Boxy Russian-built Lada automobiles still rattle across Cuba, growing more decrepit by the year, a reminder of vanished Soviet patronage for the communist-led island.
However, more than 300 shiny new Ladas are next month slated to roll onto Havana’s potholed streets, the first in more than a decade.
Avtovaz, their manufacturer and Russia’s biggest automaker, says it hopes to ramp up exports, thanks to financing from Russian state development bank Vnesheconombank.
Illustration: Lance Liu
Flush with state funding, Avtovaz and other Russian companies are once again increasing sales to the Caribbean isle. It is part of a broader move by Moscow to renew commercial, military and political ties just as the US government is retreating from Cuba under US President Donald Trump.
Russian exports to Cuba jumped 81 percent on the year to US$225 million in the January-to-September period, official Russian data show.
That is just a quarter of the exports of China, Cuba’s chief merchandise trading partner, but growing fast.
Russian state oil giant Rosneft in May resumed fuel shipments to Cuba for the first time this century. The company’s head met with Cuban President Raul Castro in Havana on Saturday, the latest sign that the two countries are readying a major energy agreement. The nations in the past have discussed increased deliveries of Russian oil to the island and development of Cuba’s offshore oil fields.
That would be a major assist for Cuba amid slumping shipments of cheap fuel from its troubled socialist ally Venezuela.
Private Russian company Sinara last month delivered the first of 75 locomotives worth US$190 million ordered by Cuba last year. Russia’s largest truck maker, KAMAZ, has also stepped up exports to Cuba.
Negotiations for rail lines and other infrastructure are in the works.
“We can call this period a renaissance,” Russian trade representative in Cuba Aleksandr Bogatyr said in an interview.
He forecast bilateral trade could grow from US$248 million last year to US$400 million this year, one of its highest levels in nearly two decades.
Russia’s Cuba offensive comes as Trump has halted efforts by his Democratic predecessor, former US president Barack Obama, to normalize US-Cuba ties and ease the decades-old US trade embargo.
In June, Trump ordered tighter travel and commercial restrictions again, disappointing US businesses that had hoped to capitalize on the detente. In September, his administration slashed US embassy staffing in Cuba.
Moscow is seizing on that rollback as a way to undermine US influence in its own backyard, some foreign policy experts say.
“Russia sees it as a moment to further its own relationship with Cuba,” Adrienne Arsht Latin America Center director Jason Marczak said.
“The more the Russian footprint increases in Cuba, the more that it will reinforce hardened anti- US attitudes and shut out US businesses from eventually doing greater business in Cuba,” Marczak added.
Throughout the Cold War, Moscow propped up then-Cuban president Fidel Castro’s revolutionary government, providing it with billions of dollars’ worth of cheap grain, machinery and other goods. Those subsidies disappeared with the 1991 collapse of the Soviet Union. Trade plunged.
Under Russian President Vladimir Putin, who longs to return his nation to superpower status, Moscow over the past decade has sought to revive relations with Latin America, particularly with countries wary of US influence.
The turnaround with Cuba got a boost in 2014 when Russia forgave 90 percent of Cuba’s US$35 billion Soviet-era debt. It also started providing export financing to Russian companies looking to sell to the cash-strapped island.
The help has been cheered in Cuba, where Castro is due to step down next year, marking the departure of the generation that led the 1959 Cuban Revolution.
Russia might be half a world away from Cuba, but traces of its historic ties with the Caribbean’s largest island are everywhere. Older generations learned Russian and studied in the Soviet Union. At a recent trade fair in the capital, Cubans spontaneously sung along to the folk music played at the opening of the Russian pavilion.
Moskvich and Lada cars, Ural motorbikes and Kamaz trucks chug along the streets. Most Cuban farm equipment is from the former Soviet Union. That legacy alone has sustained some Russian trade.
“We sell spare parts for ground transport, some models of planes and agriculture and construction equipment,” Russian businessman Igor Leonov said.
He set up his import company, Ces Co Ltd, in Cuba nearly 30 years ago and says there is plenty of demand.
The decades-old US trade embargo has also forced Cuba to remain loyal to some Russian manufacturers. The island upgraded its Soviet-era fleet in the 2000s with Russian-built Tupolev, Antonov and Ilyushin planes.
The Moscow-based Russian Export Center regards Cuba as a “strategic region,” center executive Nadezhda Lesova said.
The center is providing support for exports to Cuba, including insurance, loans and subsidies, worth about 430 million euros (US$509.74 million), she said.
Some major deals are under discussion.
State-owned monopoly Russian Railways (RZD) is negotiating to upgrade more than 1,000km of Cuban railroads and install a high-speed link between Havana and the beach resort of Varadero, in what would be Cuba’s biggest infrastructure project in decades.
“It is expected the deal will be worth 1.9 billion euros and will be signed by the end of the year,” said Oleg Nikolaev, deputy chief executive officer at the RZD subsidiary RZD International.
Rosneft in October said it was looking at modernizing the island’s Cienfuegos oil refinery.
However, the optimistic talk could be overblown.
Venezuela and China have announced investments in Cuba that came to naught, largely due to the complications of doing business in Cuba.
Some Russian companies are already smarting from Cuba’s cash crunch.
Parts importer Ces said Cuba was behind on US$9 million in payments.
In addition, it is unclear how long Russia would continue to finance exports, with its own economy struggling amid low oil prices and Western sanctions.
Russia’s economic constraints are one reason analysts are dubious that Moscow would make good on recent proposals to reopen a former base in Cuba. Shuttered in 2001, the so-called Lourdes base was used for electronic surveillance of the US.
Still, US military experts are concerned that Russia could leverage increased economic influence in Cuba to step up its military and espionage activities on the island.
Sixteen high-ranking military officers wrote an open letter to the Trump administration in April asking it to continue Obama’s opening with Cuba for national security reasons.
“If Russia is willing to offset oil supplies from Venezuela and some other things, maybe Cuba doesn’t have much of a choice but to let them re-establish political warfare operations there,” retired US Army brigadier general David L. McGinnis, one of the signatories, said in an interview.
Former British ambassador to the Republic of Cuba Paul Hare sees Russia’s renewed interest in Cuba as geostrategic.
“It’s hard to see a business interest, as Cuba can’t pay,” said Hare, who now lectures at Boston University’s Pardee School of Global Studies. “The Russians will do just as much as they want to prop up Cuba so as to be a nuisance to the US.”
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