The Tribune

EDITOR, The Tribune

The A-list columnist Philip Galanis posited an interesting take on the geopolitical machinations by the US and China to achieve hegemony in the Caribbean.

But while Galanis was transfixed by these two elephants having at it with all of the tools of persuasion at their disposal, even he failed to see the 800 lb. gorilla watching the festivities.

He could not see that, from the US side of the table, the issue was Venezuela and specifically the Trump administration’s attempts to boot its president Nicolas Maduro out of office for supposedly committing the crime of incompetency.

China supports Maduro and has been giving Venezuela an assortment of oil purchase life-lines for some time. It is largely because of the support of China and Russia that Maduro remains president of Venezuela today.

Last week Donald Trump hand-picked five heads of government from the Caribbean to attend him at his palatial Mar-a-Largo retreat in Florida. Coincidentally, the five countries – the Bahamas, Jamaica, Haiti, St. Lucia and the Dominican Republic – all support Juan Guaido, the man the Americans recognize as the constitutional (though un-elected) president of Venezuela.

This was not a case of rewarding the favoured five with a presidential audience, but more a case of admonishing other Caribbean leaders for not joining the US-led anti-Maduro bandwagon.

Caricom has officially adopted a wait-and-see attitude on Venezuela and prefers a political solution to the problems there. They are opposed to any form of military intervention as some perceive the US might be chomping at the bit to execute.

The US put on a full court press to isolate Maduro and while the fav-five flew to Florida, Beijing was busy standing up for international norms in what was clearly a rebuke to the US.

This week was supposed to be the 60th annual general meeting of the Inter-American Development Bank (IDB) in Chengdu, China. The US insisted that the host China issue visas to Guaido’s representatives and none to the delegates sent by Maduro.

China refused but did offer the olive branch of proposing that no representative be seated for Venezuela, a Solomonic resolution that stepped on everybody’s toes, equally.

But the US was having none of it and so intimidated Luis Alberto Moreno, the President of the IDB into doing something the Bank has never done in its history: cancel the highest-level policy-making meeting of the Board of Governors. Who cares about climate change, infrastructure and innovation that were on the agenda anyway?

The bank will supposedly reschedule to a new venue within 30 days. But the fact that Moreno, a former Minister of Economic Development in Colombia who harbours designs on the Colombian presidency himself, could be so easily rolled by the US Treasury Department was a harbinger for the eventual irrelevancy of the IDB in regional development.

Suddenly, China’s New Development Bank (NDB) looks more sexy to the developing world.

The US still would have gotten its way with the IDB but Moreno should have been seen to at least put up a fight to defend the bank’s neutrality in matters involving the internal affairs of a member state.

What is most egregious is the fact that four of the fav-five who traipsed to Mar-a-Largo were the beneficiaries of billions upon billions of dollars from Hugo Chavez via the PetroCaribe oil slush fund.

Despite the passionate advocacy of then BEC Chairman Leslie Miller, the Bahamas did not sign on to PetroCaribe.

But for the others it was a life-line between survival and fiscal calamity back when the price of a barrel of oil hit $140 10 years ago. PetroCaribe set a price as low as $70 a barrel that the beneficiary countries paid at the pump and then financed the difference between $70 and the daily spot price of oil over 25 years at interest rates as low as 1%.

A part of that money Venezuela pumped into the PetroCaribe Fund, a philanthropic piggy bank that helped these countries balance their budgets and financed schools, social programmes and even small businesses and farms.

The two most vocal critics of the PetroCaribe cheap oil programme were Trinidad and Tobago (an oil exporter that never felt the sting of high oil prices) and the United States that was losing influence in its backyard to an upstart it hated.

So clever at seizing the public relations mantle was Chavez that over the objections of the US government in 2008 when the financial crisis was biting, he sent free Venezuelan home-heating oil to hundreds of thousands of poor Americans.

Even when oil prices plummeted, Chavez kept the free heating oil flowing to these American homes prompting Time magazine to ask back in 2009, why, if Chavez can be so benevolent, can’t the US oil companies do the same.

Chavez and Maduro ran into a triple whammy of falling oil prices, biting US sanctions and the sheer incompetence and corruption of the government in removing professionals from the state-run oil company and installing either generals or cronies who ran it into the ground.

While Barack Obama used both carrot and stick with Maduro in an attempt to walk the fine line between hardship and misery for the Venezuelan people, Trump doubled down and essentially shut down the oil company and the financial apparatus on which it depended.

In essence they ostracized Maduro but strangled poor Venezuelans. If Maduro cannot sell his oil, thanks to the embargo, how is he to get the money to pay for the food and medicines his people desperately need?

The US solution is for power to be transferred to Guaido and they will immediately lift the sanctions. Supposedly manna will flow from heaven. This is foreign policy based on the cult of personality and not a reasoned foreign policy based on the national interest of either state.

Push must come to shove soon, or we could have the biggest humanitarian crisis that this hemisphere has witnessed in recent times.

With Maduro’s hands tied, the Jamaicans are getting ready to transfer US$1.6 billion from the PetroCaribe Fund into their Treasury and Maduro is powerless to intervene. Indeed, Jamaica’s climb out of the IMF debt trap has been helped in part by seizing the chance to repay its oil debt to Venezuela at a heavy discount.

The Dominican Republic owed Venezuela US$4 billion but used the embargo confusion to settle on a repayment of $1.9 billion, representing a $2.1 billion haircut for the Venezuelan people.

Haiti has gotten so much money from PetroCaribe and Venezuela has forgiven so much of their debt that both sides have lost count. The shoddy accounting is perhaps exacerbated by the heavy hand of corruption on both sides.

The Venezuelans could be forgiven for questioning the loyalty of their Caribbean amigos in all of this.

Meanwhile Mr. Galanis probably knows another African saying: When you wrestle with a gorilla you don’t quit when you’re tired – you quit when the gorilla is tired.

THE GRADUATE

Nassau

April 11, 2019