WikiLeaks: Cuba to be insolvent within 2-3 years

Cable's release not likely to help improve US-Cuban relations already strained by long detention of American contractor on suspicion of spying.

By ASSOCIATED PRESS
Raul Castro (photo credit: Associated Press)
Raul Castro
(photo credit: Associated Press)
HAVANA — A newly released confidential US diplomatic cable predicted Cuba's economic situation could become "fatal" within two to three years, and detailed concerns from other countries' diplomats — including China — that the communist-run country has been slow to adopt reforms.
The cable was written in February, months before Cuban President Raul Castro announced a major revamp of the island's economy, laying out plans to fire a half-million state workers and open up the island to expanded forms of private enterprise.
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The cable, sent by the US Interests Section in Havana, which Washington maintains instead of an embassy, was released Friday by WikiLeaks. It was apparently written by America's chief diplomat on the island, Jonathan Farrar.
There was no immediate reaction from the Cuban government, but the cable's release is not likely to help improve US-Cuban relations already strained by the long detention of an American contractor on suspicion of spying — not to mention 50 years of Cold War animus.
It details a breakfast meeting held by the Interests Section's chief economic officer with diplomats from some of Cuba's main trading partners, including China, Spain, Canada, Brazil and Italy, as well as France and Japan, both of which are among the island's top creditors.
"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 cable said, adding that Italian diplomats cited sources within the Cuban government as predicting that the island "would become insolvent as early as 2011."
Click here for full Jpost coverage of the latest Wikileaks
Click here for full Jpost coverage of the latest Wikileaks
Even the Chinese diplomat expressed what the cable referred to as "visible exasperation." It said the Chinese were particularly annoyed by Cuba's insistence on retaining majority control of any joint venture.
"No matter whether a foreign business invests $10 million or $100 million, the GOC's (Government of Cuba's) investment will always add up to 51%," the cable quoted the unidentified Chinese commercial counselor as saying.
The Chinese also complained about problems getting loans repaid, and in particular a Cuban request to extend from one year to four years the amount of time it has to repay credit.
The cable's confidence that the government would not enact economic reforms did not pan out. The reforms announced by Raul Castro in September are considered the most significant in a generation. Still, it is unclear if they will be enough to save the island's perennially weak economy.
The cable said Cuba's attempts at agricultural and other reform up to that point had been ineffective, and said more changes were unlikely. It said the country seemed determined to give the more control over state-run businesses to the military, and particularly Agriculture Minister Ulises Rosales del Toro, whom the cable described as Raul Castro's most trusted general.
The cable said the situation would worsen dramatically should there be economic or political problems involving Cuba's top ally, Venezuela, which the dispatch said was "increasingly unstable." It quoted the French diplomat at the meeting as saying Hugo Chavez's country "is in flames" and "a source of serious concern for Cuba."
Cuba receives billions of dollars worth of oil a year from Venezuela at greatly subsidized prices in exchange for the services of Cuban doctors and other help.