Multilateral institutions could only lend to Cuba if
political issues such as acceptance of the Organization of
American States (OAS) membership rules were addressed,
policymakers said in Cancún this weekend.
The OAS agreed at its 2009 assembly to readmit Cuba as a
member, reversing a 1962 decision to suspend it on the grounds
that its political system was undemocratic but Havana
declined to reapply.
Canadas minister of state for foreign affairs Peter
Kent told Emerging Markets in Cancún that his
country would like to see Cuba return to the inter-American
system. But this depends on Cuba embracing the democratic
principles and practices that are included in the
inter-American democratic charter of the OAS, he
The Cuban authorities acknowledge that things are tough, he
said, but they still feel that they can go it
alone. Tough is an understatement for the Cuban economy.
The government claims that GDP grew in 2009 by 1.4%, a number
revised down from the original 6%, but analysts believe the
number is inflated. The government admits that capital spending
dropped in 25%, after an even steeper decline the previous
Panamas deputy finance minister Dulcidio de la Guardia
told Emerging Markets his country would support Cuba
if it were to make the move to participate fully in the OAS or
Panama has a good relationship with the Cuban
government and supports the Cuban government when we can. We
have good commercial relations with Cuba and would like to see
it advance, he said.
Such sentiments of goodwill, nevertheless, would likely
require endosement by the US if Cubas relations with the
IDB and other lenders were to become normalized. This is
distant prospect, despite moves in the US Congress to normal
US Ambassador Craig Kelly, number two in the State
Department for the western hemisphere and the point man on
Cuba, told Emerging Markets that any move would be
contingent on meeting institutional criteria.
In terms of [Cuban] integration in the IFIs,
institutions have to look at you saw what happened in
San Pedro do Sul [OASs decision to readmit Cuba] last
The OAS lifted the ban that made clear that this
discussion had to take place within the context of the
principles and practices of the OAS, which include of course
democracy and human rights. Institutions have their
principles and procedures and so forth and they need to follow
them, he said.
Another issue that could become a stumbling block is
Cubas lack of credit history.
H. Scott Fairley, an attorney with Canadas Theall
Group, representing clients owed money by Cuba, said: The
issue for an international institution would be the
countrys reputation as a reliable borrower. The
experience in the private sector is that Cuba is not a good
He said that Cuba has the unenviable position of owing
a lot of money to a lot of people and a lot of corporations. It
has been able to dodge the bullet so far with sovereign debt,
but the problem is huge.