The Yomiuri Shimbun
Aug. 20, 2008

Cuba defaults on debts owed to Japanese firms

The National Bank of Cuba told Nippon Export and Investment Insurance (NEXI) on Aug. 11 that the bank would not be able to pay for imports into Cuba in due terms as the country is short of funds, the independent administrative institution said Monday.

Observers say more of Cuba's debts may become uncollectible in the near future as it has been seriously affected by soaring oil and food prices.

Though the extent to which Cuba is short of settlement funds is unclear as it is not a member of the International Monetary Fund, observers say the influence of the country's financial situation on the global economy will be limited as its economy has been cut off from international financing.

Meiwa Corp., a midsize trading house, said Monday that 872 million yen worth of its accounts receivable for medical instruments and other items may be uncollectible.

The company said it would not be seriously affected by the situation as 97.5 percent of the bad debts are covered by NEXI.

Exports from Japan to Cuba, mainly comprising medical and other precision instruments, were worth about 20.9 billion yen in 2007. Most of this amount was insured.

NEXI said it had already covered losses several companies have incurred on their exports to Cuba, but has not made the details public.

NEXI was established in 2001 to provide foreign trade and investment insurance services.