Marketing Chinese Fiction From Havana

Saturday, June 11, 2011
This week, Chinese vice-dictator Xi JinPing visited Havana in order "to strengthen economic ties" with the Castro regime.

So what are the fundamentals of these economic ties?

Reuters encapsulates them:

China has become the lender of last resort for debt-ridden Cuba, which is carrying out reforms to modernize and strengthen its Soviet-style economy.

Last year, China restructured debt believed to be as high as $4 billion and agreed to extend new credit in what Havana-based diplomats said was a show of support for Cuba's reforms.

In other words, Castro is delinquent on his massive debt payments to China -- thus, the need to restructure.

Yet, China is going to extend even more credit to Castro?

This is Grade A propaganda in order to market the fiction of "confidence"
in Castro's economy.

And why is this fiction (and that of "oil drilling") so important to Cuba's dictatorship?

As NYU Professors Bruce Bueno de Mesquita and Alastair Smith explain ("How Tyrants Endure") in the New York Times:

Despotic rulers stay in power by rewarding a small group of loyal supporters, often composed of key military officers, senior civil servants and family members or clansmen. A central responsibility of these loyalists is to suppress opposition to the regime. But they only carry out this messy, unpleasant task if they are well rewarded. Autocrats therefore need to ensure a continuing flow of benefits to their cronies [...]

As money becomes scarce, leaders can't pay their cronies, leaving no one to stop the people if they rebel. This is precisely what happened during the Russian and French revolutions and the collapse of communist rule in Eastern Europe — and why we predicted Mr. Mubarak's fall in a presentation to investors last May.