(Bloomberg) — Venezuela, plagued with shortages of basic goods, was offered a reprieve by the Prime Minister of neighboring Trinidad & Tobago: exchange oil for tissue paper.
Prime Minister Kamla Persad-Bissessar suggested an oil-for-tissue swap in a news conference Tuesday following a meeting in Port of Spain with Venezuelan President Nicolas Maduro. She said the deal would benefit both countries.
“The concept of commodity sharing is simple -– the Government of Trinidad and Tobago will purchase goods identified by the Government of Venezuela from T&T’s manufacturers, such as tissue paper, gasoline, and parts for machinery,” Persad-Bissessar said.
In Venezuela, which has the world’s largest oil reserves, citizens line up outside supermarkets for hours seeking a bag of clothing detergent, toilet paper or cooking oil. Price controls and a lack of dollars for importers have emptied stores of many basic goods, a situation Maduro blames on hoarders conducting an “economic war” against his socialist government.
Buffeted by plunging oil prices, Venezuela’s economy will contract 7 percent this year, according to the International Monetary Fund, while inflation, which accelerated to 69 percent in December, is already the fastest in the world. According to the constitution, Maduro must call legislative elections by the end of the year.
“Economic recession, high inflation, and growing shortages have weakened public support for the government, likely reducing its political room to introduce difficult corrective economic measures that would improve its external liquidity position,” Standard & Poor’s said in a Feb. 9 report.
While in Trinidad, Latin America’s biggest exporter of liquefied natural gas, Maduro and Persad-Bissessar discussed the commercialization of cross-border natural gas reserves.
Persad-Bissessar presented the swap proposal as a win-win opportunity for the two nations, separated by an 11-kilometer (6.8-mile) strait off Venezuela’s northeast coast.
Tissue paper and other goods “would then be traded for commodities that are needed for our industries –- in particular bitumen and crude oil -– which can be supplied by Venezuela,” she said, adding that “this proposal is at an planning stages, and we recognize that a monitoring mechanism would be key to its success.” Read more…