Dominica to give Venezuela agriculture products in exchange for fuel debt
Dominica is promising to begin to make payments within two months on the more than US $23.6 million (EC $63.3 million) owed to Petróleos de Venezuela (PDVSA) under the Petrocaribe agreement.
The agreement on the proposed deal was reportedly ironed out at negotiations which took place in Haiti about two weeks ago between the Dominica and Venezuela governments. News of a break in the stalemate comes after PSD sent 18 debt collection letters to the Dominica authorities over more than a year beginning in June 2012.
Under the terms of the agreement to repay the outstanding debt, the Dominica government is reported to have offered to supply the Venezuelans with agricultural products in a barter exchange. Discussions revolved around supplying bananas, coconuts and citrus.
Recently the Venezuelan government agreed for Jamaica to repay some of its outstanding fuel debts by supplying English speaking teachers to that country.
Meanwhile, the leader of the opposition United Workers Party in St Lucia Allen Chastanet has warned that the high level of indebtedness of that country to Venezuela threatens the country’s future.
On September 6 2005, Dominica signed a bilateral agreement with Venezuela to give effect to the Petrocaribe agreement signed on June 29 2005 along with twelve other Caribbean and Latin American countries. The bilateral agreement allowed for the Government of Dominica to set up its own National Petroleum Company. At the time, Austrie explained the credit mechanism built into the agreement: “As the price of oil continues to rise, we will get a corresponding credit facility. “If the price of oil is $40 a barrel, the credit facility is 30%. If the price of oil is $50 a barrel, the credit facility is 40%. If the price of oil gets to $100 per barrel, we will get a 50% credit. Those monies are loans to the state to be repaid over a 25 year period at 2 per cent interest which can then be used to finance social and economic development programmes in Dominica.“
Energy minister Reginald Austrie has blamed Dominica’s outstanding US $23.6 million debt on late billing by the Venezuelans and his government being requested to make payments on Venezuelan funded projects as the reasons for the delay.
Dominica’s overall level of debt owed to Venezuela is believed to be well over US S70 million.
Countries that have signed up under the Petrocaribe agreement includes Antigua, Haiti, Grenada, St. Vincent and the Grenadines, Nicaragua, Jamaica, Suriname, Dominica, Belize, Cuba, and St Lucia.