PETRO- CARIBBEAN

1,462 views

Published on

Nobody can deny that Petrocaribe offer extremely favorable conditions for Dominican Republic . The importance of this agreement in force at a time when oil prices internationally reach historically high levels.
Undoubtedly , Petrocaribe has reduced the average cost of external debt and has eased foreign exchange flows , contributing significantly to exchange rate stability.
The process has been negotiated payment for goods and services by market value instead of using a currency like the U.S. dollar . This means that even if we could pay using black beans, the beans are accepted in market value. In addition , there is a mechanism by which the government of Venezuela may have access to certain services on the Dominican economy , such as tourism.
The Dominican Republic will not require foreign currency to pay the debt and business at the same time. In addition, the Dominican government is financing the agribusiness sector funds necessary for the harvest of agricultural products to be used as payment to the Venezuelan government. The purpose of these funds is to ensure that crops are on time .
At the end everyone wins. The Dominican government may cover the country's oil needs paying for goods and services instead of specific currencies and the Venezuelan government will do the same. Meanwhile, Dominicans have a segment of agribusiness production pre - sold and entrepreneurs in the tourism sector will have discounts on their tax obligations.

Published in: News & Politics
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,462
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

PETRO- CARIBBEAN

  1. 1. (FREE TRANSLATION) FOUNDATION FOR DEVELOPMENT AND IMPLEMENTATION OF STRATEGIC STUDIES (FUNDEIMES) ESSAY: PETRO- CARIBBEAN “PETROCARIBE” AUTHOR: LICDO. RAFAEL ANTONIO PEREZ QUEZADA, M. A. SANTO DOMINGO, D. N. YEAR 2014
  2. 2. CLARIFICATION: “OPINIONS CONTAINED IN THIS RESEARCH REPORT, ARE THE SOLE RESPONSIBILITY OF THE AUTHOR AND NOT THE INSTITUTION SOLIDARITY WITH THE CONCEPTS NECESSARILY ISSUED”.
  3. 3. INTRODUCTION Nobody can deny that Petrocaribe offer extremely favorable conditions for Dominican Republic . The importance of this agreement in force at a time when oil prices internationally reach historically high levels. Undoubtedly , Petrocaribe has reduced the average cost of external debt and has eased foreign exchange flows , contributing significantly to exchange rate stability. The process has been negotiated payment for goods and services by market value instead of using a currency like the U.S. dollar . This means that even if we could pay using black beans, the beans are accepted in market value. In addition , there is a mechanism by which the government of Venezuela may have access to certain services on the Dominican economy , such as tourism. The Dominican Republic will not require foreign currency to pay the debt and business at the same time. In addition, the Dominican government is financing the agribusiness sector funds necessary for the harvest of agricultural products to be used as payment to the Venezuelan government. The purpose of these funds is to ensure that crops are on time . At the end everyone wins. The Dominican government may cover the country's oil needs paying for goods and services instead of specific currencies and the Venezuelan government will do the same. Meanwhile, Dominicans have a segment of agribusiness production pre - sold and entrepreneurs in the tourism sector will have discounts on their tax obligations.
  4. 4. DEVELOPMENT The Petrocaribe Agreement: As we pointed out Wikipedia, "Petrocaribe is an alliance in oil between some Caribbean countries with Venezuela. The initiative by the Government of Venezuela takes aim an alliance consisting of the Caribbean countries to buy Venezuelan oil under preferential payment. "This partnership was launched in June 2005. The organization was born on June 29, 2005, by President Hugo Chavez in the city of Puerto La Cruz located in eastern Venezuela in the First Energy Meeting of Heads of State and Government on Petrocaribe , and being signed by 14 countries the Energy Cooperation Agreement . The agreement allows Caribbean nations to purchase up to 185,000 barrels of oil per day. ”Agreement signatory countries were Antigua and Barbuda , Bahamas , Belize, Cuba , Dominica, Granada , Guyana , Jamaica, Dominican Republic , St. Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines , Suriname and Venezuela signed the multilateral agreement Petrocaribe . " On September 6, 2005 , the Second Summit of Heads of State and / or Government on Petrocaribe , in the city of Montego Bay , Jamaica developed." Since 2005, the Dominican Republic participates in the energy Petrocaribe agreement , through which several countries in the region can acquire oil and oil products to Venezuela on favorable terms. In an agreement dated May 5 economic complementation agreement REFIDOMSA in company with the acquisition of 49 % stake in the refinery by Caribbean PDA was signed. Pevida Klinger , E. ( 03/01/2010 ) tells us in his article Petrocaribe : Fair Trade as follows: " Almost 50 years ago , the UNCTAD ( United Nations Conference on Trade and Development ) created, was raised one of the key issues affecting the developing world was the price of Commodities ( main exports called developing world ) and unequal Exchange (exchange of unequal values for the benefit of the industrialized world ) . "Half a century later that is still the fundamental problem facing our countries , hence the importance of promoting Petrocaribe scheme with which a window opens strategic importance to the economies of the region have to become, inevitably , point of reference and world example . ”Fair Trade, in essence, is a business in which prices in the trading of goods and services are produced to ensure the full realization of productive activity . "However, in the Petrocaribe scheme goes far beyond and Commercial Compensation (payment through the export product ) as a strategic mechanism arises . In this scheme of fuel delivery and financing that emerged Petrocaribe is based.
  5. 5. ”Focusing on the mechanism is to encourage the production of the beneficiary countries , states that the product or service that is sold must come from domestic production structure and , whenever possible , favoring small producers. In turn, the receiving country shall be used exclusively for the purpose of domestic consumption. To ensure the competitiveness thereof shall meet the quality requirements and parameters of the host economy. "With this compensation scheme as a platform to encourage production and export is promoted; small producers are encouraged to venture into international trade and can be put into operation the potential of these economies." Petrocaribe Agreement and Dominican Republic: The Petrocaribe agreement signed by the Dominican Republic and the Bolivarian Republic of Venezuela detailing the purchase terms Venezuelan oil by the Dominican government has very advantageous for our country ways. The scale of funding ranging from 1 % to 50 % of the cost for delivery, with an extension of the grace period the amount financed to 2 years. Payments may be made from then until 17 to 25 years at 1% interest if the price of oil rises above $ 40 a barrel. As we discussed the eminent economist Pevida Klinger, E. ( 31/01/2010 ) in his newspaper article entitled Petrocaribe and Dominican Republic , that " Petrocaribe is one of the programs that contribute to the implementation of projects of the Bolivarian Alternative of the Americas - ALBA - integration mechanism that promotes Venezuela , together with Caribbean countries , Central and South American , Dominican Republic which is not a party, although it is a full member of Petrocaribe . "This is an Energy Cooperation Agreement oriented multilateral joint and coordinate policies with the countries of the region looking for an efficient use of energy , cooperation and technological assistance and infrastructure development , including the development of alternative sources. However, as we have been explaining , is much more than a supply contract . " At the operational level , the Petrocaribe Energy Cooperation Agreement is much more than a contract to supply oil to Caribbean countries , is a political initiative to provide both financial and structural facilities to ensure direct delivery to countries in the area , where the oil market is affected by the intermediation and speculation. Petrocaribe implies the articulation of previously existing agreements , such as the San Jose Convention and the Caracas Energy Accord . However, improving the conditions of the latter , which provides funding for 25 % of the bill , with a year of grace , payable in 15 years with 2 % interest.
  6. 6. Petrocaribe proposes a funding level of 40% of the oil bill , by reference to the price of oil . Also extend the grace period for funding one to two years and provides for an extension of the payment period from 17 to 25 years, reducing the interest rate to 1 % , if the oil price exceeds $ 40 per barrel . The short-term payment of 60 % of the bill extends from 30 to 90 days. Based on solidarity principles of this agreement, the Bolivarian Republic of Venezuela is willing to accept that part of the differentiated payment of the invoice is made with goods and services, it can offer , in some cases , special prices. He explains economist Fuentes, B. (2010) how this agreement works where he says : " The Petrocaribe Agreement provides a fairly simple mechanism , which involves the dependence of the price of oil, there is a percentage of the cost of oil we buy Venezuela is reduced . For example, for every barrel we bought at a price of $ 100, we pay Venezuela only $ 50 (50 %). "It is extremely important to understand that the $ 50 that we" saved "do not represent a discount as such but those resources are accumulated as a debt with Venezuela Dominican Republic. ”This debt is acquired at highly favorable terms because the deadline to pay is 25 years with 2 year grace period and an interest rate of only 1%. We believe that these conditions do not offer anyone. " In this same vein , economist Pevida Klinger , E. ( 31/01/2010 ) tells us in the article cited above, the importance of building international solidarity this agreement, as we stated: "It is well known that in the case DR has been referred to the Venezuelan interest in receiving imports of black beans and other products and tourism services. Both aspects have to have a positive socio- economic impact of profound consequences : guarantees agricultural production , raise the level of employment , comprehensive and consolidated export markets, substantially reduces the stress on the premium dollar , since the state does not have to out being able to find dollars to pay producers with local currency. "Obviously, knowing the red tape in the country, has been slow to push those options , but the mechanism has already begun operating . And two supply agreements black beans and liquid sugar, the latter product has aroused great interest of the Venezuelan business were signed. The Directorate of Petrocaribe, the Ministry of Finance, has constituted a fund of RD $ 100 million in the Reserve Bank to secure financing on favorable conditions to habichueleros. Are planted and 25,000 tasks and were identified with 400 thousand other vocations for it. ”The country's tourism infrastructure can be used to Venezuelan tourism plans in periods of low - as part of the social programs developed in Venezuela - which also would be discounted in the oil bill . There are many other potentials such as triangular trade in
  7. 7. the country to provide third parties Caracas export commitments. All this would be of great national impact. Indeed, there are a wide range of options. " To get the right perspective, take into account that only funds Petrocaribe oil purchases we make to Venezuela , which are around 30-40 % of the total oil bill . So, the economist Fuentes, B. (2010), tells us, " to review the statistics published by government agencies , we see that Petrocaribe has financed , on average, only 10% of the oil bill . "Although the funded percentage is not high, the country's oil bill is so high that , in just four years , the debt Petrocaribe has increased by 300 % from $ 448 million in 2006 to U.S. $ 1,850 million in 2010 . "However, Petrocaribe has reduced the average cost of external debt and has eased foreign exchange flows , contributing significantly to exchange rate stability." The process has been negotiated payment for goods and services by market value instead of using a currency like the U.S. dollar . This means that even if we could pay using black beans , beans are accepted in market value , so that means the government is buying in advance crop farmers as production rate , effectively paying the debt to Venezuela and at the same time , maintaining a margin discount for tonnage. In addition, the Dominican government is finalizing the mechanism by which the government of Venezuela may have access to certain services on the Dominican economy, such as tourism. The service used by the Venezuelan government in the Dominican tourism sector will be charged according to the value of the market and the oil bill without the Dominican government also pays the need to access funds. The Office Negotiating debt settlement Petrocaribe , located in the Ministry of Finance ( 2012) , gives the following updated information : "The country has sent Venezuela about 21 thousand 954.29 metric tons of food as a form of payment part of the debt of Petrocaribe , which in 2011 reached 2444.5 billion. ”That amount of goods was exported from the end of 2010 to date ( March 2012) and is equivalent to the payment of 33 million 674 thousand 486.19 U.S. dollars. ”Foods sent to Venezuela include black beans , fructose syrup and glucose , as well as pasta . ”The compensation mechanism is that debt Billings export of domestic fuel import bills are recognized. ”That means that $ 100 of export bills amount to $ 100 imported fuel under the Petrocaribe agreement.
  8. 8. ”That would leave the country to seek foreign currency cash to pay , which means a positive effect on the economy , as the circulating currency is not the dollar , but the Dominican peso ." The compensation mechanism debt by exports of goods and services was approved by resolution of the Fifth Summit of Heads of State and Government of Petrocaribe made in 2008. "
  9. 9. CONCLUSION The Petrocaribe agreement signed by the Dominican Republic and the Bolivarian Republic of Venezuela detailing the purchase terms Venezuelan oil by the Dominican government has very advantageous ways for our country which we believe present commercial advantages. Petrocaribe has been very positive for the country , but if we want to sell beans, we have to make contracts with agreed conditions, planting plan , coordinate actions between the parties involved and ensure compliance with the agreement. Our government must fully engage in trade negotiations, giving support to the pre- planned with the productive sector, in the form of agreement between States , seeking to eliminate intermediaries. It is vital to be attractive and viable potential business for the productive sectors , establish a form of rational and transparent payment, as would be the Dominican government would pay the producer and this feature alone can remove all the appeal of the given operation Fame bad payer with all agencies and institutions. The opportunities presented to us to get ahead are many, but it continues to sadden us that the majority vanishes from view. We have in this agreement an opportunity to streamline many sectors of our economy. We believe that doing the right thing, Petrocaribe can contribute to balanced development , enhance the countryside and local industry , converting oil energy energy progress .
  10. 10. REFERENCES http://www.hoy.com.do/opiniones/2010/1/31/312136/Petrocaribe-y-Republica-Dominicana ( Taken at date 2012-04-16 at 03:30 hours). http://hoy.com.do/opiniones/2010/1/3/308413/Petrocaribe-Comercio-justo ( Taken at date 2012-04-16 at 07:30 hours). http://es.wikipedia.org/wiki/Petrocaribe ( Taken at date 2012-04-16 at 04:00 hours). http://www.acento.com.do/index.php/blog/293/78/Las-dos-caras-de-Petrocaribe.html ( Taken at date 2012-04-16 at 05:10 hours). http://eldia.com.do/nacionales/2012/3/19/78010/El-pais-ha-enviado-21-mil-954-toneladas- alimentos-Venezuela ( Taken at date 2012-04-16 at 10:00 hours).

×