Venezuela has written off Dominica’s outstanding PetroCaribe debt of more than US$100 million, it has been announced.
Jorge Arreaza, Venezuela’s minister of foreign affairs, said Tuesday that he had been instructed by President Nicolas Maduro to announce the move in a gesture of solidarity between the two nations.
"We do not want to end this meeting without announcing a concrete provision for a country that has suffered the most which will allow the brothers of the Caribbean to enter the process of recovery," he said.
"That is why I bring instructions from President Nicolás Maduro to formally announce before this forum an act of solidarity with our brethren in Dominica, whose precedent goes back to a similar action taken by President Hugo Chávez after the earthquake in Haiti."
The PetroCaribe Initiative was created in 2005, by late Venezuelan President Hugo Chavez. Since then, several Central American and Caribbean countries have joined to reach a total of 18 members.
The scheme allows beneficiaries to pay only 40 percent of a shipment’s invoice in the short term and postpone payment on the other portion, which can be paid in a 25-year credit with a grace period of two years and an annual interest rate of one to two percent.
Countries can also barter to pay the debt with different good and services, from cattle to nutmeg. In 2013, Venezuela received 650,217 tons of food and materials – from beans to components to make cement – to pay off a portion of the invoices (16 percent less than in 2012).
"Due to the difficult conditions facing our brethren in Dominica after the passage of Hurricane Maria, Venezuela is announcing the start of a process of debt forgiveness in the short- and long-term term for supplies of PetroCaribe from its creation until September 10, 2017," Arreaza continued.
"This means the cancellation of a sovereign debt that exceeds US$100 million dollars in order to allow the government of Prime Minister Roosevelt Skerrit funds for the reconstruction of his country, as well as the creation of a fiscal space that allows access to new credits."
The U.S. government has been looking to undercut Venezuela's ties with Caribbean nations by proposing alternatives to PetroCaribe.
Spearheaded by Senator Marco Rubio, the proposed Venezuela Humanitarian Assistance and Democratic Governance Act bill proposes that the United States offers "Support for Caribbean Countries" through U.S. initiatives to advance Caribbean energy independence.