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World News

Chavez win is welcome news for ally Cuba

HAVANA (Reuters) - Venezuelan President Hugo Chavez’s referendum win, allowing him to seek re-election indefinitely, is a relief for Cuba, where oil supplies and support from its socialist ally are seen as essential to economic recovery.

Venezuelan President Hugo Chavez applauds at Miraflores Palace after the electoral court announced his victory in a national referendum to decide whether to allow him to stay in power for as long as he keeps winning elections, in Caracas February 15, 2009. REUTERS/Tomas Bravo

Cuban state-run television interrupted normal programming Sunday night to announce the news, followed by live coverage of Chavez’s victory speech.

Ailing leader Fidel Castro was the first international personality to congratulate Chavez after writing, “our future is inseparable from what happens this Sunday,” in a commentary published by state media earlier in the week.

Chavez, in power since 1999, can now run in 2012 for a third six-year term and Sunday’s “yes” vote ending term limits gave Cuba hope that its important economic relationship built upon friendship with Chavez could go on for years.

“For Cuba it means there is less uncertainty and makes more stable the various agreements we have with Venezuela and are working on,” a Cuban economist said on the condition his name was not used.

“It means steady oil supplies and income from the medical services we provide,” he said.

Dan Erikson, Cuba expert at the Inter-American Dialogue in Washington, put it more bluntly.

“It resolves doubts about the political durability of Cuba’s most important ally and will likely postpone the date when the island will be forced to live without Venezuela’s subsidized oil shipments,” he said.

Some 40,000 Cubans work in Venezuela, mainly in health care, and Venezuela sends Cuba 90,000 barrels of oil a day.

OIL GIANT

The South American oil giant has poured billions of dollars into the Communist-run Caribbean island in exchange for Cuban health, education and other technical assistance and for the purchase of pharmaceutical and other products.

That has allowed Cuba to build up its infrastructure, health care and education, all seriously hit by the decade-long economic crisis after the demise of former benefactor the Soviet Union.

The allies have close business ties, including more than 30 joint ventures in sectors such as refining, shipping, mining and agriculture. Venezuelan banks are financing 58 Cuban manufacturing programs and more than a dozen agricultural development schemes.

While the global economic crisis is affecting both countries and in particular Venezuela’s oil revenues, experts said they expected oil to keep flowing and Venezuela to keep investments in Cuba a high priority.

“As evidenced by his victory speech last night, which included ‘Viva Cuba’ chants, and the message of congratulations from Fidel, President Chavez is clearly loyal to Fidel and to Cuba,” said Sarah Stephens, director of the Washington-based Centre for Democracy in the Americas, who was in Caracas for Sunday’s referendum.

“Despite his own economic problems, he’s making it clear that he will do everything in his power to maintain and strengthen the bond with Cuba,” she said.

Fidel Castro valued the two countries’ economic ties at $7 billion per year just before he became ill in July 2006 and handed power to his brother. Too ill to return to power, Fidel Castro resigned last February and the National Assembly formally elected Raul Castro president.

The two countries’ strategic ties have strengthened further since then, even as Raul Castro has reached out to other oil producing nations such as Brazil, Angola, Russia and Nigeria.

Editing by Jeff Franks and Pascal Fletcher

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