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Posted Tuesday, October 21, 2008
For Haiti, drop in oil prices means loss of urgently needed millions of dollars from Venezuela

By Yves A. Isidor, wehaitians.com executive editor

CAMBRIDGE, MA, Oct. 21 - It is set to further go down, and extremely so, as capitalism, which without debt (it is as old as human civilization) would never be an economic system, continues to be at bay, and this may be explained by the current pronounced, contagious financial crisis in a significant number of nations, principally the United States, the bulwark of free enterprise.

Now crude oil is at $74.25 a barrel, its closing price Monday in New York, from its peak of $147 in real terms, approximately three months ago. Venezuela, (it plans its budget with oil prices at US$60 a barrel), one of the major oil producing nations in the world that will continue to largely depend on petrodollars to finance its 2009 $78.9 billion budget had late last week indicated that it intends to tight the terms for subsidizing oil exports to Caribbean nations. No more largesse. 

Unlike 1998, when oil accounted for 69 percent of Venezuela's export revenue, in 2008, ten years after the loudmouth Mr. Chavez assumed the presidency of the South American nation, the stuff brought approximately 93 percent.

Haiti, a member of  Petrocaribe S.A., the Caribbean oil alliance launched by Venezuela's President Hugo Chavez in June 2005 to sell oil to friendly leftist, poor nations on conditions of preferential payment, will most likely be too profoundly affected.

Given this regrettable decision by the Venezuelan government, as confidence and credit continue to dry up, a near-recession that can easily become a depression in wealthy and emerging nations' economies, and as a result the amount of money given annually in the form of foreign aid to impoverish nations is significantly reduced, remittances immeasurably further go downward, it is inevitable that the line between hope for a better economic future and fast increased blanket abject poverty in Haiti, which has since needlessly entering into the petro agreement collected more than $170 million in petrol taxes, and recently while four potent hurricanes were visiting the Caribbean quasi-island nation terminated the lives of nearly 800 people, caused about $1 billion in damage, will move towards the later. Overall, a calamity.                                            

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