Chavez

PRIME MINISTER Bruce Golding says he is confident Venezuela will be sympathetic to the cause of Caribbean nations and not alter the PetroCaribe Agreement in a way that would further hurt the region's economies.

"What gives me some encouragement is that there seems to be a strong sense of goodwill and, therefore, I believe we will be able to work this one out," Golding told journalists at a press conference at Jamaica House on Monday.

Jamaica had been preparing to host Venezuelan President Hugo Chavez for Independence Day celebrations and for discussions around a proposed new-look PetroCaribe agreement.

However, Chavez cancelled his visit following an injury sustained in a softball game Sunday.

Already, Golding has sent Energy and Mining Minister James Robertson off to Venezuela to meet with his energy counterpart as Jamaica attempts to secure the best possible deferred-payment oil agreement with Venezuela.

Robertson's visit follows that of Dr Wesley Hughes, the director general of the Planning Institute of Jamaica.

Better understanding

Hughes led a team to Caracas and Golding said Jamaica now has a better understanding of the parameters being proposed by Venezuela.

The PetroCaribe is a Caribbean oil alliance with Venezuela to purchase oil on conditions of preferential payment. The alliance, which was launched in June 2005, allows the nations to buy oil at market value but only part of the price is needed upfront; the remainder can be paid through a 25-year financing agreement on one per cent interest.

However, Venezuela has indicated that they wish to change the agreement. The nature of the proposed changes has not been made public.

According to Golding, "Given the kind of difficulty that Venezuela is now facing, it is not difficult to understand why they would want to make some adjustment to those arrangements."

CARICOM Chairman Bharrat Jagdeo said on Monday that the region "would like the impending changes altered or delayed and particularly over the period when we have some difficulties."

Meanwhile, Golding said the Chavez government was aware of the difficulties a change to the agreement could have on the region.

"We had already indicated to the Venezuelan government that, while we understand the difficulties that may trigger a change in the PetroCaribe agreement, we have stressed to them the fact that not only our current Budget but our medium-term economic programme was predicated on the PetroCaribe agreement as it now exists and, therefore, any sudden change in that arrangement would have a signifi-cant effect on both our external as well as our fiscal accounts," Golding said.

The prime minister has said that agreements such as the PetroCaribe initiative could further lead to the indebtedness of countries like Jamaica if care is not taken in the way deferred payment is handled.

"One of the concerns that cannot be overlooked is the fact that these very generous credit terms were increasing, at a significant level, the indebtedness of member countries."

According to Golding, the discussions revolve around not putting "a huge weight of mortgage around the necks of the next generation because of the generosity of the Venezuelan government."

Jamaica's debt now stands at $1.2 trillion.

daraine.luton@gleanerjm.com