Website Accessible at

This message is sent in compliance with e-mail Bill HR 1910. If you no longer wish to receive emails from the CTP, please click here to unsubscribe.



Issue 36 - November 2007


Cuba Facts is an ongoing series of succinct fact sheets on various topics, including, but not limited to, political structure, health, economy, education, nutrition, labor, business, foreign investment, and demographics, published and updated on a regular basis by the Cuba Transition Project staff.


Who Bankrolls the Castro Regime?

     Contrary to conventional wisdom, Venezuela and China alone do not account for the well being of the Castro regime in recent years. Before the rise of Hugo Chavez and at a time when Chinese aid to Cuba amounted to little more than shipments of poor-quality rice and bicycles, European financiers began playing a leading role in resuscitating a near-bankrupt Castro regime. From processing Havana's secretive international business transactions to providing lucrative high-interest loans to the Cuban government, European Union-based institutions have collectively bankrolled the Castro regime since the fall of the Soviet Union.

     Today, quietly and behind the scenes, more hard currency flows in and out Cuba via European financial capitals than through Beijing or Caracas. While Venezuela's [1] and China's [2] multi-billion dollar credit lines for Cuba have done much to offset the loss of Soviet-era subsidies, such politically-driven deals are largely in the form of in-kind aid (oil and refined fuels from Venezuela and "soft" trade credits from China for the purchase of Chinese-made goods) rather than in convertible currency.

     With more than US$1.6 billion in hard credit lines (see Table I) from European lenders, Cuban authorities have been able to conduct strategic international transactions ranging from policy-motivated imports of agricultural products from U.S. Congressional farm districts to financing the expansion of the island's nickel industry, in turn a major source of foreign revenue for the regime.

     European capital also sustains foreign direct investment. Of 185 foreign-financed joint ventures with the Cuban government (see Table II), two-thirds originate in Europe. The strong correlation between foreign financing and foreign investment is best exemplified by Spain's leading role in the Cuban economy. Home to nearly 40 percent of all joint ventures currently operating in the island, Spanish lenders are also the largest source of private capital -- upwards of US$581 million -- for the Castro regime.


Table I. Foreign Private Financing to Cuba, 2007*

Lenders (by country)
Amount (in U.S. dollars)
440 million
326 million
Basque Country (Spain) [3]
255 million
216 million
182 million
79 million
79 million
United Kingdom
22 million
14 million
9 million
6 million
4 million
Total European Financing
1.632 billion
Financing of Undisclosed Origin
728 million
Total Foreign Private Financing
2.360 billion
*Source: Unless otherwise noted, claims represent short-term loans (typically one-year repayment terms) from private lenders (banks and supplier financing) to Cuba-based borrowers (e.g., Cuban state-owned enterprises or joint ventures) as of March 2007. The data do not include bilateral state-backed loans or trade credits from political allies such as Venezuela and China. Cf. Bank for International Settlements (BIS), Consolidated Banking Statistics, BIS Quarterly Review, September 2007. All debts are expressed in U.S. dollars and rounded to the nearest million.


Table II. Foreign Direct Investment, 2007

Top Foreign Investors
Joint Ventures with Cuban State-Owned Enterprises
United Kingdom
Source: Cuban government data. Cf. Marta Veloz, "España quiere recuperar sus negocios con la Isla," Opciones (Cuba), Sept. 30, 2007. Data encompass only formal joint ventures ("asociaciones económicas" or "empresas mixtas") with foreign investors as of June 2007.



1. Cf. Jorge Piñon, "Venezuelan Oil Subsidies to Cuba Surpassed $3 Billion in 2006," University of Miami, Cuba Transition Project, Cuba Facts, August 2007, See also "Cuba's economy: Raul's talking cure," The Economist, October 25, 2007, valuing Venezuelan trade with Cuba at $3 to $4 billion per year.

2. Cf. Marc Frank, "Cuba, China pledge to build on growing trade," Reuters, Havana, March 27, 2007. In 2006, Sino-Cuban bilateral economic relations reached a record US$1.8 billion, largely Chinese industrial and consumer goods imported by Cuba with "soft" (non-cash) Chinese government-financed trade credits.

3. Cf. EFE, "Empresas españolas negocian contratos [con] Cuba por 180 millones [de] euros," Havana, 5 May 2006,


The CTP can be contacted at P.O. Box 248174, Coral Gables, Florida 33124-3010, Tel: 305-284-CUBA (2822), Fax: 305-284-4875, and by email at The CTP Website is accessible at