TRADE-CUBA/RUSSIA: Strengthening Ties Ahead of Putin’s Visit

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Nov 1 2000 (IPS) - Cuba and Russia are busy strengthening their commercial ties ahead of Russian President Vladimir Putin’s visit to Havana — the first such visit since the break-up of the Soviet Union.

According to press reports, Putin is slated to fly to Havana in the first half of December, although it was officially announced only that he would arrive sometime “before year-end.”

Russia, which inherited the commitments of the former Soviet Union, is an important ally that Cuba would not like to lose, in terms of international political relations as well as on the economic and trade front.

“Despite the enormous difficulties faced by Russia, it remains a world power,” and can play a decisive role, similar to that of China, in helping us to avoid becoming “a U.S. village, to which we will never submit ourselves,” said General Raúl Castro, the Minister of Cuba’s Revolutionary Armed Forces (FAR).

The head of the armed forces, President Fidel Castro’s younger brother, stressed the “vital importance” of Putin’s imminent visit, which he said was aimed at “hammering out a course to follow” after “10 years of reduced bilateral activity.”

Russia is Cuba’s fourth-largest trading partner, after Spain, Venezuela and Canada. Up to now, sugar and oil have played a predominant role in trade between the two countries.

“It is the biggest single market for our sugar,” Cuban Minister of Foreign Relations, Raúl de la Nuez, told IPS, pointing out that Russia purchased “more than 50 percent” of Cuba’s sugar exports. He added that this year’s harvest stood at slightly more than four million tonnes.

In recent years, sugar exports have ensured a large share of the oil needed by the Cuban economy — an area of trade that could be the focus of future negotiations “at the highest level,” according to European diplomats.

In the last trade deal on which official information is available, dating to 1999, Russia agreed to supply 1.5 million tonnes of oil in exchange for 800,000 tonnes of sugar.

The head of Moscow’s trade mission in Havana, Oleg Podolko, told Cuba’s state-monopolised press that petroleum was still the main product sold by Russia, but that officials from both countries were working to expand trade in other areas.

Venezuela, which signed a new agreement this week with Cuba, will soon be covering 30 percent of this Caribbean island nation’s petroleum needs, estimated at nine million tonnes a year by Vice- President Carlos Lage.

Cuba’s national production of oil, meanwhile, could climb to 3.6 million tonnes by year-end, which would cover around 40 percent of demand, providing a much-needed relief for the Cuban economy, still in the grip of a hard-hitting decade-long economic crisis.

Up to the late 1980s, Moscow was sending Cuba 13 million tonnes of oil in exchange for slightly more than 5.5 million tonnes of Cuban sugar.

After a period of weakened ties that followed in the wake of the break-up of the Soviet Union, Cuba and Russia began to renew their relations in the past two years, eager to take advantage of the infrastructure created in three decades of close ties.

The two countries currently do some 700 to 800 million dollars in annual trade — a sum that could increase if both countries make an effort, said Podolko, who pointed out that this year, Russian exports of cars and parts to Cuba grew more than 25 percent with respect to 1999.

The first Russian-Cuban joint venture, dedicated to assembling and rebuilding diesel motors for engines used in the sugar industry, will begin operating in the next few months.

The two countries are also negotiating cooperation arrangements in technologies used to produce sugar, as well as the possibility of using Russian refinery capacities for processing Cuban sugar cane.

Russia has also expressed interest in Cuba’s biotechnology and pharmaceutical industries, especially in products like vaccines against hepatitis B and meningitis, as well as modern medical equipment and new technologies that could lead to joint production agreements.

In the run-up to Putin’s visit, Russia is once again highlighting its interest in developing a mutually advantageous economic and commercial relationship, Podolko told the Cuban press.

Russian diplomats, however, stressed that their interest in forging closer economic ties is based on a search for solutions to Havana’s debt to Moscow, estimated by Russian lawmakers at 27 billion dollars.

Cuban experts, however, say that while negotiations on the debt are indeed necessary, the question should not become a hindrance to the new trend toward closer ties.

However, the issue “will inevitably have to be incorporated in the debate on bilateral ties if there is a real aim of renewing commercial relations,” and expanding cooperation to other areas of common interest, according to Cuban economist Hiram Marquetti.

Putin will be the first Russian president to visit Havana. Soviet leader Mikhael Gorbachev flew to Cuba in April 1989.