Venezuela buys foreign oil to help Cuba, despite being on the brink of collapse

Venezuela's President Nicolas Maduro
Venezuela’s President Nicolas Maduro

Venezuela on the brink of collapse buys foreign oil to ship it to its old ally, Cuba.

That’s according to Reuters report, which reveals that Venezuela’s state-owned oil company PDVSA has purchased close to $440 million worth of foreign crude oil and shipped it directly to Cuba on friendly credit terms – and often at a loss.

And that’s certainly a bizarre policy for obvious reasons. One of them is that Venezuela is major oil producer, and one would expect to ship oil to Cuba from its own reserves rather than buying them in the market. Another reason is that Venezuela is at the brink of collapse, needing all the help it can get from allies rather than subsidizing them.

But nothing no policy is bizarre in a country where there’s a long list of failed government policies, which date back several decades, even before Bolivarian socialism.

Like the wave of nationalizations in the late 1970s, which placed the country’s resources in the hands of government bureaucrats rather than professional managers.

 And the price controls and heavy subsidies under President Caldera and his allies, which made crude oil cheaper than water, while widening the government deficit and adding to soaring government debt in the meantime.

And much more.

Like the currency controls that favored foreign manufacturers over domestic manufacturers.

And the modern version of Bolivarian socialism, which borrowed a couple of failed features from Castro’s Cuban Socialism, and from Che Guevara’s and Salvatore Allende’ Anti-Americanism, to add to the woes of Venezuela’s economy. In fact, Anti-Americanism became the scapegoat for the many failures of Venezuela’s economic policies.

Now comes the last chapter of Venezuela’s long experimentation with failed government policies. And it looks ugly, very ugly. It features severe shortages of necessities, from baby diapers to paper towels, napkins and the like. But no shortages for funds to help old failing allies.

Simply put: it takes a whole lot of stupid government policies to destroy a great economy. And Venezuelan governments of different political sides seem to have raced to pursue all of them to the bitter end.

  • Arzna

    What kind of a jerk is this Maduro . Venezuela has more oil reserves than any other country in the world and his people are starving and yet he spends $440 million on foreign oil to give to Cuba

  • Niemals

    Nicolas Maduro buys votes then he buys foreign oil to help Cuba, in order to get Cubas support for his ‘correct democratic election’. ????
    He is certainly proud of Venezuela having the world’s highest inflation…. ???? ???? ???? ????

  • Niemals

    Maduro: “I do not care they call me a dictator”
    And the winner is….

    Among the many overthrows to Maduro’s advantage, Falcón and other opposition primarily mention the “red points” that the regime set up at the vallokalas.
    There are gathering places where faithful voters could be registered by the governing party PSUV.
    According to testimonies, they have been rewarded with rewards if they vote on Maduro.

    The broad opposition movement Frente Amplio (FA) has not participated in the election at all, but initially said it has been rigged. The FA also called Falcón and Bertucci during the election night.

    The United States and the EU have also expressed strong skepticism about the election.

  • Niemals

    What is the “Maduro Diet”?
    For Venezuelans, the “Maduro Diet” is a joke that reflects a gloomy reality.
    The deep economic crisis has led people to literally go to the swallow-thieves – many say they are racing at least 11 kilos.

  • Niemals

    German pensioners are leaving Venezuela
    “People are slaughtering cats and dogs”