14ymedio, Havana, 26 August 2023 — In the midst of the process of bancarización* [banking reform] of transactions in Cuba, a group of Russian experts advises the Cuban Minister of Foreign Trade and Foreign Investment, Ricardo Cabrisas, on issues of “digitalization of fiscal control and electronic banking.” His proposal: the foundation of a Business Development Bank “in collaboration” with Moscow.
The Stolypin Institute of Growth Economics, a thought center based in Moscow, offered the Island authorities details about the “Russian experience” on the subject, as reported to the RIA Novosti agency by Boris Titov, president of the Business Council between the two countries.
The new bank will function as a “specialized financial institution,” which will be supervised by a Russian banking entity, to “maintain records of commercial entities, provide online registration, open accounts for them, maintain settlement and cash services, transfer taxes as a tax agent and transfer data in automated format to the tax authority of the Republic of Cuba.”
The Business Development Bank will have the responsibility of supplying the Island with the payment terminals and boxes indispensable for its own activity. In addition, Moscow proposes to unify in the same virtual platform the banking processes carried out by micro, medium and small companies (MSMEs), such as registration, tax payment, account opening and cash management.
Antón Sviridenko, director of the Stolypin center, pointed out for his part that the Island’s regime “is thinking about the transition from strict state regulation to the development of private competition” and that for this, a greater digitization of fiscal control processes is indispensable.
The initiative responds to the strategy recently enunciated by the Cuban Government, since it proposes to “drastically reduce the circulation of cash,” in the words of Sviridenko, who also promised that if the Business Development Bank is used, it will help the “de-dollarization of the Cuban economy” and promote greater price control.
The experts of the Stolypin center accompanied Titov during his meeting with Miguel Díaz-Canel last January, in which they agreed to take relations between Cuba and Russia to a “higher moment.” During the meeting they also agreed to the foundation of an “Economic Transformation Center” that Cubans have just learned about.
At that time, Titov assured that Cuba would have Russia’s advice for the creation of “digital systems for companies” such as those that his country has implemented “successfully.”
The initiative of the Stolypin center is similar to the one approved by the Cuban government, last July, for the conversion of the Spanish company Alto Cedro, present on the Island since 2020, into a corporate bank. The company can open accounts and provide financing to Cuban companies, but not to MSMEs, a ban that will not apply to, it seems, the Russian Business Development Bank. The objective of the restriction, according to a source close to the Alto Cedro directive who was interviewed by 14ymedio, is “to benefit the state authorities and the MSMEs that they authorize.”
Even under the strict supervision of the Central Bank of Cuba, Alto Cedro – led by the Spanish tycoon Javier Botín, linked to the Santander bank – has the power to “monitor its debtors” and receive and grant loans.
Despite the dizzying rapprochement of Havana and Moscow, relations between the two regimes have not been exempt from tensions. According to the Russian press, the Ural vehicle factory, located in the town of Miass, will sue the Cuban State Import and Export Company of Technical Products (Tecnoimport) and the International Trade Bank, for 23.4 million euros.
The factory is asking for 22 million euros for losses caused by companies on the Island and another 1.4 million for the “use of other people’s funds” for several years. As part of a cooperation process, the company sent parts to assemble 120 GAZ vehicles and 500 Ural trucks that had to be assembled in Cuba with Russian advice, through audiovisual material.
“The Cuban side found reasons not to pay. They explained that the vehicles do not circulate and it is impossible to assemble them. However, in the photographs of a military parade it was clear that the vehicles were in motion and were being actively used,” explained the Ural workers, alluding to the exhibition of the Armed Forces during the “Freedom Caravan” organized at the beginning of last January. The trial of the Island’s two entities will take place in Moscow in mid-September.
Translated by Regina Anavy
*Translator’s note: “Bancarización” is term used in Cuba and other Latin American countries that refers to government efforts to reduce the role of cash through a greater reliance on banks’ digital payment options. The term does not seem to have a counterpart in English so the Spanish term is used throughout this translation.
COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.