These interlinked issues become more potent as the U.S. uses it social media power to broaden its attack on the Cuban tourist sector: Josh Lederman, "US tourist fears he was hit in Cuba, years before diplomats," The Washington Post 19 Oct. 2017 ("With no answers about the weapon, culprit or motive, the U.S. and Cuba have been unable to prevent the attacks from becoming a runaway crisis. As the United States warns its citizens to stay away from Cuba, there are signs that spring breakers, adventure-seekers and retirees already are reconsidering trips to the island. After years of cautious progress, U.S.-Cuban relations are now at risk of collapsing entirely.").
Marc FrankReuters19 October 2017
HAVANA (Reuters) - Cuba paid the second installment on a renegotiated $2.6 billion in debt to 14 wealthy creditor nations this week, diplomats from a number of the countries said, as some creditors prepare to swap debt for an equity stake in local development projects.
The diplomats, who spoke on condition of anonymity, said the payment showed the importance Cuba attaches to an agreement it reached in 2015 with the Paris Club group of major creditor nations.
An economic crisis in ally Venezuela, a drop in export earnings and damage from Hurricane Irma have all taken a recent toll on the Communist-run island, which is short on cash and has no access to most multilateral lending institutions.
The Paris Club agreement forgave $8.5 billion of $11.1 billion in official debt Cuba had defaulted on through 1986, plus charges. Repayment of the remaining debt was back-loaded through 2033, with around $40 million paid last year and nearly $60 million due by Oct. 31.
The accord was seen as a breakthrough, with Cuba agreeing for the first time to give rich capitalist countries equity in development projects, in areas like manufacturing and agriculture, in exchange for a portion of their debt holdings.
It was also seen as a step toward Cuba rejoining the international financial community, as the Obama administration moved to re-establish U.S. diplomatic and some commercial ties with the island.
The Paris Club deal also came as the European Union agreed to drop sanctions on development assistance to Cuba.
European diplomats have said they will keep trying to increase their countries’ presence on the island, despite rising tensions with the United States under President Donald Trump.
“If Trump wants to hold back U.S. companies from Cuba it simply gives us more time to establish ourselves here,” one European ambassador said in a recent interview.
CATTLE RANCHING, DAIRY
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Great Britain, Italy, Japan, the Netherlands, Spain, Sweden and Switzerland have all renegotiated their old debt with Cuba bilaterally since 2015, and in some cases current debt.
Many of the restructuring agreements include the establishment of so-called countervalue funds, under which a percentage of debt is discounted in exchange for the potential profits stemming from participation by a creditor country’s firms in local joint development projects.
The countervalue funds have an estimated combined value of around $750 million of the $2.6 billion owed. Japan, Spain, France and Italy - Cuba’s largest Paris Club creditors - are furthest along in negotiating swaps.
For example, a $46 million French project to develop cattle ranching and dairy products in central Camaguey province is ready to sign, according to France’s ambassador to Cuba, Jean-Marie Bruno.
“The project will benefit 105 cattle cooperatives with 11,000 members and their families, two industries and various service companies,” he said.
The agreement involves the French Development Bank and other public agencies and will include a number of French firms. Cuba will invest $6 million, discounting the sum from debt still owed to France.
Spain, meanwhile, has a project ready to manufacture cardboard and another aluminum structures for construction capable of resisting earthquakes and hurricanes, both involving Spanish companies, according to a source with knowledge of the negotiations.
Cuba does not publish up-to-date information on its foreign debt, citing a need to keep sensitive economic information from Washington, which it has long accused of trying to disrupt its financial and trade relations under a comprehensive U.S. sanctions regime.
But it has been late with some recent payments to foreign suppliers and joint venture partners, according to diplomats, even as it accumulates new debt.