will enable the 18 Caribbean and Central American nations that are PetroCaribe members to obtain oil on even more preferential terms than was previously the case.
new proposal policies
Under the new proposal, Venezuela will, when crude prices are higher than US$100 per barrel - the figure is currently around US$ 145 per barrel - receive payment for 40 per cent of the cost in 90 days, with the remaining 60 per cent being repaid in 25 years at an annual average interest rate of one per cent.
It was further agreed that if oil prices were to reach US$150, PetroCaribe signatory countries would pay 30 per cent of their bill within 90 days, with the remaining 70 per cent being subject to special financing terms.
Moreover, these long-term arrangements continue to be linked to a development fund which can be used by participating govern-ments for social or infrastructure projects.
Notwithstanding, the latest agreement potentially goes much further, as it appears that up to 50 per cent of the bill could be paid for with agriculture products, services, including tourism, or in other ways.
At the meeting, it was also announced that an oil block in the Orinoco belt would be assigned to PetroCaribe's member countries.
In the case of Cuba, the arrange-ment is more significant still, involving investments that include a refinery and the enlargement and construction of new petro-chemical and other facilities.
Among these are a project to enlarge the Camilo Cienfuegos plant, in central Cuba, in which US$3.6 billion will be invested to increase its processing capacity to 150 million barrels of oil a day. There are also a wide range of other agreements that include the provision of medical and teaching services by Cuba, and Venezuelan support with financing of agricultural development in Cuba.
Elsewhere in the Caribbean, there are also other Venezuelan- backed projects under way. In [COLOR=orange! important][COLOR=orange! important]Jamaica[/COLOR][/COLOR], money is being provided for the enlargement of a refinery in Kingston for completion in 2012 to increase its capacity by 15,000 barrels a day.
Recent remarks by Jamaica's Minister of Finance Audley Shaw suggest that PetroCaribe develop-ment funds are now playing a key role in the economy, having been used as [COLOR=orange! important][COLOR=orange! important]loans[/COLOR][/COLOR] for Air Jamaica and to support Clarendon Alumina Partners, the Port Authority of Jamaica and the Sugar Company of Jamaica, and in future, for developing revenue-earning facilities.
meet growing energy demand
In Central America, in order to meet growing energy demands, US$4.41 billion is to be invested in the refinery El Supremo Sueño de Bolívar in Nicaragua. Other oil refineries are also to be constructed in Dominica and Haiti, involving an investment of US$340 million.
Elsewhere in the region, Venezuela is involved in the construction of infrastructure for the storage and transportation of oil and petroleum products and is considering the construction of a transregional gas pipeline and related facilities.
Although published figures vary, it is suggested that the [COLOR=orange! important][COLOR=orange! important]investment[/COLOR][/COLOR] in joint-venture companies to provide infrastructure for storage and distribution is costing US$550 million and that social funds for the region, excluding Cuba, may amount to US$100 million.
Reports from the Maracaibo meeting suggest that other initiatives are also possible if the price of oil and related products such as fertiliser remain high.
Caribbean government repre-sentatives attending discussed closer cooperation to expand their food supply and addressed the high cost of fertiliser. In order to take such initiatives forward, a council of agriculture ministers was created, which is to meet for the first time on July 30 in Tegucigalpa, Honduras.
According to a recent report in the London [COLOR=orange! important][COLOR=orange! important]Financial [COLOR=orange! important]Times[/COLOR][/COLOR][/COLOR], the total value of these arrangements is huge and set to rise. The paper recently noted that the PetroCaribe oil arrangement alone is equivalent to 43 per cent of the US$4.7 billion cost of the 59 million barrels of oil Venezuela has sent to PetroCaribe members since 2005. It also noted that members of the scheme have saved an estimated US$921 million through the spread between PetroCaribe's one per cent financing rate and the cost of raising money on the [COLOR=orange! important][COLOR=orange! important]credit[/COLOR][/COLOR] markets.
supply from Trinidad
Meanwhile, it is becoming apparent that Trinidad's role as a regional energy supplier is becoming ever-more marginal. Moreover, there are indications that Port-of-Spain may also have become less central to Venezuela's offshore gas plans. In 2007, President Chávez had provisionally agreed that gas from a new platform known as Deltana would be processed in Trinidad's LNG facilities; but sources suggest that this now is less certain. Coincidentally or otherwise, Barbados - like Trinidad, a previous critic of the PetroCaribe arrangement - appears to be subject to a claim that two of the 24 offshore blocks that it is planning to offer to foreign oil companies are in Venezuelan waters.
Outside the region, concern continues to be expressed about the political implications of the PetroCaribe arrangement, but such politically driven comments appear increasingly vacuous as no other nation is prepared to support Caribbean governments to the extent or in the practical ways that President Hugo Chávez is.
More potent potentially are concerns less frequently expressed about the destabilising effect on the region of any change of government in Caracas. So much so that the region's future economic fortunes now depend heavily on the continuation politically of President Chávez, as it is far from clear whether electoral change in Venezuela would produce a leader who would continue the same policies.
What all of this appears to mean is an increasing macroeconomic reliance in the Caribbean on Venezuela for energy and development support.
Fortunately for the rest of the region, there are signs that in Venezuela, Mr Chávez has moderated some of his more centralising tendencies and is placing greater emphasis on trying to deliver domestic social and economic programmes that will retain the support of the poor who placed him in office.
influencing cuba
Venezuela's President Hugo Chávez speaks during the opening ceremony of the PetroCaribe Summit in Maracaibo, Venezuela, July 13.- File
There are also indications that Cuba is encouraging the institutionalisation of the existing PetroCaribe arrangements.
Traditionally, Caribbean relations with Latin neighbours have not been easy. The implications and value of the positive and central role that Venezuela is playing underwriting almost all Caribbean economies needs to be better understood by those outside of the region, as do the downside economic risks by those who benefit from the PetroCaribe arrangement. David Jessop is director of the Caribbean Council. Email: david.jessop@ caribbean-council.org
