Every week new victims of the low oil prices pop up with some sign of their distress. First, it was Venezuela, which offered a sad spectacle for years as its economy disintegrated and collapsed. Then, it was Russia, which is on the verge of staging something nasty and self-destructive, like defaulting or falling into a financial crisis. Then, a most bizarre event: the collapse of a country that is a victim of plummeting prices, without having ever been a big oil producer. Cuba is a victim because the country that kept her going, Venezuela, went broke.
The first two have gone through humbling ordeals. Venezuela has been forced to stop buying political wills all over Latin America to support its populist ideology, the Socialism of the 21st Century. Russia, which plays in a much larger and important league, had to abandon its intentions to swallow its neighbors. None of them, however, has suffered as disgracing a humiliation as that which Cuba has been forced to inflict on herself: to come close to the country Fidel and Raul Castro have called “The Empire”, which they swore to fight without giving or expecting quarter until seeing it to its death, to come close to it and humbly ask to be allowed to enter…well, The Empire — which is entering the American economic sphere of influence, opening itself to American investors, asking to be allowed to sell its wares in the American markets, asking to be allowed to receive more remittances that the Cubans living in the United States send to their families in Cuba…and begging to have the embargo removed.
The Parasitic Country
A drastic fall in the oil prices is all that was needed to push Cuba to betray all its rhetoric of class warfare and bloody revolutions. This is not surprising. It is not the first time that Cuba finds itself destitute, looking for some allowance from another country because it cannot subsist on its own means. The Castro brothers and the Communist Party destroyed the Cuban economy shortly after they staged their revolution in the late 1950s. Since then, Cuba has needed sponsors.
This didn’t seem to be a problem at the time because the Soviet Union was more than pleased to provide for the survival of the indigent island in exchange for five advantages that Castro could offer: the presence of the Soviet military 240 miles from Key West; Castro’s willingness to act as a soldier of fortune on behalf of the Soviet Union, sending his army and personnel to faraway places like Angola; a physical base for sedition against the United States in Latin America; the charisma and rhetoric of Castro and his revolutions; and, for just a short while, a platform for nuclear missiles aimed at the United States.
In this way, the island survived for the next three decades just because the Soviet Union passed it an allowance in the shape of subsidized oil, a good portion of it to be sold by Cuba in the international markets, keeping the profits.
However, in the early 1990s the Soviet Union died and its heirs refused to keep on paying for Cuba’s maintenance. The magnitude of the adjustment can be appreciated by looking at the next graph. The country’s estimated Gross Domestic Product per capita came down by 36% between 1989 and 1993. The Castros forced the Cubans to adjust by tightening further their already tight belts. To force the Cubans into such an adjustment the Castros worsened repression drastically.
Cuba limped for a few years with some help from European friends. Then, luck came Cuba’s way in the shape of Hugo Chavez, who wanted to stage a revolution in Venezuela. Cuba had a decisive competitive advantage for him. Through the years of Soviet servitude, the Cubans had learned some trades that he could use to his advantage: the considerable abilities to spy, misinform and stage conspiracies they had acquired from the KGB, their knowledge of the political and military environments in Latin America, their connections with the revolutionaries in those countries, their ability to project themselves all over the region through social workers and political advisors and their sizeable political skills. That is, the Cuban Communist Party had become a high-powered revolutionary contractor, complete with a territory strategically located and all the advantages that owning a country may provide.
Chavez struck a deal with the Cuban communists. In exchange for a huge yearly subsidy, the Cubans would provide Venezuela with a full menu of revolutionary and strategic services.
The precise amount that Venezuela transferred to Cuba through the years is not currently known. According to Carmelo Mesa, a distinguished professor at the University of Pittsburgh, during the oil booming years Venezuela provided up to US$9.4 billion per year to close the gap in Cuba’s accounts. It did so through many different channels, including the sale of oil at highly subsidized prices, the provision of funds for specific investment projects and the hiring of tens of thousands of medical personnel now working in Venezuela.
Thus, Venezuela gave employment to people who would be unemployed in Cuba. Since the workers receive only a minor fraction of the large sums that Venezuela pays for them (US$5.6 billion per year), Venezuela also transferred money directly to the Cuban government. Moreover, the usefulness of the Cuban workers is doubtful. The project these medical workers staffed, Barrio Adentro, (whose name can be loosely translated as Into the Neighborhoods) is coming apart at the seams. By December 2014 it was estimated that 80% of the Barrio Adentro establishments were abandoned.
But the Cubans did many other things for Chavez, supporting his every initiative in all international forums and praising him in every available occasion. In fact, Chavez had bought the entire country, which worked for him.
With time, however, something extraordinary, although perhaps predictable, happened. To take advantage of their abilities, Chavez allowed the Cubans to penetrate deeply into the most intimate circles of power in Venezuela. This was a dangerous move. After Chavez’s death it became apparent that the effective power of Venezuela had been transferred to Cuba. It was there where the main decisions were taken. The Cuban political presence in Venezuela became overwhelming. Cuba became the parasitic head of Venezuela, using its ideological and political power to extract resources from its host.
And then, Venezuela went all but bankrupt, leaving Cuba helpless again. The withdrawal of Venezuela’s support will force an adjustment in the income per capita at least as severe as that of the 1990s.
Thus, realistically facing starvation, Cuba had to find another way out. Getting into the American economic sphere is the Cubans’ only option. Renewing diplomatic relations was the first step to enter this new path.
The United States, however, will not provide the support that Cuba is used to get from other countries. Having only one core ability, that of staging revolutions, it has nothing to offer the United States. To survive, Cuba will have to do something that the Communist Party, like all parasites, does not like to do: to produce something. To do that, Cuba will have to reform its system. Like Russia, like China, like Vietnam and so many other formerly communist countries, it will have to swallow its pride and reintroduce capitalism. The reconciliation with the United States is part of this process, which has already started.
The End of Charisma
The decision that Cuba has taken marks an irreversible step in its history. It will not be able to go back to its role as parasitic contractor of revolutions. Of course, now there is no country that would take it as a teacher or manager of repressive methods and anti-American effervescence. All its potential customers — like Kirchner’s Argentina, Morales’ Bolivia, Correa’s Ecuador, Ortega’s Nicaragua — are bankrupt or in the process of becoming so. All of them depend on oil and commodity exports, and are struggling to adapt their dwindling economies to the new world of low commodity prices.
But, more fundamentally, the Cuban leaders lost face as revolutionaries, irretrievably so because they have joined hands with what for them was the incarnation of evil, the enemy they had to kill to ensure the progress of the masses toward the Communist Paradise. They based their competitive advantage on planting hatred against the United States and capitalism, and on being uncompromising on this hatred. They predicted the fall of capitalism and The Empire uncountable times over five and a half decades. They advised leftist movements all over Latin America to reject as treason the formation of commercial blocks with the United States, saying that forming them strengthened The Empire.
Now, how can they tell these very same people that capitalism and the United States have not fallen and, instead, have seen the collapse of the Soviet Union and all the Communist countries except Cuba and North Korea in the 1990s, and now the collapse of Cuba as well? How to explain that all the things they said marked the path to the future — Communism, the Soviet Union, the Socialism of the 21st Century, the Venezuela of Chavez and Maduro — are dead? Worse still, how will they tell their revolutionary clientele not only that The Empire has not fallen but also that Cuba wants to join it, though they are not using the same term this time?
Thus, Cuba’s renewal of diplomatic ties with the United States and the mere fact that it is looking for the elimination of the embargo mark the end of Cuban revolutionary charisma. With its disappearing charisma, Cuba is losing the competitive advantage it had to be a parasitic manager of rogue states.
With time, Cuba’s revolutionary clients and their movements will fade. They no longer have a country to support them in their daily fights. They have no human symbols. They have no living ideology. They have no charisma, and what had they had in addition to charisma in all these fifty-five years? They have only the sour taste in their mouths that they were left holding the bag of a loser ideology.
It is fine and proper that this is happening. This is the completion of a process that started in the late 1980s with the decline and fall of the Soviet Union, and which should have been finished a long time ago if Hugo Chavez had not intervened. Communist Cuba pertained to the old twentieth century, that century of class wars and flamboyant revolutionary caudillos promising freedom and progress while delivering repression and death. That century had to be closed, and this closed it.
It’s the end of an era in Latin America, even if most of the population in the United States, those away from Florida, will not feel any change in their lives, except, maybe, experiencing the pleasure of legally smoking a Cuban cigar.