Saturday, October 8, 2011

Vietnam presses Cuba on debt

Before increasing investment in oil and construction on the island, Vietnam wants Cuba to find a way to its debt with rice exporter Vinafood and allow the opening of a Vietcombank office in Havana, official daily Viet Nam News reported.

Debt is rarely mentioned in the official communication between the two long-time partner countries.

Prime Minister Nguyen Tan Dung urged a Cuban delegation, in Hanoi for routine bilateral talks, to “continue creating favorable conditions for Vietnamese enterprises to invest in the Caribbean nation and to encourage more Cuban investment in Viet Nam,” according to the official daily. Dung suggested the partners should “come up with solutions to settle outstanding debt” and urged Cuba to speed up the permit process for Vietcombank, the government foreign trade bank, to open a branch in Cuba.

“The presence of the bank will help facilitate the financial settlement between Vietnamese and Cuban companies and enable Vietnamese investors to invest in Cuba, particularly in the fields of construction, oil and gas, and trade,” Dung said, according to the newspaper.

Foreign Trade Minister Rodrigo Malmierca, who led the Cuban delegation, said Cuba wants Vietnam to continue to sell rice, and pledged to honor Cuba’s financial commitments by gradually reducing credit debts with Vinafood, according to Viet Nam News. Malmierca said Cuba wanted the partners to agree on a joint development strategy.

Neither Cuba nor Vietnam have released details about the debt.

Vietnam, a close political ally of half a century, has been selling 400,000 tons of rice per year to Cuba under generous conditions, making the fellow Communist nation the island’s main source of the basic staple. Payment terms in the past have included 450 to 540 days and either interest-free or very low interest financing. In September 2010, state company Vinafood 1 signed an agreement to sell Cuba 200,000 tons of rice, including 50,000 tons for a low price of $496 per ton.

Affected by a cash crunch in Cuba, bilateral trade dipped to $250 million in 2010 but is expected to grow again this year.

State oil company PetroVietnam leased an offshore block in Cuban waters and partnered with Russia’s Zarubezhneft, but has not performed an exploration drill yet. Meanwhile, state construction company Housing & Urban Development Corp. (HUD) in 2008 signed a letter of intent with Grupo Palmares to jointly build a 300-hectare golf community near Bauta, just west of Havana. HUD has also been negotiating construction of another golf course resort in Varadero as well as a hotel at Playa Santa Lucía in Camagüey province. In 2009, Vietnam also agreed to set up textile and electronics joint venture production in Cuba.

Dung committed to Vietnam’s continued support of rice cultivation programs in Cuba. Agricultural projects supported by Vietnam have played “a very important role” in Cuba, Malmierca said.

Meanwhile, Cuba wants to introduce new pharmaceutical products to the Vietnamese market, Malmierca said.

Source: Cubastandard

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