Friday, July 15, 2016

Cuba Getting Nervous About Venezuela

It seems that the crumbling of Venezuela's socialist model is accelerating the crumbling of the Cuban economy. Last week we learned that Venezuela is cutting oil exports. Raúl Castro sacked his economic minister and is talking about, well, capitalism.

Last week, Cuban President Raul Castro warned that citizens would have to improve management of their finances and spend less money. Murillo has been replaced with Ricardo Cabrisas Ruiz, a veteran Cuban politician who was previously overseeing the country's recent debt restructuring. 
Murillo will now help lead market reforms in efforts to manage Cuba's economy. A Cuban government statement said Murillo will focus his efforts on tasks related to "updating the Cuban economic and social model."

It's essentially a new, though more mild, Special Period coming up. Cuba will once again become financially independent, which will be painful. But it will also become more market-oriented because Cuba simply doesn't have the resources to support socialism.


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