Brazilian President Dilma Rousseff’s suspension from office is bad news for newly trendy Cuba, which despite a detente with Washington is feeling the pinch from a downturn ravaging allies’ economies and political fortunes in South America and Africa.
Friends such as Venezuela, Brazil and Angola for years used revenue from a commodities boom to pay for Cuban medical and educational services, turning it into the communist-run island’s main source of hard currency.
President Raul Castro’s detente with the United States has helped drive up tourism to record highs but income from the influx of foreign visitors were only about one-third of the $7 billion from health and education exports in 2014.
Over the last 13 years, Brazil’s leftist governments also provided at least $1.75 billion in credit on favorable terms, drawing fire from opponents who are also angered by a program that put 11,400 Cuban doctors to work in Brazil.
Those projects will now be re-examined after Brazil’s Senate voted on Thursday to put Rousseffon trial for breaking budget laws. She is now suspended from office while the trial takes place in coming months, and a likely conviction would end her presidency.
“There will be a short-term review of our Cuba policy, because the money has run out and because there are some serious governance questions regarding the loans. Everything will be put on hold,” said a Brazilian diplomat who served in Havana.
Some of Brazil’s loans bankrolled a major expansion project at Cuba’s Mariel port with 25-year repayment periods and rates of between 4.4 percent to 6.9 percent, Brazilian data shows. Critics say the terms are too generous given Cuba’s poor credit history.
Support from a bloc of leftist governments in Latin America since the turn of the century helped Cuba get back on its feet after the collapse of the Soviet Union caused a massive economic crisis in the 1990s. Improving relations with the United States and Europe hold the promise of new revenue, but for now Cuba’s economy will suffer as the tide turns against allies.
Centrist politician Michel Temer took over as interim president in Brazil on Thursday. His government is not expected to send home the Cuban doctors working in Brazil since 2013-14 but it will not hire any more.
“Obviously there will be no more Cuban doctors coming here in the future, because this model of assistance is questionable and there won’t be support for it, but I doubt any Cubans doctors will be booted out,” said the diplomat, who asked not to be named because he was not authorized to speak on the matter.