Prime Minister Samuel Hinds said it might be a little too early for him to comment on what effects the current unrest in Venezuela will eventually have on the many agreements that country has with Guyana.
Guyana and Venezuela are currently engaged in a few partnerships which seek to strengthen their economic and social sectors. The PetroCaribe agreement allows Guyana to pay 40 per cent of its bill within the first 90 days and repay the rest at one per cent interest over a period of 25 years. In 2005, former Venezuelan President Hugo Chávez had given Guyana and several other Caribbean countries economic support. The head of the oil-producing powerhouse had offered the region oil at concessionary prices with, in Guyana’s case, oil supplies being paid for by paddy and rice.
But with Chávez’s death in March last year and the Venezuelan economy declining, questions were raised as to whether the Nicolas Maduro administration would be able to sustain the oil-for-rice deal. In May of last year, those concerns were addressed when Georgetown and Caracas signed on to an agreement that extended the rice facility. The two countries also signed another agreement to fight cross-border crimes, which had become prevalent, given Guyana’s inability to keep order in the country’s interior mining communities. Prime Minister Hinds said “that question does not arise just yet”, and “those who respect democracy would support the government that was democratically elected”.
Prepare for the worst – Sanders
Caribbean diplomat Sir Ronald Sanders, in a recent publication, had urged leaders of Caribbean countries that are members of the PetroCaribe Agreement to “begin preparing for the worst-case scenario and start thinking about buying oil at market prices”.. .He wrote, “This is especially important for the countries of the Eastern Caribbean that appear to have made little provision for the possibility that the arrangement with Venezuela would end abruptly.”
He said that the Nicolas Maduro government, which has been in power for the past 10 months, is facing one of its worst unrests over food and foreign currency shortages. He continued that there have been numerous calls for steps to be taken to reverse Venezuela’s economic decline. PetroCaribe accounts for 30 per cent of Venezuela’s production, Sanders revealed.
Sanders predicted that countries that are benefiting from the deal will be required to increase their productivity and eventually pay the original price for oil. He said the effects will be strenuous on Guyana, which depends on fossil fuel. He noted that some of the monies Guyana receives under its rice-for-oil agreement with Venezuela are used to pay rice farmers. However, with the instability in Venezuela, the Guyana government and farmers should be nervous, as the situation “spells real trouble”.
