Cuba – Russia Now and Then

Years after the collapse of the Soviet Union and the associated termination of cooperation and a strong alliance between Cuba and Russia, both states are now working overtime to revive the relationship which once brought the world to the brink of nuclear war when the Soviet Union covertly installed nuclear missiles on the Caribbean island. It is hardly surprising that Russia’s attempts to revive its relationship with the former ally are being closely monitored by the U.S., seeing that Russia and Cuba have a shared legacy and due to Cuba’s proximity to Washington. Presently, however, Russia is not attempting to develop a relationship based on ideological confrontation, but rather one based on economic pragmatism.

An Overview of Cuban Relations with Russia
Russia and Cuba ties originated many decades prior to Fidel Castro taking power. After Cuba’s independence in 1902, the Russian Empire initiated diplomatic relations with Cuba. After the Russian Revolution in 1917, Cuba put the relationship on hold until1943, when Russia was a major belligerent in the war against Nazi Germany. In 1952, Batista Cuba again broke off its relationship with Moscow due to Russia’s communist affiliation. During this period and then after the Cuban Revolution in 1959 and even after Fidel Castro’s proud communist cry, Cuba was not viewed by Moscow as being of particular importance to Russia. Soviet leadership realized that the island was squarely located in the U.S. sphere of influence and would be difficult to defend if challenged by the U.S.

Before the Cuban Revolution in 1959, the United States had investments in Cuba totaling about one billion in U.S.-dollars, representing nearly twelve percent of all US-investments in Latin America. The Cuban economy at the time was completely dominated by its powerful neighbor, but everything changed after Fidel Castro came to power. He launched a land reform program and seized American assets, putting them under government control. In attempting to topple the Castro-Regime, the United States slashed its sugar quota for Cuba which heavily affected the Cuban economy. This measure did not result in a desired change in Cuban leadership, but effectively moved the island much closer politically to Moscow.

Castro Becomes a Communist
When Castro came to power in 1959, his revolutionary movement did not profess communistic ideology, but only two years later, he announced that he was a Marxist Leninist and would remain so until his death. He also declared that the Integrated Revolutionary Organizations (IRO), the precursor of the Communist Party of Cuba, was formed by the merger of Fidel Castro’s 26th of July Revolutionary Movement and the People’s Socialist Party. Castro’s political shift could be seen as one of economic necessity. After the revolution, the Cuban middle class, dissatisfied with the new leadership’s political course, fled Cuba. This huge economic brain drain, coupled with the closure of the U.S. market to Cuban sugar, led to a precarious fiscal situation on the island.

The Soviet Union took advantage of the favorable situation for it to meddle and decided to come to Cuba’s assistance on February 13, 1960. It did this in order to gain influence in the Western Hemisphere, marking the inauguration of the modern Cuban-Soviet relationship. Representatives from both leftist governments signed a trade agreement which became the basis for further economic cooperation. In this agreement, the Soviet Union committed to purchase 425,000 tons of sugar in 1960, and from 1961 to 1964 one million tons sugar annually. Furthermore, Nikita Khrushchev granted Havana a 100 million U.S.-dollar credit at a very low interest (2.5 %) and promised to sell oil to Cuba below world market prices. This enabled Cuba to once again rely on its sugar industry to buoy the Cuban economy because of Russia’s guarantee of a stable market and further economic aid. As a result, Cuba became nearly totally dependent on the Soviet Union. In order for Cuba to receive financial subventions from Moscow, the Soviet Union demanded that Cuba make certain economic reforms. Just as Cuba reformed its economy to follow the Soviet Union’s specifications, Cuba’s political order was reformed as well. On the surface, Castro’s regime became Marxist Leninist; in fact, he and his speeches framed the ideological guideline and not the working class or the party. However, through his formal commitment to communism, Castro won the abiding support and affection of the Soviet Union, even though its leaders barely comprehended him, thereby ensuring financial security for his island. Furthermore, the Soviet Union gained an ally in its Cold War against the United States located close to its borders. This alliance led to the most serious confrontation during the Cold War when Soviet and Cuban governments placed nuclear missiles on Cuban soil in 1962.

In the 1980s, Cuban dependence on the Soviet Union increased due to falling global oil prices between 1983 and 1985. Cuba, which once could sell a part of the cheap oil that it bought from Russia on the world market, was now finding it difficult to profit from the sale of its surplus oil. Thereafter, Cuba focused almost completely on trade with the Soviet Union and the other socialist countries by the late 1980s. Between 1959 and 1991, the Soviet Union delivered 170 million tons of oil, 13 million tons of grain, and 300,000 trucks, cars and tractors to Cuba. While Cuba’s dependence on the Soviet Union was growing, the latter began to gradually disassociate itself from the island. In an interview with a Cuban newspaper, Raúl Castro revealed that the Soviet Union told Fidel during his visit to Moscow in 1983 that it would not defend Cuba if the U.S. was to attack the island. Both countries decided to keep this strategic shift secret. However, eight years later it was the Soviet Union which imploded and triggered the fall of communist governments around the world.

Cuba’s Survival After the Collapse of the Soviet Union
After the collapse of the Soviet Union, Russia immediately began to throw the switches on its traditional economic relations with Cuba. Russian officials began to distance themselves from Castro and began to support the Anti-Castro emigration from Cuba. According to the Russian parliament (DUMA), the trade between Russia and Cuba decreased from nine billion in 1990 to 710 million U.S.-dollars three years later. From 1989 to 1991, Russian exports to Cuba fell by 70%. The oil exports fell twice between 1989 and 1992, resulting in the collapse of Cuba’s foreign trade. During the course of its economic crisis, the social problems in Cuba were exacerbated. Power cuts, a lack of medicine, and the prevalence of a booming black market were symptoms of the economic crisis which peaked in 1993. However, through internal market reforms, Castro was able to keep his regime barely alive during what was known as the “special period,” which was characterized by great deprivation and suffering.

Although Russia had reduced its cooperation with Cuba to a bare minimum, it never entirely ended the relationship and soon the deacceleration was followed by first tentative efforts of a weak rapprochement. In November 1992, both countries signed agreements on trade and economic cooperation. In December 1993, an agreement on cultural and scientific cooperation was also initiated. In May 1996, the Declaration on the Principles of Relationships between the Russian Federation and the Republic of Cuba outlined the desire to look for ways to resolve present economic frictions. Furthermore, critics increasingly began to voice their concerns over Russia’s restrictive stance towards its former ally.

On October 14, 1994, members of the DUMA criticized the Russian de facto embargo against Cuba and appealed to the Russian leadership to revive the economic relationship with Havana. Simultaneously, it also called upon the United States to end the economic embargo against Cuba which had led to a social and economic catastrophe on the island. However, Washington did not even consider resolving its boycott against Cuba. Instead, after the collapse of Cuba’s powerful sponsor, the United States decided to go for the kill by tightening the embargo in order to try to topple the Castro regime. In 1996, the Clinton administration passed “The Cuban Liberty Act,” also known as the Helms-Burton Act. Title III of this bitterly anti-Cuban initiative determined that the United States would prosecute countries “allegedly trafficking property formerly owned by U.S. citizens but expropriated by Cuba” after the 1959 revolution had been staged. Helms-Burton also contained a section referring to Russia, which after the collapse had retained its intelligence facilities on Cuban territory. This section refused any assistance to Russia in case it acted to pressure these facilities. Moscow backed Cuba in the UN vote against this act not wanting to close its intelligence facilities or end its economic relationship with Cuba. Instead of biding by the spirit of this act, Russia further sought to gradually foster the revival of its old relationship with its former ally.

Rapprochement of Former Allies
During the rule of Boris Yeltsin (1991 –1999), the first bilateral agreements with Cuba were signed. However, Cuba was not seen as being particularly important for Russian foreign policy goals and trade continued to decrease between the two. Under the leadership of Vladimir Putin, Russia gradually changed course in its policies toward Cuba. In 2000, he visited and granted Castro a 50 million U.S.-dollar credit, a relatively meager financial aid package, but one that marked the resumption of an official dialogue between some of Cuba’s and Russia’s highest leaders. During his visit to Cuba, Putin emphasized that Russia had no ideological agenda in the region and instead wanted practical deals that would benefit Russian businesses, pointing to a pragmatic component of the relationship. One year later, following the introduction of this new stance, Putin closed the controversial Russian radar station in Cuba, complying with the U.S. demands that had angered many Cubans because of sovereignty issues. Nonetheless, under Putin, trade links between Cuba and Russia increased, from 125 million U.S.-dollars in 2005 to over 231 million in 2006 and then to 285 million, with the trade turnover peaking in 2007. These figures made Cuba the seventh largest Russian trading partner in Latin America (but represented only 0.05% of Russia’s total foreign trade). More significant than the trade relationship between the former allies was the revival of their strategic partnership. In 2009, Russian Deputy Prime Minister Igor Sechin signed four contracts securing exploration rights in Cuba’s economic zone in Cuban territorial offshore waters, involving oil exploration in the Gulf of Mexico.

Nonetheless, for the United States, Russian involvement in Cuba is nothing to worry about. “Russia has no nuclear weapons on Cuba, no weapons. The relationship between Russia and the United States is not a threat for us,” said Wayne Smith, Senior Fellow and Director of the Cuba Project at The Center for International Policy. Even the Pentagon acknowledges that Cuba does not constitute a danger to U.S. public security. This raises the question why the United States is still clinging to the boycott against Cuba which has had no impact on Cuban policy thus far. Dr. Smith, who served as executive secretary of President Kennedy’s Latin American Task Force and Chief of Mission at the U.S. Interests Section in Havana, criticizes the American stance toward Cuba: “It does not make any sense. But the United States is not prepared as of yet to deal rationally with Cuba. Cuba is not a threat and it has signaled that it wants to have a constructive dialogue, which is needed. Polls indicate that the majority of Americans are in favor of such dialogue,” which has to leave the Obama administration a bit embarrassed by its false starts up to now.