PM’s statement on Petrocaribe long overdue

Fri, Dec 19, 2014

Ever since the initiation of the Venezuela-financed Petrocaribe programme, there has been so much skepticism about the programme, that some governments in the region who wanted to join, hesitated about taking the bold move. {{more}}

Today however, twelve of the 15 member countries of CARICOM are members of Petrocaribe, having been convinced of the clear benefits to their countries.

Recently however, concerns about Petrocaribe have intensified. Fundamentally, the concerns revolve around the sustainability of the initiative, given the falling price of oil on the international market and Venezuela’s economic problems. It is feared that these factors will bring about a collapse of the programme, and that our country and its neighbours are in grave danger of Venezuela arbitrarily changing the terms and conditions of the agreement.

It was therefore very timely that Prime Minister and Minister of Finance Dr Ralph Gonsalves chose a meeting of the House of Assembly this week to make a very comprehensive ministerial statement on the Petrocaribe Agreement and our country’s participation in it.

In the Prime Minister’s presentation, he established the basis for SVG’s participation in Petrocaribe and outlined the substantial benefits that our country and its people have been gaining from the programme.

In fact, the Prime Minister’s statement could be considered long over due, as had these facts been presented to the public before, there would have been much less misunderstanding of the programme among Vincentians.

There are of course, other concerns, repeatedly raised by the Opposition that the agreement is “outside” the scrutiny of Parliament, and that the debt incurred is not being officially recorded in the national debt. These concerns are valid, and although they were addressed to some extent by the Prime Minister, it is clear that some work needs to be done to bring the programme under the oversight of the legislature and the Accountant General.

What emerged from the Prime Minister’s presentation however, is that our country has enjoyed substantial benefits from its participation in Petrocaribe. Not only is the long-term financing plan a very generous practical manifestation of solidarity with developing countries like ours, spread over a 25-year repayment period at a “peppercorn” interest rate of one percent, but the provision of funding for social development has enabled vital social programmes to be carried out, which would have otherwise been practically impossible.

Of the approximately 61 million disbured to Central Government from the long term loan over the last few years, 31 projects of significant national importance have been funded. These include work on the Belle Isle Correctional Facility, control of the Black Sigatoka Disease, the Solar System Programme, repairs and retrofitting to several public sector buildings, the ePassport System, Liat Airline Refleeting Programme, Border Security Management, the Farmers Support Programme, rehabilitation programmes after the December floods, the National Student Loan Programme and payment of Economic Cost for students at the UWI.

The Prime Minister and Minister of Finance also laid out how this country is meeting its debt obligation to Petrocaribe, presently without dependence on the consolidated fund. He revealed that SVG has paid fully all the short term debt and is up to date with the long-term portion of the loan, which at the end of November, 2014, had a balance of $139,677,438.00.

Of course, given the trend in world oil prices and its negative effects on the economies of Venezuela, Trinidad and Tobago and other oil producers, there understandibly would be continuing concerns and it is expected that there will be differences over how the administrative and financial arrangements for Petrocaribe are handled. But while the programme lasts, these differences should not be used as excuses for deception or for derailing vital social programmes of great benefit to our country and the underpriviliged in particular.