Long-time allies, Cuba and Venezuela go different...
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Dec 23, 2014  |  Vote 0    0

Long-time allies, Cuba and Venezuela go different ways

While Havana cosies up to Washington, fellow socialists in Caracas remain embittered and aloof, despite worsening financial woes and crashing oil prices

OurWindsor.Ca

Et tu, Raul?

Just one day after announcing the restoration of diplomatic ties between his country and Cuba – following five decades of enmity – U.S. President Barack Obama turned sharply to the right last week and slapped a series of economic sanctions on Venezuela, long Cuba’s closest ally in the region and a socialist fellow traveller to boot.

Suddenly, the oil-rich but financially troubled South American country seemed to be very much alone, and at the worst time possible.

“Two days ago, Maduro was ordering everyone to burn their visas to the United States,” tweeted opposition firebrand Maria Corina Machado, referring to Venezuelan President Nicolas Maduro, a fierce critic of the U.S. government. “Meanwhile, Raul Castro was applying for his.”

In all likelihood, Cuba’s leader will have to wait a while before filling out a U.S. visa application of his own, but that’s a detail. The big story is that he has staked his country’s political and economic future on improved relations with his longtime adversaries in Washington, the opposite route being taken by his erstwhile geopolitical soulmates in Caracas.

Instead, Venezuela’s Maduro finds himself newly isolated, with his country in pitiable financial shape, beset by spiralling inflation, widespread import shortages, and a shrinking economy, not to mention toxic political unrest – and all of this was before international oil prices began to plummet from a four-year high this past summer.

“Oil prices are down 40 per cent since June,” said David Smilde, a Venezuela expert at Tulane University in New Orleans. “It’s really serious.”

Many oil-producing countries have large financial reserves to tide them through periods of sagging revenues, but not Venezuela, which was failing to make ends meet even when oil – the source of 95 per cent of its foreign earnings – was riding high at $115 a barrel.

The price is now down to about $64, and the prospects for Venezuela, and its U.S.-bashing president, are suddenly looking very grim.

“This is certainly hitting Venezuela very hard,” said George Ciccariello-Maher, a Venezuela expert at Drexel University in Philadelphia. “It’s a major political threat. Maduro just barely won the last election.”

That was last year, when the former bus driver eked out a narrow victory with little more than 50 per cent of the votes cast. According to the latest polls, his backing among Venezuelans has now tumbled to about 25 per cent.

“That’s largely because of the economy,” said Smilde. “Maduro’s popularity is very closely tied to the economy.”

And the economy is a mess.

Meanwhile, the two leading socialist beacons in the Americas – Havana and Caracas – seem to be charting political and economic courses that are headed in different directions.

While promising at every opportunity never to abandon even one of his government’s socialist principles, Raul Castro has in fact been doing exactly that ever since he replaced Fidel, his slightly older brother, as Cuban leader roughly eight years ago.

Since then, privately-run enterprises in Cuba have grown from about 150,000 to more than 460,000, and the government has off-loaded many of its own operations onto about 500 private-sector businesses that are operated by non-government co-operatives.

As for Venezuela, the Maduro government publicly vows to carry on with its “Bolivarian” revolution – named for the celebrated South American nationalist Simon Bolivar – but many believe there are divisions at the top between those who want to double down on socialist orthodoxy, despite the financial cost, and those who think it might be time for a breather.

There are steps the Venezuelan leader could take to ease his country’s financial bind, including the sale of its Citgo refinery operation in the United States, valued at about $10 billion (U.S.), an idea he seems to have rejected for now. Alternatively, the government could raise domestic gasoline prices – possibly the lowest in the world – thereby yielding new revenues estimated at about $7 billion a year.

“Gas is basically free,” said Smilde. “That has to change.”

But Maduro seems to fear the political backlash that might follow such a measure.

Despite its economic woes, Venezuela continues to supply Cuba with 100,000 barrels of petroleum a day on barter terms, paid for through the services of tens of thousands of Cuban medical workers now employed at health clinics across the South American country.

Some observers believe this arrangement is in serious jeopardy now.

Meanwhile, the government continues to take a hard line against many of its opponents.

Leading opposition figure Leopoldo Lopez remains behind bars, charged with spreading “terror,” roughly nine months after fierce anti-government demonstrations broke out in several Venezuelan cities, leaving 43 dead. For her part, Machado faces accusations – which she denies – of having conspired to assassinate the president. That could land her in jail for 16 years.

According to a recent poll conducted by Caracas firm Datanalisis, 86 per cent of Venezuelans believe their country is headed “in the wrong direction.” However, they aren’t slated to put that sentiment to a presidential vote until Maduro’s current term expires in 2019.

By then, Raul Castro will be in a rocking chair. Now 83, he has promised to step down in 2018.

Toronto Star

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