Cuban Trajectory of the Eurasian Economic Union: Regaining Positions

Chmyreva Vera PhD in History Senior Researcher, Institute of Economics of the Russian Academy of Sciences 32 Nakhimovsky Prospekt str., Moscow, 117218, Russia vera1305@mail.ru Other publications by this author

2024 is an anniversary year: ten years ago in Astana, the capital of Kazakhstan, the presidents of Russia (RF), Belarus (RB) and Kazakhstan signed an agreement on the establishment of the Eurasian Economic Union (EAEU); the accession of Armenia and Kyrgyzstan to the Union opened a new page in the history of Eurasian economic integration. Today, the EAEU claims to be one of the key poles in the global economy, and "building more effective mechanisms for interaction with third countries, especially observers, is ... one of the promising tracks for the development of the EAEU, including within the framework of its development plans until 2030 and 2045," said the Minister for Integration and Macroeconomics of the Eurasian Economic Commission (EEC) S. Y. Glazyev ^[1].

In the context of a changing world order, the Cuban vector of the EAEU's international activities is one of the most promising, and the strategic importance of the Republic of Cuba (ROK), an observer state (from 2020) and one of the key partners of the Union, is difficult to overestimate, as is the scale of the unrealized potential of the current Eurasian-Cuban cooperation. A link between North and South America, the most important trade and transport hub in Latin Caribbean America (LCA) - today Cuba is not only a valuable partner in itself for the Eurasian states, but also a stable platform for working with other countries in the region.

"The EAEU is an ambitious integration project promoted by Russia...", – stated on the official website of the Ministry of Foreign Affairs of Cuba^[2]. Back in 2014. Russian President Vladimir Putin, answering journalists' questions on the eve of the Latin American tour, admitted that in the 1990s, Russian-Cuban cooperation "slowed down, and foreign partners from other countries were ahead of us in a number of areas...", but Russia is ready to "catch up" ^[3] in the region. Today, Moscow seeks to act as a driver for the expansion of the EAEU's presence in the LCA, and relations with Cuba, according to Deputy Prime Minister of the Russian Federation D. N. Chernyshenko, "are of historical importance and are not subject to political conjuncture" ^[4].

In the context of Eurasian-Cuban relations, the dynamics of foreign trade relations in the period from 2015 to 2021 is indicative: more than 80% of trade turnover is accounted for by Russia, 5-20% by Belarus; with the rest of the EAEU member states – at the level of fractions of a percent. A high level of trade turnover between the EAEU member states and the Republic of Kazakhstan was achieved in 2018 - 417.5 million US dollars, while traditional trade is unbalanced (exports – 388 million dollars, imports – 29.5 million US dollars). Despite the fact that the EEC data on mutual trade turnover for 2022 are not available, based on the available data for January, some limited conclusions can be drawn: the turnover of the EAEU's foreign trade with Cuba in January 2022 compared to the same period in 2021. increased 3.6 times: from $692,617.  up to $2,471,029 ^[5]. Foreign trade is characterized by a significant excess of exports of the EAEU countries ($2,141,880) over imports ($329,149): Russian-Cuban trade accounted for most of the mutual trade turnover ($2,032,763); trade between Belarus and Cuba – ($397,297) ^[6]. Imbalances in mutual trade persist to the present day.

Schedule 1.

Compiled by the author under the data of the EEC ^[7].

According to the statement of the Prime Minister of the Russian Federation M. V. Mishustin, in 2022 the trade turnover between the EAEU and the Republic of Kazakhstan amounted to almost 60 billion rubles, and in 2023 "positive dynamics remains. By the end of January – April, the volume of trade increased nine times compared to the same period in 2022" ^[8], while Cuba's largest partners in the EAEU are Russia and Belarus.

Russian diplomat and ex-Ambassador of the Russian Federation to Cuba A. A. Guskov said that "significant positive dynamics have been noted in the Russian-Cuban trade turnover in 2022… Russia supplies ... a wide range of goods, including petroleum products, food and agricultural raw materials, as well as machinery, equipment and vehicles" ^[9]. According to the EEC, Belarus is an exporter of dairy products, plastics and rubber products; ferrous metals, copper and aluminum; internal combustion engines, pumps, centrifuges, bearings, engines and generators, information carriers, tractors, car bodies, trailers and semi–trailers, devices and devices used in medicine ^[10]. According to the Belarusian side, "the trade turnover between Belarus and Cuba in 2021 amounted to $22.9 million (340% by 2020), exports - $20.8 million (384.4%)" ^[11]. Cuba exports locally produced goods to the EAEU: coffee, spirits, tobacco products and medicines ^[12].

From the standpoint of Cuban foreign economic and political interests, the EAEU is a project promoted by Russia, "aimed at strengthening the economic bloc, which will be able to act as a link between the European Union and China" ^[2] – Cuba's key partners, with whom the Republic is intensifying trade and economic relations within the framework of the declared strategy of "diversification" ^[13]. The dynamics of European-Cuban and Chinese-Cuban trade and economic relations over the past decade clearly indicates that the EAEU is not among the priority economic partners of the Republic of Kazakhstan. According to the European Commission, in 2022 The EU remains Cuba's main trading partner with a turnover of over 1.5 billion euros. Stable economic growth has been registered in bilateral trade between the Republic of Kazakhstan and China (PRC): after a recession in 2020, the volume of trade between the two countries exceeded $1 billion in 2021 ^[14]. The PRC declares its intention to deepen political trust and strategic coordination with Cuba, and advocates the development of joint projects within the framework of the One Belt, One Road initiative.

These processes are taking place against the background of the dynamic development of Russian-Chinese relations of comprehensive partnership and strategic interaction, Belarusian-Chinese relations of comprehensive strategic partnership; a new level of integration of the Russian Federation and the Republic of Belarus within the framework of the Union State – all this creates a new context and opens up new opportunities for the development of cooperation, including in a new expanded format – the EAEU-Cuba- China.

Eurasian-Cuban relations: from missed opportunities to new opportunities. The rapid development of Eurasian-Cuban diplomatic relations and the growth of foreign trade turnover between the countries (see Chart 1) were replaced by a period of stagnation and a decline in trade and economic relations. In 2020, the EAEU's foreign trade turnover with Cuba almost tripled and amounted to $155.7 million – less than 0.1% of the EAEU's foreign trade turnover. (More than 95% of trade turnover by the end of 2020 was in the Russian Federation, about 4% — in the Republic of Belarus; with the rest of the EAEU member states — at the level of fractions of a percent). The growth of economic cooperation was interrupted by growing political tensions and global risks to the global economy; the situation further worsened due to the pandemic. Against this background, the rhetoric about the Eurasian-Cuban ideological proximity in the movement towards a multipolar world order and condemnation of US sanctions have intensified.  "The position of Russia and Cuba remains unchanged under the threats of the United States" ^[15], – said the President of the Republic of Kazakhstan M. Diaz-Canel Bermudez.

It is noteworthy that in an effort to overcome the consequences of the post–pandemic crisis in the Cuban economy and the US blockade, in 2022, the President of the Republic of Kazakhstan made a world tour, visiting countries that are of strategic importance to Cuba - Algeria, Russia, Turkey and China ^[16]. The President visited the priority countries from the point of view of the Cuban economy and politics, accompanied by an official delegation consisting of the First Secretary of the Central Committee of the Communist Party of the Republic of Kazakhstan and senior officials – the Minister of Foreign Affairs, the Minister of Economy and Planning, the Minister of Foreign Trade and Foreign Investment, the Minister of Health and the Minister of Energy and Mining, which indicates the scale of the tasks and long-term planning of the top Cuban leadership. As a result of the meetings, M. Diaz-Canel Bermudez signed agreements with the heads of four states in the fields of energy, healthcare, and the medical and pharmaceutical industry; the parties agreed to restructure Cuba's foreign debt and support the Cuban economy.

In Russia, the parties confirmed the developed cooperation plan and projects scheduled for implementation by 2030 ^[17], stressed the principle of continuity of relations based on a "solid foundation of friendship" ^[18]. The President of the Republic of Kazakhstan held talks with the country's top leadership and met with the Executive director of the Rosneft oil and gas company I. I. Sechin.

According to Cuba's top officials, 2022 is the time to restore the Cuban economy, develop foreign trade and attract foreign investment: the country is emerging from a series of crises caused by the US blockade, a pandemic that led to an increase in prices for international goods and services, including shipping companies, and the "military conflict in Europe" ^[19]; business activity is reviving, the number of private enterprises is growing, which are becoming full participants in the foreign trade of the Republic of Kazakhstan. The positive dynamics of relations and growth in mutual trade between the EAEU and the Republic of Kazakhstan is the beginning of a new era of Eurasian–Cuban cooperation: "a favorable political background creates the necessary conditions for the development of trade, investment, cultural and humanitarian cooperation," D. N. Chernyshenko said ^[20]. 

The Cuban vector of the EAEU is actively developing today: the accumulated potential of bilateral relations between the member states of the Union with the Republic of Kazakhstan (primarily the Russian Federation and the Republic of Belarus) in such areas as hydrocarbon exploration and development, energy, biopharmaceutical and steel industries, agriculture, tourism and transport, is successfully converted into coordinated and broad-format practical cooperation at the Union level. The institutional framework has been formed and dialogue mechanisms of interaction have been developed, the regulatory framework regulating the circulation of medicines and medical devices is being harmonized, and cooperation in the fields of technical regulation is being intensified. All these areas are of strategic importance in an unfavorable global environment and are prioritized "in the short, medium and long term" ^[21].

In 2022, the first meeting of the Advisory Committee on International Activities was held, established on the basis of the EEC in 2021 in order to expand cooperation between the Union and third countries ^[22]; Ambassador of the Republic of Cuba to the Russian Federation Julio Antonio Garmendia Pe?a was appointed permanent representative of his country as an observer state to the EAEU in the EEC. The top leadership of the Republic of Kazakhstan demonstrates its readiness to develop relations of friendship and cooperation with the EAEU countries and calls on the states of the Eurasian five to join the Havana International Fairs, contributing to the wider inclusion of the Cuban economy in the international market ^[21].

Eurasian-Cuban energy cooperation is one of their priority areas of current cooperation and is currently being implemented through the efforts of the EAEU member States. On the one hand, we are talking about the supply of mineral resources to Cuba and the introduction of methods to increase oil recovery in Cuban fields with the participation of Russian companies (PJSC NK Rosneft, JSC Zarubezhneft). According to foreign sources, since 2022, Russia has significantly increased oil exports to Cuba; according to some estimates, the Russian Federation has supplied oil in the amount of $ 352 million, and this is the largest inflow of oil from Russia ^[23]. Prime Minister of the Republic of Kazakhstan M. Marrero Cruz said that Rosneft is ready to supply 1.64 million tons of oil and other petroleum products to Cuba annually starting in 2023, but the financial terms of the contract are still unclear ^[24].

On the other hand, a large-scale modernization program of the Cuban fuel and energy complex and industrial enterprises is being implemented with the participation of Russian companies. Despite the fact that Cuba is currently not a priority partner of either the EAEU or the Russian Federation in terms of foreign trade turnover, Russian companies are confidently present in the Republic of Kazakhstan, participating in the re-equipment of Cuban enterprises for the production of metallurgical, nickel products, mineral fertilizers, in oil refining, exploration and development of oil fields. Deputy Minister of Energy of the Russian Federation P. Y. Sorokin noted progress in reducing the dependence of the Cuban electric power industry on hydrocarbon imports by increasing their production in Cuba with the participation of Russian companies ^[25].

Currently, one of the key projects being implemented on the Island is the modernization of the Antillana de Acero metallurgical plant. Jose Marti" ^[26]. The project is in an active phase – in 2023, an electric steelmaking workshop was opened, built at the expense of Russian investments and based on Russian equipment, which became "an example of successful cooperation between Russia and Cuba and a demonstration of the broad capabilities of the Russian metallurgical and machine–building industries," D. N. Chernyshenko said; according to him, this is the first in the last 25 years This is a large-scale project in the Cuban metallurgical sector of the economy: "investments in this project amounted to more than $95 million, and the opening of the workshop will provide jobs for 500 people. The production capacity of the electric steelmaking shop ... will amount to 220-230 thousand tons of liquid steel per year" ^[27]. 

Today, the parties expect the development of new Russian-Cuban projects of a similar scale and are discussing the formats for the implementation of the project for the construction of power units at the Cuban thermal power plants Maximo Gomez and East Havana within the framework of the agreement signed in 2015. Agreements with the provision of a state export loan to the Republic of Kazakhstan to finance construction ^[28].

Eurasian-Cuban relations in the field of healthcare and biotechnology are actively developing today both by stimulating the use of Cuban medicines recognized by some member States of the Union, and due to the participation of the Caribbean country as an observer in the Pharmacopoeia Committee of the Eurasian Economic Council ^[29]. (In accordance with the Joint Action Plan of the EEC and the Government of the Republic of Cuba for 2021-2025) ^[30].

A multilateral format of cooperation between Russia, Belarus and Cuba has been successfully launched and is developing: during the Second CIS and EAEU Youth Forum (June 7-9, 2023, at the site of the Sirius federal territory, Sochi), a group of enterprises of the biotechnological and pharmaceutical industry from the Republic of Kazakhstan, JSC Active Component from the Russian Federation and Belfarmprom from The Republic of Belarus signed an agreement on the creation of a multinational alliance to achieve sovereignty in the short term in the field of vaccine and drug development ^[31]. The President of BioCubaFarma expressed confidence that the new union "will provide positive results for both the Russian Federation and Cuba, as well as for other countries of the Eurasian region and Latin America and the Caribbean" ^[32].

The plans include the creation of a Russian–Cuban biopharmaceutical cluster. Sechenov University and the Cuban state holding BioCubaFarma signed a Memorandum of Understanding; work is already underway to develop new medical technologies and create drugs, which will also ensure clinical trials of Cuban drugs with subsequent registration in Russia ^[33].

Belarusian-Cuban cooperation is actively developing: in 2022, the Cuban-made vaccine Soberana Plus was registered in Belarus, which became the first Cuban vaccine against COVID-19 registered in the European space ^[34]. The parties are considering the possibility of creating a joint pharmaceutical production and expanding scientific cooperation: Chairman of the Presidium of the National Academy of Sciences (NAS) of the Republic of Belarus V. Gusakov said that NAS is ready to work with Cuban partners in various fields of scientific activity: "In terms of strategy, we propose to consider the possibility of phased implementation of a single scientific space of Belarus and Cuba without barriers" ^[35].

In general, promising areas of Eurasian-Cuban cooperation are not only joint research and programs in the field of medicine and biopharmaceuticals, in which Cuba traditionally holds a strong position, but also related research on food and biological safety, as well as cooperation in the field of agriculture.

Kazakhstan is interested in developing trade and economic cooperation with Cuba. In 2022, the first meeting of the Foreign Trade Chamber of Kazakhstan and the Chamber of Commerce of Cuba was held to discuss the development of bilateral relations in the fields of biopharmaceuticals, medicine and tourism ^[36], which also expands the possibilities of multilateral cooperation between the countries in the EAEU format.

Of particular relevance in this context is Cuba's initiative to develop the EAEU Industrial Park in the special development zone "Mariel" (OZRM) 45 km from Havana.

The OZRM is a "window" to Latin Caribbean America for the EAEU. The elaboration of the initiative to open the EAEU industrial park on the territory of the OZRM started in 2022. According to the initiators of the project, pharmaceutical and biotechnological products, medical equipment, machinery and equipment for agricultural and industrial use, for cargo and passenger automotive industry, household appliances equipment, oriented to the markets of regional strategic partners, can be produced in the industrial park in the future ^[37]. The access of exporting companies from the EAEU countries to the port and production infrastructure of the OZRM can ensure the development of trade relations with Cuba and provide an opportunity for direct transport and logistics access to the markets of the LCA states.

In November 2023, representatives of the EEC and Cuba agreed to accelerate joint work within the framework of the Havana initiative, "identify priority areas of industrial cooperation and assist at the EEC site in establishing direct contacts with enterprises of the Union to work out the issue of locating production facilities on the territory of the OZR" ^[38]. The parties confirmed their interest in developing a dialogue in the field of renewable energy and electric transport, pharmaceuticals and metalworking; it was decided to identify priority and potentially interesting areas of industry that can be located in the park, and work out cooperation with specific companies of the Union ^[39].

Currently, several joint Russian-Cuban enterprises are represented in the OZRM (the Autocentro ZED S.A. service center is engaged in servicing Kamaz equipment, as well as developing innovative solutions; TecComp Caribe, S.A. is a joint venture for the production and sale of polymers reinforced with fiberglass and resins ^[40]).

The Belarusian-Chinese presence on the Island is becoming more active: after the signing of the Memorandum of Understanding between the Great Stone Industrial Park and the OZRM (2021), the business circles of the two countries are converging and trade and economic ties are expanding ^[41]. Minsk Automobile Plant (MAZ), one of the largest Belarusian machine-building enterprises, has shown interest in establishing cooperation and organizing production in the OZRM. (Since 2018, a joint venture of MAZ-Weichai LLC has been operating in the Chinese-Belarusian industrial park, which has established engine production).

At the same time, it must be recognized that the impressive political capital of Eurasian-Cuban cooperation, including the rich experience of Soviet-Cuban cooperation, is offset by the limited economic resources of the Eurasian five, and the Chinese factor is coming to the forefront, the influence of which may be decisive in the formation of a new Eurasian architecture. Beijing is Cuba's largest trading partner and competes with the United States in Latin America, displacing the European Union; has become the main trading partner of the Russian Federation, Kazakhstan, Armenia and Kyrgyzstan; is the second trading partner of the Republic of Belarus. China has become the largest trading partner of the Republic of Kazakhstan, a key source of financing and the main supplier of technology; stable economic growth has been registered in bilateral trade: the volume of trade between the countries exceeded $1 billion in 2021 ^[42]. Despite the fact that currently the EAEU does not have competitive advantages in institutional terms in comparison with the United States, China and the EU in the LCA, the lack of geopolitical competition, cultural and historical heritage and a common vision of global development processes determine the possibilities of a long-term and multi-vector presence of the Union in the region, which allows not only to increase economic cooperation, but also and to develop network processes of harmonization of socio-political, humanitarian and cultural trans-regional space ^[43].

The access of exporting companies from the EAEU countries to the port and production infrastructure of the OZRM can strengthen the development of trade relations with the Republic of Kazakhstan and enter the markets of Latin Caribbean America. "The development of cooperation between the EAEU and Cuba in order to create new value chains and ensure technology transfer for reorientation to new regions and markets has a certain potential," said Minister of Industry and Agro–Industrial Complex of the EEC A. K. Kamalyan during a working visit to Kazakhstan. Discussing the prospects of industrial cooperation between the EAEU states and Cuba with the President of the Republic of Kazakhstan M. At the Havana International Fair (FIHAV-2023), the Minister stressed that "The Republic of Cuba is a historically friendly state for all countries of the Eurasian Economic Union. Therefore, it is no coincidence that Cuba today is an observer state of our integration association and one of the key strategic partners of the EAEU in the Latin America and the Caribbean region, with which the closest cooperation has been formed within the framework of the existing infrastructure of the Union's international activities" ^[39].

In general, given that the draft of the Main Directions of international activity of the EAEU for 2024 contains intentions to expand the international vector of the Union, we should expect an intensification of Eurasian-Cuban cooperation and the implementation of specific tasks, among other things, in terms of the potential presence of the Eurasian five in the OZRM. As the Deputy of Foreign Trade and Foreign Investments of the Republic of Kazakhstan, Anna Teresita Gonzalez Fraga, noted, the development of Eurasian-Cuban relations indicates the goal of "bringing economic relations to the level of political ones" ^[44].

Indeed, it is necessary to recognize the increasing role of geopolitical factors and the dominance of value bases, or ideological proximity over purely economic interests. In 2020, against the background of a significant decline in trade and economic relations, there was an increase in political rhetoric about the Eurasian-Cuban ideological proximity in the movement towards a multipolar world. Havana has consistently shown interest in developing political contacts and expanding comprehensive cooperation. Moreover, current world events in general and the dynamics of Eurasian-Cuban relations in particular have shown that geopolitics and geo-economics in the coming era will not be viewed through the prism of exclusively economic conditionality. In the real political process and in making managerial decisions, ideological proximity and political expediency become the determining factor – a strong platform for the growth of cooperation between countries.

In this context, the political capital of Eurasian-Cuban cooperation is now being successfully converted into the implementation of specific economic projects. The parties at the highest level, at the level of relevant ministries and departments, business and business circles, there is recognition of the need to deepen and diversify relations between the countries and strengthen the format of multilateral cooperation. This format is an additional tool for hedging risks in the context of the global geopolitical crisis and one of the steps towards sustainable development of states.