By Ishaan Tharoor
The Washington Post
According to authorities in the Czech Republic, the government of Cuba has proposed resolving a Cold War-era debt by paying the Czechs in a treasured Cuban commodity: rum.
On Thursday, Czech Finance Ministry spokesman Michal Zurovec said Cuban officials had offered paying back $276 million in the form of rum, reported the Associated Press. The debt dates back to when both Cuba and then-Czechoslovakia were firmly within the Soviet geopolitical orbit.
Zurovec said his government is weighing the offer, but would prefer at least partial repayment in cash.
Cuba, a communist isle stifled for decades by a U.S. embargo, is saddled by a tremendous amount of external debt -measured at the end of 2014 to be about $24.7 billion, or 31 percent of the country’s GDP. In the 1970s and 1980s, Cuba took out development loans from private, non-U.S. banks and then defaulted in 1986.
In recent years, it managed to reach agreements over debt forgiveness from a string of major countries, including Japan, Mexico and Russia, which wrote off $32 billion in Soviet-era debt in 2014. Last year, a group of 14 nations, mostly wealthy European countries, jointly decided to give Cuba “extraordinary debt relief,” forgiving some $8.5 billion in debt while restructuring the repayment of some remaining $2.6 billion over the next 18 years.
This week, the European Union normalized relations with Cuba, opening up the way for further foreign economic investment in the Caribbean nation.
With thousands of independent claims lodged in U.S. courts, the Justice Department says Cuba owes at least $1.9 billion as a result of its nationalizing of American-owned businesses and expropriating of U.S.-owned property in the wake of the communist takeover under Fidel Castro in 1959 – a figure closer to $8 billion, once interest is factored in. The Cubans counter that the United States owes Havana “billions of dollars” for its embargo and strangling of the Cuban economy.
If the Czech Republic accept Cuba’s offer of $276 million worth of rum, it would be rolling in the booze for decades to come. According to the AP, the Czechs import around $2 million of Cuban rum every year.
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