SANIBEL – The restoration of diplomatic relations between Cuba and the United States unlocks new prospects for the island’s economy. Some steps, including the removal of the US trade embargo, are prohibited by the Helms-Burton Act, adopted by the US Congress in 1996. But the renewal of Cuba’s membership in the International Monetary Fund is a real possibility.
Cuba was one of the IMF’s 40 original members. It was involved in much of the preliminary planning for the 1944 Bretton Woods conference, and had an active delegation there. As early as 1941, Cuba worked together with other Latin American countries in an unsuccessful attempt to establish a monetary role for silver, alongside gold. Later, it helped to secure greater voting rights for small states and a special status for Latin American countries on the IMF Executive Board.
After Cuba joined the IMF (and the World Bank) in 1946, it played a positive role in the Fund for the next 12 years. In 1954, it became the tenth country to accept the full obligations of the Fund’s Article VIII, eschewing the use of foreign-exchange restrictions on international trade. In 1956, it took a routine loan from the Fund, repaying it the following year. And then the trouble began.
In 1958, the government of President Fulgencio Batista borrowed a small amount from the IMF: $12.5 million, equivalent to 25% of Cuba’s quota. The terms of the loan called for Cuba to repay it within six months; by then, however, the government was close to collapsing.