Cuba has begun reconciling with the Paris Club of creditor nations after a nearly three-decade-long divorce, moving to put its financial house in order as it opens up to the world economy.
“We are going to finish the reconciliation in a few more weeks, and some weeks or months later we will have a negotiation,” club chairman and French Treasury Director-General Bruno Bezard said.
“We have advanced rapidly. There is a will from Cuba and its creditors’ part to complete this work,” said Bezard, who was in Havana with French officials preparing for French President Francois Hollande’s May 11 visit to the island.
The Paris Club is an informal group of public creditors created in 1956. Its members include officials from 20 industrialized countries who meet to try to resolve payment problems of debtor nations.
Cuba’s debt is expected to be on the agenda for the visit by Hollande, the first by a French president, and it is possible part of it would be forgiven, something Russia, Japan and Mexico have done in recent years.
Bezard estimates Cuba’s debt with the Paris Club at US$15 billion to 16 billion, of which US$5 billion is owed to France.
Cuba stopped servicing its debt with the Paris Club in 1987, alleging “interference” in its domestic political affairs by some of its creditors.
The entire size of the Cuban debt is not known, but is believed to exceed US$22 billion.
Cuban President Raul Castro, who took over from his brother Fidel in 2006, began normalizing relations with creditors in 2009 as part of an effort to revamp the island’s Soviet-style economy.
The objective has been to generate confidence, gain access to credit and attract foreign investment.
Cuba begins a new round of talks in Havana tomorrow with the US over restoring diplomatic ties between the two countries. The restoration of ties could eventually help lead to the lifting of the US embargo of the nation and further open Cuba up to the global economy.
“For Cuba, it is essential to put in order its international financial commitments. That would be the logical step in the policy of more prudent management of spending in effect since 2009,” said Cuban economist Pavel Vidal, at the Universidad Javeriana in Cali, Colombia.
Former economy and finance minister Jose Luis Rodriguez said Cuba paid an average of US$3.2 billion per year to service its debt between 2010 and last year, which represented 4.7 percent of Cuba’s GDP.
“This policy of control over expenditures and the other reforms underway allows Cuba to negotiate with international creditors on the basis of financial credibility, which it has been rebuilding little by little,” Vidal said.
The experts say putting Cuba’s finances on sounder footing should enable it to move away from policies that impede economic growth and consumption, to more expansionary policies.
“Receiving new financing as a result of the renegotiation of the foreign debt helps ensure that the change in economic policy does not affect macroeconomic balance,” Vidal said.
“It would be better yet if not only loans come in, but investments that bring new technologies and access to the global value chains,” Vidal said.
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to