Venezuelan vote a high-stakes affair for Chavez allies

HAVANA (Reuters) - Pedro Alvarez, who drives one of the thousands of ancient American cars that serve as taxis in Cuba, cannot bring himself to think about life without Venezuelan President Hugo Chavez.

His big, blue 1949 Buick burns gallons of gasoline every day, most of it produced from the imported Venezuelan oil that fuels Cuba and all of it costing almost $5 a gallon, a pretty penny in a country where the average monthly pay is $19.

Should Chavez lose his campaign for re-election on Sunday or should the cancer for which he has had three surgeries recur, it does not augur well for Alvarez or his country.

"If they get rid of Chavez or if he dies - which I don't want to happen ... how is it going to be here if it's already this bad? No, no, no, I don't even want to think about it," said the 35-year-old Alvarez, clapping his hand to his forehead.

The future of Chavez, politically and personally, is a high-stakes affair not just for Cuba, but for many other countries in the Caribbean and Latin America who have benefited from his willingness to share Venezuela's oil largesse in pursuit of a dream of "Bolivarian" unity.

Venezuela is providing oil on highly preferential terms to 17 countries under Chavez's Petrocaribe initiative to aid social and economic development and is a partner in other projects to produce and refine oil in countries such as Ecuador and Bolivia.

It funds infrastructure projects and social programs in several countries, including Nicaragua, where Venezuelan investments to the tune of $500 million a year are credited with cutting the poverty rate and providing drinking water, homes and roads for many in the leftist-led Central American country.

"It's been overwhelming really, the solidarity and the most important thing is that it has been unconditional," said Jorge Gutierrez, a committed Sandinista who works for the national water utility in Managua.

CHAVEZ AND CASTRO

Nicaragua gets most of its oil from Venezuela, for which it has 23 years to pay half the cost at 2 percent interest and can pay the other half in agricultural products within 90 days, said Nicaraguan economic analyst Nestor Avendano.

Venezuela's economic power is such that Uruguayan President Jose Mujica is looking to it as the potential buyer of last resort for seven small jets that belonged to his country's defunct state airline.

He is hoping Venezuela's state-owned Conviasa airline will purchase them and get Uruguay off the hook for a potential $136 million loss.

Chavez is close personally and politically to former Cuban leader Fidel Castro, with whom he has plotted strategies to promote leftist governments and Latin American unity, and he shares a regional sympathy for the small communist nation that has defied U.S. opposition for over half a century.

To the chagrin of his opponents, Chavez has taken a page from Castro's economic philosophy by nationalizing much of the Venezuelan economy, as did his mentor after taking power in Cuba's 1959 revolution.

Chavez, who went to doctors at the urging of the now 86-year-old Castro, was diagnosed with cancer in Cuba last year and treated for it on the island. He also just published a book, edited in part by Castro.

The centerpiece of the Cuba-Venezuela relationship is an oil-for-services deal under which Venezuela ships 115,000 barrels of oil daily to Cuba, most of which is used to meet the island's daily energy needs and the rest for processing in a Cuban refinery refurbished by Venezuela.

Experts say that is worth about $3 billion a year, and peripheral to it are wide-ranging joint ventures and cooperation projects that reach deeply into Cuban society.

In return, Cuba has sent 44,000 professionals to Venezuela, most of them medical personnel, to help Chavez provide the same level of free healthcare and social services Cubans receive.

Carmelo Mesa-Lago, a Cuban-American economist at the University of Pittsburgh, said that from 2000 to 2011 Cuba and Venezuela signed agreements for 370 investment projects.

He estimates that Venezuela paid Cuba the equivalent of $5.4 billion in oil and perhaps cash for its people in 2010, which he said comes to $135,800 per person, or 27 times the salary of a Venezuelan doctor. It was, he said, a "hidden subsidy."

PACE OF ECONOMIC REFORM

Chavez' generosity helped Cuba emerge from the so-called "special period," when the island's economy was shattered by the 1991 collapse of the Soviet Union, its ally and top benefactor for 30 years.

During that time, Cuba was plagued by electricity blackouts and shortages of fuel, food and consumer goods, an experience Cubans hope never to repeat.

"We would chop up banana peels and fry them like meat so we would have something to eat besides rice," remembers Carla Borges, a retired teacher who lives with her extended family in a mid-19th century home in Havana.

"It wasn't easy, but I know a nun who says that Cubans don't have to pass through purgatory when they die, they'll go straight to heaven for all they've been through," she said.

The danger for Cuba is that if Chavez loses the election or his cancer recurs it could suffer another dark economic time - perhaps not as bad because it is less dependent on Venezuela than it was on the Soviets but still serious, experts have said.

Enrique Capriles, Chavez' opponent in Sunday's vote, has said he would continue the social programs Chavez created for Venezuela's poor and honor international agreements already in place, but that preferential oil deals for most allies, including Cuba, would quickly become a thing of the past.

"To have a friend, you don't need to buy him," he said in August. "From ... 2013 not a single free barrel of oil will leave to other countries."

In 2010, Venezuela's state oil company PDVSA was not paid for 43 percent of its crude and refined oil products.

An end to Venezuelan aid could force Cuban President Raul Castro to speed up economic reforms promoting more private initiative and a reduced state role, said Cuba expert Paolo Spadoni at Augusta State University in Augusta, Georgia.

"If Venezuela is not part of the picture, the reform process must move much faster because you will have problems you must deal with in a much shorter period," said Spadoni.

BLOW TO LEFTIST ASPIRATIONS

For Chavez' leftist allies, his loss would be a political blow to their aspirations of spreading leftist influence in Latin America.

Along with Petrocaribe, he has been a driving force behind the creation of the leftist bloc ALBA, or Bolivarian Alliance for the Peoples of Our America, and CELAC, or Community of Latin American and Caribbean States, both aimed at regional integration and diminution of U.S. influence in the hemisphere.

Cuban Foreign Minister Bruno Rodriguez alluded to Chavez's importance in a speech to the United Nations on Monday and warned of "destabilizing attempts that loom on the horizon."

"The imminent elections in the sister nation of the Bolivarian Republic of Venezuela will be decisive for the common destiny of our region," he told the General Assembly.

"The governing powers in the United States will make a very serious mistake of unpredictable consequences if they attempt to reverse by force the social achievements attained by our people," he said.

For taxi driver Alvarez, regional politics were less important than keeping his gas-guzzling, slightly dilapidated Buick on the road. Should Chavez leave the scene, history might repeat itself, he thinks.

"Maybe another country will come in (and help us). You know how it is - when something bad happens, there's always another way out," he said.

(Reporting By Jeff Franks, Tim Gaynor in Mexico City, Ivan Castro in Managua, Alexandra Valencia in Quito, Brian Ellsworth in Caracas, Brian Winter in New York and Alejandro Lifschitz in Buenos Aires; Editing by Tom Brown and Todd Eastham)