Cuba: The Third Time's the End
By Roberto Álvarez Quiñones
Diario de Cuba
May 31, 2019
An old adage says that "the third time's the charm", which, with a darker twist, could prove applicable to Cuba should Nicolás Maduro be removed from power.
Shortly after the disintegration of the USSR and the collapse of the Cuban economy, which plummeted by 35%, triggering a " Special Period" and the Opción Zero energy crisis, Hugo Chávez emerged as if from a magician's hat, and Venezuela began to breastfeed Castroism. But now with that country mired in the worst crisis of its history, and el chavismo sinking fast, there is no other wet nurse in sight who might suckle Cuba. The Cuban dictatorship will be left without a benefactor.
Some scholars have calculated that the USSR gave Cuba subsidies in the amount of 35 billion dollars between 1961 and 1991, and that this amount was surpassed by Venezuela, which sent 37.2 billion between 2000 and 2018.
These figures may be lower than the real ones, because there is no access to the official sources to verify them. In any case, the amount does not matter as much as the crime committed by Raúl Castro and his military junta by maintaining a socioeconomic system that collapses if it does not receive foreign funding. As Fidel Castro admitted in a senescent lapse back in 2010: "it doesn't work".
In addition to the subsidies under the veil of "bilateral cooperation" (loans to cover Cuba's trade deficits, and other ones that Castro never paid back), Moscow gave Cuba tens of billions of dollars in armaments and triangular re-export operations of oil via the COMECON. In other words, for 30 years Cuba received a massive amount of money from the USSR, with both governments masking it.
Soviet armaments: the backbone of Castroism
These arms included tanks, fighter jets of more than seven million dollars each, like the MIG-23; rockets and cannons, antiaircraft guns, helicopters, frigates, torpedo boats, radar and espionage technology, hundreds of thousands of rifles, machine guns, mortars, armored vehicles, thousands of trucks and jeeps; and all the supplies for what became the largest and most powerful Army (300,000 troops) in Latin America, after Brazil's. The USSR even deployed 42 nuclear missiles on the island, which could have destroyed New York and Washington.
Those billions of dollars did not go directly to the economy, but they were the linchpin of Castroism. They allowed Fidel Castro to deify himself, and betray the populist, democratic socialist political platform he had promised at Moncada, and impose a Communist system, to perpetuate his hold on power.
It was a pact worthy of the mafia. Moscow turned Cuba into a spearhead for Soviet expansion in the Americas, and its confrontation with Washington. And Fidel Castro, in return, was endowed with such military power that his megalomania was given free rein. He intervened militarily in Latin American countries, and sent almost 500,000 soldiers to fight in African wars, and in the Middle East, where thousands of Cubans died, for nothing.
Gifted oil: Cuba's main export
Upon joining the COMECON in 1972, Cuba was assigned an oil quota that in the 1980s came to 13 million tons per year. Because of its small size, the Cuban economy only consumed between 10 and 11 million tons, and Moscow did not even send that excess oil to the Island. Rather, it sold it on the capitalist market and gave Castro the proceeds.
Official statistics say that in the 1980s sugar accounted for 73% of all exports, and almost 90% of the foreign currency obtained by the country. False. According to what I was told, off the record, by Humberto Pérez, then President of the JUCEPLAN (now the Ministry of Economy), in the mid 1980s the re-exportation of Soviet oil actually exceeded sugar exports.
In that decade the global price of sugar ranged between 5 and 12 cents a pound – but Moscow paid Cuba 45 cents. Even buying sugar at nine to ten times its market price, and other Cuban products, the trade deficit with the USSR was still astronomical.
I still keep, on a yellowed teletype sheet, a 1995 report by the AFP agency revealing that between 1961 and 1991 the total Cuban trade deficit was 24.687 billion dollars, of which some 20 billion were with the USSR. Between 75% and 85% of all Cuban foreign trade was with the USSR and its satellites. Between 1984 and 1991 alone the Cuban trade imbalance came to 16.084 billion dollars, peaking at 2.74 billion in 1989, and almost all of it was with the USSR.
With respect to Venezuela, the money given to the Castros exceeded the 37.2 billion cited, but the secrecy surrounding Caracas-Havana relations, typical of mafiosi, makes it impossible to quantify it. Chávez and Maduro used state institutions –such as Bandes, Fondes and others– to issue massive loans that Havana never returned.
For some 15 years Venezuela delivered more than 115,000 barrels of oil per day to Cuba. According to Horacio Medina, a former executive at PDVSA, Caracas often sent 125,000 barrels a day to Cuba, which, added to the 50,000 produced on the island, came to 175,000 barrels. But Cuban consumption was less than 120,000 barrels, so the Castros exported the surplus, which gave it up to 1 billion dollars a year.
Either its productive forces are liberated, or Cuba will be another Burundi
Ironically, today the "Empire" is the largest source of foreign revenue in Cuba, with remittances, packages and tourism worth around 7 billion dollars a year. But it is not enough. And it will be even more insufficient if US sanctions are put into effect. The parasitic Castroist economy requires no less than 15 billion dollars a year to maintain the country's standard of living in recent years, already precarious. Where will that come from?
The country produces and exports less and less. It even has to import sugar to meet its commitments to China. In 2018 it imported 40,000 metric tons of sugar from France. Nickel production fell from 72,530 tons in 2011 to less than 50,000 in 2018.
The exploitation of doctors under slave-like conditions abroad met a disastrous end, with 8,000 doctors bolting to Brazil. Tourism nets little, because for each dollar received 65 cents leave the island to import what is necessary to keep the industry running. And Washington announced that it is going to crack down on furtive tourism by Americans on the island.
According to credible sources, the talks in Norway between Venezuela's dictatorship and opposition were an initiative of Raúl Castro, who was willing to give up Maduro as long as they continued to send him free oil and keep Cuban doctors in that country. But if the opposition pacts with the chavista regime, the resulting transitional government will not be able to give Cuba more oil, and Castro II country will have to pay a pretty penny for it on the world market.
That is why the third time may be the end. There is no third patron available to bankroll the Caribbean's 'revolutionary' wastrel. Cubans wonder: if there are acute shortages now, with Maduro still in power, and sending dollars and oil to the island, what will the crisis be like when he falls? The second "Special Period" already affecting the population is going to give way to a third, and it will be even worse.
The conclusion is obvious: either private property is restored, and Cuba's productive forces are liberated, or Cuba will become another Burundi, Chad or Sudan, with its people dependent on international public charity.
If el chavismo falls, the Stalinist-Castro model will have come to an end. There will be changes in Cuba. The Castroist leadership is likely to embrace a Chinese or Vietnamese dictatorial model, but that is a subject for another analysis.