
St George’s, June 20, 2013 – A former Grenada minister, who was part of negotiations that resulted in the signing of a maritime agreement between Grenada and Trinidad and Tobago in 2010, wants his country to now also engage Venezuela in maritime talks.
According to Peter David, it is “absolutely necessary’’ that there is a strengthening of bilateral ties between Grenada and Venezuela.
The two countries, he noted, “share a physical connection by the close proximity of our coastlines’’.
“The difference between our coastlines is less than the 200 nautical miles of exclusive economic zone as stipulated in international law,’’ said David, a former Grenada Foreign Minister.
“Like we did with Trinidad and Tobago, Grenada needs to enter into negotiations with Venezuela to delimit maritime boundaries. The science shows that the Venezuela side of our maritime space is far more fertile, in terms of oil and gas, than the Trinidad end.’’
David, who also served as Tourism Minister before resigning from the former NDC government in April 2012, made the call for the opening of maritime talks with Venezuela while speaking in St George’s at the formal launch of the Grenada-Venezuela Friendship Association (GVFA).
The launch was held at the National Museum and David’s speech was titled, “The Importance of Venezuela to Grenada and the Eastern Caribbean’’.
Here is the text of the speech.
Good evening, ladies and gentlemen. Governor General Dame Cecile La Grenade; members of the diplomatic corps; ministers of government; other dignitaries; comrades all. Let me begin by asking you to join me in giving a special, public welcome to our new Venezuelan Ambassador to Grenada, His Excellency Jorge Guereero.
For this event today – an evening of solidarity with the Venezuelan people – I’ve been invited to speak on, “The Importance of Venezuela to Grenada and the Eastern Caribbean’’. The substance of the topic is Venezuela’s importance as it relates to economic development matters.
However, before delving into those matters, I want to say that the importance of Venezuela to the Caribbean goes way beyond economic concerns. There have been people-to-people contact and exchange between Venezuela and the Caribbean for centuries.
Even though our schools may not have taught us about it, or we normally may not consider it, Venezuela is part of the Caribbean. Although located in South America, part of the Venezuelan coastline is washed by the Caribbean Sea. There are thousands of Venezuelans who have sons, daughters and grandchildren living in neighbouring Trinidad; and vice versa.
And, for us in Grenada, we often think of Trinidad as having the largest regional population of Grenadians living outside of Grenada. Many would be surprised that the population of Grenadians in Venezuela may be equally large or even larger. And, they started going there long before 1974 when Grenada became Independent. Shortly thereafter, we established formal diplomatic relations with Venezuela.
For some of us, our first contact with Venezuelans occurred not too far from here – on the Carenage; or as some old timers like myself like to call it, The Wharf.
Through our interaction with Venezuelan traders who visited regularly on small vessels, we were introduced to our first lessons of Spanish; learning to count – uno, dos, tres; learning to say good day and good night – buenos dias, buenos noches.
So, ladies and gentlemen, the launch of the Grenada-Venezuela Friendship Association is – in a sense – only the formalization of a process that has been ongoing for many, many years. We – two peoples and two countries – have been friends for a very long time.
In the remainder of my presentation, I want to look at some other aspects of Venezuela’s relations with Grenada and the English-speaking Caribbean, particularly the OECS. The presentation can be divided into categories such as:
§ The inherent structural economic challenges of the OECS member-states;
§ The loss of preferential treatment, the decrease in donor financing, and the shift in priorities of traditional allies/development partners; and
§ Venezuela as a development partner.
It is important at the outset for us to acknowledge, in summary form, the basic socio-economic facts about the member-states of the OECS.
1. They are structurally dependent, open economies, which are prone to natural disasters and rank very high in the league tables of disaster-prone countries internationally.
2. Very small economically active population. Therefore, labour productivity is comparatively low by international standards. This is further compounded by high unemployment rates.
3. Hugely dependent on capital flows from overseas whether by way of foreign direct investment, grants or loans, and remittances.
4. Each OECS member-country is quite dependent on external source markets for trade in goods, tourism, and services generally. Internal demand, by itself, is unable to produce a sufficiency of surplus resources to drive economic, infrastructural or social development.
5. The virtual cessation of market preferences for Windward Islands’ agricultural commodities, including Grenada and St Lucia bananas, has shackled the agricultural sector.
6. Other challenges faced by OECS member-countries include the insufficiency of adequate and well-developed tourism infrastructure; limitations in their very small private sector; the comparatively high cost of electricity; the lack of sufficient creativity and risk-taking; the public sector’s own inefficiencies; high levels of public debt; declining secular rates of economic growth; and a deficit in the human resource capacity of member-states through the migration of young, highly trained professionals seeking greener pastures.
Friends, this array of basic socio-economic facts and considerations presents serious structural deficiencies in the economies of the OECS. These circumstances manifest themselves especially in times of global economic slowdown or regional contraction.
It is evident, therefore, that the challenging socio-economic environment in the member-states of the OECS flows from pre-existing structural vulnerabilities and the history of the region’s political economy.
Moreover, the redirection of grant funding and the apparent shift in priorities of traditional allies, (US, UK, Canada, etc.) saw a drastic decrease in the levels of economic and technical cooperation initiatives with member-states. This phenomenon also compounds the structural deficiencies that we referred to earlier.
For example, since the end of the Cold War, official development assistance – from traditional allies to CARICOM/OECS countries – has dwindled and has focused only on issues of concern to the United States, Canada and Britain; issues such as the interdiction of drug traffickers; port and airport security; and illegal migration. And, while these traditional allies have been neglectful of the Caribbean’s needs for assistance, they have been proactive on issues of trade in goods, which effectively brought an end to preferential arrangements.
Therefore, it became crystal clear that the OECS member-states had to find and engage non-traditional allies in their development. They needed new partners and started looking south and at building South-South cooperation. And, in looking south, Venezuela became a key development partner.
In this regard, we welcome the statement by Prime Minister Keith Mitchell at the swearing in ceremony of his Cabinet shortly after his election victory. He said that, while he intends to maintain and strengthen ties with traditional allies, he will seek closer South-South cooperation, mentioning Cuba and Venezuela in particular.
The fact that Venezuela has had a long interest in the Eastern Caribbean islands is well known.
In the 1970s and 1980s, Venezuelan governments took an active interest in the countries of the OECS, offering economic assistance of various kinds, seeking to have their private sector find a place in the countries’ import patterns and, to some extent, seeking active investment opportunities.
With the rise of the Windward Islands’ banana industry, for example, a joint venture was established between the Venezuelan private sector and the Windward Islands’ governments to provide boxes and packaging materials for the banana industry.
The Venezuelan national airline soon began moving through the islands, reflecting an early Venezuelan interest in gaining a part of the transport business in the Anglophone Caribbean.
And, in 1975, it was the St Lucian Prime Minister John Compton, who, in the face of difficulty in finding regional solutions to the problems of LIAT – not dissimilar to those that exist today – led a delegation to Venezuela, seeking and obtaining assistance that led to the consolidation of the airline as LIAT (1975) Limited.
The recession that struck Venezuela in the ’90s, during the government of President Carlos Andres Perez, muted Venezuelan diplomatic and economic-technical assistance in the OECS islands.
But it was, of course, the rise of President Hugo Chávez that began a heightened and more focused level of engagement with the OECS. This has undoubtedly raised the profile of Venezuela in the region. President Chavez, as we know, passed away in March. President Nicolas Maduro succeeded him and I had the great honour to attend his swearing in ceremony in Caracas in April.
Some of the major regional initiatives embarked upon by President Chavez included:
PetroCaribe
CARICOM/OECS countries – with the exception of Trinidad and Tobago –suffered from skyrocketing oil prices which reached unprecedented levels, placing an enormous burden on their economies and stunting development.
The government of President Chavez in Venezuela benefited greatly from high oil prices. When President Chavez came to power in 1999, the price of a barrel of oil was $10. During his time in office, the price rose to as much as $75 a barrel before dropping off to its average of between $55 and $60.
The windfall in oil profits allowed Venezuela to pay off its debts to the IMF and World Bank with the declaration from the then Finance Minister: “Goodbye to you…Venezuela is free and sovereign”, illustrating the scope of the Venezuelan government’s maneuverability.
In 2005, President Chavez launched the PetroCaribe initiative.
Briefly described, PetroCaribe consists of two sets of agreements: first, a framework accord, the Energy Co-operation Agreement, which was signed by all OECS governments in June 2005; and, second, several bilateral energy agreements which were subsequently signed between individual CARICOM governments and the government of Venezuela.
Under PetroCaribe, Venezuela provides crude and refined oil products to the participating states for part payment (usually 50%) within 90 days. The balance is then to be paid over a period of 23 to 25 years at one percent interest, as long as the cost of a barrel of oil does not fall below US$50 when the interest rate would rise to two percent.
The question now arises: what do the participating Caribbean governments get from this initiative?
Clearly, the participating Caribbean countries, including Grenada, derive immediate relief from payment of the full cost of their oil requirements under PetroCaribe, which eases their cash flow and allows them to spend on other projects.
This arrangement allows government to build infrastructure, embark upon poverty alleviation programs, finance human resource development, and the provision of health services.
OECS member-states have undoubtedly benefitted from this arrangement. The cash flow maneuverability that it provides government is indisputable.
The ALBA-CARIBE Fund
The overall objective of the ALBA Fund is to assist in the elimination of the disparity which exists between – and among – nations; to alleviate poverty, and to allow for the independence of the economies of member-states by encouraging and supporting investments in the various countries.
Indeed, the eye-care program that member-states benefitted from was financed under the ALBA.
Moreover, the ALBA allows member-states access to concessionary loans and grants and budgetary support for education, healthcare, agriculture and food production.
It is also important to note the ALBA arrangement promotes “Fair Trade Over Free Trade”.
Indeed, in addition to these signature initiatives, Grenada and the other OECS member-states have benefited- and continue to benefit – from numerous bilateral cooperation initiatives with Venezuela.
For many years Grenada has benefited from Venezuela through technical assistance especially in agriculture with supplies of fertilizers, scholarships and training and financial aid.
In recent times, especially after Hurricane Ivan in 2004, aid from Venezuela has escalated.
Let me quickly give you some specific figures in terms of grant funding:
In 2006 the government of Grenada received US$30 million from the government of Venezuela. $5 million was allocated to the Grenada Youth Programme; $5 million for housing materials assistance; $10 million for the Hospital Project; and $10 million for the LaCalome Housing Project in St. David.
In 2010 the government of the Bolivian Republic of Venezuela provided a grant of US$6.1 million to execute projects in Grenada. The money was earmarked for the following projects:
· Completion of the St. George’s Market Square
· Refurbishing of the Tanteen Pavilion, with reconstruction of the Angel Pan House to be completed
· Construction of a community centre and pavilion at St. Patrick
· Construction of a community centre and pavilion at Mont Toute, St. George’s
· Repair of roads and the Ford Bridge in St. Andrew; and
· Continuation of work at the St. George’s General Hospital.
The Prospects Going Forward
The foregoing is an undeniable testament that the Bolivarian Republic of Venezuela has indeed been a reliable development partner within the OECS.
And, since President Maduro has not indicated otherwise, the continuation of the Chavez brand of engagement with the sub-region is certainly very encouraging for the future of Venezuela-OECS cooperation. No doubt, we are on a path towards further consolidation. In the case of Grenada, the importance of strengthening bilateral ties with Venezuela is absolutely necessary.
Notwithstanding the social links to Venezuela by the many Grenadians who have settled there, we also share a physical connection by the close proximity of our coastlines. Indeed, the difference between our coastlines is less than the 200 nautical miles of exclusive economic zone as stipulated in international law.
Obviously, therefore, like we did with Trinidad and Tobago, Grenada needs to enter into negotiations with Venezuela to delimit maritime boundaries. The science shows that the Venezuela side of our maritime space is far more fertile, in terms of oil and gas, than the Trinidad end.
It is in Grenada’s best interest, therefore, that Grenada-Venezuela relations remain on a strong and steady growth path.
At the level of the Grenada-Venezuela Friendship Association, we’ll seek to strengthen the bonds of people-to-people relations through cultural exchanges and the opening up more opportunities for Grenadian students to study in Venezuela, as well as have programs for Venezuelans to come to our country to study English.
The Grenada-Venezuela Friendship Association is here and I invite all of you to join the Association and to invite others to also become members.
I thank you and may God bless you all.