Argentina Will Make a New Attempt To Collect the 2.8 Billion Dollars Owed by Cuba

Fernández will arrive in Cuba with a new proposal to collect the debt under his arm. (Cubadebate)

14ymedio bigger14ymedio, Madrid, 4 September 2023 — The Argentine president, Alberto Fernández, will travel to Cuba for the G-77 plus China Summit, which will be held on September 15 and 16, with a proposal for the Cuban authorities to solve the historic debt that the Island has with the South American country. According to La Política Online, Buenos Aires will ask for tax benefits for Argentine companies that decide to set up on the Island in exchange for the amount that Havana owes.

“We want to solve this, then we will see if we sell strawberries or bananas,” one of the technicians working on the proposal told the newspaper. For its part, the Cuban Embassy in Buenos Aires refused to give details to the media. “In Cuba, the tax pressure is low because they are in a rather disorderly process of economic transformation,” said a diplomat close to the situation.

The amount of the debt with Argentina stands, according to this media, at about 3 billion dollars, far from the 15 billion indicated by Infobae in January of this year. La Política Online estimates the exact amount at 2.816 billion dollars, attributed to a loan that originated in 1974 under the direction of Peronist Minister José Bel Gelbard.

At that time, the head of the economy agreed with Fidel Castro on a loan of 1.278 billion dollars for the acquisition of 1,000 tractors, agricultural machinery, 5,515 Fiat heavy trucks and 6,000 Fiat 125 cars, in addition to thousands of Renault 12, Ford Falcon, Citroën Ami 8, Peugeot 404 and 9,000 Argentine Dodge 1500 vehicles.

In January, Infobae placed the sum at 15 billion dollars that included the 1974 loans plus interest and penalty for non-payment

The debt was totally paralyzed during the military dictatorship that governed Argentina between 1976 and 1983, which maintained excellent relations with the Cuban regime. Raúl Alfonsin was the first Argentine president to visit Cuba and also, according to the local press, the only one who managed to extract a small return of those amounts from Havana.

During Alfonsín’s term, the Island paid about 200 million dollars (102 million in 1988 and 98.6 million in 1989), but the situation was again paralyzed coinciding with the fall of the Soviet Union and during Cuba’s so-called Special Period, after the collapse of the Soviet Union and the loss of its support for Cuba. In 1995, President Carlos Menem attempted a renegotiation of the payment through several missions for an amount that then amounted to about 1.278 billion dollars, including interest.

Foreign Minister Guido di Tella then tried the same thing that Fernández proposes to do in the coming weeks, so that the regime would facilitate investments in public works and tourism. But not even the conversation at the highest level, between the president and Fidel Castro, unblocked the situation.

Under the mandate of Argentine president Néstor Kirchner, also — and later of his wife, Cristina Fernández — an attempt was made to collect the historic debt, in this case through a proposal by Foreign Minister Rafael Bielsa that would consist of a forgiveness of 75% and the payment of the remaining 25% in medical missions, Cuban pharmaceuticals and a cash deposit of the interest. But despite the number of agreements signed between both nations during that time and the solid friendship of the governments, nothing was achieved.

In 2018, then Argentine president Mauricio Macri made the umpteenth collection attempt by sending his Chief of Staff, Marcos Peña, and his Secretary of Strategic Affairs, Fulvio Pompeo, to negotiate.  A year later he tried again with the Secretary of International Economic Negotiations, who met, unsuccessfully, with the Minister of Foreign Trade and Foreign Investment of Cuba, Rodrigo Malmierca.

QUOTE: Last week, Malmierca met with senior officials of the Paris Club to renegotiate the debt he has with several member countries of that group, which currently amounts to 4.827 million dollars

In 2017, according to La Política Online, the debt amounted to 1.278 billion dollars in consolidated capital and 1.273 billion dollars in accrued interest, a total of 2.552 billion that “arose from a debt conciliation and consolidation agreement as of March 31, 1995 between the BICE (Bank of Investment and Foreign Trade) and the National Bank of Cuba ratified by the act of August 24, 1995.” Up to the current amount, more interest on arrears would have accumulated, predictably.

In January, Infobae placed the sum at $15 billion, which included the 1974 loans plus interest and penalty for non-payment.

Argentina’s debt is, according to La Política Online, the largest that Cuba has with another country that is in an inactive state.

Last week, Malmierca met with senior officials of the Paris Club to renegotiate the debt he has with several member countries of that group, which currently amounts to $4.827 billion. According to official information, a new payment schedule emerged from those meetings, after failing to meet since 2020 the deadlines agreed on in 2015, when Cuba was granted a reduction of about $8.5 billion.

In 2021, the regime also agreed with Russia to defer a debt related to state export credits that Moscow granted between 2006 and 2019, in an amount of 2.3 billion dollars. At the time of signing the pact, the non-payment deficit was 57 million, in addition to another 11 million for default interest, which must be returned between 2022 and 2027.

Havana also has among its largest creditors Mexico, Japan and the CRF I Limited fund, as part of the London Club. The foreign debt declared as of 2020 – which has grown by an unknown amount – is almost 20 billion dollars.

Translated by Regina Anavy 


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