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Castro's
Doctors-for-Oil Swap With Chavez Bolsters Bush's Foes
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By Guillermo Parra-Bernal Oct. 30 (Bloomberg) -- By 10 p.m. on most nights, the sea wall alongside Havana's main drag, El Malecon, a 10-kilometer- long highway bordering the sea, is standing room only. Young Cubans listen to street musicians strumming Cuba's slow, sensuous guajira rhythms, swig from cartons of rum and discuss politics with foreigners out of earshot of the night police patrols. For the first time in more than 15 years, some see a better future. Danis Díaz is one. Unemployed right now because he broke his leg working on an oil rig, he says he doesn't expect any trouble finding a new job once he recovers. ``I am optimistic,'' Díaz, 24, says. ``It's the first time in years I've felt that way. I'm sure that new job opportunities will pop up. I hear the Venezuelans are helping.'' These are prosperous times for the economy of the Republic of Cuba, and Venezuelan President Hugo Chavez does indeed have a lot to do with it. Gross domestic product grew at 12 percent last year, according to Cuba's Economy and Planning Ministry, the fastest rate since President Fidel Castro took power in 1959 and turned the island into a communist state. Though reliable data on the Cuban economy is hard to come by, and government figures are often out of date and impossible to confirm, anecdotal evidence backs up the Cuban claims. ``The Cuban economy is doing OK,'' says Wayne Smith, a senior fellow at the Center for International Policy in Washington who spent 25 years as a U.S. diplomat focusing on Cuba. ``I see it moving forward. I see important improvements.'' Smith last visited Cuba in September. Booming Tourism The government says foreign investment was up 39 percent in 2005. Officials say tourism is booming: A record 2.5 million visitors will fly into Cuba in 2006 from Europe and from other Latin American nations. Wages have more than doubled in the past two years to an average of 398 Cuban national pesos ($21) a month, Economy Minister Jose Luis Rodriguez says, and the subsidized monthly allotments for every Cuban citizen of staples such as rice, eggs and cooking oil have been increased. The government has even added chocolate to the food package for the first time. The Ministry of Construction had plans to build 150,000 new housing units in the year ended on Sept. 30 and to remodel another 280,000. Even as Castro, 80, lay in a hospital suffering from an unidentified intestinal ailment that required surgery, the economic good news kept pouring in. Gross domestic product, which was $58 billion in 2005, grew another 12.5 percent in the first six months of 2006, Rodriguez said in a Sept. 12 press conference. Chavez's Project Venezuela's Chavez, 51, who took office in 1999, has helped drive Cuba's expansion by adopting the island nation as his favorite overseas project. Under an October 2000 accord engineered by Chavez, Venezuela, the world's fifth-biggest petroleum exporter, agreed to sell up to 100,000 barrels of oil a day to Cuba at a discount of as much as 40 percent. Some $5 billion worth of oil has been delivered since 2003. Jose Toro Hardy, a former board member of state oil company Petroleos de Venezuela SA (PDVSA) and a critic of Chavez's oil policies, says Cuba has been reselling oil it doesn't immediately need at market prices to bolster its budget. Ties to Chavez may give Castro's regime, which in mid- October was being run by his brother, Raul, 75, the financial independence to survive Fidel's death. ``All the indications are that the Cuban economy is stronger than it has been at any point since the end of the Cold War,'' says Robert Muse, a Washington-based attorney who specializes in international trade and the U.S. embargo of Cuba. ``Those who bet the only way for the Cuban economy to resuscitate was through Castro's death, or a transition to a democratic system, may keep waiting perpetually.'' Spreading the Revolution The flood of new money pouring into Havana has allowed Castro to revive his effort to spread his revolution -- and his anti-Yanqui ideology -- to the rest of Latin America and to Africa. Cuba, a nation of 11.3 million people, claims to have stationed thousands of doctors, nurses, engineers and social workers in 68 developing countries. The workers are an advertisement for what Smith calls the one success of Castro's revolution: the development of a universal, sophisticated educational system that churns out more doctors, nurses, teachers, engineers and scientists than Cuba has work for. Chavez has picked up the Cuban dictator's mantle, attacking U.S. President George W. Bush relentlessly. In a Sept. 20 outburst at the United Nations, Chavez called Bush ``the Devil'' and said he could still smell the sulfur on the microphone Bush had used the day before. The Enemy: Washington Chavez's goal, says Susan Kaufman Purcell, head of the Miami-based Center for Hemispheric Policy, is to damage U.S. political and economic interests in Latin America. Cuba is just one of a dozen countries to which Chavez has given free or discounted oil. ``The fact that petroleum prices are so high has given Chavez the wherewithal to spend money lavishly and buy influence,'' Purcell says. ``He is taking over the role of the former Soviet Union and will try to ensure that both Cuba and the region remain independent from and, ideally, hostile to the U.S.'' The help from Chavez comes a decade and a half after Cuba was thrown into penury by the collapse of the Soviet Union. Russia then withdrew billions of dollars in aid that had propped up the Cuban economy since the 1960s. Cuban Minister of Foreign Affairs Felipe Perez Roque, 41, says that because of the withdrawal of Soviet aid, Cuba's economy contracted 35 percent from 1991 to '95. Exporting Doctors Venezuela's Trade Ministry says overall commerce with Cuba will increase 42 percent this year to about $1.7 billion. About $400 million of that is a kind of barter, in which Chavez pays in oil for the salaries of more than 22,000 doctors, dentists, teachers, agricultural experts and sports trainers Cuba has stationed in Venezuela. In turn, Venezuela has enrolled about 10,000 Venezuelans in Cuban schools, where they're being trained as social workers, doctors and teachers. PDVSA is helping Cuba, an oil producer in its own right, modernize an aging refinery at the port of Cienfuegos. The company is also paying for construction of new housing and building a $20 million electricity grid in a rural district of the island. Cuba and Venezuela have also joined forces to provide financial aid to Bolivian President Evo Morales, a former coca grower whom Chavez and Castro helped bring to power. ``These new leaders have made me the happiest man in the world,'' Castro said after signing a cooperation agreement with Chavez and Morales in April. Friends in the Region One would have to go back to the 1960s to find a time when Castro had so much sympathy in the region, says Colombian Senator Gustavo Petro, 46, a former guerrilla leader who's known both Castro and Chavez for years. In July, Cuba signed an accord with Mercosur, the South American trading bloc founded by Argentina, Brazil, Paraguay and Uruguay to reduce tariffs on two-way trade. Under the accord, the island nation will export cigars, tobacco, rum and medicine in exchange for industrial products such as buses, home appliances and farming equipment. ``Castro is making his diplomats work hard toward getting the country good commercial deals that ensure it survives the U.S. embargo for some more years,'' Petro says. ``On one side, they know that they need foreign money to modernize the economy. On the other hand, they are aware that depending too much on aid from a single country does no good.'' Chavez, at the same time, is setting himself up as the new Fidel. He has given a total of $5 million in humanitarian aid to Afghanistan, Burkina Faso, Mali, Mauritania and Niger. He also gave $1 million to several relief agencies, including the American Red Cross, to help the victims of Hurricane Katrina. Havana Hero This winter, PDVSA will finance 40 percent of the cost of home heating oil for 180,000 poor households in eight states in the U.S. through its U.S. subsidiary, Citgo Petroleum Corp. Chavez's generosity and his constant baiting of Bush have earned him heroic status with Castro. His face smiles down from banners and billboards across Cuba. ``We are sowing the seeds,'' reads one billboard along the road from the international airport to the capital. It depicts Chavez, dressed in a red shirt, gazing warmly at a group of Cuban children. Havana-based Radio Reloj issues a steady stream of news reports extolling Chavez's achievements in what he calls his ``Bolivarian revolution.'' Like Simon Bolivar, who was born in Caracas and liberated much of northern South America from Spain in the 19th century, Chavez wants to free Venezuela and its neighbors from U.S. ``hegemony.'' From July 31 to mid-October, Chavez made three hospital visits to Castro, and he appeared in Havana in September for the annual conference of the Non-Aligned Movement, which Cuba hosted. Siding with Iran Chavez railed there against ``the U.S. imperialistic strategy that is placing at risk the very survival of the human species'' and called on developing nations to free themselves from Washington-dominated economic policies. He also sided with Iran, as he had in the past, in its fight with the U.S. and Europe over its nuclear program, and signed trade accords with Iranian President Mahmoud Ahmadinejad in Caracas after the close of the conference. Castro has been helped by the free market system he despises, which has driven up the value of Cuba's two main exports: nickel and sugar. The price of nickel, which is used to make stainless steel, gained 485 percent, to $32,625 a metric ton, from the start of 2002 to its peak on Oct. 20 on the London Metal Exchange. The metal cost $31,000 as of Oct. 27. Sugar, once Cuba's largest export and now in demand because it's used to make ethanol, reached a high of 19.73 cents a pound on Feb. 3 on the New York Board of Trade, more than double its level a year earlier. The price has since fallen 40 percent to 11.79 cents a pound on Oct. 27. Record Exports Cuban officials will not release figures on specific exports, saying the U.S. would try to block the trade if they did. They say total Cuban exports reached a record of $2.9 billion last year, up from $1.4 billion in 2004. ``Last year was one of the most fruitful in the history of the revolution,'' Economy Minister Rodriguez told the press in September. ``It marked the start of a wave of transformations in our economy that will last through the coming years. We expect 2006 to be as fruitful as 2005 was for our nation.'' Ordinary citizens confirm that living conditions in Cuba have improved since Chavez made himself Castro's compadre. More and better food has been available in the past year, they say, though supplies of items such as beef and milk are still inadequate. On their average pay of $21 a month, Cubans can afford the 80 U.S. cents they pay for the 10 eggs, 7 pounds (3.2 kilograms) of rice, 2.2 pounds of chicken, 10 ounces (284 grams) of beans and 8 ounces of soy meal they're entitled to. Hard Times Prices rise for additional quantities, though, and the ordinary Cuban can't afford most of the goods sold in the luxury stores that dot Havana and are mostly reserved for tourists. Still, Cubans feel they're better off than before. ``We went through hard times all these years, and, to me, the worst is now behind us,'' says Luis Anuez, 62, a Havana-based taxi driver. ``It doesn't necessarily mean we're doing great. The country has gone through a rough ride.'' Across Havana and in other Cuban cities such as Santiago, a visitor sees dozens of apartment buildings under construction, designed to replace the deteriorating, pre-revolution housing that serves most Cubans. Cuba is also rebuilding roads, bridges, railroads, ports and industrial facilities. Government investment in such facilities rose 38 percent in 2005, Rodriguez says. Cuba's Oil Wealth Since mid-2005, the government has been purchasing a planned 1,000 new buses, of which 350 have begun traversing Cuba's bumpy roads. Moraima Reyes, a housewife and mother of two, says traveling on Havana's old buses, derisively labeled ``camels,'' still mortifies her and her children. ``It's getting better, but we are far from having a good transport service,'' she says. If there's a key, besides Chavez, to Cuba's future prosperity, it may be oil. Cuba now produces 80,000 barrels of oil a day. Experts at the University of Miami say the island chain might have 1 billion barrels of untapped reserves off its northern and western coasts. For now, the country consumes more than twice as much as it produces, with the difference made up by shipments from Venezuela. Cuba doesn't have the resources to exploit its potential oil wealth. So, on Sept. 10, the government gave Oil & Natural Gas Corp., India's state-owned oil company, permission to drill for crude in its waters. Financial terms weren't disclosed. Union Cuba Petroleo, the state oil company, is also setting up joint ventures with Malaysia's Petroliam Nasional Bhd., Spain's Repsol YPF SA and Sherritt International Corp. of Canada. Cubans in Caracas Even as his oil tankers help raise the standard of living in Cuba, Chavez has to deal with his own country's poverty. Some 47 percent of Venezuelans fall below the UN's official poverty line. The ``socialism'' embraced by Chavez in Venezuela, where free enterprise still thrives, consists mostly of new programs for the poor. Cubans now play a crucial role in Chavez's most important anti-poverty program, a group of 19 social service centers called misiones bolivarianas, or Bolivarian missions. Chavez has spent about $15 billion to build up the missions since February 2003, $6 billion of it pulled from the country's burgeoning hard-currency reserves, which now stand at almost $35 billion. The missions include free medical and dental clinics; schools; literacy and job training programs; and outright handouts for the poor. Since 2003, the missions have spent $6 billion on food and housing subsidies. Food is distributed through 14,000 discount supermarkets located in poor areas, and hot food is given away free via about 500 soup kitchens. Sweet Ana Luisa One day last summer, Cuban physician Ana Luisa tended patients at the Cristo Rey modulo, or modular clinic, in the 23 de Enero slum outside Caracas, where 60,000 families live in poverty. The clinic is part of the Mision Barrio Adentro, one of the biggest poverty programs in Caracas. Ana Luisa, who declined to give her last name, works along with a medical assistant out of a small room that contains a bed and a desk. She and the other 28 Cuban doctors working in the neighborhood live in dormitories above their clinics. While she treats some minor illnesses and injuries, Ana Luisa mostly does physical exams and offers preventive care and advice. Citizens with serious illnesses go to government hospitals, where medical care is free. Ana Luisa is popular among her patients, one of whom described her as ``sweet and very efficient.'' She declined to comment, saying the Cuban government won't allow her to speak to the press. Free Medical Care Cuba has created its own version of Venezuela's anti- poverty program in Bolivia. In a project begun in May, the Castro government announced it would refurbish and fully staff 20 Bolivian hospitals, including one in La Higuera, the town where Ernesto ``Che'' Guevara, the guerrilla leader and doctor, was killed in 1967 while trying to spread Cuba's revolution. Free medical care is already being provided by 1,700 Cuban medical staff, 1,283 of them doctors, in towns across Bolivia. Cuban ophthalmologists performed eye surgery for cataracts and other ailments on 26,000 Bolivians from March to September, according to Rafael Dausa Cespedes, Cuba's ambassador to Bolivia. Cuba is also co-sponsoring an ambitious program called Yo Si Puedo, or Yes, I Can, with the Bolivian government to abolish illiteracy in the Andean country. Reading and writing will be taught by videos broadcast on 30,000 television sets donated by Cuba. For villages that have no electricity, Castro is also contributing 2,000 solar panels. `It's All on Us' Opposition politicians in Bolivia such as Senator Oscar Ortiz say they suspect the Cuban programs in Bolivia are being funded by Chavez. Dausa, 47, denies it. ``We are paying for every single item, with no expense for the Bolivian government,'' he says. ``It's all on us.'' The price of crude oil on the New York Mercantile Exchange fell 23 percent to $60.75 a barrel as of Oct. 27, from a high of $78.40 in July, raising the question of how long Chavez and his client Castro will be able to afford to pay the bills of their Latin neighbors. Under Chavez, Venezuela's national budget has increased to $40.6 billion in 2005 from $18.5 billion in 1999. Chavez is running for a new six-year term in elections scheduled for Dec. 3, and his support for Cuba has become an issue. His opponent, Manuel Rosales, governor of oil-rich Zulia province, is banking on polls that show the majority of Venezuelans, unlike their president, are not admirers of Castro, in part because Castro is still blamed for sponsoring a Venezuelan communist guerrilla movement back in the 1960s that resulted in a long break in diplomatic relations. A Close Race ``We are giving the Cuban government more than 100,000 barrels a day so Castro can maintain his tyranny,'' Rosales said in Caracas on Aug. 30. Rosales, who trailed Chavez in a July poll by 30 percentage points, has narrowed the gap by saying he would keep Chavez's anti-poverty programs while renegotiating give-away oil contracts. Rosales trailed Chavez by 18 points in a Hinterlaces opinion survey released on Sept. 20, and in mid-October, his supporters were calling it a close race. If Chavez wins, as most analysts predict, oil and socialism will remain a potent mix that could keep an old ideology burning even after Castro, its archetypal Latin leader, passes on. To contact the reporter on this story: Guillermo Parra-Bernal in Caracas, Venezuela at [EMAIL PROTECTED] Complete archives at http://www.sitbot.net/ Please let us stay on topic and be civil. OM
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