It looks like déjà vu all over again for Caribbean countries as Petrocaribe affiliates worry over the tumultuous events unfolding in Venezuela. But “those who forget their history are condemned to repeat it”. And it seems we never learn our lessons.
The current Caribbean crisis is rooted in a chronic dependency syndrome fostered by centuries of human bondage and mass social engineering. Dependency was institutionalised in the system of slavery, trade protectionism, and development policies of mendicancy and charity perpetuated by colonialism and neocolonialism. Through these mechanisations dependency became a stigma ingrained in the Caribbean psyche.
History has punished us repeatedly with hard lessons showing that dependency on “godfathers” and benevolence lacks sustainable economic viability. Yet we have steadfastly stuck to the old colonial monocultural blueprint of dependency doing little by ourselves for ourselves, proactively taking autonomous diversification initiatives – and we are paying dearly for our negligence.
Our European colonial masters created an entire infrastructure of “benevolent paternalism” and handouts for its former colonies. From colonialism to independence we have been pampered with special treatment in trade through instruments like Lome Conventions, Cotonou Protocols, and now EPA Partnership Agreements. Truth is, Caribbean countries have just been pawns of geopolitics and imperialist hegemony for building empires and spheres of influence.
“It is better to teach a man to fish than to give him a fish”. But the many years of “sweet” benevolence lulled Caribbean countries into comatose complacency of dependency on Motherland for everything we need. Then in 2005 we were jolted from our comfort zone when Europe suddenly began dismantling the system. It was a devastating blow that killed Caribbean backbone sugarcane and banana industries leaving economies with virtually nothing to fall back on. That was our first hard lesson of dependency.
With the 1970s OPEC oil embargo Caribbean economies became heavily overloaded with unsustainable debt burdens. Multilateral and bilateral grants and soft loan packages flowed in from international institutions and friendly countries to bail out our troubled economies. These include United Nations donor agencies like UNDP and UNESCO; European Development Funds, Britain’s DFID, Canada’s CIDA, USAID, OAS; and countries like Taiwan, Japan, and China.
Bilateral aid is granted with strings attached always quid pro quo, example, Japanese aid for support on the International Whaling Commission.
Recently, Grenada was taught another hard lesson: a bilateral aid promise is not something to depend on 100% guaranteed. It cannot be enforced by international law and can be abruptly terminated. That was exactly what happened when Australia reneged on promises of assistance for building our new Parliament.
In recent decades the new authoritative structures of the International Monetary Fund with its World Bank surrogates emerged as proxy to the defunct system of benevolent paternalism. Countries in trouble with fiscal/debt deficits line up “cap in hand” requesting help. But asking the IMF help is tantamount to begging your master for a beating. And that’s what you get.
The IMF is the quintessential Dr. Killcure administering medicines that often kill patients’ economies instead of curing their maladies. In the 70s it was Jamaica under the Manley administration and in 1999-2003 the IMF prescribed Argentina a regimen of conditionalities that almost reduced that country to a “failed state” wreck – more hard lessons of dependency.
Yet today Grenada is flirting with the IMF again but the verdict is still pending on this one.
In 2005, Venezuela launched its PetroCaribe initiative to supply cheap oil to Latin America and Caribbean. The deal requires 50% upfront financing at market value with grace periods of two years. The remainder is paid within 25 years at 1% interest in cash or kind by countertrade bartering. Twelve (12) CARICOM member countries immediately signed up, the exceptions Montserrat, Trinidad, and Barbados.
Masterminded by President Hugo Chavez, PetroCaribe with its ALBA component epitomises the essence of socio-economic cooperation between “brother” nations of the Americas. It was like “manna from heaven” for cash-strapped economies in the region. And with the knowledge that Venezuela has the largest oil reserve on earth, our confidence in its supply capacity was complete, our dependency sealed.
PetroCaribe is synonymous with Hugo Chavez. It is his signature showcase legacy to the Americas and arguably his greatest achievement. However, following his death many questions have been raised about the longevity of the initiative – concerns now validated by recent events in Venezuela.
Nicholas Maduro, the new Venezuelan leader, inherited an economy plagued with socio-economic and political upheavals. He is under tremendous pressure from militant opposition forces to scrap PetroCaribe and redirect resources to solve domestic problems.
Venezuela has already started tinkering with terms of the agreement, an indication of the clear and present danger looming ahead.
The Chavez oil bonanza props up several regional economies. With his godfather benevolence at risk, if alternative cost-effective energy resources cannot be found to fill the vacuum, we are facing another hard lesson of the dependency syndrome.
Déjà vu, anyone?