Venezuela has written off Dominica’s outstanding PetroCaribe debt of more than US$100 million.
Jorge Arreaza, Venezuela’s minister of foreign affairs, said Tuesday that he had been instructed by President Nicolas Maduro to announce the move as a gesture of solidarity between the two nations.
"Due to the difficult conditions our sister people of Dominica is facing after Hurricane Maria, Venezuela announces the start of a process of short-term and long-term debt forgiveness," he said during a forum on climate change organized by the United Nations and the Caribbean Community of Regional Integration.
"This is to allow the government of brother prime minister of Dominica, Roosevelt Skerrit, funds for the reconstruction of his country as well as the creation of fiscal space to access new credit," the foreign minister continued.
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).
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.
Edited by Venezuelanalysis.com.