IMF COUNTRY REPORTS – Panama

Country Report No. 2024/233 : Panama: Financial Sector Assessment Program –

Detailed Assessment of Observance and Basel Core Principles for Effective Banking Supervision

Summary: Since the last Financial Stability Assessment Program (FSAP) in 2012, the Superintendency of Banks of Panama (SBP) has made significant progress in updating its regulatory and supervisory framework.

The SBP has implemented key elements of the international regulatory reform agenda, including Basel III and IFRS9, and has introduced comprehensive new regulations in a number of important areas, including corporate governance and risk management. The SBP has also adopted a structured risk-based approach to its supervision that is supported by a sophisticated IT system. Notwithstanding the progress made in many regulatory and supervisory areas since the last FSAP, there remain a number of gaps in the legal and regulatory framework and some areas for improvement in the SBP’s supervisory approach.

 

 

Country Report No. 2024/235 : Panama: Financial Sector Assessment Program –

Technical Note on Financial Safety Net, Resolution, and Crisis Management

Summary: Key institutional pillars of a financial safety net have not been established in Panama. While state-owned banks benefit from an explicit government guarantee, Panama does not possess a deposit insurance framework, lender-of-last resort (LOLR) or emergency liquidity assistance (ELA)  mechanism to preserve financial stability. Panama, as a fully dollarized economy with no central bank, faces constraints on its development of key components of the financial safety net which will need to be overcome.

 

Country Report No. 2024/234 : Panama: Financial Sector Assessment Program –

Technical Note on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)

Summary: Panama has struggled to bring its  anti-money laundering and combating the financing of terrorism  (AML/CFT) regime in line with international standards, resulting in periods of being “grey listed” by the international standard-setter, the Financial Action Task Force (FATF). Panama’s AML/CFT regime was last assessed against the FATF standards in 2017. Panama’s mutual evaluation identified strategic deficiencies within the country’s AML/CFT regime, notably in preventing the misuse of legal persons and arrangements for money laundering purposes.

As a result, Panama was grey listed by the FATF in June 2019, where it remained until October 2023, beyond the expiration of its action plan deadlines in January 2021 and following increased pressure from the FATF. Having demonstrated completion of all items of its action plan, confirmed through an onsite visit that took place in September 2023, the country exited the grey list at the FATF October 2023 Plenary.

Country Report No. 2024/236 : Panama: Financial Sector Assessment Program –

Technical Note on Macroprudential Framework and Policies

Summary: Since the 2012 FSAP, Panama has significantly strengthened its institutional framework and instruments for macroprudential policy-making. Among other reforms, to strengthen the transparency of and accountability for macroprudential policy, the Superintendency of Banks of Panama (SBP) and the Financial Coordination Council (CCF) have made significant progress in implementing several of the recent high-priority IMF technical assistance (TA) recommendations.

These include establishing a dedicated Macroprudential Policy Committee (CPMP), updating the SBP’s decision making process for macroprudential policy issues, drafting a macroprudential policy strategy document, improving public communication via the Financial Stability Report (FSR), and addressing data gaps. The CCF also made notable advancements in establishing its own Committee on Macroprudential Policy, developing member entities’ capacity on macroprudential policy, and gathering data.

 

 

 

 

XVIII regional conference on Central America, Panama, and the Dominican Republic

July 29-30, 2024

The International Monetary Fund (IMF) in collaboration with the Central Bank of Costa Rica, the Central American Monetary Council (CMCA), the Council of Finance Ministers from Central America, Panama, and the Dominican Republic (COSEFIN), and the Central American Council of Superintendents of Banks, Insurance and Other Financial Institutions (CCSBSO) will host the XVIII Regional Conference on Central America, Panama, and the Dominican Republic (CAPDR). The conference will take place in San José, Costa Rica from July 29-30, 2024.

Over the last two decades the conference has served as a forum for authorities from central banks, ministries of finance, and supervisors of the financial system of the CAPDR, to exchange views on key regional economic challenges with the IMF and other stakeholders.

As the first in-person conference since the pandemic, this year the discussions will focus on the global and regional outlook, income convergence and structural reform priorities, monetary and exchange rate policy in an uncertain environment, and the road to investment grade.

A final session on climate change challenges and opportunities in Latin America and the Caribbean will also be featured.

 

 

Venezuela mogul Cisneros in new venture with PDVSA

Fabiola Zerpa, Bloomberg July 10, 2024

 Venezuela business mogul Ricardo Cisneros signed a deal with Petróleos de Venezuela SA as the government offers greater control of the oil and gas industry to private partners.

Cisneros, who is chairman of Cisneros Corporation, is entering a joint venture with PDVSA through Globalable Holding SL. The JV known as Petrocabimas is based in the western Zulia state and is projected to quadruple current production to 50,000 bpd by 2026, Cisneros said in a statement. PDVSA did not reply to a request for comment.

After years of economic crisis, hyperinflation, mismanagement and sanctions, many foreign companies have left Venezuela. President Nicolás Maduro has been working to attract new partners from both at home and abroad to revive oil production, increase revenue and reduce debt.

Cisneros and his brother Gustavo, took control of their father’s business empire in 1970, and in the 1980s, the clan began an expansion outside its home market, buying U.S.-based comapnies and a stake in the Spanish-language broadcaster Univision. He later purchased Cervecería Regional and Los Leones del Caracas baseball franchise, the group’s first sports team. His son Eduardo is the co-founder of a Florida-based private equity fund 3B1 Guacamaya, which in 2021 acquired stakes in a Venezuelan paint maker.

Maduro recently inked deals offering energy partnerships to powerful family-owned conglomerates, like India’s Jindal Power Ltd. and Turkey’s Yildirim Group.

(Bloomberg)

 

 

Persecution of opponents in Venezuela

 July 20th 2024

Uruguay, Argentina, Costa Rica, Guatemala, and Paraguay signed a declaration expressing ‘ concern over “harassment and persecution” the Venezuelan regime of President Nicolás Maduro is exerting on opposition leaders’ ahead of the July 28 elections which most pollsters foresee he is bound to lose.

The signatories also concurred that the electoral process should “represent an opportunity to bring peace, unity, progress and democracy” to Venezuela. The five nations have been following “with concern the harassment and persecution against leaders and supporters of the Venezuelan opposition and against members of civil society, including the arbitrary detention of numerous figures related to the opposition, all of which threatens the realization of a legitimate electoral process,” read the document which demands “the immediate cessation of harassment, persecution and repression against political and social activists of the opposition, as well as the release of all political prisoners…the democratic principles, as well as the human rights and fundamental freedoms of all Venezuelans are at stake.”

This declaration came after the Bolivarian administration’s recent violent acts against opposition leaders María Corina Machado and Edmundo González Urrutia. Maduro accused Argentine President Javier Milei of wanting to sabotage the elections.

He called the Libertarian politician a “malparido,” which translates as “bastard.”

“They want a hecatomb, a tragedy, to shout suspension of the elections, and the gringos would come out, Milei would come out, (Daniel) Noboa (president of Ecuador) would come out, the rightwing, to suspend the elections. I tell you, we are prepared. Nerves of steel, calm and sanity. And rain, thunder, or lightning, on July 28, there will be presidential elections in Venezuela. Nobody is going to sabotage them,“ Maduro said.

Maduro spoke about a ”bloodbath“ and a ”civil war“ if he does not win while Machado has repeatedly decried sabotage attempts against the opposition’s campaign.

In view of what seems to be Maduro’s imminent defeat, former US Assistant Secretary of State for Western Hemisphere Affairs Elliott Abrams suggested Maduro should be offered amnesty to accept his fate. Abrams likened the situation to that of former Panamanian dictator Manuel Noriega in the late 1980s.

”In 1988, the United States entered into negotiations with Panama’s then dictator, Manuel Noriega. Noriega had been indicted in Miami for drug trafficking and we wanted him out of office and out of Panama.“ .

”To get Noriega out and return Panama to democracy, we offered him a deal: we would drop the indictment if he would leave,” recounted Abrams, who was undersecretary of state for Latin America in the President Ronald Reagan administration. Noriega eventually refused all deals and was overthrown by force.

Extradited to the US he was sentenced to 40 years in jail.

 

 

 

Colombian President tells Maduro to release vote count

2024, 07/31 – : THE ASSOCIATED PRESS

Colombian President Gustavo Petro urged his close ally, Venezuelan President Nicolas Maduro, to release detailed vote counts of the election in which electoral authorities declared him the winner, after harsh criticism from the international community of Maduro and his ruling party-loyal National Electoral Council, which is yet to release polling center-level results as it has done in previous elections.

Maduro’s closest challenger, Edmundo Gonzalez and opposition leader Maria Corina Machado said the release of those figures would show the president lost the election.

The Carter Center, an independent U.S.-based institution that evaluates elections, said it was unable to verify the results of Venezuela’s presidential election, blaming authorities for a “complete lack of transparency” in declaring Maduro the winner without providing any individual polling tallies.

The group was authorized earlier this year by Venezuela’s electoral authorities to send experts to observe the election. It had 17 experts spread out in four cities .

“The electoral authority’s failure to announce disaggregated results by polling station constitutes a serious breach of electoral principles,” the Carter Center said, adding that the election did not meet international standards and “cannot be considered democratic.” 

CARACAS, Venezuela (AP)

 

 

 

Analyst warns of energy fallout

Jul 29, 2024

Socio-economic analyst Indera Sagewan said the Dragon gas deal Trinidad and Tobago signed with Venezuela could be undermined by potential civil unrest following the recent election results in which incumbent President Nicolas Maduro claimed victory.

As massive civilian protests built in Caracas yesterday in support of the Venezuelan opposition, Sagewan said T&T must keep eyes on potential unrest in that country. T&T must also pay attention to the United States government’s reaction to the Venezuela election results and the potential for further US sanctions that could impact the crucial energy deals with this country.

Sagewan noted that the US and several global leaders expressed concern over the results giving victory to Maduro.   Maduro and his political opponent both claimed victory in the country’s election, which was rife with accusations of fraud and counting irregularities.

Maduro declared victory after approximately 80% of the votes were counted, with his administration reporting that he secured 51% of the vote against the Democratic Unitary Platform (PUD) candidate Edmundo González Urrutia, who received over 44%, according to Venezuela’s National Electoral Council (CNE).

Sagewan said there was potential for “high social fallout” in Venezuela, which would then engage the attention of that government:  “We can see some serious instability.”

While the retention of power by a Maduro government would be “good for T&T”, this country could be affected by any US decisions that especially affect gas and oil.

“What if the US feels very strongly about the results and decides to step in and put down some sanctions and potentially affect us?”

There was a pre-election expectation that the Venezuelan opposition would have maintained a strong victory. Sagewan said the Dragon deal was “high-risk by nature because of Venezuelan politics. Every day is increasingly more uncertain.”

The world and T&T would have to “wait and see” what develops in Venezuela, and the US’s position on the final outcome. She was “not against” the T&T Government giving the Dragon deal its all, but “even more effort must be put into diversification”. This includes within the energy sector itself, as the Dragon deal currently represented a “lifeline” for the local energy industry.

Stating that “we need the gas”, Sagewan said there were “many low-hanging fruit” in T&T that could be targeted for development and diversification.

 

 

 

CAF – Development Bank of Latin America and the Caribbean Renews Partnership with Caribbean Investment Forum 2024

5 July

Barbados Caribbean Export announced renewal of the partnership with CAF – Development Bank of Latin America and the Caribbean for the upcoming Caribbean Investment Forum (CIF) 2024. Scheduled to take place from July 10th to 12th, 2024, in Georgetown, Guyana, CIF 2024 promises to be a pivotal event in the region’s economic landscape and is hosted in collaboration with the Cooperative Republic of Guyana, the European Union, CARICOM, the Caribbean Development Bank (CDB) and the Guyana Office for Investment (Go-Invest).

CAF and Caribbean Export further solidified their collaboration by signing a Memorandum of Understanding (MOU) in February 2023, underscoring their shared commitment to advancing the region’s development agenda. Recognizing the forum’s crucial role in driving investment and fostering sustainable development across the Caribbean, CAF have continued to support the event for the 3rd consecutive occasion.

Leo Naut, Deputy Executive Director of Caribbean Export, emphasized the significance of this support, stating, “CIF represents a collaborative effort among key stakeholders to promote economic resilience and prosperity in the Caribbean.

We are grateful for the continued support of partners like CAF, whose commitment to sustainable development aligns seamlessly with our mission. Together, we are working towards creating a more vibrant and resilient Caribbean economy.”

Expressing the Bank’s commitment to the event, Bernardo Requena, Trinidad and Tobago Representative for CAF remarked, “CAF is proud to collaborate once again with Caribbean Export for the Caribbean Investment Forum 2024.

This event provides a vital platform for showcasing investment opportunities and facilitating partnerships that drive sustainable development in the region. Through our collaboration, we aim to foster innovation, resilience, and inclusive growth, ultimately creating a brighter future for the Caribbean.”

CIF 2024 promises to be a dynamic gathering of thought leaders, investors, government officials and industry experts, united in their pursuit of a prosperous and sustainable Caribbean. The partnership between Caribbean Export and CAF underscores the importance of collaboration in advancing the region’s development agenda and unlocking its full potential.

Caribbean Export is grateful for the continued support of private sector partners such as Republic Bank and other development partners including the USAID, the Inter-American Development Bank (IDB) and the International Finance Corporation (IFC/World Bank), whose commitment to sustainable development aligns seamlessly with our mission.

 

 

 

Young meets CAF Development Bank

Move to expand green energy projects

23 jul

ENERGY Minister Stuart Young, SC, met Bernardo Requena, the representative in Trinidad and Tobago for the CAF Development Bank of Latin America and the Caribbean, to explore potential loan facilities for green energy projects in the petrostate.

Discussions centred on the technical assistance and loan facilities available for energy projects in Trinidad and Tobago, with a focus on harnessing green energy and reducing harmful methane emissions.

The energy projects discussed are expected to play a key role in strengthening energy security in Trinidad and Tobago, the wider Caribbean region and potentially contribute to energy security for Europe.

Young continues to actively advocate for energy security and resilience.

 

 

 

 

Colombia

Arrow announces second Ubaque results

31 Jul 2024

CNB HZ-3 on production

Arrow Exploration, the high-growth operator with a portfolio of assets across key Colombian hydrocarbon basins, provided an update on operational activity, particularly at the multi horizon, Carrizales Norte (‘CN’) field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50 percent beneficial interest.

CNB HZ-3

The second of the Ubaque horizontal wells planned for 2024 is now on production. The second horizontal well on the Carrizales Norte ‘B’ pad (CNB HZ-3) is exceeding expectations and is being restricted to a current flow rate of 3,038 BOPD gross (1,519 BOPD net to Arrow) with less than 6.5% water cut while still recovering load fluid.

Initial production flows are not necessarily indicative of long-term performance or ultimate recovery and a stabilized production rate will be determined in the first few weeks of operations, in keeping with conservative reservoir management. Further updates will be provided in due course.

CNB HZ-3 was spud on July 4, 2024 and reached a target depth of 8,457 feet (true vertical depth) on July 18, 2024. The well was drilled to a total measured depth of 12,320 feet with a horizontal section of approximately 3,050 feet. CNB HZ-3 came on production on July 26, 2024, with the use of an electric submersible pump (ESP) and, based on initial results, displayed the same reservoir characteristics as CNB HZ-1.

CNB HZ-1

The CNB HZ-1 is continuing to perform above expectations and is being restricted to a current flow rate of 2,220 BOPD gross (1,110 BOPD net to Arrow) with approximately 34% water cut. CNB HZ-1 average production for the first 30 days of production (IP30) was 2,650 BOPD gross (1,325 net).

Drilling Time and Costs

From spud to rig release the CNB HZ-1 took 30 days and cost approx. $4.9 million gross ($2.45 million net to Arrow). The CNB HZ-1 well paid out in under 30 days. Drilling operations at the CNB HZ-3 well took 21 days from spud to on production and cost approx. $4.0 million gross ($2.0 million net to Arrow). The improvement represents the learnings taken from CNB HZ-1 as the operations team continues to focus on improving capital and operating costs and creating further shareholder value.

Upcoming Drilling

The rig has been moved to the fourth cellar on the Carrizales Norte B Pad where the Company spud the third horizontal well (CNB HZ-4). Thereafter, the Company expects to drill the fourth horizontal well on the B pad, followed by the Baquiano-1 exploration well, which is on trend with the Carrizales Norte field. Following the drilling program at Baquiano, Arrow plans to return to the CNB pad for two additional horizontal wells.

Water Disposal Update

The conversion of the CN-4 well to a water disposal well is complete and injection has commenced. The CNB-2 water disposal well has been completed and is awaiting stimulation work and regulatory approval prior to starting injection.

Corporate Update

Current net corporate production is approximately 4,560 BOE/D, inclusive of CNB HZ-1 and CNB HZ-3. Arrow’s cash position was approx. $11 million on July 1, 2024. Although Arrow has an aggressive capital program, the Company has maintained a healthy balance sheet with no debt.

Marshall Abbott, CEO of Arrow commented:

‘The continued success of the horizontal well program at the CNB pad, has led the Company to plan two additional horizontal wells which Arrow intends to drill before the end of 2024, depending on technical aspects and regulatory approvals.

This will result in a total of six horizontal wells at Carrizales Norte in 2024 with additional horizontal wells being planned in 2025 from a third pad. The horizontal program continues to exceed expectations and to add production and reserves from the hydrocarbon-dense Ubaque formation.

The Arrow team strives to reduce the time and costs needed to drill horizontal and vertical wells. Internally generated development drilling and completion strategies will be used to exploit further prospects on the Company’s land holdings.’

‘The production rates from the CNB HZ-1 well are exceeding the simulation results and the CNB HZ-3 well was drilled, completed and brought on production under budget. The Company is excited about the initial results of the well and the potential to further grow reserves and production.’

‘Production infrastructure including water disposal wells, dispersion fields and roads continue to be developed to increase production and prepare for the 2025 capital program.’

Source: Arrow Exploration

 

 

Colombia – The Energy Year

July 15, 2024

Flover Rodríguez Portillo, executive director of the Colombian Association of Energy Geologists and Geophysicists (ACGGP), reviews exploration potential and challenges from a geological perspective. The ACGGP is a non-profit organisation that fosters and strengthens personal, technical and social relationships between professionals linked to earth sciences.

Can you discuss Colombia’s exploration potential and challenges, both onshore and offshore, from a geological perspective?

In Colombia there is a clear need to diversify income sources due to the economic dependence on hydrocarbons. A significant part of our exports is based on hydrocarbons as well.

Over the past century, Colombia has demonstrated substantial hydrocarbons exploration and production potential, with ongoing discoveries contributing to the interest of companies seeking to manage risk effectively.

The Llanos region, particularly Piedemonte (Foothills), stands out as a prolific gas area, meeting a significant portion of the country’s gas consumption. Ecopetrol’s recent announcement of expanding gas exploration to the northern Piedemonte region presents promising opportunities for further reserves incorporation. However, the challenge lies in the looming demand-supply crossover for gas projected around 2025-2026.

Onshore exploration offers several opportunities, such as in the lower Magdalena River Valley and the Caribbean region, where significant gas discoveries have been made. The infrastructure in place facilitates the easy integration of these discoveries into the grid, reducing investor risk.

Offshore exploration, though promising, requires substantial investment in infrastructure and market development to ensure a viable market for gas production.

Despite challenges, Ecopetrol’s offshore discoveries demonstrate the basin’s potential, which is reinforced by the company’s expertise gained from international partnerships.

The recent drilling of Orca Norte 1, Ecopetrol’s first fully operated well, underscores the ongoing potential of the basin and the need for a conducive investment environment for further development.

What are the challenges in ensuring the economic viability of gas exploration, production and commercialisation?

The key lies in building strategic alliances, which we have successfully accomplished with major players such as Occidental, Petrobras and Shell, indicating the interest in Colombia’s offshore potential. The upcoming drilling of the Uchuva delimiter well by Ecopetrol, supported by robust technical analysis, further reinforces our optimistic outlook.

However, the urgency to address Colombia’s gas supply challenge requires swift action. While past delays are regrettable, the focus now is on proactive advancement. Middle Magdalena Valley Basin has a proven source rock, and the National Hydrocarbon Agency in 2019 concluded that prospective and recoverable resources from the unconventional play may add 50 times the actual gas reserves of Colombia.

The national government, alongside regulatory agencies, are actively working to enhance regulatory frameworks to expedite offshore exploration. Infrastructure development, exemplified by the ongoing construction of a hub in Barranquilla, underscores our commitment to intensified drilling activities.

What techniques are currently being applied to enhance oil production?

EOR techniques are being implemented to support the country’s production, and Ecopetrol has been performing interesting work in Bucaramanga along with the Innovation & Technology Center ICP, its research partner.

They have been testing techniques and technologies to improve production. This has been seen in the Chichimene field, which has been a successful case study for EOR techniques. The field was declining naturally at the time, and with EOR, it has come back to life.
The average recovery percentage can be 22-25%, which is not bad. There are even fields in Colombia whose recovery factor is close to 40-45%. It depends on the conditions, the characteristics of the field and the basins, among other elements.

What are the objectives of the association, and what is your fundamental role in exploration and production?

Our clear objective is to be representative. The association, with 67 years of history, underwent a significant transformation in 2019 amid industry challenges, which forced us to rethink our role and to ask whether we should cover a wider array of subjects, which we started doing. This resulted in us becoming a platform for professional dialogue and training focused on three main lines of work.

The first is the historical and traditional one, which is technical.

The second one is regional education. Today this is one of the most important programmes and pillars of the ACGGP. In 2017, we created the National Pedagogy Programme, which explains how the activities are carried out in the regions.

By building this trust and by making communities feel part of the project, we are removing a first wall of unfamiliarity, which is perhaps the most significant one. This programme has reached more than 25,000 people around the country over the last three years, contributing to knowledge exchange and strengthening the capacities of the community, leaders, administrative authorities and the country in general.

The third pillar is public policy. We are a more representative organisation today, and the national government listens to us. We began to contact the members of congress and design training programmes for them because there is little technical knowledge useful for decision-making, and at the end of the day, that is where the country’s public policy is discussed and decided upon.

We also have a small group working on new ideas to propose public policy proposals requiring geological knowledge useful for the development of Colombia, such as knowledge on groundwater, energy sources from the subsurface and climate action.

In Colombia there are around 10,000-13,000 geologists, engineering geologists and geoscientists. As of today, we represent 5% of them, and our aim is to increase that figure. We want more professionals to find in the association a place where they recognise themselves, feel represented and feel they can come to learn but also be listened to and have a space to contribute if they want to do so.

 

 

 

OAS

Jul 07, 2024

Sir Ronald Sanders

On June 28, 2024, Antigua and Barbuda offered to host the 2025 General Assembly of the Organization of American States (OAS). I issued the invitation, on behalf of the country’s Prime Minister, Gaston Browne, and it was unanimously accepted by all member states at the 54th Regular General Assembly in Paraguay.

Why would a small country like Antigua and Barbuda take on the responsibility of hosting high-level delegates from Canada, the US, and Mexico in the North, to Brazil and Argentina in the South, with the countries of the Caribbean in between?

The simple answer is that there is immense value in the OAS, particularly to small states, which rely on the commitments of much larger states, especially their neighbours, to respect and honour territorial integrity.

By hosting an OAS General Assembly, Antigua and Barbuda would demonstrate its belief in the value of the Organization and remind all others of the necessity of equity, inclusion, and dialogue in addressing challenges and opportunities.

Regrettably, in many of the countries of the OAS, not enough is known about the Organization and what it does. Yet, the OAS has been crucially important to the well-being of all its member states and to their relations with each other. The nations of the Americas have enjoyed a remarkable period of peace, having not experienced major wars between them since 1935.

In contrast, regions such as Europe, the Middle East, Asia, and Africa have been plagued by numerous wars, resulting in millions of deaths, shifting borders, and persistent hostility. This enduring peace in the Americas has allowed borders to remain stable, fostering an environment conducive to investment, social improvement, and economic development.

The maintenance of this peace is largely due to the 77-year-old OAS. From its early beginnings, the OAS established principles in its binding charter, committing every member state to two fundamental undertakings:

1. “To strengthen the peace and security of the continent” and
2. “To prevent possible causes of difficulties and to ensure the pacific settlement of disputes that may arise among the Member States.”

The OAS charter also obliged each of its member states to accept that:

1. “International law is the standard of conduct of States in their reciprocal relations” and that
2. “International order consists essentially of respect for the personality, sovereignty, and independence of States, and the faithful fulfillment of obligations derived from treaties and other sources of international law.”

Member states of the Organization also bound themselves to the principle that “The American States condemn war of aggression;” adding that “victory does not give rights.”

By signing up to the OAS Charter, member states accepted that “Controversies of an international character arising between two or more American States shall be settled by peaceful procedures.” Consequently, all disputes that have arisen between states have been peacefully settled – or are being voluntarily addressed – at the International Court of Justice (ICJ).

The one recent aberration to this general rule has been Venezuela’s aggression toward Guyana following the Maduro government’s withdrawal from the OAS in 2019. But even amid acts of aggression, Venezuela is now participating in the ICJ process with Guyana, as are Belize and Guatemala over their territorial controversy.

From its inception, the OAS has been pivotal in maintaining peace and stability in the Americas. Through its Charters and organs, it has established a binding framework of law that governs relations among member states across various domains.

With over 100 Inter-American treaties covering areas from the peaceful settlement of disputes to family, commercial, and criminal matters, the OAS provides a comprehensive legal structure that supports peaceful coexistence.

Were it not for these OAS treaties, matters such as fighting organized crime, and cooperation on tackling trafficking in persons, guns, and drugs would have been left to limited national resources. No country – not even the biggest and richest – would have met these challenges without the framework for inter-American cooperation that the OAS has provided.

A significant contribution of the OAS is its role in promoting democratic governance, human rights, and the rule of law. The organization’s efforts have been crucial in countries where these principles have been gravely and persistently violated, helping to prevent contagion to other countries. For example, the Inter-American Democratic Charter, adopted in 2001, outlines the commitment of member states to democratic principles and has been a crucial tool in addressing democratic crises in the region.

The attempted coup d’état in Bolivia on June 26, 2024, highlights the importance of the OAS in responding to threats to constitutional regimes. By immediately condemning actions that threatened democracy and the rule of law and warning of the serious consequences, OAS member states demonstrated their collective commitment to safeguarding democratic values and ensuring the stability of member states.

The OAS’s involvement in building national electoral infrastructure and overseeing elections is another key aspect of its work. Ensuring free, fair, and transparent elections is vital for the legitimacy of governance and the fostering of public trust in democratic institutions.

The OAS played a pivotal role in the peaceful transfer of power to President Irfaan Ali in Guyana in 2020 and to President Bernardo Arévalo in Guatemala in 2024 – both of whom were democratically elected in internationally-monitored elections. These successes not only reinforced political stability in these countries but also created conditions for economic development and social improvement.

Haiti serves as another example of the OAS’s critical role. Despite the immense challenges faced by Haiti, the OAS has consistently worked to stabilize the nation and support its development, including through the work of the OAS mission to Haiti in 2016, which I led, to ensure that a transitional national government was established, in accordance with the Haitian Constitution, to replace the expired government of Michel Martelly. As an organization, the OAS has always pursued a broad vision of Haitian stability and progress, based on social and economic development. Gangs evolved in local circumstances, despite the work of the OAS.

The passage of Hurricane Beryl across several Caribbean countries, leaving death and destruction in its wake, especially in the smaller islands of Grenada and St Vincent and the Grenadines, underscores the importance of the organization’s voice in galvanizing international action to curb the impacts of climate change and to operationalize the “loss and damage” fund, pledged by the large polluting nations at UN Climate Change conferences. That voice will be raised loudly.

The OAS is a cornerstone of peace, stability, and development in the Americas. Its contributions have created a more stable and prosperous region, demonstrating the power of cooperation and legal frameworks. The value of the OAS is clear, and its continued support is essential for the well-being of all member states and their citizens.

(The writer is Antigua and Barbuda’s Ambassador to the US and the OAS. The views expressed are entirely his own. Responses and previous commentaries:

www.sirronaldsanders.com)