President Oscar Arias met with Venezuelan Foreign Minister Alí Rodríguez June 23 to discuss the possibility of oil deals to benefit Costa Rica, as well as a financial agreement to provide Ticos with more funds for education and infrastructure.
If the multilateral Caracas Energy Agreement takes effect with Costa Rica, the country could buy fuel from Venezuela with a credit rate of 2%, far below average on the international market, allowing the government to reduce gas prices for consumers – a prospect made public in the face of yet another gas hike announced this week. The Caracas agreement, signed in 2000, has taken effect between Venezuela and the rest of Central America, but the Venezuelan government is still studying changes to the agreement Costa Rica has proposed, according to Tico Foreign Minister Bruno Stagno.
Stagno, along with Finance Minister Guillermo Zúñiga, attended the hour-and a- half meeting between Arias and Rodríguez at the President’s home in the western San José suburb of Rohrmoser. A lunch meeting between the two Foreign Ministers preceded the conversation with Arias.
According to Rodríguez, who was in Costa Rica for one day, fuel is a key element of Venezuela’s efforts to strengthen its relationship with Central America.
“We’re promoting an energy policy that will become one of the axes of the effort to integrate Central America with Venezuela,” he told the daily La Nación.
“This is a first step toward strengthening bilateral relations,” Stagno told the daily, emphasizing that the ideological differences between Arias and Venezuelan President Hugo Chávez won’t keep these agreements from moving forward. Arias, who has expressed interest in cooperation with Venezuela in the past, was scheduled to meet with Chávez when the Venezuelan leader visited Costa Rica for Arias’ May 8 inauguration, but Chávez cancelled his trip at the last minute, citing a packed agenda (TT, May 12). Rodríguez said Chávez may visit Costa Rica “in the near future.”
During last week’s meeting, the leaders also discussed the possibility that Venezuela might build an oil refinery in Moín, on the Caribbean coast, though Stagno said the Venezuelan government already has plans to build the refinery in Panama. The National Oil Refinery (RECOPE) has a monopoly on importing, refining, storing and distributing fuel, but Arias has said he plans submit legislation to the Legislative Assembly to lift this monopoly.
The announcement has drawn criticism from RECOPE workers. The refinery’s union claims the Costa Rican market is too small for competition, and that allowing foreign companies in would drive the refinery out of business and cause its 1,670 employees to lose their jobs.
Environment and Energy Minister Roberto Dobles, who is also vice-president of RECOPE, says the Costa Rican refinery would compete with foreign companies, driving down prices and increasing fuel quality.
Though the Executive Branch is still deciding the details of its RECOPE proposals, legislators from the Libertarian Movement Party presented their own bill to lift the monopoly last week, saying they were encouraged by Arias’ comments (TT, June 30).
Arias has also expressed interest in oil exploration, in contrast to his predecessor, Abel Pacheco (2002-2006), who signed a moratorium prohibiting oil drilling. Arias, who took office May 8, recently met with representatives of Brazilian oil company Petróleo Brasilerio S.A. (Petrobras), interested in drilling off the Caribbean coast (TT, June 2).
Oil wasn’t the only topic at last Friday’s meeting. Rodríguez and Arias talked about the possibility that Venezuela’s Development Bank will buy Costa Rican Finance Ministry bonds to give the central government more funds for education and infrastructure, or that Costa Rica could receive an $80 million credit line for infrastructure projects in exchange for allowing Venezuelan developers or construction companies to participate in the projects, Stagno said.
Close on the heels of the meeting with Rodríguez, Arias met this week with U.S. officials including Thomas Shannon Jr., Assistant Secretary of State for Western Hemisphere Affairs (see separate story).
Asked recently about the likely U.S. response should Arias strike an oil deal with Chávez, foreign policy analyst Michael Shifter, vice-president of the Inter-American Dialogue in Washington, D.C., told The Tico Times “the United States is very sensitive now about people who are working out deals with Chávez, but the government is going to be pragmatic.”
Shifter said Arias’ track record as a moderate and a proponent of democracy will prevent a negative response from the United States, and that U.S. leaders recognize Costa Rica needs to “find the best deal (it) can get” (TT, June 2).