Posted on Fri, Dec. 10, 2010
last updated: December 10, 2010 06:37:02 PM
Cuba's financial situation "could become fatal'' within two to three years and the country risks being "insolvent'' as early as 2011, according to a U.S. diplomatic cable from Havana made public Thursday by WikiLeaks.
The cable, however, was sent Feb. 9, before Raúl Castro's government announced it was undertaking far-reaching reforms that would cut the jobs of 500,000 public employees, slash subsidies and expand private business in a bid to jump-start the anemic economy.
Earlier this year, the U.S. view from Havana was that Cuba's leadership was "muddled and unclear, in great measure because [they] are paralyzed by fear that reforms will loosen the tight grip on power that they have held for over 50 years.''
The dispatch also predicted the Cuban military would gain economic power, and that the Cuban people would have no choice but to ``endure'' the lean times ahead.
The cable reported on a breakfast hosted by a U.S. diplomat in Havana with commercial and economic counselors from five of Cuba's largest trading partners -- China, Spain, Canada, Brazil and Italy -- plus key creditor nations France and Japan.
"All diplomats agreed that Cuba could survive this year without substantial policy changes, but the financial situation could become fatal within 2-3 years,'' the dispatch noted. "Italy said GOC [Government of Cuba] contacts had suggested Cuba would become insolvent as early as 2011.''
The diplomats also reported continuing problems collecting their Cuban debts, with the Japanese noting that after restructuring all of Cuba's official debt in 2009, Tokyo had not received any payments.
``Even China admitted to having problems getting paid on time and complained about Cuban requests to extend credit terms from one to four years,'' the cable said. ``France and Canada responded with `welcome to the club.' ''
The cable noted, however, that the Brazilians are taking a longer-term view on the return for their investments, and they claimed some success in raising capital for the refurbishment of the port of Mariel, west of Havana.
Despite their grave analysis earlier this year, none of the diplomats foresaw any meaningful economic reform in 2010 because of what the Brazilian representative said was the possibility such a move would be too ``destabilizing.''
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