More Caribbean Nations Join Chavez' Cheap Oil Plan
More Caribbean Nations Join Chavez' Cheap Oil Plan - Forbes.com
Paul Maidment, 09.07.05, 11:44 AM ET
Venezuela's President Hugo Chavez, Washington's bete noir in South America, is again thumbing his nose northwards.
Nine more Caribbean nations signed up Tuesday to join the cheap-oil pact among Caribbean nations that Chavez proposed in June. Venezuela, the world's fifth-largest oil exporter, offers Petrocaribe members oil at up to 60% of market price if crude is selling at more than $50 a barrel on world markets. Caracas will finance the remaining 40% at preferential, long-term rates and will be willing to take export goods like rice, bananas or sugar as payment in kind.
The nine new members, all small Caribbean nations like the Dominican Republic and St. Kitts and Nevis, which is interested in building an oil refinery, join two notable non-friends of the U.S., President Fidel Castro's Cuba and Prime Minister James Patterson's Jamaica, who signed on at the outset. Trinidad & Tobago, the Caribbean's largest oil producer, and where BP (nyse: BP - news - people ), Exxon Mobil (nyse: XOM - news - people ) and Chevron (nyse: CVX - news - people ) are active, declined to join Petrocaribe, fearing it would damage its own oil industry. The deal stands in stark contrast to Washington's newly inked free trade pact with the Caribbean and plans for a broader free trade agreement for the Americas.
Chavez's critics will accuse him of using Venzuela''s oil wealth to buy influence and push his socialist agenda in America's backyard: "We have the opportunity to break from the path of imposed domination and servitude...The capitalist model...imposed on us is not sustainable," Chavez told the Petrocaribe meeting being held in Montego Bay, Jamaica. But there is absolutely no indication that similar terms will be offered to the United States, a leading customer of Venezuela's state oil company, PDVSA -- or that they would be accepted even if they were.
An oil trading initiative offered by Venezuelan President Hugo Chavez as an alternative to free trade deals backed by the United States has received final approval from Caribbean leaders amid rising world fuel prices.
Chavez and the leaders of nine nations signed accords Tuesday that set out the details of the Venezuelan leader's Petrocaribe initiative, which could help some of the more fragile economies in the region survive the shock of higher fuel prices.
Those signing the accords included the Dominican Republic, which has already proposed a series of national measures aimed at curbing fuel consumption, along with smaller countries such as Antigua, Suriname and St. Kitts and Nevis.
Cuba and Jamaica had previously signed onto the plan.
"We have the opportunity to break from the path of imposed domination and servitude," Chavez told leaders and representatives of 16 nations gathered at a Jamaican resort.
Under the plan, Caribbean governments would pay market price for Venezuelan oil, but they would only be required to pay a portion of the cost up front and could finance the rest over 25 years at 1 percent interest, Jamaican Prime Minister P.J. Patterson told the gathering.
Governments could also pay for part of the cost with services or goods such as rice, bananas or sugar while oil-rich Venezuela would provide assistance in expanding shipping and refining facilities.
Venezuelan Oil Minister Rafael Ramirez said the Petrocaribe initiative may also be extended to any interested Central American nations.
Patterson, whose government last month became the first to finalize a Petrocaribe agreement with Venezuela, said the accords come "without any political strings" though critics of Chavez say it will allow the socialist leader to expand his influence in the region.
Small groups of demonstrators blocked roads Tuesday throughout Jamaica to protest the rising cost of water, electricity and bus fares but the site of the summit was under heavy security and no problems were reported.
During a closing speech, Chavez praised the socialist economic model established by his close friend and ally Cuban President Fidel Castro and urged foreign delegates to consider socialism as an alternative to capitalism.
"Fidel, I think you were always right: it's socialism or death," he said.
Chavez, a frequent critic of the United States, made it clear that he offered an alternative to the dominant power in the region.
"Who can think that the North American empire will be eternal? There's no such thing as an eternal empire," he told the gathering.
"The capitalist model that the empire imposed on us is not sustainable," said Chavez, who referred to the United States as an "imperialist empire" during his speeches.
Chavez's critics accuse him of using his nation's oil wealth to line up allies for his frequent clashes with the U.S. government. Some opponents have also accused him of giving away the prime resource of the world's fifth-largest oil producer.
The Venezuelan president is firmly opposed to the U.S.-proposed Free Trade Area of the Americas, and has instead sought to build support for his own proposal - the Bolivarian Alternative for the Americas trade pact, or ALBA for its Spanish initials, named after independence hero Simon Bolivar.
High oil prices have had severe effects in Caribbean economies already weakened by the waning of the traditional banana and sugar industries
Paul Maidment, 09.07.05, 11:44 AM ET
Venezuela's President Hugo Chavez, Washington's bete noir in South America, is again thumbing his nose northwards.
Nine more Caribbean nations signed up Tuesday to join the cheap-oil pact among Caribbean nations that Chavez proposed in June. Venezuela, the world's fifth-largest oil exporter, offers Petrocaribe members oil at up to 60% of market price if crude is selling at more than $50 a barrel on world markets. Caracas will finance the remaining 40% at preferential, long-term rates and will be willing to take export goods like rice, bananas or sugar as payment in kind.
The nine new members, all small Caribbean nations like the Dominican Republic and St. Kitts and Nevis, which is interested in building an oil refinery, join two notable non-friends of the U.S., President Fidel Castro's Cuba and Prime Minister James Patterson's Jamaica, who signed on at the outset. Trinidad & Tobago, the Caribbean's largest oil producer, and where BP (nyse: BP - news - people ), Exxon Mobil (nyse: XOM - news - people ) and Chevron (nyse: CVX - news - people ) are active, declined to join Petrocaribe, fearing it would damage its own oil industry. The deal stands in stark contrast to Washington's newly inked free trade pact with the Caribbean and plans for a broader free trade agreement for the Americas.
Chavez's critics will accuse him of using Venzuela''s oil wealth to buy influence and push his socialist agenda in America's backyard: "We have the opportunity to break from the path of imposed domination and servitude...The capitalist model...imposed on us is not sustainable," Chavez told the Petrocaribe meeting being held in Montego Bay, Jamaica. But there is absolutely no indication that similar terms will be offered to the United States, a leading customer of Venezuela's state oil company, PDVSA -- or that they would be accepted even if they were.
An oil trading initiative offered by Venezuelan President Hugo Chavez as an alternative to free trade deals backed by the United States has received final approval from Caribbean leaders amid rising world fuel prices.
Chavez and the leaders of nine nations signed accords Tuesday that set out the details of the Venezuelan leader's Petrocaribe initiative, which could help some of the more fragile economies in the region survive the shock of higher fuel prices.
Those signing the accords included the Dominican Republic, which has already proposed a series of national measures aimed at curbing fuel consumption, along with smaller countries such as Antigua, Suriname and St. Kitts and Nevis.
Cuba and Jamaica had previously signed onto the plan.
"We have the opportunity to break from the path of imposed domination and servitude," Chavez told leaders and representatives of 16 nations gathered at a Jamaican resort.
Under the plan, Caribbean governments would pay market price for Venezuelan oil, but they would only be required to pay a portion of the cost up front and could finance the rest over 25 years at 1 percent interest, Jamaican Prime Minister P.J. Patterson told the gathering.
Governments could also pay for part of the cost with services or goods such as rice, bananas or sugar while oil-rich Venezuela would provide assistance in expanding shipping and refining facilities.
Venezuelan Oil Minister Rafael Ramirez said the Petrocaribe initiative may also be extended to any interested Central American nations.
Patterson, whose government last month became the first to finalize a Petrocaribe agreement with Venezuela, said the accords come "without any political strings" though critics of Chavez say it will allow the socialist leader to expand his influence in the region.
Small groups of demonstrators blocked roads Tuesday throughout Jamaica to protest the rising cost of water, electricity and bus fares but the site of the summit was under heavy security and no problems were reported.
During a closing speech, Chavez praised the socialist economic model established by his close friend and ally Cuban President Fidel Castro and urged foreign delegates to consider socialism as an alternative to capitalism.
"Fidel, I think you were always right: it's socialism or death," he said.
Chavez, a frequent critic of the United States, made it clear that he offered an alternative to the dominant power in the region.
"Who can think that the North American empire will be eternal? There's no such thing as an eternal empire," he told the gathering.
"The capitalist model that the empire imposed on us is not sustainable," said Chavez, who referred to the United States as an "imperialist empire" during his speeches.
Chavez's critics accuse him of using his nation's oil wealth to line up allies for his frequent clashes with the U.S. government. Some opponents have also accused him of giving away the prime resource of the world's fifth-largest oil producer.
The Venezuelan president is firmly opposed to the U.S.-proposed Free Trade Area of the Americas, and has instead sought to build support for his own proposal - the Bolivarian Alternative for the Americas trade pact, or ALBA for its Spanish initials, named after independence hero Simon Bolivar.
High oil prices have had severe effects in Caribbean economies already weakened by the waning of the traditional banana and sugar industries
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