[Marxism] Chávez's Oil Initiative Testing Old Caribbean Allegiances

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

(Venezuela's policy of offering lower-than-market prices for its oil
won't force private companies or anyone else out of the market since
those who wish to shop elsewhere and pay more for their petroleum
products will be completely free to do that. It's a free world, OK?)
===================================================================

Chávez's Oil Initiative Is Testing Old Allegiances in the Caribbean
By SHEARON ROBERTS
March 4, 2006; Page A4
WALL STREET JOURNAL

Venezuelan President Hugo Chávez's new energy initiative guarantees
Caribbean islands cut-rate financing for oil and a market for
agricultural products. Most of the 15 Caribbean Community countries
have embraced the alliance, with a notable exception: the twin-island
nation of Trinidad and Tobago.

Trinidad and Tobago, one of the few Caribbean countries with abundant
oil and natural-gas reserves, tends to tilt toward the U.S. -- a big
purchaser of its liquefied natural gas -- and doesn't want to lose
oil sales to island neighbors or its leadership position in the
region.

But resisting Venezuela, and its state-run oil company, is difficult.
Caracas's initiative, called PetroCaribe, is winning Mr. Chávez, an
outspoken opponent of the Bush administration, crucial support in a
region that tends to vote as a bloc in the Organization of American
States and other international bodies.

For the 13 Caribbean Community nations that signed up, PetroCaribe
guarantees an energy supply and an outlet for farm products. "As
heavily indebted countries, Caribbean nations are facing the erosion
of preferential markets in Europe for commodities like sugar and
bananas," says Anthony Bryan, a senior associate with the Center for
Strategic and International Studies in Washington. "They see
PetroCaribe as a very attractive initiative."

Venezuela lets the Caribbean islands finance 40% of their oil
purchases at a 1% interest rate over 25 years -- following a two-year
grace period. The islands can repay the balance with goods and
services, echoing Venezuela's "doctors for oil" initiative with Cuba,
through which thousands of Cuban doctors, nurses and dentists treat
Venezuela's poor in exchange for oil.

While Trinidad Prime Minister Patrick Manning chose not to
participate in the Chávez initiative, he offered to help other
islands negotiate deals with Venezuela. Trinidad's population has a
soft spot for the charismatic Mr. Chávez, but the nation's revenue
comes largely from energy exports, including to the U.S., which buys
70% of its imported liquefied natural gas from Trinidad. Barbados,
the other Caribbean nation not participating in PetroCaribe, also has
oil, and isn't eager to cross Trinidad, which provides its refining
capacity.

Trinidad and Barbados "can automatically be counted on to be the echo
chamber for Washington in the Caribbean," says Larry Birns, director
of the left-leaning Council on Hemispheric Affairs, in Washington.
Among Washington policy makers, "there will be a grateful
consideration for these two guys," he says, especially at a time when
a number of Latin American countries have elected leaders, like Mr.
Chávez, who openly oppose U.S. economic and foreign policy.

Fadi Kabboul, Venezuela's energy attaché in Washington, says the
PetroCaribe plan extends beyond delivering oil. Venezuela envisions
upgrading refineries, improving transportation and storage facilities
and constructing a pipeline linking the islands to Venezuela -- a
project that would all but cancel Trinidad's similar Caribbean
pipeline plan.

In keeping with Mr. Chávez's agenda for social reform, Mr. Kabboul
says, Venezuela will help finance housing, health care and roads on
the islands. "This is what energy intervention is about," Mr. Kabboul
says. "Venezuela does have the resources. They [the islands] are in
need, and we have a responsibility in this region to help those
countries."

For Trinidad and Tobago, the price of going it alone is steep. "There
are real economic threats -- immediate and down the road," Wendell
Mottley, a former Trinidad finance minister, told an energy
conference on the island last month. "If Trinidad doesn't step up to
the plate, then that cements our isolation and that's never a
comfortable position."

Mr. Bryan of CSIS also warns: "The PetroCaribe initiative is going to
force private oil firms to leave the area, make [Venezuela's oil
company] PDVSA the sole provider of oil for the Caribbean countries
that have signed the agreement, and challenge Trinidad's influence in
the region. My real concern is that Washington is not waking up to
the fact that there is a terrible policy vacuum in the region."

Some experts on the region see the islands as more independent 
than that, especially when it comes to supporting Mr. Chávez in
organizations such as the O.A.S. and the United Nations. "Frankly, 
I don't think Chávez represents the consensus," says Roger Noriega, a
visiting fellow at the American Enterprise Institute and a former
State Department official. "He just has a bigger voice."

Trinidad and Tobago is likely to preserve close ties with the U.S.
"The U.S. is our ally," Mr. Mottley says. "We can't shy away from
that. Trinidad has to be careful now, seeing the drift in politics.
We have to become savvy."

The U.S., too, is weighing options. Charles Shapiro, a former
American ambassador to both Venezuela and Trinidad and Tobago, says
the State Department sees development assistance as its primary focus
in the region. "That is, in fact, the issue for the U.S.," says Mr.
Shapiro, now deputy assistant secretary for Western Hemispheric
Affairs, adding that disaster preparedness and prevention -- in an
area vulnerable to hurricanes -- also are priorities.


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