By Alexis R. Milan
The International Monetary Fund (IMF) is monitoring the impact that changes to the PetroCaribe initiative may have on Caribbean nations amid worsening economic conditions in Venezuela. Despite the warning, the Venezuelan government has committed to continuing the program.
According to the IMF, the program will have to be modified or discontinued due to the economic situation in Venezuela. At a meeting last Thursday in Caracas however, Venezuelan Foreign Minister , Rafael Ramirez told representatives from the 17 PetroCaribe countries that his government was committed to continuing the initiative under any circumstances.
Speaking about the continued drop in oil prices globally Ramirez said, “This is not the first time this has happened and this is not the first time that our countries will coordinate and agree to defend our interests, with or without the Organization of the Petroleum Exporting Countries (OPEC), we will stabilize our oil prices.”
IMF Advisor, Elie Canetti said the IMF is mainly concerned because Venezuela, a country largely dependent on oil sales, has been going through increasing financial stress amid oil prices falling from US $120 a barrel to around US $70 a barrel.
“We are mindful about the feasibility of PetroCaribe continuing, certainly at the level it has been, and we are looking into what will be the impact on Caribbean countries,” Canetti said. He said the IMF has been monitoring the developments for quite some time but there is greater urgency now that Venezuela’s financial stability seems to be deteriorating much quicker with the drop in oil prices.
In October the IMF estimated that the drop in oil prices could result in a US $20 billion decline for Venezuela. US-based rating agency, Standard & Poor’s (S&P) had also downgraded the status of Venezuelan bonds.