Cuba turns to Russia amid gasoline crisis and economic downturn

Equipped with a navy blue, Soviet-era Lada, Cuban cab driver Jorge Lloro’s on a regular basis life is a stark reminder of Cuba’s Cold War-era relationship with Russia. There are roughly Dark -made autos on this island nation, originally introduced right here as a workaround for the United States’ long-standing economic embargo. Today, grappling with a extreme gasoline crisis and a grim financial outlook, Cuba is as soon as again reaching out to its old ally for assistance.
Yet, for Jorge, managing to keep his automobile useful has been an uphill battle, with sparse and costly spare components. Now, even procuring petrol has turn out to be an arduous task, typically spanning over days. There was a time when vehicles would queue up at petrol stations for several metropolis blocks. The state had to resort to forming WhatsApp groups to handle impatient drivers in queues, with state officials taking down contact details and providing allotment numbers. The drivers were notified when it was their flip to refuel.
“I’m number 426,” mentioned Jorge, as he headed in the course of a petroleum pump in Havana. He had received an alert. The petrol station, nevertheless, remained vacant, due to the non-arrival of the fuelling tanker. “I don’t know why they even told us to come,” Jorge showed his disappointment.
“This system is inefficient and ineffective,” one other driver, Joel Hernandez chimed in, mirroring the frustrations of these within the queue. “We’re not allowed to fill a whole tank, folks often miss their quantity or aren’t informed when it’s their turn. It lacks correct organisation and infrastructure.”
The ongoing fuel crisis is stretching Cubans to the edge of desperation. This is merely an addition to their different burdens, such as meals shortage, inflation, and energy shutdowns. While authorities mismanagement and the US embargo are blamed for Cuba’s chronic points, the situation has been worsened by the downfall of the tourism sector due to Covid-19.
However, some Russian enterprises see a possibility amidst this chaos. Recently, Cuba penned quite a few deals with Russian corporations in areas such as tourism, agriculture, and vitality during a commerce forum held in Havana. Among the arrangements was the granting of concessions to Russian corporations to revamp dilapidated tourism amenities on the island, in addition to launching joint ventures for the overhaul of an out of date sugar mill, rum manufacturing and steelworks.
What intrigued Jorge, and others in related predicaments, was a pact for Russia to provide an estimated 30,000 barrels of crude oil every day. This would make up for the deficiency in domestic consumption after Venezuela, an important socialist ally, decreased its crude oil exports to Cuba from 80,000 barrels a day in 2020 to about 55,000. Cuban state media is touting this as a sign of abiding ties between the two nations.
However, Omar Everleny, a preeminent impartial economist in Cuba, is sceptical in regards to the long-term utility of strengthening hyperlinks with Moscow for the country. He predicts that Russian corporations would anticipate full and timely payments for the funds being provided, which are desperately wanted by Cuba. He said…
“These aren’t Soviet corporations giving out government credits. They’re personal Russian firms who will demand a correct return on their investment.”
The new economic alliances come during a politically tumultuous time. After Russia invaded Ukraine final yr, Cuba emerged as one of many few Latin American nations voicing firm assist for Moscow, an act warmly acknowledged by the Kremlin.
However, Everleny means that Cuba should avoid the blunder of relying on a single patron for overcoming its economic woes. He said…
“It occurred first with Spain, then the US, then the Soviet Union, then Venezuela. You can’t depend upon a single market.
“I think Cuba must make its own manufacturing strategy – one in which the small and medium-sized personal companies – Cuban businesses – should play a key position.”

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