Venezuela has started to sell Jamaica oil in exchange for food, farming materials, building supplies and medicine.
Jamaica announced late last week that it was providing as much as $4 million worth of goods and services to Venezuela for oil. The announcement was made by Dr. Wesley Hughes the CEO at PetroCaribe Development Fund a governmental entity of Jamaica.
He added that it would be the decision of Venezuela as to what they needed. This type of payment is part of the two countries trade pact.
Venezuela is dramatically short of medicine and food. The people in the South American country are waiting hours in line outside of supermarkets to purchase only the basics such as eggs, flour and milk. Often times they find empty shelves once they reach the front of the line.
Other Venezuelans are dying due to hospitals being ill equipped. Despite chronic shortages, the government of Venezuela has refused any help from humanitarian groups from around the world such as Amnesty International and the United Nations.
For the Venezuela government, accepting assistance is a form of recognizing the crisis is created by them, said a director from Amnesty International.
Yet, it accepts goods as a type of payment from the Caribbean island country of Jamaica a country, which is also recovering from an economic downturn of its own that as recently as three years ago required an IMF bailout.
They are likely shipping rice and beans as a payoff for the oil shipments says an investing firm in Miami. Jamaica cannot pay the money Venezuela needs, so instead they send food.
The investing firm in Miami said that Venezuela has yet to say what the goods are they want, but have confirmed they are available immediately and would be the same as $4 million.
This is not the first time that non-cash transactions have been carried out by Venezuela.
In 2007, China loaned $65 billion to Venezuela, says a think tank located in Washington known as Inter-American Dialogue.
Some of the loans have been repaid to China for oil. Venezuela’s PDVSA oil company that is run by the state, sent close to 579,000 barrels of oil per day to China last year, according to audited financials.
Venezuela has one of the largest proven oil reserves in South America and that is likely its sole currency at this point.