Cuba and Venezuela are acting out of desperation … 2/18/21

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The opposition and the regime in Venezuela are two reeling forces facing each other. The darker it is inside the country the more light is perceived from the outside. Precisely this week several articles have been published with solid and varied international sources, that analyze aspects associated with Venezuela, putting the reader within the global geopolitical context and also reviewing the precarious Cuban situation and its close relationship with Venezuela. The themes of the week are “To Fight or Adapt? Venezuela’s Fading Opposition Struggles to Keep Going ”,“ Cuba and Venezuela open up, hesitantly, to the market ”and“ Cuba Is on the Clock – The island is in dire need of a new patron ”.

 

To Fight or Adapt? Venezuela’s Fading Opposition Struggles to Keep Going” – published by the New York Times

  • Juan Guaidó’s meteoric rise and now his decline have brought Venezuela to a crossroads.
  • Today, the adoring crowds are gone, many international allies are wavering, and the opposition coalition is crumbling — while Mr. Maduro appears more entrenched than ever.
  • “I think we’re close to a political solution. There’s no way that Maduro can recover the international confidence that’s the cornerstone of any economic recovery.” Mr. Guaidó said. Many of the remaining opposition leaders in Venezuela speak privately of a movement at its lowest ebb, mired in fear, recrimination and dwindling morale.  They say “We’re on the verge of disappearing.”
  • A growing chorus within the opposition, however, says it is time to abandon efforts to force an immediate change in government and focus on political survival. They are also preparing to participate in regional and local elections later this year — even if the votes fall short of being free and fair.
  • The offices at stake wield limited political power.
  • Many European and Latin American nations have distanced themselves
  • The heads of the four largest opposition parties comprising Mr. Guaidó’s parallel administration didn’t make themselves available for interviews.

 

Cuba and Venezuela open up, hesitantly, to the market” –  is the title of The Economist – The goal, each claims, is “perfeccionamiento”—perfection—of socialism, not its abolition

  • “Deep down, we are one single government, one single country,” said Venezuela’s loquacious president, Hugo Chávez, of the relationship with Cuba in 2007. Now the allies are discreetly sharing another experience: adoption of free-market practices to rescue their moribund economies. Neither admits this.
  • On February 6th Cuba’s council of ministers expanded the number of trades open to self-employed entrepreneurs. A list dating from 2010 (and twice revised) permitted private enterprise in 127 professions. A new list, published on February 10th, specifies 124 sectors reserved for the state (or entirely banned). Everything else is to be permitted for entrepreneurs.
  • Venezuela, which sabotaged private enterprise with expropriations and price controls but did not outlaw it, has been on a similar journey..
  • Cuba and Venezuela are acting out of desperation. Venezuela has been in recession for more than six years. Its debt soared under Chávez, mismanagement at pdvsa caused oil production to slump and sanctions imposed by the Trump administration in 2019 clobbered oil exports. Rampant corruption boosts the market for supercars but bankrupts the state.
  • Neither regime is planning to leap free of socialism in a single bound. The imf does not lend to Venezuela and Cuba is not a member of it, which means they will not get the sort of aid available to most countries that undertake painful reforms. Venezuela’s government will continue to finance its massive budget deficit by getting the Central Bank to create money.
  • The pandemic and American sanctions mean that neither Cuba nor Venezuela is likely to enjoy a market-led boom anytime soon..
  • Mr Maduro and Mr Díaz-Canel will not offer their citizens political freedoms to match their new economic ones. They look to China and Vietnam, where repression and rising prosperity co-exist, rather than to democratic neighbours.

 

Cuba Is on the Clock – The island is in dire need of a new patron” – published by  Geopolitical Futures 

  • Cuba may be a geostrategically valuable country, but its value far outweighs its actual power. Havana’s solution to this historic dilemma has been to offer itself to a patron who in return can offer economic prosperity and security guarantees. The Spanish first established this client-patron relationship in the 15th century. The Cubans rose up against the Spanish and allied with the United States. Another revolution, led by Fidel Castro, quickly aligned with the Soviet Union.
  • Cuba, a communist country in a post-Cold War world, didn’t have a lot of options. Enter Hugo Chavez. Venezuela’s ability to lend support to Cuba has dramatically declined. Russia has attempted to fill the void by canceling Cuba’s debt. These efforts were enough to forestall a crisis but not to fundamentally change the direction in which Cuba was heading.
  • It’s now 2021, and Cuba’s behavior over the past few months leads only to one conclusion: the economy is reaching a breaking point and the government is therefore looking for a patron. The government is looking for answers. Mounting social pressure has amplified the government’s sense of urgency. Last November, there was the first of many protests staged by artists.
  • Among the leading candidates are the U.S. and China. The Biden administration has put nearly all foreign relations under review, and many expect it to revitalize President Barack Obama’s efforts to normalize ties with Cuba. But it remains a highly contentious issue in U.S. politics; these kinds of changes require a lot of political capital, and Biden is currently in short supply.
  • China, meanwhile, has been slowly gaining economic influence in Latin America over the past decade and recognizes Cuba’s strategic position relative to the United States. China needs some leverage against the U.S. similar to the kind Washington has against Beijing in the South China Sea. Improved ties with Cuba would go some way toward getting that leverage.  Chinese financing now supports port modernization projects in Santiago, and investments are planned in pharmaceuticals and tourism. These projects help Cuba, of course, but more will be needed to stabilize the economy, let alone change its current trajectory.
  • How much China comes through will depend in part on how secure its foothold is in Cuba – and how well it will be able to keep the U.S. on edge.

 

 

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