- Created: Sunday, 29 November 2015 16:33
- Written by Charles Chinweizu
In July 2015, Jamaica dutifully repurchased a debt of $3bn from Venezuela. Jamaica borrowed $2bn on the international markets at interest rates of 6.75-7.875% (with a 10-year moratorium on payments, maturing in 2028 and 2045). Jamaica paid $1.5bn to Venezuela, who wrote-off the outstanding $1.5bn owed under a PetroCaribe accord, and boosted Jamaica’s reserves by $500m.
Venezuela’s PetroCaribe alliance, begun by Hugo Chavez in 2005, has supplied 18 neighbouring Caribbean and Central American countries with fuel and favourable terms for payment, such as low-interest rate loans, and invested in community projects for marginalised people including hospitals, schools, highways, and homeless shelters, as well as developing fuel supply and storage infrastructure. Unsurprisingly, it has been met with hostility from the US. Last January, Joe Biden referred to it as a ‘tool of coercion’, and Obama visited Jamaica in April to urge Jamaica and other members to leave the PetroCaribe Alliance in favour of his World Bank-funded investment plan, the Caribbean Energy Security Initiative.