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Cuba’s economy: Caribbean contagion

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Cuba’s economy

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HAVANA

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Haircuts all round in Havana

Haircuts all round in Havana

QUEUES at petrol stations. Sweltering offices. Unlit streets. Conditions in Cuba’s capital remind its residents of the “special period” in the 1990s caused by the collapse of the Soviet Union. Today, the benefactor in trouble is Venezuela.
For the past 15 years Venezuela has been shipping oil to Cuba, which in turn sends thousands of doctors and other professionals to Venezuela. The swap is lucrative for the communist-controlled island, which pays doctors a paltry few hundred dollars a month. It gets more oil than it needs, and sells the surplus. That makes Cuba perhaps the only importer that prefers high oil prices. Venezuelan support is thought to be worth 12-20% of Cuba’s GDP.

Recently, the arrangement has wobbled. Low prices have slashed Cuba’s profit from the resale of oil. Venezuela, whose oil-dependent …