HAVANA (AP) — Cubans who were tuned in to the nightly soap opera on a recent Saturday received a sudden burst of bad news, from the other side of the Caribbean. State TV cut to the presidential palace in Caracas, Venezuela, where President Hugo Chavez revealed that his cancer had returned. Facing his fourth related surgery in 18 months, he grimly named Vice President Nicolas Maduro as his possible successor.
Despite the drama, the news likely wasn’t a surprise to Cuba’s communist government, and not only because Chavez has been receiving medical care on the island.
Havana learned important lessons about overdependence when the 1991 collapse of the Soviet Union threw the country into a deep crisis. Trying to avoid the consequences of a similar cut, the Cuban government has been diversifying its portfolio of economic partners in recent years, looking to Asia, Europe and other Latin American nations, and is only about half as dependent on Caracas as it was on the former Soviet Union.
Cuba is also working to stimulate its economy back home by allowing more private-sector activity, giving a leg up to independent and cooperative farming, and decentralizing its sugar industry. A stronger Cuban economy would in theory have more hard currency to pay for energy and other imports.
Also getting off the ground is an experiment with independent nonfarm collectives that should be more efficient than state-run companies. And next year, another pilot program is planned for decentralized state enterprises that will enjoy near-autonomy and be allowed to control most of their income.
“This could have good results,” said a Cuban economist who spoke on condition of anonymity because he wasn’t authorized to talk to the foreign media. Cuba “is also thinking of boosting foreign investment in areas of the national economy, including in restricted areas like the sugar industry.”
One of the country’s top goals has been to make the island’s struggling economy less dependent on a single benefactor. Under the leadership of Chavez, who regularly calls former Cuban President Fidel Castro his ideological father and has followed parts of the Communist leader’s governance playbook, Venezuela has sent billions of dollars a year to Cuba through trade and petro-aid.
Bilateral trade stood at a little over $8 billion last year, much of it in Cuban imports of oil and derivatives. In return, Havana primarily provides Venezuela with technical support from Cuban teachers, scientists and other professionals, plus brigades of health care workers. Analysts say those services are overvalued by outside standards, apparently costing as much as $200,000 per year per doctor. Experts peg the total Venezuelan subsidy to Cuba at around $2 billion to $4 billion a year.
‘NOT GOING BACK’
While business with Venezuela makes up 40 percent of all Cuban trade, it’s still a far cry from the days when the Communist Eastern Bloc accounted for an estimated 80 percent.
“A (loss of) $2 billion to $4 billion would definitely pinch. But it is not the same relative weight as the sudden complete withdrawal of the Soviet subsidies in the early ’90s,” said Richard E. Feinberg, a professor of international political economy at the University of California, San Diego. “Cuba’s not going to go back to the days of bicycles. Could it throw the Cuban economy into recession? Yes.”
For Cuba, Chavez’s latest health scare capped off a year of disappointments in the island’s attempt to wean itself from Venezuelan energy.
Three deep-water exploratory oil wells drilled off the west coast failed to yield a strike, and last month the only oil rig in the world capable of drilling there without violating U.S. sanctions sailed away with no return in sight.
Yet time and again Havana has shown that it’s nothing if not resilient, weathering everything from U.S.-backed invasion and assassination plots in the 1960s to the austere “Special Period” in the early 1990s, when the Soviet collapse sent Cuba’s GDP plummeting 33 percent over four years. When hurricanes damaged the country’s agriculture sector and the global financial crisis squeezed tourism four years ago, Cuba tightened its belt, slashed imports and survived.
“Some people are saying the demise of Chavez is also going to be the demise of communism in Cuba because the regime’s going to collapse and the people are going to rise up,” Feinberg said. “That’s probably yet another delusion of the anti-Castro exile community.”
Still, many Cubans are nervously tuning into the near-daily updates about Chavez’s health, carried prominently in state media.
“I don’t know what would happen here,” said 52-year-old Havana resident Magaly Ruiz. “We might end up eating grass.”