Nobody can deny that Petrocaribe offer extremely favorable conditions for Dominican Republic . The importance of this agreement in force at a time when oil prices internationally reach historically high levels. Undoubtedly , Petrocaribe has reduced the average cost of external debt and has eased foreign exchange flows , contributing significantly to exchange rate stability. The process has been negotiated payment for goods and services by market value instead of using a currency like the U.S. dollar . This means that even if we could pay using black beans, the beans are accepted in market value. In addition , there is a mechanism by which the government of Venezuela may have access to certain services on the Dominican economy , such as tourism. The Dominican Republic will not require foreign currency to pay the debt and business at the same time. In addition, the Dominican government is financing the agribusiness sector funds necessary for the harvest of agricultural products to be used as payment to the Venezuelan government. The purpose of these funds is to ensure that crops are on time . At the end everyone wins. The Dominican government may cover the country's oil needs paying for goods and services instead of specific currencies and the Venezuelan government will do the same. Meanwhile, Dominicans have a segment of agribusiness production pre - sold and entrepreneurs in the tourism sector will have discounts on their tax obligations.

1. (FREE TRANSLATION)
FOUNDATION FOR DEVELOPMENT AND
IMPLEMENTATION OF STRATEGIC STUDIES
(FUNDEIMES)
ESSAY:
PETRO- CARIBBEAN
“PETROCARIBE”
AUTHOR:
LICDO. RAFAEL ANTONIO PEREZ QUEZADA, M. A.
SANTO DOMINGO, D. N.
YEAR 2014

2. CLARIFICATION:
“OPINIONS CONTAINED IN THIS RESEARCH REPORT, ARE
THE SOLE RESPONSIBILITY OF THE AUTHOR AND NOT THE
INSTITUTION
SOLIDARITY WITH THE CONCEPTS NECESSARILY ISSUED”.

3. INTRODUCTION
Nobody can deny that Petrocaribe offer extremely favorable conditions for Dominican
Republic . The importance of this agreement in force at a time when oil prices
internationally reach historically high levels.
Undoubtedly , Petrocaribe has reduced the average cost of external debt and has
eased foreign exchange flows , contributing significantly to exchange rate stability.
The process has been negotiated payment for goods and services by market value
instead of using a currency like the U.S. dollar . This means that even if we could pay
using black beans, the beans are accepted in market value. In addition , there is a
mechanism by which the government of Venezuela may have access to certain services
on the Dominican economy , such as tourism.
The Dominican Republic will not require foreign currency to pay the debt and business
at the same time. In addition, the Dominican government is financing the agribusiness
sector funds necessary for the harvest of agricultural products to be used as payment to
the Venezuelan government. The purpose of these funds is to ensure that crops are on
time .
At the end everyone wins. The Dominican government may cover the country's oil
needs paying for goods and services instead of specific currencies and the Venezuelan
government will do the same. Meanwhile, Dominicans have a segment of agribusiness
production pre - sold and entrepreneurs in the tourism sector will have discounts on their
tax obligations.

4. DEVELOPMENT
The Petrocaribe Agreement:
As we pointed out Wikipedia, "Petrocaribe is an alliance in oil between some
Caribbean countries with Venezuela. The initiative by the Government of Venezuela takes
aim an alliance consisting of the Caribbean countries to buy Venezuelan oil under
preferential payment.
"This partnership was launched in June 2005. The organization was born on June 29,
2005, by President Hugo Chavez in the city of Puerto La Cruz located in eastern
Venezuela in the First Energy Meeting of Heads of State and Government on Petrocaribe
, and being signed by 14 countries the Energy Cooperation Agreement . The agreement
allows Caribbean nations to purchase up to 185,000 barrels of oil per day.
”Agreement signatory countries were Antigua and Barbuda , Bahamas , Belize, Cuba ,
Dominica, Granada , Guyana , Jamaica, Dominican Republic , St. Kitts and Nevis, Saint
Lucia, Saint Vincent and the Grenadines , Suriname and Venezuela signed the
multilateral agreement Petrocaribe .
" On September 6, 2005 , the Second Summit of Heads of State and / or Government
on Petrocaribe , in the city of Montego Bay , Jamaica developed."
Since 2005, the Dominican Republic participates in the energy Petrocaribe agreement
, through which several countries in the region can acquire oil and oil products to
Venezuela on favorable terms. In an agreement dated May 5 economic complementation
agreement REFIDOMSA in company with the acquisition of 49 % stake in the refinery by
Caribbean PDA was signed.
Pevida Klinger , E. ( 03/01/2010 ) tells us in his article Petrocaribe : Fair Trade as
follows: " Almost 50 years ago , the UNCTAD ( United Nations Conference on Trade and
Development ) created, was raised one of the key issues affecting the developing world
was the price of Commodities ( main exports called developing world ) and unequal
Exchange (exchange of unequal values for the benefit of the industrialized world ) .
"Half a century later that is still the fundamental problem facing our countries , hence
the importance of promoting Petrocaribe scheme with which a window opens strategic
importance to the economies of the region have to become, inevitably , point of reference
and world example .
”Fair Trade, in essence, is a business in which prices in the trading of goods and
services are produced to ensure the full realization of productive activity .
"However, in the Petrocaribe scheme goes far beyond and Commercial Compensation
(payment through the export product ) as a strategic mechanism arises . In this scheme of
fuel delivery and financing that emerged Petrocaribe is based.

5. ”Focusing on the mechanism is to encourage the production of the beneficiary
countries , states that the product or service that is sold must come from domestic
production structure and , whenever possible , favoring small producers. In turn, the
receiving country shall be used exclusively for the purpose of domestic consumption. To
ensure the competitiveness thereof shall meet the quality requirements and parameters of
the host economy.
"With this compensation scheme as a platform to encourage production and export is
promoted; small producers are encouraged to venture into international trade and can be
put into operation the potential of these economies."
Petrocaribe Agreement and Dominican Republic:
The Petrocaribe agreement signed by the Dominican Republic and the Bolivarian
Republic of Venezuela detailing the purchase terms Venezuelan oil by the Dominican
government has very advantageous for our country ways. The scale of funding ranging
from 1 % to 50 % of the cost for delivery, with an extension of the grace period the
amount financed to 2 years. Payments may be made from then until 17 to 25 years at 1%
interest if the price of oil rises above $ 40 a barrel.
As we discussed the eminent economist Pevida Klinger, E. ( 31/01/2010 ) in his
newspaper article entitled Petrocaribe and Dominican Republic , that " Petrocaribe is one
of the programs that contribute to the implementation of projects of the Bolivarian
Alternative of the Americas - ALBA - integration mechanism that promotes Venezuela ,
together with Caribbean countries , Central and South American , Dominican Republic
which is not a party, although it is a full member of Petrocaribe .
"This is an Energy Cooperation Agreement oriented multilateral joint and coordinate
policies with the countries of the region looking for an efficient use of energy , cooperation
and technological assistance and infrastructure development , including the development
of alternative sources. However, as we have been explaining , is much more than a
supply contract . "
At the operational level , the Petrocaribe Energy Cooperation Agreement is much
more than a contract to supply oil to Caribbean countries , is a political initiative to provide
both financial and structural facilities to ensure direct delivery to countries in the area ,
where the oil market is affected by the intermediation and speculation.
Petrocaribe implies the articulation of previously existing agreements , such as the
San Jose Convention and the Caracas Energy Accord . However, improving the
conditions of the latter , which provides funding for 25 % of the bill , with a year of grace ,
payable in 15 years with 2 % interest.

6. Petrocaribe proposes a funding level of 40% of the oil bill , by reference to the price of
oil . Also extend the grace period for funding one to two years and provides for an
extension of the payment period from 17 to 25 years, reducing the interest rate to 1 % , if
the oil price exceeds $ 40 per barrel . The short-term payment of 60 % of the bill extends
from 30 to 90 days.
Based on solidarity principles of this agreement, the Bolivarian Republic of Venezuela
is willing to accept that part of the differentiated payment of the invoice is made with
goods and services, it can offer , in some cases , special prices.
He explains economist Fuentes, B. (2010) how this agreement works where he says :
" The Petrocaribe Agreement provides a fairly simple mechanism , which involves the
dependence of the price of oil, there is a percentage of the cost of oil we buy Venezuela
is reduced . For example, for every barrel we bought at a price of $ 100, we pay
Venezuela only $ 50 (50 %).
"It is extremely important to understand that the $ 50 that we" saved "do not represent
a discount as such but those resources are accumulated as a debt with Venezuela
Dominican Republic.
”This debt is acquired at highly favorable terms because the deadline to pay is 25
years with 2 year grace period and an interest rate of only 1%. We believe that these
conditions do not offer anyone. "
In this same vein , economist Pevida Klinger , E. ( 31/01/2010 ) tells us in the article
cited above, the importance of building international solidarity this agreement, as we
stated: "It is well known that in the case DR has been referred to the Venezuelan interest
in receiving imports of black beans and other products and tourism services. Both aspects
have to have a positive socio- economic impact of profound consequences : guarantees
agricultural production , raise the level of employment , comprehensive and consolidated
export markets, substantially reduces the stress on the premium dollar , since the state
does not have to out being able to find dollars to pay producers with local currency.
"Obviously, knowing the red tape in the country, has been slow to push those options ,
but the mechanism has already begun operating . And two supply agreements black
beans and liquid sugar, the latter product has aroused great interest of the Venezuelan
business were signed. The Directorate of Petrocaribe, the Ministry of Finance, has
constituted a fund of RD $ 100 million in the Reserve Bank to secure financing on
favorable conditions to habichueleros. Are planted and 25,000 tasks and were identified
with 400 thousand other vocations for it.
”The country's tourism infrastructure can be used to Venezuelan tourism plans in
periods of low - as part of the social programs developed in Venezuela - which also would
be discounted in the oil bill . There are many other potentials such as triangular trade in

7. the country to provide third parties Caracas export commitments. All this would be of
great national impact. Indeed, there are a wide range of options. "
To get the right perspective, take into account that only funds Petrocaribe oil
purchases we make to Venezuela , which are around 30-40 % of the total oil bill .
So, the economist Fuentes, B. (2010), tells us, " to review the statistics published by
government agencies , we see that Petrocaribe has financed , on average, only 10% of
the oil bill .
"Although the funded percentage is not high, the country's oil bill is so high that , in just
four years , the debt Petrocaribe has increased by 300 % from $ 448 million in 2006 to
U.S. $ 1,850 million in 2010 .
"However, Petrocaribe has reduced the average cost of external debt and has eased
foreign exchange flows , contributing significantly to exchange rate stability."
The process has been negotiated payment for goods and services by market value
instead of using a currency like the U.S. dollar . This means that even if we could pay
using black beans , beans are accepted in market value , so that means the government
is buying in advance crop farmers as production rate , effectively paying the debt to
Venezuela and at the same time , maintaining a margin discount for tonnage.
In addition, the Dominican government is finalizing the mechanism by which the
government of Venezuela may have access to certain services on the Dominican
economy, such as tourism. The service used by the Venezuelan government in the
Dominican tourism sector will be charged according to the value of the market and the oil
bill without the Dominican government also pays the need to access funds.
The Office Negotiating debt settlement Petrocaribe , located in the Ministry of Finance
( 2012) , gives the following updated information : "The country has sent Venezuela about
21 thousand 954.29 metric tons of food as a form of payment part of the debt of
Petrocaribe , which in 2011 reached 2444.5 billion.
”That amount of goods was exported from the end of 2010 to date ( March 2012) and
is equivalent to the payment of 33 million 674 thousand 486.19 U.S. dollars.
”Foods sent to Venezuela include black beans , fructose syrup and glucose , as well
as pasta .
”The compensation mechanism is that debt Billings export of domestic fuel import bills
are recognized.
”That means that $ 100 of export bills amount to $ 100 imported fuel under the
Petrocaribe agreement.

8. ”That would leave the country to seek foreign currency cash to pay , which means a
positive effect on the economy , as the circulating currency is not the dollar , but the
Dominican peso ."
The compensation mechanism debt by exports of goods and services was approved
by resolution of the Fifth Summit of Heads of State and Government of Petrocaribe made
in 2008. "

9. CONCLUSION
The Petrocaribe agreement signed by the Dominican Republic and the Bolivarian
Republic of Venezuela detailing the purchase terms Venezuelan oil by the Dominican
government has very advantageous ways for our country which we believe present
commercial advantages.
Petrocaribe has been very positive for the country , but if we want to sell beans, we
have to make contracts with agreed conditions, planting plan , coordinate actions
between the parties involved and ensure compliance with the agreement.
Our government must fully engage in trade negotiations, giving support to the pre-
planned with the productive sector, in the form of agreement between States , seeking to
eliminate intermediaries.
It is vital to be attractive and viable potential business for the productive sectors ,
establish a form of rational and transparent payment, as would be the Dominican
government would pay the producer and this feature alone can remove all the appeal of
the given operation Fame bad payer with all agencies and institutions.
The opportunities presented to us to get ahead are many, but it continues to sadden
us that the majority vanishes from view.
We have in this agreement an opportunity to streamline many sectors of our economy.
We believe that doing the right thing, Petrocaribe can contribute to balanced development
, enhance the countryside and local industry , converting oil energy energy progress .

10. REFERENCES
http://www.hoy.com.do/opiniones/2010/1/31/312136/Petrocaribe-y-Republica-Dominicana
( Taken at date 2012-04-16 at 03:30 hours).
http://hoy.com.do/opiniones/2010/1/3/308413/Petrocaribe-Comercio-justo ( Taken at date
2012-04-16 at 07:30 hours).
http://es.wikipedia.org/wiki/Petrocaribe ( Taken at date 2012-04-16 at 04:00 hours).
http://www.acento.com.do/index.php/blog/293/78/Las-dos-caras-de-Petrocaribe.html (
Taken at date 2012-04-16 at 05:10 hours).
http://eldia.com.do/nacionales/2012/3/19/78010/El-pais-ha-enviado-21-mil-954-toneladas-
alimentos-Venezuela ( Taken at date 2012-04-16 at 10:00 hours).