Cuba points out limitations that prevent debt payment with Brazil

The Lula government once again discussed paying Cuba’s debt to Brazil. The Cuban regime stated that it intends to pay off the debt, but cited limitations that prevent payment of the amounts at the moment. Cuba’s debt with Brazil reached US$671.7 million at the end of 2023, with outstanding installments reaching US$525 million.

On the 8th, the Ministry of Finance’s Secretariat for International Affairs brought together members of the Foreign Credit Assessment and Renegotiation Committee (Comace) and Cuban authorities to discuss the topic.

Cuba pointed out in the conciliation that it has faced “diverse external shocks”, such as the pandemic, American embargoes and climate change, according to findings from the Broadcastof Estadão. “The objective of the bilateral dialogue on debt is to reconcile values, discuss the resolution of outstanding amounts and seek ways to facilitate the resumption of the flow of payments,” said the ministry in a note released on Wednesday (14).

Most of the money lent to Cuba came from the National Bank for Economic and Social Development (BNDES) to finance the construction of Port Mariel. In September last year, President Luiz Inácio Lula da Silva (PT) met with the Cuban dictator, Miguel Díaz-Canel, in Havana. At the time, the PT member stated that Cuba is “the victim of an illegal economic embargo” by the United States and rejected the “inclusion of Cuba in the list of states sponsoring terrorism”.

Despite being an ally of Cuba, the Brazilian president cannot restructure the debt on his own. Any renegotiation of payment criteria depends on the approval of the National Congress.

In November, the federal government sent a bill to Congress that authorizes the BNDES to once again finance works and other services provided by Brazilian companies abroad. The project foresees the prohibition of loans to defaulting countries, such as Cuba, Venezuela and Mozambique. Currently, BNDES internal regulations already prohibit the granting of credit to countries that owe Brazil debt, but the idea is to reduce resistance to the project, specifying the restriction in law.

Among the controversial works financed under previous PT governments, which were not paid off, are the Caracas metro, in Venezuela, and the Port of Mariel, in Cuba.