Throughout the first quarter of the 21st century, economic relations with Venezuela have been very important for Cuba. Its fundamental component has been the exchange of oil for medical, educational, sports and technical services mainly, plus some products and medicines from the biotechnology sector, etc., in a “compensated trade” scheme and preferential agreements.
The number of Cuban professionals in the aforementioned service areas has remained between 20,000 and 40,000 in recent years. In the first years of the Bolivarian revolution, this figure was double the current amount.
It is important to keep in mind that there are no detailed public statistics on economic exchange between Cuba and Venezuela; The data presented are calculations based on scattered information that appeared in different media.
The persecution and harassment that both countries have suffered from the US have forced them to establish “clearing” account systems and payments in kind to facilitate exchange.
The relationship has not been limited only to trade; Investments shared by both countries have also been made, both in Venezuelan and Cuban territory, in various sectors such as energy, tourism, agriculture, communications, etc.
However, the levels of this exchange have been reduced since the years 2008-2012 due to Venezuela’s own economic problems and the very numerous unilateral sanctions imposed by the US.
After those years, daily oil shipments, which reached 100,000 barrels, were reduced to between 60,000 and 30,000, with values ranging from 800 to 1,500 million dollars. The total trade exchange between both countries has remained between 1,800 and 2,800 million dollars.
At this moment, the sharp increase in North American aggression, the naval blockade and the kidnapping of its president actually and intentionally pose great difficulties for this exchange to continue taking place in the way in which it had managed to develop.
This will undoubtedly have a negative impact on the Cuban economy and reinforces the causes of the crisis that the country has suffered in recent years. Its consequences would be on the energy sector, on the country’s export income from medical and other services, affecting more than 2 billion USD for this concept. There could also be macroeconomic impacts due to a potential devaluation of the national currency due to the decrease in foreign exchange income.
This situation would affect the national economy by reducing its import capacity, essential in areas such as food, as well as the functioning of the national industry due to energy difficulties.
Of course, it must be considered that the fuel supply that Cuba receives does not only come from Venezuela. Shipments from Russia and Mexico are also considerable. The latter has become the main supplier during the governments of the Fourth Transformation in that country. However, given the instability of politics in the hemisphere, the stability of this supply cannot be assured.
This entire situation, marked by the risks, complexity and uncertainty of an increasingly imperial, aggressive and irresponsible North American policy, must lead Cuba to accelerate its international geopolitical and geoeconomic insertion with strategic partners such as China and Russia, among others, as well as in emerging spaces such as the BRICS; However, we consider that to achieve effective results in this purpose it is essential to accelerate and adequately articulate the profound economic transformations that the country needs.
Author’s note: As explained in the text, there are no detailed and exact official figures on the economic relations between Cuba and Venezuela that are supposed to be classified for security reasons; It must be taken into account that they are two countries that suffer unilateral sanctions and a policy of aggression. The data has been taken from different sources such as statements from leaders, academic or press articles, etc. We have tried to be as precise as possible. Data on oil trade with Mexico comes from the Financial Times.
*This article is published on the website of the Center for Studies of the Cuban Economy of the University of Havana. It is republished with the express permission of the author.
