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INTERVIEW-Latam development bank CAF eyes presence in Cuba
May 28, 2015 / 7:52 PM / 2 years ago

INTERVIEW-Latam development bank CAF eyes presence in Cuba

CARACAS, May 28 (Reuters) - The Development Bank of Latin America (CAF) is hoping to be the first multilateral lender present in Cuba, its executive president said on Thursday, as the communist-run island seeks foreign investment amid an opening to the United States.

Buzz around Cuba has grown since U.S. President Barack Obama and Cuban President Raul Castro in December announced they had agreed to re-establish the ties severed some 54 years ago and work toward normalizing relations.

CAF, a major lender to Latin American infrastructure and development projects, is among many companies, law firms and other organizations hoping to set up an office in Havana.

"The idea is that Cuba can be a member of CAF," Enrique Garcia told Reuters in his Caracas office, adding he was already in talks with the government.

"We hope this can happen relatively quickly. I don't mean next month, but there's a pretty clear understanding... we're very optimistic," added Garcia, a Bolivian economist.

Unlike other regional financial institutions, like the Inter-American Development Bank, CAF does not require members countries to be part of the Organization of American States, which Cuba has been out of since 1962.

Still, before joining CAF, Havana would have to adapt to a series of norms and regulations, including for instance declassifying information on its reserves and opening up its accounting books, Garcia said.

In the meantime, CAF will work with Cuba in reaching cooperation agreements and, should Cuba be keen, providing recommendations for unifying its dual exchange rates, the U.S.-educated Garcia added.

LOW LATAM GROWTH

CAF, which last year reported assets worth $30.5 billion, is made up of 17 Latin American and Caribbean countries, as well as Spain, Portugal and 14 private regional banks. Its main shareholders are Bolivia, Colombia, Ecuador, Peru and Venezuela.

After a years-long boom, Latin America has been undergoing an economic slowdown as China eases its demand for commodities from Argentine soy to Chilean copper.

The region will grow a paltry 1.3 percent this year, Garcia predicted, stressing that the slowdown should push countries to rethink their commodities-driven economic models.

"This year Latin America will have another low growth rate," he said.

CAF usually lends most money during times of crisis, Garcia added. When asked whether it could extend funds for infrastructure or development projects to Venezuela, reeling from a recession and drop in oil prices and facing expensive credit, he said "of course." (Writing by Alexandra Ulmer; Editing by Andrew Cawthorne and Christian Plumb)

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