Cuban concerns over Venezuela's economic woes

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Venezuelan President Hugo Chavez (C-L) and Cuban acting President Raul Castro (C-R) in Santiago de Cuba, 22 December 2007Image source, AFP
Image caption,
Hugo Chavez is welcomed to Cuba in 2007

"Viva Cienfuegos! Viva the refinery! Viva Fidel!" shouted Venezuelan President Hugo Chavez into the microphone.

It was December 2007.

A lean, upbeat President Chavez was at the height of his powers. Dressed in his traditional red guayabera, he was in the Cuban city of Cienfuegos to inaugurate a refurbished oil refinery, a joint venture between Cuba and Venezuela.

The socialist leader heralded the energy project as the jewel in the crown of their bilateral relationship, and testament to his close personal friendship with Fidel Castro.

Almost nine years on, many Chavez supporters miss those halcyon days.

The oil price was above $100 a barrel and the charismatic leader was untouchable at the polls. There seemed to be no end to his largesse, with the profits from the country's vast oil wealth shared among left-wing allies in the region.

Image source, AFP
Image caption,
Venezuela-Cuba relations improved significantly under Chavez's presidency - he formed a strong alliance with Fidel Castro

The defining policy of the Chavez-Fidel era was the "oil-for-doctors" programme: Cuba receives about 100,000 barrels of oil a day from Venezuela in exchange for sending doctors and nurses to work in Venezuelan shanty towns and rural villages.

Under the scheme, Venezuelan medical students can also study in Cuba for free.

During breaks from their rounds, anaesthetists Jose Martin Castillo and Carlos Flores often take a little air by walking down the Avenida de los Presidentes in Havana and sitting by the statue of Simon Bolivar, the hero of independence in Venezuela and several other South American countries.

Both committed "Chavistas" from poor neighbourhoods in Venezuela, they first came to Cuba to study medicine a few years ago and are now back for their clinical training. They remain firm supporters of the late president and are thankful for what the oil-funded medical programme has allowed them to achieve.

"We're both still 'Chavistas' because Chavez was the people, he was part of every one of us," explains Dr Castillo.

Feeling the pinch

But today, Hugo Chavez is gone, his life cut short by cancer. His successor, Nicolas Maduro, is facing the biggest challenge of his political career.

The Venezuelan oil basket is languishing at about $20-25 a barrel and the country's economy is in deep trouble. The opposition has also just retaken the national assembly in Caracas with an overwhelming majority.

Image caption,
Dr Flores says he is not receiving the payments he was promised

The medical students have noticed the pinch.

"In Venezuela, they told us we'd get a stipend of $200 a month. I've been here for five months and am yet to receive a single payment," explains Dr Flores. "What has happened to that money that the comandante, President Nicolas Maduro, has already approved? Who is diverting those funds?" he asks, the frustration etched onto his face.

They are quick to thank their Cuban teachers for the "solidarity" they've received in Havana and are fulsome in their praise of the Cuban Health Ministry, describing their accommodation and teaching as "of a first world standard".

But the word the two say best defines their circumstances is "uncertainty".

Image caption,
Dr Castillo says Venezuelan medics have no representation in Cuba

"We've heard the president say that they're going to maintain the social missions, especially in health. But it's unclear as we don't have a piece of paper which says we're going to continue [our studies in Cuba] for the next four years," says Dr Flores.

"Even if we pass our tests for this year, we don't know what will happen next year - whether the opposition which took over the assembly will try to shut these programmes down."

The men also fear that in a worst-case scenario, eventually there will be no programme of Cuban healthcare in the Venezuelan shanty towns.

'Economic war'

Such is the concern in Havana about Venezuela's economic malaise and changing political landscape that the Venezuelan Ambassador to Cuba, Ali Rodriguez Araque, appeared on Cuban state television in January to calm fears.

"Let's not forget that the Venezuelan opposition is not just the opposition," he told viewers of Mesa Redonda, a well-known political discussion programme in Cuba.

"Behind them there is a great power, both economic and political," referring to the Maduro administration's oft-quoted claim that the hand of Washington is behind the crisis by waging a form of "economic war" on Venezuela.

Image source, AFP
Image caption,
Ali Rodriguez Araque has tried to allay fears over Venezuela's economy

Their ultimate goal, he argued, is to knock Nicolas Maduro from power.

The ambassador also tried to assuage ordinary Cubans' concerns about the economic health of their long-term benefactor.

The lower oil price "doesn't necessarily mean ruin for the country", he said, although he admitted it would "slow down" the provision of social programmes.

Stable alliance?

International health services are now thought to be Cuba's biggest export. What if Venezuela simply can't bankroll the healthcare programmes any more?

"That I would say is the biggest problem that they now face," says Ricardo Torres, an economist at the Centre for the Study of the Cuban Economy.

"It's not that they lack the will to maintain those programmes. But at some point they won't have the money to continue that funding."

But he thinks the links between the socialist allies will withstand the current economic woes and points out that the bilateral relationship goes beyond the purely economic.

"On the Cuban side, my guess is that even if Venezuela at some point is not able to fund the provision of those social services by the Cubans in Venezuela any more, the Cuban government will continue providing those services.

"I don't see any big disruption in the links at this time."

Image source, AFP
Image caption,
Cuban doctors have helped bring healthcare to rural parts of Venezuela

Cuba hasn't said anything about the future of the bilateral healthcare arrangement so far, but it would stand to reason that they would keep sending doctors - at least for now.

For a long time, the price of the oil they were receiving was much higher than the cost of the services they were sending. Now it seems things are evening out a bit. And in purely symbolic terms, it would look bad for both sides for the measure to suddenly be stopped.

Venezuela-Cuba relations

  • When the Soviet Union collapsed in 1991, Cuba's economic lifeline was suddenly cut, leading to blackouts, and food and fuel shortages
  • The system's survival owes much to Hugo Chavez and his support
  • Under the arrangement, Cuba received about two-thirds of its oil from Venezuela, paying for it with the services of thousands of state-employed doctors, sports trainers and military advisers
  • For many years, with oil at a high price, it was thought that Cuba had benefited most financially. But now, the oil price may not fully cover the cost of its medics bringing healthcare to poor, remote areas of Venezuela

New partners

Still, Cuba is widening its list of economic partners beyond Venezuela. The island has just renegotiated billions of dollars of debt with the Paris Club group of creditor nations and with Russia. Plus, of course, relations with Washington are moving forward at pace, with an historic visit from President Obama just weeks away.

Meanwhile Dr Flores and Dr Castillo, the Venezuelan anaesthetists in Havana, say that they will simply dedicate themselves to their studies, to fulfil Hugo Chavez's vision of thousands of Cuban-trained medics working in low-income neighbourhoods in Venezuela.

Despite their precarious situation, they say they are still the lucky ones.

"The matriculation for specialists here in Cuba starts in September. There are Venezuelan medical students approved to come here who still haven't arrived today," says Dr Flores.

"The Health Ministry of Venezuela has said that there isn't enough money to send them.

"They're missing courses, missing out on teaching, losing valuable time. It's a waste."