31 October 2006

Where Does The Money Go?

Bloomberg has an article today that analyzes the Cuban economy and details how it is being propped up by Hugo Chavez. Although 80% of Venezuelans live in poverty, Chavez continues to squander Venezuela’s vast oil wealth on an anti-American crusade that’s meant to spread Castrism throughout Latin America.

These are prosperous times for the economy of the Republic of Cuba, and Venezuelan President Hugo Chavez does indeed have a lot to do with it. Gross domestic product grew at 12 percent last year, according to Cuba's Economy and Planning Ministry, the fastest rate since President Fidel Castro took power in 1959 and turned the island into a communist state.

The Article by Guillermo Parra-Bernal delves into different sectors of the Cuban Economy:

Booming Tourism
The government says foreign investment was up 39 percent in 2005. Officials say
tourism is booming: A record 2.5 million visitors will fly into Cuba in 2006 from Europe and from other Latin American nations

Chavez's Project
Under an October 2000 accord engineered by Chavez, Venezuela, the world's fifth-biggest petroleum exporter, agreed to sell up to 100,000 barrels of oil a day to Cuba at a discount of as much as 40 percent. Some $5 billion worth of oil has been delivered since 2003. Jose Toro Hardy, a former board member of state oil company Petroleos de Venezuela SA (PDVSA) and a critic of Chavez's oil policies, says Cuba has been reselling oil it doesn't immediately need at market prices to bolster its budget.

Spreading the Revolution
The flood of new money pouring into Havana has allowed Castro to revive his effort to spread his revolution -- and his anti-Yanqui ideology -- to the rest of Latin America and to Africa. Cuba, a nation of 11.3 million people, claims to have stationed thousands of doctors, nurses, engineers and social workers in 68 developing ountries.

Whole article here

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