Almost half of all Cuban trade is with Venezuela, and such a high level of dependency leaves the island vulnerable to the political and economic swings of its partner.
Carlos Garcia Rawlins/Reuters
• A version of this post ran on the author's blog, cuba.foreignpolicyblogs.com. The views expressed are the author's own.
Fidel Castro’s long-declining health and the high average age of his successors are well-worn topics in Cuba discussions. As we turn the page on 2012, Cuba watchers and Cubans alike are now discussing the health of the leader of a different country: Venezuela. Hugo Chávez recently suffered still new complications from his cancer surgery, and he has taken a surprising step in flagging his vice president, Nicolas Maduro, as the person he would like his followers to vote for should he be unable to carry out his duties as president. President Chávez won a new six-year term in October, but if he has to step down during the first four years of his next term, a new election must be called within 30 days.
Experts suggest that a change in leadership in Venezuela could have huge consequences for Cuba. The two countries have a partnership that is rooted deeply in the personal relationship between Chávez and the Castros — particularly Fidel, whom Chávez considers to be a mentor. Business with Venezuela consists of 40 percent of all Cuban trade, and Cuba receives 60 percent of its energy needs on preferential terms from Venezuela. Such a high level of dependency leaves the island vulnerable to the political and economic swings of its partner.
A victory by the opposition in Venezuela would have the greatest impact for Cuba: during the recent campaign, opposition candidate Henrique Capriles told voters that with his election, the distribution of oil to Cuba and other countries at reduced prices or in barter deals would end. But this is an unlikely outcome. In the short term, there are essentially three possible scenarios for the Cuba-Venezuela relationship:
First, Chávez may indeed continue to govern in Venezuela and see the same arrangement with Cuba continue.
Second, Chávez’s health may decline, in which case his Vice President Maduro would almost certainly win a new election and maintain the special relationship. Maduro has been a close collaborator in the relationship with Cuba and affirmed a line used many times by Chávez himself: that Cuba and Venezuela are two countries as one.
Third is the most unsettling scenario for Havana, but it is also highly unlikely: the Venezuelan opposition could come to power in a new election and change the tenor of the relationship with Cuba, as Capriles promised during the campaign.
However, even if this final scenario ends up being the right one, Havana has some forces working in its favor. In its bilateral deals with Caracas, Havana returns the favor of preferential terms for its energy supply with a steady stream of 30,000-50,000 Cuban technical personnel working in Venezuela as physicians, teachers, and other instructors, many in impoverished areas that depend upon the social services and training they provide. A newly elected opposition — whatever its campaign rhetoric — would be foolish to do anything to endanger the continuity of these services to large swaths of the Venezuelan population. Changes in the relationship between the two countries would therefore have to be gradual and mutually negotiated in order to protect the assets provided by each side to the other, which are of great value to the receiving country.
Still, Cuba in the coming year must continue to prepare for eventual changes to its relationship with Venezuela: such an arrangement cannot continue forever. Diversification of foreign partners will ensure that instability in one will not in turn destabilize the Cuban economy. Diversification of Cuba’s own production will lessen its vulnerability to external price shocks for commodities like nickel. And actively enabling the current economic reforms that have been slowly moving Cuba from a centrally planned economy to a model more friendly toward private enterprise will augment the number of Cubans that are independent of the government payroll.
We can expect to see more on all of these fronts in 2013.
– Melissa Lockhart Fortner is Senior External Affairs Officer at the Pacific Council on International Policy and Cuba blogger at the Foreign Policy Association. Read her blog, and follow her on Twitter @LockhartFortner.