Cuba bracing for rough waters as leftist tide goes out

Yahoo News

Carlos Batista•May 20, 2016

Havana (AFP) - Cuba is bracing for rough waters ahead as it navigates a political sea change in Latin America, where the left is fighting an outgoing tide.

Venezuela is in a full-blown crisis, conservatives have taken the helm in Brazil, and Havana's leftist allies are losing ground in elections elsewhere in the region.

The government of President Raul Castro, which has enjoyed smooth sailing until recently, warned in April of a "strong and articulated imperialist counteroffensive" coinciding with the economic slowdown in Latin America.

Indeed, Cuba's communist regime can no longer count on the rhetorical support it has received in recent years from Latin governments, warns Michael Shifter, head of the Inter-American Dialogue, a think tank based in Washington.

"For Cuba, the region's changing political landscape is less hospitable than it was a few years ago," he said in an interview.

The changes mark the end of a favorable era for Cuba, one that began with Hugo Chavez's arrival in power in Venezuela in 1999, and reached a high point with the reconciliation with the United States at the end of 2014.

Taken in hand by the late Venezuelan leader, Havana emerged from isolation and economic disarray in which it was left after the collapse of the Soviet Union in 1990.

Friendly governments took office in Argentina, Brazil, Bolivia, Ecuador, Nicaragua, Uruguay, El Salvador, Peru and Chile.

But after Chavez's death in 2013, political conditions in Latin America began to shift, although the region's new conservative direction has only recently come into focus.

This year, Venezuela's downward spiral entered a critical phase, Brazil's Dilma Rousseff was suspended to face an impeachment trial, Argentina turned its back on Nestor and Cristina Kirchner's 12 years in power, Bolivia's Evo Morales lost a referendum on extending his mandate and Ecuador is preparing to elect a successor to Rafael Correa.

And what's worse: the region has had to wave goodbye to the high commodities prices that underwrote the left's most appealing social programs.

"Even more than the political shifts, Cuba will be affected by the economic crises in Brazil, and particularly, Venezuela," Shifter said in an interview.

"At a moment when Cuba is hoping to bring in more investment and generate growth, the economic deterioration in both countries is of enormous concern," he said.

- US lifeline -

Besides being its principal trade partner, with nearly $7.3 billion in trade in 2014, Venezuela supplies Cuba with 95,000 barrels of oil a day on very favorable terms.

No other friend of Cuba "can supply oil under those terms," said Jorge Pinon, head of the energy program at the University of Texas' Jackson School of Geosciences.

The loss of cheap oil "would represent a negative impact for Cuba of approximately $1.3 billion," he said.

Brazil, for its part, is one of Cuba's main suppliers of food, a source of credit and a partner in tobacco and sugar companies.

Brazil and Venezuela together account for much of the $12 billion Cuba gets each year for supplying medical services to other countries, its top source of hard currency.

Even as it closed ranks behind Venezuela's embattled President Nicolas Maduro, the Castro government joined critics of the legislative process in Brazil that ended in Rousseff's suspension this month.

The interim government in Brasilia led by Michel Temer has responded to the Cuban criticism with a blunt reminder.

"The relationship is historic. We have interests in those countries and they have theirs here," a Brazilian foreign ministry official told AFP.

Jorge Duany, head of Florida International University's Cuban Research Institute, said, "Cuba will have to reorient its diplomatic and commercial relations in Latin America and the Caribbean beyond its main regional allies of the last decade."

Cuba may already be moving in that direction, according to Duany.

"It's possible to interpret Raul Castro's government's rapprochement with the United States, in part, as a preventive response to the continuous economic and political deterioration in Venezuela," he said.

Cuba reestablished diplomatic relations with the United States in July 2015 after a half century of Cold War enmity.

Even though a US embargo is still in place, the United States could play a growing role as a supplier of food and tourists to Cuba, two important lifelines.

"It is reasonable to expect Cuban imports from the United States to continue to grow, especially as restrictions are reduced and, eventually, the embargo is lifted," said Shifter.

Meanwhile, Cuba has settled its pending affairs with creditors in the Club of Paris, and signed a cooperation agreement with the European Union, which should translate into access to more markets and financing.

Cuba will need such a multi-dimensional strategy to weather the storm.