According to the South China Morning Post, Cuba’s Deputy Prime Minister Alejandro Gil stated on November 26 that China had given the island nation a $100 million donation to help it endure a dire economic crisis.
Cuba has been suffering basic goods shortages exacerbated by the coronavirus pandemic. This has resulted in large-scale emigration. From October 2021 and September 2022 alone, more than 220,000 Cubans – about 2% of the nation’s population – were arrested at the U.S.-Mexico border.
It is also dealing with an energy crisis worsened by Hurricane Ian, which devastated the western Pinar del Rio province in September.
The donation came as Cuban President Miguel Diaz-Canel concluded a visit to China and he then continued on a global tour set to gain support for Cuba in renovating an electrical system.
After Venezuela, China is Cuba’s second biggest trade partner. As reported by Chinese tabloid Global Times, this island nation has become an active practitioner in Belt and Road Initiative (BRI). Two nations signed a memorandum of understanding in 2018 to jointly promote the construction of the BRI. In December 2021, both sides signed a cooperation plan to jointly promote BRI construction on different projects, such as infrastructure, technology, culture, education, telecommunications and energy. However, according to analysts and diplomats, Cuba’s failure to meet restructured debt payments.
Cuba is now a distressed debt investor, suffering a grave foreign exchange crisis.
According to Reuters, Cuba’s foreign debt was $18.5 billion in 2018, and $19 billion in 2019 and experts believe it has risen since then. Its investment partners reported serious payment issues. For example, the 2015 Paris Club agreement with Havana forgave $8.5 billion of $11.1 billion in sovereign debt Cuba defaulted on in 1986. Cuba pledged to pay back the remainder in annual installments until 2023. However, it only partially met its obligations in 2019 and went to default again in 2020.
Cuba has also restructured debt with other commercial debt holders from other nations, such as Russia, Germany, Mexico, and Japan.
Reuters quoted a diplomat’s saying, “It’s my understanding most of those payments are also on hold.”
Regarding the new China funding to Cuba this time, Gil said, “We are going to find mutually acceptable formulas for the ordering and restructuring of debts.”
As The Diplomat noted, “Chinese companies have played a key part in building Cuba’s telecommunications infrastructure, a system the regime uses to control its people, just as the CCP does within its own borders.”
CCP launched the BRI in 2013 to build a regime-centric land and maritime trade network by funding infrastructure projects throughout Southeast Asia, Africa, Europe, and Latin America. In recent years, critics have condemned the regime’s use of “debt-trap” diplomacy to entice countries to join its BRI.Concerning the dangerous initiative to Cuba, The Epoch Times asked, “Will the Latin American nation come to regret this decision?”