Commentary: The View from Europe: PetroCaribe, sanctions and collateral damage

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David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org. Previous columns can be found at www.caribbean-council.org

By David Jessop

As this is being written an uneasy calm prevails in Haiti following nearly two weeks of widespread demonstrations against the government of President Jovenal Moïse. Protesters had been demanding his resignation, blocking roads, burning vehicles and attacking government buildings and businesses in many parts of the country including the capital Port-au-Prince.

More protests are planned in the coming days following what many Haitians see as the continuing failure to address their concerns about the disappearance of US$1.7 billion in PetroCaribe funds between 2008 and 2016 intended for social programmes in Haiti. Among those implicated by a Senate report were former ministers, officials, and senior political figures.

Government’s response to Haitians concerns was slow. After days of silence and escalating violence, a combative President Moïse said that he heard the voice of the people. However, he provided little detail about how he intended to respond while indicating that he would see out his full term in office.

The tension only eased as drinking water and food became scarce. Then, the prime minister, Jean-Henry Ceant, announced a series of measures. Government, he said, will reduce its expenses by 30 percent, ‘encourage’ the presidency and parliament do the same, and abolish ‘all unnecessary privileges’ of senior state officials. He also promised to give the judiciary additional resources to complete PetroCaribe related prosecutions, have all autonomous state enterprises audited to identify diverted funds, abolish national monopolies affecting food prices, and try to improve the minimum wage and reduce cronyism.

How much of this happens, whether Haiti’s impoverished citizens can be appeased, or if those alleged to have benefited from PetroCaribe funds will ever be sanctioned, remains to be seen.

What is happening in Haiti illustrates just one aspect of the collateral damage arising out of Venezuela’s geo-politically led largesse. More importantly it points to economic consequences, albeit much less severe, that will likely emerge in the coming months as Caribbean nations come to unravel the complex economic and political web that PetroCaribe and US sanctions have created.

This will not be easy.

Caribbean governments and companies are already having to find and finance alternative sources of hydrocarbons on commercial terms, while addressing the now legally complicated issue of their indebtedness to PdVSA, if they have not already done so or been granted debt forgiveness by Caracas.

As a matter of urgency others are having to unwind complex commercial arrangements as is the case with Petroleos de Venezuela’s (PdVSA) 49 percent stake in Jamaica’s Petrojam refinery. Elsewhere, some OECS nations such as St Vincent’s government may have to recognise that budgeted social development programmes may become undeliverable as PetroCaribe linked developmental benefits come to an end.

In addition, other longer-term uncertainties are also likely to arise. For example, if the Maduro government does not survive, the Trinidad government may well find that planned cross-border investments and the energy sharing arrangements that it is continuing to discuss with the Maduro administration become uncertain.

All of which is happening as US sanctions on Venezuela are about to bite.

In an apparent recognition of the difficulty that some Caribbean states will face, the US administration has said that it is working to try to ameliorate their effect.

Speaking at a February 13 hearing before the Foreign Relations Committee of the US House of Representatives, Sandra Oudkirk, Deputy Assistant Secretary for Energy Diplomacy at the Bureau of Energy Resources, said that Washington was looking at what needs to be done to ensure that the focus of sanctions remains on PdVSA and not on small Caribbean markets.

In reply to a well-considered question about the impact of US sanctions on neighbouring states from the Democratic Congresswoman, Abigail Spanberger, Ms Oudkirk noted: “We are looking on a country by country, jurisdiction by jurisdiction, basis at the involvement of PdVSA in these various small countries and islands and figuring out what it is that needs to be done during that 60-day period to ensure that the focus on sanctions impact is on PdVSA not on these small markets”.

No other details were provided, but her remarks referenced mitigating the consequences of the 60-day period up to March 29 allowed for winding down operations, contracts, or other agreements involving the region, PdVSA and US institutions, its companies and citizens. Although it is not clear which countries Ms Oudkirk was referring to, it is likely to be those that have bilaterally indicated support for US policies.

The outcome of the humanitarian, economic and political confrontation taking place between the Maduro government and the president of the Venezuelan Congress Juan Guaidó and his US led international backers, has yet to play out.

President Maduro could well survive if, as is so far the case, he secures the continuing support of the country’s military and para military groups, if nations like Russia and its Kremlin-linked energy companies take a geopolitical gamble on playing a more profound hemispheric role, and US political rhetoric that hints at military action gives oxygen to those who support President Maduro.

What is becoming apparent is that coming close behind Venezuela’s humanitarian disaster and US sanctions will be a number of politically complex economic challenges touching nations as different as Cuba and Belize.

Apart from observing the obvious, that this argues for the more rapid diversification into renewables and for Guyana to consider having a regional energy role after 2020 as it becomes both a major oil and gas producer, its points to the need for a more neutral, better balanced, less politically aligned future approach to Caribbean development.

It suggests too that the US and other nations backing change in Venezuela recognise that a new pan-Caribbean mechanism is needed that incentivises external investment and private sector led growth and supports in the short term, programmes that improve education and health care as the building blocks of future prosperity.

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4 COMMENTS

  1. In each country where Petrocarib was active, there were bank accounts in each country. The leftwing politicians of the day in each country simply helped themselves to funds. In fact, in each country, the Petrocaribe accounts were kept away from any auditors and were a secret divided from the State. That was how Venezuela controlled the foreign politicians and they all did the bidding of Maduro and still do. Bought men, owned by Maduro. body and soul.

    • Jolly Greed;
      They certainly didn’t make as much funding as you do from your American Government-Paid TROLL services, on this and other sites.
      You are making much more money than the 6-million Americans’ still living on food stamps and the other 100-million Americans who are out of work and will NEVER work again because of robotics, digitization and off-shore (cheaper) manufacturing, that has moved away from the USA.

      Isn’t the USA’s Capitalist System a marvelous thing (for the extremely wealthy 1%’ers anyway)?
      Ask the unemployable majority of American workers what THEY think !

      Don D.

      • Don is a Canadian ‘make wrong right’ paid and rewarded Cuban operator that has been appointed to fight through reverse propaganda the “Havana Syndrome” complaints which is the name popularized by the media in 2018 for purported acoustic attacks on the United States and Canadian embassy staff, first reported in Cuba, and then in China. But besides that, he propagizes on all exposes of wrong by all the communist rabble countries who are friends of Cuba. His job is to make wrong right.

        Peter Binose was able to identify the Havana Syndrome as being caused by handheld microwave weapons. The same weapons used in Venezuela against demonstrators and caused them brain damage. https://www.caribbeannewsnow.com/2014/07/15/letter-hand-held-microwave-weapons/

        Another article where Binose discusses and refers to these microwave weapons.
        http://www.ieyenews.com/wordpress/peter-binose-one-of-their-very-special-supporters-is-dying-whilst-they-sit-back-and-watch/

        Jolly Green later reported on the Peter Binose report
        https://www.caribbeannewsnow.com/2014/07/15/letter-hand-held-microwave-weapons/

        Don is a full Cuban trained propagandist in ‘Whataboutism’ which is a variant of the ‘tu quoque logical fallacy’ that attempts to discredit an opponent’s position by charging them with hypocrisy or untruthfulness without directly refuting or disproving their argument, which is particularly associated with old Soviet and more recent Cuban and Russian propaganda. When criticisms were leveled at Cuba, Venezuela, Russia, Iran, and SVG, Don’s response would be “What about…” followed by an event in the non-communist world, particularly the United States. By using this propagandist tactic it is quite obvious that Don is Cuban trained because Cuba is the Caribbean nation training online propagandists like Don in the art of whataboutism.

  2. People like Don who is working hard to make wrong right. He is among the worst examples of collaborators with the dirty communist regimes and leaders thereof in the region. He badmouths his own country whilst grabbing what he can from that countries capitalist system and running his own business, contrary to what he wants for others with his Marxist-Leninist adopted opinions and behavior in places like Cuba, Venezuela.

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