Havana (AFP)

Unpaid foreign companies, creditor countries forced to wait: the target of American sanctions, the Cuban government is struggling to repay its debts, generating a certain nervousness among its partners.

After negotiating in 2015 with the Paris Club the restructuring of its debt to fourteen countries, Cuba was unable to settle all of its 2019 maturities to six of them (France, Spain, Belgium, Austria, United Kingdom, Japan ).

According to a diplomatic source, the country had to reimburse them "32 to 33 million" of the 82 million dollars due in 2019. It is now exposed to the payment of 9% interest

Faced with this delicate problem, Deputy Prime Minister Ricardo Cabrisas is responsible for reassuring: he promises that Cuba will pay by the end of May in a letter - of which AFP obtained a copy - to the Director General of the French Treasury and President of the group of creditor countries of Cuba Odile Renaud-Basso.

"They have to come up with a precise timetable," said an ambassador impatiently, admitting that the Cuban government "is having a bad time, it has no cash".

Several diplomats interviewed by AFP deplore the "precedent" thus created and say they are "worried": "They said they would pay their debts", gets annoyed one of them and, finally, "he doesn’t there is no plan, no credibility. "

"We met Cabrisas earlier this year," said another. Despite his "defeatist tone", "he told us that his country really does not want to be in default" as was the case in 1986.

- "Vicious circle" -

The island then cut itself off from international markets until the 2010s, when several countries canceled their debt almost completely: China in 2011 (6 billion dollars), Mexico in 2013 (400 million), Russia in 2014 (35 billion).

The agreement with the Paris Club has put Cuba back on track, with fourteen countries - most of them European - having agreed to erase 8.5 of the $ 11.1 billion owed. The balance has been converted to investment projects or must be repaid by 2033.

The European Union has since become Cuba's main investor and first trading partner, with trade of $ 3.47 billion in 2018.

"The incomplete payment to Paris Club creditors shows the complexity of the Cuban economic and financial situation," observes Pavel Vidal, Cuban economist from Javeriana University in Colombia.

"Cuba has had all the symptoms of a recessionary and balance of payments crisis for at least three years" and "it is difficult to get out of this vicious circle without the help of an international lender like the (International Monetary Fund), especially in the face of the escalation of American sanctions and the effects of the Venezuelan crisis. "

The country is facing the tightening of the American embargo applied since 1962, with laws penalizing foreign companies, pressures on banks and measures limiting American visits to the island.

It also suffers from the setbacks of Venezuela, its first ally and supplier of oil, while its main sources of income are at half mast.

The arrivals of tourists decreased by 9.3% in 2019, for the first time in ten years, and the sending of doctors abroad suffered from the return of 9,000 of them against a backdrop of diplomatic quarrels, particularly with the Brazil, with which Cuba has been in default since mid-2018.

According to the latest official figures, external debt jumped 53% between 2013 and 2016, to $ 18.2 billion.

- Business arrears -

"What worries me most is the other debt, that formed by supplier credits", which generally wait two years to be paid, said economist Omar Everleny Perez.

Spanish companies, the most numerous, accumulate delinquencies of 300 million euros, according to Madrid.

"Of course the US sanctions affect" Cuba's ability to repay, notes Everleny, saying that the agreement with the Paris Club is "politically important", the government "will pay".

"But that will not solve the problem in the long term," he sighs, denouncing the absence of reforms to stimulate the private sector and boost growth.

Holding a portion of the island's commercial debt worth hundreds of millions of dollars, the London Club has been trying in vain for seven years to negotiate an agreement with Cuba.

Member of the Club, the investment company CRF I Ltd has just taken legal action in the UK. "We are losing patience," says David Charters, its president. "If (Cuba) wants to have access to international financial markets again, they have to deal with it."

© 2020 AFP