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Cuba, Venezuela strengthen economic ties

Reuters | Mon Oct 15, 2007

Cuba, Venezuela strengthen economic ties

By Marc Frank

HAVANA, Oct 15 (Reuters) — Revolutionary allies Cuba and Venezuela signed a raft of economic accords on Monday aimed at furthering cooperation, including plans for nickel and oil development and a billion-dollar petrochemical complex in Cuba.

Venezuelan President Hugo Chavez and acting Cuban President Raul Castro presided over the signings, the latest in a series of such events as the two countries cement their political and economic ties in fierce opposition to the U.S. presence in the region.

Ailing President Fidel Castro and Chavez in 2004 founded the Bolivian Alternative for the Americas, under which Monday’s accords were signed, as an alternative to U.S.-led free trade initiatives.

So far just Bolivia and Nicaragua have joined the pact.

The two countries have already formed 19 joint ventures in many different sectors, especially energy where they are upgrading a Cuban super-tanker port, operating oil tankers and putting into operation a long dormant oil refinery in central Cienfuegos province abandoned when the Soviet Union collapsed.

The new plans signed on Monday call for building a plant to turn liquefied natural gas back into gas and study the potential to build a fertilizer plant and other petrochemical plants around the refinery.

The countries also plan to upgrade Cuban low-quality crude oil, and explore for oil in four offshore blocks in Cuba’s Gulf of Mexico waters and two blocks along the north coast in western Cuba.

A joint venture to mine nickel waste and turn it into ferro-nickel and letters of intent for the construction and fishing industries were also signed.

Chavez signed a presidential decree authorizing formation of a joint venture to build and administer an underwater fiber optics cable between the two countries meant to bypass the U.S. embargo.


Monday was the last day of a three-day visit by Chavez that included repeated calls to form a confederation of states, a long meeting with Fidel Castro and a live phone conversation with the Cuban leader during Chavez’s regular weekly television program broadcast on Sunday from Cuba.

"Cuba and Venezuela could easily form a confederation of states ... This is no delirium," Chavez said at the signing on Monday.

The phone chat with Castro was the first time Cubans have heard their president speak live since he handed over power in July 2006 to undergo the first of at least three major operations for an undisclosed intestinal problem. He has not appeared in public since.

A 17-minute video of the meeting with Chavez showed an alert if still gaunt Castro with a stronger voice than in previous videos.

"I am delighted that Fidel Castro has had an opportunity to have a chance to discuss things with his good friend President Chavez. It is too bad that in almost half a century of misrule in Cuba, he has never had the same kind of conversation with his own people," said U.S. State Department spokesman Tom Casey when asked about Castro’s call to Chavez’s TV show.

Bilateral trade between Venezuela and Cuba was $2.5 billion in 2006, mainly Venezuelan oil and related exports to Cuba and not including Venezuelan payments for massive Cuban medical and educational assistance valued in the billions of dollars by both parties.

Since 2004 Cuba has reported double digit economic growth and a doubling of imports after years of crisis, helped further by soft Chinese credits and high prices for its nickel exports and despite a strengthening of longstanding U.S. economic sanctions.

 source: Reuters