CUBA-RUSSIA: Making Up for Lost Time

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Jul 14 2000 (IPS) - Cuba and Russia are seeking to restore their economic and trade ties, badly weakened since the break-up of the Soviet Union, Havana’s top trading partner until 1989.

Based on a much more pragmatic strategy than the ideologically- tied relations between the USSR and Cuba, Havana and Moscow are keen on boosting two-way trade — which stood at 400 million dollars last year — in sectors like energy, medicine, medical equipment, biotechnology, tourism, oil and sugar.

Moscow is negotiating an agreement to buy Cuba’s hepatitis B vaccine. According to off-the-record sources, the deal would entail a reopening of credit lines to the island.

A letter of intent was signed early this month by Russian minister for emergency situations Serguei Shoygu, during a brief, low-profile visit to Cuba.

Cuban authorities and Shoygu, who travelled to Havana at the head of a committee that included 40 business representatives, also signed a document referring to prospects for closer economic, commercial, scientific and technical cooperation.

Cuban minister Ricardo Cabrisas said the talks were useful in helping to set in place the foundations for the “relaunch” of economic relations.

But diplomatic sources said moves toward closer economic ties must involve a search for solutions for Cuba’s debt to Russia, estimated by Russian parliamentarians at 27 billion dollars.

However, Cuban experts say that while broad negotiations on the foreign debt are needed, the issue must not stand in the way of attempts to build closer relations.

Nevertheless, the issue “must definitely be incorporated into the debate on bilateral relations if we really want to give new momentum to our commercial ties,” and even expand ties in other areas of common interest, wrote economist Hiram Marquetti in an article on the issue.

Marquetti, a researcher with the Centre of Studies on the Cuban Economy, said the strengthening of Cuban-Russian relations depended largely on the evolution of Russia’s economic and political reality, as well as on Cuba’s external financial conditions.

The government of Vladimir Putin seems inclined to make up for lost time in relations with Cuba, whose industry still has a significant Russian technological base.

Diplomatic sources in Moscow believe Putin is likely to visit Havana before or after he attends the Sep 5-6 ‘Millenium Summit’, the special session of the United Nations General Assembly, in New York.

Sources close to Cuba’s foreign ministry confirmed that the Russian leader has had a standing official invitation to visit Havana since last January.

The government of Fidel Castro still considers Russia a strategic ally, as the heir to the commitments of the former Soviet Union, which for more than 30 years — up to 1989 — accounted for over 60 percent of Cuba’s foreign trade.

Despite the sharp reduction in bilateral trade since then, Russia has remained the biggest buyer of Cuban sugar.

Cuba, meanwhile, meets part of its petroleum needs through sugar-for-oil deals with Russia. In the latest accord on which official information is available, dating to 1999, Russia pledged 1.5 million tonnes of oil in exchange for 800,000 tonnes of sugar.

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

Two major energy cooperation projects, an oil refinery and nuclear power plant, both of which are located in the province of Cienfuegos, 250 kms from Havana, were left incomplete after the break-up of the Soviet Union.

In 1998, the two countries publicly declared that they would complete the nuclear power plant with their own funds, in an about- face from an announcement made three years earlier to seek other sources of financing.

Experts estimate that around 800 million dollars are needed to complete the plant, which was 75 percent finished, with 20 percent of the equipment installed, when work was suspended in 1993.

Once the first reactor is up and working, electricity generated by the plant should reduce the need for oil imports by 700,000 tonnes.

But financing is not the only problem. The United States is staunchly opposed to the nuclear plant, arguing among other reasons that Cuba has not signed the Treaty on the Non- Proliferation of Nuclear Weapons (NPT).

The 1996 Helms-Burton law, which stiffened the four-decades-old US embargo against Cuba, urges the president to do everything within his power to make it clear to the Cuban government that the completion and operation of any nuclear installation would be seen as “an act of aggression.”