Ask Mexico about Cuba not paying their debts

We've warned countries about doing business with the Castro dictatorship.

Cuba has a way of borrowing money and not paying it back.  The latest is Mexico, as reported in Reuters:

"The Mexican government is ready to waive 70 percent of a debt worth nearly $500 million Cuba owes it, Finance Minister Luis Videgaray said yesterday, as Mexico seeks to improve ties with the communist island.  

Speaking on Mexican radio, Videgaray said a loan issued by Mexico's foreign trade development bank Bancomext to Cuba more than 15 years ago had become a debt worth $487 million.  

"Seventy percent of the debt is to be waived," Videgaray said, adding that a formal announcement would be made later.   The rest of the debt will be paid in 10 years, he added."  

So you improve relations with a country by writing off their debts?  I am anxious to hear how Mexicans will react to this "generosity toward Cuba."

I spoke to a couple of friends in Mexico on Sunday and they don't understand this move. 

One businessman said:  "I sell to Cuba and we are down to cash up front before we ship anything."

It makes no sense for Mexico to waive so much Cuban debt.  My guess is that President Pena Nieto is "throwing a big bone" to the left.  As we've reported before, President Pena Nieto has tackled a couple of the left's sacred cows, the teachers' unions and PEMEX, the oil monopoly.

He needs to distract the left and waiving Cuban debt is a good way to do it.

P. S. You can hear my chat with Allan Wall about Mexico here & follow me on Twitter @ scantojr.



We've warned countries about doing business with the Castro dictatorship.

Cuba has a way of borrowing money and not paying it back.  The latest is Mexico, as reported in Reuters:

"The Mexican government is ready to waive 70 percent of a debt worth nearly $500 million Cuba owes it, Finance Minister Luis Videgaray said yesterday, as Mexico seeks to improve ties with the communist island.  

Speaking on Mexican radio, Videgaray said a loan issued by Mexico's foreign trade development bank Bancomext to Cuba more than 15 years ago had become a debt worth $487 million.  

"Seventy percent of the debt is to be waived," Videgaray said, adding that a formal announcement would be made later.   The rest of the debt will be paid in 10 years, he added."  

So you improve relations with a country by writing off their debts?  I am anxious to hear how Mexicans will react to this "generosity toward Cuba."

I spoke to a couple of friends in Mexico on Sunday and they don't understand this move. 

One businessman said:  "I sell to Cuba and we are down to cash up front before we ship anything."

It makes no sense for Mexico to waive so much Cuban debt.  My guess is that President Pena Nieto is "throwing a big bone" to the left.  As we've reported before, President Pena Nieto has tackled a couple of the left's sacred cows, the teachers' unions and PEMEX, the oil monopoly.

He needs to distract the left and waiving Cuban debt is a good way to do it.

P. S. You can hear my chat with Allan Wall about Mexico here & follow me on Twitter @ scantojr.