Santo Domingo.- Venezuela has become Dominican Republic’s major creditor with more than 50 percent of the country’s bilateral debt and approximately 16 percent  of the total debt.

According to Treasury Ministry statistics the jump in prevalence of Venezuelan credits within the Dominican national debt began in 2005 with the application of the Petrocaribe oil agreement, which provides the country soft financing on part of the fuel imports from the South American nation.

Traditional bilateral creditors such as the United States and Spain, and the multilateral ones such as the Inter-American Development Bank and the World Bank have lost hegemony as Dominican Republic’s major credit providers.

The debt stemming from the Petrocaribe agreement, granted at a 25 year term, two of grace period and a preferential one percent annual interest rate, has surpassed the country’s financial commitments with sovereign bonds issued, reached US$1.23 billion in November last year.

The country’s debt from the Petrocaribe agreement began in 2005 with US$159.5 million, which was 2.3 percent of the total national debt that year, and the following year rose to US$448.8 million. It reached US$707.2 million for 2007 and US$1.23 billion in 2008, or 14.8 percent of the country’s financial commitments.

As the Dominican debt from the oil agreement increases so has Venezuela’s proportion in assuming a leadership among the nation’s bilateral creditors.

In 2005 when Petrocaribe began the United States was the top Dominican creditor among governments or countries, with US$779.6 million, or 11.54%, followed by Spain, with US$346.6 million, or 5.13 percent.

Venezuela was owed US$194.51 million that year, which included US$159.2 million from Petrocaribe, or 2.28 percent.

SOURCE: elcaribe.com.do