ASSESSMENTS

As Venezuela Falters, Cuba Works to Avoid Another 'Special Period'

Oct 13, 2017 | 17:32 GMT

Car ownership in Cuba lags behind other Caribbean nations. Nevertheless, the loss of Venezuelan oil could hamper the country's budget.

(JOE RAEDLE/Getty Images)

Highlights

Cuban President Raul Castro will hand power to a successor, likely Miguel Diaz-Canel, by February 2018. The new president will likely maintain Cuba's current policies toward Venezuela and the United States.
Cuba's government will attempt to wean itself off Venezuelan energy shipments while trying to diversify its import sources. In the meantime, Cuba will keep importing oil and fuel from Venezuela at current levels for as long as it can.
To accomplish this goal, the Cuban government will continue to try to keep pro-Cuban Venezuelan officials, such as President Nicolas Maduro, in key positions of power.

In Cuba, austerity is threatening to make an unwanted comeback. The island's government is planning for an immediate future of budget cutbacks with little chance of financial relief. The root cause of Cuba's slide into austerity is the Venezuelan economic crisis. Cuba receives around 55,000 barrels per day of mostly crude oil from Venezuela -- down from more than 100,000 barrels per day only five years ago -- as well as an unknown amount of financial assistance. The decline in Venezuelan energy shipments has forced the Cuban government to seek to diversify its import sources and to cut back on imports of higher-grade gasoline and diesel. Venezuela's economic crisis will not affect Cuba as dramatically or as rapidly as the Soviet Union's collapse did in the early 1990s, but declining oil and fuel shipments from Venezuela will raise the financial burden on Cuba's central government....

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