Will Brazil rescue the Cuban economy?

MOST people don’t realize that Cuba oftentimes punches well above its weight in the international arena. Take its hosting of the mid-September Group of 77 (plus China) meetings of developing countries, which represent roughly 80 per cent of the world’s population, in Havana. Besides the G77, Cuba is also a founding country of the Non-Aligned Movement (NAM) in the early 1960s, and remains today a leading member state.

Similarly, Brazil’s Luiz Inácio Lula da Silva attended the two-day G77 summit as part of his foreign policy strategy to situate Brazil as a major player on the world’s stage. As a central component of his broader international policy, he has made a point of revitalizing bilateral relations with revolutionary Cuba.

During his initial period in office, 2003-2010, Lula had significantly expanded and deepened relations with Havana. He made three official visits to Cuba, sought to enhance commercial interactions and championed Cuba in various international fora. In fact, former U.S. president Barack Obama agreed to invite Cuba’s Raúl Castro to the 2015 Summit of the Americas in Panama at the firm urging of Brazilian President Dilma Rousseff (Lula’s former vice-president).

It is, however, worth recalling that Brazilian-Cuban relations under the previous hard-right administration of Jair Bolsonaro (2019-2022) had reached a new low. Not only had Bolsonaro refused to invite Cuba’s president to his inauguration in 2019, but he also made clear that he would be immediately downgrading official ties with Havana.

At his first opportunity in 2019, Bolsonaro instructed his ambassador to the United Nations (UN) to vote against (for the first time) the annual Cuba-sponsored resolution that condemns the discredited U.S. economic blockade of the island nation. In subsequent votes, and largely in response to fierce pushback from other Latin American governments, Brazil would abstain when the UN resolution came to the floor.

With respect to Brazil’s highly successful 2013 “Mais Médicos” or more doctors program with Cuba, Bolsonaro moved to cripple the health services contract. That left badly underserved and impoverished Brazilian rural areas — where health outcomes were noticeably poor — without access to some 17,000 Cuban doctors.

During an August visit to Havana, though, Lula’s key foreign policy adviser, Celso Amorim, summed up the aspirations for the bilateral relationship nicely: “We want to make the relationship between Brazil and Cuba one of great friendship.” “That will contribute to peace in our region,” he added, “and that’s the greatest goal of diplomacy, alongside economic growth.”

The new Brazilian leader, then, spoke to the assembled G77 delegations about a flawed U.S. Cuba policy, harkening back to a time when Lula had valued his close personal relationship with Cuba’s Fidel Castro. He specifically set his sights on an ill-conceived and counterproductive U.S. trade embargo against Cuba.

On the thorny issue of Washington’s obsession with placing Cuba on a list of countries allegedly involved in sponsoring international terrorism (and thus subject to punishing U.S. sanctions), Lula was equally blunt. “We reject the inclusion of Cuba on the list of state sponsors of terrorism,” he intoned.

In his meeting with Cuba’s President Miguel Díaz-Canel, Lula stressed the importance of working together collaboratively on a wide array of policy files. And a more Cuba-friendly Lula, especially in a period when Cuba is suffering from extraordinary socio-economic challenges, is likely to make concessions to the Cubans in areas of finance and commerce.

For example, the Cuban government is on the hook for some US$540 million to Brazil’s Development Bank, which it abruptly suspended payments on in 2018. The Cubans are now hoping that a sympathetic Lula will grant better terms on interest costs and a longer repayment runway.

From an economic standpoint, the Cubans would welcome an increase in two-way trade — where Brazil already holds a yearly surplus of some US$287 million. There is also the added bonus of routing much of that trade expansion through Cuba’s free trade zone at the Port of Mariel (which Brazil helped to finance).

Political leaders in Cuba will also expect Lula to advance Havana’s agenda internationally and to vote accordingly within the Organization of American States (OAS) and the UN. And they will undoubtedly urge him to push the Joe Biden White House toward a more engaged, respectful and moderate Cuba policy.

A close Brazil-Cuba relationship, then, is clearly a win-win for both countries. Lula benefits from re-establishing Brazil’s leadership role in the world, strengthening his position within Latin America and burnishing his left-wing credentials.

Most importantly, it could provide a critical economic and financial lifeline to a cash-strapped Havana.

Peter McKenna is professor of political science at the University of Prince Edward Island in Charlottetown.

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