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  Toward the Summit

Petrocaribe emerges as a political initiative, based on the rational use of non-renewable and exhaustible energy resources, intended to promote integration and sustained development of the peoples in the region, on the basis of complementariness, solidarity and social co-responsibility and within the framework of full respect for each other’s sovereignty, diversity and needs.

In this regard, Petrocaribe is a political factor that serves as a catalyst to bring regional integration efforts to fruition and to make sovereign use of energy resources, in order to reduce the dreadful asymmetries.

Let us remember that Petrocaribe is part of Petroamérica, a geopolitical enabler oriented toward the setting up of cooperation and integration mechanisms, using the energy resources of the Caribbean, Central American and South American regions as a basis for the socioeconomic improvement of our peoples. Both initiatives exist within the framework of the ALBA (Bolivarian Alternative for the Peoples of our America), a proposal which is inspired in the dearest dream of our Liberator: “…see the formation in America of the greatest nation in the world, less for its extension and riches than for its liberty and glory.”

The 14th Petrocaribe member countries will gather in august Venezuela, at the III Summit Meeting Petrocaribe, in an effort to strengthen energy sovereignty and plan the development of our countries, and consolidate union among our peoples.

Background

  • Imperialism and Cultural Clash
     
    The violent, unequal first clash between the Spanish conquerors’ gunpowder and the American indigenous people’s axe represents the first time the original inhabitants of our continent fought for self-determination. Caribbean colonization was a violent, predating and inhuman process that razed the original ethnic groups in this insular region. Conquerors perpetrated genocidal actions leading to virtually total extermination of the ethnic groups Arawak and Caribs –which was another major turning point in the history of the American continent.

    With a view to replace this exterminated “labor force,” the European powers devised the most cruel and powerful system of exploitation of man by man, namely the institutionalization of African slave trade. In view of their expertise and work discipline, entire communities were uprooted from their natural environment in West Africa, with a goal to make quick returns on the investment plantations’ owners made when purchasing a slave.

    In the 17th and 18th centuries, the strategic location of the islands comprising the Caribbean greatly favored the development of the great empire that was built on the proceeds from plantations, slave trade and overseas trade. This region blessed by nature was the backdrop for rivalries between the colonial powers that monopolized the exploitation of a vast commercial empire fueled by large-scale farming of plantain, tobacco, cotton, coffee, and in particular sugar.

    Both economic development and social life in the different Caribbean countries were sealed by the racial implications and consequences derived from the capitalist and colonialist oppression and exploitation. As from the 18th Century, the colonial powers’ military and political presence was accompanied by shipping and trade companies penetrating the region. These firms founded major plantation-based colonies in Antigua and Barbuda, Jamaica, Martinique, Guadalupe, Haiti and Cuba. This led to an empire of gold and misery, as described by Haitian historian Gérard Pièrre-Charles.

    Subsequently, the “triangular trade” –a major factor contributing to the accumulation of goods by rising capitalism- shipped second-rate goods from Europe to Africa, chained blacks from Africa to the Caribbean, and sugar, blood and profits from the Caribbean to Europe.

 

  • Cries of Freedom
     
    Second, both as a result of the contradictions created by the oppressive system and as a reaction to the humiliating and degrading human conditions resulting from the prevailing economic model, both cries of freedom and struggles to achieve independence from imperial domination ignited in the colonies.

    Haiti is undoubtedly the first emblematic example of the struggle for equality and freedom of men and women we should mention. In this island emerged the first slave uprising in the American continent –headed by Toussaint Louverture in 1791. Haiti was also the first republic to gain independence from colonial domination, specifically in 1803. Louverture’s rebellion was then pursued by Venezuelan slave José Leonardo Chirino, who in 1795 proclaimed a free territory in Falcón state, Venezuela.
     
    Precisely our Haitian brothers would subsequently support the struggles for independence led by the precursor of American independence, Francisco de Miranda, and Simón Bolívar, the Liberator of five nations. In 1816, with logistic help given by President Alexander Petion, Bolívar landed in Venezuela, and freed slaves by proclaiming: “From now on, in Venezuela there shall only exist one single kind of men and women: all of them shall be citizens!”
     
    Ten years earlier, on March 12, 1806, Petion himself –a collaborator of then President Jean Jacques Dessalines- gave Francisco de Miranda the “Liberating Sword,” as a symbol of independence and struggle for the peoples in the continent.

 

  • Cultural Melting Pot
     
    This is another major aspect. The ruling powers include England, the Netherlands, France, Spain, Denmark, and most recently the United States. After ruining most of the farming labor force in the different African nations, slave trading spread essentially to India, China, Japan and Malaysia.

    Third, but not least, there is the cultural melting pot resulting from this exchange of sweat and exploitation –the forced co-existence of nations- which lead to significant communication schemes that would subsequently translate into legacies acknowledged universally. Our Caribbean neighbors did not only take advantage of the languages inherited from colonizing powers, but they also created their own language: Papiamento –a mixture of Spanish, Portuguese, French, and English spoken in the islands of Aruba, Bonaire and Curacao.

    Cultural resistance by these peoples not only encompassed language, but it also gave rise to a number of universal expressions in the fields of music, literature, plastic arts, and gastronomy, among others.

    We are well aware of the cultural links bonding all of the peoples sharing the Caribbean Sea. However, rather than tightening these ties, we look at each other like strangers or distant relatives. In our continental countries, for example, most people know little or nothing about the common history we share as descendants from the Caribe civilization. Some people are not even aware of the significant support Haitian President Alexander Petion provided to the pro-independence expeditions conducted by both Francisco de Miranda and Simón Bolívar.

    In order to complete this overview of the Caribbean community, reference should be made to the fact that the Caribbean is a large reservoir of energy, aquaculture and strategic minerals. This is a region with a potential to become a world-class tourism destination and maritime service provider, given its strategic geographic location.

 

  • Strategy Significance
    Real Unity
     
    From the standpoint of Venezuela’s foreign policy, Petrocaribe amounts to a change in the country’s relations with the South, which are focused on the approach of unity proposed under the Bolivarian Alternative of the Americas (ALBA) and governed by the principles of complementation, solidarity and cooperation among our nations.

    Close examination of the Caribbean community’s major strategic impact –in view of its geographic location and outstanding historic legacy-, exposes the actual relevance of Venezuelan President Hugo Chávez’ initiative to create Petrocaribe. Beyond the idea of recovering the ties bonding Caribbean brothers and sisters, the organization of Petrocaribe represents the first energy agreement based on solidarity and intended for purposes of social development and justice executed ever by a group of States in any region of the world.

    Petrocaribe has been created with a goal to supply Venezuelan crude oil at fair prices and under preferential payment terms. Petrocaribe goals, however, go further to include planning of energy policies in member countries, ranging from exploration and drilling to transportation, new refining and storage capacities, development of the petrochemical industry, marketing, training and technological assistance, as well as organization of state energy companies in countries where they do not exist. Further, Petrocaribe is set to develop alternate renewable energy sources, focusing on the near future. Under this scheme, energy use is approached as a factor of development, rather than a factor worsening divergences among our countries.

    Petrocaribe also emerges as a highly significant precedent and powerful encouragement for solidarity-based integration in Latin America and the Caribbean, as opposed to the colonialist instruments like free trade agreements. The Free Trade Agreement of the Americas (FTAA) is likely to become the final nail in the shackle of slavery in the Americas. ALBA, however, is likely to be a great force liberating and multiplying energies –the only mechanism that is to lead the Americas to development hand-in-hand with sovereignty, self-determination, and dignity. The existence of Petrocaribe, Petroamerica and Petrosur is impossible to understand without understanding the importance of ALBA first.

 

Puerto La Cruz Summit
 
The I Energy Meeting of Heads of State and/or Government of the Caribbean on Petrocaribe was held in Puerto La Cruz, Venezuela, on June 29, 2005, with the attendance of delegations from Antigua and Barbuda, Bahamas, Barbados, Belize, Cuba, Dominica, Grenada, Guyana, Jamaica, Saint Lucia, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Suriname, Trinidad & Tobago, and Dominican Republic.

At the encounter in Puerto La Cruz, the Caribbean heads of state and/or government agreed upon the creation of the Petrocaribe political enabler by signing the Energy Cooperation Agreement, which sets forth the guidelines for the implementation of the initiative.

Petrocaribe emerges as a political initiative, based on the rational use of non-renewable and exhaustible energy resources, intended to promote integration and sustained development of the peoples in the region, on the basis of complementariness, solidarity and social co-responsibility and within the framework of full respect for each other’s sovereignty, diversity and needs.

The agreements reached at the I Petrocaribe Summit include a long-term financing of 30% of the oil bill when the oil barrel is at a price higher or equal to 40 dollars, 40% if the barrel reaches US$50 and 50% if the price goes to US$100 dollar. For this financing, the Caracas Energy Cooperation Agreement provides for a one to two-year grace period. The short-term payment is within 30-90 days.

The same principles of the Caracas Agreement are applied for the deferred payments, i.e., 17 years, including the two-year grace period already mentioned, as long as the price remains below US$40/bbl.

When the price goes over this level, the payment period will be extended to 25 years, including the two-year grace period, and the interest rate will be reduced to 1%. In case of deferred payment, Venezuela is willing to accept that part of the payment be made with goods and services, which would be offered at preferential prices.

At the Puerto La Cruz meeting it was also agreed that Petrocaribe would have a Ministerial Council composed of the Energy Ministers of the signatory countries, and an Executive Secretariat held by the Minister of Energy and Petroleum of the Bolivarian Republic of Venezuela.

Furthermore, to contribute with the economic and social development of the Caribbean countries, the heads of state and/or government gathered in Puerto La Cruz agreed to set up the ALBA Caribbean Fund, intended to finance social and economic programs, with contributions from financial and non-financial instruments. These contributions can come from the part of the oil bill which is being financed and the savings obtained from direct trade.

Within the framework of the I Summit of Petrocaribe, Petróleos de Venezuela, S.A. (PDVSA) established a special purpose subsidiary to be named PDV Caribe. This subsidiary will start its operations fitted with the immediate transportation capacity enough to cover the supply commitments. The frights resulting from these operations will be charged at cost; this represents substantial savings for the countries signatory of the Petrocaribe Energy Cooperation Agreement.

 

Montego Bay Summit
 
The II Petrocaribe Summit, held on September 6, 2005, in Montego Bay, Jamaica, has a particular historical meaning, because it coincided with the 190th anniversary of the Letter of Jamaica, a set of reflections written by Simón Bolívar on the necessity of independence, sovereignty and regional integration.

Petrocaribe is an initiative of supportive energy cooperation, proposed by the Venezuelan Bolivarian Government and embraced within the framework of the ALBA (Bolivarian Alternative for the Peoples of our America), which is intended to erase asymmetries in the access to energy resources, through a new model of favorable, equitable and fair exchange among the Caribbean countries, most of which are energy consumers but lack the control of the State over the supply of resources.

At the Montego Bay summit, the President of the Bolivarian Republic of Venezuela, Hugo Chávez Frías, signed nine bilateral energy cooperation agreements with the heads of state and/or government of Antigua and Barbuda, Belize, Dominica, Grenada, Guyana, Dominican Republic, St. Kitts and Nevis, Saint Vincent and the Grenadines, and Suriname.

Under these agreements, Venezuela will supply 77,300 b/d of oil and products to the nine signatory countries, apart from the volumes destined for Jamaica and Cuba, with which bilateral agreements already exist. These agreements set forth a grace period for capital payment of up to two years and a yearly interest rate of 2%.

The I Meeting of the Petrocaribe Energy Ministerial Council, chaired by the Venezuelan Minister of Energy and Petroleum and President of PDVSA, Rafael Ramírez, was held as a preamble to this Summit. Petrocaribe by-laws and institutional platform were approved at this meeting.

Furthermore, new proposals were put forward during the encounter in Montego Bay, including the creation of Electrocaribe and the setting up of a fund to promote different social programs within the region with the aim of fulfilling Bolivar’s integration dream through solidarity and the fair integration of our peoples, values which are fostered by initiatives like Petrocaribe.