Moscow to Finance a Havana Wholesale Store
and also promote a Hotel exclusively for Russians
Boris Titov, a trusted Kremlin man, met again with the Cuban ambassador in Moscow, Julio Garmendía
HAVANA TIMES – Relations between Havana and Moscow continue to strengthen as evidenced by the announcement in Moscow on Tuesday of new business ventures on the island. The first and most fleshed-out is a joint venture with the state company Cimex that has already been approved by the Cuban government.
“Many Russian manufacturers are interested in promoting their products in Cuba. We are hoping a new trading company will serve as a consolidated wholesale importer and will be able to independently determine prices in the Caribbean nation’s retail market,” said Boris Titov, president of the Cuba-Russia Business Council and a trusted Kremlin adviser.
After meeting with Cuban ambassador Julio Garmendía on Tuesday, Titov indicated that Moscow is hoping to quickly sign a contract that would provide “the solution to complex logistical problems such as transporting Russian merchandise and acquiring insurance coverage,” two issues that have complicated the country’s foreign trade since it was hit with international sanctions following its invasion of Ukraine in 2022.
The announcement, which was reported in Cuba by the Prensa Latina news agency, contains few details. The two sides also want to expand their cooperation in the tourism sector and are considering, Titov said, the construction of a hotel for the exclusive use of Russians. The project is based the assumption that the number of Russian vacationers visiting the island will return to previous levels, something that the latest data clearly indicates is not happening.
Figures from the National Office of Statistics and Information indicate 6,632 Russians visited the country in 2022, 54.7% less than in 2021. Furthermore, Russians were the only group of foreigner visitors whose numbers declined in the first two months of 2023, falling from 35,871 travelers in January and February 2022 – the sanctions began at the end of that month – to 20,589 in the same period this year.
The number of Russian visitors was already declining before the war complicated the situation. By November 2021 the Dominican Republic had poached a good part of Cuba’s tourist trade. In September, the month the island reopened for tourism, 8,019 visitors arrived in the country. Meanwhile, the number of visitors from Russia to its Caribbean neighbor was 21,387.
The closure of European air space forced Russian carriers to suspend flights to Cuba until October 2022, when Nordwind Airlines announced it would resume service to the island along a route over the north pole.
Though Cuba has managed to lure back some tourists, the effort has not been easy. Just two weeks ago, the Russian news agency Sputnik announced that Cuban banks would begin accepting Mir, a payment system akin to Visa or Mastercard that was launched by the Kremlin in 2016 to get around potential economic sanctions. A few days later it was reported that Mir card holders could take money out of Cuban ATMs.
Cuba and Russia have drawn closer to each other out of necessity. The once extremely close relations they enjoyed during the Soviet era cooled under perestroika. They had been recovering during the 2017 crisis in Venezuela, which forced them to look for other trading partners, but things really took off after the start of the war in Ukraine.
In 2020 Moscow was forced to cancel several planned investments on the island due to “breaches of contract by the Cuban side,” as Russian officials explained. Cuba needs enormous sums of money and, though Russia knows the island is not a good credit risk, economic sanctions have created a new environment which requires finding new markets and new allies.
In January, Titov himself met with Cuban president Miguel Díaz-Canel in Havana, where they agreed to the creation of center to transform the Cuban economy “through private business.” To some in the Cuban exile community, this sounds like a scheme similar the one used by the old Soviet oligarchs, who ultimately took control of numerous state-owned enterprises.
Translated by Translating Cuba