Russia & Cuba relive old times in shadow of debt

"Our mutual trade has reached $930 million in recent years, which is not bad for both Russia and Cuba," Putin told a news conference following the talks.

"But there are still some problems remaining which have accumulated in the last 10 years and they demand especially close attention and solution. The Soviet Union has invested a lot in Cuba’s economy … This is worth billions of dollars. We have to understand what to do about this."

Cuba’s debt to the ex-Soviet Union, inherited by Russia, has been previously estimated in Moscow at around $20 billion.

But Havana disputes this figure and argues in return that the damage caused to its economy by the collapse of the Soviet Union in 1991 adds up to an equivalent value.

Putin and Castro signed a joint declaration at Havana’s Revolution Palace which condemned the US embargo, called for a multipolar world to counter U.S. Influence and lamented the perils of economic globalization for poor nations.

The mention of the US embargo will have most pleased the 74-year-old Castro, hosting Putin since Wednesday night on the first visit by a Russian leader to Latin America since the collapse of the Soviet Union a decade ago.

In Putin’s message to US election winner Bush, he wished him "success in this important and responsible post" and looking forward to "an intensive and constructive dialogue with you and your administration."

Bush has promised a tough line on Castro, defiantly maintaining one of the world’s last few bastions of Communism and a longtime political thorn in the side of Washington.

Although himself a proponent of multi-party democracy and free-market economics — both of which Castro has rejected in Cuba — Putin wants to rekindle Moscow’s political and economic ties with its former Cold War ally.

Putin is thought to want to rebuild Russia’s global role, particularly in the Third World, and has not been shy about making advances to other nations viewed suspiciously by the West — including Libya, North Korea and Iraq.

Besides their joint communique, Castro and Putin also penned five other agreements, covering legal and health cooperation, avoidance of double taxation, trade targets for 2001-2005 and a project on archives of mutual interest.

"I believe new prospects have opened up for the development of relations between Russia and Cuba … They have received a special boost from President Putin’s visit," Castro said.

The presidents, who met at Havana airport for Putin’s arrival, spent most of the day together, with a highly unusual visit to the mysterious Russian-operated Lourdes electronic intelligence center outside the Cuban capital in the afternoon.

Putin held an unscheduled 20-minute meeting with Castro after his arrival shortly before midnight on Wednesday, during which he invited Castro to visit Moscow.

The last major visit to Cuba from Moscow was by Sovietleader Mikhail Gorbachev in 1989.

The Soviet Union became Cuba’s strategic partner shortly after Castro came to power in his 1959 revolution, which toppled dictator Fulgencio Batista. But relations cooled dramatically after the collapse of the Soviet empire in 1991.

Russia believes part of Cuba’s debt could be covered by Russian participation in some potentially lucrative projects left over from the Soviet era.

Unfinished projects include a nickel ore processing plant at Las Camariocas, modernization of the Cienfuegos and Santiago oil refineries and the incomplete Juragua nuclear plant, whose construction was halted in 1992.

But no concrete agreements on these projects wereannounced.

The two governments signed a protocol extending a $350 million Russian credit to the island, originally granted in 1993 and intended to finance the completion of industrial projects.