Anti-Castro Group’s Report : Cuba Is Reselling Sugar to Russia

Cuba has been buying cheap sugar on the world market and reselling it to the Soviet Union, reaping a sevenfold profit on the deal, according to a report that an anti-Castro group said was written by the central bank of Cuba to its Western creditor nations.

Cuba has also been reselling cheap oil that it gets from the Soviets at prices high enough to have provided $850 million over two years--40% of its export income, the report said.

The 64-page document, written in English and dated February, 1985, was provided to reporters by the Cuban-American National Foundation. Its director, Frank Calzon, said a European banker was the source for the report.

A State Department official concerned with Cuba said he believes the document is genuine and called its contents “incredibly frank.” He said the sugar and oil disclosures indicate that the Cubans are “ripping the Soviets off. That they should say it publicly is incredible.”

A spokesman for the Cuban government said that such documents are routinely provided to the Paris Club but that he did not know whether this one was an official presentation. He said the Soviet Union is aware of Cuba’s sugar-purchasing and oil-resale arrangements and has no objection.

The report was addressed to the Paris Club, an informal group of creditor nations that deals with rescheduling the government debts of financially troubled countries. The document blamed Cuba’s “extremely adverse conditions” of trade in part on rock-bottom world sugar prices, now at 3.5 cents a pound, but quoted President Fidel Castro as promising Dec. 6 to honor all of Cuba’s debts.

The State Department official said this was “ironic” because Cuba has urged other Latin American debtor nations to refuse to repay their loans to U.S. and European banks. The Cuban government spokesman said Cuba’s conditions are very different from those in other debtor nations.

Cuba owes about $3 billion to private and government banks worldwide, primarily in Japan, Great Britain, France, West Germany, Spain and Canada, according to the report. Cuba suspended payment on the principal in 1982 and has obtained a rescheduling of part of the interest due every year since.

The report asked the Paris Club to reschedule Cuba’s payments on “terms which compare adequately with those that are being granted to other debtor countries in Latin America,” such as longer repayment schedules, lower interest rates, reduced spreads and commissions and new credits to pay interest costs.

It also asked creditors to open access to their markets, ease trade and technology restrictions, push tourism in Cuba and provide $30 million for more than 100 studies of ways to boost the Cuban economy.

In return, it promised “a greater reduction in material consumption, especially energy, greater efficiency in the productive process, a rational replacement of imports, and above all, the implementation of a bold program to increase and diversify exports.”