A Creative Way to Pay the Czechs

During the Cold War, much of the world was divided into two camps: the democracies and the communist nations. While there were definite rifts and disagreements within each camp, by and large, the gulf between the two sides was even larger. In an effort to exert economic pressure against the “evil empire,” the United States and its NATO allies often boycotted the Soviet Union and those nations under its thumb. As a result, the communist Eastern European nations traded amongst themselves, occasionally looping Cuba into the mix. 

Cuba, though, didn’t have as robust an economy as other nations. And when the Cold War ended, Cuba had a problem: a lot of debt and not a lot of cash. 

By the time 2016 came around, Cuba owed Czechoslovakia the equivalent of about $270 million. There were two problems, though: first, Cuba didn’t have the money, and second, Czechoslovakia no longer existed. The second part was easily resolved, as the Czech Republic, one of Czechoslovakia’s successor states, inherited the owed debt. But that didn’t change the fact that Cuba couldn’t meet its financial obligations.

Instead, it tried to get the Czechs very, very drunk.

As the Guardian reported, Cuba asked to pay up not in cash, but in goods. Cuba’s proposal was made up predominantly of rum — a lot of rum. According to Atlas Obscura, the Cuban government offered “around 135,000 tons of rum or enough for 130 years of Czech consumption.” (And that’s saying something — per the Guardian, the Czech Republic is the “country with the highest per capita beer consumption in the world” and had already imported nearly 900 tons of Cuban rum the year prior.)

Crazy? Maybe, but not everyone thought the offer was so ridiculous. Bloomberg News suggested that the offer “isn’t as weird as it sounds” as you can always try to sell the rum to recoup some of the debt. One economist went on record to endorse the deal, saying that Czechs should take the offer for similar reasons, and also noting that it wasn’t like Cuba was going to suddenly have the cash any time soon. And the Czech government didn’t reject it out of hand, either. Food and Wine explains:

Czech deputy finance minister Lenka Dupakova reportedly described the offer as “an interesting option” – which might speak more to Czech skepticism that Cuba can repay its debts at all than to the Eastern European country’s love of rum.

From a logistics standpoint, Dupakova was specifically concerned about how the rum would sell. “These are relatively unknown brands which might be good, but we would have to advertise them and generally launch them into the market,” she said.

Ultimately, though, more sober minds prevailed. As of the close of 2016, the Czech government had not formally responded to Cuba’s offer, and the debt appears to remain unpaid.

Bonus fact: Rum in lieu of payment isn’t entirely unheard of. From 1850 to 1970, the Royal Navy (that’s the UK’s navy) offered sailors a midday drink as part of their daily compensation — an eighth of a pint of rum. These “rum rations,” as they became known, were optional, and if you were a teetotaller or otherwise abstained from the day’s drink, you could choose an extra three pence in wages that day. (As the BBC notes, the tradition ended in 1970 out of “concern[s] that a lunchtime slug of rum would hinder sailors’ ability to operate increasingly complex weapons systems and navigational tools.”)

From the Archives: Bud But Not Buddies: Budweiser in the Czech Republic isn’t what you think.