Caution
Editorial
Stabroek News
February 25, 2007
Among the items of good news to emerge last week was the statement from Guyana National Energy Authority CEO Joseph O'Lall that Guyana would be buying only half its oil energy needs from Venezuela. He was reported in our Wednesday edition as telling this newspaper that this would amount to 5,200 barrels per day on concessionary terms under the PetroCaribe agreement, although Venezuela was willing to supply more than this. Sensibly, Guyana, it seems, was not prepared to put all its eggs in one basket.
Trinidad, from whom we have been buying oil ever since the PdVSA strike in Venezuela in 2002, had made it clear even before PetroCaribe was signed that she would not be stepping in to fill the breach for those countries which had switched to Venezuelan oil and who subsequently encountered difficulties in their supply. Energy contracts tended to be of a long-term nature, it was explained, and once Trinidad had found new markets she would not be in a position to make good any shortfall experienced by her former customers. Perhaps this was one of the reasons which persuaded the GNEA to operate with more caution than some of its Caribbean counterparts.
As it is, Trinidad, a Caricom member and the primary supplier of petroleum products to the Caribbean has now been displaced by Venezuela. It was all done with unseemly haste. While Caricom nations had been in discussions about the PetroCaribe deal prior to its signing, and they had come to some accord in principle, no final document had been laid in front of the members. According to the Venezuelan press, that only materialized shortly before the representatives of the countries being offered the concession actually turned up for the ceremony in Puerto de la Cruz. Prime Minister Patrick Manning was understandably hostile to the arrangement and did not sign, and neither did Barbados, which sent a relatively low level official to the meeting. The fact that the heads were prepared to go along with these somewhat irregular arrangements had the stamp of opportunism on it.
The exceptions noted above, no one, for example, seemed too concerned about the implications of PetroCaribe for economic integration of regional unity. And now it is President Chávez who is lecturing Caricom member states about unity, although what he has in mind is not quite the same as what the regional leaders have in mind. In Dominica the week before last he was reported by the Associated Press as saying, "We are one nation - the Caribbean nation… Let's get together, truly." To lubricate the wheels of this new-found 'unity' Dominica has received - or will receive - asphalt, five fuel storage tanks, university scholarships and $12 million for housing. There is also a proposed refinery which would process 10,000 barrels a day, and according to AP have sufficient capacity to export refined oil. The latter project has caused objections from the Caribbean Conservation Association, which wants Dominica to reject the Venezuelan offer. President Chávez assured that nation's citizens, however, that, "We did not come to pollute your country."
And then it was on to St Vincent for ceremonies in relation to another oil storage tank as well as a liquid natural gas facility and the site for a new airport. There the Venezuelan head of state was reported to have attacked NAFTA, and preached to his listeners on the virtues of Bolivarianism. In his usual uninhibited style he told them: "Down with US imperialism! Long live the people of this world. We must join together and we will be free." AP reported that the crowd was unmoved, and greeted this harangue in silence.
The peoples of the Caribbean, a high proportion of whose relatives live in the United States, and many of whom themselves are seekers after a green card are not likely to buy into the idea of relations with Venezuela to the exclusion of those with the United States, although they will surely be happy about the largesse from Caracas. Even their governments were anxious to stress that relations with one would not exclude the other, the Dominican Foreign Minister being reported by AP as saying that the close ties to Caracas did not signal any distancing from Washington.
However, it would be naïve to suppose that the Venezuelan government does not expect something in return for its generosity. While there might not be a connection, one has to note nevertheless Dominica's abandonment of its claim to Bird Island (which Venezuela maintains belongs to it), despite the longstanding support of its Eastern Caribbean partners as well as Caricom on the matter. In the same vein we recently also reported a Caracas academic as effectively suggesting that in Guyana's case PetroCaribe could have border concessions as one of its aims, although it has to be said he hardly constituted an official source and his views may not have reflected exactly those of Miraflores.
Whatever the status of the scholar's remarks vis-Ã -vis official policy, the region still needs to operate with caution. The Washington Times reported last week based on remarks made by a Venezuelan admiral, that Caracas may be contemplating buying nine submarines. If so, said the daily, it could be with a view to protecting its 'Exclusive Economic Zone' in the Caribbean Sea. At the moment it only has two aging German subs which cannot patrol the large area claimed as an EEZ. If indeed the proposed submarine purchase materializes, it should be a matter of interest to this country in relation to the maritime boundary and our western neighbour's insistence over the years that Guyana should make a concession to give Venezuela direct access to the ocean. It would also be of interest to other Caribbean nations whose EEZ is affected by Venezuela's claim to Bird Island. Now that Dominica has abandoned its traditional stance and is to enter into negotiations about seaspace with Venezuela, the Eastern Caribbean states have been curiously quiet on the matter. One hopes that PetroCaribe has not caused them to lose their voices. Caricom governments should recognize that nine submarines are notoriously difficult for small states to argue with out on the open sea, and whatever has to be said has to be said now. At this stage there is no excuse for the anglophone states not moving to agree among themselves a common negotiating stance in relation to maritime boundaries; if they don't, Caracas will pick them off one by one as she has done in the past.
So is Venezuela moving on several fronts at once to corral the Caribbean states into the Bolivarian pen? Perhaps. But even if it is not so, they should be aware of the potential danger to their interests. The possible good news is that President Chávez's vision for the region is a long-term one, and there are all kinds of impediments which will stand in his way for achieving it. Since his primary instrument for 'unification' is oil, the United States - as we reported recently, and as David Jessop discusses in his column today, p 11 - has woken up to the potential of ethanol as a counterbalance for regional influence. An ethanol project will link the US with Brazil (currently the world's two largest producers) and some other nations, including Caribbean ones like Jamaica, which incidentally has been a major beneficiary under the PetroCaribe initiative. With reorganization, ethanol production could keep the sugar industry in the region afloat - including in Guyana.
In the meantime, as in the case of Guyana and the oil supply from the west, the watchword should be caution when dealing with Venezuelan blandishments.