Caribbean & Central America - July 2013 (ISSN 1741-4458)

Petrocaribe: On 2 July Guatemala’s Vice-President Roxana Baldetti said that the government was analysing the possibility of Guatemala signing up to Petrocaribe, Venezuela’s oil trading scheme, on the condition that interest rates charged are less than 2%. Under the initiative, Venezuela offers oil to the scheme’s 17 members on concessionary terms, whereby members pay 40% at market rate within 90 days and the remaining 60% spread over 25 years at an interest rate of 1%, as long as oil prices are over US$100/b. When oil prices fall below US$100/barrel, the conditions are tightened, so that 50% is demanded upfront. However, both Guatemala and Honduras – which Venezuela’s President Nicolás Maduro announced on 5 May at a Petrocaribe summit in Caracas that would now be included in the scheme – claim that the Venezuelan government has doubled interest rates to 2%. Guatemala had signed up to Petrocaribe in 2009 under the Alvaro Colom administration (2008-2012), but it ultimately failed to ratify the agreement amid last minute differences with Venezuela over its terms and conditions. Honduras first signed up to Petrocaribe in December 2007 under the former president, Manuel Zelaya (2006-2009), but was suspended after Zelaya was ejected in a coup in June 2009. The change in interest rates was notably not mentioned in the final statement issued at the most recent Petrocaribe summit, held in Managua, Nicaragua, on 29 June. What did come out of the Managua summit, however, was the possibility of boosting trade between Petrocaribe members in regional transportation, communication, agriculture, tourism and social service projects although specifics were not provided.

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