Cuban corporation says cash crunch slows payments

Cuban corporation says cash crunch slows payments
Published on Friday, May 22, 2009
By Jeff Franks

HAVANA, Cuba (Reuters) -- A cash crunch is causing one of Cuba's largest
business corporations, Cimex, to put off payments for some products, but
the bills eventually will be settled, the head of the state-owned
company said on Thursday.

Cimex President Eduardo Bencomo also said Cuba had not yet seen an
increase in remittances sent by Cuban Americans to their families on the
communist-ruled island, after US President Barack Obama lifted
restrictions on them last month.

Cuba has been struggling through a liquidity crisis in recent months
that has provoked complaints from foreign businesses that they are not
getting paid for their products.

Some foreign diplomats have said they feared Cuba was on the brink of
insolvency.

Cimex is a sprawling conglomerate with annual sales above $1 billion.
Its businesses include a network of shops selling goods in Cuban
convertible pesos, real estate operations and food services, and the
processing of remittances.

Bencomo acknowledged the liquidity squeeze, telling reporters at a press
conference that payments for certain imported items such as air
conditioners and other equipment had suffered "some delay." But he said
"the will of the country" was to meet its financial obligations.

"We had an amount of money in the bank for external payments and we've
been paying out," he said. "The will is to keep paying ... the country
will keep paying, without doubt.

"If more people come (to visit Cuba), there will be more money and we
will be able to pay what we haven't paid," Bencomo said.

Cuba's economy has been crippled by the global financial crisis and
three hurricanes that struck last year, causing $10 billion in damage,
according to the Cuban government.

It blames a US trade embargo imposed since 1962 for many of its
problems. But Cuban President Raul Castro has said Cuba needs greater
productivity and called for a pay system that rewards the best workers.

On April 13, Obama lifted restrictions on Cuban American travel and
remittances to Cuba, which he said was a signal to the island that the
US wants to end hostilities that began after Fidel Castro took power in
a 1959 revolution.

Bencomo said remittances had shown no increase since Obama eased the
embargo and in fact were below what they were this time last year. "The
impact of that declaration still has not been felt," he said.
While there were signs US agencies were becoming more relaxed in their
enforcement of the embargo, Bencomo said it appeared Obama's message of
change had not been fully transmitted to the US bureaucracy.

But, he said, Cuba is beginning to see an increase of US business people
coming to the island anticipating that soon they may be able to sell
their wares freely.

"The future could be promising, it is still uncertain," Bencomo said.

Caribbean Net News: Cuban corporation says cash crunch slows payments
(22 May 2009)

http://www.caribbeannetnews.com/article.php?news_id=16610