- by Graham Holton
- The Guardian
- Issue #2198
Rally in support of Cuba, Perth.
Cuba is now an associate member of BRICS (Brazil, Russia, India, China, South Africa), alongside twelve nations, including Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.
Joining BRICS offers Cuba a broad network of trading partners, investment opportunities, and political support. Although it will not offset the impact of US sanctions, it is an important pillar of Havana’s strategy to diversify its international economic relationships and pursue long-term development.
Many BRICS members have repeatedly called for an end to the US oil blockade on Cuba and have supported the annual United Nations General Assembly resolutions urging its removal. BRICS forums provide Cuba with opportunities to deepen diplomatic partnerships. Since 2020, Cuba holds an observer status with the Eurasian Economic Union (EAEU), the first nation outside of Eurasia to do so.
BRICS is important for Cuba to reduce its dependence on Western financial institution, improving access to infrastructure and development financing. The New Development Bank (NDB) offers an alternative source of development finance outside the International Monetary Fund (IMF) and the World Bank. So far the NDB has provided little direct financing to Cuba.
The group has encouraged greater use of national currencies in international trade instead of the US dollar. This is valuable for Cuba as dollar-based transactions are complicated by US sanctions. Instead, bilateral settlements using the Chinese Yuan or the Russian Rouble reduce reliance on the US financial system. Cubans have become adept at using a parallel internet infrastructure, with the government encouraging digital payments and e-commerce.
BRICS countries account for a significant share of Cuba’s trade. China is one of Cuba’s largest trading partners, supplying machinery, vehicles, electronics, and consumer goods. In 2018 Cuba joined China’s Belt and Road Initiative, a massive infrastructural project connecting approximately 150 countries worldwide. China has supported Cuba through the supply of telecommunications equipment, internet infrastructure, renewable-energy technology, and transportation projects. These investments are intended to modernise key sectors of the Cuban economy.
Tourism remains a major source of foreign exchange for Cuba. Russia and China have encouraged tourism to Cuba and explored investments in hotel construction, port facilities, transportation, biotechnology, and pharmaceuticals. This diversification of trade reduces Cuba’s vulnerability to supply disruptions and sanctions.
BRICS has not solved Cuba’s economic problems. US sanctions continue to discourage many international banks and companies from doing business with Cuba. The country faces domestic challenges including low productivity, foreign-exchange shortages, and aging infrastructure. What BRICS does is provide increased hope for the people of Cuba.
