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LATIN AMERICA |
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Venezuela's Chávez Fills $9.4 Billion Yearly
Post-Soviet Gap in Cuba’s Accounts
By Jeremy Morgan,
Latin American Herald Tribune staff
CARACAS – Time was when the Castro regime in
Cuba looked to the Soviet Union to keep its
economic head above water. That was until
the USSR fell apart two decades ago and the
well of subsidies dried up.
Hard times were had by most people in Havana
and elsewhere on the sugar cane island. A
new rich friend was needed, and around a
decade ago, duly appeared. Venezuela’s
President Hugo Chávez came to the
much-needed rescue, and continues to do so
to this day, even if Chávez’s favored
mentor, the ailing Fidel, has made way for
his brother, Raúl.
In nominal terms, at least, Caracas looks to
be as open-handed towards Havana as Moscow
ever was. According to Carmelo Mesa, a Cuban
economist who’s a visiting professor at
Tulane University in the United States,
Venezuela bankrolled Cuba to the tune of
$9.4 billion last year.
This includes $2 billion to take account of
the cost of subsidizing Venezuelan oil
exports to Cuba. Venezuela sends oil to Cuba
at a “preferential” price of just $27 a
barrel.
That price is below even the low point of a
little over $34 a barrel that the price of
Venezuela’s mix of medium-grade and heavy
crude oil hit at the end of last year. At
present, Venezuela's oil basket is wobbling
up and down at around $60 a barrel.
Venezuela is also calculated to have footed
the bill for $1.37 billion for 76 bilateral
projects last year. More of these are said
to be waiting in the wings, and in addition,
there’s the (perhaps theoretical) cost of
servicing Cuba’s burgeoning debts to
Venezuela.
However, the biggest ticket item on last
year’s account is said to have been Barrio
Adentro, the flagship project launched by
Chávez in 2003 to bring basic medical
services to poor barrios across Venezuela.
Chávez adjudged the existing state health
service to have fallen down on the job; he
lambasted the medical profession for turning
their backs on the poor; he set up Barrio
Adentro; and he staffed it largely with
doctors, nurses and other medical staff
brought in from Cuba.
To some extent, this made sense. For all the
shortcomings of the Castro regime, presumed
or actual, Cuba trains many medical
professionals, even if the courses are much
shorter in years. experience and technology
than Western countries would expect from
their doctors.
This, it would seem, has not come cheaply.
According to Mesa’s breakdown, which was
published Monday by the conservative (and
quite openly anti-Chávez) newspaper, El
Universal, the payroll for Cuban medical and
ancillary staff at Barrio Adentro reached
$5.6 billion in 2008.
News of this came after a string of reports
to the effect that Barrio Adentro began to
come apart at the seams quite some time ago.
One reason for this, it was said, that
Cubans had used Barrio Adentro to leave
Cuba, and then piggie-backed on Chávez’s
parallel public health program to make their
way into private practice, not least of all
in the highly lucrative health market in the
United States.
There are some problems with this. If so
many Cubans had used Barrio Adentro for
their own purposes, how come the payroll
costs remained so high?
Mesa puzzled about this, evidently convinced
that a lot of Cubans had flown the coop.
“What happened with all these Cuban doctors
that there were, and for whom Venezuela paid
this sum last year?” he asked. “Where are
these doctors?” To him, the situation was
“inexplicable.”
In this context, it’s now being remembered
that none other than Chávez himself finally
rang an alarm bell about what was going on
(or not) at Barrio Adentro last month.
On September 20, Chavez reported that 2,000
centers in the Barrio Adentro network didn’t
actually have any medical staff. By then,
the evidence of one’s own eyes indicated
that he’d got a point, in that at least some
of the centers had acquired a distinctly
abandoned air about them.
Declaring an “emergency” in the health
sector, Chávez announced that he would bring
in a whole lot more Cubans, or Venezuelans
who’d been trained in Cuba, all over again.
They would arrive on October 8, he added,
1,111 Cubans and 213 Cuban-trained
Venezuelans in all, and they would include
specialists in a range of medical skills.
However, by this week, all talk of a rescue
job had evidently been consigned to the
past. On Monday, Chávez rang up the state
channel VTV to extol the virtues of the
health sector, claiming that Venezuela was
“one of the countries which offer the best
and most ample health systems.”
Chávez was in Bolívar state, opening a new
“integral diagnosis” center boasting 24
doctors, six nurses and other personnel. As
to Barrio Adentro, he said, at present it
had “more than 13,165” doctors working for
it, the majority of them Cubans with “some”
Venezuelans.
The president urged everybody to give Barrio
Adentro a new impulse, regardless of whether
he was around to make it happen, and then he
denied that it was being “relaunched”
because it had never gotten behind. Instead,
it was being strengthened by “rectification”
and by giving it impulse anew.
But while Barrio Adentro hogs the limelight
in the Cuban-Venezuelan relationship, it’s
by no means the only important element in
the bilateral equation. Mesa cited
statistics from the University of Miami
showing that the Cuban government’s debts to
Venezuela had reached $11.4 billion, of
which $4.6 billion had accumulated on the
oil account alone.
This implied that even as the Cubans were
benefiting from the low-cost oil, they
weren’t actually keeping up payments on the
bill. And in the process, Venezuela has
become Cuba’s biggest single trading partner
in what to all intents in purposes looks
rather like a one-way street, amid signs
that Venezuela might well be paying the bill
in both directions.
Cuba’s total foreign trade was worth $17.9
billion, according to Cuban statistics
quoted by Mesa. Out of this overall total,
Cuban exports to Venezuela came out at just
$415 million, Venezuela’s exports to Cuba at
$4.47 billion.
Cuba’s overall trade deficit totalled $10.56
billion last year. Of this, Mesa continued,
$4.06 billion corresponded to Venezuela, or
38 percent of the total shortfall on all
trade.
Mesa asked how a bilateral trade deficit of
over $4 billion last year alone was being
covered. At this juncture, he pointed to the
bill for Barrio Adentro, suggesting that
this was how the gap was being filled.
Mesa concluded that Venezuela was the
biggest provider of subsidy to Cuba, and
perhaps ever. “In nominal terms, the
Venezuelan subsidy is higher than whatever
subsidy the Soviet Union gave to Cuba,” he
claimed.
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