Tag Archives: Cuba-Venezuela Relations

IS CUBA’S ECONOMY READY FOR THE 2018 LEADERSHIP TRANSITION?

Posted on March 20, 2018 by Arch Ritter

Pavel Vidal Professor, Pontificia Universidad Javeriana Cali

CUBA STUDY GROUP, February 2018

Complete Article, English:  Pavel_Is Cuba’s Economy Ready English

Complete Article, Spanish:  Pavel En qué condicion llega la economia cubana a la transicion generacional

Introduction

Cuba has changed considerably in these last ten years of economic reforms, though not enough. Family income, tourist services, food production, restaurants, and transportation depend less on the state and much more on private initiative. The real estate market, sales of diverse consumer goods and services, and the supply of inputs for the private sector have all expanded, in formal and informal markets. Foreign investment stands out as a fundamental factor in Cuba’s development. The country has achieved important advances in the renegotiation of its external debts.

Nevertheless, many other announced changes were defeated by internal resistance, half-heartedly implemented, or put in place in ways that replicated mistakes of the past. The bureaucratic and inefficient state enterprise sector, tied down by low salaries and a strict central plan, impedes economic progress. Cuba’s advantages in education and human capital continue to be underexploited. Neither has the international environment provided much help. The U.S. trade embargo remains in place, the Trump administration has returned to the old and failed rhetoric of past U.S. policies, and Cuba continues to depend on a Venezuelan economy that does not yet seem to have hit rock bottom.

As a consequence, the growth of GDP and productivity has been disappointing, agricultural reform has produced few positive results, and Cuba is once again drowning in a financial crisis. The reforms implemented to date did not create sufficient quality jobs, and, all told, half a million formal positions were eliminated from the labor market.

The second half of 2017 proved especially challenging due to the impacts of Hurricane Irma and new restrictive measures announced by the U.S. government. To these difficulties one must add the decision of the Cuban government to freeze (temporarily) the issuance of licenses to the private sector.

Even so, the National Office of Statistics and Information (ONEI) reported that the economy has not fallen into recession. There are reasons to doubt these statistics, however. Such doubts only multiply when we take into consideration the decision to delay, or altogether avoid, the publication of reports on individual sectors of the economy and the state of the national accounts. For 2018, the government has proposed a rather optimistic economic growth plan (2% increase in GDP) that once again does not appear to appropriately evaluate the complexity of Cuba’s macro-financial environment.

Three highly significant events are anticipated this year: the generational transition within the government, new norms for the private sector, and the beginning of the currency reform process. These three issues have raised expectations on the island, but each may be tackled in a disappointing fashion.

…………………………………..

Conclusions:

Two Other Changes that Could Disappoint A generational transition in the Cuban government will take place on April 19, 2018. Beyond indications that Miguel Díaz-Canel will be the future president, there are no signals as to who will be vice president or who will direct principal ministries such as the Ministry of the Economy or the Ministry of Foreign Relations. Nor do we know where politicians of the “historic generation” will end up.

The new government will want to demonstrate continuity with the former in order to assure its position with various spheres of political power. It appears that the new government will not have its own economic agenda. We can expect that documents approved by recent Congresses of the Cuban Communist Party—which define the limits of reform, the desired development strategy, and the social and economic model to which Cuba aspires—will continue to serve as economic policy guides.

Whatever the composition of the incoming government, in the short term, Cuba’s new leaders will need to convince other state actors that they have the authority and will to, first, achieve the objectives laid out in the “Guidelines for Economic and Social Policy” (Lineamientos), and then deepen the process of reform, overcoming internal forces resistant to change. The new government will thus have to carefully assess the political costs and benefits of implementing reforms to different degrees and at varying speeds, but it will start with low initial political capital due to less popular recognition and a lack of historic legitimacy. Cuba’s new leaders, moreover, must confront these challenges at a time of renewed conflict with the U.S. government. The task is by no means easy, and we will have to wait to see how they handle it.

Another change we can expect this year is the publication of new rules governing the operations of the private sector, and thus unfreezing the issuance of licenses. A greater degree of control over tax payments, as well as efforts to more strongly “bank” the sector, appear to be two basic objectives of the forthcoming rules.

It is very important that the private sector contribute to the Treasury in proportion to its earnings. This is impossible to guarantee if private sector operations are not registered in banks. An effective and progressive tax system provides net dividends to all. The state budget would benefit, exorbitant gaps in income distribution could be avoided, and the societal image of the private sector would be improved. It will be much easier to defeat political and ideological resistance to expansion of the private sector when its income also serves to finance expenses in education and healthcare, and when individual contributions are in line with variable levels of income.

We still do not know if the new rules for the private sector will focus only on fiscal and banking control, or if new policies will address some of the many complaints that the private sector itself has made—high tax rates, the struggle to obtain inputs, and the difficulty of linking operations to foreign trade, for example. A draft of the rules that has circulated does not contain answers to these problems, but rather suggests a focus primarily on more control and penalization.6 If the rules that are ultimately implemented do not differ much from what appears in this draft, depleted prospects for the private sector will be the first disappointment Cubans face in 2018.

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Slim pickings. CLUELESS ON CUBA’S ECONOMY

Posted on September 29, 2017 by Arch Ritter

HAVANA. The communist regime can no longer rely on the generosity of its allies. It has no idea what to do

The Economist.  Print edition | The Americas. Sep 30th 2017

GABRIEL and Leo have little in common. Gabriel makes 576 Cuban pesos ($23) a month as a maintenance man in a hospital. Leo runs a private company with revenues of $20,000 a month and 11 full-time employees. But both have cause for complaint. For Gabriel it is the meagre subsistence that his salary affords. In a dimly lit minimá (mini-mall) in Havana he shows what a ration book entitles one person to buy per month: it includes a small bag of coffee, a half-bottle of cooking oil and five pounds of rice. The provisions cost next to nothing (rice is one cent per pound) but are not enough. Cubans have to buy extra in the “free market”, where rice costs 20 times as much.

Leo (not his real name) has different gripes. Cuba does not manufacture the inputs he needs or permit enterprises like his to import them. He travels abroad two or three times a month to get them anyway. It takes six to eight hours to pack his suitcases in such a way that customs officials don’t spot the clandestine goods. “You feel like you’re moving cocaine,” he says.

Making things easier for entrepreneurs like Leo would ultimately help people like Gabriel by encouraging the creation of better jobs, but Cuba’s socialist government does not see it that way. In August it announced that it will stop issuing new licences in two dozen of the 201 trades in which private enterprise is permitted. The frozen professions include running restaurants, renting out rooms to tourists, repairing electronic devices and teaching music.

This does not end Cuba’s experiment with capitalism. Most of the 600,000 cuentapropistas (self-employed workers), including restaurateurs, hoteliers and so on, will be able to carry on as before. But the government mistrusts them. Their prosperity provokes envy among poorer Cubans. Their independent-mindedness could one day become dissent. Raúl Castro, the country’s president, recently railed against “illegalities and other irregularities”, including tax evasion, committed by cuentapropistas. He did not admit that kooky government restrictions make them inevitable. The government “fights wealth, not poverty”, laments one entrepreneur.

A Santeria Message

Trump’s mouth, Irma’s eye

The clampdown on capitalism comes at a fraught time for Cuba. Mr Castro is due to step down as president in February. That will end nearly 60 years of autocratic rule by him and his elder brother, Fidel, who led Cuba’s revolution in 1959. The next president will probably have no memory of that event. Relations with the United States, which under Barack Obama eased its economic embargo and restored diplomatic relations, have taken a nasty turn. President Donald Trump plans to make it more difficult for Americans to visit the island. Reports of mysterious “sonic attacks” on American diplomats in Havana have further raised tensions.

Hurricane Irma, which struck in early September, killed at least ten people, laid waste to some of Cuba’s most popular beach resorts and briefly knocked out the country’s entire power system. With a budget deficit expected to reach 12% of GDP this year, the government has little money to spend on reconstruction.

These are blows to an economy that was already in terrible shape. Cuba’s favourite economic stratagem—extracting subsidies from left-wing allies—has had its day. Venezuela, which replaced the Soviet Union as its patron, is in even worse shape than Cuba. Their barter trade—Venezuelan oil in exchange for the services of Cuban doctors and other professionals—is shrinking. Trade between the two countries has dropped from $8.5bn in 2012 to $2.2bn last year. Cuba has had to buy more fuel at full price on the international market. Despite a boom in tourism, its revenues from services, including medical ones, have been declining since 2013.

Bound by a socialist straitjacket, Cuba produces little else that other countries or its own people want to buy. Farming, for example, is constrained by the absence of markets for land, machinery and other inputs, by government-set prices, which are often below the market price, and by bad transport. Cuba imports 80% of its food.

Paying for it is becoming harder. In July the economy minister, Ricardo Cabrisas, told the national assembly that the financial squeeze would reduce imports by $1.5bn in 2017. What appears in shops often depends on which of Cuba’s suppliers are willing to wait for payment. GDP shrank by 0.9% in real terms in 2016. Irma and the drop in imports condemn the economy to another bad year in 2017.

The government does not know what to do. One answer is to encourage foreign investment, but the government insists on pulling investors into a goo of bureaucracy. Multiple ministries must sign off on every transaction; officials decide such matters as how many litres of diesel will be needed for delivery trucks; investors cannot freely send profits home. Between March 2014 and November 2016 Cuba attracted $1.3bn of foreign investment, less than a quarter of its target.

Faced with a stalled economy and the threat of shortages, the government is trying harder to woo investors. It has agreed to let food companies, for example, repatriate some of their profits. But anything more daring seems a distant prospect. Cuentapropistaslike Leo are waiting impatiently for a planned law on small- and medium-sized enterprises. That would allow them to incorporate and do other sorts of things that normal companies do. It will not be passed anytime soon, says Omar Everleny, a Cuban economist.

An even bigger step would be a reform of Cuba’s dual-currency system, which makes state-owned firms uncompetitive, keeps salaries in the state sector at miserable levels and distorts prices throughout the economy. Cuban pesos circulate alongside “convertible pesos” (CUC), which are worth about a dollar. Although for individuals (including tourists) the exchange rate between Cuban pesos and CUC is 24 to one, for state-owned enterprises and other public bodies it is one to one. For those entities, which account for the bulk of the economy, the Cuban peso is thus grossly overvalued. This delivers a massive subsidy to importers and punishes exporters.

A devaluation of the Cuban peso for state firms is necessary for the economy to function properly. But it would bankrupt many, throw people out of work and spark inflation. Countries attempting such a devaluation usually look for outside help. But, because of American opposition, Cuba cannot join the IMF or World Bank, among the main sources of aid. Fixing the currency system is a “precondition for further liberalisation”, says Emily Morris, an economist at University College London.

It is unlikely to happen while Cuba is in the throes of choosing a new leader. The process has sharpened struggles between reformers and conservatives within the government. Mr Trump’s belligerence has probably helped the latter. Most Cuba-watchers had identified Miguel Díaz-Canel, the first vice-president and Mr Castro’s probable successor, as a liberal by Cuban standards. But that was before a videotape of him addressing Communist Party members became public in August. In it, Mr Díaz-Canel accused the United States of plotting the “political and economic conquest” of Cuba and lashed out at media critical of the regime. Perhaps he was just pandering to conservatives to improve his chances to succeed Mr Castro. If those are his true opinions, that is bad news for Leo and Gabriel.

State Food Distribution Center:  the rationing system. (2015)

Mobile Self-employed Food Vendor.  (2015)

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VENEZUELA’S ECONOMIC WOES SEND A CHILL OVER CLOSEST ALLY CUBA: Warnings of rationing revive memories of post-Soviet austerity in Havana

Posted on July 27, 2016 by Arch Ritter

Financial Times, July 25, 2016

Marc Frank in Havana

The crisis in Venezuela has spread to its closest ally Cuba, with Havana warning of power rationing and other shortages that some fear could mark a return to the economic austerity that traumatised the island nation after the collapse of the Soviet Union.

Only a year after the euphoria that followed the re-establishment of diplomatic relations with the US, hopes of an economic rebound in Cuba have faded and an undercurrent of concern and frustration is evident on the streets of the capital.

“Just when we thought we were going forward, everything is slipping away again,” says Havana retiree Miriam Calabasa. “I am worried people are going to decide enough is enough: then what?”

Government offices now close early, with open windows and whirring fans in lieu of air-conditioners. Already scant public lighting has been reduced further, and traffic in Havana and other cities is down noticeably.

“Nothing will get better any time soon; it can only get worse,” worries Ignacio Perez, a mechanic. “The roads won’t be paved, schools painted, the rubbish picked up, public transportation improved, and on and on.”

President Raúl Castro outlined the scale of the problem this month, telling the National Assembly that “all but essential spending” must cease. He blamed “limits facing some of our principal commercial partners due to the fall in oil prices … and a certain contraction in the supply of oil contracted with Venezuela.”

Fuel consumption has been cut 28 per cent between now and December, electricity by a similar amount and imports by 15 per cent, or $2.5bn, in a centralised economy where 17 cents of every dollar of economic output consists of imports.

But crippling shortages, rampant inflation and an economy that is expected to shrink 10 per cent this year have forced Venezuela’s president Nicolás Maduro to cut back. According to internal data from state oil company PDVSA seen by Reuters, oil deliveries to Cuba are down a fifth on last year.

Venezuela has for 15 years supplied unspecified amounts of cash and about 90,000 barrels per day of oil — half of Cuba’s energy needs. Havana in return sold medical and other professional services to Caracas. Venezuelan aid helped to lift Cuba out of an economic black hole after Soviet subsidies ended in 1991.

“Under current conditions, [Cuban] gross domestic product will dip into negative territory this year and decline 2.9 per cent in 2017,” says Pavel Vidal, a former Cuban central bank employee who is now a professor at Colombia’s Pontificia Universidad Javeriana Cali. “If relations with Venezuela fall apart completely, GDP could decline 10 per cent.”

Although Venezuelan aid is a fraction of Soviet help, mention of the “special period” that followed the fall of the Berlin Wall provokes traumatic memories in Cuba, with many remembering shortages so severe they ate street cats. Karina Marrón, deputy director of the official Granma newspaper, this month warned of possible street protests similar to 1994.

“A perfect storm is brewing … this phenomenon of a cut in fuel, a cut in energy,” Ms Marrón told the Union of Cuban Journalists. “This country can’t withstand another ’93, another ’94.”

So-called rapid response brigades, formed in the 1990s to quell social unrest, are back on alert, according to one brigade member who asked not to be named.

For Mr Castro, the slowdown is a serious blow to the limited market-orientated reforms begun under his leadership, especially the long-planned liberalisation of the peso, which requires a comfortable foreign reserve cushion.

But foreign businesses hope it may speed economic opening. “Venezuela’s problems increase the chance of Cuban reforms. This government only acts when it has to,” says one Spanish investor on the island.

One complication lies in how the government apportions resources.  Cuba relies heavily on tourists, most of whom expect hotels with electricity and air-conditioning. Meanwhile, some 500,000 people, or 10 per cent of Cuba’s workforce, are employed at restaurants, lodging houses and other recently allowed private businesses which need power to ply their trade.

Mr Castro insists residential users will be spared power cuts, for now, while Marino Murillo, who heads the reform commission of the ruling Communist party, says hard currency earning sectors such as tourism and nickel would be spared.

Another problem is that the other countries Cuba exports medical services to, such as Algeria, Angola and Brazil, are also expected to reduce spending. In 2014, medical services earned Cuba about $8bn, or 40 per cent of exports.

“We cannot deny there will be some impact, including worse than currently, but we are prepared,” Mr Castro has said.

Analysts suggest Mr Castro’s warning may in part serve to deflate expectations following the easing of US sanctions. Certainly, a full return to special period-style austerity looks unlikely as Cuba has more diversified income streams, from increased remittances, medical services, tourism to a nascent private sector.

However, “a majority [in Cuba] are still very dependent on state salaries that are now worth a third of what they were in 1989 in real terms”, said Prof Vidal. “[They] are in a situation of extreme vulnerability.”

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AMID GRIM ECONOMIC FORECASTS, CUBANS FEAR A RETURN TO DARKER TIMES

Posted on July 12, 2016 by Arch Ritter

By VICTORIA BURNETT

New York Times, JULY 12, 2016

Original Article: Darker Times

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A return to the “Black-outs” of the early 1990s?  No, I don’t think so.    Maybe a few but unlikely to be as widespread or longlasting.zz apagon

 

MEXICO CITY — During the economic turmoil of the early 1990s, power cuts in Havana were so routine that residents called the few hours of daily electricity “lightouts.”

Now, grim economic forecasts; the crisis in its patron, Venezuela; and government warnings to save energy have stoked fears among Cubans of a return to the days when they used oil lamps to light their living rooms and walked or bicycled miles to work because there was no gasoline.

Addressing members of Parliament last week, Cuba’s economy minister, Marino Murillo, said the country would have to cut fuel consumption by nearly a third during the second half of the year and reduce state investments and imports. His comments, to a closed session, were published on Saturday by the state news media.

Cuba’s economy grew by just 1 percent in the first half of the year, compared with 4 percent last year, as export income and fuel supply to the island dropped, said Mr. Murillo.

“This has placed us in a tense economic situation,” he said.

Weak oil and nickel prices and a poor sugar harvest have contributed to Cuba’s woes, officials said. Venezuela’s economic agony has led many Cubans to wonder how much longer their oil-rich ally will continue to supply the island with crucial oil — especially if the government of President Nicolás Maduro falls.  Those fears grew last week after Mr. Murillo warned of blackouts and state workers were asked to cut their hours and sharply reduce energy use.

“We all know that it’s Venezuelan oil that keeps the lights on,” said Regina Coyula, a blogger who worked for several years for Cuban state security. “People are convinced that if Maduro falls, there will be blackouts here.”

President Raúl Castro of Cuba acknowledged those fears on Friday but said they were unfounded.

“There is speculation and rumors of an imminent collapse of our economy and a return to the acute phase of the ‘special period,’” Mr. Castro said in speech to Parliament, referring to the 1990s, when Cuba lost billions of dollars’ worth of Soviet subsidies.

“We don’t deny that there may be ill effects,” he added, “but we are in better conditions than we were then to face them.”

Mark Entwistle, a business consultant who was Canada’s ambassador to Cuba during the special period, said that despite its dependency on Venezuelan fuel, the island’s economy is now more sophisticated and diversified than it was before the Soviet collapse.

Besides, he said, Cuba has “this phenomenal social and political capacity to absorb critical changes.”

Still, some are perturbed at the prospect of power cuts. None of the Havana residents interviewed over the weekend had experienced power outages in their neighborhoods.

In an unusually blunt speech to journalists this month, Karina Marrón González, a deputy director of Granma, the official Communist Party newspaper in Cuba, warned of the risk of protests like those of August 1994, when hundreds of angry Cubans took to the streets of Havana for several hours.

 “We are creating a perfect storm,” she said, according to a transcript of her speech that was published in various blogs. She added, “Sirs, this country cannot take another ’93, another ’94.”

Herbert Delgado-Rodríguez, 29, an art student, remembered his mother cooking with charcoal in the 1990s.

“I don’t know if it will get to the point where there will be protests in the street,” he said. However, he added, Cubans “won’t tolerate the extreme hardships we faced in the ’90s.”

One worker at a bank said that employees had been told to use air-conditioning for two hours each day and work a half-day. Fuel for office cars had been cut by half, she said. A university professor said that she had been given a fan for her office and told to work at home when possible.

Jose Gonzales, who owns a small cafeteria in downtown Havana, was more sanguine.

“Raúl is simply urging us to cut back on unnecessary consumption, that’s all,” he said, adding that talk of another special period was “just a lot of speculation.”

Not all offices or companies have been affected, and Mr. Murillo said that the idea was to ration energy in some users so that others — homes, tourist facilities and companies — could use as much as they need.

In all, he said, the government aimed to cut electricity usage by 6 percent and fuel by 28 percent in the second half of the year.

Under an agreement signed in 2000, Venezuela supplies Cuba with about 80,000 barrels of oil per day, a deal worth about $1.3 billion, said Jorge Piñon, an energy expert at the University of Texas. In return, Cuba sends thousands of medical and other specialists to Venezuela.

On Friday, Mr. Castro said there had been a “certain contraction” of that oil supply.

How large of a contraction is unclear. Reuters reported last week that shipments of crude to Cuba had fallen 40 percent in the first half of this year. Mr. Piñon said that at least part of the reduction was oil that Venezuela refines in Cuba and then ships out again.

Cuba’s energy problems may also be a product of growing demand on the electricity grid, he said. Electricity consumption has risen dramatically over the past 10 years as Cubans who receive remittances from abroad kept air-conditioners whirring and private restaurants, bars and bed-and-breakfasts added refrigerators and heated food in toaster ovens.

Tourism has soared since the United States and Cuba announced an end to their 50-year standoff in December 2014. The number of visitors rose 13.5 percent in the first four months of 2016 and is likely to rise further when commercial flights from the United States begin this year.

If Venezuela did halt oil exports to Cuba, it would not necessarily precipitate a political crisis, experts and bloggers said.

The United States may offer help in order to prevent instability or a mass exodus of desperate Cubans. The Cuban government might speed reforms and open the door wider to foreign investment, Mr. Entwistle said.

“To extrapolate some dire political consequence is unwise,” said Mr. Entwistle, adding, “There are so many levers that they have to push and pull.”

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CRISIS IN VENEZUELA MAKES LIFE HELL FOR CUBAN MEDICAL PROFESSIONALS

Posted on June 23, 2016 by Arch Ritter

A growing number of Cuban health professionals working in Venezuela are fleeing or seeking second jobs as a result of the economic and political crisis in the South American country.

By MARIO J. PENTÓN

In Cuba Today, June 22, 2016

Original Article: Cuban Doctors in Venezuela

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Cuban Doctors in Venezuela in More Promising Times

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Tania Tamara Rodríguez never thought she would escape from the Cuban medical teams in Venezuela and become a “deserter,” now blocked by her government from returning to her country for eight years.

But the many difficulties that Cuban health professionals face in Venezuela as a result of the economic and political crisis in the South American country are leading a growing number to seek refuge in neighboring countries or obtain other jobs to make ends meet.

“Conditions for the doctors and other health professionals are horrible. You live all the time under the threat of being returned to Cuba, losing the job. You’re afraid they will take all the money – which is in Cuban government accounts – and revoke your assignment (to Venezuela) if they want to discipline you,” said Rodríguez, who now lives in Tampa.

While she worked in a medical laboratory in Venezuela as part of Cuba’s “Mission to the Neighborhood” medical aid program, the government deposited Rodríguez’s salary of 700 pesos per month (about $29) to an account in Cuba and gave her access to $280 dollars (U.S.) per month and a card for 25 percent off at the TRD shops in Cuba, which offer hard-to-find imported goods at dollar prices.

In 2014, after acknowledging that its “export of health services” was earning the island more than $8.2 billion a year, the Cuban government increased salaries in the domestic health sector. Even with the increases, which took effect after the public health sector had dismissed 109,000 employees, Cuban doctors are still not earning even close to the international median.

Rodríguez went to Venezuela in early 2015 from the eastern city of Holguín where she worked in the laboratory of the Máximo Gómez Báez. She agreed to join one of Cuba’s many medical teams in foreign countries in hopes of providing better opportunities for her 13-year-old daughter.

Cuba currently has about 28,810 medical personnel in Venezuela working in public health programs that, according to President Nicolás Maduro, represent a priority sector for his government and has cost Venezuela more than $250 billion since 1999.

The payment arrangement, essentially trading Venezuelan oil for Cuban medical personnel, has been repeatedly denounced by critics as a way for the Venezuelan government to cover up its subsidies to Cuba. Cuba then resells part of the refined oil products on the international market.

Rodríguez, who arrived in the United States after a few months in Venezuela under the U.S. government’s special parole program for Cuban medical personnel who defect, saved the money needed to buy her daughter a plane ticket to the United States from Cuba. But when her family took the girl to an Interior Ministry office to apply for a passport, she was denied because the mother was still listed as working in Venezuela.

“I don’t understand how I can be listed as working when I have been in the United States for more than a year. Someone must be pocketing the money the Venezuelan government is paying for me,” Rodríguez said.

According to the U.S. Citizenship and Immigration Service (USCIS) agency, 2,335 petitions were received in Fiscal Year 2015 under the Cuban Medical Professional Parole (CMPP) program, an initiative by the George W. Bush administration that offers visas to Cuban medical personnel “recruited by the (Cuban) government to study or work in a third country. Since its start in 2006, more than 8,000 medical professionals have been admitted under the program.  Solidarity Without Borders, a Hialeah non-profit that helps the arriving Cuban medical professionals, told el Nuevo Herald that the number of Cubans applying for the CMPP has risen in recent years. Not everyone is accepted, and 367 were rejected in fiscal year 2015, according to official data.

Rodríguez said that when she arrived in Venezuela in 2015, she was assigned to work with other Cuban medical personnel in the north central state of Falcon.

 “Everything in Venezuela is a lie,” she complained. “We were forced to throw away the reactive for CKMB (a type of blood test), a product that is scarce in Cuba. But we had to throw it away so that it would be marked in the books as having been used and Cuba could sell more. The same happened with the alcohol, bandage, medicines …  “Everything was produced in Cuba and paid for by the Venezuelan government,” Rodríguez said. “We faked lists of patients and were forced to live on nothing, while Cuba took all the money.”

During the time she worked in Venezuela, Cuban officials paid each medical professional about 3,000 bolivares (about $3) per month — an amount that has increased substantially recently because of an inflationary crisis and the relentless devaluation of the Venezuelan currency.

“Sometimes I had to do little jobs on the side to make ends meet,” she said. “Thank God that many Venezuelans take pity on the Cubans and help us.”  “Maybe what happened in my case was that when I decided to escape, I went to the municipality and told them everything about the disaster” at her clinic, she said. “And now they want to take revenge because I denounced them.”

Another Cuban doctor who works in the northeastern state of Anzoategui spoke on the condition of not being identified because of fear of being punished for speaking with a journalist.

“We started earning 3,000 bolivares and we’re now up to 15,000,” he said, or about $15 on the black market. “What’s interesting is that it makes no difference if they give us more bolivares because they are worthless in real life.”   “Our working conditions are horrible. We are salaried slaves of Cuba,” the doctor said. “They keep us in groups. Since I arrived, I live with three doctors from other parts of the island, so I have to share my room with someone I don’t know, and every day at 6 p.m. I have to ‘report’ that I am home.”

Officials of the Cuban medical teams in Venezuela justify the daily check-ins as a security measure due to the high levels of violence in the neighborhoods where they work. The doctors, however, see it as part of an effort to keep a close watch on them.

“There are many (Cuban) state security agents. Their job is to keep us from escaping,” said the doctor working in Anzoategui. “When you arrive in Venezuela, they ask you if you have relatives abroad, especially in the United States. We all say no, even if we do, because the surveillance is even worse then.”

The economy in Venezuela is so poor, he added, that returning from his last vacation in Cuba he had to carry back laundry and bathroom soap and toothpaste.

“When we first got here, this was paradise. They had everything we did not have in Cuba. Today it’s exactly the opposite,” he said. “We came thinking we would help our families, and it turns out they are the ones helping us. If it were not for the money that my brother in Miami sends me, I don’t know what I would do.”

Several other medical professionals in Venezuela also said that authorities try to hide cases when the Cubans become the victims of crimes, even when they are killed.

“You can’t avoid being robbed, because everyone gets robbed here. A stray bullet, a thug who doesn’t like you, we run all those risks,” said another Cuban doctor who also asked for anonymity. “One day I was mugged by two children, no more than 12 years old. I had to give them all my money because the pistols they were playing with were real.”

The personal relations of the Cuban medical personnel are also watched.

“They warn you that it can go badly for you if you have relations with Venezuelan government critics,” the female doctor said. And although intimate relations with Venezuelans are formally forbidden, “people find a way.”

During the 13 years that Cuba has been sending medical personnel to Venezuela, more than 124,000 have served in the South American country. Thousands have escaped to the United States and other countries, searching for better lives.

For many years, like Rodríguez, the medical defectors were banned from returning to Cuba for eight years. Last year, Cuba announced the defectors could return and would be guaranteed “a job similar to what they had before.”

But there was a catch: Those who returned would need a special permit to travel abroad again.

Venezuela's President Maduro speaks with Cuba's President Castro during their meeting in Havana

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CAPITULO TORMENTOSO EN LAS RELACIONES CUBA-ESTADOS UNIDOS-VENEZUELA

Posted on March 18, 2015 by Arch Ritter

El proceso de negociaciones distendido y promisorio entre Cuba y Estados Unidos peligra debido a la    gran confrontación motivada por la Orden Ejecutiva del Presidente Obama el 9 de marzo contra 7 altos cargos chavistas, al declarar estado de emergencia nacional porque Venezuela constituía una amenaza a la seguridad de Estados Unidos.  Se  ha argumentado que esa es la redacción establecida para la imposición de las sanciones, adoptadas por ambas cámaras del Congreso y  aprobada por el presidente el 18 de diciembre de 2014, un día después del anuncio de Raúl Castro y Barack Obama sobre el restablecimiento de las relaciones diplomáticas y la apertura de embajadas.

Sin embargo su implementación llegó en un momento  delicado,  y ha desviado la atención de la represión a la oposición y los demás problemas internos en Venezuela. Los cubanos en la isla han pasado del optimismo al temor de volver a vivir en gran  tensión y que las medidas anunciadas por el presidente Obama sean obstruccionadas por el gobierno de Cuba, nuevamente pretextando la confrontación.

Nicolás Maduro recién había visitado a Fidel Castro, y acusado al gobierno de Obama de  fomentar un golpe de estado para justificar la detención de dirigentes opositores, establecer visado para todos los norteamericanos, ordenar la reducción del personal de la embajada norteamericana en Caracas a igual cantidad que la venezolana en Washington, y que los funcionarios tendrían que reportar sus actividades  y solicitar permiso para efectuarlas. Respondió a la Orden Ejecutiva con la demanda a la Asamblea Nacional de una Ley Habilitantes Antiimperialista, enardecidas concentraciones y  demanda de Cumbres de la Unión de Naciones Suramericanas (UNASUR) y ALBA-TCP, aunque no logró una de CELAC.   Los cancilleres de Colombia, Ecuador y Brasil y el secretario general de UNASUR habían estado en Caracas el 6 de marzo en una infructuosa gestión de promoción de diálogo con la oposición y  la participación en las próximas elecciones parlamentarias. Todos los cancilleres se reunieron en Quito, su sede, el 14 de marzo para aprobar una declaración de apoyo al gobierno de Maduro.  Ese día, el canciller Bruno Rodríguez  visitó a Maduro para declarar que Estados Unidos no puede tener una política de zanahoria con Cuba y una política de garrote con Venezuela.

La Alianza Bolivariana para los Pueblos de Nuestra América-Tratado de Comercio de los Pueblos (ALBA-TCP)  realizó el 17 de marzo una Cumbre Extraordinaria de solidaridad con Venezuela y  para coordinar una posición común con vista a la VII Cumbre de las Américas (10-11 de abril). En la Declaración se rechazó

“la Orden Ejecutiva injusta e injustificada, que constituye una interferencia contra el principio de soberanía y el principio de no intervención en los asuntos internos de los Estados”. Se ratificó “el compromiso y apoyo irrestricto con la hermana República Bolivariana de Venezuela en la búsqueda de mecanismos de diálogo con el gobierno de Estados Unidos, para que cesen las agresiones de este gobierno contra Venezuela”, y se propuso crear un Grupo de Facilitadores de CELAC, UNASUR, ALBA-TCP y CARICOM “para facilitar una diplomacia de compromiso entre los gobiernos de Estados Unidos y Venezuela para aliviar las tensiones y garantizar la resolución amigable”.

Raúl Castro se expresó fuertemente contra Estados Unidos y llamó a que eliminara la Orden Ejecutiva y normalizar las relaciones con Venezuela.  Manifestó que

“Estados Unidos debería entender de una vez que es imposible seducir o comprar a Cuba ni intimidar a Venezuela. Nuestra unidad es indestructible. Tampoco cederemos ni un ápice en la defensa de la soberanía e independencia, ni toleraremos ningún tipo de injerencia ni condicionamiento en nuestros asuntos internos.  No cejaremos en la defensa de las causas justas en nuestra América y en el mundo, ni dejaremos nunca solos a nuestros hermanos de lucha”.

Reveló los objetivos para la VII Cumbre de las Américas:

“Rechazaremos con determinación toda tentativa de aislar y amenazar a Venezuela, y reclamaremos el fin definitivo del bloqueo a Cuba.  La sociedad civil cubana será la voz de los sin voz, y desenmascarará a los mercenarios que presentarán allí como sociedad civil de Cuba y a sus patrones”.

Llama la atención que antes y durante el año y medio que duraron las negociaciones que culminaron el 17 de diciembre, las relaciones de Estados Unidos y Venezuela se deterioraban intensamente, lo que no impidió que Raúl Castro llegará a los sorprendentes acuerdos con Barack Obama. En 2010 quedaron sin embajadores; en 2013 comenzaron y se suspendieron negociaciones, y Maduro ofreció asilo a Edward Snowden; Kelly Keiderling, encargada de negocios y dos diplomático fueron expulsados, supuestamente por alentar acciones de sabotaje; en 2014 Maduro acusó al gobierno  norteamericano de estar detrás de las protestas como parte de un plan en su contra.

La sorpresiva  tercera ronda de conversaciones para el restablecimiento de las relaciones diplomáticas entre Roberta Jacobson, subsecretaria de estado, y Josefina Vidal, directora general de Estados Unidos en la Cancillería cubana, y  el alejamiento de la prensa indicaron la urgencia para tratar  la confrontación Estados Unidos-Venezuela,  en La Habana, el 16 de marzo. Resultaba obvio que el proceso sería complejo y prolongado, pero no se esperaba la abrupta interferencia de este diferendo.  En poco menos de un mes se requieren muchas negociaciones y voluntad de resolver asuntos muy complejos. La Cumbre de las Américas junto a la novedosa participación del gobierno de Cuba y el encuentro de Raúl Castro y Barack Obama, debería ser un espacio de diálogo constructivo y relanzamiento de las relaciones  Estados Unidos-América Latina y el Caribe.

La Habana, 18 de marzo de 2015

Miriam Leiva

Miriam Leiva, Periodista Independiente

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VENEZUELA: THE REVOLUTION AT BAY with major implications for Cuba!

Posted on February 16, 2015 by Arch Ritter

Mismanagement, corruption and the oil slump are fraying Hugo Chávez’s regime

The Economist Feb 14th 2015 | CARACAS

Original here: Revolution at Bay

zzzON A Wednesday evening around 30 pensioners have gathered for a meeting in a long, brightly lit room in a largely abandoned shopping gallery in Santa Teresa, a rundown and overcrowded district in the centre of Caracas. After a video and some announcements, Alexis Rondón, an official of the Ministry of Social Movements and Communes, begins to speak. “Chávez lives,” he says. “Make no mistake: our revolution is stronger than ever.”

Mr Rondón’s rambling remarks over the next 45 minutes belie that claim. Saying Venezuela is faced with an “economic war”, he calls on his audience to check food queues for outsiders, who might be profiteers or troublemakers, and to draw up a census of the district to identify opposition activists and government supporters. “We must impose harsh controls,” he warns. “This will be a year of struggle”.

About this, at least, Mr Rondón is correct. Sixteen years after Hugo Chávez took power in Venezuela, and two years after he died, his “Bolivarian Revolution” faces the gravest threats yet to its survival. The regime is running out of money to import necessities and pay its debts. There are shortages of basic goods, from milk and flour to shampoo and disposable nappies. Queues, often of several hundred people, form each day outside supermarkets. Ten patients of the University Hospital in Caracas died over the Christmas period because of a shortage of heart valves.

Both debt default and the measures that would be required to avoid one pose risks to the regime. It is on course to lose a parliamentary election later this year, which might then be followed by a referendum to recall Chávez’s inept and unloved successor, Nicolás Maduro. That could bring Venezuela’s revolution to a peaceful and democratic end as early as 2016. But there are darker possibilities. Caracas buzzes with speculation that the armed forces will oust the president.

Venezuela is suffering from the combination of years of mismanagement and corruption, and the collapse in the price of oil, which accounts for almost all of its exports. Chávez, an army officer, was the beneficiary of the greatest oil boom in history. From 2000 to 2012, Venezuela received around $800 billion in oil revenue, or two-and-a-half times as much in real terms as in the previous 13 years. He spent the money on “21st-century socialism”.

Some went on health care and low-cost housing for the poor, who hailed Chávez as a secular saint. Some has gone on infrastructure: a few new roads and metro lines were built, years behind schedule. Another chunk was given away in the form of cheap oil to Cuba and to other Caribbean countries, assuring Chávez loyal allies. Perhaps the biggest slice was frittered away or simply stolen. Filling a 60-litre tank with petrol costs less than a dollar at the strongest official exchange rate. Unsurprisingly, petrol worth $2.2 billion a year, according to an official estimate, is smuggled to Colombia and Brazil, with the complicity of the armed forces.

Continue Reading: VENEZUELA, THE REVOLUTION AT BAY

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VENEZUELA’S CUBA PROBLEM

Posted on December 31, 2014 by Arch Ritter

The Economist, December 19th 2014

In a surprise announcement on December 17th the US president, Barack Obama, and the Cuban president, Raúl Castro, announced a significant thaw in relations between their respective countries. The move has major implications for Venezuela, Cuba‘s main ally.

The Venezuelan president, Nicolás Maduro, appeared to be caught unawares on December 17th, right in the middle of a rhetorical campaign against “insolent, imperialist” sanctions passed by the US Congress just one week beforehand. Unlike the decades-old Cuba embargo, the sanctions are targeted at senior Venezuelan government officials accused of committing human rights violations. However, just as members of the ruling Partido Socialista Unido de Venezuela (PSUV) were being invited to burn their US visas in public, Cuba was announcing the restoration of diplomatic relations with the US.

A quiet betrayal?

The process that led to the announcement, it is now clear, began not long after the death of Mr Maduro’s predecessor and mentor, the former Venezuelan president, Hugo Chávez (1999-2013). The Cuban government, which has benefited from billions of dollars in Venezuelan subsidies—including cheap oil under the PetroCaribe oil-financing initiative—needed a “plan B”, given the severe economic crisis facing the Maduro government and the likelihood that it would be unable to resist mounting pressure to divert resources away from foreign aid. However, with an extensive network of Cuban intelligence agents given free rein in Venezuela—particularly in the barracks—Mr Maduro must now be wondering what else has been (or might be) negotiated behind his back.

At the very least, the news of a US-Cuban rapprochement will exacerbate resentment in the military over its subordination to Cuban officials who, it seems, gather intelligence but do not share it. There is also some confusion within the ranks of the PSUV, whose militants find it hard to understand why Mr Obama is allegedly seeking to overthrow Mr Maduro, but is happy to shake Mr Castro’s hand.

Hard choices ahead for Mr Maduro

Anti-imperialism is a handy tool with which to maintain unity against an external enemy. However, it is hard to wield when your best friend is embracing the “empire” (swiftly renamed “the giant of the north” in Mr Maduro’s post-announcement comments). Cuba has for decades played a useful role for Latin American governments of both left and right. “Solidarity” with Cuba has been a convenient, mainly risk-free way to stand up to the US government and beat the nationalist drum.

Now Venezuela faces the prospect of replacing Cuba as the US’s main adversary in the region—just as its economy is imploding and its governability is at risk from internal dissent—or capitulating and losing the support of the already-restive domestic left. The timing could hardly be worse for Mr Maduro.

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THE CUBAN QUESTION

Posted on December 5, 2014 by Arch Ritter

December 5, 2014 – The Economist

Original Complete Article: The Cuban Question

HAVING got immigration reform off his chest, will Barack Obama unsheathe his executive-order pen again to tackle another intractable subject on which Congress has blocked change for decades? The United States imposed an economic embargo on Cuba back in 1960 as Fidel Castro was forcing communism on his people. The embargo was meant to topple Mr Castro. Today he enjoys a tranquil retirement in a Havana suburb while his slightly younger brother, Raúl, runs the country.

The embargo has not just failed; it has also given the Castros a potent propaganda weapon. It still has diehard defenders in Congress, which under a law from the 1990s is the only body that can repeal it. Even so, Mr Obama has some scope to change the policy. Indeed, in his first term he lifted restrictions on travel and remittances to the island by Cuban-Americans. There are several reasons why he might now want to do more.

First, support for the embargo across America is crumbling. A nationwide poll taken earlier this year for the Atlantic Council, a think-tank, found that 56% of respondents favoured improving relations, while more than 60% of Latinos and residents of Florida did. Second, Cuba is itself starting to change. Under reforms launched by Raúl Castro, 1.1m Cubans, more than a fifth of the labour force, work in a budding private sector of farms, co-operatives and small businesses. Access to mobile phones and the internet has grown. Opposition bloggers such as Yoani Sánchez, though often harassed, have not been silenced.

The third reason for action is that Cuba is one of the few issues that unites Latin America. The region is unanimous in believing that, notwithstanding its Communist regime, the island should be accorded a normal place in relations in the Americas. That consensus lies behind the decision of Panama to invite Raúl Castro to the Summit of the Americas, a gathering that it is due to host in April. The previous six summits have been restricted to the hemisphere’s democracies.

This leaves Mr Obama with a dilemma. This is not so much over whether or not to attend. He probably will. Rather, it is whether to act between now and then to stop the embargo becoming an issue that dominates the summit. Mr Obama could, for example, issue a general licence for all Americans to travel to Cuba. He could also remove Cuba from the State Department’s list of “state sponsors of terrorism”, on which it sits alongside only Iran, Sudan and Syria. There are no grounds for Cuba still to be there. In October the Financial Action Task Force, an inter-governmental body, removed Cuba from its watch list of countries doing too little to prevent money laundering and terrorist financing.

But the administration has not yet asked the State Department to remove Cuba from its terrorism list. Although Mr Obama has little to lose from loosening the embargo, he also has little to gain. Raúl Castro’s economic reforms have stalled recently; he never intended them to lead to political change. The Cubans show no sign of being prepared to release Alan Gross, an elderly American aid worker jailed for illegally handing out telecoms equipment. They want to swap him for three Cuban spies serving life terms for snooping on hardline exiles in Miami.

Even so, it would be surprising if Mr Obama did not take some action on Cuba before the summit. Oddly, pushback from the defenders of the embargo in Congress may take the form of sanctions on Venezuela, which provides the island with a subsidy (in the form of cheap oil) equal to perhaps 15% of its GDP. A bill to deny visas and freeze bank accounts of Venezuelan officials implicated in the repression of protests earlier this year is stalled in the Senate. Once the new Republican majority takes control in January, it is likely to move forward. Anthony Blinken, Mr Obama’s nominee for deputy secretary of state, told a Senate committee on November 19th that the administration “would not oppose” this—a reversal of its previous stance.

For anyone who wants to see change in Venezuela, this is depressing. The plunging oil price and economic mismanagement are weakening President NicolásMaduro’s elected authoritarian regime. The crucial issue is ensuring that a legislative election next year is free and fair. Sanctions, however limited, will boost MrMaduro’s declining popularity and give him an excuse to crack down, as some opposition leaders recognise. The lesson of Cuba is that pressure from Washington does not lead to democratisation. It would be a sad irony if the beginning of the end of one futile embargo coincided with the birth of another.

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CARIBBEAN VIEW: VENEZUELA IN FINANCIAL DIFFICULTY, WILL PETRO CARIBE SURVIVE?

Posted on November 28, 2014 by Arch Ritter

petrocaribe2-655x436By Sir Ronald Sanders

Thursday, November 27, 2014 – 14:20

Original article here: CARIBBEAN 360  e

 The government of Venezuela is undoubtedly disappointed with the outcome of the 166th meeting of the Organisation of Petroleum Exporting Countries (OPEC) held in Vienna, Austria on 27 November 2014.

Despite intense lobbying by Venezuela, the OPEC decided not to cut oil production even in the face of declining oil prices globally.  The official communiqué of the meeting declared that “the Conference decided to maintain the production level of 30.0 mb/d, as was agreed in December 2011”.  This was bad news for Venezuela which needs to sell oil at US$120 per barrel to meet repayments of its loan commitments; finance its domestic social welfare programme; provide the requisite goods and services for its people, including security; and to fund its Petro Caribe arrangements with neighbouring countries in Central America and the Caribbean.

Venezuela wanted oil production to be decreased urgently so that the price of oil could go up against reduced supply.  The country’s foreign minister, Rafael Ramirez, tried to spearhead an effort to cut oil production by 2 million barrels a day by organizing a meeting of non-OPEC oil producers Russia and Mexico with Venezuela and Saudi Arabia in Vienna on 25 November, but the effort came to naught.

Worse yet for Venezuela, its representatives failed to convince many Arab states, particularly Saudi Arabia, that the oil production of all the OPEC countries should be cut. The Saudis, Kuwait, Qatar and the United Arab Emirates have large foreign currency reserves and therefore can withstand a drop in oil prices for a fairly long time. Their purpose in keeping the price of oil low is to wreck shale oil production in countries such as the United States.  Shale oil companies need a high price of oil to justify investment in production.  Clearly, the Saudis and other powerful OPEC members have calculated that the only way they can remain dominant as oil suppliers in the global market is to keep shale-oil producers out of it.

Before the crucial OPEC meeting, the oil price was hovering close to US$80 a barrel, lower than it has been for many years and largely because of shale-oil production.  Immediately after the Vienna meeting, the price fell as low as US$72.74 a barrel. Even if prices stabilise in the coming weeks to around US$75 a barrel, Venezuela will face a short fall of almost US$40 a barrel – a huge blow to its revenues and its economy.

Against this current background, an undertaking given on 20 November by Ramirez, on behalf of the Venezuelan government, to the 14th meeting of the Petro Caribe Council assumes a huge significance.  Ramirez emphasized that Petro Caribe “is an energy agreement that is perfectly sustainable over time” and he pledged his government’s “firm commitment” to it.   He made this commitment, just one week before the Vienna meeting when it was clear that the majority of OPEC members would not cut oil production in order to hike the price, so he must have done the arithmetic to know that Petro Caribe could be sustained even at a reduced world price for oil.

The fact is that, in economic and financial terms, oil shipments under Petro Caribe, while generous to its recipient countries, are a small portion of Venezuela’s production, and the delayed payment terms have a smaller impact on Venezuela’s revenues in comparison with the bigger blow of a huge drop in the price of its oil sold globally.  It is, therefore, quite likely that, in financial terms, the Venezuelan government will be able to sustain Petro Caribe as foreign minister Ramirez has pledged.

The problem that Petro Caribe poses for the Venezuelan government is more political than financial.  Within Venezuela, opposition parties have demonised Petro Caribe as giving away Venezuela’s financial resources when the people of the country need greater support.  The decline in government revenues, resulting from a loss of almost $40 a barrel for oil, will put severe strain on the government of President Nicolas Maduro, and will embolden the opposition to further paint the picture of Petro Caribe as giving away money that should be spent on the needs of the Venezuelan people.  That is a huge political difficulty for Maduro.

The Petro Caribe beneficiary countries are Antigua and Barbuda, Belize, Cuba, Dominica, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, the Dominican Republic, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Saint Lucia and Suriname.  With oil at about US$75 a barrel, they can each cope with the price.  So, how Petro Caribe now benefits them is in the deferred payment component.  Many of the beneficiary countries pay 40 % of cash up front for oil shipments, while the balance of the price is converted to a 25-year loan at 1 % with a two-year moratorium on payments.  Many of the beneficiary countries have been using the loan component of the price to pay public service salaries and to fund their recurrent costs.  But the debt has piled-up for several of them.

Sensibly, those countries should now set aside the deferred payment component of the oil price to build-up their foreign-currency reserves  and to help meet the full price of oil should this Venezuelan government –or any other – be compelled to significantly alter or dismantle Petro Caribe.

So, at the moment, despite the unwelcome outcome of the OPEC meeting for Venezuela, Petro Caribe beneficiary countries, including those in the Caribbean, will continue to benefit even as the Venezuelan economy reels from the impact of US$40 a barrel less in income for its oil.

The beneficiary countries have good reason for appreciating the goodwill and co-operation of the Maduro Government.   They would best show it not only by building-up their foreign reserves to cope with future increases in oil prices that will inevitably come, but also by actually repaying the loan component of the oil shipments they now receive.  By doing the latter, they would reduce their own high indebtedness and they would also allow Maduro to show the Venezuelan people a return on the investment that he and his predecessor, Hugo Chavez, made in Caribbean and Central American countries.

Sanders is a Senior Fellow at London University

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