Economy & Trade, Headlines, Latin America & the Caribbean

VENEZUELA-DOMINICAN REPUBLIC: Oil a Pawn in Bilateral Relations

Humberto Márquez

CARACAS, Sep 24 2003 (IPS) - Venezuela and the Dominican Republic to try Friday at the United Nations to smooth out diplomatic tensions that have already undermined a petroleum programme that for 23 years has served as an example of South-South cooperation.

Relations with the Dominican Republic "are in the deep freeze", commented Venezuelan Vice-President José Vicente Rangel, as are oil deliveries.

Caracas recalled its ambassador in Santo Domingo, Francisco Belisario, for consultation and halted its petroleum shipments, charging that the Caribbean country was harbouring a plot to overthrow, and even assassinate, Venezuelan President Hugo Chávez.

"Continuous warnings were issued, but there was no response from the Dominican government," but relations "will never be broken off," Rangel said Tuesday.

The vice-president also reported that Venezuela’s foreign minister, Roy Chaderton, will meet with his Dominican counterpart, Frank Guerrero Prats, Friday in New York, where both will attend the 58th General Assembly of the United Nations.

Faced with a potential shortfall of crude and petroleum derivatives from Venezuela, the state-run Refinería Dominicana de Petróleo (REFIDOMSA) and the transnational oil companies Shell and Exxon, which have installations in the Dominican Republic, began purchasing fuel from spot markets in Puerto Rico, Mexico and United States.

Until last week, Venezuela sold the Dominican Republic around 110,000 barrels of oil a day, more than 75 percent of the island country’s consumption for vehicles, electrical plants and industry.

Approximately two-thirds of Venezuelan oil shipments to the Central American and Caribbean region benefit from cooperative agreements.

Some 35,000 barrels (159 litres each) are shipped to the Dominican Republic under the San José Pact, in which oil producers Mexico and Venezuela, since 1980, have split the sales of 160,000 barrels daily to 10 countries in the area.

The oil-buying countries in the San José Pact pay just 80 percent of the receipts, and the rest is converted to soft credits for development projects, with an emphasis on energy-related initiatives.

But since 2000, at Chávez’s behest, Venezuela added the scheme known as the "Caracas Energy Accord", which benefits Cuba most of all, but also the Dominican Republic.

The Caracas Accord covers 30,000 barrels of oil per day delivered to Santo Domingo, under similar terms as the San José Pact, meaning that 65,000 of the 110,000 barrels sold per day were under special terms.

A source from REFIDOMSA, who preferred not to be named, told IPS by telephone that in reality the temporary halt in deliveries from Caracas will not affect refinery operations in the short term.

"There is sufficient petroleum on the market and we can obtain products at even lower cost than those that Venezuela sends us," said the source.

The Dominican oil market represents 1.5 billion dollars in annual revenues for Venezuela, but if the shipments are not renewed, it will have to find other customers to buy the oil formerly earmarked for the island.

Meanwhile, in the Dominican Republic, said the source, "Supplies are ensured and fuel prices for consumers will not rise as a result of this contingency."

The official Dominican reaction to the steps taken by the Chávez government has been to insist that the country "is not conspiring against the president of Venezuela."

The response refers specifically to statements Chávez made during his weekly radio and television programme "Aló Presidente".

"We have evidence that they are conspiring against Venezuela in the Dominican Republic. There is a nest of conspirators there with great economic weight, terrorist; and from there they are planning to assassinate your humble servant," Chávez said.

Furthermore, "There are people in that (Dominican) government, including ministers, who are harbouring coup-plotters there," and President Hipólito Mejía "has promised me, but has not been able to" dismantle the conspiracy.

Despite these statements, Mejía denied that there are any plans to withdraw the Dominican Republic’s diplomatic delegation from Caracas.

But his vice-president, Milagros Ortiz Bosch, has asked Venezuela to refrain from making "spontaneous declarations".

She says the matter is being handled quietly and calmly, and added, "We would like the Venezuelan government to communicate through its foreign ministry its contributions towards finding a solution to this problem."

At the root of the tensions is the fact that Carlos Andrés Pérez, social-democrat leader and former president of Venezuela (1974-1979 and 1989-1993) lived in self-imposed exile for several months in the Dominican Republic. He says he has since moved to New York.

Chávez led a failed coup against the Pérez government in February 1992 when he was yet a paratrooper colonel on active duty.

He served to years in prison for that crime, and afterwards dedicated himself to politics, ultimately launching a successful presidential campaign that gave him a victory in the December 1998 elections.

Pérez, during his first term as president, energetically supported the Dominican social-democrats, and in 1978 won the support of then-U.S. president Jimmy Carter to achieve recognition of the victory of his party’s counterparts on the island against conservative Joaquín Balaguer, who was seeking a third re-election.

Mejía also belongs to the social-democratic Dominican Revolutionary Party, and recognises a debt of gratitude to Pérez. The government refused to expel the Venezuelan party leader from the country, although it did ask him to tone done his discourse of opposition against Chávez.

Pérez said some weeks ago, "Unfortunately, this tyrant’s apprentice (Chávez) will not exit peacefully, but through violence, when the armed forces decide to re-establish order and democratic principles" in Venezuela.

The former Venezuelan president also said he is proud of the fact that Chávez names him as one of the leaders of the opposition movement against his government.

Chávez and his advisers have cited Pérez’s statements from late 2001 and early 2002 in which he asked his backers to maintain contacts and alliances with Pedro Carmona, former leader of the powerful business association Fedecámaras and dictator during the coup that removed Chávez from power for 48 hours beginning Apr. 12, 2002.

In this context, the political opposition in Venezuela has come down hard against Chávez for halting petroleum shipments to the Dominican Republic.

"It is an act of international aggression, as defined by the United Nations," says opposition jurist Asdrúbal Aguiar, a Christian democrat.

Teodoro Petkoff, a political analyst with the opposition and editor of Tal Cual newspaper, says the move is "opportunism and cowardice unworthy of Venezuelans."

Chávez "is using economic reprisals against the Dominican people just like those he criticises because the United States applies them against Cuba," says Petkoff.

In the Dominican Republic, former president Leonel Fernández (1996-2000), who once again is seeking the post as candidate for the Dominican Liberation Party, called for an urgent clarification of the situation in response to the Venezuelan charges.

"It is of utmost importance to maintain good relations with the Venezuelan state," he said.

But the controversy has already tarnished the image of the San José Pact, which – until now – was considered a prime example of cooperation amongst developing countries.

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