Mother Russia Likes What She Now Sees in Cuba

Mother Russia Likes What She Now Sees in Cuba
Wednesday, 2 May 2007, 11:35 am
Opinion: Council on Hemispheric Affairs

Council On Hemispheric Affairs
MONITORING POLITICAL, ECONOMIC AND DIPLOMATIC
ISSUES AFFECTING THE WESTERN HEMISPHERE
Tuesday, May 1st, 2007
Cuba, Reports

The following article was simultaneously published by the e-journal
Cuban Affairs (http://www.cubanaffairsjournal.org), the publication of
the University of Miami's Institute for Cuban and Cuban American
Studies. In revised form, it is being also released by the Council on
Hemispheric Affairs. W. Alejandro Sanchez Nieto is a Research Fellow
with COHA. Continuing with his interest in Russian foreign policy
issues, a forthcoming article, "A Central Asian Security Paradigm:
Russia and Uzbekistan," will appear in an upcoming issue of the journal
Small Wars and Insurgencies.

• Moscow's resurgent ties to Cuba represents an important new direction
for Russian foreign policy
• New relationship could auger renewed Russian geopolitical penetration
of Cuba
• This time the leitmotif of Moscow policy will be driven by a
tit-for-tat impulse rather than Cold War ideology

Relations between Cuba and the former Soviet Union amplified during the
early 1960s, reaching their culminations in October of 1962 during the
Cuban Missile Crisis, which put the world at the brink of a nuclear
conflict between Washington and Moscow. Some thirty years after that
fateful confrontation, the dissolution of the Soviet Union brought about
the end of the Cold War. During the ensuing period of frosty relations
between Moscow and Havana, a gradual rapprochement between the USSR's
heir, the Russian Federation, and Cuba began. Today, it is important not
to view current Moscow-Havana ties through a Cold War-prism, but through
other dynamics now at work that reflect the global relations have
dramatically changed in recent years, despite the ongoing contest among
world powers in economic, political, and military spheres. Today, Moscow
is determined to demonstrate that a unipolar world defined by the U.S.
does not exist, with geopolitical ties to Latin America being an
important venue to prove this conclusion.

Defining the Situation Today
Contemporary relations between Russia and Cuba no longer remotely
resemble those of an imperial power decreeing its edicts to one of its
satrapies, but rather that of two fully sovereign nations. They see that
it is in their respective national interests to renew a cordial
dialogue, as well as prepare to engage in a full range of relationships.
This rapprochement mainly has to do with economic initiatives set in a
historical and geopolitical framework. Ineluctably, Moscow-Havana's
gravitational pull will become a function of the extent of Russia's
growing political hostility towards Washington.

Russia historically has been a consistent supporter of Havana in
condemning the United States' longstanding embargo of the island. As an
expression of this default solidarity, and in order to improve
relations, there have been a number of important high-level visits
between the two governments in recent years. Regarding trade, there has
also been a steady, if not modest, growth of Russian investment in Cuba.
Steps such as the hallmark moment of extending a $355-million credit to
Havana and promoting Russian tourism to the Caribbean island may be
meager in comparison to the closeness of the Moscow-Havana relationship
(particularly in financial aid) during the heydays of the Cold War, but
nonetheless does not make such contemporary initiatives any less important.

After a decade of protracted internal turmoil, Russian President
Vladimir Putin has put the Russian Federation (with the exception of
Chechnya), under firm Moscow control. This has had the effect of
reinvigorating traditional Russian foreign policy, where old ties like
those with Cuba, are being reconfigured and being awarded premium status
to make Russia once again a global player. It is too early to forecast
the precise future of Russia-Cuba relations. What is certain is that
this emerging relationship will depend on a number of issues, like for
example the future alliances of each country and Moscow's effectiveness
in containing its domestic corruption and adjusting to the passing torch
of Putin rule and Cuba's own issues of succession.

It is still unclear who President Putin will choose as his successor in
the 2008 presidential elections. Likewise, Cuban leader Fidel Castro has
been in crippling ill-health for many months, and Raul Castro, Fidel's
brother and currently Cuba's interim leader, remains all but
unfathomable when it comes to his stance on foreign policy issues,
although he likely shares all of his brother's major views.

Moscow Evolves a Strategy
Similarly, it is unclear if Russia today has drafted a grand-strategy
regarding what would be its military and political-diplomatic presence
in the Western Hemisphere. However, the revenues that Moscow now
receives from its oil and gas production provides it with the necessary
wealth to once again become a major contender for regional influence.
Moscow policymakers fully recognize that there is a growing unrest
throughout the Western Hemisphere, as regional governments attempt to
work their way out from under Washington's traditional influence and
control. Already, the People's Republic of China is taking advantage of
this loosening situation. Meanwhile, current and future Cuban-Russian
relations can be expected to revolve around a well-defined axis: Moscow
certainly does not want to lose what is left of the Soviet era's
traditional sphere of influence. In the meantime, Havana, even-seeking
out new strategic partners in order to counter U.S. hegemony, sees
Moscow as a relationship worthy of resuscitating. With inter-state
relations based on mutual self-interests, Moscow does not have to search
far for reasons to come once again together with Havana, a factor to
keep in mind as U.S. influence in the region palpably decreases.

Today's Political Relations
During a trip to Havana to attend a ceremony marking the 48th
anniversary of the Cuban Revolution, Russian Vice Foreign Minister
Sergey Kislyak, delivered a speech explaining present day relations
between the Russian Federation and Cuba. "A period of adapting to new
realities was not easy, but now we are moving towards a new level of
cooperation and mutual interaction with our Cuban friends," Kislyak
said, later adding that "Russia has been and will continue consistently
advocating the abolition of the U.S. economic embargo and other
sanctions against Cuba." Russian Foreign Affairs Minister Sergei Lavrov
has also made similar statements soliciting positive relations between
both countries.

After a period of strained ties that lasted throughout the 1990s, Moscow
and Havana began rekindling their historic links, beginning with
President Putin's visit to Cuba in 2000. Although the visit itself was
primarily ceremonial, in addition to the expected affirmation of
friendship, Putin offered a relatively modest $50 million credit to
Cuba. In comparison to the amount of aid received by Cuba during the
Cold War (in the billions) the present-day amounts are flowing into the
island from Moscow are rather meager. While no mention was made during
the Putin trip of restoring massive Soviet-style subsidies to the
island, or that Moscow was ready to forgive Cuba's huge debt, the
Russian declared that "we are going to offer Cuba the most privileged
terms, but that must be done with procedures used in international
finances."

High-level visits between the two countries picked up once again in
September 2006, when Russian Prime Minister Mikhail Fradkov traveled to
Havana. While there, he met with Ricardo Alarcon de Quesada, president
of Cuba's National Assembly, and signed a still modest $355 million
credit over a period of ten years. The Premier's visit was followed by a
mid-December visit to the island by Vice Foreign Minister Kislyak, who
met with Cuban Foreign Affairs Minister Felipe Perez Roque. The Russian
official endorsed a protocol of political consultation between the two
countries' foreign ministries, which was originally signed in June 1993
but now has been updated. Kislyak later signed the protocol along with
his Cuban counterpart, Deputy Foreign Minister Eumelio Cabaliero. After
the signing, Cabaliero declared that: "through joint efforts, we can
further expand and strengthen each others positions within the framework
of bilateral ties."

Diplomatic Flurry
High-level political and diplomatic initiatives between the two
countries have been maintained since 2000. In November 2005, Havana
hosted the second Cuba-Russia meeting on multilateral issues, which was
presided over by Vladimir Zaemski, Moscow's vice-director of
international agencies. In November of 2006, both governments signed a
sports cooperation agreement in Havana, with the signatories being the
head of the Russian Federal Physical Culture and Sports Agency,
Vyacheslav Fetisov, and Cuban Sports Minister Christian Jimenez. As a
result of this agreement, Russia and Cuba will pool efforts to combat
doping and promote athletes health, exchange new state-of-the-art sports
medicine technologies, and encourage their citizens to participate in
recreational sports. In addition, Cuba has continued to maintain close
ties with Belarus and Kazakhstan, close Russian allies.

The Blockade
The one issue that has kept Havana and Moscow linked throughout the
years, both during, as well as after the Cold War, has been Moscow's
longstanding opposition to the U.S.' economic, commercial, and financial
blockade of Cuba. The island has been subjected to a U.S. financial
embargo since 1961; two years after Fidel Castro came to power after
ousting Washington's man in Havana, President Fulgencio Batista.

During a November 2006 visit to Russia, Ricardo Alarcon expressed his
gratitude to the State Duma, Russia's lower house, for its declaration
condemning the U.S. trade embargo against Cuba as "a flagrant violation
of human rights" and which called on other parliaments worldwide to
follow suit in exerting pressure on Washington. The declaration reads:
"The United States […] in recent years has further strengthened its
policy of interfering with the affairs of a sovereign state with the aim
of a forcible change of the constitution[al] regime of the Republic of
Cuba." The Duma vote was unanimous, with all 432 members of the house
voting in its favor. "I thank you in the name of all Cuban people,
victims of political genocide," Cuba's Ambassador to Russia, Jorge
Martinez, read from Havana's official response to the Russian resolution.

Spotlighting Trade
Cuba has still not fully recovered from the so-called "special period"
of the 1990s, when the government had to impose severe austerity
measures as it rushed to survive the crushing economic consequences
brought about by the fall of the Soviet Union. But by the end of that
decade, the island began to experience slightly improved living
standards and trade expansion. By 2007, Cuba's economy had posted two
relatively torrid years of economic growth, with an expansion of trade
of at least 10 percent being recorded, according to Economy Minister
Jose Luis Rodriguez. The Cuban official has declared that the island's
economy has gone from exporting 90 percent goods and only 10 percent
services in 1989, to exporting 70 percent services and 30 percent goods
today. Services now account for 76 percent of Cuba's overall economy
while primary goods, such as crops, amount to only 4 percent.

A number of Russian initiatives have aided the Cuban economy. The
agreement signed last year, granting Cuba the 355-million-dollar credit
was aimed at helping the island develop its commercial sector, focusing
on "power engineering," the rehabilitation of its railway system, the
upgrading of Cuba's transport infrastructure and water reservoirs, and,
in particular, its air navigation system. According to the Russian prime
minister, the loan carries four percent interest and a grace period of
four years. The Catch 22 however, is that the money given to Cuba must
be used to purchase Russian equipment and hire Russian technicians.

Russia was also an active participant in the 2006 24th International
Havana Fair (FIHAV). Reports at the time claimed that more than 40
Russian firms participated in the exhibition, occupying an entire
pavilion of 1,300 square meters. Among the participants were the Moscow
machine-building enterprise Soyuz, the arms trading firm Rosoboronexport
and joint-stock company Zvezda from St. Petersburg. There were also
displays by the Moscow Chamber of Commerce and Industry, the GAZ group,
a major Russian manufacturer of commercial automobiles, and the Russian
Aytomotris Company.

One sector that has received relatively little attention but which is
essential to the Cuban economy is tourism. In 2006, around 27,000
Russians visited Cuba, far short of the local industry goal of 100,000
such visitors per year. On this subject, Mario Fernandez, the head of
Cuba's Tourism Ministry's foreign relations department, stressed that
"Russian tourists need no visas to visit Cuba. Besides, Cubans have
friendly attitudes to Russians as they are connected by several decades
of friendship." It is a near certainty that there will be an increase in
the number of flights from Moscow to Havana by Russia's Aeroflot and
Cuba's Cubana de Aviacion, in order to accommodate the expected
increased tourism. As an example of future planning, the Russian company
Ilyshin Finance has leased three Ilyushin Il-96-300 long-haul aircrafts,
with more possible in the future to Cubana de Aviacion. Each aircraft
has a capacity to carry over 200 passengers. Four other such
aircraft—two for cargo and two designated for passengers—are scheduled
to be handed over to Cuba this year.

Smaller but still interesting events included a Russian-Cuban business
workshop held in Havana on October 31, 2006. Cuban Minister Ricardo
Cabrisas attended the event and took the opportunity to expand upon the
$355 million credit line, describing it as a concrete example of
strengthened economic and trade relations between the two countries.
During his visit to Cuba, Fradkov also discussed a renewed program aimed
at the exchange and training of specialists, which would likely include
Russian technicians working to rehabilitate facilities which originally
were built with the Soviet Union's assistance, in particular, the
thermal power station in Havana.

Moreover, there is still abundant room for improving trade between
Havana and Moscow. Officials from both countries acknowledge that their
bilateral trade figure remains very humble– in 2005, trade added up to
only $186 million between the two countries. During his visit to Havana,
Premier Fradkov mentioned that Cuba placed only seventh among Russian
trading partners in Latin America at the date, signifying a need to
continue boosting trade and economic cooperation.

The Cuban Military
Strapped for cash after the 1991 collapse of the Soviet Union, Cuba's
Revolutionary Armed Forces (FAR) under the command of Raul Castro, have
formed a series of money-churning businesses, including a tourism
promotion corporation that runs a domestic airline, hotels, retail
outlets, and marinas. These days, most high-level Cuban military
officers have traded in their uniforms for business suits. As a November
1994 Time article notes, "professional soldiers who once earned battle
medals [for fighting ]in Angola and Ethiopia are now assigned to repair
city pipelines, build tourist hotels, and direct industrial production."
An example is the army's construction company, Union de Empresas
Constructoras, which has built tourist facilities in Havana as well as
Varadero. In addition, ordinary soldiers have been assigned plots to
raise livestock and cultivate vegetables to be later sold at farmer markets.

This transformation has not necessarily meant a decrease in the active
manpower in the country's military. According to Military Technology,
FAR numbers around 185,000 troops, including around 80,000 conscripts.
Conscription is mandatory for men, who are required to serve three-year
tours of duty, while women volunteers must serve two-year terms.
Para-military forces include 15,000 troops under the command of the
Ministry of Interior, and 4,000 border guards. FAR's equipment is mainly
of Soviet-origin, including T-62 and T-tanks, as well as standard jet
fighters like the MiG-29s and military helicopters like the Mi-8s and
Mi-14s.

The Cuban navy includes only one corvette, a Soviet PAUK-type, as well
as four YEVGENYA-class inshore minesweepers used to patrol. According to
intelligence data, a good deal of Cuban military hardware is
non-operational due to a lack of spare parts. According to U.S.
intelligence data revealed in Military Technology, there are no fully
operational units above the battalion level. This means that even though
the armed forces is supposed to have close to 200,000 troops, the number
of "active" troops is significantly lower, as military personnel are
sent to plow fields and generals are assigned to manage restaurants.

Armor and artillery units have a particularly low readiness level due to
lack of functional units and an insufficient budget to purchase live and
salvo rounds of ammunition for practice.
As Cuba's defense minister and the country's interim leader, it will be
important to anticipate decisions likely to be taken by Raul Castro in
coming months regarding the military establishment and the effect that
his attitudes are likely to have on Cuba-Russia relations. During his
visit to the island in September 2006, Prime Minister Fradkov signed a
military-technical agreement with Cuba. He also specifically explained
at the time that the $355-million credit given to Cuba was not to
include for military sales. "This means that Cuba will pay Russia
directly for the military machinery which interests it," Fradkov
explained to journalists. Such a statement clearly demonstrates that
Russia will have no problem with selling high-tech military equipment if
Havana has the funds to pay for it.

Analysis
While relations between Russia and Cuba have slowly improved, they are
still far from what they were during the Soviet era. A reason for this
perhaps is the more business-oriented views of today's Kremlin. The
Russian government currently is more interested in continuing to fill
its revenue coffers than in emptying them by providing massive amounts
of aid to other nations for ideological purposes, as in times past. This
is probably the biggest impediment now hindering a potentially tighter
relationship between the two governments, with Cuba still possessing the
dubious distinction of remaining Russia's biggest debtor as a result of
the huge credits routinely granted to Havana by the former USSR.
According to the estimates of the Russian Finance Ministry, such aid
amount exceeded $22 billion, while other analysts put the total debt as
high as $26 billion. On the other hand, some Cuban officials claim the
debt is only around $11 billion. Havana officials argue that Russia
should write off the debt as "compensation" for damages caused to the
island's economy by the abrupt fall of the Soviet Union and the damage
that this brought on Cuba. But the Kremlin continues to insist that
Havana has to pay the debt in full. Nevertheless, it seems a near
certainty, though, that some kind of agreement will eventually be
reached whereby Cuba will only pay part of its debt, with Russian
industries given a preferential position regarding future commercial
projects on the island. In returning, this could be an even more
important arrangement if it is confirmed that Cuba does possess
commercially significant offshore oil deposits, which would make the
island, and whatever company companies are contracted to build offshore
oil platforms, immensely wealthy.

On the other hand, Russia, regardless of the non-performing Cuban debt,
is extremely interested in renewing its ties with Cuba in order to once
again assert itself as a global player. With the U.S. focused on the War
on Terror in the Middle East and Central Asia, a window of opportunity
has been left open for non-western hemispheric powers like Russia and
China to promote their aspirations. Perhaps the best example of this is
China's growing presence in the region. Not to be outdone, Russia is
revisiting its traditional relations with countries like Cuba, although
it has a long way to go, Nicaragua (thanks to the election of Sandinista
leader Daniel Ortega), and a new cadre of left-leaning, anti-American
leaders like Venezuela's Hugo Chavez as well as newly prominent Rafael
Correa of Ecuador all can be expected to catch Moscow's eye.

Cuban-Russian relations are now in the process of being
re-conceptualized within a wider context of a post-Cold War framework.
In recent years there have been a number of developments that have
brought about strained relations between Washington and Moscow.

Causes of this tension include:

1. NATO membership of several former USSR/Warsaw Pact nations, including
the Baltic states, which effectively have transformed them into
unsympathetic NATO border neighbors of Russia (in addition to Finland).
2. Possibility that Ukraine and Georgia may join NATO.
3. Projection of America's military in Central Asia via Afghanistan, and
a proposed U.S. base in Kyrgyzstan.
4. Development of a U.S. missile shield (defended by Washington as
providing the capability of protecting the U.S. from an attack by rogue
nations like Iran), provided by bases in Poland and the Czech Republic.
5. The Bulgarian government granting Washington the right to have a U.S.
military presence in a number of bases on its territory.

During the 1990s and in the early part of this century, the Russian
Federation was in no position to counterbalance this almost unrestrained
American aggressiveness in taking over the traditional spheres of
influence once possessed by the Soviet Union. Furthermore, while the
U.S. saw no reason why it shouldn't press its influence against Moscow's
very doors, Russia was retreating from sites that once allowed it to
exercise direct pressure on Washington. The best example of this was the
2001 closure of a well-known Soviet-era spy station in Lourdes, Cuba,
which had been utilized for 40 years to eavesdrop on the U.S.
Ironically, Putin, accompanied by Fidel Castro, had visited the station
during his December 2000 trip to Havana, where he emphasized the
importance of the Lourdes hub. Its closure was even more ironic as Putin
– a former intelligence officer for the former KGB – was well aware of
the base's importance in monitoring U.S. military and civilian flights,
as well as the range of activities going on at the U.S. Southern Command
facility in Florida.

The official Kremlin reason for this decision was to save the state the
$200 million per year, which it cost to keep the base operational.
However, analysts have argued that the real basis for this decision was
that, at the time, improved relations between Washington and Moscow were
desired. Lourdes' closure was announced on October 2001, one month after
the 9/11 attacks on the U.S. Nevertheless, relations between the two
major powers have not improved; instead they have become even more
strained in recent years. The Kremlin probably now feels, with some
reason, that its "goodwill" gesture in closing down the Lourdes base was
not reciprocated by the White House.

The Chairman of the Russian State Duma, Boris Gryzlov, has declared that
"relations between Russia and Cuba are based on the firmest foundation
and are not subject to influence of the external state of affairs." This
reference obviously refers to the U.S. What ever romance may have
existed between Washington and Moscow was very brief and now is
certainly gone. The Kremlin is again focused on geo-politically
projecting its influence in the world, and Cuba is, geo-strategically
speaking, a perfect place to start.

The Future
In a March 7 article published in the Russian daily, Komsomolskaya
Pravda, the military observer Viktor Baranets declared that:

How much clearer it would be to both Russians and Americans and to all
of NATO if we [Russians] adopted a symmetrical response that was very
easy to understand - say, by deploying our own missile-attack
early-warning stations or space-based missile defence systems on the
territory of friendly countries like Cuba or Venezuela. We have spent
too long parrying threats with nonsensical new paragraphs in our
military doctrines and doing nothing to remove those threats by means of
the kind of actual military measures in which both the Pentagon and NATO
have indulged themselves.

This admirably clear, if forceful and perhaps too unqualified a
statement, may portend the future of Russian-Cuban relations. That
relationship, as always, will be based upon mutual national interests.
Cuba is interested in Russian technology (particularly of a military
nature so as to upgrade its Soviet-era equipment, as the island has no
other such logical potential supplier). There is the likelihood of the
availability of a tidal wave of Russian petro-dollars for the Cuban
economy as their relationship intensifies. In addition, at least for the
immediate future, Cuba and the U.S. are likely to have continued
strained relations over issues like the embargo and the status of the
American naval base in Guantanamo Bay, which makes it very much within
Havana's national interests to be able to solicit Russian protection
against any new wave of hostility, which may develop in terms of
U.S.-Cuban bilateral relations.

The outstanding Cuban debt to Russia will probably continue to be a burr
in their relationship, even though officials of both governments prefer
to minimize its role if not altogether try to avoid discussing the
potentially inflammable issue. It is unlikely that Cuba can pull a
"Russia revolution" – meaning deciding to not honor its debt to
international creditors like the Lenin government did in 1917 – after
the czar had been ousted. Nevertheless, the debt will continue to hang
in the air, but it seems clear that both countries are actively
interested in forging closer ties in spite of it, which means that some
mutually acceptable accommodation will eventually be found.

The future leadership change in both countries is what is keeping the
future of the Moscow-Havana relationship somewhat unclear. Russia will
be staging presidential elections next year, and it seems very likely
that a hand-picked candidate of President Putin will be installed as the
next leader. It is similarly likely that Putin and his entourage will
continue to have plenary influence over the country's foreign policy
even after they leave the Kremlin. Regarding the future of Cuba's
leadership, it is very much a question of when Fidel Castro's death will
come (many speculate that he has cancer and could die in the next
several months). His brother and likely successor, Raul Castro, is 75
and may not be able to rule for a lengthy period himself, once he takes
over. Rambunctious Cuban exiles in nearby Miami are waiting for the end
of the era of the Castro brothers in order to return to the island, in
body or in influence, but the Cuban military establishment—those
tough-minded loyalists who control much of the country's economy and
oversee much of the island's major industries – is unlikely to easily
give up its decades-long authority.

With Russian-U.S. relations unlikely to warm up anytime soon, the
Kremlin apparently sees it as a matter of national priority to court
friendly governments like Cuba and Venezuela, even though it continues
to be unclear if there is some kind of Russian grand design or long-term
strategy in the making which permanently will establish Russia's
presence in the Western Hemisphere. Most likely, the Kremlin will
pragmatically attempt to maintain good relations with whoever is in
power in Cuba, on the basis of business and prideful sovereignty rather
than ideological zeal. This is even more likely as the Russian
Federation now has the petro dollars to pursue increasingly ambitious
relations. With some kind of security-oriented civil-military order
being in control of the island for the immediate future, Russian-Cuban
relations will likely continue to prosper, but in a sure-footed manner.

*************

About the Author
W. Alejandro Sánchez Nieto is a Research Fellow at the Washington-based
Council on Hemispheric Affairs. He has a Master's degree in
International Peace and Conflict Resolution from the School of
International Service at American University and currently attends the
Institute for World Politics. He has written several articles on Latin
American affairs for The Washington Report on the Hemisphere, the
biweekly publication of the Council on Hemispheric Affairs. His articles
"The Rebirth of Insurgency in Peru" and "A Central Asian Security
Paradigm: Russia and Uzbekistan" have been published in Small Wars and
Insurgencies.

Cuban Affairs is a quarterly, electronic journal published by the
Institute for Cuban & Cuban-American Studies at the University of Miami.
The journal publishes articles on economic, political, and social issues
in contemporary Cuba. The cost of the journal is $25 for a year's
subscription to individuals. Institutional subscriptions (multiple-user
access) are $95. For more information please visit the Cuban Affairs
website, http://www.cubanaffairsjournal.org.

This analysis was prepared by COHA Research Fellow Alex Sánchez
May 1st, 2007
Word Count: 4600

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