February 13, 2019 03:49 PM
Updated on February 13, 2019 04:19 PM
"Gentlemen, I must say it with complete honesty, Cuba does not need the United States, Cuba does not need Europe, what a delightful thing to say that, has learned to do without them," Fidel Castro announced during a Literacy Congress in Havana . It was February 2005.
A month later, in another speech, the Cuban leader affirmed that the island was about to achieve economic "invulnerability". "We have two economic props, China and Venezuela, we should not look for more," he said.
Progressively, Beijing and Caracas had become Havana's main trading partners, displacing other actors such as Spain and Canada in just five years.
In the case of the South American country, bilateral ties went far beyond trade and extended to numerous strategic sectors, including defense, energy or food.
The proximity was such that in 2007, Venezuelan President Hugo Chávez went on to say that Cuba and Venezuela were "one nation" and that "we are basically one government".
The close alliance between Havana and Caracas survived the death of Chávez in 2013 and the rise to power in Cuba of Miguel Díaz-Canel as a substitute for Raúl Castro.
The fluidity that relations have maintained is explained, according to many analysts, by the fact that the current president of Venezuela, Nicolás Maduro, already had the approval of Cuba when, in December 2012, a Chavez cancer patient named him as his successor.
Hugo Chávez did all his treatment against cancer in Cuba. | Photo: AFP
Rafael Ramírez, who in the government was Minister of Petroleum during the Chávez government, is one of those who subscribe to this thesis. In a recent interview with BBC Mundo, he pointed out that to a large extent Maduro's appointment "has a lot to do with the influence of Cubans."
Currently, the Venezuelan leader is in the middle of a serious political crisis unleashed since, on January 10, Nicolás Maduro was sworn in for a second term as a result of votes considered fraudulent by fifty countries, including the United States. United and the European Union.
Maduro, who enjoys the support of Russia, China, Iran, Turkey, Nicaragua and Bolivia, among others; he claims to be the victim of an attempted coup d'état and accuses the president of the National Assembly of Venezuela, deputy Juan Guaidó, of attempting to usurp the Executive Power.
On January 23, that congressman was sworn in as "president in charge" of the Republic, with the declared aim of leading a transitional government and calling for free elections.
The outcome of this pulse for power will depend not only on Venezuela's immediate future but also on its future relations with Cuba. But what exactly is Havana playing in this crisis?
An existential issue
Although the famous phrase of Fidel Castro on the economic autonomy of the island was pronounced in 2005, the benefits of the establishment of the Bolivarian revolution in Caracas began to be felt much earlier.
The personal relationship between Chavez and Fidel Castro began to be forged in 1994, when the Venezuelan visited Havana. | Photo: AFP
The rise of Hugo Chávez to power in February 1999 marked a dramatic qualitative and quantitative leap in relations between Cuba and Venezuela.
By the year 2000, Venezuela had become the main commercial partner of the island with a commercial exchange of 912 million pesos, according to data from the National Bureau of Statistics of Cuba (ONE). (Cuban statistics are presented in pesos and, although the island's authorities do not specify it, experts assume that it is convertible pesos -UCC-, whose exchange rate is 1 CUC per US $ 1).
That figure slightly exceeded Spain's 893 million but doubled Russia's 435 million.
In that year the oil exchange agreement for professional services was signed, which has been a cornerstone of the bilateral economic relationship.
"The sale of professional services is the main income in currencies of Cuba, we speak of doctors, nurses, teachers, sports coaches and security personnel, it has been published that Venezuela buys 75% of those professional services", explains Carmelo Mesa- Lago, Professor Emeritus of Economics and Latin American Studies at the University of Pittsburgh, in conversation with BBC Mundo.
The expert indicates that the amount of these Cuban exports increased steadily until reaching its peak in 2013, when they stood at some US $ 10,420 million, of which some US $ 7,800 million corresponded to Venezuela.
Although Cuba sends different types of professionals abroad, in the case of Venezuela the largest group corresponds to the integral doctors who participate in a primary care program known as Barrio Adentro.
Thousands of Cuban doctors arrived in Venezuela through the oil agreement for professional services. | Photo: AFP
According to Mesa-Lago, at the peak of the exchange there were up to 40,000 Cuban specialists in Venezuela.
The final figures in this matter are, however, difficult to estimate due to the lack of official information and the opaque way in which the authorities handle this cooperation. In fact, Chavez revealed in 2011 that the first Cuban doctors secretly entered Venezuela on night flights designed so that his arrival was not discovered.
In 2008, the then Minister of Health of Venezuela, Jesus Mantilla, said that in that country there were 29,996 Cuban professionals working in that sector, including 13,020 doctors, 2,938 dentists, 4,170 graduates in nursing and 9,168 health technicians.
Taking that figure as good, we should add the rest of Cuban personnel, especially sports coaches and security personnel, whose figures are unknown.
In any case, the sale of professional services to Caracas seems to have been good business for Havana.
"I made an estimate a few years ago and concluded that Venezuela paid for every Cuban doctor seven times the average cost of a Venezuelan doctor, which means that, in reality, the price of oil was being subsidized because they were inflating the value of medical services. seven times, it was a hidden subsidy that Venezuela passed on to Cuba, "the economist points out.
Anyway, Chávez was a great defender of this program.
"The government in 12 years, with the support of Cuba – in this invaluable case – has done something miraculous, today we are serving in Barrio Adentro almost 83% of the population," the president said in 2011.
Support for Cuba through this route has been maintained to the present, to the point that last month, Maduro announced that some 2,500 Cuban doctors of the 8,000 who were working in Brazil would arrive in the country, before the arrival of Jair Bolsonaro.
Cuba decided to withdraw its doctors from Brazil after the arrival to power of Jair Bolsonaro. | Photo: Getty Images
The South American giant was, after Venezuela, the second largest recipient of Cuban doctors, so Mesa-Lago believes that Maduro is trying to compensate Havana for this hard loss.
In spite of everything, the relationship between Caracas and Havana does not manage to escape the hard crisis that the Venezuelan economy suffers, whose GDP fell 18% in 2018, accumulating a decrease of 50% in the last four years, according to figures from Mesa-Lago .
The effect is evident in trade statistics. According to ONE, the bilateral exchange fell from 8,562 million pesos in 2012 to 2,213 million pesos in 2017, despite which Venezuela continues to be the main partner of the island.
"A Venezuela with Maduro at the forefront is something existential for Cuba", summarizes Rocío San Miguel, president of the Venezuelan NGO Control Ciudadano, when talking about the importance of the Chavez government for Havana.
"This is a scheme of usufruct so wide, so powerful, that it has unimaginable scope, one can document some formal aspects but under that carpet there is any amount of economic support, logistics that Venezuela provides for the government and the Cuban power", adds in conversation with BBC News World
Energy and food
The permanence of Chavismo in power also impacts other strategic sectors of the island.
The Cienfuegos refinery was reactivated after a million dollar investment that included Venezuelan capital. | Photo: Getty Images
"The relationship with Venezuela is also key to Cuba's energy and food security, which depends on a high content of food imports and which is associated with the exchange of oil for services," says Arturo López-Levy, assistant professor at Gustavus. Adolphus College of Minnesota, to BBC News World.
During Chávez's government, Venezuela not only became the key supplier of oil to Cuba but also was a partner with a 49% stake in the process of reactivating the Cienfuegos refinery, carried out in 2007 with an initial US investment. $ 236 million. As reported by PDVSA at the time, in a second phase they would create a petrochemical center that required an additional US $ 1,300 million.
Mesa-Lago affirms that by 2012 Venezuela sent some 105,000 barrels per day of crude oil to the island, which processed part of that refinery and sold the surplus at market prices.
The expert points out that the drastic fall in oil production that the South American country has experienced led to a reduction in shipments to around 50,000 barrels, with which it covers around 55% of Cuba's energy needs.
In December of 2017, the Reuters news agency published a story according to which, Cuba had taken full possession of all the shares of the Cienfuegos refinery due to a default by Venezuela of outstanding debts.
Although at that time none of the governments involved officially corroborated this news, the official newspaper of the Communist Party of Cuba, Granma, said that since August 2017, the refinery operated "as a fully Cuban state entity."
But if the government of Maduro is key to Havana. The same can be said in the opposite direction.
The opposition in Venezuela questions the role played by Cuban advisers in matters of security and defense. | Photo: Getty Images
Rocío San Miguel points out that the government of Cuba "has had a completely undue interference" in five key areas of the Venezuelan government:
- Registries and notaries
- Identification and aliens
- Organization of the Bolivarian National Police
- Participation in the intelligence and counterintelligence bodies
- Presence within the National Armed Forces
"The most serious area of participation is Security and Defense," stresses San Miguel.
The expert assures that Cuba intervened in the restructuring of the Bolivarian National Armed Force, as well as in the drafting of the five reforms to the Organic Law of the FANB.
"The new Bolivarian military thought was conceived and protected by Cuba, and it has also participated in the purchase of weapons systems," he says.
San Miguel indicates that there is a permanent presence of Cuban soldiers in the Venezuelan barracks and that in Fuerte Tiuna (headquarters of the Ministry of Defense) they have access to areas that are closed to Venezuelan officials.
"We do not have figures, but we have testimonies of military personnel that give an account of the Cuban presence in different periods and in different spaces within the FAN, both in meetings of design of the strategic-military concept until the presence of civilians who carry out works of permanent in military installations and that in times of crisis, they are clearly willing to assume their combatants' hat, that is another function they fulfill ", he adds.
The political scientist and internationalist Carlos Romero believes that the support that the government of Cuba has shown to Maduro in the current crisis suggests that the fate of both countries is not only linked by economic issues, but also by political and diplomatic issues.
Chávez went on to say that Cuba and Venezuela had "the same government". | Photo: Getty Images
López-Levy, for his part, points out that Havana has found great affinity in the Venezuelan government, which became an important ally.
"The Cuban position is motivated by the appreciation that was established between the two countries based on ideological affinity, economic integration, national interests and political projection towards the hemisphere: a rather contentious Latin Americanism towards the idea of a relationship of understanding with the United States, which was expressed in the Alba and the Celac, "he explains.
He indicated that, on the other hand, Havana expresses its open rejection of the position of some countries of not knowing the Maduro government and, above all, of recognizing the president of the AN as "president in charge".
"That is a clear deviation from the principle of non-intervention that is practically sacred in Cuban foreign policy," he says.
But how could a hypothetical change of government in Venezuela affect Cuba?
"It would be catastrophic because Cuba's economic situation in the last two years has been very difficult, GDP growth has not reached 1%, there are many social sectors that live practically from begging, there are power cuts much greater than those that there is in Venezuela, the material base of Cuba is very inferior to that of Venezuela, "says Romero.
Mesa-Lago coincides in the somber diagnosis and stresses that in order to have an adequate and sustainable economic growth, Cuba should grow at a rate of between 5% and 6% per year.
However, he points out that a change in Venezuela would not be as dramatic for Cuba as was the effect of the dissolution of the Soviet Union, since the island is less dependent on Venezuelan oil than it was on the Soviet and, in addition, its economy is more diversified
It points, for example, to remittances – which generate some US $ 3.5 billion a year – to tourism – which provides some US $ 3 billion – and to foreign investment. Three sources of income with which the island did not count in 1989.
"When the disappearance of the USSR, Cuba lost 35% of its GDP but over four years, now we are talking about losing between 10% and 12% of GDP in a year, which is what is related to aid It's going to be a very serious impact, a fall like that was not seen since the 1990s, "he concludes.