TODAY VENEZUELA (ElUniversal) The Cuban economy will continue, at least for other three years, depending on strategic trade with Venezuela, even though the measures adopted by Washington to improve ties with the island will help Cuba to alleviate the drop of imports from Caracas.
By 2012, Cuba-Venezuela trade accounted for 44.2% of the island’s total foreign trade and 33% of Venezuela’s foreign purchases. A decline in imports from Venezuela will certainly hit the island, based on data from the Cuban Statistical Yearbook.
From 2008-2011, Caracas transferred US$18 billion dollars to Havana in loans, investment, or gifts, the Association for the Study of the Cuban Economy (ASCE) disclosed in a report.
The number would account not even for 10% of the benefits that may be obtained in 2015 from US actions, whose food sales in 2001-2013 totaled US$5 billion.
Cuba-US trade in goods and services may eventually hit USD 12.6 billion, based on a report released in May 2014 by Gary Hufbauer and Bárbara Kotschwar, Peterson Institute for International Economics.
“We are talking about additional USD 400 million dollars in remittances in 2015 if Obama’s measures are implemented promptly. A rise in the number of non-Cuban American tourists would result in other USD 100 million,” estimates Luis R. Luis, PhD. in economics and member of ASCE board of directors.
Cuba-Venezuela trade depends on the fluctuations in the oil price.
“In 2012 Cuba-Venezuela trade represented 16% of the Cuban GDP. In 2014, the figure was some 12%,” said economist Pavel Vidal, a former officer with the Central Bank of Cuba.
Plummeting imports from Venezuela (37.2% down in 2014 versus 2013, according to data from the National Statistics Institute) are likely to hit Cuba in 2015, and many believe that such situation may have encouraged Castro to seek rapprochement with the White House.
Cuba is tied to Caracas for four reasons: sale of goods and services, direct loans, oil supply, and gifts.
Keeping oil supply is vital to Raúl Castro. Caracas will continue to be a strategic ally until the embargo is not fully lifted. However, at this point, Havana may cope with a “crash” of Venezuela’s gifts and investments, but a political crisis could be more dangerous.