USSR-CUBA: HOLDING TIGHT ON ECONOMIC AID

Created: 6/15/1985

OCR scan of the original document, errors are possible

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Analysis

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Tight on Economic Aid

appears to Pa tlghtanlna up on economic ass/stance to Cuba, forcing Havana to reshape Its economic pcfJcfes, butfhanges in Ihe rtlmtlonthlp are evident.

Soviei economic aid in tne form of trade subsidies, protect aid. and trade deficit financing nave decaned from an estimated peak of7 billion2 to4 Billion4

Any hopes Havana may have held for increased Soviet generosity were squelched at the meeting of the CEMA heads of government last November, when Moscow said It would Increase neither economic aid nor oil deliveries when the current five-year plan expires at the end of this year. The Soviets also instated that Cuba begin meeting targets lor exports to CEMA nations on which It has fallen short In recent years. To fulfill CEMA quotas for sugar this year Havana already has had to buy sugar on the world market to supplement domestic production. Meeting CEMA goals for exports win limit Havana's earnings ot hard currency from trade with West. mama*wmm

Outlook

Moscow is littery toharp eye on Cuba's economic performance.IBkiiiiieB^BB|^BBaiaHHHtre Cubans believe General

Secretary Gorbachev will demanoTney meet strict economic requirements. Vitall Vorotnikov, the former Soviet Ambassador to Cubataunch supporter of Gorbachev, undoubtedly is familiar with Cuban meifieiency. Hts elevation to the Politburo mayove by Moscow to exercise greater control over its investment in

Cuba.

To head off further Soviet criticism. Havana is likely to continue lo make significant policy and personnel changes in the economy before the Third Cuban Communist Party Congress in December and the start ot the next tive-yaar plan. Castro's more pragmatic advisers, who are gaming influence, are nevertheless likely to push for increased trade with tha West, belt-tightening at home, and more private economic activity.

FORRFIEflSE DATLKAVIIOI

who deeply resents Soviet economic pressure, has been careful In his public statements to reaffirm Cuba's close relations the USSR. The economic poacy changes introduced by Havana tms year indeed indicate-thalCastro is responding seriously to Soviet demands that he pul CDWs economic house in order.

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Original document.

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