Saturday, December 11, 2010

Even China complained Cuba wasn't paying its bills

Posted on Friday, 12.10.10
WikiLeaks: Even China complained Cuba wasn't paying its bills
By Juan O. Tamayo
The Miami Herald

Cuba's financial situation "could become fatal'' within two to three
years and the country risks being "insolvent'' as early as 2011,
according to a U.S. diplomatic cable from Havana made public Thursday by

The cable, however, was sent Feb. 9, before Raúl Castro's government
announced it was undertaking far-reaching reforms that would cut the
jobs of 500,000 public employees, slash subsidies and expand private
business in a bid to jump-start the anemic economy.

Earlier this year, the U.S. view from Havana was that Cuba's leadership
was "muddled and unclear, in great measure because [they] are paralyzed
by fear that reforms will loosen the tight grip on power that they have
held for over 50 years.''

The dispatch also predicted the Cuban military would gain economic
power, and that the Cuban people would have no choice but to ``endure''
the lean times ahead.

The cable reported on a breakfast hosted by a U.S. diplomat in Havana
with commercial and economic counselors from five of Cuba's largest
trading partners -- China, Spain, Canada, Brazil and Italy -- plus key
creditor nations France and Japan.

"All diplomats agreed that Cuba could survive this year without
substantial policy changes, but the financial situation could become
fatal within 2-3 years,'' the dispatch noted. "Italy said GOC
[Government of Cuba] contacts had suggested Cuba would become insolvent
as early as 2011.''

The diplomats also reported continuing problems collecting their Cuban
debts, with the Japanese noting that after restructuring all of Cuba's
official debt in 2009, Tokyo had not received any payments.

``Even China admitted to having problems getting paid on time and
complained about Cuban requests to extend credit terms from one to four
years,'' the cable said. ``France and Canada responded with `welcome to
the club.' ''

The cable noted, however, that the Brazilians are taking a longer-term
view on the return for their investments, and they claimed some success
in raising capital for the refurbishment of the port of Mariel, west of

Despite their grave analysis earlier this year, none of the diplomats
foresaw any meaningful economic reform in 2010 because of what the
Brazilian representative said was the possibility such a move would be
too ``destabilizing.''

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