The two largest economic partners for Cuba today are Venezuela and China. Venezuela provides oil to Cuba in exchange for a finely tuned barter arrangement for tens of thousands of doctors deployed throughout Venezuelan cities and villages. China is pumping “tied aid” and financing into Cuba because it smells mercantilist opportunities there.
On Friday, Wu Guanzheng — a member of the Standing Committee of China’s Communist Party Poliburo — arrived for four days of meetings. He has since met with both acting President Raul Castro as well as the ailing Fidel Castro.
From my recent trip to Cuba, it became clear that China is moving quickly up in economic significance to the Cuban government. My hunch is that it will not take long for China to overtake Venezuela as the most important economic partner to Cuba.
One Cuban government official told me that Cuba has a history of always being dependent on some outside government. For a while it was America, until the revolution. Then Cuba’s patron became the Soviet Union. After the fall of the Soviets and the Socialist Bloc, Cuba scrounged desperately around and remodeled much of its internal economy to survive a 35% plunge in its GDP when Soviet transfer payments stopped. Venezuela and China have become the patrons of the moment.
But many in the Cuban government look at Venezuela as a peer nation, whereas being attached to “a superpower” has a “completely different set of realities,” said a prominent Cuban economist to me.
China is not yet a superpower on the scale of the former USSR or the US, but it is clearly ascending and is building important economic bridges with Cuba — and its projected 9 billion barrels of crude and sizable natural gas reserves.
Venezuela’s attempts to colonize Cuba are driven more by Hugo Chavez’s regional political pretensions. China is expanding its relations to secure energy sources and economic partners — but is far more incrementalist and responsible as it inches toward the island nation just off America’s coast.
But what continues to defy logic is America’s absence as these economic currents turn in directions away from US interests.
While I was in Havana, I discovered that significant citrus groves were managed by Israeli firms. I saw a Benetton store in old Havana. On my roof at the Parque Central Hotel, British Petroleum was having a large party — attended by many Cuban nationals. BP bought and manages today ARCO’s former oil operations in Alaska’s oil fields.
BP can apparently sniff around in Cuba for opportunities — but American firms are still stymied in what has become an enormously ineffective embargo.
— Steve Clemons