Cuba Pledges to Repay Outstanding Debts Despite US Sanctions

RIO DE JANEIRO, BRAZIL – Cuba will fulfil its commitments to the Paris Club. The Cuban government has pledged to do so in a letter to the club’s president and assured the president of the group of 14 creditor countries, Odile Renaud-Basso, that the deferred payment will be effected by May.

Deputy Prime Minister Ricardo Cabrisas had notified the creditors of the postponement during his visit to Paris in January and outlined the reasons. As previously reported by President Miguel Díaz-Canel and other high-ranking members of the government, Cabrisas also pointed out that the current financing issues are mainly due to the tightening of the US blockade by the government of President Donald Trump.

In fact, for over a year, the US administration has been imposing new restrictions and sanctions almost weekly in order to disrupt Cuba’s economic development by imposing penalties and pressure on foreign investors, suppliers and trading partners.

Central economic sectors such as tourism, industrial production, health care, the transport sector and many others have been severely affected by the sharp reduction in oil supplies, for one. In addition, the US government is continually trying to prevent other states and banks from granting loans to Cuba.

Cuba’s ODA (Official Development Assistance) levels are comparatively low, at around US$191 million. A number of capitalist states have much higher debt ratios. Moreover, Cuba is regarded as a reliable payer. In this context, it should be noted that every year in the UN General Assembly, the overwhelming majority of states vote for an end to the US blockade on Cuba, which is in breach of international law.

But no specific and effective measures against this aggressive US policy have been taken, even though the Trump government is forcing more and more foreign companies, banks and even NGOs, to pay fines because of their trade and contacts with Cuba.

The yearly damages and losses for Cuba due to the blockade currently amount to more than US$4.3 billion (April 2018 to March 2019). The fact that this also hinders Cuba’s debt repayment is likely one of the goals of US policy.

In reference to this predicament, the head of “Network Cuba” explained: “The US blockade, the sanctions and the subversion are designed to first destroy Cuba’s economy in order to then be able to portray socialism as economically unviable and illusory. This imperial behavior must be stopped because according to international law it is an act of war and violates the human rights of an entire people”. It appears that the victim is harmed, but not the perpetrators.

The Paris Club is an informal supranational body in which public creditors meet with a debtor country in financial distress to negotiate debt rescheduling or debt relief. The club’s function is to mediate between creditor countries and countries that are experiencing difficulties repaying loans or development assistance loans.

The countries affected by the default are Austria, Belgium, the United Kingdom, Japan, France, Spain and eight other countries to which the island state owes and must repay a total of €82 million, according to a diplomatic source quoted by the French news agency AFP.