At the beginning of this year, Russia made a commitment to increase its participation in the Cuban economy. This move comes more than 30 years after the collapse of the Soviet Union and the close relationship that Moscow had with Havana. President Putin is seeking allies in light of the impact the Ukrainian crisis had on Russia’s military, economy, and politics. However, even before the crisis, Russia’s economy was weak. Its economic weight is primarily derived from its extraction and distribution of hydrocarbon products, as well as producing and distributing other services and products such as weapons. While Russia appeared successful in reducing inflation and creating monetary reserves, it failed to address its low economic growth rates.
A study by Philip Hanson at Chatham House highlights the sacrifices made by the Russian people and the repressive nature of the Russian system. Attempts to introduce reforms, such as the rule of law, could destabilize the existing political system and are unlikely to be pursued. Russia has promised extensive investment and collaboration with Cuba, but the specific projects announced are relatively small and local in nature. The Cuban government has made concessions to ensure the protection of Russian investments, including granting land to Russian agricultural producers and offering tax exemptions. Given Russia’s state capitalism and corruption, its economic intervention in Cuba will differ from the past roles played by the USSR and other foreign investors.
Russia’s negotiating team in Cuba consists of individuals associated with the political right. Boris Titov, the presidential commissioner for entrepreneurial rights, leads the team and has been involved in Putin’s electoral process. The Institute for the Economy of Growth, named after Piotr Stolypin, is another surprising presence in Cuba. Stolypin, a prime minister in the Tsarist government, aimed to modernize Russian agriculture for the benefit of landlords and prosperous peasants. The Stolypin Institute proposes a shift in Russia’s economic model towards small and medium-sized enterprises, improved labor productivity, digital economy, and a small social sector.
In summary, Russia’s increased involvement in the Cuban economy reflects Putin’s search for allies and the weak state of Russia’s economy. The specific projects announced for Cuba are modest in scale, and the involvement of Russian capitalists linked to Putin’s regime raises questions about the potential for large-scale privatization in Cuba. The negotiations are led by individuals associated with the Russian political right, and the Stolypin Institute proposes a shift towards a competitive economic model. Overall, the Russian presence in Cuba differs from previous foreign investors and has implications for Cuba’s economic and political landscape.