Govt Calming PetroCaribe Fears

Finance Minister, Dr. Peter Phillips says based on assurances, he’s confident that Jamaica’s all important Petro Caribe arrangement with Venezuela will last for at least the next three years.

Reports in the international press on Friday indicated that Venezuela is moving to sell the Petro-Caribe debts of the Dominican Republic and Jamaica, to Wall Street investment bank Goldman Sachs.

This as the South American country battles a serious cash shortage, prompted by falling oil prices.

Addressing parliament’s standing finance committee this afternoon, Dr. Phillips sought to calm fears regarding the Petro Caribe agreement.

He told parliament that the government has received no formal word that Venezuela has plans to sell Jamaica’s Petro Caribe debt.

Dr. Philips was responding to questions posed by Opposition Spokesman on Finance, Audley Shaw.

But Dr. Phillips conceded that there’s no obligation for Venezuela to consult Jamaica should it decide to sell the Petro Caribe debt on the international markets.

The Finance Minister also insisted that Jamaica is not in danger of having credit available under the Petro Caribe arrangement, being reduced due to falling oil prices.

That issue was put to Dr. Phillips by Opposition MP Edmund Bartlett.

Meanwhile, Dr. Phillips says Jamaica has received proposals from stakeholders on the international markets who are interested in purchasing the island’s Petro Caribe Debt.

Opposition Spokesman on Finance, Audley Shaw this afternoon brought to Dr. Phillips attention that 4-billion dollars of the Dominican Republic’s Petro Caribe debt has been sold by Venezuela to a global company at a discounted price.

Mr. Shaw asked Dr. Phillips whether the government has been approached about its Petro Caribe debt.

Dr. Phillips says there are factors to consider before Jamaica agrees to sell its debt.

Dr. Peter Phillips, Finance Minister addressing parliament’s standing Finance Committee this afternoon.

And, co-Chairman of the Economic Programme Oversight Committee, EPOC, Richard Byles, says the possible sale of PetroCaribe debt could create opportunities for Jamaica to reduce its debt faster than projected under the IMF programme.

Mr. Byles was speaking to Nationwide News at today’s monthly EPOC press briefing in New Kingston.

Mr. Byles says if Jamaica could buy back the debt from a third party, such as Goldman Sachs, at a rate that doesn’t increase the dollar amount currently paid for interest on PetroCaribe debt, then the country could benefit.

He says depending on the level of discount at which the debt is bought by Jamaica, there could also be a basis for seeking a reduction in the seven-and-a-half percent Primary Surplus target.

Meanwhile, Mr. Byles says the government continued to perform creditably under the current IMF agreement.

He says the cumulative primary surplus of almost 46-billion dollars for April to October, is 7-and-a-half percent better than the amount budgeted.

Mr. Byles says the Net International Reserves also remains above programme targets.

But he says tax revenues were over 7-billion dollars short of target.

He also noted that EPOC was becoming increasingly concerned about the continuous cuts in Capital Expenditure.

He says EPOC would rather see a greater effort to collect outstanding taxes than to cut capital expenditure.

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