The Associated Press/HAVANA
By FABIOLA SANCHEZ
Associated Press Writer
Venezuela sees boosting trade with Cuba
APR. 10 5:27 P.M. ET Friendly ties between Fidel Castro’s Cuba and Hugo
Chavez’ Venezuela are now much more than political, opening the way to a
burgeoning trade relationship estimated to reach more than $3.5 billion
(euro2.9 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 to the communist-run island daily, but the
South American nation also has increased non-petroleum exports to Cuba
in recent months, selling products from construction supplies to chocolate.
“The potential grows every day,” Adan Chavez, Venezuela’s ambassador to
Cuba and Hugo Chavez’s older brother, told The Associated Press in an
interview here last week.
Chavez said the countries ended 2005 with $2.5 billion (euro2 billion)
in trade. By increasing Venezuela’s non-petroleum exports to the island,
“in 2006 we should finish with a balance of some $3.5 billion (euro2.9
billion),” he said.
In 2001, trade between the two countries was estimated at $1 billion
(euro827 million), Venezuela’s state news agency Venpres reported then.
The ambassador said Venezuela’s oil exports to Cuba last year were worth
about $1.8 billion (nearly euro1.5 billion).
Sold on preferential terms, the Venezuelan oil has helped Cuba deal with
the island’s serious energy problems, giving it the rest of the
petroleum it needs to provide electricity to this island of 11.2 million
Cuba, meanwhile, sold Venezuela about $500 million (euro414 million) of
goods and services in 2005, Chavez 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 now 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 one to build housing in Venezuela and
Cuba, Chavez said. Cuban officials have estimated more than $1 billion
(euro827 million) has been invested in that program from both governments.
Though much of the trade has been promoted by the closely allied
governments, private companies also are involved. The ambassador said
the countries agreed to launch several mixed enterprises this year —
using government and private funds — to produce musical recordings and
films, and publish books and magazines. They will also form a
construction company, he said.
“Beyond the economic … there is the feeling of cooperation, of
solidarity, of authentic integration,” said the ambassador. He was
referring to the two countries’ Bolivarian Alternative for the Americas
— their concept for shared regional trade following socialist
principles in lieu of the Washington-backed Free Trade Area of the Americas.
Among private Venezuelan companies that now have a presence in Cuba is
Lamigal, the country No. 1 manufacturer of galvanized steel sheeting for
Javier Leon, export analyst for Lamigal, said Cuba is using the
company’s construction materials for the roofing of homes and to build
sheds. In the future, the materials could be also used to as safety
guards on the island’s highways, Leon said.
Venezuela’s Foreign Commerce Bank approved an initial line of credit of
$24 million (euro20 million) to finance the exports that began last
August, said Leon. He added that the eventual value of the construction
materials exported could grow to $96.8 million (euro80 million).
As for other Venezuelan goods, the president of the government’s
Industrial Bank of Venezuela, Luis Quiaro, said his country is already
exporting a wide variety of products to Cuba, including workers’
uniforms, boots, construction materials, and food products such as
chocolate, tomato sauce, canned sardines, gelatin, fruit jams and juices.