German Economics Minister Upbeat About Cuba
By Manfred Schäfers
HAVANA. Germany's economics minister emerged from a six-hour meeting with Cuban leader Fidel Castro on Tuesday determined to increase trade between the two countries.
"I would like to do what I can to smooth the way for German companies wishing to invest in Cuba," said Werner Müller, only the second current German cabinet member to visit Cuba. Development Minister Heidemarie Wieczorek-Zeul preceded him last year.
At the meeting, he pointed out that more scope for foreign investors would be a good thing. Even so, Mr. Müller said he was upbeat about the future.
In lengthy statements on subjects not directly related to Mr. Müller's visit, Mr. Castro reportedly denounced the planned Free Trade Area of the Americas as an "annexation of South America by the United States."
At the start of his on Monday, Mr. Müller criticized the fact that Germany, the world's No. 2 exporter, was lagging behind other countries in trade with Cuba.
"I would like to see significantly more joint projects realized," he said at the unveiling of a production site. Nothing stands in the way of increased German economic activity in Cuba, he said, since the two countries signed an agreement protecting investments several years ago.
Germany's bilateral trade with Cuba is marginal. Total trade volume between the two countries totaled DM240 million ($105 million) in 2000. German exports to Cuba grew by 7 percent to DM138 million, while German imports from Cuba expanded by 36 percent to DM103 million.
On Tuesday, Mr. Müller also said German companies would find excellent conditions in Cuba, praising the country's "high standards of training and education." Moreover, he said, the Cuban government is gradually improving framework conditions for the country's economy.
Just before Mr. Müller's arrival on Monday, Cuba transferred an overdue installment under its debt rescheduling arrangement with Germany. Guarantees from Germany's state export credit insurance agency, which has given Cuba its lowest credit rating, are tied to these payments. Exporters are only insured for the risk of default on loans of up to one year, and individual transactions are insured up to a maximum of DM1 million.
"If the insurance ceiling of DM25 million is not enough, it will certainly be raised," Mr. Müller said. Germany and Cuba signed a rescheduling agreement on DM230 million of debt last May, with repayment periods of up to 21 yearHowever, Mr. Müller also referred to Cuba's economic shortcomings. He brought up the case of a tourism manager who said that one hotel's air-conditioning system was always breaking down because the country's customs authorities had withheld the necessary spare parts for two years.
The manager also cited the example of a nuclear physicist who worked as a bartender to survive. Instead of the average salary of $15 per month, bartending allowed him to earn up to $10 in tips every day, making him a rich man by Cuban standards, said the manager. Since Cubans face constant food shortages, every hotel employee also receives an additional, monthly package of staple foods, he added.
Cuba is striving to increase its supply of foreign currency from tourism. By 2005, the number of foreign tourists visiting the Caribbean island is supposed to grow to 3 million annually, 50 percent more than today. The number of German tourists has already doubled in the last three years to just under 200,000 annually.
Cuba urgently needs this tourism: The country has accumulated $11 billion in foreign debt. Last year, Cuba exported goods totaling $1.6 billion in value and imported $4.8 billion in goods.