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Petrocaribe debt grew by 2467% since 2005

The Petrocaribe Accord represented US$8.22 billion in petroleum imports to the Dominican Republic from 2005 until 30 June 2014, according to the Office of the Coordinator of the Petrocaribe Negotiations, part of Venezuela’s Ministry of Hacienda, as reported in Diario Libre.

In August 2014, the debt from the Petrocaribe Accord closed at US $4.095 billion, which represented 26% of the country’s total overseas obligations.

Of the total PetroCaribe import billed, US$4.261 billion, or 51.8% has been financed at an interest rate of 1% per year, payable over 23 years with a two-year grace period, said Petrocaribe Office deputy director Pablo de Jesus Tejeda King. “This debt has been paid punctually, and we have never been in arrears.”

Since 2010, this debt began to be “compensated” partially, with exports of food goods produced in the Dominican Republic that comply with a 70% rule of Dominican origin along with other requirements, adds Petrocaribe Office general coordinator Jose Ramon Suriel. Of the total, the DR has paid US$136.9 million in export products, as reported in Diario Libre.

During 2014, up until October, the Dominican Republic exported to Venezuela, in payment of the Petrocaribe debts, goods for a value of US $40.3 million. These products are pasta, flour, liquid sugar, mono-calcium phosphate and de-fluoridated phosphate.

Dropping petroleum prices will reduce the privileges of PetroCaribe for the Dominican government. In this context, Stratford Global Intelligence estimates that if oil prices remain low for a long period, which seems likely, Venezuela “might be obliged to reconsider its agreements with Cuba or programs such as Petrocaribe.”

According to the geopolitical intelligence firm, “Venezuela’s high social spending and the depressed world oil prices mean that the government has reduced its cash flow.” If this is confirmed, the Nicolas Maduro government will face difficulties in order to maintain internally its broad-based social work program that sustains his political support and oversees the financial cost of the very costly Petrocaribe Accord.

Source: DR1, DiarioLibre

Category: DR News |

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Last updated March 23, 2017 at 1:16 AM
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