Russia, Cuba, To Develop Trade & Investment Ties

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Cuban President Miguel Diaz-Canel has been in Moscow meeting with Russia’s President Vladimir Putin to discuss the development of trade, security and investment ties.

Russia actively participates as a strategic partner for Cuba, financing prioritized projects for Cuban National Development and has linked these investments to Cuba’s 2030 Economic and Social Development Plan in various Cuban sectors, including energy, the bilateral agenda consolidates exchanges and contacts for the advancement of joint projects.

These include the construction of four 200-megawatt thermoelectric blocks, three at the Ernesto Guevara thermoelectric plant in Santa Cruz del Norte and one at the Máximo Gómez plant in Mariel Port as part of the Russian-Cuban cooperation, in addition to the Zarubezhneft project aimed at increasing extraction in the Boca de Jaruco deposits, in the northwest of Cuba. In infrastructure, Russia has been upgrading Cuba’s national railway system.

Russia is developing as one of Cuba’s main trading partners, rising to fifth position in 2021, backed by a 93% increase in trade compared to 2020.

Energy will be a large part of future development, with the aim of lifting Cuba to a large degree of self-sufficiency. Speaking at the Russian-Cuban Intergovernmental Commission for Trade, Economic, Scientific and Technological Cooperation, Russian Deputy Prime Minister Dmitry Chernyshenko and Cuban Deputy Prime Minister Ricardo Cabrisas, attention was paid to this with Chernyshenko stating that “Energy is a key sphere of bilateral cooperation. Joint projects, including efforts to boost oil production at the Boca de Jaruco field, will help reduce Cuba’s dependence on oil and petroleum products imports.”

Chernyshenko said that additional projects to modernise a metallurgical plant and to deliver locomotives, vehicles and other equipment are being developed as part of industrial cooperation. This year, direct charter flights between Russia and Cuba resumed, which have been positively received. Chernyshenko said “We consider it important to develop mutually beneficial cooperation in healthcare and to strengthen Russian-Cuban interaction in IT. I am sure that meetings like this one will facilitate expanding sectoral cooperation between our countries and bring it to a new level.”

The two countries cooperate in agriculture, in particular, on deliveries of food-grade wheat. Agricultural products traditionally rank at the top of Russian imports from Cuba. Agro-industrial products make up over 60 percent of Russian exports.

Russia is also looking for maintenance contracts to help rebuild and repair some of Cuba’s Soviet-era infrastructure. There is a lot of Soviet and Russian made civilian equipment in Cuba, including infrastructure facilities previously built with Moscow’s assistance. Contracts for the maintenance of that equipment and infrastructure are also of interest to Russia. The countries have de-dollarized their trade, while Cuba is accepting Russian MIR payment cards to facilitate tourism. Increasing numbers of Russian tourists are visiting now that direct flights have begun operating and European and US destinations are now off-limits to Russian travellers, who due to sanctions, are unable to use US and EU issued bank cards.

Other developments indicating bilateral trade will show substantial future improvement are that Cuba has joined the Eurasian Economic Union as an Observer nation – a status that will allow it access to other EAEU member states and ultimately, sign off a Free Trade Agreement. The EAEU is also discussing the establishment of a Special Economic Zone at Mariel Port. This will be attractive to Russian and Cuban manufacturers looking to export to other LatAm markets.

Bilateral trade figures are relatively small between the two countries at about US$250 million per annum, with 80% of that in Russia’s favour. Typical Russian products exported to Cuba include transport and power equipment, while Cuba exports sugar products, fruits and rum. Given the development of Russian investment into Cuba, the increase in tourism, and export trade development, it can be expected that Russian investments into real estate and support businesses for Russians in Cuba will begin to accelerate.

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