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Chavez's beneficiaries gird for lost aid

By Frank Bajak

Associated Press

Published: Saturday, Feb. 25 2012 2:08 p.m. MST

Venezuela's President Hugo Chavez, left, greets supporters during his caravan from Miraflores presidential palace to the airport in Caracas, Venezuela, Friday Feb. 24, 2012. Chavez bid an emotional goodbye to soldiers and supporters and waved to crowded streets in Caracas on his way to Cuba for urgent surgery to remove a tumor he says is probably malignant.

Fernando Llano, Associated Press

LIMA, Peru — Millions who have never set foot in Venezuela have a stake in the physical and political survival of Hugo Chavez as the once-indefatigable leftist strongman submits to surgery in Cuba for removal of a tumor he says is likely malignant.

Those most tied to Chavez's fate inhabit Nicaragua and Cuba, which have received billions of dollars in gifts, long-term loans and cut-rate oil from Venezuela. Both countries have taken limited steps to soften the blow if Venezuelan aid were to end.

Other nations as diverse as Bolivia and the Dominican Republic have also benefited.

Many have good reason to gird for an end to the aid as the leftist president undergoes another surgery after having a baseball-sized tumor removed from the same pelvic region in June.

Chavez has insisted that his economic ties with Cuba and other allied nations in his leftist bloc make good financial sense beyond the revolutionary solidarity. But critics say Chavez has more often been intent on trying to buy loyalty and counter U.S. influence.

Chavez's challenger in October elections, Gov. Henrique Capriles, would end Venezuela's "asymmetrical" economic favoritism and ideological-based foreign aid, said Carlos Romero, a foreign policy adviser to the candidate.

Venezuela would continue to provide subsidized oil to "the poorest countries, such as Haiti, but there will not be subsidies for countries like Cuba or faraway nations like Syria," he said.

Polls have shown Capriles within striking distance of Chavez, and political analysts say his chances of unseating Chavez are apt to improve if the 57-year-old president's condition worsens.

"I'm scared," said Pedro Iglesias, a 72-year-old retiree living in gritty central Havana. "I don't want to think of what could happen here if something bad happens to Chavez. It would be terrible for us."

The communist Caribbean island nation depends on Venezuela for two-thirds of its oil, analysts say, and cash flow from Venezuela for services such as doctors and sports trainers amounts to some $5 billion a year. That accounted for about 15 percent of Cuba's economy in 2008, the last year the island nation published figures.

Without the aid, Cuba might need to severely tighten food rationing and suffer through lengthy power outages as it did two decades ago during the "Special Period" after the dissolution of its previous patron, the Soviet Union.

Cuban officials have refused to comment on how they would adjust to an end in Venezuelan assistance.

But Cuban leader Raul Castro has been pushing modest free-market reforms and just opened the island's waters to oil exploration. The Spanish oil company Repsol YPF began exploratory drilling last month but it would take at least three years to produce commercially viable crude if the drilling proves successful.

Michael Shifter, president of the Washington-based Inter-American Dialogue think tank, said Cuba's reforms "are in part an effort to anticipate a possible reduction or cutoff."

Oil analyst Jorge Pinon of the University of Texas said Cuban leaders have shown they've learned from the loss of Soviet oil in the early 1990s.

"The Cuban government is very well aware of the risks that their economy faces with the loss of Venezuela," Pinon said.

"Cuba's government is in Chavez's pocket," tweeted famously gutsy Cuban blogger Yoani Sanchez on Friday as Venezuela's president flew to the island. "There's speculation here of a possible second Special Period if Chavez's health worsens."

Pinon said it would be "catastrophic" for Cuba if it were forced to pay market prices for oil because the island would have to cut back on food imports. Cuba imports about 70 percent of its food.

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