By Michael Ritchie
HAVANA TIMES – Reuters is now reporting that Cuba has defaulted on its payments for a restructured loan from the international financier, the Paris Club. That 2015 deal with the Club forgave $8.5 billion of $11.1 billion that Cuba owed.
A hell of a deal.
This default is unforgivable not only because of the high interest Cuba will now owe Paris Club in addition to its principal, but because of the message it sends to the rest of the financial world that Cuba is not only broke, but a bad business investment as well.
Who or what is at fault here? The U.S. Embargo? The Regime?
In truth, both.
Yes, the Embargo has made it increasingly difficult for Cuba to do international business— to buy equipment and materials it greatly needs. The country is limited in most cases to cash transactions only. And that means US dollars, which are fewer and further between with the loss of cruise ships, flights and US tourists.
But at the same time the Regime simply does not have its priorities in place, at the fore.
Cuba’s new president, Miguel Diaz-Canel, has maintained a very high public presence. He’s made speeches. He’s dutifully quoted Marti and Fidel.
He’s criss-crossed the country looking at things– all sorts of things.
He’s kissed abuelas and babies. He’s examined flour plants. And tobacco farms.
In short, he’s looked especially presidential.
Which has gotten Cuba exactly nothing.
The National Assembly of People’s Power ponders currency unification, which will throw the country into even greater financial confusion and peril.
The Regime has embarked on massive construction efforts— all directed at luxurious new hotels which, once completed, sit empty of Cubans or tourists.
At the same time, entire barrios such as Centro Habana are crumbling from erosion and falling down every day. The water system is failing. There are hours-long waits for what little gasoline is available. Food and basic essentials like toilet paper and personal hygiene items are difficult to find and hard to afford on the still-meager Cuban income.
It’s time for both Diaz-Canel and the Assembly to sit in days-long discussions of how to rebuild the overall Cuban economy.
The answer is staring them in the face. The country itself.
Flying into Cuba for the first time, every new visitor is stunned at how much open green space there is on this huge island. Undeveloped, unplanted, unfarmed land, offering some of the richest soil in the world.
There is no real reason that Cuba should import any meat or produce. The country should be a major exporter of both. And exports are a major boost to any national economy.
Again, the problem with producing those exports rests with both the Embargo and the Regime.
First the Regime needs to act.
Oxen won’t cut it any longer. The Regime must beg, borrow or steal tractors — lots of them. Get some cattle. Get some chickens. Start planting sugar cane again. Raise produce. And allow farmers to produce as much as they can and at a reasonable profit.
Next, beg, borrow or steal some trucks — lots of them, refrigerated and unrefrigerated, to deliver product to market. Horse carts will no longer do.
Call it a Second Agrarian Reform Act. A revolutionary movement to produce.
Forget currency unification. Forget new hotel construction.
Fix what is broken. That is the Cuban infrastructure. All of it.
I have written many articles for Havana Times, most of which have included suggestions such as these. In most of those articles I referred to these as “baby steps,” meaning patience was needed.
I now reject that. Giant steps are now needed if Cuba is to survive and to, one day, prosper.