HAVANA: Several agreements designed to bolster bilateral trade have breathed new life into relations between Cuba and Russia, in which the pragmatism of business has replaced the ideological affinities of the past. The accords were at the centre of the official visit to Cuba by Russian Prime Minister Mikhail Fradkov, who arrived late Wednesday and has met in private Defence Minister Raúl Castro in a climate described as “cordial and friendly” by the Cuban press.
Castro, who is acting president while his brother Fidel recovers from intestinal surgery, and Fradkov reportedly identified sectors of the Cuban economy with an eye to joint business ventures or other kinds of cooperation, such as the biotech industry.
The main agreements signed involve the restructuring of 166 million dollars in Cuban debt to Russia and a 350 million dollar credit line to finance purchases of Russian goods and services.
A technical-military accord was also signed, although no information on it was made available.
Cuba stopped receiving arms and spare parts from Moscow in 1991, when the Soviet Union collapsed. In 1993, Raúl Castro estimated the value of Russian-made weapons in Cuba during the three decades of close military cooperation between Havana and Moscow at 10 billion dollars.
The Russian media reported that trade between Russia and Cuba amounted to 125 million dollars in 2005, said Alejandro Mustellier, president of the Cuban section of the Cuba-Russia Business Committee. He added that the new credit line had been long awaited.
The business committee, made up of 70 Russian companies and their Cuban counterparts, was created in 2005 to foment bilateral trade. On Friday, it held its second business conference, to coincide with Fradkov’s visit. “The credit line will help us reach a new level in our trade relations. It is a first step in that direction,” Andreivich Kozachuk, an executive at Karachanov, a Russian firm that manufactures freight elevators, cranes and other machinery, commented to IPS.
Odalys Seijo, vice-president of Cuba’s Chamber of Commerce, agreed. “These new accords will strengthen our economic-commercial ties,” she told IPS shortly before the start of the business committee’s conference, in which some 30 Russian firms took part.
A number of transportation companies are also participating in the International Transport Fair which runs through Saturday in Havana. Fradkov visited the Fair as well as the Centre for Genetic Engineering and Biotechnology.
“It looks like both sides are interested in preserving good relations, but they will have to get used to the new context,” a Russian diplomatic source commented to IPS, pointing out that his country is “a market economy” while Cuba is still a socialist country.
For three decades until the breakup of the Soviet Union, Havana and Moscow had a close political and economic alliance in which Cuba had a guaranteed market for its sugar and other products, while it was supplied with 13 million tons of oil a year from Russia at preferential prices.
But the collapse of the Soviet Union and the East European socialist bloc brought that special relationship to an end.
Although with a much more pragmatic focus, the two countries began to show an interest in restoring their ties at the start of the current decade, as indicated by Russian President Vladimir Putin’s December 2000 visit to Havana. At that time, the leaders did not discuss Cuba’s Soviet-era debts to Moscow. Nor is the issue on Fradkov’s agenda this week.
The debt is estimated at 26 billion dollars, although Havana alleges that it is owed 30 billion dollars in indemnification for breach of contract caused by the breakup of the Soviet Union. An oil refinery in Cienfuegos, 232 km from Havana, which was built with Soviet aid and was not quite completed when work on the site came to a halt in 1991, should begin processing oil in the second half of 2007 under a joint venture agreement with Venezuela to upgrade and open the refinery.
Venezuela is now Cuba’s top trading partner, supplying this Caribbean island nation with between 90,000 and 100,000 barrels a day of oil.
According to Venezuelan sources, the Cienfuegos refinery should begin refining 65,000 barrels a day, but further revamping will enable it to process 120,000 barrels a day, including heavy crude oil.
As Russia increases its trade with Cuba, it will also be competing with China, which is today this Caribbean island nation’s third-largest trading partner, after Venezuela and Spain. China currently cooperates with Cuba in education, the oil industry, nickel mining, technological development, and transportation infrastructure.
