Why is Ramiro in Caracas?

That’s the rhetorical question Venezuelan private media and Chávez opponents have been asking ever since Ramiro Valdés Menéndez, the two-time interior minister and father of Cuba’s intelligence services, landed in their country early this month, apparently to stay for quite a while.

I would argue, the answer should not only interest people with a political agenda. Ramiro’s presence in Venezuela could be a big opportunity for your company, and I’ll explain that in a moment.

The business opportunity is not at all obvious when you listen to the top-of-the-lung rhetoric in Venezuela. 

The opposition’s answer to the question: Ramiro is in Venezuela to repress dissent and thus solidify VeneCuba, a Communist Frankenstein created by the evil Fidel who is now running two countries from his secret lair.

Hugo Chávez’ answer: To show unselfish Socialist solidarity and provide Venezuela with cutting-edge know-how after a natural disaster has befallen the country.

I admit, this is a caricature of the arguments fielded, amid rolling blackouts as a consequence of dramatically shrinking water levels in the country’s biggest reservoirs (Seventy percent of Venezuela’s electricity is generated with hydropower). 

The truth, as always, lies somewhere between the extremes.

Yes, the main reason the Cuban government sent its No. 3 to Venezuela is political. After all, Venezuela is the island’s main economic partner and benefactor; without it, tough times would be even tougher. The drought is shining a painfully bright light on economic bungling and weak state institutions in the oil-rich country. As a result, approval for the political one-man show in Venezuela has dropped considerably, and that is of concern to Cuba. 

But the Cubans didn’t come to repress dissent in Caracas. They are there — as are the Brazilian, Argentine, Chinese and Russian teams Chávez has asked for help — to provide hands-on technical support. 

Two facts about Ramiro and Cuba have been conveniently blacked out by the Chávez critics: One — as vice president and minister of technology since 2003, Valdés has been one of the key players in a recent radical makeover of Cuba’s energy system. Two — that makeover in 2006/07, dubbed “Energy Revolution” by the Cubans, has been a success.

In a matter of 48 months, and with relatively modest investment, Cuba was able to end the rolling blackouts that had Cubans sweating and precious food rotting during hot Caribbean summers. Combining a new system of distributed power generation by thousands of diesel and fuel-oil generators with an intense energy savings campaign and a focus on renewable energy did the trick.

It’s not an unqualified success yet. For one, the new generators increased Cuba’s dependency on expensive fuel imports, and that is harshly felt now by Cubans, as their cash-strapped government keeps urging them to use the “off” switch more often than they would like. Also, the long-run cost for maintenance and replacement of the still-new generators remains to be seen. And finally, whether the Cuban distributed-energy model will work in larger, continental country is still open for judgment. 

Even so, if you live in a blackout-prone country such as Venezuela, the Dominican Republic, Nicaragua, Panama, or even Mexico and Brazil, Cuba’s “Energy Revolution” is at the least worth serious consideration.

And that’s where business opportunities come in. 

Not surprisingly, the Cubans have not publicly talked about the dollars and cents involved in their energy know-how exports. The Cuban government, not surprisingly, paints it not as an economic but as a solidarity issue. When it comes to aid, revenues are not supposed to matter, and talking about profits is a no-no. But particularly in these times of crisis, the hard-currency cash flow from the program is a significant economic factor for Cuba. 

If you believe the former energy ministry official cited by opposition newspaper El Nacional, Venezuela owes Cuba $2.4 billion just for the additional capacity it recently agreed to be deployed. Given the characteristics of the anonymous source, take this number with a grain of salt. But it’s fairly safe to talk about hundreds of millions of dollars.

And they are going not only to Cuban entities, but also their foreign suppliers. The biggest quiet beneficiary of the Cuban-Venezuelan program has — so far — been MTU Onsite Energy, a division of Germany’s Tognum AG. Cuban engineers have deployed hundreds of the company’s generators in Venezuela.

In a nutshell: Ramiro’s presence in Venezuela has everything to do with green (as in greenback) thinking, and probably nothing with Red Terror. My guess is, he’s way too busy managing technicians, suppliers, finances, shipments and construction crews to have time to reign in Venezuelan Chávez critics.

Johannes Werner is editor of Cuba Standard and Cuba Trade & Investment News.

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