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FACTBOX-Key political risks to watch in Cuba

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(Globalpost/GlobalPost)

By Marc Frank

HAVANA, March 8 (Reuters) - With the death of Venezuelan President Hugo Chavez, Cuba has lost its closest ally and faces questions about its economic sustainability.

The charismatic Chavez died from cancer on Tuesday, about two weeks after President Raul Castro said he would retire after his second term in office ends in 2018, and named longtime Communist Party insider Miguel Diaz-Canel, 52, as his potential successor.

CHAVEZ

Tens of thousands of Cubans paid their final respects to Hugo Chavez at memorials across the country, including at Havana's Jose Marti memorial, an honor reserved for Commanders of the Revolution and a single foreigner, Argentine-born revolutionary Ernesto "Che" Guevara.

Chavez's economic help to Cuba over his 14-year presidency proved to be a lifesaver for the bankrupt Caribbean island .

An election must be called within 30 days, according to Venezuela's constitution, and the stakes could not be higher for Cuba, which depends on Venezuelan oil and billions of dollars in payments for professional services.

The election will pit Chavez's hand-picked successor, Vice President Nicolas Maduro, against centrist opposition leader Henrique Capriles, who lost to Chavez in the last presidential race.

Maduro is favored to win, ensuring there would be no immediate interruption in the bilateral relationship. But many experts believe the Chavista coalition might erode in the coming months and years without his leadership, creating uncertainty about Cuba's mid-term stability.

If Capriles pulled off a victory, the flow of Venezuelan aid would at least be slowed dramatically and possibly halted.

Cuba's economy has become more diversified in the last 20 years with the development of tourism, pharmaceuticals and increased oil and nickel production, but it remains dependent on Venezuela.

Cuba is in the process of lifting some restrictions on civil liberties and revamping the state-dominated economy into a more mixed and market-friendly one.

Regardless of the outcome of the Venezuelan election, a quicker opening to foreign investment in Cuba can be expected.

What to watch:

- Venezuela's election, and the impact on aid to Cuba

- Foreign investment

GOVERNMENT SHUFFLE

"This will be my last term," President Raul Castro, 81, said in late February as the National Assembly elected him to a second, five-year term as head of the Council of State.

Castro then said a constitutional referendum would be called to make term and age limits official.

In a surprise move, he named as his first vice president Miguel Diaz-Canel, a member of the political bureau of the Communist Party since 2003, who rose through the party ranks in the provinces.

Diaz-Canel supplanted Juan Ramon Machado Ventura, 82, who remained a vice president.

Diaz-Canel is the youngest non-military man to come so close to the pinnacle of power in Cuba since the Castro brothers took power in 1959.

He would succeed Castro if he cannot serve his full term, becoming the first Cuban president to not carry the Castro name in more than half a century.

Fidel Castro, the 86-year-old revolutionary leader and former president, joined the meeting in a rare public appearance apparently designed to show his support for the new first vice president.

What to watch:

- Raul Castro's health

- Miguel Diaz-Canel's position on key issues

U.S. RELATIONS

Democratic Senator Patrick Leahy of Vermont led a seven-member U.S. congressional delegation on a trip to Cuba, where they met with President Raul Castro and other senior officials, and visited jailed U.S. contractor Alan Gross .

Leahy, who led a similar trip a year ago, met with President Obama before traveling to the island and privately with Castro.

There were apparently no breakthroughs in the Gross case, which has dashed any hope of improving U.S.-Cuba relations.

Gross, 63, was arrested in December 2009 and sentenced to 15 years in prison for installing Internet networks under a secretive U.S. program Cuba's government considers subversive.

Cuba has linked Gross' fate to that of five Cuban agents imprisoned in the late 1990s for infiltrating Miami exile organizations and U.S. military bases.

The agents, known as the Cuban Five, were sentenced to long terms, ranging from 15 years to life.

What to watch:

- Future contacts

- Status of Alan Gross

RUSSIAN RELATIONS

Prime Minister Dmitry Medvedev arrived soon after the Americans left. He met with the Castro brothers and signed off on an important debt agreement as the two former Cold War allies try to rebuild their relations.

The two countries have haggled over Cuba's debt to the former Soviet Union since its demise, with Havana insisting it owed nothing due to damages caused by broken contracts and the inflated value of the convertible ruble.

The old debt is estimated at between $20 billion and $30 billion and the terms of the agreement were not released, though it will most likely forgive most of it in exchange for small payments over the next 10 years. The accord still must be approved by the full Russian government, including the Duma.

Trade between the two countries last year was just $200 million, but two oil companies from Russia, the world's largest energy exporter, have been exploring Cuba's offshore oil deposits and a third is looking at refining on the island.

The two governments also signed a deal for Russia to lease eight jets worth $650 million to Cuba, which has been purchasing Russian aircraft on credit since 2000.

What to watch:

- Movement on old debt

- Russian investment and trade

REFORMS

Cuba's best-known dissident, blogger Yoani Sanchez, left without incident on an 80-day tour of a dozen nations. Her travels were seen as a political test of a major immigration reform that took effect earlier this year.

Sanchez is one of a number of high profile government opponents who received a passport under the new regulations, but the first to actually take advantage of the measure.

A few dissidents have been denied passports. She was denied permission to travel some 20 times under the old regulations.

Sanchez's travels and eventual return to Cuba are being carefully monitored by governments and human rights advocates as a test of Cuban authorities' commitment to free travel.

What to watch:

- Sanchez's travels and return (Reporting By Marc Frank; Editing by Kieran Murray and Stacey Joyce)

http://www.globalpost.com/dispatch/news/thomson-reuters/130308/factbox-key-political-risks-watch-cuba