The Soviet Union has increased its five-year aid and trade package to Cuba by 50 percent, the official Cuban newspaper Granma reported yesterday.
Analysts here suggested that several factors may have caused Moscow to boost its already heavy investment in Cuba, including growing U.S. commitments in nearby Central America, the weakness of the Cuban economy and improved relations between the new Soviet leadership and Havana.
The Granma article, quoted by Reuter, said Soviet First Deputy Premier Ivan Arkhipov signed four trade and economic cooperation agreements worth a total of $3 billion after four days of talks in Havana. Vice President Carlos Rafael Rodriguez signed for Cuba. The article said the agreements, for 1986-90, represented a 50 percent increase in Soviet credit to Cuba during the last five-year period.
Only a year ago it was reported that Moscow had pledged to continue aid to Cuba at the existing level through 1990. At the same time, however, Moscow had agreed to suspend repayment of Cuba's debt to the Soviet Union, estimated at $9 billion.
Since then, observers in Washington pointed out, the Cuban economy has suffered severe blows because of a hurricane that damaged the sugar crop and the rapid plunge in the price of oil. Under its arrangement with Moscow, Cuba sells the Soviets sugar at an artificially high price and buys Soviet oil at an artificially low price. Cuba then sells its unused oil on the world market for badly needed hard currency. When oil prices were high, Cuba made a profit, but now it "is in a squeeze more than ever," one analyst said.
Cuba's other major export is sugar, but production is down, and the world price is also at its lowest point in recent years.
Observers in Washington also speculated that Cuban leader Fidel Castro, who attended the Soviet Communist Party Congress in Moscow this winter, has made an effort to show the new Soviet leader, Mikhail Gorbachev, that he had taken measures to make Cuba a more efficient and responsible member of the Eastern Bloc's economic system. At the Cuban party congress in February, before the Soviet conclave, a number of officials involved in inefficient sectors of the economy lost their jobs to younger, better trained people.
Castro reportedly had strained relations with both of Gorbachev's predecessors, Yuri Andropov and Konstantin Chernenko, and had delivered a number of pointed snubs such as failing to appear at various Soviet Bloc meetings.
Wayne Smith, former head of the U.S. mission to Havana, said the Soviet aid rise might also be a response to increased U.S. activity in Central America and the Caribbean.
"The more pressure we put on Cubans and Nicaraguans, the more the Soviets will feel they have little choice but to increase their own assistance," said Smith, now at Johns Hopkins University's School for Advanced International Studies.