Venezuela and Nicaragua Progress on Food Security, Refinery, and Public Health

The following is reprinted from Venezuelanalysis.com.

Mérida, April 15th 2010

By James Suggett

Venezuelan and Nicaraguan officials met in Managua on Wednesday to deepen bilateral economic ties with the goal of fostering import substitution, promoting Latin American integration, and creating an economic alternative to U.S.-dominated free trade agreements.

"We must raise production in our countries and lower the amount of imports of goods and services, and transform the import-oriented economic model of our economies," said Venezuelan President Chavez in a press conference with Nicaraguan President Daniel Ortega.

The two countries plan to double bilateral trade by the end of this year, according to both the Nicaraguan Agriculture ministry and the Venezuelan Embassy in Managua.

A major agenda item was the progress of an oil refinery that is to be built in western Nicaragua with a joint investment of $2.5 billion. The refinery is projected to produce 100,000 barrels per day by 2015, and to be expanded to produce 150,000 barrels per day by 2019.

"Thanks to this refinery, in 2019, Nicaragua will be able to export the petroleum derivatives that it has to import today," said President Chavez on Wednesday. "For Venezuela, it is very important because it will allow us to enter the Central American market."

Ortega and Chavez, both of whom advocate socialism and oppose U.S. imperialism, also agreed to explore the possibility of constructing a gas liquefying plant in Nicaragua to process the natural gas from Venezuela’s coastline, where reserves are projected to be the fourth largest in the world.

In addition, the Nicaraguan Company for Basic Foods and Venezuela’s Ministry for Food signed an accord to cooperate to assure the food security of their countries’ citizens, which will include the purchase of a barge to transport more than 20,000 heads of cattle to Venezuela.

As is customary between Venezuela and many of its economic partners, the two countries also discussed how to further cooperate to improve public health and access to medical care, and agreed to continue providing grants for university student exchanges.

Relations between Nicaragua and Venezuela increased dramatically in 2007, when Ortega, a former guerrilla leader who fought to overthrow the U.S.-backed Somoza dictatorship in 1979, took office as president.

In that year, Nicaragua joined the Bolivarian Alliance for the Americas (ALBA), an anti-imperialist, pro-Latin American integration economic bloc whose members are now Venezuela, Cuba, Nicaragua, Bolivia, Ecuador, Dominica, Antigua and Barbuda, and Saint Vincent and the Grenadines. Venezuela immediately forgave Nicaragua’s debt of $31.3 million "without conditions" and donated $10 million for social programs in Nicaragua.

On Wednesday, both Ortega and Chavez spoke of the importance of ALBA and of Latin American integration. "We cannot advance alone. We must be united and, despite resistance from imperialism, in Latin America we have advanced considerably in the integration of our nations," said Ortega.

Chavez commented, "This is about uniting our peoples, social unity, political unity, full unity. Only this will allow us to free ourselves once and for all... Only united will we be free, on the path of socialism."

The ALBA model of economic cooperation so far has centered on the exchange of discounted Venezuelan oil for agricultural, industrial, and other goods and services.

Bilateral trade between Nicaragua and Venezuela reached US$115 million in 2009. That year, Nicaragua exported 6,000 metric tons of milk, 11,000 heads of cattle, 3,000 metric tons of black beans, and 100,000 metric quintals of coffee to Venezuela. In return, Venezuela provided Nicaragua with electricity generators to produce nearly 300,000 megawatts of electricity.

Chavez has visited Nicaragua six times over the past three years. Chavez and Ortega’s next quarterly meeting on bilateral economic accords is scheduled for July in Venezuela. The two presidents will also meeting on June 16th in Nicaragua at the summit of PETROCARIBE, another regional economic development bloc powered by subsidized Venezuelan oil.