After three years and Venezuela’s failure to repay a US$50 million debt to local carrier Caribbean Airlines Ltd, (CAL), international relations expert Prof W Andy Knight says close attention must be paid to the arrangements discussed last Monday between Prime Minister Dr Keith Rowley and President Nicolás Maduro.
Knight said there was every indication that Venezuela, once a potentially very rich country, would begin to default on its loans and perhaps experience difficulty in buying goods that were even subsidised in price.
Venezuela owes CAL monies for ticket sales.
The airline has been trying to get back the funds in US dollars but it has been unsuccessful.
When Maduro visited T&T in February 2015, former prime minister Kamla Persad-Bissessar said the debt was discussed. She said Maduro was very adamant on settling the debt to CAL.
Last week, Finance Minister Colm Imbert said the debt had not been repaid.
Knight described Maduro’s visit as “a propaganda visit” that would accomplish very little in terms of improving the relationship between T&T and Venezuela.
A Barbadian by birth, Knight teaches international relations at the University of Alberta, Canada.
He spent the past three years on a secondment from his university to be director of the Institute of International Relations at the University of the West Indies, St Augustine campus. That secondment ended in December 2015.
Among the agreements made between Rowley and Maduro were trade, collaboration on gas exploration, security, the repatriation of Trinidadians being held in Venezuelan prisons and the repatriation of Venezuelans who found themselves behind bars in T&T.
Knight said, “I may be overly sceptical, but the fact that a promise was made by Maduro, on his last trip to Trinidad in 2015, that his government would pay the millions of dollars owed by Venezuela to Caribbean Airlines, should make one stand up and take notice.”
Will the food loan
be sustainable?
Meanwhile, it is uncertain how the US$50 million revolving food fund made between Venezuela and T&T will operate or even improve trade relations between the two countries.
Knight said Rowley will need the support of the private sector for the arrangement to work.
“Basically it seems to me that the US$50 million will be used to purchase such goods as butter, chicken, pork, ketchup, toilet paper, rice, black beans etc, so that the people in eastern Venezuela who are experiencing these shortages will be placated at least for now.”
However, he said, Trinidadian business people, as in other parts of the globe, were in business to make money and if they were being asked to offer their products at cost without any markup, he could not see how that revolving fund would be sustainable.
He felt that perhaps Rowley was looking at this as an opportunity to help prop up the Maduro government and, in so doing, stave off the inevitability of refugees from Venezuela, especially those from the eastern part of the country flocking to Trinidad.
Knight said it was a demonstration by Maduro to his domestic public that he was still in charge and was doing all in his power to use his good relationship with T&T and Jamaica to negotiate a series of agreements aimed at staving off the inevitable.
He added that it was becoming quite evident that Maduro was losing control of his country and it must be painfully embarrassing for Venezuelans to be in a position where they have to literally ask for subsidised goods from T&T, a country also undergoing its fair share of economic difficulty with the low oil revenues and what seemed like economic mismanagement by the past government.
“The fact that Venezuela is reaching out to Trinidad and Tobago, its close neighbour, to help provide manufactured goods (food, toilet paper, medicine, etc) is an acknowledgment that the Venezuelan government has seriously mismanaged its economy.
“After all, Venezuela was considered the wealthiest country in South America. It has the second largest oil reserves in the world, after Saudi Arabia. But the country, under both Hugo Chavez and Maduro, has relied much too heavily on its oil revenues.”
Gas deal a “win-win”
for both countries
The topic of the Loran Manatee gas fields had also been on the agenda during Maduro's last visit with former prime minister Kamla Persad-Bissessar.
They had signed an agreement to jointly develop the massive Loran Manatee gas fields which are located within the maritime borders of the two countries.
But a year later, Knight said he was quite surprised to see it on the agenda.
He said, “What this tells me is that not much have been done since last year to put in place the process for joint exploration of the gas fields in that area.”
On Monday though, the two governments signed a unitisation and unit operating agreement that will allow a consortium of oil companies to develop a strategy for joint exploration of the gas fields.
What this means for Trinidad is that the country will process the gas and export it as LNG to international markets.
Knight said, “I think that this particular case is a win-win for both Venezuela and T&T.
“The sunk costs for the joint gas exploration will be borne largely by Royal Dutch Shell, Chevron Corp, Petroles de Venezuela South Africa, and Shell. And T&T, rather than Venezuela, will be in a position to process the natural gas.”