Credit: Kevin Dietsch/Getty Images, Published WSJ Online Edition Jan 15, 2025
Short History of Cuba
Under the dictatorship of Fulgencio Batista, Cuba was an island paradise ninety miles off U.S. shores. Cuba was the world’s largest producer of cane sugar. Its casinos attracted high rollers from all over the world, to drink fine rum and smoke the best Cuban cigars. Like Las Vegas when it was a speck in the desert, mob affiliated capital loved this kind of setup.
Batista invited American mobsters like Meyer Lansky to come and build the casinos and hotels. Cuban sugar found its way into the Domino sugar cubes which appeared on every commercial restaurant table in America. Cuba also was a large producer of citrus fruits like oranges and melons. How could this paradise be rotten at its core?
Unburdened by an ideological overlay, Batista’s Cuba was a pure kleptocracy. He took large cuts of all the foreign exchange producing activities for himself, in cash. Commodity markets like sugar and citrus fruits are volatile, requiring some sort of infrastructure to manage the national treasury. Batista had no affinity for this kind of management, and he didn’t create any professional approach to the treasury. When the treasury was low and markets were on down cycles, he basically took whatever cash he had and fled to the Dominican Republic in 1959.
Fidel Comes Down to Save the People
Fidel Castro was a Cuban nationalist, first. Fighting a guerilla action against Batista from the mountains of Oriente province, he came into the vacuum left by Batista’s exit and established a new government. Unfortunately, he brought with him a radical Marxist-Leninist communist ideology. Castro’s own predilections would not have taken him far in imposing such an ideology on the Cuban people. Instead, his comrade Che Guevara, an Argentine national, took the position of Minister of Industry in the Castro regime, from where he guided Castro’s creation of a Communist state, where private property was confiscated, enterprises run by the state, while a regime of spying on one’s neighbors served to remove all enemies of the new Cuba.
As bad as Batista’s regime was, at least it was a situation of pure greed. Wrapped up in the ideologies of Marxism and Communism, Castro’s regime stole everything in the name of a better future. Once the U.S. government and our incompetent CIA and other agencies realized what Castro really represented, we began a period of failed attempts to invade Cuba (the Bay of Pigs operation in 1961), and various attempts to assassinate Castro himself, including by recruiting a prostitute to give him an exploding cigar! What all this nefarious buffoonery did was to drive Cuba further into the arms of the Soviet Union, which saw an opening to fulfill Khrushchev’s promise, “We will bury you.”
The Cuban Missile Crisis and Handoff to Raul
When the Soviet government placed strategic missiles in Cuba, it was an undisguised provocation by Khrushchev's government; the Kennedy administration made it clear that the missiles had to be removed. Now, everything was set for a very dangerous situation in East-West political relations. Through many different channels of communication, including at the heads of state level a crisis was avoided. Cuba was, for a moment, a strategic asset more than an economic interest in our hemisphere.
When Fidel fell ill, he handed off his powers to his younger brother and Minister of Defense, Raul Castro. For all the worrying about threats which Fidel’s Cuba may have represented to U.S. interests, it has been Raul Castro’s Cuba which has become a “state sponsor of terrorism,” under a designation of the U.S. Department of State. This designation had included Cuba, North Korea, Iran and Syria, until President Biden for some unfathomable reason removed Cuba’s designation in the waning days of his regime. One day later, President Trump put Cuba back on that list. The rest of this publication will explain why Cuba’s influence has become more nefarious and poisonous than ever in our hemisphere.
Corrupt Dictator Partners: Raul Castro and Nicolas Maduro
Raul Castro, as opposed to brother Fidel, was more of a long-term strategist, and he played a long game with Nicolas Maduro. Cuba today effectively runs the economy of Venezuela.
Cuba has has a population of some 11 million people, compared to over 29 million for Venezuela. Cuba’s population is, by comparison, relatively well educated: there are more medically trained doctors, nurses and clinicians, and more teachers, for example. Being a Caribbean island, Cuba’s main asset had been arable land, a congenial climate, and a workforce suited for large scale cultivation of cash crops. Venezuela’s greatest marketable asset is,by far, its oil and gas endowment.
Venezuela was a founding member of OPEC and its resource base ranked among its leaders. It exports were largely composed of lighter, sweeter grade crudes which produced higher product prices per barrel than did heavier crudes. Over time, under the dictatorship of Hugo Chavez, its patrimony was depleted; the population was anaesthetized by gasoline at $0.04 a gallon, so the common folk could drive their fifties American GM low riders, while there was no meat, produce or common household products in the stores. Those who had jobs with subsidiaries of foreign companies, were waylaid in traffic by pairs of thieves on motorbikes; the foreign companies worked hard to get their key employees out of Caracas.
Chavez hand picked his successor Nicolas Maduro who took over in 2013. Venezuela’s population is comparatively large, and most live isolated in rural villages, and the overall education levels are low, as are their health care standards. So, it follows that once the government nationalized the oil resources, it had to depend on foreign companies to take exploration and development risks, and to then extract the oil and get paid. Once the national oil company was created (PDVSA), suddenly the previous agreements were revoked and all became joint ventures with PDVSA which got a large share which got paid out first.
Many of the majors had no choice but to pull their engineers and send them to more profitable projects'; Venezuela had no engineers of their own and consequently, daily production rates plummeted . Oil revenues supplied the majority of the wasteful public budgets, and import prices rose as inflation skyrocketed.
Looking for a big policy distraction for their citizens, dictators Castro and Maduro framed a vision, largely crafted by Raul Castro, to barter medical services of Cuban doctors and nurses for payment in oil for energy-starved Cuba. The program was called Barrio Adentro. Although some non-profit propaganda claims the program had some success until CoVid, the program was a dismal failure and imposed cruel exploitation of the Cuban workers. Venezuelans were unhappy about foreigners providing their healthcare.
Cuban doctors would had preferred to emigrate to the United States, but most could not have done so. Barrio Adentro offered higher wages in local currency, with elected amounts being remitted to families in Cuba; living expenses in Venezuela would be subsidized, and clinic materials and supplied were to be supplied and charged to the inter-company agreement. Cuban doctors had quotas for patients seen by period, and they were to document their work.
First of all, local Venezuelans deeply resented the presence of foreign medical staff in their villages. They wondered where the Venezuelan doctors were. The governments had made no formal roll-out or communication about the program at the local level. Next, clinic supplies and consumables were not in place or never arrived; it could have been bureaucratic incompetence, or just the supplies being pirated at ports and sold for cash.
Families of Cuban medical personnel heard that their families had not received any remittances, and many were in desperate straits. Communications to and from Havana were slow and unreliable. Eventually, instead of fixing the arrears in pay for work done, the doctors received renewal contracts. The offers suggested that if they did not extend their contracts, then all outstanding amounts might be at risk. With these tactics, the Cuban health care workers were really indentured servants.
Cuba’s Long Game
Daily oil production in Venezuela, according to the Energy Information Administration hit a low of 200,00 barrels/day at year-end 2024. However, Venezuela through some clever work in U.S. courts has gained additional access to U.S. refineries of Citgo and Chevron, which can help generate more revenue per barrel from this heavy crude.
In the meantime, since Cuba was supposed to have received more oil during the agreement, in which period production was declining, Cuba demanded that their personnel be put in place to monitor production, movement of oil, and its destinations. For all intents and purposes, Cuba’s personnel has control over what happens to Venezuelan oil supply.
Maduro does not care because he, like Batista, has been skimming off large cuts of PDVSA production in his pockets; more intelligently, his generals also share in the generous payouts. There will be no military coups. Over more than sixty years of looting and corruption under Chavez and Maduro, tens of billions of dollars minimally must have passed to the politicos and generals.
Our Puerile Support for Venezuelan Opposition Is a Betrayal
In the 2015 election, opposition parties coalesced around a single candidate Juan Guaido, an engineer by profession, who captured 77% of the ballot compared to 23% for Maduro. The U.S. Government of President Barack Obama recognized Guaido as the head of the Parliamentary Assembly and interim President. America, it appeared, had finally stepped up to the plate against a dictator. After the initial press releases, there was no material follow up from the Obama administration.
The generals were not going to sit by and see their gravy train leave the tracks. Messages and money clearly went out to the opposition party blocs who had previously unified around Guaido. A few years later, the parties felt that Guaido had failed to do enough to fulfill the mandate given him by the electorate, and they revoked their support. A little money talks for little people. The reports are that Guaido fled the country in 2023, and is living in fear of his life, exiled in Miami. Recently, we have repeated this Punch and Judy Show with a new women opposition candidate against Maduro.
What About Cuba Now?
Cuban intelligence spies, agents, and technical personnel are all over a large energy economy in Venezuela. Since they help manage the movement of a dollar-denominated commodity, they have helped Russia around its various energy and currency sanctions.
Cuba is a surveillance state which keeps tight tabs around emails to and from research personnel who might want to publish or present preliminary results at foreign meetings. Two such researchers had some promising peptides that might have been useful in treating certain lung diseases. Their window of opportunity passed, and nothing came of their research. Fear of Cubans defecting is as was in Russia of the 1970s.
The government is very good at generating international propaganda. The Rolling Stones “Havana Moon” tour went to Cuba, as the government suggested that it was to bring some joy into the difficult life of Cuban citizens. Unfortunately, videos of the people and the ticket prices suggested that the audience were all wealthy Americans, Europeans, and Latin Americans. Well, it made nice press.
What remains of their best agricultural land in the center of the island? For decades, U.S. and European companies expressed interest in being allowed to rehabilitate this land to grow saleable crops. No meaningful interest was shown by the Cuban dictatorships. Today, the land is overgrown by kudzu, an invasive Asian vine which grows over a foot a day, strangling and choking off any plants in its path. In Cuba, it has silently done its damage over the island’s best cropland. Over many decades of neglect, kudzu is a sad metaphor for what has become of Cuba.