Cuba's economy at mercy of Venezuela's voters

Rick MacInnes-Rae: Cuba's economy at mercy of Venezuela's voters

Post-Chavez election threatens Cuba's subsidized oil
By Rick MacInnes-Rae, CBC News
Posted: Apr 1, 2013 5:16 AM ET

In Cuba, state restrictions have loosened in the past year or so. One
result: private cars acting as taxis for tourists and other visitors,
like here in downtown Havana. In Cuba, state restrictions have loosened
in the past year or so. One result: private cars acting as taxis for t

It is not just Venezuelans who are looking anxiously at their post-Hugo
Chavez future.

Cubans, too, have much to lose if Venezuela's government changes after
the April 14 election, and they're not happy about it.

In campaign speeches, Venezuelan opposition leader Henrique Capriles is
threatening to axe the long-time lifeline Venezuela has been providing
to Cuba in the form of heavily discounted oil.

For 13 years, the small Caribbean state has depended on Venezuela for
nearly 100,000 barrels a day of petroleum — to light Cuba's homes and
the hotels that underpin its tourist economy — at discount prices that
amount to an estimated $6-billion subsidy over the six-year life of the
current agreement.

"The giveaways to other countries are going to end," Capriles told a
student rally in Zulia recently. "Not another drop of oil will go toward
financing the government of the Castros."

The market-friendly Venezuelan governor is no fan of the radical
socialism of the late president Hugo Chavez who viewed Cuba's Fidel
Castro as a mentor. And his message is getting through to Cuban loud and
clear.

"The opposition is talking about cutting off the oil and if they do
we're in big trouble," says Tina (not her real name), a tour guide in
the northern province of Mattanzas.

Trouble is not something Cuba needs any more of, particularly now.

"After the triumph of the revolution in 1959, Cuba became an upside-down
pyramid. Labourers at the top. Professionals at the bottom," says Tina,
her own life being a case in point.
Surviving on tourists

Tina is a multilingual, university-trained interpreter/translator in her
late 20s who found no work after graduating. So she became a teacher,
and found there was no money in that.

Her teacher's salary equalled $25 Cdn a month. Almost enough to buy four
kilograms of pork to feed her extended family, providing she bought
nothing else that month.

But she's a smart woman. She speaks Spanish, English, German and
realpolitik. So, like Cuba after the collapse of its Soviet sponsor in
the early-1990s, she stopped what she was doing and turned to tourism.

Cuba's been turning out joint-venture resorts as fast as it can drain
the swamps of Varadero, building a new economy on the hard currency of
foreign visitors to the tune of almost $2.5 billion a year, according to
reports.

Tourists are flocking to the pastel-colored, all-inclusive,
air-conditioned bubbles of blue water and white rum that could be
anywhere in the Caribbean since they portray so little of Cuba or Castro
or the political tensions that litter the country's past and present.

For those willing to leave the bubble, Tina will guide them where they
want to go for a daily fee that's small to them, but eight times what
she used to make in a month.

Most of her customers are Canadians ("So nice!") and Russians ("Not so
nice."), since the ongoing 53-year-old U.S. embargo pretty much keeps
Americans out.

The departures and arrivals board at Varadero Airport reads like a
survey of cold weather capitals, with flights from Toronto, Montreal,
Quebec City, Edmonton and Saint John coming and going all day long.
Still shortages

But while there are plenty of Canadians and Russians (even a few Chinese
nationals) basking in sun and cheap rum, there are shortages of other
things, despite the much trumpeted "triumph of the revolution."

Earlier this month it was butter. Before that, toothpaste. And before
that, a shortage of shampoo.

The U.S. embargo against the Castro regime compels Cuba to pay for the
things it wants in cash, and hard currency is hard to come by.

That is also where Venezuela helps out. Along with the subsidized oil,
it also invests billions of its hard-earned petrodollars directly in
Cuba's aging infrastructure.

Still, despite the help, Cuba can't afford everything, all the time. So
it constantly runs out of all kinds of stuff.

"Cubans get by on tips," Tina tells me. A bartender in a tourist resort
trousers more in a day than a teacher will in a month.

Times are tough, but not as tough as they once were in the mid-1990s
when some 50,000 state-owned cows suddenly vanished into many thousands
of pots when Cubans were going hungry.

There's emigration, of course.

Cuba has famously had two kinds. "Wet" and "dry." Wet means finding a
boat, or lashing a few inner tubes together and trying your luck on the
tides to Florida, 144 kilometres to the north.

Dry meant going to someplace like Venezuela, then travelling north over
land through Mexico by rail to the U.S. A little more expensive, and
fraught with risks of its own.
Raul Castro greets Venezuela's Hugo Chavez at Havana's airport in May
2011. The Venezuelan leader had been in Cuba undergoing treatment for
the cancer that would eventually claim his life two years later.Raul
Castro greets Venezuela's Hugo Chavez at Havana's airport in May 2011.
The Venezuelan leader had been in Cuba undergoing treatment for the
cancer that would eventually claim his life two years later. (Reuters)

Passports have become easier to come by since January, when Cuba lifted
the burdensome restrictions that were once designed to prevent people
skipping out.

But like the easing of restrictions on buying and selling cars and
houses over the past two years, it sounds better than it is.

As Tina says, you have to be able to afford these things, and not many can.

She likes to say that Cuba has no important natural resources, which is
why it is so tourist-dependent. But she's wrong about that. Cuban has
resources all right. Human resources. It exports people.

Tens of thousands of doctors, health professionals, teachers and sports
coaches are dispatched on contracts all over the developing world, but
particularly to Venezuela, where over 30,000 Cuban doctors and dentists
are based, part of a doctors for (subsidized) oil program that the
Castros set up with Chavez.

Human chattel, whose talents are part payment for the oil lifeline many
are worried about losing.

Were the oil exchange to end, there'd be little waiting for these
professionals back at home, beyond slinging mojitos to surly Russians.

But the first major poll of the Venezuelan campaign has the party of
late president Chavez in the lead. Its victory would ensure the oil
keeps flowing to Cuba, at least for the short term.

http://www.cbc.ca/news/world/story/2013/03/28/f-vp-macinnes-rae-cuba-venezuela.html