LOS ANGELES, CALIFORNIA
June 1st, 2019  

 

CUBA, THE THIRD TIME'S THE END
Roberto Alvarez Quiñones

 

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Gifted oil: Cuba's main export

Upon joining the COMECON in 1972, Cuba was assigned an oil quota that in the 1980s came to 13 million tons per year. Because of its small size, the Cuban economy only consumed between 10 and 11 million tons, and Moscow did not even send that excess oil to the Island. Rather, it sold it on the capitalist market and gave Castro the proceeds.

Official statistics say that in the 1980s sugar accounted for 73% of all exports, and almost 90% of the foreign currency obtained by the country. False.  According to what I was told, off the record, by Humberto Pérez, then President of the JUCEPLAN (now the Ministry of Economy), in the mid 1980s the re-exportation of Soviet oil actually exceeded sugar exports.

In that decade the global price of sugar ranged between 5 and 12 cents a pound – but Moscow paid Cuba 45 cents.  Even buying sugar at nine to ten times its market price, and other Cuban products, the trade deficit with the USSR was still astronomical.

I still keep, on a yellowed teletype sheet, a 1995 report by the AFP agency revealing that between 1961 and 1991 the total Cuban trade deficit was 24.687 billion dollars, of which some 20 billion were with the USSR. Between 75% and 85% of all Cuban foreign trade was with the USSR and its satellites. Between 1984 and 1991 alone the Cuban trade imbalance came to 16.084 billion dollars, peaking at 2.74 billion in 1989, and almost all of it was with the USSR.

With respect to Venezuela, the money given to the Castros exceeded the 37.2 billion cited, but the secrecy surrounding Caracas-Havana relations, typical of mafiosi, makes it impossible to quantify it. Chávez and Maduro used state institutions –such as Bandes, Fondes and others– to issue massive loans that Havana never returned.

For some 15 years Venezuela delivered more than 115,000 barrels of oil per day to Cuba. According to Horacio Medina, a former executive at PDVSA, Caracas often sent 125,000 barrels a day to Cuba, which, added to the 50,000 produced on the island, came to 175,000 barrels. But Cuban consumption was less than 120,000 barrels, so the Castros exported the surplus, which gave it up to 1 billion dollars a year.

Either its productive forces are liberated, or Cuba will be another Burundi

Ironically, today the "Empire" is the largest source of foreign revenue in Cuba, with remittances, packages and tourism worth around 7 billion dollars a year. But it is not enough. And it will be even more insufficient if US sanctions are put into effect. The parasitic Castroist economy requires no less than 15 billion dollars a year to maintain the country's standard of living in recent years, already precarious. Where will that come from?

The country produces and exports less and less. It even has to import sugar to meet its commitments to China. In 2018 it imported 40,000 metric tons of sugar from France. Nickel production fell from 72,530 tons in 2011 to less than 50,000 in 2018.

The exploitation of doctors under slave-like conditions abroad met a disastrous end, with 8,000 doctors bolting to Brazil. Tourism nets little, because for each dollar received 65 cents leave the island to import what is necessary to keep the industry running. And Washington announced that it is going to crack down on furtive tourism by Americans on the island.

According to credible sources, the talks in Norway between Venezuela's dictatorship and opposition were an initiative of Raúl Castro, who was willing to give up Maduro as long as they continued to send him free oil and keep Cuban doctors in that country. But if the opposition pacts with the chavista regime, the resulting transitional government will not be able to give Cuba more oil, and Castro II country will have to pay a pretty penny for it on the world market.

That is why the third time may be the end. There is no third patron available to bankroll the Caribbean's 'revolutionary' wastrel. Cubans wonder: if there are acute shortages now, with Maduro still in power, and sending dollars and oil to the island, what will the crisis be like when he falls? The second "Special Period" already affecting the population is going to give way to a third, and it will be even worse.

The conclusion is obvious: either private property is restored, and Cuba's productive forces are liberated, or Cuba will become another Burundi, Chad or Sudan, with its people dependent on international public charity.

If el chavismo falls, the Stalinist-Castro model will have come to an end. There will be changes in Cuba. The Castroist leadership is likely to embrace a Chinese or Vietnamese dictatorial model, but that is a subject for another analysis.