Cuba’s debt with Argentina is close to half a century and is already estimated at USD 15,000 million

President Alberto Fernández with that of Cuba, Miguel Díaz Canel. Behind them both, Felipe Solá, who was still foreign minister

DK/NA. Do not know, no answer. Such would be the option that best describes the Argentine government’s response to the state of Cuba’s historic debt with Argentina, on the eve of the CELAC (Community of Latin American and Caribbean States) Summit that President Alberto Fernández will lead on Tuesday, the 24th. in Buenos Aires and which will be attended by the Cuban president, Miguel Díaz Canel.

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It could be an occasion to deal with that debt at the highest level. Its origin is the tour that in February 1974 José Ber Gelbard, Minister of Economy of the governments of Héctor Cámpora and Juan Domingo Perón, led to the Caribbean island, where he agreed to a loan of USD 1,278.8 million for the Castro regime to acquire 1,000 tractors, agricultural machinery, 5,515 Fiat heavy trucks and 6,000 Fiat 125 cars, in addition to thousands of other Renault 12, Ford Falcon, Citroën Ami 8, Peugeot 404, and 9,000 Dodge 1500 units, from Argentina. Providing models of North American companies to Cuba even required the management of permits in Washington for the headquarters of the North American automobile companies in Argentina.

“It was the largest credit granted by Argentina to any country up to that time,” said diplomat Juan Archibaldo Lanús in his book “From Chapultepec to the Beagle.” The credit was part of the rapprochement with the “real socialism” bloc, firmly spearheaded by the then Union of Soviet Socialist Republics (USSR) in a then bipolar world. In fact, the Gelbardist tour continued in Moscow and also passed through Budapest and Prague, which were under the grip of the USSR: in 1956 Soviet tanks had put down a revolt in the Hungarian capital, where protesters had dared to tear down a statue of Stalin, and in 1958 they had crushed the so-called “Prague Spring”, the capital of the then Czechoslovakia.

The Cuban ambassador with the minister José Ber Gelbard in 1974

As the former Argentine ambassador to Israel and Costa Rica, Mariano Caucino, recalled in Infobae, the former Argentine Foreign Minister Oscar Camilión recalled in a conversation for the book “Memories”, before the historian Guillermo Gasió: “nothing characterized Gelbard, the one who carried out operations so manifestly linked to Soviet interests, such as credit to Cuba. An operation that was naturally destined for failure that was subsequently recorded. It was an operation in which the Central Bank financed Cuba on the one hand and a multinational on the other.”

There were various attempts to settle the matter, none of which prospered. In October 1986 Raúl Alfonsin was the first Argentine president to visit the island. Among the vicissitudes of that visit, Alfonsín and Fidel Castro endured -stoically or ridiculously, depending on how you look at it- a long and very strong rain at an outdoor event in Havana, but the debt continued undaunted and increased.

Then, in 1995, recalled at the time the Cordovan economist Ramón Frediani, who investigated the issue, there was a proposal to capitalize the debt in exchange for Argentine investments in Cuba. Foreign Minister Guido di Tella proposed paying off Argentine investments in public works and tourism on the island with Cuban facilities, and even President Carlos Menem discussed the issue with Fidel Castro, without getting anywhere.

Menem and Fidel Castro in an “Ibero-American Summit”

The attempts intensified in the Kirchner governments, especially during the administration of Rafael Bielsa in foreign ministry. “He was the most interested in the matter,” a former ambassador who requested the reservation of his name told Infobae. The now ambassador to Chile proposed to Cuba a removal of 75% of the debt and to settle the remaining 25% in various ways: payment of interest in cash, free medical care for low-income Argentines on the island, provision by Cuba of some medicines and biotechnology training for Argentine professionals.

“Additionally,” Frediani recalled in his investigation, “Argentina requested in that draft agreement a preferential tariff treatment to introduce 1,300 Argentine products to Cuba with tariff advantages.” Back, everything was in intentions.

In 2009, recalled former ambassador Caucino, then-president Cristina Kichner signed 11 agreements with Fidel Castro in Havana, but not a word about the debt.

Fidel Castro with Cristina Fernandez

Due to a lack of ideological affinity, the government of Mauricio Macri was the one that put the most effort into collecting the Cuban debt.

In September 2017, Gabriel Salvia, director of the Center for the Opening and Development of Latin America (Cadal), made a request for information to the Investment and Foreign Trade Bank. The BICE Institutional Relations manager, Agustina Tiscornia, informed her that the amount of the consolidated debt reported by the Ministry of Foreign Affairs and Worship to the Americas and Caribbean Business Management Department of Banco Nacional de Cuba, “whose last calculation corresponds to March 31, 2017″ was USD 1,278.8 million of “consolidated capital” and USD 1,272.9 million of “accrued interest”, for a total of USD 2,551.7 million arising from a conciliation agreement and consolidation of the debt as of March 31, 1995 between BICE and Banco Nacional de Cuba ratified by the act of August 24, 1995″.

As of that date, the debt accrued interest semi-annually at the LIBO rate plus 1.5 percentage points. The debt, the note added, “was included for accounting purposes as part of the BICE Capitalization on January 31, 2012.” In March 1993, the BCRA had transferred that debt to the Ministry of Finance, which in 1999 had transferred it to BICE through a trust that was liquidated in December 2011.

In March 2018, the then Chief of Staff, Marcos Peña, and the Secretary for Strategic Affairs of the Macri presidency, Fulvio Pompeo, made a lightning trip to Cuba to discuss “bilateral issues” and also returned empty-handed. A year later, the then Secretary of International Economic Negotiations of the Argentine Foreign Ministry, Horacio Reyser, met with the Minister of Foreign Trade and Foreign Investment of Cuba, Rodrigo Malmierca, head of the Cuban delegation that was attending a Conference in Buenos Aires on South-South cooperation. Reyser brought up the subject and Malmierca shrugged.

Already in the government of Alberto Fernández, the issue resurfaced a year and a half ago, in June 2021, when, as Infobae learned at that time, the Government raised in Cuba, through the Minister of Health, Carla Vizzotti, and the adviser presidential Cecilia Nicolini, pay off the purchase of the Cuban vaccines “Soberana 2” and “Abdala” against Covid with the very old debt. The saving punctures would come when the Cuban regime vaccinated at least 70% of its population.

The Minister of Health, Carla Vizzotti, in 2021 in Cuba with Cuban President Miguel Díaz Canel. A possible swap of “vaccines for debt” was considered

After so many unsuccessful attempts, last October Salvia, from Cadal, wanted to know what the matter had ended and again asked BICE for information, this time from its vice president, the former deputy of the Renovation Front, Carla Pitiot. The official and former massista national deputy 2015-19, who had not turned one year old when Gelbard granted the original credit, did not respond.

Now, what is the current value of that debt about to blow out 49 candles today? Frediani calculated in May 2019 that the sum of principal and interest then amounted to USD 4,805 million, without taking into account default and punitive interest that would apply, “which would easily double that amount.”

In turn, the economist Orlando Ferreres told Infobae from Jacksonville, USA, that he had calculated that, updated by the LIBO rate, the value of the debt was USD 11,000 million in 2009. “They never paid anything so now it must be worse,” he added. In fact, updating for US inflation since then (just over 36%), the value would now be around USD 15 billion.

Just 3 days ago, through CubaDebate, the main digital media platform of the Cuban regime, it was leaked that José Luis Rodríguez, former Minister of Economy of the island, estimated that Cuba’s international reserves have been reduced by some USD 2.5 billion since 2019. And Marc Frank, a Reuters correspondent in Havana, quoted another Cuban “senior economist”, who requested that his name be withheld, according to whom the reserves at the end of 2022 were barely USD 8 billion.

In addition, the Central Bank of Cuba itself reported a few days ago a claim before the British Supreme Court of Justice by CRF-I Limited, a “vulture” fund located in the Cayman Islands, alleging that Cuba owes it 72 million euros. It is very unlikely that Alberto Fernández will do anything that dwarfs that claim, although a debt of almost half a century suggests that “vulture” is rather the regime that contracted it and never set out to pay it.

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