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What now for PetroCaribe?


On Tuesday afternoon, the news that Venezuelan President Hugo Chavez Frias had lost his two-year battle with cancer came via an official announcement from his Vice President and interim successor, Nicolas Maduro. In the hours that followed the announcement, Maduro and several other key Government officials gave public statements reassuring Venezuelans and the international community of the country’s stability. It was a necessary exercise, and one which they will no doubt continue in the coming weeks and perhaps months. Ever conscious of their opponents’ desire to see Chavez’ grand socialist project derailed, Maduro and other supporters in government were swift to call for national unity and to pledge that his legacy will live on as they continue the work of the iconic Latin American leader.


Venezuela is now confronted with a national political landscape that will no longer include the charismatic and outspoken leader, who for 14 years was the face and heart of a ‘Bolivarian Revolution’ that forged strong alliances in neighbouring South American countries. Chavez’s influence even extended to the archipelago of the Caribbean region, with the iconic leader of the oil-rich nation reaching across the language barrier to embrace many of the Anglophone islands. He was the impetus behind a Latino-Caribbean trading bloc, the Bolivarian Alliance of the America (ALBA), which includes CARICOM members, Antigua and Barbadua, Dominica and St. Vincent and the Grenadines.


However, his most significant overture towards the Caribbean came through the PetroCaribe agreement, established in 2005. Under this agreement, CARICOM states, with the exception of Barbados, Monsterrat and Trinidad & Tobago, receive Venezuelan oil at preferential rates. It employs a barter system that has given access to large quantities of crude oil to the participating countries without the accompanying impact on their national cash flow, thus saving them billions of dollars. The impact of the ongoing recession on their economies has definitely been cushioned by the financial buffer provided by PetroCaribe.


Venezuela is one of the world’s largest oil producers, with the oil industry literally providing the fuel to drive the Venezuelan economy. The early reassurances from Minister of Oil and Mining, Rafael Ramirez, that the policies governing that key industry would remain intact should have therefore provided some comfort for PetroCaribe members. But with the loss of such a towering figure, there can be no denying the unease that some regional economists must be experiencing. Already, the Associate Press has reported that Opposition leader Henrique Capriles has said he would re-evaluate the programme if elected. As Chavez’s health worsened and now in the days since his death, many have speculated on what would become of PetroCaribe in his absence. Just last month, the Editorial of the Jamaica Observer newspaper advised participating Caribbean countries to be prepared for any eventuality and not to “complacently assume that there will be unchanged continuity”.


It is noteworthy that the Barbadian Government announced just this week at the opening of Parliament that a ‘renewable energy revolution’ will be the centrepiece of its economic strategy. The air of uncertainty that now hangs over the survival of ‘chavismo’ and what it could mean for the energy supply in the Caribbean is a reminder that oil dependency remains a challenge for governments throughout the world. Barbados should therefore be encouraged to continue on its path of building up the renewable energy sector, thus reducing the island’s exposure to the volatility of international oil prices and securing the prosperity of its people.



Category/ies:Barbados News.
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