Cuba-Russia business forum agrees measures to significantly strengthen ties

22 May 2023

Russia and Cuba have agreed at a business forum in Havana a series of economic and commercial measures that suggest that investment and trade relations with Russia may now deepen significantly.

Remarks made there by Russian Deputy Prime Minister, Dmitri Chernishenko, and Boris Titov, the Russian Presidential Commissioner for Entrepreneurs’ Rights and Co-Chair of the  quasi-official Russia-Cuba Business Council, indicate Cuba is prepared to offer Russian enterprises unique concessions to encourage private investment in sectors including agriculture, agribusiness, rum, construction, transportation, and tourism,

During  the forum Chernishenko confirmed that: “The Governments of Russia and Cuba are working to create beneficial conditions for business, which means removing bureaucratic barriers, reducing taxes and tariffs, developing banking infrastructure to guarantee uninterrupted service of contracts, active work in expanding access to agricultural products in the market of both countries, and the development of logistics routes that meet the demands of our companies.” 

He also indicated that Russia is willing to propose comprehensive solutions in relation to digitisation, construction, and modern technologies, and in what he described as a most attractive sphere for Russian investment, tourism.

The event was notable for comments made in relation to incentives aimed at attracting Russian private investment.

During the opening session Titov alluded to land in usufruct being made available to Russian agricultural producers for 30 years, related tax exemptions, and several possible tariff and other incentives aimed at attracting Russian private investment, including new mechanisms to repatriate profits to Russia, and the development of a shipping line to facilitate Russia- Cuba trade. 

In addition, Russian Deputy Prime Minister Chernishenko referred to the creation of a banking infrastructure that will enable trade and a Russian business presence in Cuba, and to Moscow’s help in the modernisation of  Cuba’s inefficient sugar mills. He also announced that scheduled direct air services would restart soon (See Russia Below).

In addition, a statement by the Russian government quoted him as saying that Cuba had given the green light for Russian banks to open subsidiaries to finance Russian companies on the island and that both countries will use the Rouble for their joint projects.

Chernyshenko said that the Forum had made it possible to conclude agreements that should result in greater Russian collaboration in construction, tourism, sugar as an agro-industry and energy. He also noted that Cuba remained one of Russia’s principal allies and partners in the Latin American and Caribbean region, based not on the external situation but on principles of friendship and mutual respect.

In other  published remarks, Chernishenko said that “work is underway to inaugurate a Russian House of Commerce in Havana, which will provide a wide range of high-quality products for Cuban consumers.” He also noted that the upgrading of Cuba’s Antillana de Acero steel plant with Russian finance had been completed and it is expected to produce some 230,000 tons of liquid steel per year.

At the end of the meeting, eight documents were signed, including an Action Plan for the period 2023-2024, a memorandum relating to discussions in a joint macroeconomics working group, another on collaboration in relation to artificial intelligence, a contract for the supply of wheat, and letters of intent relating to joint ventures, including one for the development of a Russia-Cuba rum company.

Meetings described as offering new possibilities for Cuba

Speaking at the close of the Forum, Deputy Prime Minister Ricardo Cabrisas described the event as constituting “a milestone in the history of our bilateral relations in general and in business relations in particular.” He noted that new and greater possibilities were opening with Russia.

The meeting, he said, provided an ideal space for dialogue and business to strengthen ties between both nations demonstrating the will of both governments to raise their economic relations to the level of their political relations. Concrete agreements had been reached.

In his remarks Cabrisas emphasised that it was now up to the Cuba-Russia Business Committee, which he Co-chairs  with Titov, to lead and follow up the agreements and commitments adopted. He also underlined Cuba’s desire to reverse the existing imbalance in trade through increasing non-traditional Cuban exports to Russia. He also noted the significance to Cuba of Russia’s future support in relation to the supply of oil, raw materials, and technology, in helping change the island’s energy matrix, and in relation to tourism.

The forum, he said, enhanced not only relations between Russia and Cuba, but also between Eurasia and Latin America, as the two nations were central to interregional ties. He confirmed that Cuba’s Prime Minister, Manuel Marrero, will participate in the next meeting of the Council of the Eurasian Economic Union to be held in June  in Sochi in Russia.

According to the Cuban Presidency website, President  Díaz-Canel, who attended the closing ceremony of the Forum, highlighted during a later meeting with Chernishenko what was described as “a new moment in relations between the two countries”. It quoted him as saying that Cuba valued “the understanding that Russia has had, particularly President Putin, about the situation in Cuba” and its willingness to rapidly follow-up rate the agreements derived from the talks held when he visited Russia last year (Cuba Briefing 29 November 2022).

Noting that the follow up action had been “intense”, he said that Russia’s response would contribute “towards the realisation of projects that provide comprehensive solutions to Cuba’s problems and that are mutually beneficial for the two nations.”

“There is no doubt that we are in a very particular, very special moment in our bilateral ties.” “We ratify our willingness and desire to continue expanding relations”, Díaz-Canel told Chernyshenko.

The Presidency website quoted Chernyshenko as noting in reply, the intensity of the bilateral meetings in recent months, and as highlighting “the preferential treatment that is being given to relations between Cuba and Russia.”

Boris Titov outlines far reaching concessions for Russian business

During the Forum, Boris Titov, the Russian Presidential Commissioner for Entrepreneurs’ Rights, who co-chairs the Russia-Cuba Business Council and is close to President Putin,  was reported by Sputnik, the state linked Russian media platform, as having confirmed that Cuba is ready to provide more favourable conditions for Russian businesses than are available to investors from elsewhere.

Sputnik quoted him as saying: “Cuba is transforming, mastering new rules for interaction between the state and business. The Cuban authorities are ready to provide special conditions to Russian businessmen.”  The most favourable conditions being offered to Russian business, Titov said, “concern both long-term land leasing and duty-free importation of agricultural machinery, granting the right to transfer foreign exchange earnings, and much more.” Adding: “Of course, we are also waiting for the reduction of bureaucratic barriers.”

The online platform also quoted him as highlighting the fact that problems remained relating to transport, but that Cuba and Russia were working together to “establish permanent maritime lines for the supply of goods.” He also noted that under discussion were “subsidised loans from the Russian government”, that three Russian banks had requested registration from Cuba’s Central Bank to establish branches in Cuba, and that  Cuba had confirmed its interest in doing so.

The Russian news agency TASS separately quoted Titov as saying that plans were being developed to create a joint Russian-Cuban bank to finance independently managed Cuban SMSES. “We believe that it is necessary to open large-scale joint banks. Today the number of entrepreneurs in Cuba is growing and they need their own professional bank that can support a business project, finance small and medium-sized enterprises,” Titov said. He also noted that to this end proposals had been presented and that rapid progress is expected.

According to TASS, Titov confirmed that as of June it will be possible to pay for goods and services in Cuba using Russia’s Mir payments system through its credit and debit cards, but that consultations are due to take place soon in Moscow about a fast payments system being developed by Cuba using QR codes.  “Cuba has its own system of fast payments through a QR code. Cuban representatives will soon go to Moscow for a consultation with the Central Bank and, probably, an interaction will be established to unify the system of fast payments through a QR code,” the news agency quoted Titov as saying.

Other Russian media and western news agencies indicated that during the forum Titov confirmed joint plans for the opening soon of a store selling Russian products to Cubans; expedited processes to establish  mixed Russian-Cuban companies; and the possibility of business operations in both the Rouble and the Cuban Peso. “A lot is being done for Russian investors, there are preferential conditions,” Titov was quoted by AP as saying.

Some of the legislative issues required to make these concessions are believed to have been discussed when Vyacheslav Volodin, the Chairman of Russia’s State Duma (lower house) recently visited Havana and met with the President of Cuba’s National Assembly, Esteban Lazo, and others (Cuba Briefing 8 May 2023). Such changes by press time had not been reported in Cuba’s state media.

The business forum was attended by 52 Russian businesspeople and about 100 Cuban companies. A Russian Government statement indicated that Moscow intended “to do everything we can to help get the Cuban economy to a decent level”

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

Photo: Prensa Latina