Thu | Jul 18, 2019

Daniel Thwaites | Making enemies of friends

Published:Sunday | January 13, 2019 | 12:00 AM

The sheer audacity of this gambit is amazing: I see the Holness administration setting itself up to rule in perpetuity. How so? Alienate the Venezuelans, seize their large local asset, socialise the debt, then privatise the profit, and maybe associates will feed at that trough.

I hate to state it so starkly, but the week's events have been that dramatic. I mean, shorn of all the posturing and diplomatic bumfluffery, how else would you describe what's about to happen to Petrojam?

If this plan was in the works from a long time ago, I can only imagine the fury at Wakanda Wheatley for almost messing things up by drawing unnecessary attention to the refinery because of venial desires to shave off small bits of fat, employ a few honeys, enjoy the odd US$1,000 birthday cake, and a few high-end crazy shindigs. Not when the target was the filet mignon!

Now I have been extremely critical of the Venezuelan government in these pages, and I have praised the Holness administration for signalling Jamaica's unhappiness with the direction of Venezuela. Truth is, Madura has been dismantling the Venezuelan economy and ripping the society to shreds. The evidence is irrefutable, with astronomical inflation, the hospitals in tatters, hunger stalking the land, and refugees spilling out into surrounding countries.

And it's our right to criticise them in international forums. And we can do it while respecting their sovereignty and upholding the principles of non-intervention.

We must not forget that Venezuela has been an incomparable friend to us. That's why we must cuss dem: It's your friends yuh mus cuss when dem naw gwaan good. But it is a terrible mistake to make them our enemies, which is surely the path we're currently on.

 

Recent Snapshots

 

Let's identify some important recent snapshots from the long history of friendship, which actually stretches back to when Bolivar was chilling in Kingston.

Anyway, when the 60-odd million was paid over to Jamaica for the stake in Petrojam, that money was to be for the upgrades that everyone now bemoans are needed and long overdue. Of course, the upgrades never took place. The funds were swallowed up by the Consolidated Fund, under Audley's watch.

Soon after, it was the PetroCaribe Agreement that saved our behinds when the worldwide recession (that Audley said would be good for Jamaica) hit with ferocity. As the price of oil ballooned, we were saved by the massively concessionary terms that essentially allowed Jamaicans to survive on the goodwill of the Venezuelan people. They had quite literally thrown us a lifeline.

Despite that critical assistance, the administration oversaw the escalation of debt levels to frightening amounts, and it was generally understood that Jamaica was on the brink of collapse. The edict from the international market was that nobody would lend us any money unless we dragged down the debt-to-GDP ratio with decisive action.

Again, through permitting the restructuring of the massive debt we had by then accumulated to them, the Venezuelans threw us another massive bone. To summarise, Venezuela has saved us not once, not twice, but over and over again. At this point, our debts to them run deeper than just money.

So with all that in the background, what could have led our Government to get on board with the recent OAS resolution declaring the Venezuelan government illegitimate? Can it be mere coincidence that this occurred during the same week that our Government declared that they, acting like true Latin American caudillos, would unilaterally seize a massive Venezuelan asset?

We're not on very strong footing when in the same week we condemn the madcap behaviour of the Bolivarians when back home we're doing exactly the sort of thing they've been up to in their yard.

 

Last Resort

 

Government expropriation of assets should be a very last resort, where there are no alternatives, and preceded by fair and clear opportunities to negotiate.

There is a shareholder agreement that governs the dealings of the partners in Petrojam. Where is the required arbitration? Because we don't like how the Venezuelans are behaving is hardly justification to turn around and tief dem!

What's even more troubling is that this fierce aggression to our erstwhile friends seems calculated to facilitate a massive privatisation not too far down the road.

It is no secret that the Petrojam facility is a unique national asset, suited for those dreaming of a monopolistic control of the import of finished oil products.

Currently, Petrojam adds about US$200 million to the Jamaican economy. Had the upgrades been done, it could be adding some $400 million. I don't need to spell out the political implications if the entity falls under the control of a well-heeled political crony, a few of whom stand salivating.

Clearly Mr Holness plans to rule forever. But could he please come up with some other plan to do that which doesn't involve making our good friends into enemies? Will the new owners be friends of Jamaica (like Venezuela), or just friends of the administration?

- Daniel Thwaites is an attorney-at-law. Email feedback to columns@gleanerjm.com.