Putin Writes Off $32 Billion of Cuba's Debts to Russia

[Mugwop]

Russian President Vladimir Putin is currently on a grand tour of Latin America. His first stop is in Havana, Cuba. Ahead of arriving in Cuba, Putin decided to bestow a gift upon the Cuban government. With one swift signature, he eliminated $32 billion of Cuba's debt, left over from the Soviet era.

Cuba isn't completely off the hook. They will be required to pay back just $3.2 billion over the next ten years, a 90 percent decrease from what they previously owed. The first payment is due in October, and will be made from the National Bank of Cuba to the Russian lender Vnesheconombank.

Cuba has been working to restructure its debt over the last few years. In 2011, Cuba was able to restructure a $6 billion debt with China. Other nations have also forgiven their debt. In 2012, Japan forgave $1.4 billion and more recently, Mexico forgave $478 million in debt.

While it may be nice to think Putin was simply showing a kind gesture to the Cuban government in forgiving this debt, it may be motivated by oil. Right now, the Cuban state oil company CUPET and Russia's Rosneft are in negotiations for a very lucrative deal. Russia and Cuba are close allies. Last year, trade between the two countries totaled about $200 million.

Cuba has oil reserves of between 4 billion and 20 billion barrels, though likely in the area of 9 billion barrels. With the oil price at $110 per barrel, this deal could bring around $900 billion. This is comparable to the deal Rosneft currently has with Exxon Mobil in the Arctic. As Russia stands to earn $900 billion (perhaps more) from Cuba in oil, forgiving a $32 billion debt may be worth it to push contract negotiations in Russia's favor.
Putin Writes Off $32 Billion of Cuba's Debts to Russia - The Wire

 

[Chinese-Dragon]

Wow, $32 billion is a massive amount to write off.

But the Russians can certainly afford it, and they may even turn a profit in the end, due to the upcoming Russia-Cuba oil deal.

 

[arp2041]

Wow, $32 billion is a massive amount to write off.

But the Russians can certainly afford it, and they may even turn a profit in the end, due to the upcoming Russia-Cuba oil deal.

Maybe Cuba paid him few billions in return??

 

[C130]

writes off debt that Cuba could never pay off, good guy Ivan.
here's hoping China writes off our debt as well

 

[general_yermolov_stalin]

writes off debt that Cuba could never pay off, good guy Ivan.
here's hoping China writes off our debt as well

The way I see it ,we are heading for nuclear war. But then Russia has always survived massive genocidal and apocalyptic wars for centuries. We will survive this one also.Though I will say that the urban population of Russia will be written off. But the small town and rural will survive WW3 and will rebuild Russia after the coming great nuclear war.

 

[UKBengali]

Cuba has a population of only 11 million.

9 billion barrels of oil could easily help them become a rich country if used correctly.

 

[C130]

The way I see it ,we are heading for nuclear war. But then Russia has always survived massive genocidal and apocalyptic wars for centuries. We will survive this one also.Though I will say that the urban population of Russia will be written off. But the small town and rural will survive WW3 and will rebuild Russia after the coming great nuclear war.

bro, no one wins with nukes
no second chances no do overs.
to win is not to play in the first place
that cold winter in siberia will just get even colder with a nuclear winter

 

[JohnyD]

Warning to US....Cuban crisis could happen again if US mess with Russia!

 

[AZADPAKISTAN2009]

wow Generosity of Putin is now greatest in world