USD 18 billion heading for Cuba in three-year term The cash flow included lending, donation and investment
By FRANK LÓPEZ BALLESTEROS EL UNIVERSAL Monday June 02, 2014
Cuban economy did not wreck in the last decade only because of the input from the Venezuelan government. In three years only, USD 18 billion was transferred in form of loans, investments or grants.
The government of deceased President Hugo Chávez, and now the administration of Nicolás Maduro, never provided details of uncontrolled outlays. However, little by little, official data from Caracas and Havana have provided an estimate of the alliance paid in cash.
In 2008-2011, approximately USD 18 billion was transferred from Venezuela to Cuba by means of funds, loans and investments. Most of it accounted for payment of services and the onerous Bolivarian philanthropy.
The sum of money arises from data collected as part of a research conducted by the Association for the Study of the Cuban Economy (ASCE), based in the United States. To that aim, the official numbers in Cuba were considered.
"We don't know how much is debt and how much is transfer (gift). The impression is that almost all of it is transfer and the debt, if any, is under very favorable conditions," explained Luis R. Luis, the author of the paper, Ph. D in Economy and a member of the ASCE board of directors.
Most of financial flows to Cuba through 2013 come from Venezuela, yet the breakdown is unknown. "Some must be debt, yet the numbers do not show it," Luis said.
A paper by the European Union revealed USD 31 billion of Cuba's foreign debt at 2008. Venezuela would appear as the major creditor for USD 11.4 billion.
Under an agreement effective in 2003, Cuba supplies medical and social services to Venezuela, with a shipment of some 100,000 barrels per day of Venezuelan oil for valuable consideration.
Around 44,800 Cubans render services within the welfare missions started in 2003, according to the last official numbers reported in 2012. However, sources claim, such number is dwindling. Given that Venezuela pays Cuba with oil on account of professional services, in 2013, the Venezuelan government must have paid USD 91,000 per each person; or USD 7,600 monthly.
Green springboard
After 2011, Venezuelan oil kept on going to Cuba. Notwithstanding, as appears from the numbers supplied by Cuba, the value of the services of Cuban doctors, teachers or advisors is much higher than the value of oil.
In 2012, again, based on the official numbers, the bilateral balance of trade tipped in favor of Cuba with a surplus of USD 6 billion in the aggregate. "Hence, no debt has been accrued and any existing debt might be decreasing very quickly," Dr. Luis noted.
Debt is not the problem anyway. The point at issue is that Venezuela ships oil for which Cuba pays with nicely valued services.
To Luis' mind, official data hint that in 2012-2013, such transfers have vanished. Swap of Cuban services for Venezuelan oil is the focus point here.
According to the estimates made by Cuban economist Carmelo Mesa Lago, based on the numbers released by the Economic Commission for Latin America and the Caribbean (ECLAC) and data collected from Cuba, Venezuela disbursed USD 5.6 billion in 2008 for payment of the services rendered by Cuban doctors, nurses and other professionals.
Further, as appears from the flows of international banks, Cuba has received from Venezuela net funds through 2011.
"Are these loans or transfers?" Luis wonders. "As Cuba does not point to any existing debt, they are supposed to be transfers or donation."
Official data help dispel the doubt. At 2011, 70% of the Fund for International Cooperation of the Social Development Fund of Venezuela (Bandes) was used to "help" the Cuban government sponsor some bilateral programs.
Based on a report learned by El Universal, Cuba is the country with the largest amount of liabilities to Bandes, with a debt of USD 1.19 billion. At the end, nobody knows the conditions of the "supportive loans."
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