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Published: Sat, December 17, 2016
Economy | By Melissa Porter

Cuba offers to pay off debt to Czech Republic with rum

Cuba offers to pay off debt to Czech Republic with rum

Michal Zurovec, a spokesman for the Czech finance ministry, said that Cuban authorities have proposed to pay back $276m (£222m) to the Czech Republic from the time both countries were part of the communist bloc.

In total, Cuba's external government debt is about $24.7bn, or about 31 per cent of the country's gross domestic product, according to estimates by Moody's. Cuba also has a lot of pharmaceutical drugs on hand, and there was some talk of using medication as a form of settlement as well.

Cuba is not, however, the first state to offer this kind of payment to the Czech Republic. If the entire debt were paid fully in rum, the supply would last well over a century according to current Czech consumption rates.

However, Cuban drugs do not have European Union certification and hence, could not be used to pay back the debt. If Cuba's offer is taken up, the Czech Republic is expected to have rum reserves that would last more than 100 years.

While the trade offer was being considered by Prague, Zurovec thought the debt ought to be paid at least partly in cash.

Does Cuba's Havana Club rum hold up to its legend?

Pernod Ricard's Havana Club is the fifth-largest rum brand in the world, with nearly 4 million cases sold from 2012-2013 throughout 120 countries. While restrictions were lifted this year allowing U.S citizens to buy Cuban rum and cigars, the island still faces a devastating US -imposed economic blockade.

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