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    The link between Venezuela and Cuba

    The link between Venezuela and Cuba
    By Keith Johnson
    Foreign Policy
    US lawmakers increase pressure on Obama to take tougher line on Caracas

    WASHINGTON — Top US lawmakers from both parties are urging the Obama
    administration to take a tougher line on Venezuela, which is violently
    cracking down on popular protests against the government of Nicolás
    Maduro. For some on Capitol Hill, though, the real target is Cuba.
    These leading Republicans and Democrats are pushing back at a country
    that has been a constant thorn in the side of US interests in Latin
    America in recent years.
    Representatives Ileana Ros-Lehtinen, Republican for Florida, and Eliot
    Engel, Democrat for New York, have both called for the Organization of
    American States, which meets this week, to take a tougher line on the
    Maduro government’s treatment of peaceful protesters.
    Senator Marco Rubio, Republican for Florida, has floated the idea of US
    sanctions against Venezuelan officials involved in the crackdown, and
    even against the Venezuelan government itself.
    But Venezuela hawks such as Rubio are making a second argument: tougher
    action against Venezuela represents a chance to undermine one of the key
    lifelines of the communist regime in Cuba, whose economy relies on
    heavily subsidized oil and other gifts from Caracas.
    “The Cubans get free and cheap oil from the Venezuelans. So their
    interest is keeping this regime in place because they’re their
    benefactors,” Rubio told CNN this week. “And Cuba is clearly involved in
    assisting the Venezuelan government with both personnel and training and
    equipment to carry out these repressive activities,” he added.
    A host of key lawmakers have long been sceptical of the Obama
    administration’s efforts to reach out to Cuba after more than 50 years
    of a US economic embargo against the island nation. Obama’s efforts to
    loosen restrictions on travel and remittances, especially for US
    citizens of Cuban descent, have provoked a backlash among lawmakers,
    like Rubio, who count on their votes.
    That perception was strengthened in December, when President Obama shook
    hands with Raúl Castro, the brother of Fidel and the current Cuban
    president, at the funeral of Nelson Mandela. That came just a month
    after Obama suggested the United States might need to rethink the embargo.
    Rubio said in a passionate speech on the Senate floor Monday that he
    also wants normal relations with Cuba — “a democratic and free Cuba. But
    you want us to reach out and develop friendly relationships with a
    serial violator of human rights, who supports what’s going on in
    Venezuela and every other atrocity on the planet?”
    Cuba and Venezuela are linked as foreign policy challenges for many
    lawmakers because of the close ties between the two socialist regimes.
    Former Venezuelan strongman Hugo Chávez was an unabashed supporter of
    Fidel Castro, and helped ensure that Venezuela used its oil wealth to
    help prop up Cuba’s ailing economy. Chávez repeatedly sought medical
    treatment for the cancer that eventually killed him in Cuba, and the
    close relationship between the two countries has continued even as both
    have moved on to other leaders. Nicolás Maduro was one of the feted
    guests last summer when Cuba celebrated the 60th anniversary of the
    start of the Cuban revolution.
    ‘Bolivarian revolution’
    While Venezuela’s self-proclaimed “Bolivarian revolution” was modelled
    on Cuba’s, the South American oil giant replaced the Soviet Union as the
    island country’s main economic patron, underwriting the Cuban economy to
    the tune of billions of dollars a year.
    Some estimates of the scale of Venezuelan support for Cuba, including
    more than 130,000 barrels a day of oil but also salaries for thousands
    of Cuban officials working in the country, suggest Caracas gives Cuba
    more than US$10 billion a year, or between one-fifth and one-sixth of
    Cuba’s gross domestic product. That comes close to the level of economic
    support that Cuba received from the Soviet Union in the late 1980s,
    before the Soviet collapse abruptly ended Moscow’s economic aid to Fidel
    In other words, some lawmakers believe, further unrest or even a change
    in the regime in Venezuela could represent a direct threat to the
    continued rule of Raúl and Fidel Castro in Cuba.
    However, a lot has changed since the end of the Cold War. Cuba has
    slowly tried to reform its economy and find more than one “sugar daddy”
    to prop it up. Brazil, for one, is increasing investment and trade in
    Cuba, and just helped construct a major port not far from Havana. Cuba,
    recognizing the peril that reliance on Venezuelan oil poses for its
    economy, has also repeatedly sought to tap what it believes are abundant
    oil reserves in the Gulf of Mexico, but so far without success.
    “Do you drive Cuba off the edge of the earth by strangling Venezuela?
    Nothing the United States has done in 50 years has caused that to happen
    in Cuba,” Julia Sweig, a Latin American expert at the Council on Foreign
    Relations, told Foreign Policy. “My expectation is that Cuba has been
    planning for this for a long time, and even if they’re not 100 percent
    ready, they are prepared enough,” including deeper economic ties with
    Brazil, the European Union, Canada, and China, she said.Oil is at the
    heart of Venezuela’s support for Cuba, but it is also at the heart of
    Venezuela’s own woes. Much of the popular anger in Venezuela is a
    reaction to the government crackdown on students. However, widespread
    dissatisfaction with the Maduro government’s economic mismanagement has
    prompted even the middle class — hammered by soaring inflation, empty
    store shelves and a cratering currency — to join the protests. The New
    York Times captured the mood this week talking with one such protester:
    “Look. I’ve got a stone in my hand and I’m the distributor for Adidas
    eyewear in Venezuela,” Carlos Álvarez told the newspaper.
    Economic malaise
    And that economic malaise is due in part to the systemic mismanagement
    of Venezuela’s oil wealth over the past 15 years. Blessed with the
    largest oil reserves in Latin America, and the second largest in the
    world, Venezuela has struggled to attract the foreign investment needed
    to increase oil production, especially in challenging oil fields laden
    with thick, heavy oil.
    Production has remained constant, at about 2.3 million barrels per day
    in recent years, in part because rampant inflation has made it hard for
    foreign firms to boost output there and partly because the Chávez and
    Maduro regimes have used oil income to underwrite expensive social
    programmes at home, to the detriment of productive investment in the
    Exports have plummeted
    Exports, which account for about half the Venezuelan budget, have
    plummeted since the advent of Chavismo. Venezuelan oil exports peaked in
    the late 1990s at about three million barrels, but have since fallen to
    about 1.7 million barrels a day. Additionally, some 400,000 barrels of
    that export total are sent to Caribbean nations under preferential
    terms, further eroding Caracas’ potential earnings.
    While Rubio and others rail at the State Department for not taking a
    tougher stance on Venezuela, another office in Foggy Bottom did take one
    important step this week that could ultimately deal a big economic blow
    to Maduro and the Venezuelan government. The State Department’s
    Inspector General determined that its environmental review of the
    controversial Keystone XL pipeline suffered no conflict of interest.
    That removes one of the last potential obstacles for the Obama
    administration to finally greenlight the pipeline that would carry
    almost 800,000 barrels a day of heavy crude oil from Canada to
    refineries on the US Gulf Coast.
    The biggest loser if Keystone is built? Venezuela, which currently
    exports about 800,000 barrels of heavy oil a day to the United States to
    keep those refineries humming.

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