Rick MacInnes-Rae: Cuba's economy at mercy of Venezuela's voters

In his lifetime, Hugo Chavez was a huge admirer of Cuba's Fidel Castro, subsidizing Cuba's straitened economy with billions of Venezuelan petrodollars. But in Venezuela's first post-Chavez election, those old revolutionary ties are now on the line.

Post-Chavez election threatens Cuba's subsidized oil

In Cuba, state restrictions have loosened in the past year or so. One result: private cars acting as taxis for tourists and other visitors, like here in downtown Havana. (Reuters)

It is not just Venezuelans who are looking anxiously at their post-Hugo Chavez future.

Cubans, too, have much to lose if Venezuela's government changes after the April 14 election, and they're not happy about it.

In campaign speeches, Venezuelan opposition leader Henrique Capriles is threatening to axe the long-time lifeline Venezuela has been providing to Cuba in the form of heavily discounted oil.

For 13 years, the small Caribbean state has depended on Venezuela for nearly 100,000 barrels a day of petroleum — to light Cuba's homes and the hotels that underpin its tourist economy — at discount prices that amount to an estimated $6-billion subsidy over the six-year life of the current agreement.

"The giveaways to other countries are going to end," Capriles told a student rally in Zulia recently. "Not another drop of oil will go toward financing the government of the Castros."

The market-friendly Venezuelan governor is no fan of the radical socialism of the late president Hugo Chavez who viewed Cuba's Fidel Castro as a mentor. And his message is getting through to Cubans loud and clear.

"The opposition is talking about cutting off the oil and if they do we're in big trouble," says Tina (not her real name), a tour guide in the northern province of Mattanzas.

Trouble is not something Cuba needs any more of, particularly now.

"After the triumph of the revolution in 1959, Cuba became an upside-down pyramid. Labourers at the top. Professionals at the bottom," says Tina, her own life being a case in point.

Surviving on tourists

Tina is a multilingual, university-trained interpreter/translator in her late 20s who found no work after graduating. So she became a teacher, and found there was no money in that.

The cult of Che

I've been to 68 countries in a 35-year career with the CBC, but never to the republic of Cuba, which is famously resistant to the charms of working journalists and free speech.

Last year, more than 5,000 people were arbitrarily detained for advocating democracy, according to the Cuban Human Rights Commission. Twice as many as in 2010.

But with Fidel Castro now frail, and with his aging brother Raul in charge and implementing incremental reforms, it seemed time to see what Cuba feels like, so I might recognize what changes come later.

The first thing I noticed when I went was that famous bearded face. It's everywhere. On shirts, hats, DayGlo posters and tenement walls.

But it's not Castro's face. It's Che Guevara, one of Fidel's comrades-in-arms who lived fast, died young and left a good-looking corpse, as they say.

In my experience in dictatorships enforcing a cult of personality, it's a little unusual for the boss to share a poster with anyone but the chosen successor.

Perhaps the Castros reckon that Che dead isn't a challenge to the brand, but more of a romantic advertisement for what is so often here called the "triumph of the revolution."

Her teacher's salary equalled $25 Cdn a month. Almost enough to buy four kilograms of pork to feed her extended family, providing she bought nothing else that month.

But she's a smart woman. She speaks Spanish, English, German and realpolitik. So, like Cuba after the collapse of its Soviet sponsor in the early-1990s, she stopped what she was doing and turned to tourism.

Cuba's been turning out joint-venture resorts as fast as it can drain the swamps of Varadero, building a new economy on the hard currency of foreign visitors to the tune of almost $2.5 billion a year, according to reports.

Tourists are flocking to the pastel-colored, all-inclusive, air-conditioned bubbles of blue water and white rum that could be anywhere in the Caribbean since they portray so little of Cuba or Castro or the political tensions that litter the country's past and present.

For those willing to leave the bubble, Tina will guide them where they want to go for a daily fee that's small to them, but eight times what she used to make in a month.

Most of her customers are Canadians ("So nice!") and Russians ("Not so nice."), since the ongoing 53-year-old U.S. embargo pretty much keeps Americans out.

The departures and arrivals board at Varadero Airport reads like a survey of cold weather capitals, with flights from Toronto, Montreal, Quebec City, Edmonton and Saint John coming and going all day long.

Still shortages

But while there are plenty of Canadians and Russians (even a few Chinese nationals) basking in sun and cheap rum, there are shortages of other things, despite the much trumpeted "triumph of the revolution."

Earlier this month it was butter. Before that, toothpaste. And before that, a shortage of shampoo.

The U.S. embargo against the Castro regime compels Cuba to pay for the things it wants in cash, and hard currency is hard to come by.

That is also where Venezuela helps out. Along with the subsidized oil, it also invests billions of its hard-earned petrodollars directly in Cuba's aging infrastructure.

Still, despite the help, Cuba can't afford everything, all the time. So it constantly runs out of all kinds of stuff.

"Cubans get by on tips," Tina tells me. A bartender in a tourist resort trousers more in a day than a teacher will in a month.

Times are tough, but not as tough as they once were in the mid-1990s when some 50,000 state-owned cows suddenly vanished into many thousands of pots when Cubans were going hungry.

There's emigration, of course.

Cuba has famously had two kinds. "Wet" and "dry." Wet means finding a boat, or lashing a few inner tubes together and trying your luck on the tides to Florida, 144 kilometres to the north.

Dry meant going to someplace like Venezuela, then travelling north over land through Mexico by rail to the U.S. A little more expensive, and fraught with risks of its own.

Passports have become easier to come by since January, when Cuba lifted the burdensome restrictions that were once designed to prevent people skipping out.

But like the easing of restrictions on buying and selling cars and houses over the past two years, it sounds better than it is.

As Tina says, you have to be able to afford these things, and not many can.

She likes to say that Cuba has no important natural resources, which is why it is so tourist-dependent. But she's wrong about that. Cuba has resources all right. Human resources. It exports people.

Tens of thousands of doctors, health professionals, teachers and sports coaches are dispatched on contracts all over the developing world, but particularly to Venezuela, where over 30,000 Cuban doctors and dentists are based, part of a doctors for (subsidized) oil program that the Castros set up with Chavez.

Human chattel, whose talents are part payment for the oil lifeline many are worried about losing.

Were the oil exchange to end, there'd be little waiting for these professionals back at home, beyond slinging mojitos to surly Russians.

But the first major poll of the Venezuelan campaign has the party of late president Chavez in the lead. Its victory would ensure the oil keeps flowing to Cuba, at least for the short term.