The black gold pipe-dream in detail.
By Vicente Morin Aguado
HAVANA TIMES — The Cuban economy is without a doubt in recession, even when the government’s political dictionary doesn’t accept this word.
Foreseeing national GDP falling last year (it turned out by a negative growth of 0.9%), last July super minister Mario Murillo warned us that there would be problems due to “a fall in oil and nickel prices, sugar production targets not being met and a drop in other expected revenue.”
On that same day, the former Cuban Economy Minister Jose Luis Rodriguez – not in exile – recognized the fact that losses linked to “Cuban” oil sales surpassed 500 million USD last year. This is mainly the result of derivatives coming from the Cienfuegos oil refinery. [Cuba is not an exporter of its own crude but has been able to sell a portion of the cheap oil from Venezuela.]
However, these millions are just the public face of a business which is six times bigger and needs to be examined in-depth. I’m talking about what could well be called the black gold pipe-dream.
Expert testimonies, along with the voice of some victims, shine a light on this subject:
Carmelo Mesa Lago, Havana, 1934, still working. Professor emeritus at Pittsburgh University. Author of a vast bibliography on his country’s economy.
“I have calculated that Venezuela pays an average of 10,600 euros per month (127,200 per year) for every Cuba professional, there is a secret subsidy which the Cuban government receives, which only pays a small fraction of this to its doctors.”
Several professionals who have returned from their mission abroad have agreed to give their opinions although obviously they won’t be identified because they live in their country.
Magdalena, sports trainer: “Payment is made via a card which you leave behind in Cuba. Before you leave, you know how much you will receive per year, for example, I used to get at least 4000 CUC (333 per month), which became available once I returned, with the option of choosing somebody in Cuba to take out this money according to the monthly sum. The advantage of having the card is that if you accumulate money in the account, when you return, you can buy in hard currency stores (TRDs) and get a 30% discount.”
Ana Irma, teacher: “In Venezuela, you receive an allowance for personal expenses: food, personal hygiene and others, which aren’t enough because you get it in Bolivars according to the [devalued] official exchange rate. What used to be 100 Bolivars yesterday can cost 300 today if you’re lucky and everything’s like this. The majority of us employees are asking our families for dollars to keep us going because US currency is the only one that has hard value here anymore.”
Alfredo, public health technician: “In my case, it was 325 CUC per month. Generally-speaking, overseas voluntary workers receive between 200-350 CUC per month, which are made available in Cuba if you meet all of the requirements, which include discipline and toeing the political-ideological line.”
Calculating the extortion of Cuban workers is difficult because there isn’t any public information made available on the subject. After consulting over a hundred newspaper articles, interviews given to experts and feature articles, there isn’t any documented reference to the agreement that governments signed between the two countries, drawing out the terms of the contract. The victims don’t even know anything more than the outline and the compulsory contract they have to accept under the unspoken precept of take it or leave it, and if you do, beware of the consequences!
However, the patient analysis of different sources gives a more trustworthy calculation:
Different publications, including the Cuban government’s own, coincide on the daily oil barrel supply, between 105,000 at the peak and around 90,000 as an average over 13 years. Nowadays, this has been cut down to 53,500 with the temporary solution from Fuel Oil, Diesel and Liquefied Gas from oil, substitutes which bring the total equivalent to some 83,130 barrels according to PDVSA (the Venezuelan government’s oil company) reports.
There were over 40,000 Cuban professionals per year, but this dropped to around 30,000, the last figure which will be used as a reference in the latest analyses.
1- Food and personal hygiene allowances given to Cubans on a mission don’t count because they aren’t even enough to live a decent life in today’s Venezuela.
2- Monthly payments in CUC allow us to calculate between 2400 to 4200 per year, the equivalent to USD, but Cuban professionals generally receive this payment in a virtual form because the card is used to buy items in Cuba at TRDs, where the State has a monopoly on retail sales with extremely large profit margins.
3- Normal salaries, in Cuban pesos (CUP), by building up, provide the “revolutionary missionary” a minimum income paid by the State, which varies from 300 to 1000 CUC per year, according to the official exchange rate of 1 CUC = 25 CUP.
In all, every “overseas worker” costs the Cuban government between 3000-5000 CUC per year (250-415 per month) while it receives an average of over 100,000 CUC per professional.
Resale oil dollars are another thing altogether, they go directly to the Central Bank of Cuba’s treasure chests.
If we consider the fact that the average supply of oil is 90,000 barrels per day, at the price of the oil boom which has now come to an end, Cuban government revenue greatly exceeds 3 billion USD per year. When dividing the above income between 30,000 voluntary workers, the final number varies around 10,000 USD per month, a figure which coincides with what academic Mesa Lago states about Venezuela’s payment to the Cuban government for its professionals.
The obliging applause from these exported workers by the Cuban government doesn’t mean anything when defending the idea that they aren’t being exploited. Maria Werlau, an expert on the subject and a promoter of the Cubaarchive.org project, when giving her testimony before the US Senate specified:
“The consent of the victims being exploited is irrelevant. The 2000 Protocol against the Smuggling of Migrants, supplementing the Convention against Transnational Organized Crime, defines human trafficking as an abuse of power or a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation.”
Vicente Morín Aguado: email@example.com