The Dance of Debt and the Stability of Strategic Economic Misery: Cuba (Again) Restructures its (Unpayable) Foreign Debt

 

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 In my last consideration of the state of Cuba (The Cuban Economic Condition--The Abyss is not an Empty Space), I noted  the odd but stable state of desperation that Cuba and its enemies have now comfortably institutionalized.  Cuba obtains its purported independence and a stabilizing measure of discursive  space in which it can blame all of its problems on capitalism, foreign interference and the United States as the once and only evil hegemon of choice. Foreign capitalist, Marxist-Leninist, and other monied or interested states (whatever their ideological camp) get what they think is a measure of leverage (though it is hard to measure the trajectories of leverage when it is the Cubans who have the money). They also get a measure of narrative trope space--able to use Cuba as the paragon of states that go wrong, and always as a way f virtue signal to the intended target--not Cuba bit the mass of developing and post-colonial states whose exploitation is essential to the constitution of post-global empire. 

Everyone loves to play.

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And there is a measure of stability in this playground of self-loving states with incompatible agendas except this: to use Cuba to its own discursive advantage. And Cuba has gotten good (not quite as good as the Argentines, but good enough) to play these monied states with agendas and the ability to pay for the privilege of appearing to advance them with and against themselves.  

Everybody wins. The lending states can continue to develop the narrative of Cuba as a state of crisis and its political economic model as incapable of any fix that can make it viable, but without the bother of cleaning up the mess of a collapsed Cuba. The Cubans continue to get what they want--money with a quite flexible repayment plan. Their vanguard and nomenklatura can keep the state at the point of crisis but without a substantial danger of collapse. That feeds the narrative of the craven capitalist imperialists, the Chinese Marxists  who betrayed the core principles of Marxist-Leninism, and the ability to play the new Russia-Iran-Venezuela-North Korea united front. "Or better put--Cuba will remain in stasis as long as it suits those who make use of it.  And in the process Cuba has effectively lost what it has claimed is one of the few things it has managed to preserve since 1959--its sovereign autonomy.  Irony." (Cuba's Central Contradiction--A rejection of markets and the contradiction between the productive forces and the relations of production).

And thus one has the state of Cuba's foreign financial relations with the liberal democratic (Paris) club. As reported by Reuters:

Representatives of 14 western creditor nations, grouped in the Paris Club, were in Cuba this week to salvage a debt agreement with the import dependent country which is expected to default on payments for a fourth consecutive year. . . Reuters, which has seen the agreement, estimates Cuba has failed to pay the creditors more than $500 million as it struggles with shortages of food, medicine, fuel, and other basic goods amid rising social tensions. The estimate includes money due by November. Cuba, which last reported foreign debt of $19.7 billion for 2020, has restructured debt with Russia, China and some other creditors since then. The Caribbean island nation is not a member of the International Monetary Fund nor the World Bank. The Cuba group of the 22-member Paris Club, which manages old sovereign debt, comprises Australia, Austria, Belgium, Canada, Denmark, Finland, France, Britain, Italy, Japan, the Netherlands, Spain, Sweden and Switzerland. (Western creditors and Cuba pledge to salvage debt deal)

Cuba and its monied friends have been here before.  And they will be here again . . . as long as it is necessary to maintain the status quo because it suits everyone (everyone who counts anyway).  And thus the perpetuation of the stability of strategic economic misery wrapped up on narrative excuses that suit all of the ruling elites and their apparatus. 

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Tied to the politics of debt relief is that of charity. Cuba subsists, to some extent, on the success of its self promotion as a value added recipient of public and private charity from states and foundations. That has been successful enough in the past It is likely to be more so in the future. The key, though, is the ability to maintaon at least the optics of suffering through the policy of economic misery (all donors like to see suffering sufficient to add value to their offerings). In a sense, then, state charity creates incentives to ensuring that the economic crisis is unresolved. . . at least entirely. And lastly foreign investment remains unchanged. Cuban stability is still (in the opinion of those who run the state) essentially a function of preventing dfoect contact with foreigners that is not carefully supervised. The boundaries of the national territory are a barrier (natural and artificial) through which the state can control the quality and quantity of interactions with foreigners and their footprint within the national territory. Though it is expensive in terms of foregone investment, the price appears to be cheap enough to prevent change. Again the optics and discourse of foreign investment and its reality are quite different things. (The Management of Misery and the Risks to Cuban Stability: Brief Reflections on Domingo Amuchastegui, "Mirando a Cuba el el 2023" ["A Look at Cuba in 2023])

The reporting of Marc Frank and Nelson Acosta follows:

 

 

Western creditors and Cuba pledge to salvage debt deal

By Marc Frank and Nelson Acosta

September 1, 20232:52 PM EDTUpdated a day ago

 

 

HAVANA, Sept 1 (Reuters) - Representatives of 14 western creditor nations, grouped in the Paris Club, were in Cuba this week to salvage a debt agreement with the import dependent country which is expected to default on payments for a fourth consecutive year.

“The discussions enabled us to come closer to finding a solution to delays in meeting (Cuba’s) obligations ... negotiations will continue to establish a new payment plan agreeable to both sides,” a brief statement released on Thursday evening said.

William Roos, co-chairman of the Paris Club, had said on Wednesday that he proposed a plan which apparently was rejected.

Thursday’s statement said Foreign Investment and Cooperation Minister Ricardo Cabrisas had expressed the Communist-run government’s determination to meet its obligations as soon as conditions permitted.

Cabrisas was seen on state television during the talks blaming tough new U.S. sanctions on top of the decades old trade embargo and the pandemic for the payment delays.

The 2015 Paris Club agreement forgave $8.5 billion of the $11.1 billion in sovereign debt Cuba defaulted on in 1986. Cuba agreed to repay the remainder in annual installments through 2033.

The country’s foreign exchange earnings used to import goods and pay debt have fallen by more than 50% since the deal was signed, according to official statistics.

Gross domestic product is eight points short of its 2019 pre-pandemic level, the government reported.

Reuters, which has seen the agreement, estimates Cuba has failed to pay the creditors more than $500 million as it struggles with shortages of food, medicine, fuel, and other basic goods amid rising social tensions. The estimate includes money due by November.

Cuba, which last reported foreign debt of $19.7 billion for 2020, has restructured debt with Russia, China and some other creditors since then. The Caribbean island nation is not a member of the International Monetary Fund nor the World Bank.

The Cuba group of the 22-member Paris Club, which manages old sovereign debt, comprises Australia, Austria, Belgium, Canada, Denmark, Finland, France, Britain, Italy, Japan, the Netherlands, Spain, Sweden and Switzerland.

Reporting by Marc Frank; Editing by Kirsten Donovan