US investment bank, Goldman Sachs, will not be able to change the terms of the Petrocaribe agreement, if it purchases Jamaica’s debt under the oil deal with Venezuela.
That’s the word from Finance Minister, Dr. Peter Phillips and former international banker, Aubyn Hill.
Mr. Hill is also Chairman of the Opposition Leader’s economic advisory council.
There’ve been reports that Venezuela is planning to sell the Petrocaribe debt of Jamaica and the Dominican Republic to Goldman Sachs.
The South American country is reportedly facing a cash crisis, due to tumbling oil prices.
Both Dr. Phillips and Aubyn Hill views should comfort many who questioned whether an investment bank like Goldman Sachs would be willing to continue the generous terms of the Petrocaribe Agreement.
Under the deal with Venezuela, Caribbean beneficiaries are able to access loans at just 1 or 2 percent.
They’re also able to pay off the debt in kind, by swapping commodities such as rice, or in the case of Jamaica, clinker.
If the deal goes through, Jamaica would in the near future, have to repay its Petrocaribe debt to Goldman Sachs instead of Venezuela.
Some have expressed concern that this could spell doom for the barter agreement and low interest rate.
But according to Mr. Hill, Goldman Sachs would not be able to change the terms of the agreement without Jamaica’s consent.
Hill’s analysis supports the position of Finance Minister Dr. Peter Phillips.
Dr. Phillips adopted a similar line when responding to concerns expressed in parliament yesterday by the Opposition spokesman on finance, Audley Shaw.
According to Hill, the sale of the debt would be beneficial to both Goldman Sachs and Jamaica.
Mr. Hill has worked out how he believes Goldman will make money from the deal.
No deal has yet been announced by either Venezuela or Goldman Sachs, concerning the sale of Jamaica’s Petrocaribe debt.
Meanwhile, Finance Minister, Dr. Peter Phillips says the Jamaican government would be open to any deal on the Petro Caribe agreement that would see a reduction in the country’s debt exposure.
Dr. Phillips was speaking this morning with Nationwide News.
Until now, Dr. Phillips had refused to comment on whether the government would be interested in purchasing its Petro Caribe debt from a third party, should Venezuela sell that debt.
However, he declined to say whether any such deal resulting in a lowering of the country’s debt would mean that a lower primary surplus target would be pursued under the current IMF agreement.
Meanwhile, Venezuela has already announced that it will be scaling back oil exports to one Petrocaribe beneficiary.
The Prime Minister of Belize, Dean Barrow, has confirmed that Venezuela will no longer be supplying his country with Premium 90-grade gasoline.
Dean Barrow, Prime Minister of Belize.