The future of debt 4,827 million Cuban dollars with its Paris Club creditors is being played today in Havana. According to the official press, William Roos, co-president of the institution, proposed establishing a new calendar in accordance with Cuba’s ability to pay after exposing that “there is understanding towards the difficulties that the island is going through.”
The official traveled to Havana this Tuesday together with Fabien Bertho, secretary of the Paris Club, to meet, yesterday Wednesdaywith Ricardo Cabrisas Ruiz, who in addition to being Deputy Prime Minister and Head of Foreign Trade and Foreign Investment, has been the main supporter of the foreign debt renegotiation agreements with its various creditors.
In the talks, which culminated today, the Cuban side argued that “the political criminal and the illegitimate inclusion” of Cuba in the list of State sponsors of terrorism hinders access to sources of financing and foreign investment, “when in the midst of the rise in prices Cuba needs foreign currency for its economic and social development and to fulfill its obligations”.
Cuba will obtain a new payment schedule to pay a debt that continues to be the second in the region, only surpassed by Venezuela, which exceeds 8,000 million dollars
If Cabrisas manages to convince the Paris Club that the constant Russian and Chinese investments on the Island or those that the Government itself allocates to the construction of hotels are not enough to pay its installments, Cuba will obtain a new payment schedule to pay a debt that it has negotiated twice in the last eight years and continues to be the second in the region, only surpassed by the Venezuelan, which exceeds 8,000 million dollars.
Cuba’s creditors within the Paris Club are Australia, Austria, Belgium, Canada, Denmark, Spain, Finland, France, Italy, Japan, the Netherlands, Sweden, Switzerland, and the United Kingdom. Until 2015, the debt amounted to 10,660 million of dollars. That year, a withdrawal traditionally calculated at 8,500 million was negotiated, although the documentation for the years 2016 and 2017 is not archived on the institution’s website.
In 2018, the amount amounted to 5,560 million dollars, which was reduced to 5,211 in 2019. But with the arrival of the pandemic, Cuba stopped paying the installments and, at the end of that year, the amount had increased to 5,667 million dollars. Dollars.
Cabrisas held several meetings in 2021 to improve the conditions for payment of installments. At that time, they also resorted to the “unprecedented tightening of the economic, commercial and financial blockade of the United States and the impact of phenomena associated with climate change and the covid-19 pandemic.” The authorities promised that, after the worst of the pandemic, tourism would recover and the money would come again and they obtained new relief, with a moratorium until 2022.
What the regime had not calculated is that the tourists would not return as expected. Last year, of the 2.5 million international travelers expected, it did not even reach 1.7 million. An adverse international economic context together with a terrible management of the so-called Ordering Task finished off an economy battered for decades and that has plunged the Island into the worst crisis in memory, at the level of the Special Period of the 90s.
The payment schedule, therefore, becomes impossible, which is why the Government is focused on obtaining a new extension, which it will also try to encourage with the visit of the Paris Club representatives to various bilateral collaboration projects, with financing from the French Development Agency and the Franco-Cuban Contravalor Fund, which are part of the agreements.
In its latest Statistical Yearbook, corresponding to 2023 and published this August, Cuba declared almost 20,000 million dollars in foreign debt, but the data refers to 2020
In its latest Statistical Yearbook, corresponding to 2023 and published this August, Cuba declared almost 20 billion dollars in foreign debt, but the data refers to 2020, confirming suspicions that the 18.2 billion dollars it owed in 2016 would have increased.
In 2021, Cuba also agreed to a deferral of the payment of its debt with Russia, which it had stopped paying in 2020. In this case, the amount is relative to state export credits that Moscow granted between 2006 and 2019, with a total amount of 2,300 million dollars. At the time of signing the pact, the default deficit was 57 million, in addition to another 11 for late-payment interest, which must be returned between 2022 and 2027.
Years ago, Raúl Castro had already managed to get Moscow to forgive 90% of the 35,000 million dollars of the debt contracted in USSR times.
Other minor creditors are Mexico, which in 2013 forgave 70% of the 487 million dollars it had lent to the island, and Japan, which a year later granted a 1,000-million-dollar debt relief in 2014. Vietnam and China they have also forgiven an unknown amount to the Island.
The palm, however, goes to the historical debt of 15,000 million that Cuba has with Argentina. Several of its leaders, including the current one, Alberto Fernández, have urged the Island to return or exchange it – the exchange for vaccines was even negotiated, which did not prosper – but every attempt has been unsuccessful.
A separate case is that of the debt with the London Club, which has reached the courts and is still far from being resolved. This April the trial was held to determine whether the investment fund CRF I Limited was the holder of the 72 million euro debt that Cuban financial institutions signed with entities later acquired by it.
The ruling confirmed that the CRF was the legitimate owner, although the consequences are nothing more than an offer from its president to now negotiate a payment schedule. “[Hay que] find a solution with Cuba that (has) zero impact on its budget for at least five years, recognizing the difficult economic situation the country is going through,” he said.
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