Venezuela is drowning, yet Maduro keeps subsidizing Havana
September 18, 2018 05:00 PM NPT
Photo Courtesy: Agencies
VENEZUELA, Sept 18: As Venezuelans live with an unprecedented and recurring shortage of food and medicines, suffering through an economic crisis characterized by the highest inflation in the world and the lowest wages in the region, President Nicolas Maduro continues to send millions of barrels of subsidized crude oil to Cuba.
Venezuelan oil production is plummeting. The government has no money to purchase basic things like food, medicine, or consumer goods, nor does it have the money to pay its debts. In the only official foreign exchange market, Dicom, only 20 million dollars have been traded in the first semester of 2018, whereas in 2002, Venezuela traded 80 million dollars per day.
According to the Organization of Petroleum Exporting Countries, oil production in Venezuela fell in August to an average of 1.23 million barrels per day, 2.8 percent less than in July and its lowest figure since the late 1980s. Even as this decline was occurring, Venezuelan Minister of Energy and Petroleum Manuel Quevedo was promising to keep Maduro's impossible promise of increasing production by one million barrels per day by December.
In the real world, the country is scheduled to close three of its largest refineries due to shortages of crude oil and personnel. This would have been an unimaginable situation two decades ago when PDVSA, Venezuela's oil producer and its largest company, was the envy of the region, a corporation rated as the best in Latin America.
In July, economist Ricardo Hausmann, director of the Center for International Development at Harvard University, said via video conference at the 2018 Congress of Conindustria, that "GDP has fallen 50 percent and that is because imports have fallen more than 80 percent and private imports have fallen more than 90 percent.”
Yet even amidst all this decline and the accompanying suffering, Maduro's regime has remembered its friends. It continues to send oil subsidies to Cuba without fail, fulfilling its commitment to the socialist alliance.
According to a Reuters' report, PDVSA has sent 11.74 million barrels (about 49,000 daily) to Cuba to date, with more than 4 million barrels making the northward trek between the months of June and August. The question many might ask is, why? After the fall of the Soviet Union in the 1990's, Cuba's socialist system experienced a huge crisis, which had an immediate and devastating effect on the island's social, political and economic life. Ever since the arrival of Chavismo in Venezuela, Cuba has depended financially on the South American country, which has covered up to 70 percent of its fuel needs for years.
In exchange, Cuba's regime has not only provided medical and educational collaboration contracts to Venezuela but has also offered the experience of Cuban intelligence to keep Chavez and now Maduro in power.
Today, Cuba is the true pillar of the Venezuelan regime. Havana is providing Maduro with the instruments of repression and the intelligence apparatus that allows him to remain in power despite his regime's failure and the storm he faces in consequence.
The capacity of Venezuelan intelligence received a strong boost after Chávez allied with Cuba, that is why the deceased ex-president was is in debt to the Caribbean country. His regime can now detect every plot beforehand and watch the opposition because of the large number of Cubans involved in spying on Venezuelans. Both Maduro and his allies realized that SEBIN — the Venezuelan intelligence service — would never have been up to the task without Cuban help.
The loss of Maduro's alliance with Cuba would cause the abrupt fall of his regime. And so he will do whatever it takes to preserve that alliance, even if he has to starve his people to death in order to do it.