Trade Between Cuba And Venezuela Falls 70% In The Last Two Years

The deceased Fidel Castro and Hugo Chavez signed a Cooperation Agreement between Cuba and Venezuela in 2000, but the economy of the latter has lost its strength since then. (Embassy of Cuba in Venezuela)

14ymedio bigger14ymedio (With agency information), Havana, 16 August 2017 – The effect of the Venezuelan crisis on the Cuban economy is greater than expected, judging by the latest data from the National Statistics Office (ONE) that reveals a 70% fall in trade between the two countries in only two years.

The trade in merchandise was $2.2 billion in 2016, compared to $4.2 billion a year earlier and $7.3 billion in 2014. Cuba has had to reduce imports from Venezuela and there has also been a cut in fuel shipments which has affected Cuba’s domestic economy, which fell into recession for the first time last year with 0.9% fall in the Gross Domestic Product.

Venezuela’s exports fell to $ 1.6 billion in 2016 from $ 2.8 billion in 2015 and $ 5.1 billion a year earlier. On the other hand, Cuba exported to Venezuela 642 million dollars in goods in 2016 compared to 1.4 billion dollars in 2015 and 2.0 billion in 2014.

Cuba’s trade in goods totaled $12.6 billion in 2016, down from $15 billion in 2015. The economy has grown by 1.1% in the first half of the year, according to official figures, but the tightening will continue and could be extended, according to the government.

Cuba’s dependence on Venezuela continues to be very strong and Cuban has no solid alternative plan, the prospects in this regard are not good. In 2017 so far, the Venezuelan government has sent Cuba 13% less crude oil and other fuels, compared to the same period last year.

The governments of Cuba and Venezuela maintain an alliance forged by the late Fidel Castro and Hugo Chavez. As a part of this alliance the island exports professional services to Caracas, particularly in the health sector, in exchange for oil and fuel. At the high point of the accords, in 2008, Havana received some 115,000 barrels of crude oil a day at subsidized prices, but due to the economic crisis in Venezuela, that amount has been reduced to 72,350 barrels a day.

Cuba intends to supply these energy deficiencies through Russia after more than a decade without having to resort to that country.