Rousseff’s Ouster Will Have a Negative Impact On The Cuban Economy

Rousseff's Ouster Will Have a Negative Impact On The Cuban Economy /
14ymedio

14ymedio/Agencies, Havana, 13 May 2016 — The suspension of the president
of Brazil, Dilma Rousseff, is bad news for Cuba, which, despite detente
with Washington, is feeling the effects of the recession affecting its
allies in South America and Africa. Brazil will review its short-term
policy toward the island, as revealed on Friday to Reuters, by a
diplomat from that country who was stationed in Havana.

Over the past 13 years, the Government of Brazil provided Havana with at
least 1.75 billion dollars in loans on favorable terms, resulting in
criticism from the opposition, which is also angered by the "More
Doctors" program, which sent some 11,400 Cuban doctors to work in Brazil.

These projects will be reexamined after the vote in the Brazilian Senate
this Thursday and the ouster of president Rousseff for allegedly
falsifying public accounts.

"There will be a short-term review of our policy toward Cuba because the
money has run out. All this is not on hold," said a Brazilian diplomat
who asked to remain anonymous.

Some of the Brazilian loans were spent on the expansion of the Mariel
Special Development zone, with repayment periods of 25 years at rates of
between 4.4% and 6.9%, according to official data from Brazil. The
detractors of this policy believe that the terms of the agreements have
been extremely generous to a country like Cuba, with recognized solvency
problems.

It is not expected that the interim government led by Michel Temer will
end the collaboration with the with the Cuban doctors program working in
Brazil since 2013, although it will not contract with new doctors. "This
model of cooperation is debatable and he will not support, although I
doubt they throw the Cuban doctors out of the country," a diplomatic
source told Reuters.

Last month, Rousseff extended the health services contract for three
years, a measure that is currently pending in Congress.

Cuban medical personnel work in some of the remotest regions of Brazil,
where they enjoy the support of local authorities. The holding of
municipal elections in October is one of the factors that Congress
should consider before opting for a drastic interruption of the program
of cooperation.

Allies like Venezuela, Brazil and Angola have been used their enormous
oil revenue during the boom years—now diminished by the very low price
per barrel—to pay for medical and educational services from Cuba, making
these a principal source of hard currency for the island..

The thaw reached by President Raul Castro with the United States has
been a boost for tourism, but revenue from this sector accounts for only
about a third of the seven billion earned in 2014 through the export of
health and education services.

The Government of Cuba began to cut imports and request longer deadlines
for payment to foreign suppliers last year, and is falling behind in its
obligations this year, according to Western diplomats and businessmen.
"Clearly, they have a liquidity problem. Some of our companies receive
payments and others do not," a European ambassador told Reuters on Monday.

The official forecast points to a slowdown in economic growth for 2016
compared to 4% increase recorded last year.

Source: Rousseff's Ouster Will Have a Negative Impact On The Cuban
Economy / 14ymedio – Translating Cuba -
http://translatingcuba.com/rousseffs-ouster-will-have-a-negative-impact-on-the-cuban-economy-14ymedio/