Cuba turns to Russia amid gasoline crisis and economic downturn

Equipped with Value , 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 a hundred,000 Russian-made autos on this island nation, originally introduced right here as a workaround for the United States’ long-standing financial embargo. Today, grappling with a severe gas disaster and a grim economic outlook, Cuba is once once more reaching out to its old ally for help.
Yet, for Jorge, managing to maintain his vehicle useful has been an uphill battle, with sparse and costly spare elements. Now, even procuring petrol has turn into an arduous task, sometimes spanning over days. There was a time when vehicles would queue up at petrol stations for a quantity of metropolis blocks. The state needed to resort to forming WhatsApp groups to handle impatient drivers in queues, with state officials taking down contact particulars and providing allotment numbers. The drivers had been notified when it was their flip to refuel.
“I’m number 426,” said Jorge, as he headed towards a petrol pump in Havana. He had obtained an alert. The petrol station, however, remained vacant, as a result of non-arrival of the fuelling tanker. “I don’t know why they even told us to return,” Jorge showed his disappointment.
“This system is inefficient and ineffective,” one other driver, Joel Hernandez chimed in, mirroring the frustrations of those within the queue. “We’re not allowed to fill an entire tank, folks often miss their quantity or aren’t knowledgeable when it’s their turn. It lacks proper organisation and infrastructure.”
The ongoing gasoline crisis is stretching Cubans to the edge of desperation. This is merely an addition to their other burdens, similar to food shortage, inflation, and power shutdowns. While authorities mismanagement and the US embargo are blamed for Cuba’s chronic issues, the scenario has been worsened by the downfall of the tourism sector as a end result of Covid-19.
However, some Russian enterprises see an opportunity amidst this chaos. Recently, Cuba penned numerous deals with Russian companies in areas corresponding to tourism, agriculture, and power during a trade forum held in Havana. Among the preparations 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to revamp dilapidated tourism amenities on the island, in addition to launching joint ventures for the overhaul of an out of date sugar mill, rum production and steelworks.
What intrigued Jorge, and others in comparable 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 an indication of abiding ties between the 2 nations.
However, Omar Everleny, a preeminent impartial economist in Cuba, is sceptical concerning the long-term utility of strengthening links with Moscow for the country. He predicts that Russian companies would anticipate full and well timed payments for the funds being offered, which are desperately needed by Cuba. He said…
“These aren’t Soviet corporations giving out authorities credits. They’re private Russian firms who will demand a proper return on their investment.”
The new financial alliances come throughout a politically tumultuous time. After Russia invaded Ukraine final year, Cuba emerged as one of many few Latin American nations voicing firm support for Moscow, an act warmly acknowledged by the Kremlin.
However, Everleny means that Cuba should keep away from the blunder of counting on a single patron for overcoming its financial woes. He said…
“It occurred first with Spain, then the US, then the Soviet Union, then Venezuela. You can’t rely upon a single market.
“I assume Cuba must make its own production technique – one by which the small and medium-sized private companies – Cuban companies – ought to play a key position.”

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