Tuesday, January 15, 2008

Lula bets on Raul

The President of Brazil, now visiting Havana after attending the inauguration ceremony in Guatemala, is about to announce a series of economic agreements, including substantial credits, to Cuba.

This is a vote of confidence in Cuba’s government and economic potential on the part of South America’s largest democracy and economic powerhouse. It is one more sign of American isolation on the Cuba issue. No country on earth buys the U.S. theory that Cuba’s government is on its last legs, or agrees that there’s any benefit in trying to squeeze the island’s economy through sanctions.

The wire stories available now (Reuters and AP) are based on pre-briefings from Brazilian diplomats, and they differ regarding the terms of the deals that will be announced.

But the deals are substantial: “$1 billion in credit for food, road building, nickel mining and other development projects,” according to Reuters; “a deal to begin exploratory oil drilling in Cuban waters within two years,” according to AP; construction of a lubricants plant; refurbishment of a nickel plant (the Pedro Soto Alba in Moa?); and biotechnology.

Also, encouragement of private Brazilian investment through credits to support Cuban exports through Brazilian companies, provided that Cuba provides collateral.

There is one issue that screams out by its absence: ethanol. This is hard to figure considering Brazil’s previous interest in ethanol development in Cuba, Cuba’s announced policy of being open to sugar/ethanol investment, the economic advantages of sugar-based ethanol and Brazil’s state-of-the-art expertise in producing it, Cuba’s ability to produce sugar, the high price of ethanol today, and the short period of time (two to three years, an industry friend tells me) to go from groundbreaking to production. I wonder how officials will discuss this if they face reporters on Tuesday.

Finally, a humble suggestion: If they are going to spend millions on road construction, could they consider spending a small part of that budget on signs that tell you where Cuba’s roads lead?

11 comments:

Alex said...

Phil, maybe because of Castro's editorial attacking ethanol production and predicting 3 billion deaths, where he specifically calls the use of Brazil's technology in Cuba a "dream and an illusion"?

Agustin Farinas said...

I wonder if the Govt. of Brasil has bothered to check on Cuba's record of payment several other outstanding loans made to them in the past?
it would serve them well to study that record to know when to expect payment back on their loans. They may want to ask their neirbough to the south, Argentina, or even Mexico, about Cuba's record about paying back the loans made to them during the 1980's.
But I guess they want to throw away 1 billion dollars of their money in loans that will never be paid back.

Phil Peters said...

Alex, that could be the case. But even after Fidel trashed everything about ethanol, the minister of basic industries reiterated (last May) that Cuba remains open to the possibility of joint ventures to produce ethanol.

Alex said...

Then maybe they are just waiting for him to die, like everybody else. I just think it would be weird to do an about face after he published that editorial back in March and it got significant international attention (it was even seen as a slight to Lula).

Anonymous said...

I find the fact that the Brazilian government is flirting with the idea of aiding the island's tourism apartheid machine by funding hotel development deplorable at best.

As for ethanol development, I was under the impression - after Fidel's own statements in Granma - that Cuba wouldn't touch the industry with a ten-foot pole. Fidel seemed to be quite opposed to the idea for fear of negative impact on food production. Am I missing something here? I would guess that would explain the absence of the topic from conversation in Havana.

Best,

Anatasio Blanco

Phil Peters said...

Yes, Fidel did indeed say trash ethanol development in every possible form, but then the minister of basic industries contradicted him, here:

http://cubantriangle.blogspot.com/2007/05/ethanol-confusion.html

Don’t ask me to explain. My hunch is that Cuba and Brazil will talk about it in the future and if they reach agreement on a joint venture, then maybe some of the pool of credit offered by Lula in this visit will be used, or private Brazilian capital will be used. The match between Cuba’s needs and capabilities and Brazil’s world-leading expertise is perfect, and Raul says he wants more foreign investment, including in agriculture. Added benefits for Cuba, obviously, are greater energy independence, higher foreign exchange earnings, and diversification, i.e. fewer eggs in the Venezuelan basket.

Anonymous said...

I wonder if people think that we are finally starting to see some decisions being made by the Cuban government that differ from Fidel's views...
The recent announcement that they would sign the UN Human Rights accord might be one example.

Anonymous said...

Anonymous,

I see your point however, one mustn't forget the efforts launched by the Cuban government on the run-up to the announcement, to round-up peaceful dissidents. Not to mention the death threats and beatings endured by dissidents such as Dr. Darsi Ferrer on the VERY DAY Foreign Minister Perez-Roque made the announcement. Talk about irony!

Cheers,

Anatasio Blanco

Anonymous said...

Anastasio,
Fair enough but I have to say I'm kind of fascinated by the idea that others within the government might be starting to assert their own views and agendas.
What do you all think? To me this is a huge--although very gradual-- change.

Anonymous said...

I just don't see any huge changes taking place. That whole song and dance by Raul about being more open and expressing dissenting opinions was nothing more than window dressing in my view. I haven't seen one real substantive change, nor do I expect to. That will only happen once both brothers are out of the scene. It's been 49 years of this nonsense and these guys are old and set in their ways. Furthermore, they absolutely HAVE to protect the status quo. What happens if there's a major change in the government with all these old revolutionary cadres still alive? Some of them are going to be eaten alive - there's a lot of anger and resentment on that island. For that reason, they MUST preserve the status quo - for their own benefit. Don't expect big changes - in my humble opinion.

Best,

Anatasio

jose said...

the key to me is expressed by Phil
..."No country on earth buys the U.S. theory that Cuba’s government is on its last legs, ..."

brazilans are no dummies, they have good analysts and would NOT throw billion dollars at something that is precarious.