The Erosion of Venezuelan Economic Aid to Cuba and its Impact on the Island

Abstract

The constant in six decades of the Cuban socialist economy is its economic dependence on another nation: it has been unable to generate adequate growth and finance its imports with its own exports, without receiving external subsidies. Between 1960 and 1990, the value of the USSR's economic relationship with Cuba was US$65 billion and 60% of it was in price subsidies (non-refundable) to Cuban exports of sugar and nickel (paid at prices above the world price) and oil imports (paid below the world price). This article evaluates Venezuela's economic relationship with Cuba between 2000 and 2018, the price subsidies in that relationship, as well as the erosion of the relationship and its adverse impact on Cuba that has generated the current crisis.