Cuban Government Attempts to Ease Foreign Debt with National Asset Swap

On Wednesday, Cuban leader Miguel Díaz-Canel proposed a strategy to exchange foreign debt for national assets, as part of the Emergency Economic and Social Agenda unveiled during the Extraordinary Plenary Session of the Central Committee of the Communist Party of Cuba, held at the Palace of the Revolution.

The president explained the plan as follows: "We must initiate a debt-for-assets swap process, primarily focused on exchanging national assets for debt, without permanently relinquishing ownership. This approach enables us to secure financing and other benefits without forfeiting the property rights of the assets."

This mechanism, referred to as a debt-for-asset swap in sovereign finance, involves offering partial control or use of state assets—such as companies, infrastructure, lands, or facilities—in exchange for creditors forgiving or reducing the debt, without Cuba permanently transferring ownership of these assets.

Exploring Additional Financial Mechanisms

Díaz-Canel also highlighted other potential avenues: "We should explore additional mechanisms like debt-for-nature swaps, debt-for-social development swaps, and issuing bonds for sustainable development goals, among others."

The announcement comes amid an unprecedented financial crisis. Cuba's foreign debt is estimated to exceed $29.5 billion, with documented defaults to numerous creditors: over $1.5 billion owed to Mexico for oil exports between May and November 2025, more than $3 billion to Argentina, and approximately €330 million to Spanish companies, along with overdue payments to the Paris Club since 2019.

Changes in Foreign Trade and Investment Policies

In the same segment of his address, the president declared the removal of mandatory intermediaries in foreign trade: "We need to authorize direct import and export for both state and non-state productive, exporting, or import-substituting companies, while maintaining technical and fiscal requirements but eliminating obligatory intermediation."

Regarding foreign investment, Díaz-Canel acknowledged that it is "trapped in a web of obstacles" and announced its direct authorization in the national private sector, including small and medium-sized private enterprises (SMEs), "with clear rules on ownership, repatriation, reinvestment, and dispute resolution."

The government also pledged to review the list of activities prohibited to the private sector under the principle of "replacing prohibitions with responsible regulations whenever possible," and to ease the bureaucratic burden on SMEs by clarifying their social purpose.

Engagement with Cuban Expatriates

For Cubans living abroad, Díaz-Canel offered an unrestricted framework for participation: "To those who wish to build with Cuba without seeking to impose anything, we say with open hearts: here is your home, and here is the open door, because in these times, no good Cuban is surplus to this homeland."

The more than 20 proposed transformations were approved by the Plenary with the backing of Raúl Castro, who participated via videoconference and emphasized that "as important as the approval of these transformations is their timely and proper implementation."

The National Assembly was called to an extraordinary session this Thursday to ratify the measures approved by the Communist Party, amidst an economic outlook that the Economic Commission for Latin America and the Caribbean (ECLAC) projects will see a 6.5% contraction in 2026, with an accumulated decline of 10.3% over the 2025-2026 biennium.