(Publisher note: See my comments in bold below)
By Jeff Franks | Reuters
A cash crunch is causing one of Cuba’s largest business corporations, Cimex, to put off payments for some products, but the bills eventually will be settled, the head of the state-owned company said on Thursday.
Eventually? Just like the Russian debt from the 1960s, 1970s and 1980s will eventually be settled?
Cimex President Eduardo Bencomo also said Cuba had not yet seen an increase in remittances sent by Cuban Americans to their families on the communist-ruled island, after U.S. President Barack Obama lifted restrictions on them last month.
and the Cuban government was expecting this money so they could pay bills? I thought remittances went to the Cuban people.
Cuba has been struggling through a liquidity crisis in recent months that has provoked complaints from foreign businesses that they are not getting paid for their products.
Some foreign diplomats have said they feared Cuba was on the brink of insolvency.
I don’t think this is anything new and I don’t think the Cuban government really cares.
Cimex is a sprawling conglomerate with annual sales above $1 billion. Its businesses include a network of shops selling goods in Cuban convertible pesos, real estate operations and food services, and the processing of remittances.
Bencomo acknowledged the liquidity squeeze, telling reporters at a press conference that payments for certain imported items such as air conditioners and other equipment had suffered “some delay.” But he said “the will of the country” was to meet its financial obligations.
“We had an amount of money in the bank for external payments and we’ve been paying out,” he said. “The will is to keep paying ... the country will keep paying, without doubt.
The “will of the country” and the “will is to keep paying”. Anyone want to buy Cuban debt or give Cuba a loan with the “will” from the Cuban government to pay you back?
“If more people come (to visit Cuba), there will be more money and we will be able to pay what we haven’t paid,” Bencomo said.
Really? Now he is saying that if tourism is off then Cuba cannot pay its bills?
Cuba’s economy has been crippled by the global financial crisis and three hurricanes that struck last year, causing $10 billion in damage, according to the Cuban government.
It blames a U.S. trade embargo imposed since 1962 for many of its problems. But Cuban President Raul Castro has said Cuba needs greater productivity and called for a pay system that rewards the best workers.
Right. Communism has nothing to do with the fact that Cuba’s economy has always been terrible? What about the fact that Cuba gets free oil and all kinds of credits from dozens of countries around the world and all business ventures on the island are joint ventures? But, it’s all the Embargo’s fault? Nice try, again but it’s just a stupid old argument that no one believes.
On April 13, Obama lifted restrictions on Cuban American travel and remittances to Cuba, which he said was a signal to the island that the U.S. wants to end hostilities that began after Fidel Castro took power in a 1959 revolution.
Bencomo said remittances had shown no increase since Obama eased the embargo and in fact were below what they were this time last year. “The impact of that declaration still has not been felt,” he said.
While there were signs U.S. agencies were becoming more relaxed in their enforcement of the embargo, Bencomo said it appeared Obama’s message of change had not been fully transmitted to the U.S. bureaucracy.
That I agree with. OFAC has not released the revised rules yet on Cuban American travel and remittances.
But, he said, Cuba is beginning to see an increase of U.S. business people coming to the island anticipating that soon they may be able to sell their wares freely.
“The future could be promising, it is still uncertain,” Bencomo said. (Reporting by Jeff Franks; Editing by Pascal Fletcher and Dan Grebler)