On December 12, Cuba concluded a “historic accord” regarding its outstanding loans to the Paris Club, an informal group of countries that give credit to developing countries. After two years of negotiations, an agreement has been reached to restructure the debt owed to 15 states since Cuba’s default in 1986. One such caveat of the new pact pledges that Cuba will pay the $2.6bn owed to France over the next 18 years (assuming that it is financially able), while the cumulative interest of $4bn has been waived.
The conclusion of the talks and the normalisation of relations with Cuba’s debtors indicates another milestone in the state’s reintroduction to the global economy
“This accord helps to definitively resolve the issue of Cuba’s medium-term debt… which has not been honoured since the 1980s,” said French Finance Minister Michel Sapin, according to the AFP.
At present, a total of $11.1bn is owed to the UK, France, Japan, Russia, Canada, Australia, Italy, Spain, the Netherlands, Switzerland, Belgium, Sweden, Denmark, Finland and Austria. The majority of Cuba’s debtors have shown great flexibility in the talks, which can be attributed to their growing interest in doing business with the Caribbean island.
The conclusion of the talks and the normalisation of relations with Cuba’s debtors indicates another milestone in the state’s reintroduction to the global economy. The long-awaited process started one year ago, to the surprise of the international community, when the US and Cuba announced the restoration of their diplomatic relations. In the months that have followed, the two states have struck other agreements also, including the loosing of telecommunication restrictions and a joint project for marine conservation.
Despite the year-long détente, a strict trade embargo with the US still exists, which is continuing to stunt the financial growth of the communist state. That said, the end seems more likely now than ever before. And when trade restrictions with the US are finally eradicated, Cuba will benefit from a huge economic boost, including a new impetus its vital tourism sector, which is expected to triple to nine million tourists a year.