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Editorial: Jamaica and Venezuela: talk frankly as friends

Published:Sunday | September 6, 2015 | 9:00 AM

Jamaica and Venezuela are the best of friends. They have had formal diplomatic relations for 50 years. But their friendship rests on far more than that.

Two centuries ago, the Venezuelan independence leader, Simon Bolivar, found refuge in Jamaica during a period when counter-revolutionary forces gained the upper hand against his Latin American liberation efforts. Bolivar's year in Kingston allowed him time to reflect on, and refine, his case for independence of Spanish America, the philosophy upon which the new states should rest, and the logic of integration.

These ideas were captured in Bolivar's Letter to Jamaica, a treatise that has not only informed his own movement, but has been influential in shaping the ideologies of several of Latin America's modern leaders.

For more than 30 years, too, Venezuela has provided oil to Jamaica and other regional countries under preferential arrangements; first, via the San JosÈ Accord with Mexico, and over the past decade on its own under PetroCaribe, which allows the beneficiaries to pay only for a portion of their petroleum purchases in cash, with the rest of the cost being converted to long-term, low-interest debt. PetroCaribe has proved an important lifeline to Jamaica, especially during the recent past of high oil prices.

In the context of the foregoing, it is quite appropriate that the 10th anniversary of PetroCaribe members - organised to coincide with today's 200th anniversary of Bolivar's Jamaica Letter - was held in Jamaica yesterday, and that Jamaica's prime minister, Portia Simpson Miller, and Venezuela's president, Nicolas Maduro, will today also jointly inaugurate a BolÌvar Cultural Centre in Kingston, built with Venezuelan money.

Good friends can talk to each other frankly. This is a good opportunity for Prime Minister Simpson Miller to do so with President Maduro about his management of his country and the dangers to democracy in Venezuela. To put it mildly, Venezuela's economy is in crisis, fomented by populist, anti-market, spendthrift economic policies initially by Mr Maduro's predecessor, Hugo Ch·vez, and now exacerbated by the collapse in oil prices.

 

BYZANTINE EXCHANGE SYSTEM

 

For instance, in something reminiscent of Jamaica of the 1980s, Venezuela has a Byzantine exchange system with three official mechanisms to determine the rate of the bolivar to other currencies: for formal government transactions, the rate is 6.3 bolivars to the US dollar; then there are two levels of currency auctions used for different types of transactions. Then there is the unofficial market, where the bolivar now trades at around 700 to the US dollar. The upshot is that growth has stagnated, inflation is heading towards 70 per cent, real wages are plummeting, and, like Jamaica of the 1970s, there are shortages on the shelves.

While Venezuela maintains the formal institutions of plurality, a centralisation of authority and an increasing tendency towards a monopoly on power by Mr Maduro's United Socialist Party already severely squeeze and further threaten the safety valve of democracy. Mrs Simpson Miller has the standing, representing Jamaica, to tell Mr Maduro it won't do. His behaviour runs counter to the principles of Simon Bolivar.

Further, as a good friend and worthy partner, she might offer to dispatch her finance minister, Peter Phillips, to Caracas, to teach them about the discipline of fiscal management. Clearly, Venezuela can use the help. And Jamaica, on all counts, has been there before.