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Image: Russia Forgives $32 Billion Cuba Debt as Putin Meets Castro
Russian President Vladimir Putin meets in Cuba in December 2000 with Fidel Castro, who was still president at the time.

Russia Forgives $32 Billion Cuba Debt as Putin Meets Castro

Friday, 11 Jul 2014 02:55 PM

Russia agreed to write off 90 percent, or almost $32 billion, of Cuba’s Soviet-era debt as President Vladimir Putin arrived on the Caribbean island Friday for meetings with President Raul Castro and his brother Fidel.

The agreement was signed into law by Putin hours before he landed in Cuba, 90 miles from Florida. The accord was passed by the lower house of parliament on July 4 and approved by the upper chamber two days ago. In 2010, Cuba and North Korea together accounted for more than half of all foreign assets claimed by the Russian government.

With Russia mired in a standoff over Ukraine, Putin is kicking off a six-day tour of Latin America by offering joint ventures and throwing a lifeline to former Cold War ally Cuba, where economic growth has ground to a halt. In March, Cuba became one of 11 countries in the 193-member U.N. General Assembly to reject a U.S.-backed resolution declaring invalid Crimea’s referendum to secede from Ukraine.

“Cuba is one of Russia’s leading partners in the region” with which “we closely coordinate our foreign policy,” Putin said in an interview with Itar-Tass and Prensa Latina yesterday. While “our bilateral trade has slowed somewhat in the 1990s,” Russia is “ready to make up this lost ground.”

Putin and 87-year-old Fidel met for about an hour to discuss global affairs, the economy and Russia-Cuba ties, the Kremlin said on its website.

 

Putin, who will also visit Argentina and Brazil in the coming days, is making the second high-profile visit by a Russian official after Prime Minister Dmitry Medvedev was in Cuba last year.

Under the terms of its agreement with Russia, Cuba will pay back the $3.5 billion remainder of its debt during a 10-year period, transferring money to a special account opened by Russian state development lender Vnesheconombank, known as VEB, at the National Bank of Cuba. VEB plans to use the funds for projects in Cuba.

Two years ago, Russia struck a similar agreement with North Korea, writing off 90 percent of its $11 billion debt that dated back to the Soviet period. The remaining 10 percent will be settled via joint projects in health care, education and energy, according to the Russian Finance Ministry.

During Putin’s visit, state oil producers OAO Rosneft and OAO Zarubezhneft plan to sign an agreement with Cuban company Cupet SA to carry out joint operations in Cuba’s offshore areas. Russian companies are also interested in work at the Mariel special economic zone near Havana, according to Putin.

A senior military official in Moscow said two years ago that Russia was in talks to set up resupply bases in Cuba after undertaking its biggest military overhaul since the Soviet era.

Under the deal that ended the 1962 Cuban crisis, the Soviet Union withdrew its missiles on the island and pledged not to station offensive weapons. Russian military cooperation with Cuba ended in 2002 after Russia closed its radar base at Lourdes, Russia’s only intelligence-gathering center in the Western hemisphere, which had been operating since the 1960s.


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Russia agreed to write off 90 percent, or almost $32 billion, of Cuba’s Soviet-era debt as President Vladimir Putin arrived on the Caribbean island Friday for meetings with President Raul Castro and his brother Fidel.
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