Economy & Trade, Headlines, Latin America & the Caribbean

CUBA-VENEZUELA: Strategic Alliance Cemented

Patricia Grogg

HAVANA, Oct 15 2007 (IPS) - Signing a string of economic agreements with Cuba Monday, Venezuelan President Hugo Chávez further tightened his close alliance with this Caribbean island nation’s ailing leader, Fidel Castro, who he considers a mentor and the "father of all revolutionaries."

During his three-day visit to Cuba, Chávez spent hours talking with Castro, who has not been seen in public since undergoing emergency intestinal surgery in July 2006.

On Sunday, Castro called in to the Venezuelan leader’s weekly "Aló Presidente" radio and TV programme, enabling Cubans to hear his voice live for the first time in 14 months. Chávez broadcast the programme from the city of Santa Clara, 268 km from Havana.

"I saw him in high spirits, with good colouring…and a well-trimmed beard," said the Venezuelan leader with respect to Castro’s health, after meeting with him in person for more than four hours on Saturday.

Chávez and acting President Raúl Castro – the defence minister and Fidel’s brother – signed 13 accords Monday aimed at bolstering economic integration between the two countries, as part of the Bolivarian Alternative for the Americas (ALBA), launched by Chávez as a kind of counterpoint to the since-failed Free Trade Area of the Americas (FTAA) sponsored by the United States.

The agreements included the creation of two new joint ventures and three contracts for oil exploration, a question of strategic interest for the two countries.

Chávez also signed a presidential decree authorising the creation of a joint venture that will install, operate and run a telecommunications system linking Venezuela and Cuba.

The accord will entail the installation of an underwater fibre optic cable running from Guaira in northern Venezuela to Siboney in eastern Cuba, which will permit the high-quality, high-speed transmission of a large amount of information.

As Venezuelan experts explained to the Cuban media, other countries in the region will be able to hook up to the cable, to gain access to telecommunication services at a lower cost than those offered by private operators.

The directors of the state-run oil companies Petróleos de Venezuela (PDVSA) and Cubapetróleo (CUPET) signed contracts to explore for oil in four offshore blocks in Cuba&#39s Gulf of Mexico waters, which were opened up to foreign investment several years ago, and in other offshore and land deposits.

In addition, a letter of intent was signed to build a petrochemical complex in the city of Cienfuegos, 250 km southeast of the capital, where an oil refinery is to begin operating in December.

The refinery, which was built with aid from the former Soviet Union, was nearly complete when work was brought to a halt by the collapse of the Soviet bloc. Chávez, who visited the refinery late Sunday, described the project as the first step in a major industrial complex to be built in Cienfuegos.

The refinery will initially process 65,000 barrels a day of crude, which could eventually increase to more than 100,000. "There is a good chance of that. I truly hope more oil is found in Cuba," said the Venezuelan president.

The Cuban-Venezuelan joint venture that is revamping the refinery was created in April 2006, with 51 percent of shares in the hands of the Cuban state and 49 percent belonging to PDVSA.

The plant in Cienfuegos is to be the first of a network of refineries that Chávez plans to build in the Caribbean to process the heavy crude that Venezuela extracts in its southeastern Orinoco strip.

To that end, Venezuela has also made investments in Jamaica, and plans to build another refinery in Dominica.

Caracas’s projects to sell oil to nations in the Caribbean on soft payment terms are also focusing on developing the petrochemical industry and building regasification plants that convert liquefied gas back into its gaseous state.

Venezuela supplies Cuba with 90,000 to 100,000 barrels a day of oil.

Trade between the two countries climbed from 902 million dollars in 2000 to 2.6 billion in 2006, and could rise to 3.0 billion dollars this year.

Cuba, in the meantime, provides Venezuela with assistance in the areas of health, education and sports, and around 20,000 Venezuelan students are studying medicine with Cuban professors in Venezuela, while another 2,400 are studying medicine in Cuba.

During his visit, Chávez underscored Latin American integration as the way to confront U.S. policies in the region. "We will convert this group of countries in ALBA and beyond ALBA into a world power – not a single-country power but a regional power," he said.

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