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UPDATE 4-Russian president visits Cold War ally Cuba

Published 11/27/2008, 10:23 PM
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(Adds Medvedev remarks)

By Patrick Markey and Oleg Shchedrov

HAVANA, Nov 27 (Reuters) - Russian President Dmitry Medvedev held talks with former Cold War ally Cuba on Thursday as a resurgent Moscow flexed its muscle in Latin America by seeking energy, military and trade deals across the region.

The symbolic trip to Havana will taunt the White House in its own traditional backyard at a time when ties between Moscow and Washington are tense over Russia's war with Georgia and U.S. plans for missile defense programs in Eastern Europe.

Medvedev arrived in Havana from OPEC-member Venezuela, where he and U.S. foe President Hugo Chavez discussed closer cooperation, including on oil and nuclear energy, and Russian and Venezuelan warships conducted exercises in the Caribbean.

Russia is likely to commit to rebuilding its alliance with Cuba, abandoned after the collapse of the Soviet Union. Russian oil companies want to drill offshore and Russia's military has talked about airspace defense cooperation with Havana.

Cuban President Raul Castro and Medvedev discussed the world financial crisis and economic and military cooperation with the Communist-run island after the Russian leader laid flowers at a monument to Cuban independence hero Jose Marti and visited an Orthodox church in Havana.

"We have a systematic dialogue. Our relations have been generally good, but in the past six months they have become especially intense," Medvedev told reporters after meeting with Castro.

Where ties between Cuba and the Soviet Union were once a symbol of Russian power in Latin America, Havana is now more likely to seek more diverse trade and Moscow is hunting for new markets to ward off the global economic crisis.

Medvedev is the first Russian leader to visit Havana since then President Vladimir Putin closed down Russia's Lourdes intelligence base in 2001, and Cuba will likely take a pragmatic approach to ties with Moscow after U.S. President-elect Barack Obama offered to roll back some restrictions on the island, analysts say.

"Even with Russia's differences with the United States, they are not interested in worsening relations," said Vadim Teperman at the Latin American Institute of the Russian Academy of Sciences. "Cuba is expecting some positive changes from Obama, promised during his campaign."

BALANCE OF POWER

Earlier, Chavez signed a deal while on a Russian ship for two Ilyushin passenger jets. The former soldier has purchased jet fighters, attack helicopters and rifles from Moscow, a build-up he says is just to overhaul the country's military, but which Washington says is worrying.

Russia and Venezuela have signed a string of other deals, including Russian help for Venezuela to develop nuclear energy for civilian purposes. Russia's foreign minister on Thursday offered its atomic expertise to left-leaning Ecuador.

The United States dismisses the alliance between Russia and Venezuela as mostly talk and although Washington says it is unconcerned by the joint naval exercises, it acknowledges it is monitoring Russia's moves.

"I don't think there's any confusion about the balance of power in the Western Hemisphere," U.S. Secretary of State Condoleezza Rice said on Wednesday, criticizing what she called Venezuela's "destabilizing behavior" in the region.

"It is important that that be taken note of, and that anything that is done in this hemisphere does not further exacerbate the effect of Venezuelan policies," she said.

Medvedev's Cuba visit comes on the heels of a trip by Chinese President Hu Jintao, who put off some of Cuba's debt payments and agreed to cooperation deals to strengthen ties between the two communist nations.

Raul Castro may visit Russia next year and Moscow has called for Washington to lift the economic embargo on the Caribbean island imposed in 1962, three years after Castro's brother, Fidel Castro, came to power in an armed revolution.

Moscow was Havana's main benefactor during the Cold War but the 1991 collapse of the Soviet Union battered Cuba's economy. Ties soured further after Putin visited in 2000 and closed down the Lourdes base months later, depriving Cuba of income.

Venezuela under Chavez has increasingly become a key trade partner for Cuba, providing the island with valuable energy supplies in exchange for services. Caracas is also upgrading an oil refinery and a nickel plant.

"Cuba is involved in a series of diplomatic initiatives aimed at diversifying its portfolio," said Julia Sweig at the U.S. think tank Council on Foreign Relations. "This is pure pragmatism." (Additional reporting by Caracas and Quito bureaus; editing by Anthony Boadle)

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