The member-countries of the Organisation of Eastern Caribbean States (OECS) must feel like a confused young girl unsure of who to choose between her suitors as both Trinidad and Tobago and Venezuela make applications to join them in a kind of matrimony.
Earlier this year Trinidad and Tobago’s Prime Minister Patrick Manning proposed the creation of a political union between his oil-rich nation and the seven island-states that comprise the OECS. The proposal was later amended to a different proposition – one in which Trinidad and Tobago would become a member of the OECS in 2013 after the existing member states completed the creation of an Economic Union by 2009.
It has now emerged that the government of President Hugo Chavez has proposed that Venezuela should join the OECS. The only inkling that the public has of Venezuela’s request and the OECS’ response is a statement attributed to the OECS Director-General Dr Len Ishmael that the matter was discussed at a meeting of the OECS heads of government in Montserrat in late November and Venezuela’s request was being considered.
The only logical benefit for Venezuela of OECS membership is the considerable influence that the Chavez government would exert on these small countries.
And, it is understandable why the OECS countries have not as deftly as possible declined President Chavez’s request. Many of them have become recipients of Venezuelan credit for a portion of oil they purchase under an agreement entitled Petro Caribe. None of the recipients would want to endanger the deferred payment scheme they now enjoy, although they should all realise that their debt is mounting.
Some of the members of the OECS have also enjoyed other gifts from Chavez’s government. Just how much both the oil credits and other loans to the OECS countries have totalled is a mystery, since while the promises, adding up to billions of dollars, are announced with much fanfare practically nothing is said about the actual delivery.
It has become clear, however, that with oil prices now lingering at $53 a barrel, Chavez’s capacity for largesse is considerably reduced from the heady days of $147 a barrel. He had said that Venezuela was immune from the current global financial crisis – a boast that turned out to be empty. PDVSA, the Venezuelan state-owned oil company, on which Chavez relies for the monies he has waved around at less well-off governments, failed to get a $4 billion loan two months ago, and its revenues have dropped significantly as the price of oil plunged.
The Chavez government had planned a budget for 2009 based on oil prices averaging $60 a barrel. With the price dropping to $53 a barrel, there is a huge hole in his domestic spending ambitions and an even bigger one in his promises to other countries.
Two further worries for Chavez is that although the government claims to produce 3.24 million barrels of oil a day, the oil-cartel, OPEC, reports that it produces no more than 2.33 million barrels a day, and while the Chavez government is urging OPEC to cut production to force the price of oil up to $100 a barrel, this is unlikely to happen in the present global financial meltdown.
In any event, the governments of OECS countries would want to be very careful about Venezuela joining their organisation. The OECS is a natural alliance born out of a common history, common culture, common language, common laws and traditions and shared problems. While a relationship with Venezuela should be cultivated, the small OECS countries ought to do so collectively and in areas of mutual benefit. There is no need for Venezuela to join the OECS.
Account should also be taken of the fact that Venezuela’s GDP is $334.3 billion whereas the combined GDP of the six independent countries of the OECS is a mere $7 billion. This is a very large shark and some very small sardines.
And, one has to ask the question: if the government of Venezuela is so keen to forge stronger ties with Caribbean countries, why not seek to do it with the wider Caribbean Community and Common market (CARICOM) whose members include not only the OECS, but also the Bahamas, Barbados, Belize, Guyana, Jamaica, Suriname and Trinidad and Tobago?
It will be recalled that after careful study, the West Indian Commission, established by Caribbean Heads of Government to chart the course for the region’s future made the following two points that remain valid:
· “On the economic side, we have to feel our way in enlarging the CARICOM market so that we make progress in that direction without being overwhelmed by new members and end up being lost within our own widened community; and
· CARICOM should remain the inner core of our relationship in the Region, and we should consciously create space beyond membership of CARICOM for development of CARICOM’s integrationist relationships”.
In the case of the Manning government’s proposal, the OECS countries and Trinidad and Tobago enjoy a historical relationship based on culture, language, laws, administration, university education and that all important glue – Cricket. As members of CARICOM, they already enjoy a close relationship, and there are several inter-governmental bodies and areas of functional cooperation that would make Trinidad and Tobago’s membership of the OECS feasible.
Of course, account would have to be taken of the fact that the economy of Trinidad and Tobago, at about $26.9 billion, is almost four times larger than the six independent OECS countries combined, and critical matters such as freedom of movement of all the factors of production, especially labour, would have to be settled well in advance of any deeper integration.
The world economic circumstances including the loss of preferential markets for their primary exports, increased costs of imports, and the downturn in tourism, have highlighted the limited capacity of the OECS countries to cope and alliances with “god fathers” must seem tempting. But, it has to be said that the better prospect for the OECS and CARICOM as a whole is to complete the Caribbean Single Market and Economy and to put in place a structured and empowered system of governance.
Sir Ronald Sanders
business consultant and former Caribbean diplomat