10:27 02-10-2014
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Russia writes off $32bn Cuban debt

Bishkek (AKIpress) - russia-cuba Russia's parliament has ratified an agreement to write off 90% of Cuba's $35.2bn debt to the Soviet Union, according to the Russian news agency ITAR-Tass.

The agreement, which both countries signed in October 2013, draws a line under a two-decade-long quarrel. It stipulates that Cuba must pay back $3.2 billion over a 10 year period in exchange for Russia forgetting about the remaining $32 billion.

Cuba's first payment is expected in October, and will be paid into an account opened by Russian state-owned lender Vnesheconombank at the National Bank of Cuba.

The agreement was hurried through the State Duma on the last day of its spring session on Friday, a week before President Vladimir Putin's official visit to Cuba, where he will meet Cuban President Raul Castro, and his brother, revolutionary leader Fidel Castro.

During Friday's Duma session, lawmaker Valentina Tereshkova supported the decision to cancel the debt, which was accrued in the 1970s and 1980s, reminding her colleagues that following the Chernobyl disaster of 1986, Cuba welcomed 40,000 Soviet children to its shores to aid their recovery.

Mexico recently forgave $478 million of Cuban debt, and Havana agreed to pay back $146 million over 10 years.

Cuba’s total debt was officially estimated at $13.6 billion in 2012 which is described as “active”. Other debt collected prior to its default in 1980s is referred to as “passive”.

Cuba remains a strong ally of Russia, with trade between the two countries at about $200 million last year.

After the Soviet Union broke up Russia became the legal successor to Cuba’s loans. Cuba in turn rejected this, saying that the debt was in a currency that no longer existed, and was to a country that had vanished.


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