Real Estate Rebound

THE STAR Businessweek JANUARY 19, 2019

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Real Estate Rebound

St Lucia’s real estate sector continues to improve as opportunities emerge for house-hunters

By Catherine Morris, STAR Businessweek Correspondent

January is a time for New Year’s resolutions and if buying a house is on your list for 2019, you’re in luck, according to Saint Lucia’s realtors who say now is a good time to grab a bargain on your dream home, invest in rental accommodations or simply move up the property ladder.

Fair trade food schemes battle to promote better standards Early last month, a small team of auditors arrived unannounced at a melon farm in Choluteca, the fertile region of southern Honduras. The farm is a division of Fyffes, the Irish fruit company Pages 3 & 7

Continued on page 4

Emmanuel Macron’s public consultation is a high-risk strategy A French king tried it before and it did not end so well. Louis XVI ordered his subjects to compile their cahiers de doléances, or catalogues of grievances, in the spring of 1789.

Rather than defuse popular anger, the exercise helped to galvanise a spirit of insurrection against the crown Page 7

Sea Breeze Villa, priced at just over US$ 1m

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Can Saint Lucia’s New Track Outrace Caribbean Competition?

By ED Kennedy, STAR Businessweek Correspondent

Alongside the races themselves, world famous horse racing events like the Belmont Stakes in the USA, the Prix de l’Arc de Triomphe in France and the Melbourne Cup in Australia all draw artists, fashionistas, and celebrities alongside the business community

I

Rendering of ‘The Pearl of the Caribbean’, an integrated sports and tourism development by Chinese developer Desert Star Holdings

t has been a long time coming and in early 2019 many in Saint Lucia and beyond look forward to progress of a particular major project in Vieux Fort. The Royal Saint Lucia Turf Club is not only set to be a world class circuit, but also forms part of the larger Pearl of the Caribbean project, a huge vision that provides for a new casino, marina, resorts and new shopping and residential property to complement the new race track.

In the works for years, the frustration that horse racing enthusiasts have felt over the speed of the project has been offset by the promise of the ultimate vision for the new track, one that will be the first of its kind in Saint Lucia, and a circuit that could soon be the envy of all other nations around the Caribbean.

But while there’s understandably much pride and excitement surrounding the realisation of the new track and the US$ 2.6 billion Pearl of the Caribbean project as a whole, there remains much distance to cover before the finish line. And as this project progresses, it’s appropriate to review the history of other tourism magnets like this race track, locally, and discern what project planners can take forward from the lessons of recent history in the region.

What the Project Will Offer

At the core of Saint Lucia’s future race track is a strong foundation surrounding its planning: from the financial backing of Desert Star Holdings, to the addition of personnel like Sam Elliot, who left his post as director of racing at Parx to become chief

executive of the Turf Club in April 2018, to even the ‘wow factor’ of celebrities like Prince Harry turning the first sod on the new works in November 2015 while making a visit to the nation.

Alongside the races themselves, world famous horse racing events like the Belmont Stakes in the USA, the Prix de l’Arc de Triomphe in France and the Melbourne Cup in Australia all draw artists, fashionistas and celebrities alongside the business community. With the project’s stated aspiration of attracting foreign racing enthusiasts — with a particular focus on the booming Chinese market — there is rightfully much excitement about the future.

Nonetheless, just as recognition of the positives that other regional nations have achieved via horse racing is essential, so

too must the risks be fairly recorded. True, sports advocates would surely say that having a new race track is always better than not having a new race track but, distinct from the construction of a new school or hospital that has clear and enduring public benefits, the Pearl of the Caribbean has a higher hurdle to clear when it comes to return on investment.

Its construction has been championed by the Chastanet government as a victory against the high rates of youth unemployment in the nation, especially with the Pearl’s proposed location in the south of Saint Lucia. There is fair optimism here, certainly, but it is also something of a ‘wait and see’, especially when factoring in its impact on the current economy in the south.

A History of Horse Racing in the Caribbean

All the way back in the 1800s, horses were galloping in competition across Barbados.

The modern era of the industry began in 1982, with the creation of the Barbados Gold Cup at a horse track today recognised as a leading attraction throughout the Caribbean.

Alongside the Gold Cup, the now iconic Garrison Savannah Racetrack outside the Continued on page 5

Agricultural Trade

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Fair trade food schemes battle to promote better standards

Growing demand for ethical products has encouraged more companies to certify output

By David Crouch, FT Correspondent

E

arly last month, a small team of auditors arrived unannounced at a melon farm in Choluteca, the fertile region of southern Honduras. The farm is a division of Fyffes, the Irish fruit company.

After interviewing workers, the auditors sent a report to Fair Trade USA, a non-profit organisation that certifies and labels products as “fair trade”. A few days later, it decertified the farm, claiming multiple infringements of its standards, including trade union rights.

This storm in a Central American farmyard goes to the heart of problems facing the international fair trade movement, as it struggles to respond to challenges posed by the global food industry and changing consumer habits.

The controversy came as an embarrassment to Fair Trade USA, since it had certified the farm only eight months previously. The organisation had split from Fairtrade International, an umbrella group, in pursuit of bigger and faster gains. Critics had said the move would lead to a dilution of fair trade standards, which generally guarantee better than market prices and safe working conditions for farmers and workers in the developing world.

Growing consumer demand for ethical food has encouraged more companies to certify their output, leading to the emergence of new fair trade schemes and putting pressure on established fair trade certifiers to expand their operations, despite limited resources.

Accreditation of fresh fruit and other foodstuffs can be subject to withdrawal

“We have ended up with a proliferation of labels because there are some strong differences in how producers and people in the fair trade movement believe they can best respond,” says Anna Canning, campaigns manager for Fair World Project, a fair trade watchdog.

The trend threatens to undermine consumer confidence, while encouraging “fairwashing” — when a company applies for a fair trade label to gloss over its problems — Ms Canning says.

Some leading producers have recently pulled out of established fair trade schemes to set up their own ethical labels.

The decision in 2016 by Cadbury, the British confectionery maker owned by US food group Mondelez International, to pull out of the Fairtrade scheme in favour of its own sustainability programme, Cocoa Life, placed a question mark over the viability of established fair trade organisations. Green & Black’s, which pioneered organic Fairtrade

chocolate and was bought by Cadbury in 2005, joined Cocoa Life the following year.

In 2017, UK retailer J Sainsbury announced it would also drop the Fairtrade label from its own-brand tea, launching its Fairly Traded label instead. Meanwhile, Nestlé is expanding its in-house Cocoa Plan sustainability programme.

Trishna Shah, senior analyst at market researcher Euromonitor International, says that “2009 was the year when the big global fair trade brands became important to companies, they began to seek them out — Cadbury, Mars and Nestlé went fair trade; 2017 is when they switched”.

While Fairtrade, UTZ and the Rainforest Alliance have been seen as the gold standard for fair trade certification in recent years, there is now “a ripple of change”, with leading manufacturers moving to selfcertification, Ms Shah says.

“For some manufacturers with complex supply chains, established fair trade

schemes don’t offer enough flexibility.

That’s why they are looking to adapt to the current business climate,” she says.

In this sense, the best-known fair trade certification brands are victims of their own success.

“Fair trade has been one of the most important ways of getting more people to think about where the stuff they buy comes from, and the conditions under which it is produced. That’s a fantastic thing,” says Christopher Cramer, development economist and professor at Soas, University of London, and co-author of one of the few in-depth academic studies of the impact of fair trade schemes.

“There is a neoclassical view that it doesn’t work to intervene in markets — I disagree. You are more likely to reach poor people through larger producers who are in the public eye,” he says.

However, research four years ago, led

by Prof Cramer, questioned the positive effect of fair trade on the people it is supposed to benefit: the producers.

“We found that fair trade made no positive difference to the poorest people in the supply chain. We had statistically significant evidence suggesting that we don’t know enough, and that what we know is that it doesn’t make much difference,” he says.

Fairtrade International says it has since worked closely with the researchers “to listen to their views and better understand some of their findings”.

But the organisation is bullish about its prospects, claiming to represent almost 1.7m Fairtrade farmers and workers, and being a partner to 2,400 companies selling more than 30,000 products with the Fairtrade mark.

“The producers will tell you that Fairtrade provides more benefits for them,” says Dario Soto Abril, chief executive of Fairtrade International.

Continued on page 7

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Real Estate Rebound Continued from page 1

accountants. That is a market that is quite strong. As British sellers reduce their prices, these buyers are getting the benefit of considerable reductions.”

And locals are ideal buyers for those sellers interested in securing a quick and easy sale. Transactions like these can close in as little as 5 weeks according to Farrin who says savvy local buyers can get a 15 to 20 per cent reduction from the asking price.

“It is a buyer’s market. These properties virtually never sell at the listed price.” His advice for buyers this year is simple, “Look long and hard, and if you want a deal, make sure you have your finances in place.”

Foreign investment

Heather Floissac, Managing Director of Belle Vue Properties and President of the Saint Lucia Realtors’ Association

David Farrin, Managing Director at Doubloon Real Estate, says he is “cautiously optimistic” heading into 2019, and adds: “There has been improvement.

Last year was one of the better years we have had since the recession [and] the level of enquiries coming in at the start of this year is encouraging.”

Brits create buzz

Doubloon Real Estate caters mostly to foreigners, with around 70% of its business coming from international buyers and sellers, and Farrin notes that the falling

British pound has created opportunities for locals, particularly in the middle of the market, around the US$ 500,000 price range. “A lot of British sellers have been able to reduce their prices to make their offer more attractive. That has helped inject some life into the market.”

These properties are particularly attractive to a new breed of buyers — young Saint Lucian professionals who are eager to invest in real estate. “There is a younger generation that is creating a market,” says Farrin. “They are professionals in their mid-30s to mid-40s — bankers, lawyers,

Locals may be snapping up deals, but foreign buyers continue to be the bedrock of the sector. Saint Lucia has always been popular with international investors, thanks to its tropical climate, island lifestyle and welcoming, friendly communities. “People fall in love with Saint Lucia,” says Heather Floissac, Managing Director of Belle Vue Properties and President of the Saint Lucia Realtors’ Association. “The natural beauty of this country really appeals to people.

They come here and they want to buy.”

But the process for foreign buyers has not always been easy, marred by excessive bureaucracy and lengthy delays. Many international buyers choose to form an International Business Company (IBC) through which they can purchase property, but this option is no longer available following a clampdown led by the Organisation of Economic Cooperation and Development. “Buyers are not allowed to form IBCs to buy property anymore and that will affect all islands,” says Floissac who is currently working with government on behalf of the Realtors’ Association to find a better way to service foreign buyers.

The government is consulting with the sector as it prepares to review and revise the Aliens Landholding Licence, and examine proposed changes to the current residency regime. Farrin says: “There is some confusion in the market; the government is going to change the rules and regulations of buying and we are

As development ramps up and momentum builds within the sector, Floissac is focused on improving its professionals during her second term as President of the Realtors’ Association

wanting some clarity on that.”

Proposals on the table include a residency programme that would come into effect when foreign buyers pay a residency fee.

This would give investors more freedom and flexibility, allowing them to live in the country for as long as they wish, rather than the usual 42 days provided under a visitor’s visa.

Floissac welcomes these changes and praises the government for taking a proactive and collaborative approach, saying: “They are very responsive and very open. The government wants to hear from us and they like the feedback.”

New Year predictions

Certainty is good for business and as government looks at relaxing the rules, there are many reasons for realtors to celebrate the new year. At the moment, most movement is in the north of the island where the infrastructure is more developed.

Farrin has noted particular interest in Cap Estate where Doubloon has a number of properties including the US$ 650,000

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5

Can Saint Lucia’s New Track Outrace Caribbean Competition?

Continued from page 2

The Garrison Savannah Horse Track near Bridgetown, Barbados. The facility is managed by the Barbados Turf Club which is responsible for the regulation and promotion of the sport on the island

The Marina Village at Marigot Bay, with a 2-bed apartment listed at US$ 325,000

Hummingbird Villa, a 3-bed, 3-bath, residence with stunning views, and Sea Breeze Villa, priced at just over US$ 1 million, which comes with a one-bed guest cottage. At a lower price point is the Marina Village at Marigot Bay, where a 2-bed apartment is listed at US$ 325,000.

Farrin expects the buzz around the north to continue through 2019, but predicts that interest will shift south in the future, spurred by development in Vieux Fort where plans include expansion of the Hewanorra International Airport, a new cruise port, more retail and restaurant facilities and the US$ 2.6 billion Pearl of the Caribbean project. “There’s going to be enormous investment in the south over the next 10 years,” he says. “If that comes to fruition, it will change the island dramatically.”

Floissac agrees, and says she is encouraged by the scale of investment.

“There is a lot happening and the signs are

good. With all these new projects coming onstream the government is making a concerted effort to improve the economy.

The new airport will allow more travel and more people coming to the island. There are more and more villas being built, there is no stopping it.”

As development ramps up and momentum builds within the sector, Floissac is focused on improving its professionals during her second term as President of the Realtors’ Association. Under her leadership the group, which has around 40 members and is steadily growing, works closely with local colleges to offer training courses. A sure sign of a healthy industry is the level of interest it generates among the next generation and, according to Floissac, there are many young Saint Lucians who want to build a career as a realtor. “There is so much interest now in real estate as a profession. We are seeing so much enthusiasm.”

nation’s capital of Bridgetown plays host to the Triple Crown of Thoroughbred Racing, an event that has grown in recognition year by year, to today serving alongside the Gold Cup as a cornerstone of Barbados’ claim to be the horse racing epicentre of the Caribbean.

Undoubtedly the success of Barbados in adding a new angle to its tourism appeal is an inspiration for any Saint Lucians in the local industry who relish what the new track on this island could mean for domestic business and tourism in Saint Lucia.

However, the Caribbean family’s experience with horse racing has not been uniform, and not always like the success the Barbadians have enjoyed.

Jamaica’s racing industry has known some real turbulence through its history.

While Barbados was making preparations for its big push into the racing world during the 1980s, Jamaica’s Caymanas Park track has since been alleged to be a hub of organised crime activity. The presence of an unsavoury element around Jamaica’s only racing track was reinforced when notorious gangster Dennis Barth was shot dead at the park during a shootout with police in 1978.

This episode highlights a difficult reality.

The expansion of the horse racing industry anywhere must also confront the universal challenge of corruption. While horse racing may be the sport of kings, history has shown it is also one where high profile scandals have seen dubious bookies and criminals make massive illicit profits, often

at the expense of the regular attendee and fan.

There is no suggestion that such an episode will visit Saint Lucia with this new track.

Nor that modern measures cannot go a long way to combating illicit activity in the industry. But instead it’s a reality that the sober identification of issues now offers the opportunity to proactively address them before they have the chance to actually arise.

Building on Regional Experiences with Experienced Nations

As well as a notable addition to Saint Lucia, the race track will bring a new dynamic to the region’s racing history. Alongside the aforementioned nations, Martinique, Grenada and Trinidad and Tobago have all had race tracks. So too the island of Puerto Rico, and the US Virgin Islands. While Saint Lucia will have to compete for the racing tourist dollar, collectively there’s the opportunity to further build ‘Brand Caribbean’ as a whole. The global network of horse racing and the prestige surrounding it, makes it a natural fit for enticing tourists.

As the newest track with immense momentum behind it, Saint Lucia has a real chance, through the Pearl of the Caribbean, to emerge out front of the pack when it comes to local leadership in this sport. In doing so, not only could this be a hugely exciting new chapter for national sports and tourism, but for regional sport all around the Caribbean.

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Venezuela Will Continue To Divide The Hemisphere

By David Jessop

S

peaking on January 10 after being sworn in for a second six-year term, Venezuela’s President, Nicolás Maduro declared that his country would “construct 21st century socialism”, was “a democracy under construction” and pledged to “promote the changes that are needed in Venezuela”.

Although uncompromising, his remarks contained no detail as to how his government intends remedying the food shortages, hyperinflation, deteriorating medical services, crime, and arbitrary decision making that have become the norm for millions of Venezuelans.

It is therefore hard to anticipate anything other than the continuing deterioration of the country’s economy. As a consequence, many more Venezuelans are fleeing the country in an exodus that shows no sign of abating.

Already some three million have chosen to do so, according to the UNHCR, the United Nations refugee agency, which reported last November that of this number, 2.4 million Venezuelans had arrived in Latin America and the Caribbean as refugees and migrants.

To put this human disaster in context,

These photos, released by China’s Xinhua News Agency, show Venezuela’s President Nicolas Maduro (left) and then security personnel surrounding him during an incident in Caracas, Venezuela on Saturday, August. 4, 2018. Drones armed with explosives detonated near Maduro as he gave a speech to hundreds of soldiers in Caracas but the socialist leader was unharmed, according to the government.

it is happening in the Americas and in a country that is not at war, like Syria, or, like Myanmar, experiencing ‘ethnic cleansing’.

Rather, it is occurring in a nation that has the largest proven oil reserves in the world and which in 1999 saw most of its people genuinely embrace the social reforms promised by the late Hugo Chavez.

Some argue that the problems the country faces are the fault of falling oil prices and US sanctions and interference. However, this does not explain how other socialist nations, whether energy rich like Vietnam or energy poor like Cuba, have been able, sometimes with difficulty and hardship, to manage their way through periods of austerity without similar outcomes.

Rather, it more plausibly suggests that the cause is gross mismanagement, corruption, ideology trumping common sense, and a previously divided and self-centred opposition.

Unfortunately, there are no easy solutions.

Having ruled out the always-unlikely scenario of a military intervention, and aware that internal conflict will add to the refugee crisis, destabilise neighbours and fuel regional criminality, Washington, the EU and some members of the Lima Group of nations are seeking a new approach.

This variously involves declaring President Maduro’s government illegitimate; recognising the legitimacy of the National Assembly — now under new leadership — as a vehicle for dialogue; imposing additional sanctions on named companies and individuals; breaking diplomatic relations; encouraging the halting of loans through international and regional financial organisations; and providing greater support to neighbouring nations and agencies struggling to cope with ever-increasing numbers of refugees.

There is also a continuing interest in the US administration and in some Latin nations in trying to leverage the relationship between the Venezuelan military and President Maduro in ways that might remove him from office and change the nature of the country’s leadership.

In an apparent reflection of this, President Maduro went from his inauguration at the Supreme Court to an ‘act of reaffirmation and recognition as Commander in Chief’ before the senior officers who lead his country’s armed forces. There the Minister of Defence, Vladimir Padrino observed, according to pro-government Venezuelan media reports, that the people of Venezuela “in the legitimate exercise of their sovereignty chose as their president Nicolás Maduro . . . in accordance with the provisions of the Constitution.”

Whether the new external measures aimed at encouraging change in Venezuela will succeed, remains questionable.

President Maduro and those around him and who support him clearly believe that government and its patronage will continue, have found ways to set aside dissent, and seem content to see the country haemorrhage its citizens. The National Assembly has been bypassed, causing the new generation of opposition figures to struggle to overcome the way the law, constitution and many key institutions are now skewed against them.

As for the Caribbean, it remains divided over how to respond.

While all governments remain firm in their belief in non-intervention in Venezuela’s internal affairs, there is no unified position beyond this. Instead, the issue remains complex and divisive and there are multiple Continued on page 8

France

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Emmanuel Macron’s public consultation is a high-risk strategy

There is no sign that the French president will reverse his most controversial policies Ben Hall, FT Correspondent

A

French king tried it before and it did not end so well.

Louis XVI ordered his subjects to compile their cahiers de doléances, or catalogues of grievances, in the spring of 1789. Rather than defuse popular anger, the exercise helped to galvanise a spirit of insurrection against the crown.

Now modern-day cahiers de doléances are being opened again in town halls across France to give voice to a people incensed by injustice and the remoteness of power. President Emmanuel Macron, likened by his critics to a republican monarch, has launched his own nationwide debate on the state of the nation. Can President Macron succeed where King Louis failed?

Filling out a mayor’s notebook seems like an odd device in a functioning democracy in age of hyper-connectedness via social media. But Mr Macron was forced to this resort — together with 10bn Euros of fiscal concessions — by the gilets jaunes anti-government protests last year which threatened to spiral into a violent revolt and smash his reform agenda. It could prove useful to a beleaguered leader.

The debate could help to defuse the yellow vest protesters, not by offering them warm words, but by hiving off an extremist core bent on violence from a larger group, and their sympathisers among the public at large, who say their demands for change have been ignored by an out-of-touch elite.

The consultation, which extends until March 15, could help to revive the original Macron method of

Fair trade food schemes battle to promote better standards Continued from page 3

French President Emmanuel Macron struggles to implement his policy agenda due to widespread opposition from the country’s gilets jaunes protestors

harnessing business, civil society and local communities, not to mention his own party, to reform the country — an approach the president dropped soon after the election in favour of micro-management from the Elysée palace.

Handled adroitly, the process could be used to channel public frustration. If the burden of taxation emerges as the overriding concern it could put more power behind a proposed streamlining of public administration, for example. It could shape a reformist programme for the second half of his presidency.

Equally, it could prove a waste of time that only breeds public cynicism. The range of topics — tax, spending, public services, shape of the state, action on climate change, democracy, citizenship, immigration and integration — is absurdly broad.

In his letter to the nation on Sunday night, Mr Macron said there would be “no prohibited questions”. But, a few lines later, he says he will not revisit tax decisions taken in the past 20 months. That includes the scrapping of the wealth tax, the number one

beef of many gilets jaunes. Mr Macron is convinced the wealth tax deterred investment and entrepreneurship in France. “I have not forgotten that I was elected on a programme, on broad guidelines to which I remain committed,” he writes. The problem is that many of his opponents do not believe in those same guidelines, such as the primacy of the private sector in job creation, let alone the detailed policies stemming from them.

How are all the ideas and complaints to be distilled, translated into policy, set against other government objectives and reconciled with France’s international obligations, not least the EU’s 3 per cent public deficit limit? It is hard to imagine these choices and trade-offs — the very essence of governing — being made anywhere else than the gilded offices of the Elysée palace. Mr Macron concludes his letter saying he has a “firm determination to draw all the conclusions” from the debate. You cannot be much more non-committal than that.

“We set the bar high, we are the gold standard — we put the producers in the driving seat.”

Among consumers, the Fairtrade brand has the highest recognition, with nine out of 10 shoppers in the UK knowing about it, he says.

Mr Soto Abril sees the trend towards self-certification by large manufacturers as a vindication. “We are disruptive of the terms of trade. Part of being disruptive is that we force companies to catch up,” he says.

Rather than being bypassed by Mondelez, Fairtrade is now partnered with the company, monitoring closely what it does, Mr Soto Abril says.

Fairtrade is also responding to the changing business environment, he says. Next year it will launch Fairtrace, which uses blockchain technology to increase traceability and allow shoppers to know more about the origin of the products they are holding in their hands.

The move is a recognition that sustainability is a lot more nuanced, with consumers more demanding and inquisitive than before, making it harder for companies to win their trust. Ms Shah at Euromonitor says a wave of start-ups is trialling digital platforms such as blockchain and smart labelling to connect consumers with the ethical credentials of brands.

“One of the big buzzwords in 2018 has been traceability,” Ms Shah says.

Meanwhile, the Fyffes melon farm in Choluteca is left without the Fair Trade USA label.

Fyffes said it “remains committed to the highest ethical standards, robust certifications or ethical audit programmes that operate across our supply chain”.

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JAMAICA MOVING TO RETAKE SHARES HELD BY VENEZUELA IN PETROJAM

T

he Jamaica government last week said it would enact special legislation that would allow it to forcibly retake the 49 per cent stake held by Venezuela in the state-owned oil refinery PetroJam. “It will not be a general piece of legislation which allows for acquisition of property rights, other than land, beyond the scope of the transfer of ownership of the 49 per cent shares in PetroJam currently held by PDV Caribe,” Foreign Affairs and Foreign Trade Minister, Kamina Johnson Smith, told a news conference.

PDV Caribe, an affiliate of the stateowned Petroleos de Venezuela S.A., and the Petroleum Corporation of Jamaica (PCJ) entered into a joint venture agreement which resulted in the sale of PetroJam shares in August 2006 and February 2007.

The agreement had called for the upgrading and expansion of the refinery to improve its competitiveness and meet local and international market demands, but Johnson Smith said these objectives were not met and that this poses a risk to the economy.

She told reporters that Prime Minister

Venezuela Will Continue To Divide The Hemisphere Continued from page 6

Petrojam’s parent company — the Petroleum Corporation of Jamaica (PCJ) — in mid-2018 signalled that there would be difficulties ahead for the refinery as the market for heavy fuel oil (HFO) continues to contract

Andrew Holness had led a delegation, including then energy minister Dr Andrew Wheatley, that held talks with Venezuelan President Nicolás Maduro in May 2016 where Caracas gave a commitment to upgrading PetroJam. The Foreign Affairs and Foreign Trade

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Minister said that after signing a Letter of Intent in January 2017 and a refinery upgrade agreement in February 2018, Venezuela has not fulfilled its obligations and that Kingston had made a formal offer to buy back the PetroJam shares in March 2018.

But she said that these efforts had not borne fruit and that Jamaica’s decision to retake the PetroJam shares was based on economic considerations and not political.

“But it has become clear that the shared priority and interest in Jamaica’s energy security, which drove PCJ and PDVSA to work together to operate and upgrade PetroJam, no longer exists,” Johnson Smith told reporters.

“Even as the government of Jamaica acknowledges, values and appreciates the tremendous support provided to this country by the Bolivarian Republic of Venezuela to the energy sector over the years, Jamaica regretfully cannot continue negotiations in perpetuity, especially where it appears that delays are of no concern to our counterparty.

“Therefore, in the national and economic interest of Jamaica, the decision has been taken to commence the legislative process towards acquiring the shares in PetroJam held by PDV Caribe,” said Johnson Smith.

In March last year, a government statement said that the attempt to take full control of PetroJam followed the decision

by US President Donald Trump to issue an Executive Order imposing sanctions targeting the Government of Venezuela and its stateowned entities.

Wheatley told Parliament then that since the Trump announcement “the relationship between PetroJam Limited and PDVSA has come under intense scrutiny, both locally and internationally.”

The Ministry of Finance has set aside J$ 35 billion (one Jamaica dollar = US$ 0.008 cents) in the 2018/2019 budget to repurchase the shares.

views on what, if anything, should happen next.

This is because some nations remain largely positive about their experience of Venezuelan support through its PetroCaribe oil facility; political and ideological differences have become more acute within the region; US hostility to those countries seen as siding with Caracas is increasing; and China and Russia — for different reasons — and more recently Turkey, have made clear they are backing President Maduro.

In a very visible demonstration of this, Cuba’s President and St Kitts’ and St Vincent’s Prime Ministers, along with senior ministers from Antigua and Suriname, attended President Maduro’s inauguration.

In contrast, the same day in Peru, Guyana and Saint Lucia joined 11 other members of the Lima group, including Canada, in signing the Lima Group Declaration which declared President Maduro’s election illegitimate and called for sanctions.

At a regional level the issue has been made more complex by Venezuela’s territorial claims and not helped by the attempted interdiction by the Venezuelan military on December 22nd of a Bahamian-registered vessel undertaking seismic surveys for ExxonMobil in Guyanese waters.

Regrettably there is no end in sight to the human exodus (some US think tanks suggest another five million people could leave Venezuela), to the wider dangers this is bringing to neighbours, and its potential to export political instability if resentment against migrants grows. Nor is it clear how, without massive external investment, President Maduro intends turning the country’s economy around at a time when oil production continues to fall, oil prices remain low, and much of the industry and the country’s infrastructure is deteriorating.

Despite this, it appears that the Venezuelan government will now take measures to further consolidate its political position, while seeking to fragment the hemispheric and international response.

This suggests that, with or without its present president, Venezuela will continue to divide the hemisphere and the Caribbean for many years to come.

David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org

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