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Cuba Offers to Repay Czech Debt with Rum

Cuba Offers to Repay Czech Debt with Rum

Cash-strapped Cuba has offered to repay its Cold War-era debt to then-Czechoslovakia with rum and medicine, an offer which the Czech Finance Ministry said it was considering.

The ministry, which had been negotiating a payment plan, called the offer “interesting” and was considering both the rum and the drugs, Deputy Finance Minister Lenka Dupáková told the Mlada Fronta Dnes (Youth Front Today) newspaper in an interview published Thursday.

At the end of 2015, Cuba owed the Czech Republic US$181 million (4.7 billion Czech Crowns) in principal and US$87 million (2.3 billion Czech Crowns) in interest for a total of about US$268 million (7 billion Czech Crowns), figures from the Finance Ministry show.

At least a portion of the settled debt would be reinvested in Czech engineering and technology firms to modernize aging infrastructure in Cuba, the Dnes newspaper reported.

Rum would be an easier method of payment since pharmaceutical drugs require European regulatory approvals that may be lengthy and costly, Ms. Dupáková told the daily. Still, the Czech Republic would prefer to be paid at least partially in cash, she added.

The debts stem from the Communist era when then-Czechoslovakia approved special loans to supply engineering services and military supplies to the Caribbean island nation.

The amount of rum that would equal US$268 million would be “enough Cuban rum for more than a century,” the BBC claimed without saying how it reached the figure. A contributor to Forbes believes “that claim of a century’s supply is not correct.”

Cuba imported 892 tons of Cuban rum last year at a cost of 53 million Czech Crowns, or just over US$2 million.

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