Oil Fund for OECS countries

Continuing hostilities in the Middle East are expected to push the price of crude oil even higher this week, and with developing countries left to grapple with this surge of close to $80 a barrel on the world markets, St. Vincent and the Grenadines along with other OECS countries will be looking at exploring the possibility of establishing a special fund from resources from oil-producing countries to help combat this crisis.{{more}}

With member countries of the ECCU forced to cut subsides of retail pricing for oil, this special fund is expected to cushion future escalation in which prices would become unsustainable to member countries.

The possible formulation of this special fund was high on the agenda of the 56th meeting of the Monetary Council of the Eastern Caribbean States during their deliberation here last Friday.

According to this country’s Finance Minister, Prime Minister Dr. Ralph Gonsalves, this new fund, similar to the fund established in the 1973 oil crisis operated through the Caribbean Development Bank, would enable Eastern Caribbean Currency Union (ECCU) member countries to cushion any major escalation in the cost of oil.

One country to which ECCU member countries would more than likely turn would be Trinidad and Tobago, where a Stabilization Fund of EC $150 million has been set up to assist its Caricom member countries in times of high energy prices.

A further sum of EC $30 million for OECS countries has been added to this figure by Trinidad and Tobago. monies from that fund, Dr. Gonsalves said, might be operationalised through a mechanism for easy access by ECCU member countries.

Analysts say Venezuela is likely to be the closet option, after Trinidad and Tobago, from which resources for this special fund would be drawn.

“This issue of the fund is part of the overall macro economic response which we are seeking to fashion to this problem which is really ballooning…It is a problem outside of our control, but we have to respond to it because it is a challenge,” Dr. Gonsalves saidn