Jamaica News: The Petroleum (Amendment) Act, 2019, which seeks to transfer the rights and obligations of the PetroCaribe Development Fund (PDF) to the Government of Jamaica, was passed in the Senate on Friday (July 5).
Under the amendments, the PDF’s functions and a small amount of liabilities will be integrated into the Ministry of Finance and Public Service, and the Fund, as a separate entity, will cease to exist.
Legislation to allow for this new arrangement had become necessary given that the Fund, which was established as a public body in 2006, has now fulfilled its mandate.
The PDF had the responsibility of managing the proceeds, which accrued to Jamaica under the Energy Co-operation Agreement entered into between the Governments of Jamaica and the Bolivarian Republic of Venezuela.
It was charged with lending to self-financing public bodies for human capital development, offering assistance to the Ministry of Finance for domestic debt refinancing as well as lending to reduce Jamaica’s dependence on fossil fuel.
Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Senator the Hon. Pearnel Charles Jr., who piloted the legislation, said that transfer of the Fund to Central Government is crucial in light of the Standby Agreement with the International Monetary Fund (IMF) and is also in keeping with good public financial management.
He noted that the inflows to Jamaica under the PetroCaribe Agreement have been negligible since financial year 2015/2016 and the prospects for any improvement in inflows “appears to be unlikely given the clear outlook on Venezuela’s economy and the sanctions that have been imposed by the United States and other Governments.”
In his contribution to the debate, Government Senator, Don Wehby, noted that the legislation forms part of the Government’s overall policy to rationalise the public service in order to ensure greater efficiencies in the use of public resources.
“When you have an efficient Government, we will have more fiscal space to spend on health, education and welfare programmes to improve the quality of life of each Jamaican. This Bill, therefore, is one step to achieving this outcome,” he said.
The PDF’s establishment resulted from an agreement between Venezuela and a group of countries in the Caribbean and Central America, and was aimed at ameliorating the impact of the significant increase in oil prices on these countries.
Its functions included receiving loan repayments from borrowers from the Fund; receiving other proceeds, which might accrue from the Fund’s investments; financing projects and programmes; and settling Jamaica’s debt service obligations for the purchase of oil and petroleum products under the PetroCaribe Agreement or any other bi-lateral arrangements between Jamaica and Venezuela.
The Fund provided grants for housing, school sanitation, and assistance to children in the inner-city communities; and investment in infrastructure, such as the port in Falmouth, renovation of the Norman Manley International Airport and the downtown markets, and Highway 2000.
Source: JIS New