Cuba weathers storm in Venezuela but future looks uncertain
HAVANA – Refineries have gone dark. Gas rations have been slashed for hundreds of thousands of state workers. Construction materials are nearly impossible to find.
But Cuba’s hotels and restaurants are packed, major U.S. airlines are adding flights and government stores are full of frozen American chicken and U.S.-made candy. So far, Cuba is weathering the storm as Venezuela’s economy craters and protesters fill its streets to denounce Cuba’s greatest socialist ally.
A much-feared return to Cuba’s post-Soviet “Special Period” of food shortages and blackouts has yet to materialize as energy conservation and a boom in tourism and overseas remittances cushion the blow of a roughly 50 percent cut in Venezuelan oil aid worth hundreds of millions of dollars a year. Interminable bus lines and long hunts for products like milk, paint and cement seem manageable by comparison with the hunger and hardship of the early 1990s that followed the drastic loss of Soviet bloc aid and subsidies that had propped up Cuba’s economy for decades.
The boom set off by the re-establishment of diplomatic relations with the U.S. in 2015 shows no signs of slacking: About 285,000 American tourists visited in 2016, up 76 percent from 2015, and the Cuban government says U.S. visitors increased 125 percent in January. The number of visitors from all countries topped a record 4 million last year and appears on track to top that in 2017.
“So far we aren’t living in the Special Period again and I don’t think we will be,” said Ramon Santana, a 52-year-old bicycle taxi driver. “Before, we depended on a single country but now we’re trading with many. Before, the Soviet Union fell and everyone thought we would die. But we didn’t die. We’re still here.”
Still, Cubans are nervously watching Venezuela for signs of a deeper cut in oil shipments, which are paid for with the services of Cuban state doctors on “missions” in poor Venezuelan neighborhoods. So far, the Cuban government has funneled nearly all the cuts into the state sector, cutting air conditioning and summer work hours at government offices and, most recently, eliminating the supply of higher-octane “special” gasoline for state employees.
The special gas is entirely imported while regular is maintained through the small but steady domestic oil production on Cuba’s north-central coast, which touches the oil-rich Gulf of Mexico. Owners of modern, fuel-injected cars buy special if they can afford it to prevent the lower-octane fuel from damaging their engines.
High-ranking Cuban public officials often get both government cars and a monthly gasoline ration; their pay of $30 to $40 a month makes it impossible otherwise to afford gas that costs more than $4 a gallon. As in virtually every aspect of the Cuban economy, special gas cards provided to state employees to buy the fuel fed a thriving black market. Throughout the day, state officials can be seen filling the tanks of their government car, then popping the pump nozzle into a used 2-liter soft drink bottle and filling it with gas to be sold at a discount to other drivers.
Starting April 1, state gas stations were instructed to stop selling special gas to card-holders, a move that sent state employees to regular pumps, forced business people and diplomats to buy special gas with cash and set off shortage fears and panic buying that created several days of hours-long lines.
Many gas stations around the capital appear to have permanently stopped selling even regular gasoline, their pumps blocked off by orange traffic cones. The column of black smoke from one of Cuba’s main refineries, the Nico Lopez facility overlooking Havana Bay, has disappeared without explanation, leaving the skies clearer but residents worried about Cuba’s future energy supplies.
The replacement of oil money with tourism dollars has accelerated both the decline of Cuba’s ailing state-run businesses and the growth of its small private sector. Whereas oil money went entirely to the Communist state, much of the tourism is going to private enterprise – taxi drivers, private restaurants and bed-and-breakfasts that provide higher value service to tourists trying to avoid the high prices and poor service at state-run eateries and hotels.
“Those who work in the private sector have, in one way or another, seen improvement in their quality of life,” said Omar Everleny Perez, a Cuban economist and expert on the private sector. “The state worker on a salary hasn’t seen that.”
There’s also a geographic disparity, with rural areas and towns that don’t draw tourists seeing deeper, more protracted shortages.
In Cuba, there’s a widespread sense that deeper cuts in Venezuelan oil would push the entire country over the edge into intolerable economic problems.
A near-constant refrain is that Cubans can tolerate deep deprivation, but would not stand for a repeat of the Special Period. On Aug. 5, 1994, at the depth of post-Soviet crisis, Havana residents clashed with police around the Malecon seaside promenade in civil unrest that only subsided after Fidel Castro rushed to the scene and called for the protests to end.
Fidel’s brother and successor, President Raul Castro, has announced that he will step down from the presidency in February 2018. His most likely successor appears to be his first vice-president, 56-year-old Communist Party official Miguel Diaz-Canel, but the government has said nothing about the handover process. Cubans are highly skeptical that a new leader without the credibility conferred by the Castros’ founding role in the Cuban revolution will be able to guide an increasingly well-informed and worldly population through a new period of profound economic hardship.
“If Venezuela falls, if Venezuela changes and they don’t send Cuba any more oil, it’s going to be like it was, in 1991, ’92, ’93. It’s going to be hard,” said Li Nelson Florentino Abreu, an 80-year-old retired electrical engineer. “And Cubans aren’t sheep. They aren’t going to put up with everything. Cubans today, they know how to defend their rights.”