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Rating Communism.

WHEN MOODY'S INVESTOR SERVICES, THE INTERNATIONAL credit rating agency released its first ever report on Cuba in late May, the company was deluged with curious inquiries from media and investors alike. Everybody asked the same question: Why Cuba? After all, the communist nation has not paid its debts--now totaling $8.5 billion including principal and interest--since declaring a moratorium in 1986. * "Even the Cuban government asked why we were so interested," says Mauro Leos, a Moody's analyst who spent three days on the island meeting with government officials and gathering data on its economy. "It was important for Moody's to send out the message that we cover the entire Latin American and Caribbean region, even though Cuba is a country that's out of the loop," he explains. * Moody's assigned Cuba a Caal rating, one of its poorest, which comes as no surprise. Cuba has struggled to rebuild after losing an estimated $7 billion in annual aid from the former Soviet Union. * In the 1990s, Cuba has relied on tou rism with some success to fill its coffers with dollars and has formed joint ventures with several Spanish and Canadian companies. "Despite the profound changes, Cuba remains an economy in transition," concludes Moody's. Without mentioning President Fidel Castro by name, Moody's says it is concerned about the "intergenerational transfer of power." It also warns of possible social unrest because of "the double economic standard" between Cuban-peso-based and "dollarized" economies.
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Author:Bustos, Sergio R.
Publication:Latin Trade
Date:Aug 1, 1999
Words:238
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