Wednesday, December 8, 2010

South African President Zuma gives aid to Cuba

Posted on Wednesday, 12.08.10
South African President Zuma gives aid to Cuba
Associated Press

JOHANNESBURG -- South African President Jacob Zuma announced a 210
million rand ($30 million) credit package for Cuba and forgave Cuba's
debt to South Africa during a state visit to the island nation, a
decision his opponents criticized Wednesday.

Zuma also said Cuba would get trading credits to import South African goods.

South Africa's main opposition group said they believe improved
relations with Cuba would offer little to South Africans or to the
country's economy.

"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," said a statement from the Democratic

In the past 20 years, Cuba has most likely defaulted on payments of
South African exports, said Mark Ellyne, a former senior economist at
the International Monetary Fund and visiting professor at University of
Cape Town.

"If you look back at the data of all South African exports to Cuba in
the past 20 years, strangely enough, the value of those exports is about
1.2 billion rand ($172 million), and the South African government is
holding a claim of 1.1 billion rand ($158 million)."

The aid included seeds and fertilizer to support agriculture in the
aftermath of Cuba's 2008 hurricane and a grant from the African
Renaissance Fund, which promotes good governance and cooperation between
South Africa and other countries.

South African government officials said they aim to boost trade and
investments between the two countries, which fell to 1 million rand
($144,000) this year from 82 million rand($12 million) in 2008.

South Africa exports some 525 billion rand ($75 billion) of goods each
year, so the 1.2 billion rand ($172 million) debt write-off for 20 years
of trade with Cuba is relatively insignificant, Ellyne said.

"This is not going to have any economic impact on South Africa," he
said. "We don't know whether this is a favor to Cuban companies or a
favor to South African exporters."

South Africa's National Union of Mineworkers applauded the debt
forgiveness, recognizing Cuba's support against South Africa's pre-1994
apartheid government and the number of Cuban health workers who came to
South Africa after the end of apartheid rule.

During his visit, Zuma also relaxed visa requirements for Cubans
traveling to South Africa.

South Africa and Cuba have had close ties since South Africa's first
democratic elections in 1994. In October, South Africa supported the
U.N. in condemning almost a half-century of U.S. sanctions against Cuba
and demanded an end to what member states say is a Cold War anachronism
that only hurts ordinary people.

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