Raphael John-Lall

As a re­sult of the US cap­ture of Venezue­lan Pres­i­dent Nicolás Maduro, the sit­u­a­tion in the South Amer­i­can coun­try re­mains “un­cer­tain” and there is like­ly to be an im­pact on T&T and the Caribbean econ­o­my in the fore­see­able fu­ture.

CEO of the UWI Arthur Lok Jack Glob­al School of Busi­ness Mar­i­ano Browne gave this view at a we­bi­nar host­ed by the Caribbean Cor­po­rate Gov­er­nance In­sti­tute (CC­GI), which held the third part of its se­ries on the Venezue­lan con­flict last Wednes­day.

It was en­ti­tled “The Im­pact of Ten­sions be­tween the US and Venezuela on the Busi­ness Sec­tor.”

CC­GI CEO Kam­la Ram­per­sad de Sil­va re­mind­ed the au­di­ence that they had giv­en sev­er­al sce­nar­ios in 2025 and the first sce­nario, which was a di­rect mil­i­tary con­flict, is the one that took place.

On Jan­u­ary 3, the US mil­i­tary car­ried out mil­i­tary strikes on Venezuela’s cap­i­tal Cara­cas killing and in­jur­ing hun­dreds of peo­ple and cap­tur­ing Pres­i­dent Maduro.

Browne said de­spite the ex­trac­tion of Maduro, the rest of Venezuela’s po­lit­i­cal and eco­nom­ic struc­ture re­mains in place.

“So, the re­al is­sue is that there’s a lot of short-term in­sta­bil­i­ty here. It’s not clear how this is go­ing to set it­self up. If you look at the re­ports to­day by Reuters, you hear that Amer­i­ca is look­ing to seize more ships in the re­gion, which has im­pli­ca­tions for ship­ping, which has im­pli­ca­tions for knock-on im­pact in terms of in­sur­ance and so on, which does af­fect the costs.”

He al­so spoke about pos­si­ble po­lit­i­cal in­sta­bil­i­ty.

“Why do I say the sit­u­a­tion is un­re­solved? Well, if I re­mem­ber, the State De­part­ment yes­ter­day or the day be­fore is­sued a no­tice to all Amer­i­can cit­i­zens of Venezuela to leave. If there was some con­trol and po­lit­i­cal sta­bil­i­ty, you wouldn’t be giv­ing that ad­vi­so­ry. So that ad­vi­so­ry speaks to the fact that we’re still in a very flu­id state where Venezuela is con­cerned.”

He then spoke about how it may im­pact the en­er­gy re­la­tion­ship be­tween T&T and Venezuela.

“Now, that has im­pli­ca­tions not mere­ly for Drag­on, but that has im­pli­ca­tions more im­por­tant­ly for Man­a­tee and Cocuina in terms of a lat­er con­text. The oth­er speak­er Resh­ma made a com­ment from econ­o­mist Mar­lene Attz, that these im­pacts im­me­di­ate­ly feed in­to the pub­lic sec­tor and gov­ern­ment debt sit­u­a­tion and gov­ern­ment fi­nances. So that has a much big­ger im­pact, I think, in the case of Trinidad and To­ba­go than it has any­where else in the re­gion.”

Giv­en T&T’s im­port-based econ­o­my, Browne spoke of a like­li­hood of the prices of im­port­ed goods in­creas­ing.

“We have to feel our way around and take what­ev­er de­fen­sive mea­sures, par­tic­u­lar­ly with re­gard to ship­ping lines, sup­ply chains, and costs that go with that. Over­all, what does it mean? Well, it means that we’re like­ly go­ing to have to pay more, be­cause we’re al­so im­port de­pen­dent. We’re go­ing to have to pay more for much of what we get, be­cause of the im­pact of in­sur­ance costs, and cer­tain­ly the ques­tion of prob­a­bly ship­ping rates as well, that go up as a re­sult of that.”

Pos­i­tive out­come

Chair­man of Guyana’s Pri­vate Sec­tor Com­mis­sion Cap­tain Ger­ry Gou­veia, who al­so spoke dur­ing the we­bi­nar, ex­pressed the view that the events in Venezuela will have a pos­i­tive im­pact on Guyana.

“How we are view­ing this is ac­tu­al­ly pos­i­tive for Guyana, be­cause what hap­pened on Jan­u­ary 3, while the method­ol­o­gy is ques­tion­able, the out­come, at least the feed­back that we have been get­ting from Guyana’s Venezue­lan di­as­po­ra that came back to Guyana, is that it is the best thing for Venezuela. Peo­ple are hap­py about it, we feel like this will open up the bor­ders more for trade, and it will be bring­ing a sta­bil­is­ing force to the re­gion.”

De­spite Venezuela be­ing a “desta­bil­is­ing fac­tor,” he point­ed out that over the last 10 years, Guyana has gone from a US$3 bil­lion econ­o­my to a US$30 bil­lion econ­o­my and it con­tin­ues to grow ex­po­nen­tial­ly at dou­ble-dig­it Gross Do­mes­tic Prod­uct (GDP) growth per year.

“And last year, we ac­tu­al­ly had, for the first time in our his­to­ry, our non-oil GDP out­pac­ing GDP growth. So, what that tells you is our eco­nom­ic di­ver­si­ty is grow­ing, and our sup­ply chain re­quire­ments and net­works are grow­ing.”

At the same time, he said Guyana needs more hu­man re­source tal­ent and now that there is po­lit­i­cal change in Venezuela, Venezue­lan mi­grants will be re­turn­ing home leav­ing a gap in the labour mar­ket.

“Based on our dis­cus­sions, we ac­tu­al­ly see it go­ing the oth­er way, that we may ac­tu­al­ly see as Venezuela’s econ­o­my starts to turn around, and I’m as­sum­ing that it turns around. As it starts to turn around, as it starts to re­build, you’re go­ing to see a re-mi­gra­tion of Venezue­lans back to Venezuela.”

Pres­i­dent of the Ja­maican Cham­ber of Com­merce Emile Lei­ba who al­so con­tributed to the we­bi­nar said the Ja­maican pri­vate sec­tor is tak­ing a cau­tious stance on the lat­est turn of events in Venezuela.

“From the tourism stand­point, we al­ready are cur­rent­ly deal­ing with some lev­el of neg­a­tive per­cep­tion due to Hur­ri­cane Melis­sa, in terms of us be­ing a dis­as­ter zone and area, which some as­pects of Ja­maica are, but clear­ly not the en­tire­ty. And then that’s com­pound­ed by the con­cerns, the re­gion­al con­cerns that a lot of our tourism mar­ket is based in the US, who view the re­gion as mono­lith­ic. They are sim­ply of the view that there is dis­tur­bance in the Caribbean and air­space clo­sures and things like that.”

Un­like T&T and Guyana, he not­ed that Ja­maica does not have an oil and gas in­dus­try.

“For our pur­pos­es, we don’t have an oil and gas in­dus­try. We are an im­porter of oil and not a pro­duc­er. And so there­fore, the rel­a­tive im­pact in terms of the Venezue­lan sit­u­a­tion from an oil and gas per­spec­tive, un­less it has the net ef­fect of bring­ing down in­creas­ing re­gion­al oil op­tions and bring­ing down the cost. This has im­pli­ca­tions for us in our en­er­gy sec­tor in par­tic­u­lar, be­cause the cost of oil is a sig­nif­i­cant por­tion of our over­all en­er­gy cost which is one of the high­er en­er­gy costs in the re­gion, which al­so has busi­ness im­pli­ca­tions for us.”

Man­ag­ing Di­rec­tor of Ad­vance Com­mer­cial Equip­ment Resh­ma Ad­vani-Ro­jas, who al­so spoke, talked about the po­ten­tial im­pact at the busi­ness lev­el.

“I’m just a Caribbean busi­ness op­er­a­tor who is run­ning a com­pa­ny that de­pends on ship­ping sched­ules, on fu­el costs, on ac­cess to US dol­lars. On top of which, I’m ac­tu­al­ly in the mid­dle of a growth spurt. So, the un­cer­tain­ty isn’t ab­stract, it’s ac­tu­al op­er­a­tional fric­tion that I can mea­sure in dol­lars, in days, and in de­lays. So, when peo­ple say geopo­lit­i­cal un­cer­tain­ty, my mind doesn’t go to the the­atre of it.”

She al­so re­ferred to the CEO of Exxon­Mo­bil Dar­ren Woods who said that at the mo­ment Venezuela is “un­in­vestable” and warned that the busi­ness sec­tor has to take a wait-and-see ap­proach.

“The black swan has come to pass. And we are see­ing that when you look at es­ca­lat­ing ten­sions in Venezuela, and you hear a gi­ant like Exxon­Mo­bil pub­licly la­bel our neigh­bour as un­in­vestable, that black swan is land­ing on our doorstep. Now, un­in­vestable is a heavy word, right? In my world, it’s a sig­nal that the sur­round­ing nar­ra­tive might be loud and promis­ing but com­mer­cial pre­dictabil­i­ty is not there. So, for those of us caught up in the con­cen­tric cir­cles of glob­al dis­putes, we can’t af­ford to be guid­ed by the en­thu­si­asm of the mo­ment. We have to be guid­ed by da­ta.”