Latin American Network Information Center - LANIC


PY252353 Sao Paulo VEJA in Portuguese 18 Mar 87 pp 5, 6, 7, 8, 10

["Text" of interview with President Fidel Castro by VEJA correspondent Elio
Gaspari "last week" in Havana]

[Excerpt] [Introductory passage omitted] VEJA: Diplomatic relations that
were severed during the Castello Branco government 22 years ago have been
reestablished by the Brazilian Government. What did that period of severed
relations represent for you, and what does the resumption of relations do?

Fidel: We were engaged in a battle with the United States, and all the
Latin American countries, except Mexico, followed Washington's policy.
Brazil, Uruguay, and Chile resisted as long as they could, but in the end
they bent and joined the blockade. Such was the dominion by the United
States at that time that it managed to have its way. The breaking of
relations by Latin American countries had only moral and political, but not
economic, importance. Most of our relations were with the United States.
For the United States to get the Latin American countries to join was a
political blow, but the position of Latin America, except Mexico, in favor
of the United States enhanced the danger Cuba faced. It was a period we
went through alone, but we were determined to resist at all cost. All that
lies in a sad period of the past which will not return. The dirty war
against Cuba, and the invasion of the Dominican Republic in 1965 destroyed
the OAS. Today hardly anyone talks about the OAS. The United States gave it
a death blow during the Malvinas war. It can now be seen, in the face of
U.S. Government hostility against the Government of Nicaragua, that Latin
America is something different, which no longer is pushed around by
Washington. There is more awareness now; the times have changed greatly.
Those were difficult years, but we have buried them. We do not hold any
resentment. That was a historical period that has been left behind. Today,
the population of the continent is double what is was then, the social
problems have become worse, and there is a $400-billion foreign debt. In
the 1960's, President John Kennedy inaugurated his Alliance for Progress, a
program that was considered ambitious. In fact, the program contemplated
investments on the order of $20 billion throughout the continent over a
period of 10 years. Today, we owe what amounts to 20 times the expected
investments under the Alliance for Progress, and we are paying every year
in interest what amounts to one Alliance for Progress. The times have
changed and Latin American politicians have realized this. As for the
decision by the Brazilian Government, we only have reasons to be satisfied.
We very much appreciated that gesture of Brazil's democratic government and
we view our relations with Brazil as one of the most important aspects of
our foreign policy. We are so confident of this that we made available one
of Havana's choice sites for Brazil to build its embassy. The architect is
Oscar Niemeyer.

VEJA: Looking in another direction, after all these years, how do you
evaluate today the position of the Cuban Government in the late 1960's and
early 1970's, when your government lent material assistance to the
clandestine organization of the Brazilian left, which was training
guerrillas, and was accused of practicing urban terrorism?

Fidel: We have already talked about what happened, of the U.S. policy to
blockade us. We were in a struggle to the death with the world's most
powerful imperialist might. We were struggling for our lives. We could see
the United States and Latin American countries, except Mexico, at war
against us, and ourselves at war against them. I do not think it worthwhile
to relive the past to look for mutual offenses. I am just explaining the
state of mind with which we viewed those events and saying that we saw
those who followed that policy as enemies. Theoretical or doctrinary views
may have interfered -- I do not deny this -- but the truth is that our
foreign policy was influenced by the situation at that time. Perhaps there
were alternatives, even better alternatives, but the truth is that we
considered ourselves activists against the Latin American governments that
adhered to the policy of isolation imposed on Cuba. Nevertheless, with the
passing years, we gained experience; both we and the Latin American
leaders. We are now more mature, with more things in common and more causes
uniting us. Our victory will be to defeat the U.S. attempts to divide us.
We must strive for as much unity as possible, considering our different
political and economic tenets. I believe that this is the spirit of
interest, understanding, and cooperation that led to the reestablishment of
relations between Brazil and Cuba. I do not want to pass judgment on
historical attitudes and events. I will leave it to other men in the future
to analyze the events of that period of our history.

VEJA: The first foreign embassy you visited in 1960, when you left the
mountains, was the Brazilian Embassy. You went to a reception carrying your
rifle, which you left at the entrance. Shortly afterwards, you went to
Brazil. Now that you have a new Brazilian Embassy in Havana is it
reasonable to assume that your next step will be to visit Brazil?

Fidel: I do not carry a rifle anymore. During the 1960's we behaved like
guerrillas who had just come down from the mountains. As for my return to
Brazil, I should not express my feelings because I could put the Brazilian
Government in an uncomfortable position. I could be giving the impression
that I want to be invited. Nevertheless, I can say that the day the
Brazilian Government finds it useful, and in the best interest of Latin
America, it will find a way to let we know. Until then, we should not plan
ahead of events. I will always do what is best for our relations and for
Brazil. I feel a great deal of respect and admiration for Brazil and have
very warm feelings for Brazil.

VEJA: You say that the creditors should forget about the debt that the
Third World owes them. Can you explain how this could be achieved?

Fidel: In the first place, I believe that the foreign debt has already been
paid. It has been paid through underdevelopment. For centuries, the
creditor powers of the world have grown rich at the expense of the Third
World. During the colonial period, the industrialized European countries
plundered our resources, wiped out our populations, and took away our gold
and silver. They accumulated wealth so that they could develop while we
remained backward. You could say this is the old, historical reason. This
problem is so persistent that it can be considered the rule. It is very
simple: the products from underdeveloped countries, or the creditors, every
year cost more. You want numbers? In 1960 you could buy 37.3 tons of
fertilizer with the money obtained from the sale of 1 ton of coffee. In
1982 you could only buy 15.8 tons of fertilizer with the same amount of
coffee. In 1959, with 6 tons of jute you could buy a truck. In 1982 you
needed 26 tons of jute to buy the same truck. This is a historical process
which started at the end of World War II. But the vicious circle does not
end there. Not only is the mechanism of the market unfair, but this very
same mechanism of international trade is being used to suffocate the Third
World. Frequently the market is closed by protectionist measures taken by
the more developed countries. This is the case, for instance, of the
development of subsidized agriculture in Europe. Brazilians know very well
another aspect of protectionism. You know better than anyone else what this
is. You make shoes and when you start selling them on the international
market they impose tariffs. You manufacture steel and they impose import
restrictions. There is a market when you plan your production, but it
closes when you start to produce.

If the factors I have just mentioned hurt the production of the
underdeveloped countries, there are other factors that hurt the financial
aspect. The manipulation of the dollar through interest rate increases has
caused the Third World to pay back to loans they had borrowed when the
dollar was cheap with expensive dollars. All these factors together have
made the weakened economies of many countries vulnerable to inflation and
have led to a loss of trust in their weak currencies. As a result, many of
the borrowed dollars remained only a short time in many parts of the Third
World. As soon as possible, these dollars returned to the developed
countries in the form of illegal capital drain.

VEJA: There may be people who support your position, but in view of the
fact that creditors are on the other side of the street, do you believe
that the CITICORP chairman would endorse an analysis that would allow us to
find a solution to the foreign debt problem?

Fidel: The CITICORP chairman would never make proposals like the ones I
make. But since this is a problem affecting Third World countries, I am the
one who is making this proposal.

VEJA: Nevertheless, bankers claim that they are not responsible for the
problems affecting the economies of developing countries, such as the high
inflation rate.

Fidel: That is a myth. Inflation was exported to the Third World. For over
a decade the United States waged the Vietnam war. It spent billions of
dollars but it did not impose a single tax. It simply printed dollar bills.
Through manipulation, the United States simply printed more and more money
and said that it kept the value of the dollar tied to the gold standard.
The United States was able to pay for the war and buy half the world, and
when it thought it was the proper time, it announced that it had dropped
the gold standard. What does this mean? A person had paper currency which,
he was told, had an equivalent value in gold, which, theoretically, he
could exchange for gold. But suddenly from one hour to the next, the
country that sold him the paper currency informs him that it is dropping
@he gold standard. In doing so, the United States robbed the entire world.
This is one of the causes of the inflation that is affecting the Third

VEJA: But for debtor countries it is not just a question of suspending
payments on the principal of their foreign debts or on the interest of
their foreign debts. It is a question of not paying the principal on their
foreign debt, of postponing interest payments, and also of making the same
creditors -- the ones who will not get their money back, the ones who made
the loans -- lend more money, lend the so-called "fresh money." How do you
suppose it would be possible to obtain this money under these conditions?

Fidel: It is possible. I view this issue from an all-encompassing
rationale. I associate the foreign debt issue with the peace issue. I do
not make this comparison out of a mere whim, but because it is a part of
our daily lives. In our world, peace is tied to the hope of achieving
development, to the solution of the foreign-debt problem. There are
billions of human beings living under terrible conditions: without proper
housing, without food, without a future for their children. Where is the
money to achieve the development of this part of the world going to come
from? It must come from developed countries, including socialist countries.
Although the Soviet Union cannot be blamed for the underdevelopment of
Asian countries, socialist countries must contribute money. But
specifically, where is this money going to come from? From the arms race.
With just 20 percent of what is being spent on arms, we can resolve the
foreign debt and the underdevelopment problems. I am talking about $200
billion per year. Now, figure this: If the Third World succeeds in
canceling the debt, in putting an end unbalanced exchanges, and in
achieving a new international order, it could save more than $200 billion.
As you can see, $200 billion is just a small portion of what is spent on
arms. The fresh money you are referring to is being used for arms that
threaten world peace. I do not advocate the bankruptcy of the international
financial system. I do not advocate the bankruptcy of the banks. What I am
proposing is that the creditor countries' governments be responsible for
the debt. I am not proposing that the developed countries be sacrificed or
that new taxes be created. Quite the contrary. My proposal is to use
correctly part of the funds which are, to a certain extent, the result of
unbalanced exchanges, and which are being absurdly embezzled. If the
developing countries are allowed to use the funds which I have just
referred to, the Third World's purchasing power will increase
extraordinarily, and the developed capitalist world will have solved its
production and unemployment problems.

VEJA: Your line of thought is logical, but you have to admit that the
developed countries and the bankers will probably reject it. Therefore, the
problem of how to obtain the so-called fresh money persists.

Fidel: I will again show you where to obtain that money. From 1982 to 1986,
the Latin American countries paid the creditor countries $131 billion in
interest and debt servicing. I am talking about liquid transfer of money
from the pockets of the destitute to those of the wealthy. The Latin
American countries have been paying an average of $30 billion a year. In
1986, the Latin American countries did not have enough money to pay the
debt, they could only pay part of the interest and the servicing of the
debt, which in 1986 alone, amounted to $30.7 billion. Thus, they paid this
amount, but had a negative balance of $22.1 billion, because, in the same
period, they received only $8.6 billion in capital. Therefore, it can never
be said that the Latin American countries did not make efforts to honor
their debt. We have made tremendous efforts and sacrifices. We have
exported more and imported less. However, this is like pouring water into a
straw basket. If one pays more than one has, one's reserves become
exhausted. However, we are back to the old problem: Where does fresh money
come from? From the same channels which are being used to take it out of
our countries. We do not need this so-called fresh money. We need liquid
money, any money. The money we need is merely the money that we would have
been investing, if we did not have to send it abroad. This money that we
are sending abroad would be enough to promote our growth.

VEJA: Your debt to the capital market is estimated at $3 billion, and you
have been a reasonable payer. Moreover, you have introduced drastic
measures to the Cuban economy because of the shortage of foreign currency.
You planned a growth rate lower than that of previous years, you reduced
imports by half and, in order to do this, you restrained consumption to the
point of cutting the rice supply at the workers mess halls. Don't you think
that by doing this you are practicing the policy of "do as I say but not as
I do?"

FIDEL: In some aspects Cuba's case is different from that of other debtor
countries. Although it differs only in some aspects, it is still different.
Like the rest of the countries, we have been the victims of colonialism and
of the unfair exchange system. We are also the victims of protectionism but
with the difference that we are subject to an economic boycott. But, on the
other hand, we have not had the problem of capital flight. The money that
was used for speculation left Cuba a long time ago. Money here is neither
embezzled nor wasted. Whatever came our way was invested in developing the
country. Cuba have never found it easy to borrow money. Those banks and
developed countries that have lent us money have done so in defiance of the
United States. Moreover, we have two types of debts. We owe the socialist
countries over $10 billion but we have no problems with them. This is true
because there is no unfair exchange in socialist world. The price of our
sugar increase proportionally to the cost of imports. We enjoy fair prices
and the terms of trade are satisfactory. Specifically referring to our
foreign debt with the socialist world, we have managed to renegotiate it
with many years of grace and no interest. Moreover, the debt did not
represent an obstacle to more loans. Because about 90 percent of our
economy developes with the socialist world, only 10 or 12 percent of our
economic relations depend on the Western world.

Therefore, the problems that affect the other countries do not affect us in
the same way. Nevertheless, our relationship with developed capitalist
countries is very important to us. We import industrial equipment, some
foodstuffs, technology, and a series of items necessary for our economy.
The trade may be on a small scale but it is still important. Only because
of this do we depend on that nefarious Western market with its obscure
regulations. I am saying this so that you may see that Cuba's position is
not prompted by a national problem that concerns only Cuba. I have been
talking about the debt problem since 1972 because it prompts us to voice
our solidarity with the Third World. Cuba had been honoring all the
financial requirements on its loans because to honor these requirements did
not affect our development. But our position was drastically altered during
the 1st quarter of 1986. In our capacity as a country that imports oil and
then exports it, we lost almost $300 million when the price of oil fell. At
the same time, the dollar lost about 40 percent of its value and because we
did not trade with the United States we found that we were gradually
operating with Western European hard currencies. In addition we were
affected by a 2-year drought, and hit by a hurricane that swept right
through the country in late 1985. As a result of this, we were forced to
stop interest payments in mid-1986. We negotiated because it was the only
alternative. However, we were still not able to honor our commitments. Our
debt was also unpayable. We adopted austerity measures by reducing imports
by 50 percent. We are achieving something extraordinary by developing the
country with only half our imports. We have never made such an enormous
effort. The effort we are making now is almost as great as the one we made
during the first years after the revolution. For this purpose we have made
some important decisions. We have decided not to sacrifice the people's
consumption or development. As a consequence, those youths of 12 to 18
years of age who used to receive 1/2 liter of milk per day began to receive
only 1/3. If 1/3 liter of milk was served in workers mess halls it was cut
down to 1/4. Why, then, do I say that consumption has not been sacrificed?
Because children under 7 years of age continue to receive 1 liter of milk
per day as usual, and because the Cuban family basket contains the same
products at the same price. It is true that some prices have gone up.
Electricity went up but it is now the same price it was 30 years ago.
Public transport fares went from 5 cents to 10 cents, that is, 100 percent
higher, but it is probably still the cheapest in the world. At the same
time we increased the pensioners' allowance and raised the minimum wage to
$100. Other salaries were also increased.

VEJA: Has your salary, or those of your ministers been increased?

Fidel: No.

VEJA: Have these changes in the economy been unpopular?

Fidel: No, our government considers very carefully before taking measures
like these. The matter is well analyzed, either by the party or by the
state. Besides, we are very careful to explain to the people what we are
doing. We explain fully to the people that new measures are taken for our
own good, and we always find them understanding. This is not by accident.
After all, we have been working for them for many years. I would have been
better if we did not have to make sacrifices, just as it would have been
better if no underdeveloped country had to make those sacrifices. Many
years back our hope was to form a front with Third World countries.
Unfortunately this front was not established. The creditor countries make
every effort to prevent this unity, thus keeping Third World countries
divided. The tactic of the creditor countries to keep us divided has

VEJA: Did this situation change after the Brazilian moratorium? Is it not
an irony of history that in 1960 the United States launched a process of
open warfare against Cuba over expropriations worth $1 billion, and 27
years later has to face a situation that entails risking almost $100
billion with Brazil?

Fidel: These situations are different. In 1960 a newly-arrived group of
revolutionaries made changes for the benefit of the Cuban people. We did
not expropriate anything. We just wanted to change our domestic situation.
In return, the United States cut off our oil supply, they wanted to destroy
the revolution. They suspended our sugar quota and organized a dirty war
which included plans to murder Cuban leaders. They tried to subdue us. We
did not start expropriating without provocation. We did it progressively,
in response to the U.S. aggression. We had no choice. Had it been
different, perhaps we would have taken other measures, perhaps
expropriation with compensation. The blockade they imposed on us cost us
over $10 billion. Thus, we do not owe them anything. They are the ones that
owe us. In the Brazilian case, there was no alternative but to suspend the
payment of interest. It is wrong to say that Brazil has behaved in a
hostile manner, or that it seeks confrontation. Brazil had been using
nearly 40 percent of its exports to pay the interest of the debt. In 1981,
your country paid over $10 billion in interest services and profit on the
debt. In 1985 you had a trade surplus of $12 billion. In 1986, the surplus
was $10.5 billion. Practically everything Brazil earned was being used to
pay interest and services. How can a country continue to grow in a
situation like this? The foreign exchange reserves were being depleted.
They were cut by half in a single year. Brazil did not declare war. It
expressed its disposition to negotiate. The country wants to find a way to
develop. How can you doubt that? The moratorium on interest payments by
Brazil is an historic event. It was a strong and courageous step to put the
country's well being above everything. Tancredo Neves himself, during his
campaign and after being elected, said that he would not pay the debt at
the expense of the people's hunger. It is a dignified and respectable
principle. A just, moral and patriotic decision.

VEJA: Does your experience suggest to you any foreseeable developments in
the Brazilian situation?

Fidel: The creditors will attempt to put out the fire. They will do their
best to prevent the fire from spreading. They have already expressed their
willingness to hear out the requests of other countries in order to isolate
Brazil's case. I have believed for many years that a country that is forced
to make this kind of decision should receive full support from Latin
America and the rest of the Third World. It would also deserve the support
of socialist countries and developed countries that are neither colonial
nor imperialist powers. I also feel that reprisals cannot be taken against
Brazil. Since reprisals did not work with Cuba, they are less likely to
accomplish anything with Brazil. It would be tantamount to trying to put
out a fire by pouring gasoline on it. Brazil is defending not only its own
interests but the interests of all creditors. This is not a battle of the
Brazilians alone but of the entire Third World. Whatever success Brazil may
have in this struggle will benefit the other creditors as well.

VEJA: Yes, but the creditors want Brazil to pay, and the Third World cannot
help Brazil do it.

Fidel: You must understand that the problem was not created by Brazil but
by economic system that is experiencing a crisis, a deep crisis. I have
always said to the crisis would take place, and now we have it, staring us
in the face. Notice that no one is talking about the payment of the debt.
Nobody even discusses it. It has already become a mere hope of the
creditors. They are talking about the interest and many countries can no
longer pay even a portion of this interest. Some time ago the creditors
began to lend money to help pay interest on a debt that could not be
repayed. While in 1985 the debt amounted to $360 billion, now it stands at
$400 billion. It has become a cancer that is out of control. I am not
talking from the political point of view. What I just told you is simple
arithmetic. In the end neither the debt nor the interest will be paid. It
is impossible to pay and equally impossible to collect. It is a political,
economic, moral, and mathematical absurdity.