Wednesday, December 8, 2010

DA mulls govt's Cuba aid

DA mulls govt's Cuba aid
Wed, 08 Dec 2010 5:45

The Democratic Alliance (DA) has expressed concern about the
presidency's announcement of financial support to Cuba.

"The DA is in favour of building strong ties with other countries, but
this enormous financial injection raises questions about the policy
priorities of the Zuma administration," Kenneth Mubu, the DA's shadow
Minister of International Relations and Cooperation, said in a statement

Earlier the Presidency announced that South Africa's Trade and Industry
Minister Rob Davies signed an agreement cancelling Cuba's R1.1-billion
debt, which was incurred during the 1990s when Cuba purchased diesel
engines from South Africa.

"It is not as if Cuba could not repay the debt. The problem is that it
was becoming a hindrance to trade and economic development between the
two countries," said Davies.

Cuba has exhausted its credit limit

He added that South African businesses demanded cash in advance because
the Export Credit Insurance Corporation of the Department of Trade and
Industry could no longer insure Cuba's orders as it had exhausted its
credit limit.

"So we are re-opening the credit lines so that we can start trading
actively again," he said.

According to a statement from the Presidency, South African exports to
Cuba have fallen from R82-million in 2008 to only a million rand in 2010.

Apart from the debt cancellation, the credit lines package includes the
extension of credit guarantees to the value of R70-million, R40-million
to support Cuba with seeds and fertilizers following the devastating
2008 hurricane which destroyed agriculture and R100-million from SA's
African Renaissance Fund for purchases from South Africa.

Trade between countries had stagnated

It is envisaged that this package will help to boost trade and
investments between the two countries which had stagnated, the
Presidency said.

The DA said that at the beginning of the next session, it will request
that the Minister of International Relations and Cooperation, Maite
Nkoana Mashabane, appears before Parliament next year to explain what
foreign policy objectives are served by supporting Cuba in this manner.

"We are certainly not furthering our trade objectives when one considers
that Cuba is not a major trading partner and lacks the capacity to
develop into one in the future. We are also not serving our ostensible
principled foreign policy objectives by supporting a regime that relies
on nepotistic promotion for national leadership instead of open and
democratic participation," the DA said.

What the Zuma admin wishes to achieve

"One has to wonder what the Zuma administration wishes to achieve by
buying better relations with Cuba. South Africa's total export volume to
Cuba amounted to a grand total of R1-million so far this year and it is
well documented that Cuba possesses a failing economy. Surely it is
clear that a R1.4-billion investment in this island nation will not bear
much fruit. In short, improved Cuban relations have little to offer
South Africa," it added.

The DA said government should be investing time and resources in
building strong trade relations with economies that can actually benefit
South African industry and create jobs for regular South Africans.

"Indeed, considering that we are currently trying to become a member of
the BRIC nations, the Zuma administration would do well to focus on
strategic foreign priorities where such a massive allocation of
resources is concerned.

Zuma admin ignores growing crisis

"It is disheartening that the Zuma administration has all but ignored
the growing crisis in Cote d'Ivoire, where our efforts might actually
make a difference and where democracy is being subverted. Instead, we
are providing active support to a regime that has never held democratic
elections. Even more worrying is that this aid is something of a wasted
opportunity as it is not currently tied to any conditions for democratic
reform, a common tool in foreign aid deals," the DA added.

With massive service delivery backlogs and constrained domestic budgets,
the wisdom of this "investment" in Cuban relations seems somewhat
questionable, the DA continued.

"As such, it behoves the minister and the president to explain to South
Africans what this aid hopes to achieve, either for Cubans striving for
democracy or for ordinary citizens back home," it concluded.

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