7/09/2016

The Castro parasite dies as Venezuela dies

This was released by Rigzone, based on a Reuters report: "Cuba, long reliant on Venezuela as its top energy supplier, has received some 53,500 barrels per day (bpd) of crude from PDVSA this year, a 40 percent decline from the first half of 2015, according to PDVSA data."
Quite a few press reports and bloggers inform that Cuba is suffering from fuel shortages and a weak economy. In recent days Raúl Castro informed the communist party that the economy didn't grow in 2016 as expected, and that belt tightening was needed to survive the coming hard times (this in spite of the help delivered by Obama, who is trying to help his buddy Raúl Castro survive the Venezuelan apocalypse).
Raúl Castro visiting his satrap, Nicolas Maduro
The Castro family dictatorship controls a lot of what goes on in Venezuela. This means they were able to function as a parasite extracting cash flow and oil from its host. But the Cubans tried to push the Chavez and Maduro regime into the same irrational policies which destroyed the Cuban economy.

 The dynamics are complex, because we note a significant conflict within the Cuban communist party upper elite. Some of them want to move towards a Chinese style capitalism with fascist attributes. Others keep preaching medieval Marxism, and others want a modified communism allied with foreign investors who use Cuban slave labor.


This conflict was reflected in their Venezuelan colony, with the added flavor that Chavez and Maduro encouraged enormous corruption, drug trade, and anarchy. This chavista tendency was disliked by the Cubans, but they allowed it because it also allowed control over corrupt or narco government officials, who can be kept on the leash because they have broken so many laws.

Thus the Venezuelan economy has been destroyed in a fairly ad hoc fashion, and as it descends into total destruction the Cubans have been unable to get Maduro to respond properly. To make matters even worse, Venezuelans have awakened to the fact that Maduro aspires to become a dictator just like his mentor boss Raúl Castro.

'Cuba Out" sign in Venezuela protest 

The Cubans are also unable to interface very well with a society where people do expect some sort of democracy and respect for human rights, instead of having the ability to use violence and suppress dissent as they have in Cuba. Thus Venezuela is slowing down more day by day, and Cuba just can't squeeze it as hard as it used to. 


PS: A while back I wrote a very rough estimate of Venezuela's oil reserves. I had to prepare different cases, but the overriding factor was the government. The current government is corrupt, incompetent, abuses human rights, has allowed the crime rate to increase enormously, and lately it has been using food as a weapon to make the population submit to its will. In other words, the Maduro regime has crossed into crime against humanity territory, and I just don't see those reserves being even 1/3 of what's booked given the reality on the ground. Oil production is dropping, the oil quality is so low the Venezuelan basket fetches about 80% of the WTI price, and it's bound to get even worse. 

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