Venezuela’s disputed poll result is bad news for Cuba’s Communist regime, which relied on former leader Hugo Chavez for hard currency and an annual supply of $6bn of subsidized oil. The end of chavista subsidies could trigger “social upheaval” on the island, analysts suggest.
“Cubans can’t be cheering this result. They have to be worried that Maduro proved so politically weak. The opposition has the momentum and will define the agenda,” said Michael Shifter, head of the Inter-American Dialogue think tank.
With Maduro entering office with a much weaker mandate than his colorful predecessor, the Castro-led regime may not enjoy the same economic benefits, potentially threatening the communist island’s lifeline……A clause in Venezuela’s constitution allows for a possible referendum to revoke a president half way through his six-year term, a consideration that will weigh on Maduro’s foreign policy, after his narrow election win.
“The outcome could accelerate Cuba’s reform process,” Shifter told AFP, alluding to the likely need for Maduro to focus his efforts on domestic policy. “The (Cuban) government will be compelled to pursue other economic options.”
To date, measures under Raúl Castro, 81, the president, have bettered everyday life but failed to improve Cuba’s underlying performance, critics say. For the regime, it is a balancing act: change too fast and the regime could unravel; change too slow and the economy will deteriorate and undermine the Castro brothers’ legacy anyway.
Mr Castro, who was quick to congratulate Venezuela’s president-elect on his victory, which should ensure that Cuba has five more years of cheap oil, has three main goals, says Bert Hoffmann, a Cuba expert at the German Institute of Global and Area Studies: “Avoid splits in the elite, and also social unrest; organise a succession; and get gradual economic reforms started to secure the regime’s survival.”
Venezuela supplies Cuba with two thirds of its oil – 100,000 barrels of crude a day – on privileged terms. The arrangement is worth some $9bn, the regime’s major source of funds, exceeding the value of remittances ($2.5 billion), tourism ($2 billion) or exports of nickel, tobacco and drugs (less than $2 billion).
“Cuba can’t hope for anything good from political instability in Venezuela,” according to Cuban academic Arturo Lopez-Levy, from the University of Denver.
“The Cuban government would do well to accelerate its reform process and the opening up of its economic system, to prepare for various scenarios, all of them less favorable than the current situation,” he told AFP.
The regime has enacted a series of relatively anemic economic reforms, allowing Cubans to establish small businesses, buy and sell their homes and permitting farmers to sell up to 50% of their produce directly rather than to the state. But the attempt to mimic China’s model of Market-Leninism is likely to fail, say analysts.
“Nonetheless,” the FT’s Marc Frank suggests, “those changes are only around the edges of what remains a centrally-planned economy that needs to attract foreign investment and grow by more than 5 per cent a year if it is to have any hope of rebuilding crumbling infrastructure and create sufficient jobs to absorb the bulk of Cubans who work for a state that barely pays a living wage.”
Since Castro became president, he adds, economic growth has averaged 2 per cent.
“The reforms are afflicted by inner contradictions in their design: a positive step is taken but then excessive controls and restrictions are introduced, generating disincentives that conspire against their success,” said Carmelo Mesa-Lago, author of Cuba Under Raúl Castro: Assessing the Reforms.
The demise of Chavismo is likely to have significant repercussions for Cuba’s citizens, not least Miguel Diaz-Canel, Castro’s designated successor, said Paul Webster Hare, British ambassador to Cuba from 2001-2004 and a former deputy head of its mission in Caracas.
“Cubans will know now that the Chavista movement depended on Chavez for its leadership and momentum,”
“The Cubans will now conclude that their time for depending on the largesse of Chavismo is limited,” said the ex-diplomat, who teaches international relations at the University of Boston.
“The key lesson may be that for Miguel Diaz-Canel to assume smoothly the mantle of the Castros will be much tougher than they may have supposed,” he said.
Diaz-Canel “may need to start talking more about the material ambitions of Cubans,” and “tell fewer fantasy stories.”