Cuba reported financial reserves for the first time in history
2023.01.17 15:41
Cuba reported financial reserves for the first time in history
By Kristina Sobol
Budrigannews.com – An estimate of Cuba’s international reserves, long regarded as a “state secret” there, has been published by the state-run media, causing a stir among economists, diplomats, and creditors.
Insider and former economy minister Jose Luis Rodriguez estimated that the country’s international reserves would decrease by $2.5 billion, or 22%, through 2021 in a two-part, 2,000-word analysis of the economy published earlier this month on Cubadebate, the country’s leading digital media platform.
Another senior and well-connected economist, whose name has not been used, recently gave Reuters access to an unpublished presentation that put reserves at $8 billion in 2022, broadly in line with the data in CubaDebate.
A request for the number to be confirmed was not received by the Cuban government.
Cuba says that the delay is necessary to avoid further economic persecution from its long-time adversary, the United States, so it does not publish reserve data and only publishes very limited current account and debt figures every three years.
According to Cuban economist Omar Everleny, who, like others interviewed for this story, was unable to independently confirm the figures, “This data shows international reserves have declined a lot, and that is very serious.”
According to Rodriguez in CubaDebate, reserves suffered as a result of the coronavirus pandemic and the harsh new sanctions imposed on Cuba by former US President Donald Trump.
Cuba is importing food, fuel, spare parts, industrial and agricultural inputs, and spare parts from other countries using its precious reserves, whose economic activity is still 8 percent below 2019 levels.
When diplomats received what appeared to be an official document in 2014, it was the last time any reserve figures were revealed in Cuba. The data at the time put them at $10 billion.
The ability of the Cuban government to repay its creditors is shown by the reserves data, which is another reason why they are important.
In 2020, Cuba stopped making payments on its debt to groups like the Paris Club of rich creditor nations and said it was behind on payments to many partners in joint ventures and suppliers.
A participant said that the data published in CubaDebate was on the agenda last week at the monthly meeting of economic attaches for members of the European Union in Havana. They said they were still unsure why the numbers were released and how they were calculated.
He requested anonymity and stated, “None of my colleagues had information to support this statement of Rodriguez.”
The released figures may have combined central bank reserves with other hard-currency holdings, according to former Cuban central bank economist Pavel Vidal, who is now based in Colombia. Vidal anticipated that reserves would be significantly lower.
He stated, “If they are talking about money saved by the State, that would be a very broad definition… because companies, commercial banks, and non-bank financial institutions may be included and many things can be added.” “If they are talking about money saved by the State,” he added.
“However, what the data do show is that reserves are decreasing, which is bad news for any nation.”
