Cuba on the Road to Development, With or Without Oil

Erasmo Calzadilla

HAVANA TIMES — September is passing us by and there have been different news reports going around relating to the energy situation in Cuba. It’s a shame that they’re all fake or superficial.

First of all, we’ve had the disappointment that is Motembo. The alleged light crude discovery of the century within the central region was going to be the country’s salvation but it turns out that it was just media garbage. At least it gave us Cubans the opportunity to rediscover this town in Villa Clara whose indigenous name means Land of Fire. Natives used rock oil in a respectful and moderate manner, leaving a lot for the future; it wasn’t a commodity meant for exploiting. Instead of oil, we should take a valuable lesson away from Motembo.

Secondly, we saw a BBC report about the drop in Venezuela’s oil production. The multinational media corporation gave a nod to delve deeply into the root causes of the problem and look what they’ve found:

“At the root of the oil industry’s problem is the profound and widespread crisis that the country is currently experiencing [and] the sharp fall in global oil prices. The opposition argues that the government’s poor administration of resources has made matters worse.”

Great! Now we know that among the fundamental causes for a decline in production, the “natural” exhaustion of this resource doesn’t appear as the result of irrational exploitation. I’m trying to figure out a connection between the two: The oil that remains is heavier while the articles from the BBC on energy get lighter.

However, the most resounding recent news was that Algeria is sending about 500,000 barrels of black gold to Cuba. Our Venezuelan supply fell by 40% in the first semester of 2016 and we have to quickly find a substitute as soon as possible, so as not to interrupt the government’s development plans. The oil situation is so grave right now in the Americas that we have had to resort to a supplier on the other side of the Atlantic.

As I’ve already mentioned Algeria, let’s take a moment to learn a little bit about this country’s energy situation.

According to an article published by the Elcano Royal Institute,

“…Algeria’s net income in oil exports fell in 2014 by approximately 8 billion dollars […] Such a drain has left the country’s economy in an already compromised state because of the increases made in public expenditure which was carried out in order to pacify the population and prevent replications of the revolutions that have taken place in other Arab countries since 2011. […] Argelia could enter a vicious cycle which would take it back to the economic difficulties it suffered in the second half of the 1980s.”

Like most African nations, Algeria has already reached Peak Oil (2007). And just like almost every other poor country, it hasn’t managed to diversify its economy: 40% of its GDP, 70% of national revenues and 97% of exports depend on the sale of oil. The “natural” fall in oil production will result in a systemic crisis with unpredictable consequences sooner rather than later; which will be made worse by the fatal combination of terrorism and foreign military intervention.

Oil production in Africa.

If the current trend continues, at the end of this decade, Algeria will no longer have any crude oil left to export. Its social, economic and political situation will dangerously reflect that of Syria and Yemen just before their respective conflicts broke out.

Algeria: production, consumption  and export of oil, polynomial exportation.
Algeria: production, consumption and export of oil, polynomial exportation.

The “nicest” thing about this story is that the entire world is on its way to the same slaughterhouse; when Algeria can no longer provide us with more oil, it will be difficult to find another substitute. However, Cuban economists and politicians continue to bet on exponential economic growth; if it’s not with oil, it’ll be by burning sugar cane pulp, sickle bushes or whatever they have in front of them.  This is the Party’s top priority.


Erasmo Calzadilla

Erasmo Calzadilla: I find it difficult to introduce myself in public. I've tried many times but it doesn’t flow. I’m more less how I appear in my posts, add some unpresentable qualities and stir; that should do for a first approach. If you want to dig a little deeper, ask me for an appointment and wait for a reply.

14 thoughts on “Cuba on the Road to Development, With or Without Oil

  • An article on renewables would be interesting. Just before we left Cuba we spent a night at a government hotel near Matanzas. There were some very old solar units there, some of them discarded and replaced by very new looking solar installations. Cuba may not have oil–but does have sun, wind and tides. Prices for all of these are dropping world wide, some north African nations and China (and Canada, maybe especially wind and tidal) are doing research, developing large installations and could possibly support Cuban renewables. Ideal industry for cooperatives, or private companies.

  • Canadians have a far better standard of living than Cubans. At that minimum wage, a Canadian worker can buy a beer on 20 minutes of work. Compare that to a Cuban salary of $20 per month & a bottle of beer going for $1, a full day’s work.

    And go ahead and ask a Cuban when’s the last time he ever saw a T-bone steak!

  • Canadians have all of the above but our pensions are in big time trouble – a house in Vancouver plus $ 3 million – T bone steak $ 18 a pound – small glass beer Barkley Hotel $ 2.95. Min. wage in B.C. $ 10.85 an hour.

    I

  • Cuba is already a pirate theme park, where Captain Long Beard of the Pirate Ship Castro rules. Everywhere you go, you see posters of their revolutionary Mickey Mouse, Che Guevara.

    What Cuba really needs is freedom, democracy & human rights.

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