Venezuela - CARICOM’s Once and Future Foreign Policy Challenge

By Bumpy Walker

During the 20th century decolonisation process, Haitian heroes  inspired the movement, from the Cape to Cairo, from the Dragon's Mouth to the Dragon's Tail (Beach) and all points to Bandung. For this privilege Haiti has had to literally sacrifice its economic progress, its society, its soul. In 1820’s President Boyer mortgaged its future for peace with reparation payments being made to the former enslaving colonisers - the French - for the loss of its property. Included in this payment was value for the people who had freed themselves from the French and from slavery by force of arms.

For this inspirational sacrifice few have ever held out a sustainable non exploitative relief.  Imagine a place where, when to relieve suffering from an earthquake, the UN brings Cholera and NGO child abusers? (1) (2)

Chavez as the FT Hero

The only government or governmental organisation that seems to have  offered sustainable, developmental aid without strings to Haiti  has been  the Bolivarian Republic of Venezuela  through the PETROCARIBE facility.

PETROCARIBE is a Bolivarian Republic of Venezuela attempt to provide enhanced energy security and development aid to the Caribbean region. For Haiti its positive impact is doubly so.  Rhetoric from its creator, the late President Hugo Chavez, indicated he thought of it as sharing Venezuelan fortune with her fraternal neighbours. This was done at a time when Venezuela was flush with Petrodollars and the Caribbean nations were suffering from the effects of high energy costs. A noble sentiment, and possibly the first truly geopolitical altruistic gesture that Haiti has ever received!

Under PETROCARIBE, 15 nations in the Caribbean region (of which 12 are members of CARICOM), including Haiti, Jamaica, Guyana, and Grenada, buy oil from Venezuela at discounted rates of up to 50% of its market value.  Up-front payments are made after a one-year grace period, with the remainder paid after 12- 15 years, as a 1 % loan, if the price of oil is above $40.00 a barrel.

The FT, a newspaper not known to view history from a South-South perspective, acknowledges the negative economic impact of the reparations Haiti had to pay to its former enslavers. It then went further to sing praise poems to the positive effects that PETROCARIBE has had on Haiti.  Given that PETROCARIBE was started by the charismatic, beret wearing,  coca leaf chewing socialist, and arch- capitalist basher, the  late President Chavez , reading this  was truly a croissant choking, cafe au Lait  spilling, breakfast moment (3).

Launch

PETROCARIBE was launched in 2005, during a sustained period of high oil prices.   Since the last quarter of 2014, the price of oil has fallen dramatically.   Venezuela whose economy has a near total dependence on oil exports, needs the price to be above $100.00 to balance its budget.  It is in deep financial straits, given that the Venezuelan basket of crudes currently trade at less than $60.00 a barrel.  This has been devastating to that country’s economy and presents a possible danger of future social unrest with accompanying political instability which has been a feature of post-independence South American nations.

To counter, the current president of Venezuela, Nicolas Maduro, was granted the power to rule by decree for nine months by the Venezuelan assembly on the 15th of March 2015 (4)

Alarming

On the 29th of May 2015, the Bolivarian Republic stunned the world by signing into law a decree that once more claimed more than 50% of Guyana maritime territory (Map1).

It is striking that last month Guyana Gold inc., a Canadian company, announced that it has all the infrastructure and equipment to begin gold production in the next few months (5). Further, on 20th of May, EXXON, whose assets were nationalised by the Bolivarian Republic (6), announced the discovery of considerable hydrocarbons offshore Guyana. These two economic stories should have inspired positive discussion; instead we are left with the feeling that Guyana’s blessings are again evidence of the curse of resource rich nations.

Neither of these factors will be presented by Venezuela as the reason for the sudden renewal of the claim.   Given that Venezuela has the world's largest proven reserves of hydrocarbons, it seems craven they would deny these resources to a smaller, poorer nation.  Instead the reason will be framed as a moral duty or righting a historical wrong.  Indeed, in some school children’s maps, the region they now claim is identified as part of Venezuelan territory and is called Guayana Esiquiba, Zona de reclamation (Map2).

Not uncommon

Border disputes triggered by a whiff of hydrocarbons are not uncommon.  And there has been considerable success in settling them through arbitrations.  Some recent such disputes that catch the eye are:

•The border dispute between Guyana and Suriname,

•The multiple competing claims over the Gulf of Guinea (Cameroon, Nigeria, Sao Tome Equatorial Guinea) 

•The issue between Timor Leste and Australia

Currently there is a border dispute in arbitration between Ghana and Cote D’Ivoire.  Jamaica has an interest in this dispute, as Tullow oil who owns exploration rights in Jamaica is the operator of the oil field in question. 

The fact that these disputes were settled peacefully would lend one hope of an amicable resolution in this case as well. However, the size of these disputes pale into insignificance as Venezuela is claiming more than half of Guyana’s land mass and a proportional part of its territorial waters! This is truly alarming! 

To defuse this potential powder keg Guyana has gone seeking UN mediation (7).

 Blame Spain, Holland, USA, UK, the Pope, Germany, Russia, Venezuela, not Guyana!

Caribbean students with a superior knowledge of the region's history than I will be aware of the root of this claim:  the colonial past. Cristobal Colon, the Italian, claimed half the world for the Spanish Crown. The validity of this claim was ratified but reduced by the Borgia Pope, Alexander VI, who between pimping his daughter Lucrezia, and commissioning great art by Michelangelo, shared the half the world between the Iberian neighbours Portugal and Spain in 1494. Subsequently Holland, a former colony of Spain planted a colony(s) in the area now in dispute.   The Dutch, French, Spanish, Portuguese, British played  the ultimate game of geopolitical monopoly  from 1492 to the end of the Napoleonic era, forming  alliance, breaking  alliance, fighting wars, signing  peace treaties, exchanging colonies, adjusting borders.  In the end, Great Britain was the colonial power holding the territory now called Guyana. And yes, dear reader, without consulting the inhabitants.

Uncertainty

The essential issue was the uncertainty of the exact position of the border between the Dutch Colonies and Spanish colonies, later Venezuela.  With the Dutch claiming up to the Orinoco East Bank and the Venezuelan claiming to the Essequibo West Bank (Venezuela’s claim is essentially that the Treaty of Munster in 1648 recognised the Dutch possessions to the east of the Essequibo River).  Britain then inherited this uncertainty, along with its Guiana colony, through the Anglo-Dutch treaty of 1814 (Convention of London).

The British in the 1840’s commissioned Robert Schomburgk, a German geographer, to survey the contested border region and unilaterally imposed this border on Venezuela, which immediately protested, citing historical precedents, based on Spanish colonial claims. Britain, being the major superpower at the time, ignored the protests in the main, but did send a diplomat - Philip Wodehouse - to Caracas to negotiate.  Wodehouse claimed there was not a stable government to negotiate with, so he left (8).

Venezuela continued to persistently press its case.  In the 1890 the US took up the cause of the Venezuelans in their dispute with the British, with US Secretary of State Richard Onley (to misquote Theodore Roosevelt) shaking a big stick at the British by invoking the Monroe doctrine.  At the time Britain, being preoccupied with the Boer Crisis in South Africa, sensibly agreed to talk to avoid two major conflicts running concurrently.  Thus the border dispute was referred to a panel of five commissioners:  two British, two from United States (which represented Venezuela) and one Russian.  The result was The Treaty of Washington which basically recognised British sovereignty over the Venezuelan claim. Again the Venezuelans agreed, signed, then protested and still consider this treaty null and void.   Well, the Tsar at the time was related to Queen Victoria!

At the time of Guyana’s Independence, the UK, Guyana and Venezuela did meet in Geneva to thrash out the dispute, and signed yet another treaty, aimed at defusing the tension (10). However Venezuela resisted Guyana’s entry into the OAS. In 1970s, a moratorium of 12 years was agreed between both nations, on the dispute. It was during this period that a Mexico, Venezuela, Jamaica, Guyana Aluminium project was discussed. However, in 1981, Venezuela refused to renew the moratorium.

It must be stated at this juncture that the relationship has improved somewhat since the 1990s, despite some hiccups, some military in nature.  After all, Venezuela did include Guyana in its PETROCARIBE development package, which shows the idealism and internationalism beliefs of Chavez was not empty rhetoric.

 No CARICOM, No Comment

CARICOM’s reaction has been disappointing.  A quick look at the CARICOM secretariat website recently showed no comment, no mission to intervene, no press release, no positions (well not for 14 years) ( 9). The sole reference on searching the website to the crisis was to the 1966 Geneva Treaty. Leaving the head scratching question: Exactly what is CARICOM’s position on this issue? 

This question is particularly pertinent given that one CARICOM’s primary objectives is the “enhanced co-ordination of Member States' foreign and [foreign] economic policies,” which to the layperson would suggest supporting Guyana, a founding member when its borders are at risk.    At a minimum, offering solidarity with a member state, offering to negotiate and presenting a united front against threats to a member state's sovereignty.   What is more alarming is that, if this is left to stand, there are future potential disputes between Venezuela and two other CARICOM countries - Barbados and Grenada (11), (12), (Map3).

Indeed, a search on CARICOM’s website for Venezuela discovers there is a free trade agreement where the signatories can export into Venezuela without duty a multi-varied list of goods, including facial powder!  The question is, does CARICOM fear a comment would have a negative impact on the trade in make up?

Surprisingly, these border disputes do not affect Venezuela's closest Caribbean neighbour and CARICOM member Trinidad & Tobago (13).  The two nations signed a treaty, which, in effect, acknowledged the Venezuelan claim to Guyana's and Barbadian territorial waters.

Or does CARICOM’s silence indicate simple avoidance, so as not to antagonise Venezuela, whose generosity through PETROCARIBE has bestowed positive economic benefit to most CARICOM countries, including Guyana?  The Venezuelans must find the current situation galling, given that during their economic good time the Bolivarian Republic shared its treasure with its neighbours. Now, in a period of belt tightening, the neighbours have not reciprocated or aided them. It would be not unexpected if the Venezuelans seek to modify or rescind the PETROCARIBE deal in the near future. 

Choose your future host; Galtieri or Chavez?

Currently Nicolas Maduro, the elected president of Venezuela, is facing a grave economic situation. He has been in perpetual motion, looking for a way of stabilising the economy. Thankfully all indications are that Maduro’s Bolivarian philosophy would not extend to a military solution, despite the huge disparity in armed forces between Venezuela and Guyana. 

What is of concern is the future.   A possible return to autocratic rule, supported by the military in Venezuela, cannot be ruled out.  The unspoken fear is that panem ET circenses distractive strategy to divert the population from the arrows of unfulfilled promises would be attempted by a future president through a military action, along the lines of the Galtieri Malvinas debacle. As outrageous as this seems in an era of Venezuelan peace and love, one has only to look back at the actions of Venezuela toward Guyana in the past.

In 1982 a Vice Admiral Bertorelli of the Venezuelan Navy stated that a military solution as a possibility to settle the issue could not be discarded (14). In 2007 a Venezuelan general and 36 soldiers crossed the border and blew up dredgers with military explosives (15). Then in 2013 the Venezuelan Navy intervened, capturing an oil exploration vessel (16).

Help your Brother in need, Pass it on

In the 1990’s the once Fresh Prince, PJ Patterson, was involved with an attempt to negotiate the above mentioned border dispute between Guyana and its eastern neighbour, Suriname.  Like the suspected issue behind the current crisis, the cause then was the potential of offshore commercial hydrocarbon. Ultimately Jamaica’s mediating efforts were unsuccessful, but the United Nations Law of the Sea Convention (UNCLOS) concluded an equitable treaty (17).

This demonstrates that Jamaica has the wherewithal to reach out to our South American brothers and attempt to defuse the situation. Additionally, this would justify the million dollars a month mobile bill for Ministers!

This is not simply because we are good neighbours, but for sound practical economic reasons. Though unstated, Venezuelan economists must be trying their hardest to stop the haemorrhaging of foreign currency that is leaving at rate $2 billion a month, while at the same time increasing their hard currency inflow.  It is strikingly obvious, that an easy fix is to sell the oil from the PETROCARIBE deal at actual market price. They have already sold some PETROCARIBE debt to Goldman Sachs for cents on the dollar (18).

While to Jamaica the loss of PETROCARIBE would be devastating, the impact on Haiti could be as soul destroying as the recent earthquake!

References

1.http://www.dailymail.co.uk/news/article-2450735/Haiti-cholera-outbreak-victims-sue-UN-peacekeepers.html

2.http://www.independent.co.uk/news/world/americas/un-peacekeepers-sexually-abuse-hundreds-of-women-and-minors-in-haiti-in-exchange-for-food-and-medicine-new-report-will-reveal-10309963.html

3.http://www.ft.com/cms/s/0/17970490-f275-11e4-892a-00144feab7de.html#axzz3dJc9oX9y

4.http://www.theguardian.com/world/2015/mar/16/venezuelan-president-nicolas-maduro-given-power-to-rule-by-decree

5.http://www.bbc.co.uk/news/business-29561345

6.http://www.bloomberg.com/news/articles/2014-10-09/exxon-wins-1-6-billion-settlement-for-venezuela-seizure

7.http://www.jamaicaobserver.com/news/Guyana-wants-UN-to-intervene-in-border-dispute-with-Venezuela-_19119020

8.http://www.guyana.org/features/guyanastory/chapter52.html

9.https://history.state.gov/milestones/1866-1898/venezuela

10.http://peacemaker.un.org/guyana-venezuela-border66https://treaties.un.org/doc/Publication/UNTS/Volume 561/volume-561-I-8192-English.pdf

11.https://notesfromthemargin.wordpress.com/2008/06/16/marginal-picks-up-his-pen-venezuelas-claim-of-barbados-waters/

12.https://books.google.co.uk/books?id=sfpJM9kOE7wC&pg=PA251&lpg=PA251&dq=grenada+venezuela+border&source=bl&ots=TwVcl6q4qo&sig=OW5zLcimPIJpt1Kmbz6NSOwCFM8&hl=en&sa=X&ved=0CEEQ6AEwBmoVChMIzaHSjZiWxgIVSz8UCh2NAgDU#v=onepage&q=grenada venezuela border&f=false

13.http://www.un.org/Depts/los/LEGISLATIONANDTREATIES/PDFFILES/TREATIES/TTO-VEN1990SA.PDF & https://notesfromthemargin.wordpress.com/2007/07/27/how-trinidad-recognised-venezuelas-claim-to-most-of-guyanas-land/

14.http://www.guyana.org/features/trail_diplomacy_pt9.html#chap43

15.http://www.guyana.org/features/trail_diplomacy_pt9.html#chap53  $  http://news.bbc.co.uk/1/hi/world/americas/7099476.stm

16.http://fuelfix.com/blog/2013/10/15/officials-from-venezuela-guyana-set-to-discuss-detained-anadarko-contracted-ship/

17.http://www.haguejusticeportal.net/index.php?id=8298

18.http://www.argusmedia.com/News/Article?id=957160

Map1    http://s2.stabroeknews.com/images/2015/06/guyana-venezuela-dispute.jpg

Map2.  https://www.flickr.com/photos/apoyopublicacion/6192821442/

Map 3 https://notesfromthemargin.files.wordpress.com/2008/06/bid-blocks-disputed.jpg

http://www.tullowoil.com/media/press-releases/ghana-and-côte-d-ivoire-maritime-boundary-arbitration-update-April-2015