x Abu Dhabi, UAEMonday 24 July 2017

Cable from Cuba warns of collapse

Key allies of communist island express fears that economic breakdown could be imminent, WikiLeaks reveals.

Cuban workers pile up sacks of coffee at a small warehouse in the Sierra Maestra. A US diplomatic memorandum published by the website WikiLeaks describes leadership indecision on the island.
Cuban workers pile up sacks of coffee at a small warehouse in the Sierra Maestra. A US diplomatic memorandum published by the website WikiLeaks describes leadership indecision on the island.

It may be nearly 50 years since the Bay of Pigs invasion, but everybody is still concerned about Cuba. All of the island's major economic partners, except for Venezuela, worry that the communist nation's economy could collapse within two years, according to a secret US diplomatic cable revealed yesterday.

Diplomats from six of Cuba's seven largest trading partners - China, Spain, Canada, the US, Brazil and Italy - and key creditors France and Japan warned the country's "financial situation could become fatal within two-three years", a US cable marked "confidential" said.

The memo, released by WikiLeaks, was written on February 9 this year by, Jonathan Farrar, the chief of mission of the US Interests Section in Havana after he hosted diplomats from those countries for a working breakfast.

Notably excluded was an "increasingly unstable" Venezuela, a major US foe in the region and a close ally of Cuba.

The group gathered by Mr Farrar considered that support from Caracas was a major impediment to Cuban reform, saying it was "the most important and 'increasingly complicated' foreign variable".

"The view from the French is that Venezuela 'es[t] en flam[m]es' [is in flames] and a source of serious concern for Cuba," according to the cable.

Cuban officials suggested to Italian diplomats that Cuba "would become insolvent as early as 2011", Mr Farrar said, adding that all the participant countries were experiencing problems in receiving payments from the Caribbean nation.

"Even China admitted to having problems getting paid on time and complained about Cuban requests to extend credit terms from one to four years."

But all agreed that Cubans, already accustomed to belt-tightening, could withstand more economic hardship.

Structural reforms promised by Raul Castro, the president, "remain on hold while the Cuban government wrings its hands in indecision, fearful of the political consequences of these long-overdue changes", the cable said.

Mr Castro, who took over from his ailing brother Fidel in 2006, "needs the 'support of the machine' to make changes," Canadian diplomats told Mr Farrar.

The cable painted a grim outlook for the Cuban economy.

"Exports and other sources of foreign currency [tourism and remittances] are unlikely to increase substantially without a dramatic global turnaround, access to US markets or an opening to US tourists," it said, noting two-way trade with China had fallen by nearly US$1 billion (Dh3.67bn) last year alone.

"Regarding increasing production, the only significant reform in the last five years, the leasing of idle land to improve agricultural production, has little chance of succeeding as implemented."

The cable said many of the Cubans who obtained land grants had no farming experience or little access to capital, tools and markets.

"The GOC's direction and leadership remains muddled and unclear, in great measure because its leaders are paralysed by fear that reforms will loosen the tight grip on power that they have held for over 50 years," Mr Farrar said.

"Faced with political uncertainty regarding future Cuban leadership and relations with the United States, the Cuban people are more likely to endure a slow erosion of state-subsidies than a much-needed radical restructuring."

 

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* with agencies