COLON FREE ZONE, PANAMA
WHEN Cuba's state-run shops ran out of embargoed United States luxury goods, Fidel Castro used to send his buyers here to restock. Cubans breezed into Colon's Free Zone, slapped down $100 bills, and snapped up Levis, IBM computers, and Whirlpool refrigerators. ``They [the Cubans] were flying in and out of here a few years ago,'' says a free-zone salesman.
But the buying spree is over. Cuba is no longer a conspicuous consumer in Colon, home to the world's second-busiest tax-free trade zone.
Soaring oil prices and recent cutbacks in Soviet subsidies have strangled Cuba's cash flow, making credit deals more necessary. But with their economy under siege, Cubans are seen as poor credit risks.
``You don't see [Cubans] here anymore,'' says Jorge Lopez of Jacobo International, an electronics outlet.
Set at the Panama Canal's Atlantic gate, the zone comprises a warehouse area and a 100-acre commercial tract, walled off from Colon, a gritty port city. The zone, which is a pillar of Panama's economy, lets companies import, store, assemble, and reexport wares ranging from furniture and chemicals to electronic goods.
Zone reexports reached $2.3 billion last year, with shipments to Cuba about 3.5 percent of all sales, according to controller general figures. But sales to Cuba have plunged in the last six months and some companies report losses in Cuban credit deals, say zone wholesalers. Cuban Embassy officials were not available for comment.
Merchants were stunned last year when Mr. Castro whisked home his two main buyers from Panama during a purge of Cuban officers linked to drug trafficking. ``They shipped them back there and executed them,'' says Fernando Nunez, a radio station owner with ties to Panama's Cuban community. ``You'd think twice about selling to that same company wouldn't you?''
Although Castro's shopping list is shorter these days, the US Treasury Department still blacklists more than 200 Panamanian companies thought to be trading with Cuba. Since the 1960s, US sanctions against Cuba prohibit the export of US goods to the island.
The regime of Manuel Noriega, Panama's former dictator, kept friendly ties with Cuba, especially after ties with Washington soured. Mr. Noriega helped Castro defy Washington's embargo and buy tony US imports. Front companies, such as the Panamanian company Transit, shipped US goods to the zone and funneled them to Cuba, says Gerardo Harris, the zone's deputy director. Transit, now closed, was run by Carlos Duque, a Noriega business partner and presidential candidate.
In l989, zone reexports to Cuba - mostly Far Eastern, US, and European goods - totaled $82 million. Businessmen say much more slipped by unreported.
Businessmen remained accomplices against Washington even after the US invaded Panama last December. Sales to Cuba were brisk through April, about $8 million a month, according to comptroller figures. But businessmen say sales dropped to $5.7 million in May.
Panama's pro-US government has taken some steps to clip diplomatic and commercial ties with Cuba. The Cuban ambassador was sent home in March, after Cuba attacked the new Panamanian government's legitimacy. Panama has also shut some front companies that were shipping US goods to Cuba.
``There's been visible progress on the Cuban front companies - getting them out of business,'' says Deane Hinton, the US ambassador to Panama. ``The rest of the trade to Cuba - we don't much like it, we wish it didn't take place, but there's nothing illegal about it.''