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LatinNews Daily Report - 10 December 2013
In Brief - Cuba
ECONOMY | Cuba-Russia debt forgiveness deal. According to a 9 December report by the newswire Reuters, Cuba and Russia have inked a deal to pardon 90% of Cuba’s outstanding US$32bn debt, contracted during the Soviet era. The debt has been the subject of a bilateral dispute with Moscow for some 20 years, since the fall of the former Soviet Union (USSR). Under the deal, Cuba reportedly would pay US$3.2bn over 10 years in settlement of the remaining 10%, with Russia agreeing to forgive some US$20bn plus interest. The deal, which requires ratification by the Russian parliament (the Duma) and which likely will involve more Russian investment in Cuba by way of a quid pro quo, would go a long way towards clearing Cuba’s slate as it prepares for a tricky currency reform process that will require more financial and monetary transparency and confidence in its international reserves position. Cuba still has an outstanding debt of an estimated US$37bn with the Paris Club, according to the Reuters report, which had included the Russian debt in that calculation and which may not take kindly to the unilateral move by Russia to pardon Cuba its portion. Cuba over the past three years has also restructured debt with China, Japan and latterly Mexico as it begins to re-position itself to attract international foreign investment.
