The Future of "Cubazuela"

Friday, March 1, 2013
Great article by Jose de Cordoba in The Wall Street Journal:

The Future of 'Cubazuela'

The ties between Castro and Chávez have kept the island nation afloat. What now?

Few people around the world are more keenly interested in the health of cancer-stricken Venezuelan President Hugo Chávez than a pair of brothers in Cuba: Fidel and Raúl Castro.

Since becoming president of Venezuela in 1999, Mr. Chávez has developed an exceptionally close bond with Fidel Castro, who has served as the Venezuelan's mentor, medical adviser and father figure. The personal relationship between the old dictator and his younger autocratic pupil has evolved into a web of economic and political ties that today bind together the destinies of the two countries. It has given the poor, almost bankrupt island enormous power over its far wealthier and more populous oil-producing neighbor.

Cuba, ruled by the Castro brothers since 1959, has a lot to lose if Mr. Chávez dies. Since 2007, Venezuela has provided the Communist island nation about $10 billion a year in economic aid, mostly in the form of cut-rate oil and inflated payments for thousands of Cuban doctors and other professionals, according to the University of Miami's Cuban-studies center. Total aid and investment from Venezuela now amount to about 22% of Cuba's annual economic output, said Carmelo Mesa Lago, a professor emeritus at the University of Pittsburgh.

If the relationship between Havana and Caracas were to end or falter, many Cubans fear that the island's threadbare economy could be pushed into depression, as in the early 1990s, when Cuba lost Soviet aid and its economy plunged by about 40%. "It could lead to a social upheaval," said Riordan Roett, the head of Latin American studies at Johns Hopkins University.

In February, after Mr. Chávez had spent two months in Cuba's best hospital recovering from his fourth cancer surgery in 18 months, the ailing president was flown back to Caracas in the middle of the night and spirited off to a military hospital. His prognosis is a state secret, but most analysts believe he is fighting a terminal disease.

If Mr. Chávez dies, Venezuelan law calls for new elections. The country's political opposition has long railed against the aid to Cuba, promising to spend Venezuela's oil money at home.

The elder Castro has for years been Mr. Chávez's top adviser on the art of political survival, analysts say. The two countries have signed more than 300 trade and economic cooperation deals, many of them involving barter arrangements that appear to favor Cuba.

"Since when do poor countries run rich countries, small countries run big countries and weak countries run powerful countries?" asked former Mexican foreign minister Jorge Castañeda. "It's as if Puerto Rico ran the U.S. It's crazy."

Read more here.