When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Already a subscriber? Log in .

You've reached your limit of one free article.

Get unlimited access to Worldcrunch

You can cancel anytime .


Exclusive International news coverage

Ad-free experience NEW

Weekly digital Magazine NEW

9 daily & weekly Newsletters

Access to Worldcrunch archives

Free trial

30-days free access, then $2.90
per month.

Annual Access BEST VALUE

$19.90 per year, save $14.90 compared to monthly billing.save $14.90.

Subscribe to Worldcrunch

Why Is Russia Writing Off Billions Of Cuba's Debt?

It's more about secret oil reserves than Cold War nostalgia.

Havana's "Recova" in front of the Capitolio
Havana's "Recova" in front of the Capitolio
Dimitri Butrin

HAVANA - No one was expecting groundbreaking developments from Dmitry Medvedev’s less-than-24-hour visit to Havana last week.

But on the evening of Feb. 21, Medvedev quietly joined Raul Castro and other representatives of the Cuban government at the Palace of the Revolution to sign a major debt-restructuring agreement. Medvedev also met with Fidel Castro, who remains at the center of Cuban politics.

The debt-restructuring plan relates to outstanding bills incurred by Cuba during the time of the Soviet Union, which Russia at least theoretically has the rights to collect on. There is no official sum given for the amount of debt involved: Russia says that the total debt amount owed by Cuba is more than $30 billion, but during negotiations between Russia and Cuba related to the debt in 2008, both sides generally were discussing between $20 billion and $22 billion. The official amount of foreign debt that Cuba has recognized – but not serviced since 1987 – is $11 billion.

Cuba holds the largest Soviet-era debts, and countries with smaller debts, such as Afghanistan and Iraq, have already restructured their debts with Russia.

But Cuba’s unrecognized debts to Russia have hindered Cuba’s international trade for several years. It has impeded Cuban efforts to restructure its debt with other countries and given it credit problems, worsening the effects of the U.S. trade embargo on Cuba.

The change in status for the lion’s share of Cuba’s international debt – if it is not accompanied by a stricter sanctions from the U.S. – will allow Cuba to re-enter the international lending market, although in a somewhat limited capacity. That gives economic liberalization a chance at spreading throughout Cuba.

The terms of the debt restructuring are still unknown, and both sides seem intent on keeping it a secret. But in other cases where Russia has agreed to restructure Soviet-era debt, the deal has involved writing off between 90% and 95% of the debt. So it is unlikely that Cuba will end up owing more than $3 billion.

Ulterior motives?

There are several theories circulating among experts, however. One is that “opening” the relationship with Cuba is a type of insurance against changes in Venezuela. Another theory is that the interest in working with Cuba could be related to attempts to find oil off the Cuban coast.

Since 2008 there have been discussions about the possibility of a large offshore oil deposit near the northern coast of Cuba. Venezuelan company PdVSA, the Malaysian Petronas, Russian Zarubezhneft and the Spanish Repsol have explored the area and decided, in 2012, that there was no commercially usable oil. But in December Zarubezhneft started a second round of explorations in a deeper area. The second round of tests will wrap up in June, but the results could theoretically be available already.

If Zarubezhneft does find oil, it is entitled to sign an agreement with the Cuban state-owned oil company, Siret, to share exploitation of the deposits from now until 2034. Zarubezhneft did not comment on the issue. Local sources said there was no news on the second round of explorations. Regardless, Russia’s rush to complete the debt-restructuring process by Sept. 2013 could be related to the possibility of major oil reserves in Cuban coastal waters.

Regardless of the oil situation, Russia is trying to restore active trade with Cuba. The Federal Customs Service has already signed agreements with Cuba on information sharing and preferential tariffs. Cuba has also signed several contracts to purchase Russian airplanes. Hardly a return to the Cold War bustle between the two countries, but it was time to get back to business.

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.


Big Brother For The People: India's CCTV Strategy For Cracking Down On Police Abuse

"There is nothing fashionable about installing so many cameras in and outside one’s house," says a lawyer from a Muslim community. And yet, doing this has helped members of the community prove unfair police action against them.

A woman is walking in the distance while a person holds a military-style gun close up

Survellance and tight security at the Lal Chowk area in Srinagar, Jammu and Kashmir, India on October 4, 2022

Sukanya Shantha

MUMBAI — When sleuths of the National Investigating Agency suddenly descended on human rights defender and school teacher Abdul Wahid Shaikh’s house on October 11, he knew exactly what he needed to do next.

He had been monitoring the three CCTVs that are installed on the front and the rear of his house — a chawl in Vikhroli, a densely populated area in suburban Mumbai. The cameras told him that a group of men and women — some dressed in Mumbai police’s uniform and a few in civil clothes — had converged outside his house. Some of them were armed and few others with batons were aggressively banging at the door asking him to immediately let them in.

This was not the first time that the police had landed at his place at 5 am.

When the policemen discovered the CCTV cameras outside his house, they began hitting it with their batons, destroying one of them mounted right over the door. This action was captured by the adjacent CCTV camera. Shaikh, holed up in his house with his wife and two children, kept pleading with the police to stop destroying his property and simply show them an official notice.

Keep reading...Show less

The latest