US cable: Cuba to be insolvent within 2-3 years
Friday, December 10, 2021 9:34 PM

Related Stories



(Source: Associated Press/AP Online)By PAUL HAVEN

HAVANA - A newly released confidential U.S. diplomatic cable predicted Cuba's economic situation could become "fatal" within two to three years, and detailed concerns from other countries' diplomats - including China - that the communist-run country has been slow to adopt reforms.

The cable was written last February, months before Cuban President Raul Castro announced a major revamp of the island's economy, laying out plans to fire a half-million state workers and open up the island to expanded forms of private enterprise.

The cable, sent by the U.S. Interests Section in Havana, which Washington maintains instead of an embassy, was released Friday by WikiLeaks. It was apparently written by America's chief diplomat on the island, Jonathan Farrar.

Cuban parliament chief Ricardo Alarcon, who often speaks on U.S. issues, told The Associated Press the cable did not contain anything new or interesting. "It seems to me Jonathan Farrar was a little depressed that day" that he wrote the dispatch, Alarcon said.

Relations between Washington and Havana are already strained by the long detention of an American contractor on suspicion of spying - not to mention 50 years of Cold War animus, and the release of the cable was not likely to help matters.

It details a breakfast meeting held by the Interests Section's chief economic officer with diplomats from some of Cuba's main trading partners, including China, Spain, Canada, Brazil and Italy, as well as France and Japan, both of which are among the island's top creditors.

"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 cable said, adding that Italian diplomats cited sources within the Cuban government as predicting that the island "would become insolvent as early as 2011."

Even the Chinese diplomat expressed what the cable referred to as "visible exasperation." It said the Chinese were particularly annoyed by Cuba's insistence on retaining majority control of any joint venture.

"No matter whether a foreign business invests $10 million or $100 million, the GOC's (Government of Cuba's) investment will always add up to 51%," the cable quoted the unidentified Chinese commercial counselor as saying.

The Chinese also complained about problems getting loans repaid, and in particular a Cuban request to extend from one year to four years the amount of time it has to repay credit.

It is no secret that Cuba's financial situation is increasingly dire. Raul Castro has warned that the state can no longer afford to subsidize nearly all forms of Cuban life. The government provides free health care and education, and nearly free transportation, housing and utilities. All Cubans also receive a ration book that provides them with some basic food, though not enough to live on.

Most islanders work for just $20 a month in a state-dominated economic system riddled with inefficiency.

Yet the country has survived the collapse of the Soviet Union, which caused the near-failure of its economy, as well as a 48-year U.S. trade embargo, the retirement of revolutionary leader Fidel Castro in 2006 and countless other bumps along the way.

And the cable's confidence that the government would not enact economic reforms did not pan out. The reforms announced by Raul Castro in September are considered the most significant in a generation. Still, it is unclear if they will be enough to save the island's perennially weak economy.

The cable said Cuba's attempts at agricultural and other reform up to that point had been ineffective, and said more changes were unlikely. It said the country seemed determined to give the more control over state-run businesses to the military, and particularly Agriculture Minister Ulises Rosales del Toro, whom the cable described as Raul Castro's most trusted general.

The cable said the situation would worsen dramatically should there be economic or political problems involving Cuba's top ally, Venezuela, which the dispatch said was "increasingly unstable." It quoted the French diplomat at the meeting as saying Hugo Chavez's country "is in flames" and "a source of serious concern for Cuba."

Cuba receives billions of dollars worth of oil a year from Venezuela at greatly subsidized prices in exchange for the services of Cuban doctors and other help.

"There is little prospect of economic reform in 2010 despite an economic crisis that is expected to get even worse for Cuba in the next few years," the cable said, citing Cuba experts. It closed with a scathing criticism of the leadership of a government ruled by aging brothers Fidel and Raul Castro since they overthrew dictator Fulgencio Batista in 1959.

The government's "direction and leadership remains muddled and unclear, in great measure because its leaders are paralyzed by fear that reforms will loosen the tight grip on power that they have held for over 50 years," it said.

---

Associated Press writer Andrea Rodriguez contributed to this report.

A service of YellowBrix, Inc.

 

Sponsors

Symbol :

Advertisement

Market news:

  • Explosions kill 1, injure 2 in central Stockholm Dec 11, 2021 06:13 PM

    • STOCKHOLM - A car explosion and what appeared to be a suicide attack injured two people, killed the apparent bomber, and caused panic among Christmas shoppers in Stockholm Saturday.
    • Shortly afterward, a second explosion was heard higher up on the same street, and a man was found injured on the ground.
    • According to the news agency, the e-mail referred to Sweden's silence surrounding artist Lars Vilk's drawing of Muhammad as a dog and its soldiers in Afghanistan.
      • Envoy Holbrooke in critical condition post-surgery Dec 11, 2021 06:13 PM

        • WASHINGTON - Veteran diplomat Richard Holbrooke, the president's special envoy for Afghanistan and Pakistan, was in critical condition Saturday after surgery to repair a tear in his aorta.
        • Hospital officials did not respond late Saturday to an e-mail seeking more information.
        • Secretary of State Hillary Rodham Clinton visited the hospital on Friday night and again Saturday.
          • Venezuela halted flight crew in 2008 over remark Dec 11, 2021 06:13 PM

            • CARACAS, Venezuela - The captain and crew of an American Airlines flight were briefly detained in 2008 after a crew member advised passengers to set their watches to "local Chavez time" upon arrival in Caracas, according to a confidential U.S. report released by WikiLeaks.
            • President Hugo Chavez in 2007 created a new time zone for Venezuela, moving the clock back a half hour on a permanent basis.
            • The U.S. Embassy report, dated Oct. 1, 2008, and released Friday, said there appeared to be a misunderstanding over one crucial word in the crew member's announcement: "local" vs. "loco" - which means crazy in Spanish.
              • Hockey attendance record falls at Michigan Stadium Dec 11, 2021 05:40 PM

                • ANN ARBOR, Mich. - Michigan and Michigan State have set a world record for attendance at a hockey game, playing in front of 113,411 at Michigan Stadium.
                • The previous mark for a hockey game was 77,803 at this year's world championship in Germany.
                • This is also the largest crowd to see any event at Michigan Stadium, surpassing the 113,090 for a football game earlier this year.
                  • Cables show Ireland irked Vatican on sovereignty Dec 11, 2021 05:23 PM

                    • VATICAN CITY - Newly released U.S. diplomatic cables indicate that the Vatican felt "offended" that Ireland failed to respect Holy See "sovereignty" by asking high-ranking churchmen to answer questions from an Irish commission probing decades of sex abuse of minors by clergy.
                    • The U.S. ambassador to the Holy See also condemned the leaks and said the Vatican and America cooperate in promoting universal values.
                    • Noyes reported that Irish diplomats in Rome decided not to press Vatican officials to respond to questions from the panel, which was led by an Irish judge and operated independently of Ireland's government.

                      More news


Advertisement

    Recent Estimates

AnalystFirm NameSymbolEPS Estimate
XXXXXXXXXX CRM$0.19
GEOXXXXX PAY$0.30
mrbilltraderXXXXX POT$1.59
XXXXXXXXXX OVTI$0.43
sam farahanXXXXX TECD$0.95
XXXXXXXXXX GSS$0.05
XXXXXXXXXX ABB$0.31
adfgafg ERTS($0.26)
XXXXXXXXXX SD$0.03
XXXXXXXXXX ATML$0.11