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The Venezuelan Crisis Underscores our Interdependence
Posted: Wednesday, December 25, 2002
By Stephen Kangal MOM
CARONI, Trinidad and Tobago
What can be termed the second edition or deja vu of the Venezuelan politico-economic crisis, (the first took place on April 12 last), brings into bold relief the degree of T&T/Venezuelan interdependence.
The imperatives and principles of geo-politics prescribed that our two neighbouring Caribbean republics, in spite of the legacy bequeathed by the Anglo-colonial agenda to keep us apart, must now co-operate in bilateral/regional solidarity geared to foster and promote the fortunes of our strategic, long-term hydrocarbon and other common interests.
The Lake that Unites Us
The Gulf of Paria Lake and the Caribbean Sea Basin must now not divide us. Enlightened and progressive statesmanship conducted via timely interventions must now use channel this interdependence to unite us to help to prosecute and forge collaboratively our common destinies within a US dominated, WTO globalized, competitive market place.
T&T' s Foreign Policy Position
The aforementioned considerations may have underpinned the T&T foreign policy position reiterated recently by PM Manning on the Venezuelan crisis. That consistent policy was also implemented at the debate held at recent Foreign Ministers OAS Meeting on the Venezuelan sponsored and Caricom backed Resolution (32-0) that endorsed and supported the democratic legitimacy of President's Chávez tenure at The Mira Flores Palace in the face of US opposition. The PM pledged T&T's continuing support for the democratically elected presidency of populist leader, Hugo Chávez that the latter publicly acknowledged and acclaimed (Express 15/12, p.5).
Let me analyse some aspects of our expanding interdependence with Venezuela.
World Oil Price Escalation
In respect of oil revenues T&T stands to benefit from an escalating oil- price that has broken the $ US 30.00 ($31.95) barrier directly attributable to the closure of 90% of Venezuela's three million bpd production that contributes 15% of the US market but to a lesser extent to the tension in Iraqi/US relations (Guardian 24/12, p.13). An oil price of $40.00 should hostilities erupt in Iraq is a real possibility. It will cause havoc in the contemporary international financial system and may lead to a recession.
Petroleos de Venezuela (PDVSA) is the nationalised production and refining mega- company that is pivotal to the 22 day old- strike in Venezuela has forged good relations with the hydrocarbon industry in T&T via foreign companies such as British Gas and BP, Mobil that operate in both countries.
Joint Exploration of Fields
On the other hand current TT/Venezuela negotiations being conducted for concluding bilateral arrangements to enable joint exploration/exploitation of oil and gas fields that straddle the 1991 bilateral maritime boundary may be delayed owing to important top managerial changes being effected at PDVSA by Chávez (Guardian 2/12, p.12; 24/12, p.15; Express 15/12, p.5) in spite of assurances to the contrary given by the Venezuela Foreign Minister Roy Chaterdon Matos.
The Refining Industry in T&T
The Petrotrin Refinery depends on Venezuelan crude (> 20,000 bpd) for 20% of its daily refinery throughput and has taken steps to source alternative crude from Brazil, Colombia, West Africa etc (Newsday 24/12, p.7). With Venezuelan supplies of oil being cut off to Guyana and Barbados these Caricom partners should appreciate their folly of going for Venezuelan oil on volatile, but concessionary- terms and may request bail –out contingency supplies from Petrotrin. I will not rule out a similar SOS from Castro that Venezuela supplies with 53,000 bpd and which has dried up (Express 23/12, p.4). Prime Minster Manning just returned from Cuba where he attended ceremonies to commemorate the 30th Anniversary of the establishment of Caricom/Cuba diplomatic relations that started in 1972.
Venezuelan LNG Industry
Several of our offshore oil supply companies may be adversely affected by the continuing closure of PDVSA. Political instability that has hitherto characterised the tenure of the Chávez regime may delay Venezuelan plans to kick-start its proposed LNG industry scheduled to come on stream by 2007 (Guardian 2/12, p.12) and compete with Atlantic LNG for the US market, 52% of which is now cornered by T&T.
My commiseration to Universal Foods and Peake's for closure, albeit temporarily, of the lucrative Venezuelan market for cereals (30 containers per month) and air conditioners (50% of production) respectively.
Trinidad's Maritime Industry
The geo-political and strategic-economic factors have manifested themselves in the favourable spin –offs that have accrued to the local maritime /shipping industry. Both Point Lisas (PLIPDECO) and The Port Authority (PATT) have benefited enormously from a consequential sudden, unexpected upsurge in the Venezuelan bound trans-shipment trade as well as storage of diverted Venezuelan bound Xmas containers. The congestion at these two ports from unscheduled calls made by cargo vessels was expected (Express 12/12, p.4).
Air Travel
The suspension/reduction of Piarco-Caracas-Curacao-Margarita air travel owing to refueling problems/travel restrictions/liquidity problems adversely affected the T&T suit case trade. This was compounded by the absence of the usual influx of Venezuelan Xmas shoppers POS-bound for fabrics and Xmas merchandise owing to US currency being in short supply in the mainland due to the hitherto 21 day strike. Even the Cedros fishermen withdrew from the traditional Venezuelan shrimping grounds in the face of a politically- divided unpredictable Guardia Nacional (Probe 22/12, p.29 ). Venezuelan students enrolled in institutions in T&T should not be unduly affected in 2003.
Consular Relations
From a political/consular perspective T&T may yet have to evacuate its nationals/Embassy staff should the crisis escalate into violence (Express 14/12, p.20). One also has to weigh the potential cost of T&T's strong diplomatic support accorded to President Chávez both bilaterally and at the OAS Meeting within the context of current/future T&T/US relations. Oil would appear to be the mitigating factor.
TT/ USA Relations
There is evidence to support alleged involvement of the Bush Administration in covert support of the Opposition, middle-upper class collusion designed to remove leftist, Castro-friendly Chávez as it did on April 12 this year. But the US may be stymied in its usual retaliatory response by the constrictions imposed by the current tri-dimensional petro-politics that is at the heart of the current impasse.
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