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Can Cuba Afford to Pay?

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International Claims
Tuesday, 27 October 2015 19:02

By Mauricio Tamargo

There are Certain Cuba policy advocates and lobbyists in Washington, DC that are in a hurry to normalize trade relations with Cuba. One of the things that we keep hearing repeatedly from these people is that American certified claimants need to settle for pennies on the dollar because Cuba does not have the money to pay. 

Well, that is just not true and those who keep repeating that misinformation are undercutting our State Department’s negotiating team who are trying to get the best deal they can for the American claimants. Here are a few facts which give us a good indication of Cuba’s ability to pay the $8 billion debt represented by the 5,913 certified claims.

Forbes Magazine used to list both Castro brothers on its list of the top 100 richest people in the world. Forbes later removed the Castro brothers from the “Top 100” after the Cuban government objected, indicating those Swiss bank accounts in both Fidel and Raul’s names are held by the Castro brothers on “behalf of the Cuban people.” 

The Paris Club recently announced that they are entering into negotiations with the Cuban government to restructure the $15 billion debt arising for a 1986 default by Cuba. Financial experts have opined that the Paris Club creditors believe Cuba and the US may normalize trade relations and would give Cuba more revenue to start paying the Paris Club.

The World bank estimates that Cuba’s GDP, based on its population of 11.38 million people and the last reported Cuban government figures of 2013, is estimated to be $77.15 billion. According to these statistics, the per capita income of $5,880; however, we know that this money is kept by the state and the government officials who run the Cuban economy.

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To these facts we need to add the biggest fact of all, the lifting of the US embargo on Cuba. We need to remember that the US embargo was first created because Cuba refused to pay for taking American property. To this day Cuba still represents the largest taking of American property in the world. The bi-lateral negotiations will most likely include the US agreeing to lift the embargo if Cuba agrees to pay these certified claims, among other conditions that the Congress will likely require of such an arrangement.

Once that embargo is lifted, economic activity and trade in Cuba will increase and Cuba will be in a much better position to pay its debts. That being the case, if Cuba were unable to come up with all of the money to pay, Cuba could finance the $8 billion it needs to settle the American certified claims before lifting the embargo. 

Even with the devastated state of the Cuban economy resulting from decades of central planning, according to Forbes, Cuba is still able to generate $8 billion a year from its medical industries. Once Cuba is free, the economy will generate a great deal of income from tourism, medicine research development, and much more.

There is no good reason for the US to settle for anything less than the full payment of the certified claims, with interest, just as the United States did with American claims against Vietnam and Germany. There is no reason to give Cuba a free ride. The world needs to see that Cuba is ready to rejoin the global arena of trading nations and that it is prepared to pay its bills and will keep doing so.  

We should remember also that for the majority of those American families in Cuba 1959, they lost everything, and were completely devastated. They have been waiting for 55 years for justice and to be paid for what was taken from them. It is crucial for the world to see that the US will look out for its own people otherwise we will have a repeat of Cuba.    

 

 

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