Russian private sector to play a larger role in Cuban economy 

3rd April 2023

Together with Cuba’s state owned Corporación CIMEX SA, Russian private sector interests are to open a wholesale supermarket selling Russian goods, and with Russian government funding will develop a first hotel for Russians. Additionally, a joint Russia Cuba Centre for Economic Transformation is expected to be established, and a new financial settlement system created.

In the last week the Russian news agency Interfax has quoted Boris Titov, Chairman of the Russia-Cuba Business Council, and President Putin’s Commissioner for the Protection of Entrepreneurs’ Rights, as telling the Russian media: “Many Russian manufacturers are interested in promoting their products in Cuba. We hope that the new trading house would become a single wholesale importer of products and independently determine prices on the retail market in this country.” The preliminary consent of the Cuban side has been received, we continue to expect the official signing of the contract,” he said.

The idea of a Russian trading house follows from discussions held during President Diaz-Canel’s visit to Moscow in late November 2022 (Cuba Briefing 29 November 2022).

According to Titov, the proposed ‘Rusmarket’ will sell food products, household products, and other goods. The arrangement will be based on a contract that will, he said, make it possible to resolve difficult issues with logistics, the transportation of Russian goods, and their insurance. Speaking about tourism, the Chair of the Russia-Cuba Business Council told the news agency that consideration was being given to closer cooperation with Cuba in the field of tourism.

“The flow of Russian tourists to Cuba is gradually recovering. Now we are considering the creation of a separate hotel specifically for guests from our country. Financing of such projects is possible at the expense of a fund under the Ministry of Finance”,  Interfax quoted Titov as saying. The fund referred to relates to a new offsetting arrangement for trade with Cuba through what previously has been described as “a specially formed account”.

Titov indicated that he expects a Cuban working group related to the economic reform of the Cuban economy to arrive in Moscow shortly. In January Interfax reported that the Russia-Cuba Business Council was exploring “economic transformation in Cuba based on the development of private companies.”

The forthcoming visit is expected to discuss the launch of a joint Centre for Economic Transformation, involving representatives of key Cuban ministries and the Cuban Central Bank, with Russian experts drawn from the Stolypin Institute for Growth Economics as well as the Centre for Strategic Research and the Institute for Economic Forecasting of the Russian Academy of Sciences.

Speaking about the new initiatives, Cuba’s Ambassador in Moscow, Julio Garmendia, said that Russia and Cuba are currently “in a new moment of promising relations.” In remarks to the Russian media quoted by Interfax he said that the Cuban National Assembly is preparing to develop legislation that will deepen contacts with Russia. “The main thing is that a political decision on this matter has already been made,” the Ambassador said.

As reported previously by Cuba Briefing, the Stolypin Institute for Growth Economics is a think tank with close ties with the Russian government and state academies of sciences. It conducts scientific research financed by the private sector, government, and grants from the President of the Russian Federation. Its views are broadly based on a belief in the need for the Russian economy to encourage private property and competition, cultivating markets, developing a middle class and small and medium-sized companies, and that Russia stops depending on oil.

Previously Titov, who is close to President Putin, has said that one of the proposals under consideration involves the creation of a new financial settlement system that would incorporate the trading accounts of all those participating. This would, he said, “Not only [be] a clearing centre, but, by and large, an organisation with a banking license, the main task of which is to significantly reduce the volume of cash payments. And, of course, we will have to deal with lending, leasing, and factoring”.

Separately, Cuba’s Minister of Foreign Trade and Foreign Investment, Rodrigo Malmierca, has said about the supermarket proposals being developed by Titov: “We are working to ensure that Russian investments in Cuba are subject to special protection. Despite the difficulties with liquidity, we can provide this joint venture with special treatment so that it does not have to repatriate its income.” (Background Cuba Briefing 30 January 2023).

As Commissioner for the Protection of Entrepreneurs’ Rights, Titov is in charge of protecting the rights of Russian businessmen who support the Kremlin.  In January, Titov met with President Díaz-Canel in Havana. He has previously been quoted as saying that the Russia-Cuba Business Council want to “breathe the energy of entrepreneurial initiative into these relations.” Corporación CIMEX SA is controlled by the US-sanctioned Cuban military related conglomerate GAESA.  The spokeswoman for the Russian Ministry of Foreign Affairs, María Zajárova, recently said that Moscow maintains its commitment to strengthen strategic cooperation with Cuba in multiple fields. 

Photo by Kir Simakov 

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.