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Lula signs $200m in deals with Fidel
CubaNews / October 2003

By Larry Luxner

Brazil and Cuba signed $200 million in business deals during a highly successful visit to Havana by Brazilian President Luiz Inacio Lula da Silva, an old friend and admirer of Fidel Castro.

Specifics of the agreements weren’t disclosed, though Brazilian officials told AP and Reuters that they included $140 million in deals with Brazilian firms to build four beach resort hotels. Other deals reportedly involve the sugar and transportation industries.

Brazil’s National Social and Economic De-velopment Bank (BNDES) is to provide financing for the investments, though bank officials denied earlier suggestions that BNDES was negotiating a $400 million credit line for the Castro government.

Earlier this year, CubaNews reported that BNDES had extended a $60 million loan to Cubacel — a state-owned cellular monopoly — so it could purchase badly needed mobile telephone equipment from the Brazilian subsidiary of Swedish telecom giant Ericsson.

“Cuba is very honored,” said a beaming Castro with Lula at his side. “This is the best trip we have had in a long time.”

The two presidents signed accords on education, health, agriculture and fishing, as well as an agreement to renegotiate Cuba’s $40 million debt with Brazil, whose sizeable delegation consisted of 20 Cabinet members, 50 business executives and 30 lower-ranking government officials.

Yet critics from Miami to Madrid were outraged that Brazil’s leftist leader had refused to meet with dissidents or even discuss Cuba’s dismal human-rights record with Castro.

“What Lula did was horrible and condemnable,” said Joe García, executive director of the Cuban American National Foundation, “but it’s no more disgusting than Florida cattle dealers sending cattle to Fidel’s brother.”

Last year, trade between Brazil and Cuba came to around $88 million (see our extensive report in the June 2003 issue of CubaNews).

One company that might see immediate benefits from the Lula visit is Volvo do Brasil, which recently sold 33 tourist buses to state tourism agency Veracuba; it already provides 90% of vehicles used in Cuba’s tourist sector.

Luiz Carlos Caparelli, sales manager of Volvo do Brasil, told Cuban daily Granma his company could contribute greatly to alleviating the island’s urban transport shortage.

“We offer the best of our experience to Havana so that it can incorporate the transport solution we achieved in Curitiba [a city of 2 million], where the Volvo do Brasil plant is based,” he said.

Caparelli mentioned the possibility of sending chasses to Cuba, thus enabling buses to be assembled at the Guanajay plant.

Meanwhile, Brazilian state oil giant Petro-bras has signed a letter of intent with Cuba on technological exchange as part of a strategy to return to the island in search of crude.

Petrobras CEO José Eduardo Dutra said his company was studying at least one block that should be offered on a concession basis by the Cuban government.

“We have already been there and drilled one well five years ago, and now Cuba will be licensing other blocks,” Dutra told Reuters. Petrobras also has interest in working there.”

The company’s first wildcat well off Cuba’s northern coast turned out to be dry, leading it to pull out of Cuba after spending $15 million.

If it does re-enter the market, Petrobras will join two other Brazilian entities that have invested heavily in Cuba: Busscar Onibus S.A., which assembles buses, and Souza Cruz S.A., which produces cigarettes for domestic use in a joint venture with state-run Tabacuba.

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