Between the few hours that Cuba was off the list of state sponsors of terrorism and the return after the signature of the brand-new Trump, a piece of really good news slipped in: having managed to renegotiate the debt that the country has with the so-called Paris Club, that which had already been renegotiated in 2015, after decades in moratorium.
The arrival of Trump to the White House, from my perspective, will substantially increase the uncertainty, the fear, the caution of “doing business with Cuba,” of thinking about investment projects, of opening lines of credit.
I always tell myself that the toughest exercise that some Cuban government will have to face one day will be when the sanctions are eliminated; when some U.S. Congress finally lifts the blockade and revokes the Helms-Burton Act.
Although the renegotiation with the Paris Club does not compensate for Trump dissolving Biden’s late decision, renegotiating the debt offers us a magnificent opportunity and its positive effects go beyond the borders ― and the wallets ― of the Club’s member countries.
The new agreement, whose announcement has just been known, should help generate some confidence in potential creditors of the member countries and others, which is more than necessary if we want to reverse several years of negative growth, including the current one.
Without growth, there will be no possible development, no reduction in poverty, no improvement in equity, except if it is leveled down ― which we are experts at. And the promised prosperity will continue to be, at best, like the horizon, an imaginary line that moves away from us as we approach it.
Our country is trapped in a vicious circle of decline, motivated, among other causes, by this low GDP dynamic, which in turn conditions the weakness of internal savings, which leads to low rates of national investment in a loop that feeds this vicious circle again.
To this we must add the well-known erroneous allocation of scarce investment resources in sectors where they can hardly be recovered in the estimated time.
Not only foreign investment
Incentivizing national and foreign private investment is one of the ways to break this vicious circle.
Giving national, private and/or state investors the same opportunities that are currently discreetly granted to some foreign companies in the commercial sector, in the agricultural or fishing sector and in infrastructure sectors should be an obligatory rule, because our country must grow with its own forces as well.
Finding new foreign partners will only make the effect lasting if the “national partners” join and are encouraged to join rather than being forced to step away.
The agreement with the Paris Club could be an opportunity, and taking advantage of it in time will depend on the institutional capacity to convince current and future foreign creditors.
It will also depend on that same institutional capacity to create incentives for national investment, even when it is small, and to generate the confidence that is essential for those potential national investors to decide to risk their money in our market.
We are doing badly, it is very true, but we can do well. We do not have to wait for them to “let us do it”; we have to do it, even if they don’t let us.
