TRADE-CUBA/VENEZUELA: Castro Visit Marks Closer Ties

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Oct 24 2000 (IPS) - Cuba’s President Fidel Castro flies to Venezuela Thursday, his first official visit to the country in 40 years, which could give the two Caribbean nation’ economic relations a big push, going beyond the petroleum sector.

Castro is to initial Cuba’s participation in the Caracas Energy Accord, signed last Thursday by other nations of the Caribbean and Central America, in which Venezuela gives them access to its oil under preferential credit terms.

Castro is also expected to lay the groundwork for an integral programme of bilateral projects and co-operation during his four- day visit.

The agenda of the 74-year-old president, according to official sources in Cuba, includes activities ranging from a baseball game to taking part in the Sunday radio programme “Aló, Presidente,” his host President Hugo Chavez’s weekly show.

“If only there were men in the Americas of Fidel Castro’s moral stature and with his spirit of the people. Fidel is no tyrant,” Chávez said in response to criticism from some political sectors of his friendship with the Cuban president.

It will be necessary for Venezuela to overcome “40 years of practices against Cuba,” in anti-communism and disinformation, if we are to defeat efforts to isolate the island nation, said Venezuelan ambassador to Havana, Julio Montes.

What this means, explained the diplomat, is “seeking out the things we have that complement each other,” joint formulas of “mutual benefit in expanding our exportable products” and bringing our economies into line.

The potential growth of bilateral trade relations dates back to 1996 when the Venezuelan government under Rafael Calderas signed 10 co-operation agreements with Cuba.

Since then, tariff reductions have been implemented for more than 400 products the two countries regularly trade. An accord on the promotion and reciprocal protection of investments has also taken effect.

Along that road, the integration of Cuba in the regional petroleum pact means in practice that Havana could acquire 30,000 barrels of crude daily, virtually covering its oil needs under preferential payment conditions.

The Castro government has not had an opportunity like this since the island lost its providers of 13 million tonnes of oil annually in 1990 with the fall of the Soviet Union and the socialist bloc.

The ensuing energy shortage pushed Cuba into its worst economic crisis in the second half of the twentieth century – and the nation has yet to recover.

In these circumstances, Venezuela turned into Cuba’s top trade partner in the Latin American region, with petroleum making up 90 percent of their commercial relationship.

According to Cuban sources, annual consumption of imported oil is approximately six million tonnes per year, and 60 percent of that comes from Venezuela.

Despite the serious cash-flow problems afflicting Castro’s government since the beginning of the economic crisis a decade ago, “Cuba has been paying its petroleum bill year to year,” Montes pointed out.

According to the Venezuelan diplomat, the island imports four million tonnes of oil each year under 360-day financing. “We therefore believe that Havana can complement our economy,” he said.

It is evident that Venezuela’s willingness to accept payment for oil with services, including health, or other products, would facilitate an array of trade opportunities and economic integration between the two nations.

The Cuban government “is offering us a good agreement. Venezuelans will travel to Havana for surgery to save their lives, and we will pay Cuba with petroleum supplies,” affirmed Chávez last Sunday during his radio programme.

Venezuela this year paid Cuba two million dollars for 24 units of virus-detecting equipment and 900,000 for medical reagent kits, and purchased three million doses of the hepatitis B vaccine for six million dollars to be used in a massive inoculation programme.

Currently, Venezuela is spending 12 million dollars yearly on such medical products from Cuba, according to Montes.

This “is just the beginning, because it is the first phase of a much broader programme for the acquisition of medications,” said the Cuban ambassador to Venezuela, Germán Sánchez Otero.

The co-operation projects established so far between Castro and Chávez include the recovery of Venezuela’s sugarcane sector – which may involve the creation of a mixed enterprise -, Cuban services and the sale of equipment and technology.

The Venezuelan government also wants Cuba to take part in a low- income housing construction programme it has on the agenda, which would involve 100,000 housing units annually.

The island’s cement production sector is in full expansion and the two nations are discussing the possibility of setting up a mixed-capital plant.

Cuba is also to take part in the construction of a 1,700-km railroad in the next six years, a project that will connect the Venezuelan coast with the nation’s south, and the Orinoco River with the Amazon region.

In the transport sector, plans are on the drawing board for a maritime company, based on Spanish, Venezuelan and Cuban capital, as a connection point in the Caribbean for shipments arriving from Europe and South America.

Additionally, Venezuela’s principal airline, Aeropostal, and the Cuban Civil Aeronautics Corporation are considering a partnership to set up a new airline in the Caribbean region.

The aeronautics project would complement the development of a multi-destination tourism plan based on combining Venezuelan visits to the jungle and the mountains with Cuba’s sun and surf.

As far as the energy industry, in addition to petroleum, Venezuela may sell technology to Cuba, and the two countries are considering renovating an oil refinery on the island, building a lubricant manufacturer and an electrical plant.

But Carlos Raúl Hernández, a Venezuelan political analyst and former senator, affirms that Chávez’s decision to include Cuba in the Caracas Energy Accord has strong political nuances and does not take Venezuela’s interests into account.

“This decision makes it clear that Chávez is opening the doors not only to local authoritarianism but also to totalitarian regimes like Castro’s,” Hernández told the US-based Miami Herald newspaper.