The Embargo Works

For those who continually repeat the same mantra that “the embargo hasn’t worked,” take a look at the billions upon billions of dollars other nations lent the Castro regime and have virtually no hope of ever getting paid back.

Via the BBC News:

Reliable figures are hard to come by, but estimates suggest that Cuba’s debt runs into many billions of dollars.

The Paris Club of creditor nations lists Cuba as its second-biggest debtor, with $30.4bn outstanding as of the end of 2009.

However, this includes money owed by Havana to the former Soviet Union. This debt has been inherited by Russia, which is now a full Paris Club member.

In the past, Russian officials have estimated the amount at about $20bn, but no updated value has been confirmed.

Outside the Paris Club, Cuba’s biggest long-standing creditor is Argentina, with an estimated $1.8bn owed, thanks to a loan granted in 1973 by the short-lived government of President Hector Campora, which lasted less than two months.

New lenders

In general, these debts were incurred during the Cold War, when Cuba was a client state of Moscow and benefited from cosy preferential trade deals.

But after the final collapse of the Soviet Union in 1991, Fidel Castro put more effort into finding new benefactors than into reforming an inefficient system.

Subsidised Venezuelan oil eventually replaced subsidised Soviet oil, as Cuba looked to President Hugo Chavez for its energy needs.

Then Mr Castro struck lucky with China, which rapidly became Havana’s lender of last resort as it racked up still more foreign debt – perhaps as much as $4bn, according to some Cuban sources.

But officials in Beijing now preside over an economy that exemplifies “socialism with Chinese characteristics” – in other words, a state-led, market-oriented system that is communist in name only.

They did not intend their loans to provide the Castros with the wherewithal to block similar changes at home.

As a result, China is now pushing for Cuba to modernise its economy and has offered the benefit of its experience, not least because Beijing is fed up with Cuba’s failure to meet its loan repayments on time.

For their part, Cuban ministers have realised that their country’s debt mountain has become too big to service – and they intend to use the party Congress to further the reform process.

If it were not for the embargo, we (as in you, me, and every other American tax payer) would have been out billions of dollars.