Cuba Business

Cuba to “restructure” foreign debt

Posted September 06, 2008 by publisher in Cuba Business.

By Marc Frank | Reuters

Cuba’s central bank has told creditors the country’s foreign debt increased by $1.1 billion in 2007 to $16.5 billion, sources close to Cuban efforts to reschedule some official debt said this week.

The increase came in Cuba’s so-called “active” debt, on which it pays interest and principal, which rose from $7.8 billion in 2006 to $8.9 billion.

Additional official and bank debt accounted for the increase.

Cuba’s active debt includes around $4.5 billion in official debt owed to other governments, $2.5 billion in supplier debt owed to traders, and bank debt of $1.86 billion owed to foreign financial institutions.

Cuba’s active debt is comprised of money borrowed since the 1991 collapse of the Soviet Union. Its “inactive” debt is the debt it is not paying interest on and which was built up after Cuba defaulted on its obligations in the 1980s.

Cuba reported a $488 million balance of payments surplus in 2007, but higher costs for food and fuel imports this year, and lower prices for its main export, nickel, have led it to seek some restructuring with Japan and other creditors.

Cuba is not a member of the International Monetary Fund, World Bank or other multilateral lending institution.

Cuba last reported its inactive debt as $7.6 billion in 2006.

The central bank said there was little change in that part of the debt, the sources said.

Venezuela has replaced the Soviet Union as the leader in supplying oil and finance to Cuba, with China in second place.

Member Comments

On September 06, 2008, publisher wrote:

I doubt Venezuela and China ever expect to get any money repaid from Cuba.

Such a shame. Cuba could be such a great country if they could just shake Fidel’s useless communism.

Right. My comments have been a little harsh lately. I’m just sick of the same old shit year after year of how great the Revolution is and how great Cuba is with the free healthcare and free education and the 99% turn outs voting for Fidel or Raul.

Hey Fidel, we don’t believe it anymore.

No one is listening to you!

On September 07, 2008, chuckdaplumber wrote:

I find it ironic: That a Hurricane named “IKE” will probably be the final straw that breaks the back of Communism in Cuba.
If the numbers on their economy are any where near correct: this group of Dictators will be exposed as the real fraud of the last 50 years.

On September 08, 2008, HavanAndrew wrote:

As far as I know, Cuba does not have the copyright on debt. The useful figures would be the debt per capita and its relative ratio to other countries. I like the rest of you am hoping that there is a straw that will break the camel’s back and the hurricane hits this year just might be the straw or straws. If this is not the case, Cuba would be best of to put the sugar cane fields back into full production and start making ethanol. Combined with their oil production, Cuba would be energy self sufficient and not reliant on anyone else. In a new form, the new Cuba could be independent of outside control and be the model of a just and democratic society. The leaky boat is getting harder and harder to keep afloat and I hope that when it comes to change that the people of Cuba have the sense to model their new form of government similar to Norway rather the United States.

On September 08, 2008, publisher wrote:

Good comment but let’s not wish for hurricanes. The people of all of Cuba now thanks to Gustav and Ike will be suffering for many weeks and probably even months in some parts.

However, I do agree that the hurricanes could be the one two punch. Obama has asked that the Embargo be suspended on Cuban Americans but of course Rice and Bush don’t think that’s a good idea.

This decision not to act could be Bush’s last major issue for his Presidency. Nice way for him to retire huh?

Such a humanitarian.

On September 08, 2008, erwinalf wrote:

@publisher. Ever set foot on cuban soil? Please speak for yourself. Still wonder why cuba can’t pay debts? Kind’a ignorrant, aren’t you?

On September 08, 2008, publisher wrote:


On September 08, 2008, chuckdaplumber wrote:

I would not wish harm to anyone. I was referring to the fact that the resultant effects on the Cuban cash flow will bring about a stark realization that Cuba’s furure is in deep trouble and if Chavez cannot support it on a monthly cash input, the people must rise up and overthrow it’s corrupt and inefficent leaders.
Don’t blame U.S. for dealing on a COD business model.

On September 10, 2008, cubanpete wrote:

“Restructure” debt?  If an individual tried to do that, he would be forced into bankruptcy.  Cuba has long since maxed out its credit cards.  Which is why even its convertible currency (chavitos) can’t be exchanged outside Cuba, even in such friendly nations as Venezuela.  Suppliers are reluctant to deal with Cuba not because of any “embargo”, but because Cuba has a track record of being either unable to unwilling to settle its accounts as agreed to.

On September 10, 2008, humberto rodriguez wrote:

candela al jarro hasta que suelte el cuba sin fidel.