Posted May 22, 2009 by publisher in Cuba Business.
(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)
On May 22, 2009, grant wrote:
This was a report or was it propaganda? Ignorance of the reality of the cuban economic system is no excuse for this distrortion. Cuba earns 20 % on dollar(US) amounts sent to Cuba by americans and 10% on other currencies. Monies owed to the USSR are not valid debts and will not be paid. Canada has a two way trade with Cuba of 1.6 billion a year with Cuba selling to Canada about 850 million a year.
On May 22, 2009, Simpatic wrote:
After reading Fidel Castro, Inc, A Global Conglomerate, I would tell those foreign investors and diplomats, that all they need to do is ask Castro to make a withdrawal from one of his bank accounts that he has money stashed away in. You will not find money in his Cuban banks, but you will be able to find money in his other hidden bank accounts, located in various countries around the world. After reading this article, it’s very clear to me that Castro has kept his people poor and enslaved. He has been stealing from Cuba for close to 50 years now and with that money, he has built his fortune. I am sick of hearing about how poor Castro is. That’s what Castro wants us to think and that is what his American and Canadian business associates want us to think.
American politicians are being influenced by group of highly politically connected attorneys and consultants that are experts in Cuban affairs and business advisement. They want the embargo to end without any political changes in Cuba. Many of these attorney and consultants have served as ex-diplomats or have served under former presidents in regards to U.S. Cuban relations. They are very happy doing business with the Castro brothers because they have formed relationships with them and they already have their business plan in place with them. They don’t care about ending the embargo for humanitarian reasons. They want the embargo to end, in order to make more money for their investors, but they want it to end without any real political change. They just want to be able to ship daiquiri mix to Cuba because their tourist is thirsty. They want internet availability and good cell phone signals; not because the average Cuban has a laptop or cell phone, but because they don’t want tourist that are staying at their resort to complain about not being able to get internet access or reception for their blackberries.
What I find so clearly unethical about these people is that some of them were going around the country buying the old U.S. Certified Claims, and they were buying these claims for almost nothing. They know that Castro has money because they are not stupid what he’s been doing, yet they are telling these claimants and our politicians, that the claims are only worth pennies on the dollar because of the Cuban debt. What is dangerous about these people is that they are so well positioned having worked for our government in the past, that everyone (especially U.S. politicians) believes them. If you ask the U. S. State Department about the Cuban Claims, they will send you the Landau report. Pages 31-33 is all about the U.S. Certified claims and it is written by the attorney that represented a foreign company that was buying the Cuban claims.
It does not sit right with me that someone like this is trying to screw Americans and Cuban-Americans for their claims. They have been patiently waiting close to fifty years to get restitution for what Castro stole from them, and now Castro has figured out away to get out of paying them back. These attorney and consultants are doing Castro’s dirty work for him. Castro claims that there is no money to pay restitution for the claims because of the terrible burden of the U.S. embargo. That’s his story and he is sticking to it. That is also the story that his old American and Canadian ex-diplomat friends are helping him legitimize. I also get tired of the argument to forget about those old claims. Those claims were not just from large corporations. Most of the claims belonged to individual families that lost everything. They were told that the embargo cannot end without restitution of their claims, so they can’t just forget about those old claims because it’s what we they have been hoping and praying for, for a long time.
These people don’t care about the Americans and Cuban Americans that lost everything some 50 years ago, nor do they care about the Cuban people who have been suffering under the tyranny of Castro’s self-serving kingdom. They want to help Castro out by getting rid of the claims, which have been an obstacle and old problem for ending the embargo. By getting rid of the claims, they clear the way for their investments, and Castro and he will favor and reward them with more investment opportunities when the embargo end. These attorneys and consultants also represent off shore hedge funds that are buying the claims. They say these hedge funds are buying claims because they specialize in buying and trading debt. I think the claims are being bought more as an insurance policy for their foreign investors. It’s is better to build a resort or golf course on land that has no past claim on it, and if they can buy the old claim for next to nothing, it’s just considered a small expense to protect their investment.
If you know anyone that has a U.S. Certified Cuban Claim, please make sure they read this. Knowledge is power and we must not let this small but highly influential group of self-serving scoundrels continue to do what they are doing. The embargo should end, but not without justice for the Cuban people and a fair resolution for the claims. There needs to be a democratic change in Cuba before the embargo ends. If the embargo ends without kicking out the Castro brothers, then they win and have accomplished everything that they set out to do, which is to continue stealing and oppressing the Cuban people. Get the Castro brothers out of Cuban, but not before seizing their assets and foreign bank accounts. They need to pay back the money they have been stealing from the Cuban people to rebuild their country and to restore their dignity, and Castro needs to pay fair restitution for the Americans and Cuban-Americans who he stole from so many years ago. Please remember that a crime is a crime. It does not make any difference if it happened yesterday or fifty years ago, just ask the victims that it happened to.