The side effects of war in Europe, and Cuba’s increasingly strategic asset
HAVANA, April 22nd. In a sign of a very spotty tourism recovery, airport traffic at Varadero has plummeted at the end of this high season, as a result of Russia’s invasion of Ukraine and the absence of Russian flights.
In response to Visa and Mastercard sanctions against Russia, Cuban officials are scrambling to enable Russian tourists to pay with their Mir cards in the island. But that will be of little help if Russian airlines continue to be blocked from crossing European Union airspace.
The war in Ukraine — in addition to triggering scarcity for coveted Lada parts — also put upward pressure on fuel and food prices.
Even so, inflation has slowed a bit from the fast rate in January and February. In informal markets the euro is now trading at 125 pesos — five times the official rate.
Upside: For one, the opening towards private business continues at a speedy pace, with the number of incorporated companies crossing the 2,000 threshold.
Also, Cuba’s nickel and cobalt reserves are becoming an increasingly strategic asset, as global demand for batteries is skyrocketing and Russian nickel is now sanctioned by the western world.
Ironically, the Cuban industry is now one of the biggest “independent” nickel mining operations outside the control of Russia or China.
A boost in export revenues aside, this has the potential of producing a political opening for the island. Immediately after Russia invaded Ukraine, the Biden administration sent negotiators to Caracas to restart the oil flow from previously shunned Venezuela.
Why not Cuba, too? In a first sign of easing, the Biden administration held its first round of immigration talks with Cuba today, after a four-year interruption.
