Any political party that governs a country during a period of international recession is expected to devise novel programmes and policies for stimulating economic activity and for relieving the financial pressure on the people and institutions of the country.
It is against this background therefore that the Peoples Empowerment Party hereby accuses the current governmental administration of being negligent and delinquent in their management of Barbados’ economic affairs over the past five and a half years of economic recession.
And we make this charge simply because we cannot identify a single truly meaningful programme or policy that the governing Democratic Labour Party administration has designed and implemented over the past five and a half years to tackle the recession!
In light of this woeful record, the PEP would like to take the initiative to suggest to Prime Minister Freundel Stuart and Minister of Finance Chris Sinckler that one very meaningful and concrete anti-recession policy that they can adopt is to sign Barbados on to the Petro Caribe Energy Cooperation Agreement.
As many Barbadians would be aware, the Petro Caribe Energy Cooperation Agreement was the brainchild of the late President Hugo Chavez of Venezuela, and was designed to protect vulnerable petroleum-importing Caribbean nations by affording them access to Venezuela’s massive stock of petroleum reserves on the most favourable financial terms available world-wide.
Some 18 nations are now members of the Petro Caribe arrangement, with no less than 12 CARICOM member states participating — Antigua, Bahamas, Dominica, Grenada, Guyana, Haiti, Jamaica, St. Kitts, St. Vincent, St. Lucia and Suriname. The only CARICOM “odd men out” are Trinidad & Tobago (an oil rich country) and Barbados!
The CARICOM members of Petro Caribe have all benefitted tremendously from being part of the energy cooperation club, and many of them would have been totally devastated by the international recession were it not for the protection and financial assistance that they derived from Petro Caribe. Why then is the Barbados Government perversely and stupidly denying Barbados the undoubted financial benefits of being a member of Petro Caribe?
The initial reason given by the Barbados government for not joining Petro Caribe was that the Petro Caribe mechanism of deferring payment on approximately one half of the country’s fuel import bill and converting it into a 25 year loan at a fantastically low interest rate of one per cent per annum, had the disadvantage of adding to the country’s debt profile.
Well, if that was the reason back in 2007 and 2008 for not joining Petro Caribe, that reason no longer exists today, for the Petro Caribe arrangement has been modified so as to preclude deferred payments.
What obtains today is that the government of the receiving state (in this case — Barbados — acting through the state owned National Petroleum Corporation) pays 40 per cent of the price of the fuel imports to the Petroleum Corporation of Venezuela, and the other 60 per cent of the price into a fund known as the “Petro Caribe Bilateral Fund”.
Furthermore, arrangements can be made to pay the 60 per cent that is deposited in the Petro Caribe Bilateral Fund in the form of bartered goods and services rather than hard cash. Thus, Barbados could make arrangements to pay with Barbados produced sugar, thereby providing a life-line to our struggling sugar industry, or in the form of tourism services that could be provided by our small locally owned hotels.
In addition, the money, or the value of the goods and services, that Barbados pays into the Petro Caribe Bilateral Fund then becomes available to Barbados to access either as soft loans at four per cent interest or as outright grants that are to be applied to social programmes in Barbados.
Now, since Barbados’ annual expenditure on fuel imports is some $800 million, it means that approximately 60 per cent of this — $480million — would be available to be accessed every year in the form of soft loans and grants. Just imagine how much assistance could be given to our struggling cash-strapped economic producers and social development institutions and programmes through these bilateral fund monies.
It should also be said that joining Petro Caribe does not mean that Barbados has to terminate its fuel importing commercial relationship with Trinidad & Tobago. Barbados could simply have two sources of fuel imports, and could manage the two relationships in a manner that is most favourable to the national interests of Barbados.
The PEP hereby calls upon the Government of Barbados to sign on to the Petro Caribe Energy Cooperation Agreement as a matter of urgency.
* David Comissiong is president of the Peoples Empowerment Party.