Posted on Tue, Apr. 11, 2006
Trade with Venezuela `grows every day’
The trade relationship between Cuba and Venezuela has skyrocketed
recently, with more growth expected.
BY FABIOLA SANCHEZ
HAVANA – Friendly ties between Fidel Castro’s Cuba and Hugo Chávez’s
Venezuela have opened the way to a burgeoning trade relationship
projected to reach more than $3.5 billion this year — about 50 percent
richer than in 2005.
The favorable balance converted Cuba last year into Venezuela’s third
most important trade partner, after the United States and Colombia.
The bulk of trade comes from the 90,000 barrels of crude petroleum that
oil-producing Venezuela sends daily to the communist-run island, but the
South American nation also has increased non-petroleum exports to Cuba
in recent months, with products from construction supplies to chocolate.
”The potential grows every day,” Adan Chávez, Venezuela’s ambassador
to Cuba and the president’s older brother, told The Associated Press in
an interview here last week.
Chávez said the countries ended 2005 with $2.5 billion in trade. By
increasing Venezuela’s nonpetroleum exports to the island, ”in 2006 we
should finish with a balance of some $3.5 billion,” he said.
The ambassador said Venezuela’s oil exports to Cuba last year were worth
about $1.8 billion.
Sold on preferential terms, Venezuelan oil has helped Cuba deal with
serious problems in supplying power to its 11.2 million people.
Cuba, meanwhile, sold Venezuela about $500 million of goods and services
in 2005, Chávez said.
Venezuela’s purchases of Cuban products will continue growing in areas
such as medicines and medical equipment, supplying a program providing
free medical care in poor Venezuelan neighborhoods, he said.
Cuba has about 22,000 doctors and other health workers in Venezuela as
part of that program, but the costs to Cuba for sending the doctors —
along with other government-to-government cooperative programs — are
not included in the trade estimates.
Other planned programs include building housing in Venezuela and Cuba,
Chávez said. Cuban officials have estimated that project will involve
more than $1 billion in investment.
Though much has been direct government trade, private companies also are
involved, and the ambassador said the countries agreed to launch several
mixed enterprises this year — using government and private funds — to
produce musical recordings, films, books and magazines. They also plan
to form a construction company, he said.
”Beyond the economic . . . there is the feeling of cooperation, of
solidarity, of authentic integration,” Chávez said, referring to the
Bolivarian Alternative for the Americas — the two countries’ regional
trade initiative that is meant to follow socialist principles, in
contrast to the Washington-backed Free Trade Area of the Americas.
Lamigal, Venezuela’s No. 1 manufacturer of galvanized steel sheeting for
construction, is selling Cuba material for roofing of homes and to build
sheds, said company export analyst Javier Leon.
Venezuela’s Foreign Commerce Bank approved an initial line of credit of
$24 million to finance the exports that began last August, said Leon,
and the company expects the eventual value of exports could reach $96.8
Cuba says Venezuelan products do well against products from Spain, the
Netherlands, Italy and Colombia.