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Document Says Cuba Re-Exports Oil It Buys from Soviets

June 5, 1985

WASHINGTON (AP) _ Cuba receives from the Soviet Union 10 times the world market price for sugar and also re-exports two-thirds of the oil it imports from the Russians, according to a secret document released by an anti-Castro group.

The 80-page study, reportedly prepared in February, was obtained by the Cuban-American National Foundation and was released Tuesday at a news conference.

The authenticity of the report could not be confirmed independently. But a U.S. government official who read the study said he was convinced it was an official document.

The official, who spoke only on condition of anonymity, said the report reinforces the U.S. view that Cuba is one of the most heavily subsidized countries in the world. The CIA reported that in 1983, the latest year for which estimates are available, the Soviet subsidy for Cuba totaled $4.1 billion.

One of the ironies of Cuba’s complex trade and financial ties with the Soviets is that Cuba, one of the world’s largest producers of sugar, buys great amounts of that commodity on the world market and also has become a major exporter of oil even though the island has no oil reserves.

The report said Cuba expects to buy 100 million pesos worth of sugar this year and resell it to the Soviets for slightly more than 1 billion pesos.

With the income derived from these sales, Cuba purchases far more oil from the Soviets than it needs for internal consumption.

According to projections in the document, of the 6,674,000 metric tons of oil Cuba planned to purchase from the Soviets during 1984 and 1985, 4,393,000 is earmarked for re-export and the remainder for domestic use.

At current world market prices, the oil sales would net Cuba nearly $850 million.

A spokesman at the Cuban diplomatic mission here, Bienvenido Abierno, said he had no knowledge of the report.

The document gave no indication from which countries Cuba buys sugar or to which countries it sells oil. Jorge A. Sanguinetty, a former official of the Cuban Central Planning Board who defected in 1966, told the news conference he believes Cuba has been forced to buy sugar on the world market because lagging production prevents the island from fulfilling its foreign commitments.

The study said the arrangements Cuba has made with the Soviet Union on the sugar and oil transactions ″point out clearly the possibilities which trade with the Soviet Union offers the country to maintain a high level of income in convertible currency.″

Cuban President Fidel Castro has frequently alluded to the beneficial trade relationships Cuba has with the Eastern bloc. He said in a March interview with Mexican reporters these relationships were responsible for Cuba’s ″great economic and social successes.″

In contrast, Castro has said other Third World countries are being impoverished by the ″unjust″ prices they receive for their exports to the industrialized democracies and the high cost of their imports of manufactured goods.

Sanguinetty said the report was prepared for the private use of Western banks that have lent money to Cuba and that the document was leaked by one of those institutions. Cuba is said to owe $3 billion to banks in Great Britain, France, West Germany, Spain, Japan and Canada.

Cuba is believed to owe the Soviet Union about $10 billion, but the report indicates that a start on repayment is being delayed until 1990.

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