PetroCaribe, ALBA merge in new economic zone

Lawrence Powell, Contributor

As announced earlier this month by Energy Minister Phillip Paulwell, the latest regional PetroCaribe meeting, which he attended in Caracas, brought some reassuring news for Jamaicans. Agreements struck at that meeting not only continued, but actually expanded, oil-rich Venezuela's PetroCaribe arrangements with participating countries in the Caribbean.

Following the March cancer death of Hugo Chávez, and a fiercely disputed April election that saw his less-charismatic successor Nicolas Maduro win by only 1.6 per cent, many had worried that PetroCaribe's days were numbered. That would have come at a fragile moment when Jamaica's struggling economy could ill afford such a loss, with about two-thirds of Jamaica's crude oil imports depending on Venezuela.

The ominous handwriting seemed to be on the wall everywhere. In a March 10 Jamaica Observer column titled 'If the PetroCaribe deal collapses', British Labour Party MP Diane Abbott predicted, "It seems unlikely that the winner of the forthcoming presidential election would be willing to keep the PetroCaribe deal going at the expense of local social programmes."

And in an April speech at the Trafalgar-New Heights Rotary Club, the CEO of Jamaica's PetroCaribe Development Fund, Wesley Hughes, warned that there was "not going to be a continuation in the form that the agreement was structured," and that Jamaica would "have to be prepared for some changes".

PETROCARIBE, ALBA SURVIVE

But the May 4-5 meeting in Caracas made it clear that PetroCaribe is alive and well. In spite of the loss of Chávez as original catalyst to the agreement, the regional pact is obviously thriving, and commitments remain strong.

In their weekend summit, the 19 members of the PetroCaribe oil alliance agreed to a proposed link-up with ALBA (Bolivarian Alliance for the Peoples of Our America), to form a new Latin American 'economic zone'. The new 'zone' would include the member states of both organisations and aims to promote investment, trade, tourism, agribusiness and international development projects via an expanded network of reciprocal economic exchanges.

As described by Venezuela's oil and mining minister, Rafael Ramirez, this revised agreement will expand PetroCaribe's role well beyond its earlier focus on providing oil to participating states under favourable conditions.

Guatemala and Honduras were added as provisional new members, and the PetroCaribe-ALBA alliance adopted new proposals for a permanent headquarters in Caracas, for "strengthening food security", and for distributing fertilisers among member countries. New measures were also adopted to develop regional tourism by improving international inter-connections between the PetroCaribe countries.

As an example of limitations to be overcome in the latter, Maduro complained to those present that flights between Caracas and Suriname have to pass through the United States, adding that "in the 21st century, this is unforgivable ... . We are prepared to form an alliance with public and private ventures to establish air connections in the PetroCaribe zone".

BENEFITS FOR JAMAICA

According to Paulwell, the benefits for Jamaica will include a continuation of the PetroCaribe oil deal previously struck with the Chávez administration and the additional new prospect of reciprocal economic exchanges.

Regarding the latter, Paulwell told TVJ after the meeting that "we're looking to take advantage of that component of the agreement which allows countries to use goods and services to pay for the debts". He indicated that the Venezuelan and Jamaican governments expect to conduct further negotiations to hammer out a payment deal under PetroCaribe that could possibly involve Jamaican cement or other mutually agreed economic exchanges.

All of this seems very encouraging, in
terms of what it suggests about the continued development of flexible
PetroCaribe arrangements for generous repayment terms and goods
exchanges. There's another angle to consider, though: the larger
geopolitical implications.

What will the US State
Department think of all this? How will they react to Jamaica embracing a
'new economic zone' that excludes North Americans? The strengthening of
an 'alternative economic alliance' like PetroCaribe-ALBA within the
American hemisphere is likely to be interpreted as a threat to
long-standing US dominance in the region.

With this
revised agreement that links PetroCaribe to ALBA (which Chávez created
as an alternative to North-America-dominated 'free trade' agreements),
Jamaica is expanding its cooperative trade ties with US-unfriendly
regimes like Cuba, Venezuela, Bolivia, Ecuador and Nicaragua. How will
this affect Jamaican-US relations, and are Jamaicans prepared to pay the
eventual 'price' in terms of possible sanctions, or
worse?

Lawrence Alfred Powell is honorary research
fellow at the Centre of Methods and Policy Application in the Social
Sciences at the University of Auckland, New Zealand. Email feedback to
columns@gleanerjm.com and
lapowell.auckland@ymail.com.