Tag Archives: Cuba-Venezuela Relations

Cuban Doctors in Eye of Venezuelan Hurricane

Washington Post, April 16, 2014

Original Here: Cuban Doctors in Eye of Venezuelan Hurricane

CARACAS, Venezuela — When Judith Faraiz’s son was near death after a severe motorcycle accident, she put his life in the hands of God and Cuban doctors.

Like many in Petare, a sprawling hillside slum of crumbling brick buildings on the eastern outskirts of Caracas, Faraiz has come to rely on Cuban physicians for free health services in a country where private care is too expensive for the poor and public hospitals have a dismal reputation.

The link is vital for both governments: In exchange for the services of its doctors and other professionals, Havana gets an estimated $3.2 billion in cut-rate Venezuelan oil that is a lifeline for Cuba’s ailing economy. Venezuelan President Nicolas Maduro, for his part, relies on social programs such as these to shore up support among his poor power base even as his approval ratings fall hand-in-hand with a faltering economy.

The Cuban doctors are the most visible symbol of the controversial collaboration between the two countries during 15 years of socialist rule in Venezuela, and increasingly they are a flashpoint for the violent unrest that has rocked the country since February and is blamed for at more than 40 deaths.

The mostly middle- and upper-class protesters who have taken to the streets say their country is following the path of Fidel Castro’s one-party Communist system. They see the doctors-for-oil deal as an intolerable giveaway of Venezuela’s vast petroleum wealth, even as the country suffers from 50 percent inflation and chronic shortages of basic goods like flour, cooking oil and toilet paper, not to mention a homicide rate among the world’s highest.

Unsubstantiated rumors have circulated that Cuban military advisers are helping to crush the anti-government demonstrations. Some allege that Havana is essentially running the Venezuelan military and that the Cuban doctors lack proper training.

 AAANicolas Maduro with Cuban Doctors in Venezuela

For supporters of Maduro’s government, however, the doctors are an example of concrete improvements in their lives delivered under the late President Hugo Chavez and now his hand-picked successor.

Faraiz, a 54-year-old former domestic worker, said doctors at a public hospital wanted to amputate one of her son’s legs, which had been horribly mutilated. He was prescribed a daily dose of antibiotics that the family couldn’t afford and contracted a serious infection.

So she took him to the Cuban doctors, who saved the leg by surgically implanting eight nails and also healed his fractured cranium. The care, and some of his medicine, didn’t cost a cent.

Faraiz fears that if the opposition ever takes power it would follow through on a promise to alter terms of the Cuba-Venezuela relationship, and the doctors would be forced to leave.

“It will ruin the poor,” she said, sitting in her low-ceiling living room in Petare.

While official figures are not public, Cuba is believed to have sent around 100,000 professionals, mostly health care workers but also athletes, engineers and even circus artists, to Venezuela since Chavez came to power in 1999. An estimated 31,000 Cuban health workers, about 11,000 of them doctors, are believed to be working in the country today.

Venezuela pays the Cubans a stipend for living expenses and they sleep in dormitories at the clinics where they work. Havana also pays them $425 a month — about 20 times the average government salary back home.

Cuba has similar programs in developing nations around the globe that help burnish its international image, but none as important as the one in Venezuela. Chavez was long the Caribbean island’s staunchest political and economic ally, and he spent months in Havana in 2013 for cancer treatments before he died.

The South American country sends about 100,000 barrels of oil every day to Cuba that accounts for half the island’s domestic energy consumption, University of Texas energy analyst Jorge Pinon says. Venezuela also ships oil on preferential terms to other poor nations such as Haiti and the Dominican Republic.

When the Cuban doctors arrived in Petare five years ago, residents initially eyed them with suspicion and sometimes slammed the door in their faces, said Yurisleidy Varela, a 29-year-old Cuban physician who directs the local clinic that treated Faraiz’s son.

Today the Cubans who staff “La Urbina” clinic are welcomed as they walk the mazelike streets making house calls and vaccinating children. The clinic offers free emergency, ophthalmology and pediatric care, as well as minimally invasive surgical procedures. Its several dozen staffers also minister to gunshot victims and drug and alcohol addicts.

But outside the slums and poor rural communities of Venezuela, the Cubans have become a focus of anti-government rage.

In February, dozens of people carrying signs saying “Cuba go home” physically harassed a Cuban baseball team playing in a tournament on Margarita Island. More recently, assailants burned down a medical clinic staffed by Cubans in the western city of Barquisimeto.

Some of the Cubans say the violence has them spooked.

“One never knows what can happen,” Varela said. “If they’re attacking their own institutions, imagine how it is with us Cubans.”

There’s no sign that the doctors will decamp anytime soon, and Maduro has vowed the anti-Cuba sentiment will only “bolster our conviction that we must strengthen our brotherhood.”

Miguel Tinker Salas, a professor of Latin American history at Pomona College in California, said that besides domestic political concerns, continuing the Cuba-Venezuela alliance is a way for Maduro to send a message to Washington that has been echoed in recent years by like-minded presidents around the region. “Cuba was a model for this generation” of leftist leaders, Tinker Salas said, “and I think it is, in a way, a way to declare one’s autonomy and independence.”

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The Venezuelan Dialogue From a Cuban Point of View

By Yoani Sanchez in the World Post

Posted: 04/14/2014 11:58 am EDT Updated: 04/14/2014 11:59 am EDT

 Original here: The Venezuelan Dialogue From a Cuban Point of View

The dialog between the Venezuelan opposition and Nicolas Maduro is in full swing. Its critics are many, its most visible loser: the Cuban government. For a system that for more than half a century has disqualified and reprimanded its dissidents, this discussion table must present a sad acknowledgement of its own inabilities.

Last Tuesday stunned Cuban viewers could watch a debate between the opposition forces in Venezuela and pro-government representatives. The controversial meeting was broadcast on TeleSur, which is characterized by its tendency to back the work of Chavism with its reporting. On this occasion, however, it was forced to also broadcast the concerns and arguments of the other side.

The requirement that cameras and microphones would be present at the discussion proved to be a magnificent political move by Maduro’s adversaries. In this way the audience is engaged in the dialog and it’s more difficult to publish distorted versions later. The participants on both sides were allowed ten minutes each, an exercise in synthesis that the Venezuelan president, clearly, couldn’t accomplish.

For disinformed Cubans, the first thing that jumped out at us was the high level of the arguments the opposition brought to the table. Figures, statistics and concrete examples expressed within a framework of respect. The next day the most commonly heard comment in the streets of Havana was the popular phrase, “They swept the floor with Maduro.” A clear reference to the crushing critiques of his rivals. The government supporters, however, were notably timid, fearful, and offered a discourse plagued with slogans.

There is no doubt, this discussion table has been a bitter pill to swallow for those who up until a few hours before were accusing their political opponents of being “fascists” and “enemies of the nation.” Venezuela will no longer be the same, although the negotiations end tomorrow and Nicolas Madura will once again take the microphone to hand out insults right and left. He acceded to a discussion and this marks a distance between the path followed by the Plaza of the Revolution and another that recently began for Miraflores.

0010886523Maduro and Caprilles

New Picture (2)President Maduro

biXxJ.St.84The Opposition, Caprilles in the middle

And in Cuba? Is this also possible?

While the broadcast of the Venezuelan dialogue was airing, many of us asked ourselves if something similar could occur in our political scenario. Although the official press presents these conversations as a sign of strength on the part of Chavism, it has also kept enough distance so that we won’t get illusions of possible Cuban versions.

It is less chimeric to imagine Raul Castro getting on a plane and escaping the country than to project him sitting at a table with those he dubs counterrevolutionaries. For more than five decades, both he and his brother have been dedicated to demonizing dissident voices, such that now they are prevented from accepting a conversation with their critics. The danger posed by the impossibility of negotiations is that it leaves only the path to an overthrow, with its consequent trail of chaos and violence.

However, not only do the Cuban regime’s principal figures show reluctance before any negotiating table. The better part of the Island’s opposition doesn’t want to hear it spoken of. Before this double rejection, the agenda of a chimeric meeting fails to take shape. The opposition parties haven’t yet come together on a project for the country that can be coherently defended in any negotiation and look like a viable alternative. We members of the emerging civil society have reasons to feel concerned. Are the politicians now operating illegally in the country prepared to sustain a debate and capable of convincing an audience? Could they represent us with dignity when the time comes?

The answer to this question will only be known once the opportunity arises. Until now the Cuban political dissidence has concentrated more on tearing down than on elaborating foundational strategies; the greater part of their energy has been directed to opposing the governing Party rather than on persuading their potential followers within the population. Given the limitations on disseminating their programs and the numerous material restrictions they suffer, these groups have not been able to carry their message to a significant number of Cubans. It is not entirely their responsibility, but they should be aware that these deficiencies hinder them.

If tomorrow the table for a dialog was set, it would be unlikely that we would hear a speech from the Cuban opposition as well articulated as that achieved by their Venezuelan colleagues. However, although negotiation isn’t a current possibility, no one should be exempted from preparing for it. Cuba needs for the people before those possible microphones to be those who best represent the interests of the nation, its worries, its dreams. They may speak for us, the citizens, but please, do so coherently, without verbal violence and with arguments that convince us.

d8b426fb7787a00c41d72006c4bec2013c0a2b4f - CopyYoani Sanchez

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Proyecciones macroeconómicas de una Cuba sin Venezuela

Pavel Vidal Alejandro

from the  Cuba Study Group, Desde la Isla; original source:  full article

Análisis de Pavel Vidal acerca del impacto a la economía cubana en el supuesto caso de una reducción importante en la cooperación económica con Venezuela.

New PictureDesde inicios de la década pasada la economía cubana ha venido incrementando sistemáticamente sus relaciones con Venezuela. Actualmente el comercio de bienes representa el 40% del intercambio total de la isla, muy por encima del segundo lugar ocupado por China con 12,5%. En este porcentaje pesa sobre todo la importación de petróleo venezolano; en 2011 la factura llegó a US$2.759 millones. La importación del crudo venezolano cubre el 60% de la demanda nacional y además permite la reexportación de una parte del mismo. Solo el 50% del pago de las importaciones de crudo venezolan se efectúa dentro de los primeros 90 días, el restante 50% se acumula en una deuda a pagarse en 25 años con un tipo de interés del 1% anual.

 Continue reading: Vidal,  Cuba sin Venezuela

New Picture (11)

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Venezuela and Argentina: The party’s over; [ time for Cuba to partner with Brazil ! ]

Latin America’s weakest economies are reaching breaking-point

Feb 1st 2014 | BUENOS AIRES AND CARACAS

Original essay here: http://www.economist.com/-latin-americas-weakest-economies-are-reaching-breaking-point


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Nicolás Maduro and Cristina Fernández de Kirchner at the CELAC Cumbre, Havana

WHEN the euro crisis was at its height it became commonplace for struggling European economies to insist that they were not outliers like Greece. Whatever their woes, they declared, Greece’s were in a class of their own. In Latin America, by contrast, the unwanted title of outlier has two contenders: Argentina and Venezuela. Both have been living high on the hog for years, blithely dishing out the proceeds of an unrepeatable commodities boom (oil in Venezuela; soya in Argentina). Both have been using a mix of central-bank interventions and administrative controls to keep overvalued exchange rates from falling and inflation from rising. Both now face a come-uppance.

High inflation is a shared problem. Argentina’s rate, propelled higher by loose monetary and fiscal policies, is unofficially put at 28%. Argentina’s official exchange rate is overvalued as a result, fetching 70% more dollars per peso than the informal “blue” rate in mid-January. Venezuela’s prices are rising faster still. Last year, during an awkward political transition after the death of Hugo Chávez to the presidency of Nicolás Maduro (pictured with Cristina Fernández de Kirchner, the Argentine president), the Central Bank stepped up money-printing to finance public spending, pushing inflation to 56.2%. A dollar fetches 75-80 bolívares on the black market, up to seven times the official rate.

Both countries have dwindling arsenals with which to defend their overvalued currencies. Venezuela’s reserves of gold and foreign currency, which stood at nearly $30 billion at the end of 2012, were down to just over $21 billion by last week. Only about $2 billion of that is in liquid assets. Ecoanalítica, a research firm, estimates that the government can also dip into around $13 billion of opaque, off-budget funds. Argentina’s reserves have also been tumbling (see chart).

Something had to give, and late last month it did. Argentina first allowed the peso to plunge, by more than 15% in the week starting January 20th, and then announced a relaxation of the government’s ban on buying foreign currency for saving purposes. Argentines making over 7,200 pesos ($900) monthly are now able to change 20% of their salary into dollars at the official exchange rate so long as they get approval from AFIP, Argentina’s tax agency. The dollars are transferred to their bank accounts, not released in cash, and hit by a 20% fee if withdrawn before a year. If that sounds complicated, it is still cheaper than buying dollars in the illegal market.

The government’s objective seems to be to close the gap between the official and blue exchange rates, alleviating the need to spend more of those precious reserves to prop up the official rate. Although the gap has closed a little, fear that devaluation will lead only to yet higher inflation explains continued high demand for dollars, even at the less favourable exchange rate. So too does the fact that only a third of Argentine workers meet the declared-income threshold for buying dollars, according to analysis by IARAF, a think-tank.

Guido Sandleris of the University Torcuato di Tella says the plan is doomed to failure unless the government becomes more open about its intentions and adopts a genuinely restrictive set of policies to battle inflation. Although the Central Bank this week raised one of its interest rates by a full six percentage points, rates remain below inflation, giving Argentines little reason to hold pesos.

On the fiscal front the government needs to reduce subsidies and remain unyielding in the face of workers’ demands for pay rises. Miguel Kiguel of EconViews, a consultancy, says wage increases to be negotiated in March and April must remain under 30% if they are to serve as an anti-inflationary anchor. That will be hard given lavish pay awards handed out to striking policemen last year.

Whether the government is willing to put prudence before politics is not clear. On the day that her government let the peso’s slide turn into a slump, Ms Fernández announced a plan to fund education for unemployed 18- to 24-year-olds that could cost 11 billion pesos. Her only reference to the currency’s fall was a tweet accusing banks of helping favoured investors to speculate on the peso. There are some people, she wrote, who “want to make us eat soup again, but this time with a fork.”

20140201_AMC257At least Argentina’s partial liberalisation of currency controls is a halting step towards normality. Venezuela, where the situation is even more perilous, is heading in the other direction. On January 22nd the government unveiled new rules under which a higher rate for non-essential transactions is set weekly (it stood at 11.36 bolívares to the dollar this week). The old rate of 6.3 still applies for government imports and basic items such as food and medicine, so reserves will keep falling as the government defends the currency.

Venezuela is running out of dollars to pay its bills. Although payments to its financial creditors of around $5 billion this year do not appear to be at risk, the country’s arrears on non-financial debt are put at over ten times that sum. These include more than $3 billion owed to foreign airlines for tickets sold in bolívares, and around $9 billion in private-sector imports that have not been paid for because of the dollar shortage. “Under the current economic model, and with this economic policy,” says Asdrúbal Oliveros of Ecoanalítica, “this [debt] looks unpayable.”

The effects are already apparent. Foreign airlines have placed tight restrictions on ticket sales; some have suspended them altogether. Many drugs and spare parts for medical equipment are unavailable. Car parts, including batteries, are increasingly hard to find; newspapers are closing for lack of paper. The country’s largest private firm, Empresas Polar, which makes many basic foodstuffs, is struggling to make some products. In a statement Polar said the government owed it $463m and that production was “at risk” because foreign suppliers of raw materials and packaging were threatening to halt shipments.

The government blames the crisis on private businesses and “irresponsible” use of hard currency by ordinary Venezuelans. It has ordered drastic cuts in dollar allowances for travellers, especially to popular destinations like Miami. Remittances to relatives abroad have also been slashed. In a bid to curb runaway inflation, it has introduced a new law restricting companies’ profits to 30% of costs. Long jail sentences await transgressors. Without a big injection of dollars from the state oil company, Petróleos de Venezuela, which brings in 96% of foreign earnings, the crunch will continue. Better terms for foreign investors in the oil industry would bring in much-needed cash and boost stagnant production. But unless the government abandons its antipathy to private capital, the prospect of new investment is dim. Shortages of goods are only likely to worsen. If Argentina is an outlier, Venezuela risks straying into a different category entirely.

cristina-fernandez-raul-castro-nicolas-maduro-foto-estudios-revolucionRaul, Cristina and Nicolás 

Raul and DilmaRaul and Dilma Rousseff

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Publication of the Papers from the 2013 Conference of the Association for the Study of the Cuban Economy

 

The proceedings of the Association for the Study of the Cuban Economy’s 23rd Annual Meeting entitled  “Reforming Cuba?” (August 1–3, 2013) is now available. The presentations have now been published by ASCE  at http://www.ascecuba.org/.

The presentations are listed below and linked to their sources in the ASCE Web Site.

ASCE_logo_220

 Preface

Panorama de las reformas económico-sociales y sus efectos en Cuba, Carmelo Mesa-Lago

Crítica a las reformas socioeconómicas raulistas, 2006–2013, Rolando H. Castañeda

Nuevo tratamiento jurídico-penal a empresarios extranjeros: ¿parte de las reformas en Cuba?, René Gómez Manzano

Reformas en Cuba: ¿La última utopía?, Emilio Morales

Potentials and Pitfalls of Cuba’s Move Toward Non-Agricultural Cooperatives, Archibald R. M. Ritter

Possible Political Transformations in Cuba in the Light of Some Theoretical and Empirically Comparative Elements, Vegard Bye

Las reformas en Cuba: qué sigue, qué cambia, qué falta, Armando Chaguaceda and Marie Laure Geoffray

Cuba: ¿Hacia dónde van las “reformas”?, María C. Werlau

Resumen de las recomendaciones del panel sobre las medidas que debe adoptar Cuba para promover el crecimiento económico y nuevas oportunidades, Lorenzo L. Pérez

Immigration and Economics: Lessons for Policy, George J. Borjas

The Problem of Labor and the Construction of Socialism in Cuba: On Contradictions in the Reform of Cuba’s Regulations for Private Labor Cooperatives, Larry Catá Backer

Possible Electoral Systems in a Democratic Cuba, Daniel Buigas

The Legal Relations Between the U.S. and Cuba, Antonio R. Zamora

Cambios en la política migratoria del Gobierno cubano: ¿Nuevas reformas?, Laritza Diversent

The Venezuela Risks for PetroCaribe and Alba Countries, Gabriel Di Bella, Rafael Romeu and Andy Wolfe

Venezuela 2013: Situación y perspectivas socioeconómicas, ajustes insuficientes, Rolando H. Castañeda

Cuba: The Impact of Venezuela, Domingo Amuchástegui

Should the U.S. Lift the Cuban Embargo? Yes; It Already Has; and It Depends!, Roger R. Betancourt

Cuba External Debt and Finance in the Context of Limited Reforms, Luis R. Luis

Cuba, the Soviet Union, and Venezuela: A Tale of Dependence and Shock, Ernesto Hernández-Catá

Competitive Solidarity and the Political Economy of Invento, Roberto I. Armengol

The Fist of Lázaro is the Fist of His Generation: Lázaro Saavedra and New Cuban Art as Dissidence, Emily Snyder

La bipolaridad de la industria de la música cubana: La concepción del bien común y el aprovechamiento del mercado global, Jesse Friedman

Biohydrogen as an Alternative Energy Source for Cuba, Melissa Barona, Margarita Giraldo and Seth Marini

Cuba’s Prospects for a Military Oligarchy, Daniel I. Pedreira

Revolutions and their Aftermaths: Part One — Argentina’s Perón and Venezuela’s Chávez, Gary H. Maybarduk

Cuba’s Economic Policies: Growth, Development or Subsistence?, Jorge A. Sanguinetty

Cuba and Venezuela: Revolution and Reform, Silvia Pedraza and Carlos A. Romero Mercado

Mercado inmobiliario en Cuba: Una apertura a medias, Emilio Morales and Joseph Scarpaci

Estonia’s Post-Soviet Agricultural Reforms: Lessons for Cuba, Mario A. González-Corzo

Cuba Today: Walking New Roads? Roberto Veiga González

From Collision to Covenant: Challenges Faced by Cuba’s Future Leaders, Lenier González Mederos

Proyecto “DLíderes”, José Luis Leyva Cruz

Notes for the Cuban Transition, Antonio Rodiles and Alexis Jardines

Economistas y politólogos, blogueros y sociólogos: ¿Y quién habla de recursos naturales? Yociel Marrero Báez

Cambio cultural y actualización económica en Cuba: internet como espacio contencioso, Soren Triff

From Nada to Nauta: Internet Access and Cyber-Activism in A Changing Cuba, Ted A. Henken and Sjamme van de Voort

Technology Domestication, Cultural Public Sphere, and Popular Music in Contemporary Cuba, Nora Gámez Torres

Internet and Society in Cuba, Emily Parker

Poverty and the Effects on Aversive Social Control, Enrique S. Pumar

Cuba’s Long Tradition of Health Care Policies: Implications for Cuba and Other Nations, Rodolfo J. Stusser

A Century of Cuban Demographic Interactions and What They May Portend for the Future, Sergio Díaz-Briquets

The Rebirth of the Cuban Paladar: Is the Third Time the Charm? Ted A. Henken

Trabajo por cuenta propia en Cuba hoy: trabas y oportunidades, Karina Gálvez Chiú

Remesas de conocimiento, Juan Antonio Blanco

Diaspora Tourism: Performance and Impact of Nonresident Nationals on Cuba’s Tourism Sector, María Dolores Espino

The Path Taken by the Pharmaceutical Association of Cuba in Exile, Juan Luis Aguiar Muxella and Luis Ernesto Mejer Sarrá

Appendix A: About the Authors

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New Site on the Cuban Economy: “ASCE BLOG”

 New Picture (10)

 

The Association for the Study of the Cuban Economy established a Blog  some months ago. It promises to be the locus of timely and serious economic analyses and commentaries on the Cuban economy.

The location of the Blog is  http://www.ascecuba.org/blog/

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The Table of Contents as of January 6 2013 was as follows. Each article is linked to the original location on the ASCE Blog.

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Cuba’s External Debt Problem: Daunting Yet Surmountable  by Luis R. Luis

The external debt of Cuba is not excessively large relative to GDP, though this is distorted by an overvalued currency and the reliance on non-cash services exports. Recent bilateral restructurings are easing the debt burden but are insufficient to lift creditworthiness and restore access to international financial markets. [More]

Controls, Subsidies and the Behavior of Cuba’s GDP Price Deflator by Ernesto Hernández-Catá

In this paper a model of overall price behavior for the Cuban economy is estimated. The model, despite limitations, explains reasonably well the path of the GDP deflator. Importantly, the model sheds light on the interaction between unit labor costs, consumption subsidies and the behavior of prices in the economy. [More]

A Triumph of Intelligence: Cuba Moves Towards Exchange Rate Unification by Ernesto Hernández-Catá

The movement towards a unified exchange rate is positive, though a gradualist approach presents some dangers, argues Ernesto Hernandez-Cata in this post. [More]

La Senda de Cuba para Aumentar la Productividad by Rolando Castaneda

Este artículo de Rolando Castañeda señala la necesidad de estimular la actividad privada propiamente dicha para alcanzar mayor productividad y empleo como han demostrado un gran número de economías en transición. [More]

Another Cuban Statistical Mystery by Ernesto Hernández-Catá

Ernesto Hernandez-Cata estimates the net value of Cuban donations abroad. [More]

La Estructura Institucional del Producto Interno Bruto en Cuba by Ernesto Hernández-Catá

Este trabajo presenta estimaciones de la estructura del PIB cubano para el gobierno, empresas del estado y el sector no estatal e ilustra la relativamente baja contribución del sector privado a la economía. [More]

Oscar Espinosa Chepe by ASCE

The members of ASCE are deeply saddened by the news of the passing after a long illness of Oscar Espinosa Chepe in Madrid on September 23.[More]

Convertible Pesos: How Strong is the Central Bank of Cuba? by Luis R. Luis

In this post Luis R. Luis analyzes implications of the lack of full dollar backing for the convertible Cuban peso (CUC), one of the two national currencies circulating in Cuba. [More]

Government Support to Enterprises in Cuba by Ernesto Hernández-Catá

This post looks at state support to Cuban enterprises and uncovers that net transfers are again rising. The reasons for this are not always clear but Ernesto Hernandez-Cata offers a plausible explanation. [More]

A Political Economy Approach to the Cuban Embargo by Roger Betancourt

Roger Betancourt analyzes the evolution of the Cuban embargo and shows that some parts have already been lifted. Verifiable human rights guarantees may provide a way to elicit political support in the US for action to change trade and financial elements of the embargo. [More]

Cinco mitos sobre el sistema cambiario cubano by Ernesto Hernández-Catá

Ernesto Hernández-Catá comenta sobre el sistema de cambios múltiples vigente en Cuba. [More]

La dualidad monetaria en Cuba: Comentario sobre el artículo de Roberto Orro by Joaquin P. Pujol

Joaquín P. Pujol comenta en esta nota sobre la dualidad monetaria en Cuba. [More]

Unificación monetaria en Cuba: ¿quimera o realidad? by Roberto Orro

En este artículo Roberto Orro describe el complejo sistema monetario y cambiario de Cuba y sugiere que la unificacion monetaria no está a la vista. [More]

Consumption v. Investment: Another Duality of the Cuban Economy by Roberto Orro

Roberto Orro argues in this article that the Cuban economy experienced two distinct periods where either investment or consumption prevailed. This behavior was influenced by external factors among them the assistance derived from the Soviet Union as contrasted to that coming presently from Venezuela. [More]

Gauging Cuba’s Economic Reforms by Luis R. Luis

In this post Luis R. Luis gauges the progress of Cuba’s recent economic reforms using Transition Indicators developed by the European Bank for Reconstruction and Development (EBRD). [More]

On the Economic Impact of Post-Soviet and Post-Venezuelan Assistance to Cuba by Ernesto Hernández-Catá

The end of Venezuelan aid to Cuba will have a sizable negative impact on the economy though very likely of lesser magnitude than the withdrawal of Soviet assistance in the 1990′s concludes Ernesto Hernandez-Cata in this article. [More]

The Significant Assistance of Venezuela to Cuba: How Long Will it Last? by Rolando Castaneda

Rolando H. Castaneda argues that the high levels of Venezuelan aid to Cuba are unsustainable and constitute a heavy burden for both countries even for Cuba in the medium-term as the assistance allows the postponement of essential economic reforms. [More]

Cuba: The Mass Privatization of Employment Started in 2011 by Ernesto Hernández-Catá

In this post Ernesto Hernandez-Cata analyzes Cuban labor market data, identifying large sectoral changes in employment that signal the beginning of large scale privatization of employment in the island. [More]

How Large is Venezuelan Assistance to Cuba? by Ernesto Hernández-Catá

In this article Ernesto Hernandez-Cata explores Cuban official statistics to show that Venezuelan subsidies rival or exceed those flowing from the former Soviet Union during the 1980s. This raises questions of sustainability and severe adjustment for both countries. [More]

Cuba Ill-Prepared for Venezuelan Shock  by Luis R. Luis

Cuba’s weak international accounts and liquidity and lack of access to financial markets place the country in a difficult position to withstand a potential cut in Venezuelan aid argues Luis R. Luis. The failure of reforms to boost farm output and merchandise exports make the economy highly dependent on Venezuelan aid and remittances from Cubans living abroad. [More]

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¿Más allá de la cooperación Sur-Sur? Contexto, luces y sombras de la alianza Cuba-Venezuela

Daniele Benzi y Giuseppe Lo Brutto

Daniele Benzi (dbenzi@flacso.edu.ec) Profesor Asociado del Departamento en Estudios Internacionales y Comunicación FLACSO-Ecuador; Giuseppe Lo Brutto (giuseloby@msn.com) Profesor-Investigador del ICSyH, BUAP-México.

En proceso de publicación en Ayala, C., Rivera, J. (2013), De la diversidad a la consonancia: la CSS latinoamericana, AMEXCID/INSTITUTO MORA/BUAP.

El Ensayo completo esta aqui:   Benzi_y_Lo_Brutto,Mas_alla_de_la_cooperacion_Sur-Sur

 Nicolas_Maduro_y_Raul_Castro_1

Resumen

 Además de constituir el núcleo originario y eje central de la propuesta de integración denominada ALBA-TCP, las relaciones bilaterales entre Cuba y Venezuela destacan en el panorama regional por los estrechos vínculos políticos y económicos establecidos en la última década, que, en la actualidad, se plasman y articulan en un amplio espectro de áreas de cooperación, proyectos conjuntos, inversiones e intercambios comerciales.

 Si para algunos autores se trata de un modelo paradigmático y al mismo tiempo novedoso de cooperación Sur-Sur que recupera y se alimenta del legado histórico de solidaridad internacional y entre los pueblos propio de la revolución cubana; otros, en cambio, críticos o escépticos a menudo, prefieren referirse al eje La Habana-Caracas como a un “caso singular” y hasta a una “utopía bilateral” (Romero, C. A. 2010: 127; 2011) inclusive dentro del panorama de las nuevas relaciones y cooperación Sur-Sur.

 En el presente artículo, tras caracterizar la posición de ambos países en términos de inserciónregional e internacional, líneas estratégicas en política exterior y áreas de cooperación, los autores abordan el análisis de sus relaciones y vínculos recíprocos, buscando profundizar todos aquellos aspectos útiles para revelar luces y sombras.

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Reflexiones finales

Una evaluación de las relaciones entre Cuba y Venezuela resulta una tarea nada sencilla. Al margen de las numerosas informaciones que se desconocen, las cuales indudablemente podrían aclarar distintos aspectos de este peculiar matrimonio en el cuadro de las relaciones internacionales contemporáneas, la valoración final depende en buena medida de la postura política adoptada por el observador. Lo cual implica, además, tener en cuenta factores de orden ideológico, político y de seguridad relativos a ambas naciones y que afectan profundamente sus vínculos, que apenas hemos mencionado a lo largo de este artículo.

Aunque quizás sería oportuno introducir alguna y otra variable de naturaleza política y de clases, en el corto plazo y en términos de coyunturas enfrentadas particularmente críticas, las ventajas en términos globales han sido sustanciales para ambos países. Por ello, desde la perspectiva cubana, Pérez Villanueva (2008: 63) ha afirmado que:

este vínculo abre una serie de potencialidades que podrían aprovecharse para desarrollar programas de reindustrialización, que por un lado complementen y sean funcionales a los sectores más dinámicos de la economía y, por otro, posibiliten la recuperación y el relanzamiento de sectores estratégicos por su impacto en la calidad de vida de la población y sus efectos sobre el sector externo.

Por otro lado, “En cuanto a los servicios médicos que el país exporta, fundamentalmente a Venezuela, su impacto directo en el sector productivo es muy reducido” (Sánchez y Triana, 2008: 82). Sin embargo, agregan los mismos autores:

“Otra perspectiva del análisis está en el hecho real de que Cuba ha venido creando una especie de rampa de lanzamiento en torno al sector de la salud. [...] Si tenemos en cuenta, junto a los servicios médicos, la exportación de equipos médicos y medicamentos genéricos y biotecnológicos y la inversión en el exterior en el sector biotecnológico junto a negocios de transferencia de tecnología, entonces estamos en presencia de uno de los sectores más dinámicos de la economía nacional, con altas posibilidades de generación de sinergias que potencien su efecto sobre el resto de la economía en un futuro próximo.” (Ibidem: 91)

No obstante, a la vez que algunos cuestionan la supuesta capacidad de los servicios médicos de volverse una efectiva “rampa de lanzamiento”, evaluándolos más bien como una peligrosa “terciarización disfuncional de la estructura económica” (Monreal, 2007, cit. en Mesa-Lago, 2008: 47), la actual dependencia energética y financiera de Venezuela, junto a lo que se percibe como una escasa diversificación de las relaciones económicas y comerciales del país, constituyen de momento el factor crucial de la realidad cubana. Una dependencia que, además, como advierte Mesa-Lago (2011: 5), “creció justo cuando la economía venezolana sufrió el peor desempeño regional”.

Otro punto importante a considerar es el impacto de la exportación de servicios médicos o salida de cooperantes a Venezuela y a otros países en el desempeño del sector nacional de salud. Si por un lado, como aclara Feinsilver (2008: 121), “la diplomacia médica ha proporcionado una válvula de escape para los disgustados profesionales de la salud que, aunque han sacrificado su tiempo, estudiado y trabajado con ahínco, ganan mucho menos que buena parte de los empleados menos calificados de la industria del turismo”; por el otro, el déficit interno es ahora evidente. Mesa-Lago (2011: 17) calcula “que aproximadamente un tercio de los médicos está en el exterior”. Así, sigue el autor, “Uno de los acuerdos [del último Congreso del PCC] estipula garantizar que la graduación de especialistas médicos cubra «las necesidades del país y las que se generen por los compromisos internacionales»” (Ibidem).

Por todo lo anterior, no resulta sorprendente constatar que mientras en Cuba el vínculo con la República Bolivariana es visto por lo general como una oportunidad para la mejora social y el necesario relanzamiento de la economía del país, muchos teman al mismo tiempo el repetirse de la tragedia de un nuevo CAME, tanto más en cuanto particularmente a partir del referéndum de 2007 perdido por el oficialismo en Venezuela y de la crisis económica de 2008, se revelaron cabalmente las fragilidades de un aliado estratégico y vital, como hemos visto, en el sentido literal de la palabra.

Entre 2008 y 2009, en efecto, una serie de eventos fuera del control de los gobiernos cubano y venezolano se ha encargado de evidenciar la inestabilidad y los límites de una alianza cuya principal fortaleza es dada por la afinidad humana e ideológica entre las respectivas cúpulas del poder y, sólo hasta cierto punto, de las elites políticas y algunos segmentos de la sociedad civil y organizaciones populares.

La drástica, aunque temporánea, caída en los precios del petróleo, sumándose en el caso de Cubaal desplome del precio mundial del níquel, de la reducción de los ingresos por turismo, de las remesas y del impacto catastrófico provocado por el paso seguido de tres huracanes, destacaron la impotencia de los subsidios y solidarid bolivariana para mantener a flote una economía estancada, en un cuadro de agotamiento y necesario replanteamiento también de la dinámica política.

Para esta fecha, sin embargo, esas cuestiones ya habían sido asumidas por la dirigencia cubana como un problema, a la hora de darle forma y contenidos al proceso de “actualización” del modelo. En este sentido, el pragmatismo de Raúl Castro y el ajuste intraelite que supuso su definitiva toma del poder, han significado también, en un marco de continuidad por el momento, un cambio cualitativo y de perspectiva en la relación con Venezuela, cuyos contornos apenas empiezan a esclarecerse.

Lo único cierto, por ahora, es que tanto la consolidación de la “utopía bilateral” que tanto preocupa a Carlos A. Romero (2011), como la “ilusión neocastrista”, en palabras de Alain Touraine (2006), de emprender nuevamente un proyecto revolucionario a escala continental a partir del eje La Habana-Caracas, ya no figuran en la agenda de quienes, verosímilmente, llevarán por un tiempo todavía las riendas del proceso de “actualización” del socialismo cubano31 .

Desde la perspectiva venezolana, la evaluación se torna tal vez aun más complicada. Hasta los críticos más enconados y menos reflexivos tienen cierta dificultad a la hora de sustentar con argumentos serios la descalificación total de la cooperación cubana dentro de las Misiones, unque éstas fueran meras políticas de corte asistencial con un perfil netamente partidista y/o políticoideológico.

Briceño (2011: 71), por ejemplo, sostiene que “Es cierto que Venezuela se ha beneficiado de la ayuda cubana en el desarrollo de las Misiones, pero surgen [algunas] cuestiones. La primera es la cuestión del equilibrio en la cooperación, que en el caso concreto del ALBA se plantea en comparar el aporte de la cooperación de Venezuela con Cuba, y la de este país con Venezuela”. El tema de las asimetrías en la cooperación ofrecida y recibida es inocultable y lo sería probablemente aun más en la medida en que fueran oficializadas las cifras estimadas en los párrafos anteriores y, especialmente, las que se refieren al supuesto sobrepago por servicios profesionales médicos.

Nuestro punto, sin embargo, en el marco de estas conclusiones, es otro. El gobierno bolivariano, aunque quizás no parezca evidente, también ha desarrollado cierta dependencia tanto de los servicios médicos cubanos, como en general de la asistencia técnica y política, así como en la orientación ideológica y hasta simbólica procedente de este país.

Si en algunos sectores y programas efectivamente se podría cuestionar un “exceso” de cooperación – en términos de presencias, capacidad operativa, escasa coordinación, oportunidad y/o falta de resultados – la colaboración cubana es por el momento un ingrediente esencial de las políticas desplegadas con las Misiones y de los resultados obtenidos en distintos indicadores.

De instrumento transitorio y excepcional, se ha pasado a su multiplicación y establecimiento semi permanente, pero siempre paralelo a las estructuras preexistentes, manteniendo un carácter híbrido de dispositivo extraordinario en mano del poder ejecutivo, que ha creado “una numerosa y desordenada burocracia paralela al funcionariado ministerial formal existente, para atender el desarrollo de cada actividad propia en estos programas sociales” (Viloria, 2011: 8-9)33 .

En el caso de Barrio Adentro, además, la Misión médica cubana goza de una autonomía cuasi absoluta con respecto a las autoridades venezolanas y al resto del sistema nacional de salud. Si por un lado se podría poner en tela de juicio su capacidad para llevar a cabo un programa tan complejo y prolongado en el tiempo en un país tan polarizado como es actualmente la República Bolivariana, por el otro, a pesar de no ser la única responsable de esta situación, su autonomía y falta de articulación con otras instituciones supone determinados problemas tanto legales como de funcionalidad y efectividad de resultados34. A pesar de la destacada actividad médica cubana a lo largo de los últimos decenios, lo cual ha implicado ciertamente un importante proceso de aprendizaje y reflexión sobre si misma, el hecho de que la colaboración con Venezuela sea de lejos el programa más amplio y complejo jamás emprendido, determina nuevos e insoslayables desafíos que son al mismo tiempo técnicos, éticos y políticos.

Después del giro de 2006-2007, al lado de las Misiones surgidas para experimentar las nuevas políticas e instituciones socialistas, la última generación de estos programas ha abandonado el carácter inicial de complemento a las políticas económicas y de desarrollo, para reproducir, por una parte, políticas meramente compensatorias y focalizadas; y, por la otra, sustituirse a lo que debería ser la acción ordinaria del gobierno y de sus Ministerios.

Lo anterior, evidentemente, está íntimamente atado a la característica estructural de Venezuela en cuanto Estado-nación, esto es, ser un país rentista-petrolero, lo cual produce y reproduce ciertas “creencias en los atajos, las soluciones cortoplacistas, la creencia de un país rico”, con el resultado de que muchas propuestas “en gestión de políticas públicas dirigidas a erradicar a la pobreza, descansen en el asistencialismo y en la transferencia de recursos económicos de forma directa, hacia aquellos sectores poblacionales seleccionados como beneficiarios de los programas sociales” (Viloria, 2011: 8).

Por paradójico que pudiera aparecer, esta condición encuentra un terreno particularmente fértil y potencialmente perverso tanto en el voluntarismo típico de todo proceso revolucionario y muy presente en Cuba a lo largo de su historia, como, por un lado, en una concepción anquilosada del socialismo y del papel del Estado, la cual produce ciertas formas de paternalismo y parasitismo social; y, por el otro, en las urgentes e insoslayables necesidades económicas del régimen cubano y de sus propios cooperantes.

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Camilo Cienfuegos Refinery

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The Venezuela-Cuba Undersea Cable Arriving in Cuba, 2011

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Ernesto Hernández-Catá, “Cuba, the Soviet Union, and Venezuela: A Tale of Dependence and Shock.”

The complete analysis is available here: “Cuba, the Soviet Union, and Venezuela:  A Tale of Dependence and Shock.”   September 2013

Introduction

Recently there have been several estimates of Venezuelan economic assistance to Cuba—for example by Lopez (2012) and Mesa-Lago (2013). My latest estimates suggest that payments from Venezuela increased rapidly during the first decade of the XXI century and peaked at almost 19% of Cuba’s GDP) in 2009. They declined over the following two years but remained quite large: I estimate Venezuelan assistance in 2011 (the last year for which the required data are available) at just over $7 billion, or 11 % of Cuba’s GDP. These numbers are large, and they have invited comparisons with Soviet assistance to Cuba in the late 1980s. It has been implied that the adverse effect on Cuba’s real GDP of ending Venezuelan aid would be similar in size to the devastating impact of the elimination of Soviet aid in 1990. This is almost certainly wrong.

Conclusion

The analysis presented in this paper indicates that a complete cancellation of Venezuelan assistance to Cuba would cause considerably less damage than the elimination of Soviet assistance in the early 1990s, with the fall in real GDP estimated at somewhere between 7% and 10%, compared to 38% after the breakdown of Cuban/Soviet relations. Moreover, if the Cuban government were to avoid the policies of   subsidization and inflationary finance pursued in the post-Soviet period, the post-Venezuelan contraction would be at the lower end of the range or approximately 7%.

This is still a lot, however. To be sure, the danger of a sudden elimination of aid inflows has diminished considerably since the Venezuelan election of April 2013. Nevertheless, the prospect of a more gradual reduction in aid remains likely given Venezuela’s economic difficulties. In that case, the effect would be a reduction in the growth of the Cuban economy spread over several years, rather than a sudden contraction of output. Furthermore, current efforts to obtain financing at non-market terms from other countries, like Algeria, Angola and Brazil, would, if successful, diminish the magnitude of the shock. But it would perpetuate dependence and delay the needed adjustment.

The only way to diminish the pain of reduced income and consumption would be a decisive effort to expand Cuba’s productive capacity by intensifying the reform process. The list of required actions is familiar to all: liberalize prices, unify the exchange rate system, dismantle exchange and trade controls, stop the bureaucratic interference with non-state agricultural producers, continue efforts to downsize employment in the state sector, and increase substantially the list of activities opened to the private sector, including (why not?) doctors, nurses, teachers and athletes. Private clinics and schools would pop up, consultancy services would flourish, and the baseball winter leagues would come back to life.

 Karl Marx (1852) credited Hegel with the idea that history repeats itself twice. Unfortunately for him, he added: the first time as a tragedy, the second time as a farce”. This is not necessarily true. Often the second time is also a tragedy, as when the West gave Eastern Europe to Stalin at Yalta, less than a decade after giving it to Hitler in Munich. And why couldn’t the second time be an epiphany? Cuba’s rulers now have a historic opportunity to allow people to improve their own standard of living, and to stop wasting resources to keep the faded and sinister red banner afloat. Without a doubt, history will absolve them if they take that chance. And then, perhaps, Cuba will be allowed to replace its politically inspired dependence on doubtful friends with free, mutually beneficial trade with all nations.

Ernesto Hernandez-Cata was born in Marianao, Havana, Cuba in 1942. He holds a License from the Graduate Institute of International Studies in Geneva, Switzerland; and a Ph.D. in economics from Yale University. For about 30 years through, Ernesto Hernandez-Cata worked for the International Monetary Fund where he held a number of senior positions. When he retired from the I.M.F. in July 2003 he was Associate Director of the African Department and Chairman of the Investment Committee of the Staff Retirement Plan. Previously he had served in the Division of International Finance of the Federal Reserve Board. From 2002 to 2007 Mr. Hernandez-Cata taught economic development and growth at the Paul Nitze School of Advanced International Studies of the University of Johns Hopkins. Previously he had taught macroeconomics and monetary policy at The American University.

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Venezuela’s Capriles Vows to End Cuba Giveaways

Reuters/By Brian Ellsworth/Mon Mar 18, 2013

CARACAS (Reuters) – Venezuelan opposition presidential candidate Henrique Capriles on Monday vowed to end the OPEC nation’s shipments of subsidized oil to communist-run Cuba, slamming acting President Nicolas Maduro as a puppet of Havana.

Capriles has berated Maduro as a weak imitation of the late Hugo Chavez, whose death two weeks ago convulsed the country and triggered the April 14 vote. The opposition also accuses the government of failing to fight crime and control inflation. “The giveaways to other countries are going to end. Not another drop of oil will go toward financing the government of the Castros,” Capriles said, referring to Cuba’s present and past leaders, Raul and Fidel Castro.

“Nicolas is the candidate of Raul Castro; I’m the candidate of the Venezuelan people,” Capriles said during a speech to university students in the oil-rich state of Zulia.

The election marks the first test of the “Chavismo” movement’s ability to maintain the late leader’s radical socialism after his death, and it will be crucial for regional allies that depend on Caracas for financing and cheap fuel.

A victory for Capriles, 40, would likely give global oil companies greater access to the world’s largest crude reserves and offer investors more market-friendly policies after years of state-centered economics.

Henrique Capriles

Maduro, a 50-year-old former bus driver seen as having the advantage in the vote, has vowed to continue Chavez’s economic model that included frequent nationalizations and heavy regulation of private enterprise alongside generous social welfare programs that underpinned his popularity.

The youthful Capriles, who lost to Chavez by 11 percentage points in 2012, faces a delicate balancing act to highlight the flaws of Chavez’s governance without appearing to be attacking the former president or seeking to tarnish his legacy. He has exchanged furious barbs with Maduro since launching his candidacy and renewed his criticisms from last year’s campaign over day-to-day problems such as unchecked crime, product shortages and high cost of living.

“Every day it’s harder to find food, and every day food is more expensive,” Capriles said. “This model is not viable.”

He said halting cheap oil sales to Cuba would free up resources to boost public employee salaries by 40 percent to make up for inflation that is one of the region’s highest.

VICIOUS CAMPAIGN

Ties to Cuba are likely to remain a central part of the campaign. Capriles for months accused authorities of compromising the country’s sovereignty by letting Chavez govern for two months from a Havana hospital.

Venezuela provides close to 100,000 barrels per day of oil to Cuba in exchange for a host of services including doctors that staff free health clinics in slums and rural areas.

Supporters say it has helped expand access to health care, while critics call it a mere subsidy to the Castro government. Maduro’s frequent visits to the island during Chavez’s two-month convalescence there led opposition leaders to joke that he had picked up a Cuban accent.

The emotional outpouring of affection for Chavez following his March 5 death, along with ample use of government television broadcasts, has helped give Maduro a leg up in the race. Millions of bereaved supporters have lined up before Chavez’s remains to pay respects to a leader who was loved by many of the country’s poor but reviled by adversaries who called him a fledgling dictator.

MADURO LEAD

Two recent opinion polls showed Capriles trailing Maduro. Respected local pollster Datanalisis gave Maduro 46.4 percent versus 34.3 percent for Capriles in a survey carried out before Chavez’s death.

He enraged Maduro by accusing him of repeatedly lying about the late president’s two-year battle with cancer, and of then cynically using his death as a campaign tool. He later apologized to Chavez’s family if his words had offended them.

Maduro last week described a plot by “far right” U.S. elements linked to two senior former members of the George W. Bush administration to kill Capriles. Both officials denied the charges.

(Editing by Andrew Cawthorne and Cynthia Osterman)

Nicolas Maduro and Friend

 

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Marc Frank: “Stunned Cuba ponders future without Chavez”

Wed Mar 6, 2013

By Marc Frank

HAVANA, March 5 (Reuters) – A mix of sorrow, self-interest and dread took hold of Cuba Tuesday evening as word spread like wildfire that Venezuelan President Hugo Chavez, who had done so much for the country, was dead.

While the official evening newscast devoted its entire program to events unfolding in Caracas, the government reaction was slow in coming.

Later in the evening Cuba declared three days of mourning, and eulogized Chavez saying his “Bolivarian Revolution” was “irreversible” and that Cuba would continue to “accompany Venezuelans in their struggles.”

Chavez’s resolute ideological embrace of Cuba helped propel the once isolated communist island back into the center of regional politics, and oil-rich Venezuela’s largesse under Chavez proved a life saver for the embargoed and near bankrupt Caribbean island after the collapse of its longtime benefactor, the Soviet Union.

Even so, analysts do not expect Chavez’s death to have any short-term impact for Cuba.

“I’m sure the Cubans are concerned, but I don’t think this will be a game changer for the Cubans. They have weathered worse storms before,” said Frank Mora, former deputy assistant secretary of defense for Western Hemisphere Affairs in the first Obama administration.

Chavez is viewed in Cuba as an irreplaceable leader of the region and savior of socialism, portrayed day and night by official media as a champion of regional unity, independence and the island.

During his two-year battle with cancer, Chavez had four operations in Cuba and spent months receiving treatment on the island.

“Once again the horizon for all of Latin America has grown dark,” Havana snack vendor, Eric Rodriguez, said.

“I only hope Venezuela can support this blow, but the road ahead for them won’t be easy, nor for Cuba,” he said.

There were tears for the 58-year-old Venezuelan and his family over the tragedy of succumbing to cancer. Then there were the calculations over what events in Caracas might mean for daily life on the Communist-run island, so dependent on the preferential trade relations under Chavez.

There was dread that Cuba would once more lose a strategic ally and be plunged back into a grave economic crisis similar to the scarcity in the 1990s that followed the demise of the Soviet Union.

Soon after Chavez won his first election in 1998, Fidel Castro anointed the young and vitriolic firebrand as his revolutionary successor in Latin America.

President Raul Castro, who replaced his ailing brother in 2008, has strengthened relations with Venezuela even as he forged closer ties with other oil-producing nations such as Brazil, Angola, Algeria and Russia.

ECONOMIC DEPENDENCE

Most Cuban economists point out that the economy has become more diversified over the last 20 years with the development of tourism, pharmaceuticals and increased oil and nickel production. But they say it remains far too dependent on Venezuela.

Cuba and Venezuela have formed more than 30 joint ventures over the years, most of them based in Venezuela.

They range from a fishing fleet, to port and rail repair, to hotels, agriculture, nickel and steel production and just about all of Cuba’s downstream oil industry.

In 2011, Venezuela accounted for $8.3 billion of Cuba’s $20 billion in foreign trade. It pays Cuba an estimated $6 billion or more annually for the services of 40,000 doctors, nurses and other professionals, local economists say. That is around 60 percent of the foreign exchange Cuba earned from services.

Venezuelan banks provide soft credits for dozens of development projects across the island.

Venezuela serves as a guarantor for investment and trade with the island.

While many Cubans fretted, others were more optimistic that Chavez’s hand-picked successor, Vice President Nicolas Maduro, would win the election that must now take place within 30 days.

UNCERTAINTY AND REFORM

Cuba is in the process of lifting some restrictions on civil liberties and revamping the state-dominated economy into a more mixed and market friendly one.

Experts said that regardless of the election’s outcome the pace and depth of reform would most likely pick up.

An opposition victory, viewed as unlikely, would certainly force Havana to scamper, they said, and while a Maduro win would spell no changes for Cuba in the short term, the threat of instability in Venezuela’s future would loom large on local leaders’ minds.

“Assuming that Maduro is elected, Venezuela will continue its critical oil subsidies, but both international credit markets and the Cuban leadership can now more clearly see a future where Cuba will have to bolster its energy self-sufficiency and improve its credit ratings,” said Carlos Saladrigas, head of the Cuba Study Group, a Cuban American business organization that advocates engagement with Havana.

“The pro-reform factions within the Cuban system will have additional arguments in their quiver for moving forward with all deliberate speed,” he said.

Mora agreed that mid-term instability in Venezuela would be Cuba’s biggest challenge.

“I think everyone will try and unite behind Maduro. It’s what becomes of Venezuela after, and whether Maduro can keep all the disparate factions within Chavismo together for a long period of time, especially if the Venezuelan economy runs into macro-economic troubles and it’s not able to continue subsidizing political support (for Cuba),” he said.

(Reporting by Marc Frank; Additional reporting by David Adams.; Editing by David Adams and Lisa Shumaker)

Venezuelan President Hugo Chavez speaks next to Vice President Nicolas Maduro (right) and National assembly president Diosdado Cabello (left) during a national broadcast at Miraflores Palace in Caracas on December 8, 2012.   © 2012 Reuters

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