Vol. IX, No. 9 www.cubatradenews.com September 2007 Obama: Modest proposal, big impact The Democratic Congress so far has disappointed those in favor of ending the embargo against Cuba. But now, Cuba is popping up in presidential campaigns in a way it hasn’t before. A novelty The face of change is Democratic front-runner Barack Obama, who broke a decades- in Miami: old political taboo by campaigning on an embargo-easing platform in Miami. The A presidential Illinois senator said he would roll back the Bush Administration’s 2004 travel and frontrunner remittance restrictions against Cuban Americans. campaigning “I will grant Cuban Americans unrestricted rights to visit family and send to ease Cuba remittances to the island,’’ Obama wrote in an op-ed published by the Miami restrictions. Herald four days before a fundraiser in Little Havana. Although Obama’s proposals are modest — he said he would continue the embargo, with radical political change in Cuba as his ultimate goal — Photo courtesy Obama he has succeeded in forcing the other candidates to take a stand on U.S.- Cuban relations in their campaigns. Obama is taking a calculated risk. Fifty-five percent of Cuban Americans in Miami favor unrestricted travel to Cuba, according to a recent survey by Florida International University. And the potential rewards from the mainstream electorate are large: fifty-six percent of Americans favor lifting all restrictions on Cuba, according to a recent Zogby poll. Also see: And the Others? P. 2 Continued on next page
FT: Washington targets foreign banks Economy U.S. criminal investigators and regulators have ALBA BANK GETS UNDERWAY stepped up investigations of several large European Government officials from Cuba, Nicaragua and Venezuela banks for violating U.S. sanctions against Cuba, Iran, met in Managua Sept. 3 to hammer out the founding act and Libya and Sudan, the Financial Times reported. bylaws of a development bank under the auspices of the ALBA According to an anonymous source quoted by FT, some trade and integration agreement. of the targeted banks have begun to negotiate settlements The draft proposal will then be presented to the ALBA and are expected to pay fines by the end of this year. Council of Ministers, which will gather in Havana Sept. 20- The legal lever backing up the Bush Administration’s 21. investigations is a clause of the Patriot Act that aims at If funded, the Banco de la Alternativa Bolivariana de las U.S. dollar transactions third-country banks perform for Américas could provide another boost to the Cuban economy. clients of embargoed countries. All of these payments In April, Venezuelan President Hugo Chávez announced that must clear through a U.S. financial institution, which the Chinese government was willing to contribute $4 billion to the Patriot Act forbids. a $6 billion fund that finances ALBA infrastructure projects. Although Washington has not provided any evidence The creation of the of Cuba supporting terror organizations, and Cuba Banco del ALBA was ALSO READ apparently isn’t a target in the administration’s War on decided at an ALBA Terror, the Bush Administration’s efforts have already Council of Ministers ‘ALBA’S TELECOM ’ caused at least a dozen foreign banks to drop Cuba meeting in June. The page 5 altogether over the past two years; nearly all foreign charter members Continued on page 8 agree that all ALBA Continued on page 5 ‘Obama,’ from previous page programmatic difference from the historical majority of the It’s too early to say whether the move helped or damaged main candidates.” his chances in the Florida and other states’ primaries, but Obama’s next test will come Sept. 9 when the Democratic Obama’s Aug. 25 pilgrimage to Little Havana increased the candidates debate each other at the University of Miami. probability of a more conciliatory era to begin between the United States and Cuba, should he be elected. And the others? Rousing applause and 1,500 sold tickets at the fundraiser aside, Obama managed to line up the support of the Miami- The Democrats: Dade Democrats for his restrictions-easing proposals before •Sen. Hillary Clinton has said she won’t lift the embargo the event. Obama was able to achieve this mainly with the until Cuba has changed substantially. Clinton has made help of local Cuban American politicians who only a few Cuba statements mostly in reaction to Obama whose years ago were weighty embargo supporters. foreign policy proposals she has called“naïve.” In a recent “It shows courage, and it shows commitment to move Senate vote, Clinton supported funding for TV Marti. beyond the status-quo politics of rhetoric, which is all the •John Edwards has expressed support for the embargo Cuban-American community has received from any party in the past, but didn’t rule out meeting with the heads of for the last half century,” Joe Garcia, a former executive “rogue” states. director of the hardline Cuban American National Foundation •Connecticut Sen. Chris Dodd has sponsored legislation and chairman of the Miami-Dade Democrats, said about that would end the travel ban altogether. Obama’s proposal. •Bill Richardson is in favor of maintaining the embargo, French embargo expert Salim Lamrani, in a commentary but he has said Washington should “reevaluate” it. in Spain’s left-wing Rebelión’— a publication generally •Delaware Sen. Joseph Biden is in favor of maintaining supportive of Cuba — called Obama’s proposals “eminently the embargo. constructive.” •Ohio Rep. Dennis Kucinich calls for an end to the What’s more, in a historical first, Obama got restrained embargo. applause from high-ranking Cuban officials and Cuban state •Mike Gravel opposes the embargo and has called for a media. normalization of relations. To be sure, Fidel Castro countered Obama’s gambit with a full-blown verbal attack belittling his intentions. The Republicans Suggesting that Obama will end up as vice president under •Mitt Romney supports the embargo. a President Hillary Clinton, Obama and Clinton “are not •Rudy Giuliani has attacked Fidel Castro and Hugo making politics — they are playing a game of cards on a Chávez in fiery campaign speeches. Sunday afternoon,” the ailing Cuban leader wrote in a •Arizona Sen. John McCain has consistently voted in scathing Aug. 28 editorial. favor of the embargo. But with younger brother Raúl at the helm of Cuba’s •Mike Huckabee’s opinion on Cuba policy is unknown. government, other official statements gave Obama a cautious •Kansas Rep. Sam Brownback has expressed support but warmer welcome. for the embargo. Breaking with the Republican White Obama expresses “the sentiment of the majority of House, in 2003 he voted to ease restrictions on Americans Americans,” Foreign Minister Felipe Pérez Roque said Aug. traveling to Cuba. 22 in Brazil, asked to comment by reporters. •California Rep. Duncan Hunter has been a consistent And an Aug. 25 article in Communist Party newspaper supporter of a hard line against Cuba. Granma International pointed out that Obama “separated •Texas Rep. Ron Paul has worked against the himself from the traditional declarations against the Cuban agricultural trade restrictions. revolution in U.S. election campaigns, marking a •Colorado Rep. Tom Tancredo’s stance is unknown.
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2 Documentation: Cuban trade statistics
Tracking In its report to Congress in June, the U.S. International Trade Commission compiled a wealth of statistics about Cuba’s foreign trade. We are reprinting a the Embargo selection of these statistics here. Cuban agricultural, fish, and forestry imports By Paolo Spadoni 2000–06 (mln. US$) Irrelevant dissidents? Country 2000 2001 2002 2003 2004 2005 2006 United States 0 4 140 254 392 352 337 The recent succession of power EU 273 238 209 239 164 171 170 from Fidel to Raúl Castro has so far Brazil 22 58 41 27 62 110 149 produced little change, not only in Argentina 41 36 1312687271 Cuba but also in U.S. policy toward Canada 74 84 62 41 63 79 66 the island. China 70 59 87 47 32 57 52 Labeling the power shift a New Zealand 6 44 30 39 54 40 43 continuation of “autocracy,” the Total 550 603 650 756 937 1,045 1,039 Bush administration has stated that it makes no difference whether Fidel Source: ITC, compiled from Global Trade Atlas. Note: Data unavailable for Vietnam or Raúl leads the country. In order to hasten a democratic transition in Cuba, the United States continues to Cuban agricultural, fish, and forestry imports rely on restrictive measures aimed to deny hard-currency resources to the from the United States Castro government and provide 2000–06 (mln. US$) increasing financial support to Commodity 2000 2001 2002 2003 2004 2005 2006 dissident groups in an attempt to Grains 0 2 52 83 180 145 136 “empower” the Cuban people and Wheat 0 0 23 37 58 51 51 strengthen an independent civil Flour 0000003 society. It seems almost irrelevant to Corn 0 2 23 36585543 the White House that some Rice 00611643940 prominent Cuban dissidents, often Animal feed 0 0 19 26 36 24 42 portrayed as U.S.-backed Soybeans 0 0 21 34 28 33 32 “mercenaries” by the island’s Fats and oils 0 0 22 52 24 28 22 authorities, have described Bush’s Dry beans 000181220 policy approach as Meats 0 2 23 37 63 66 59 counterproductive and actually favor Poultry 0 2 23 37 61 58 45 lifting the embargo. Pork 00002814 Leaving aside Washington’s Dairy products 0000273013 chronic inability to spur meaningful Processed food 000121021 changes in Cuba, the U.S. focus on Paper and wood 000510610 dissidents is deeply flawed for Total 0 4 140 254 392 351 337 several reasons. Source: ITC, compiled from Global Trade Atlas. First, it is no secret that the vast majority of U.S. dissident aid never reaches the island and simply fuels anti-Castro projects in South Florida. Cuban imports of paper and wood products As Cuban dissident Oswaldo Paya 2000–06 (mln. US$) unequivocally put it, “Virtually all Country 2000 2001 2002 2003 2004 2005 2006 such funds remain in Miami, but they EU 8.7 11.6 12.4 11.5 12.1 12.9 12.6 tarnish us even so and simply make Canada 5.3 3.0 7.7 9.6 8.5 8.6 13.7 our work more difficult.” United States 0 0 0.01 5.2 9.8 6.4 9.7 To make things worse, a report Brazil 0.7 2.2 3.8 4.5 4.5 6.8 8.2 issued by the Government China 0 2.1 5.5 3.0 6.2 2.1 4.8 Accountability Office (GAO) last Argentina 0.02 0.05 1.4 2.7 3.3 5.2 3.8 November revealed that about 95 Total 22.4 33.3 35.2 43.7 50.1 50.4 57.5 Continued on next page Source: ITC, compiled from Global Trade Atlas Continued on next page
3 Documentation: Cuban trade statistics
Cuban imports of processed food 2000–06 (mln. US$) Cuban exports 2000 2001 2002 2003 2004 2005 2006 2001-06 (mln CUC) European Union 21.3 22.3 26 31.8 31.7 31.6 33.6 United States 0 0 0.9 11.6 10 2.3 1.1 2001 1,621.9 Mexico 6.7 5 4.8 4 3.1 4.3 4 2002 1,421.7 Chile 2.5 3.5 3.9 4.5 5.6 4.5 6.6 2003 1,617.6 Guatemala 0 0 1.7 4 2.6 2.3 3.5 2004 2,188 Canada 2.1 2 1.9 2.4 2.5 2.5 2.3 2005 1,994.6 Brazil 2.4 2 1.1 1.6 2.4 3.5 4.1 2006 2,759.4 China 0.28 0.39 4.7 0.1 1.1 1.9 5.5 Total 36.2 37.7 42.7 64.7 64.2 58.8 66.7 Source: Oficina Nacional de Estadísticas Source: ITC, Compiled from Global Trade Atlas.
Tracking the Embargo (contd.) of Cubans. What they really want is the introduction of economic reforms that would reduce state control, enhance percent of the $74 million the U.S. Agency for International living standards and foster actual development, something Development (USAID) had awarded for projects to foster the United States should welcome as a move in the right democracy in Cuba since 1995 had been assigned without direction. competitive bidding and proper oversight. Some funds, apparently granted by USAID “to provide humanitarian assistance and information to dissidents and their families,” Dictating the terms went to Miami-based groups that purchased and sent to Cuba More specifically, the White House and Congress should luxury items such as Nintendo Game Boys, mountain bikes, declare their willingness to take steps to normalize relations cashmere sweaters, crab meat, Harry Potter books, and and ease the embargo if Cuban authorities begin a process Godiva chocolates. What a waste of U.S. taxpayers’ money. of liberalization, even if such process remains limited to the economic realm and falls short of U.S. expectations. Discredited, because of U.S. link Washington’s myopic and confrontational approach to Cuba might play well in Miami, but it works against the goal of Moreover, even some leading pro-embargo Cuban- promoting democratic change on the island at a critical time American exiles recognize that dissident groups in Cuba when Raul Castro himself is contemplating a number of remain weak and pose virtually no threat to the current reforms to overcome the shortcomings of the socialist system regime. The reality is that Cuba’s dissident movement, and meet popular demands. despite the potential infusion of funds and various supplies Despite its alleged intention of empowering the Cuban from the United States, has little chance to grow in the near people, U.S. policy is conveying the message that the United future after being regularly infiltrated by Cuban state security States wants to dictate the terms of Cuba’s transition and agents and publicly discredited because of its U.S. links. supports only the views of political dissidents. This will Competing views among dissidents about whether officials continue to alienate ordinary Cubans and reinforce the in today’s communist government should have a say in a position of hardliners within the island’s government. post-Castro scenario simply add to the weakness of the Oscar Espinosa Chepe, a dissident Cuban economist who movement. was sent to prison in April 2003 after a massive government crackdown and later released on parole for health reasons, Radical transition not a priority recently noted: “Today, Raúl is the only hope of change in Finally, and most important of all, the Bush Cuba.” administration’s overattention to a handful of poorly Perhaps U.S. policymakers should give Raúl Castro a organized political dissidents who strongly oppose the Castro chance. government neglects the fact that in Cuba there are also many people who simply reject some aspects of the socialist Paolo Spadoni is a visiting assistant professor in the economic system. The end of the Castro brothers’ rule on department of political science at Rollins College in Winter the island, free and fair elections, and a transition to a fully Park. This column was first published Sept. 2 in the Orlando capitalist society are not immediate priorities for the majority Sentinel.
4 E c o n o m y
‘Alba bank,’ from page 1 “proyectos grannacionales” proposed at a meeting of ALBA nations — currently Venezuela, Cuba, Bolivia and Nicaragua heads of state in Caracas in April. These projects include a — should have equal participation in the bank, which will joint airline (Alsur), an aircraft maintenance and construction operate on the principle of complementarity. company, joint telecommunications company, a cargo and The bank is designed to take over some central bank passenger shipping company, a joint geology center for mining functions, coordinating the hard-currency reserve strategies projects, companies to develop the steel, aluminum and cement of the four nations. industries, and more. But first and foremost, it is a development bank. The main “We are establishing a new regional finance architecture that task of Banco del ALBA will be to fund operations of the 12 will not necessarily adhere to the usual conditions in financial relations,” Nicaraguan Finance Minister Alberto Guevara told ALBA’s telecom plans Prensa Latina. Guevara said that Bolivian officials could not participate If ALBATEL, as the “grand national” for technical reasons, but that Bolivia is being duly informed telecommunications company project is called, becomes about the meeting. reality, suppliers to Cuba’s ETECSA may have to change The Banco del ALBA project comes in addition to Banco their ways of doing business. del Sur, another regional development bank project Cuba’s vice minister of telecommunications at a speech spearheaded by Venezuela. Banco del Sur, capitalized with at in Caracas Aug. 8 provided an outline of the planned least $7 billion by charter members Venezuela, Argentina, telecom, one of a dozen “empresas grannacionales” Bolivia, Uruguay, Paraguay, Brazil and Ecuador, is set to begin proposed under the ALBA trade and integration operations in November. agreement. Cuba has supported the Banco del Sur project. •Standardization and joint purchasing: The member Both banks are designed to be a counterweight to U.S.- nations will first create an ALBA Telecommunications dominated multilateral financial instituations such as the Regulatory Authority to harmonize standards of the International Monetary Fund, World Bank, and Interamerican different countries. An ALBATEL engineering firm will Development Bank. then assist the telecoms of participating nations in selecting technologies, elaboration of technical projects, CUBA HELPS CREATE FOOD COMPANIES feasibility studies, equipment purchase and equipment Cuba and Venezuela signed an agreement to create five joint financing, personnel training, and technical support. agricultural companies within the framework of the Bolivarian •International communications infrastructure: A Alternative for the Americas (ALBA). All five companies will planned undersea cable linking Venezuela and Cuba, and be located in Venezuela, but their main task is to guarantee the Simón Bolívar satellite system (which is expected to supply of basic foodstaples — vegetable, milk and yoghurt, be operational by the end of 2008) will provide the rice, poultry, and wood — to both countries. The companies technical backbone. may also eventually supply other ALBA member nations. The •Internet: An ALBATEL Web division will produce its agreement was signed in Caracas by Cuban Agriculture own content, supported by a domestic software industry. Minister María del Carmen Pérez, and her Venezuelan counterpart, Elías Jaua. advertisement
5 advertisement
6 E c o n o m y Venezuela pushing Petrocaribe to next level The Third Petrocaribe Summit in Caracas Aug. 10-11 was underlined by Venezuelan efforts to bring the 14 nations that participate in the regional oil and gas supply agreement closer to the ALBA trade and integration agreement, the Venezuelan-Cuban integration project for Latin America. Cuba and Nicaragua are the only Petrocaribe member nations that are also part of ALBA. Eight heads of state and government took their commitment to the next level, signing an Energy Security Treaty under which Venezuela promises to help build refineries and other oil and gas inftrastructure, and guarantee access to oil reserves.. Chávez at the Petrocaribe summit photo Relaciones Exteriores Venezuela However, six Petrocaribe states — Antigua & Barbuda, the Bahamas, Guyana, the Dominican Republic, St. ... WHILE HOLDING BACK ETHANOL Lucia, and St. Kitts and Nevis — opted not to sign the new Trying to put the brakes on U.S.-Brazilian ethanol plans, document yet, saying they needed more time. Venezuela and Cuba are urging Caribbean nations to limit During the summit, Haiti and Nicaragua formally joined their sugarcane cultivation for ethanol. Petrocaribe. The other Petrocaribe members are Cuba, Antigua In March, the United States and Brazil signed an ethanol & Barbuda, the Bahamas, Belize, Dominica, Grenada, agreement that has prompted the Brazilian sugar and ethanol Guyana, Jamaica, Dominican Republic, Saint Kitts and Nevis, industry to push for increased sugarcane production in the Saint Lucia, Saint Vincent and the Grenadines, and Surinam. Caribbean region to export ethanol to the United States. More Caribbean nations joining ALBA — currently Reacting to the pact, Hugo Chávez and Fidel Castro have consisting of Venezuela, Cuba, Bolivia, Nicaragua and spoken out against a major expansion of sugarcane for ethanol Ecuador — could help the Cuban economy by broadening production, arguing this would trigger a food shortage. trade and investment. Now, acts are following the words. Under the Energy Cuba was represented by Vice President Carlos Lage and Security Treaty signed in August by eight member states of Foreign Investment Minister Marta Lomas, as well as a Petrocaribe, each state commits to dedicating only 10 percent technical delegation of state company CubaPetróleo. of its sugarcane seed capacity to ethanol production, in exchange for guaranteed access to Venezuelan oil and gas. Chávez proposes petrochemical cluster Ethanol production will be limited to the amounts “strictly Cuba and Venezuela should develop a petrochemical necessary” for gasoline additives, the agreement says. Hugo cluster around the Camilo Cienfuegos refinery, which is Chávez said that a billion-dollar refinery Venezuela is building currently being refurbished by a Cuban-Venezuelan joint in Nicaragua could include an ethanol refinery financed by venture, Hugo Chávez suggested during the Petrocaribe his country, “under the condition that [the ethanol] is only summit in Caracas Aug. 10. The refinery project in the used as an additive to the gasoline that’s being produced there.” southern port city should be completed by November, Another condition to get financing for ethanol infrastructure Chávez said. is that for each acre of sugarcane planted for ethanol, at least A Cuban petrochemical and gas cluster could serve as two acres of other crops must be planted. a model for other petrochemical clusters to be developed In another step that makes the life of Brazilian ethanol in Petrocaribe member nations throughout the Caribbean, companies difficult, the signatories promise to only deal with Chávez said. The cluster could include a regasification each other, eliminating third-country intermediaries. plant, as well as plastics, housing, medication, paint, urea, However, even Nicaragua, a close ally of Cuba and and textile companies. Venezuela, is hedging its bets. Sugarcane-based ethanol production should be run according to the circumstances of More to each country, President Daniel Ortega said during the summit. come? Nicaragua is also part of CAFTA, a new free trade agreement Cienfuegos with the United States. refinery Meanwhile, Cuba seems to be continuing with plans to update three of its 11 existing distilleries and build seven new ones, boosting ethanol capacity threefold to 130 million-plus gallons by 2010. Some of these projects are going up with the Courtesy PdVSA help of Brazilian joint venture partners.
7 E m b a r g o
LAWG: ANTI-EMBARGO BILLS ALIVE ‘Washington targets banks,’ from page 1 Despite a surprise defeat in July for a bill that would have eased U.S. agricultural exports to Cuba, one anti-embargo banks have stopped offering U.S. dollar services to group in Washington still expects bills seeking to ease the Cuba-based clients. travel ban to make it to the House floor this year in late The investigations have riled up bankers and September or October. businesspeople who doubt the legality of Washington’s “We were shocked by the vote in the House,” the Latin moves. American Working Group said about a July TK vote against “This is an issue where the legal lines are not clear. an amendment to the Farm Bill sponsored by Charles Rangel It is the kind of thing that banks around the world (D-N.Y.), the powerful chair of the House Ways and Means engaged in,” FT quotes an anonymous source. “The Committee. “Never before had the House voted against bottom line is, name a major bank in Europe that didn’t helping U.S. farmers sell their products to Cuba.” do dollar payments for Iran or Sudan. A large number LAWG blamed the defeat on the fact that the amendment of them did it for Cuba. And right there is the issue.” was attached to the controversial agriculture bill. Many However, there aren’t any signs that the European representatives had higher-priority amendments tugged into Union or Canadian governments are willing to the bill, and thought they couldn’t support any other challenge Washington’s actions against their banks. controversial amendments. The U.S. investigations were apparently triggered by The group gave an upbeat assessment for the remainder of a 2005 money-laundering settlement by Dutch-Belgian this session. bank ABN Amro. That case involved Iran and Libya. “Although we lost on the Rangel amendment, key “The ABN Amro case is a very high-profile indication congressional allies are energized to do more on Cuba travel of the intention of the Office of Foreign Assets Control legislation,” LAWG said, specifically mentioning Charles [at the U.S. Treasury Department] and other agencies Rangel, the New York democrat who chairs the powerful Ways to enforce that position,” the Financial Times quoted and Means committee. Wynn Segall, a partner at law firm Akin Gump in Rangel, according to LAWG, “is committed to making Washington. “As a result, it is a wake-up call for the changes in Cuba policy this year.” financial community with respect to the handling of wire Other observers attributed the defeat to pinpointing of transfers by foreign banks that ultimately touch on U.S.- freshmen by the U.S.-Cuba Democracy PAC, the campaign embargoed states.” funding arm of the staunchest pro-embargo activists. Embargo Payroll Money talks? US-Cuba Democracy PAC, largest contributions (2006 Cycle) Sixty-six House House Candidate Total Senate Candidate Total Democrats, including Salazar, John (D-CO) $10,000 Alexander, Lamar (R-TN) $10,000 20 freshmen — voted in Sires, Albio (D-NJ) $10,000 Lieberman, Joe (I-CT) $10,000 July against Rangel’s Barrow, John (D-GA) $8,000 Menendez, Robert (D-NJ) $10,000 farm bill amendment. Chandler, Ben (D-KY) $8,000 Nelson, Bill (D-FL) $10,000 Some of it may have to McMorris, Cathy (R-WA) $8,000 Whitehouse, Sheldon (D-RI) $10,000 do with money. The Wu, David (D-OR) $7,500 Burns, Conrad (R-MT) $8,000 anti-embargo side gets Schiff, Adam (D-CA) $7,000 Ensign, John (R-NV) $8,000 support from a PAC Ackerman, Gary (D-NY) $6,000 Corker, Bob (R-TN) $6,000 which reported a mere Baca, Joe (D-CA) $6,000 Hatch, Orrin G (R-UT) $6,000 $3,000 in assets at the Butterfield, G K (D-NC) $6,000 Kennedy, Mark (R-MN) $6,000 end of 2006. The pro- Carnahan, Russ (D-MO) $6,000 Coleman, Norm (R-MN) $5,000 embargo side is much Cuellar, Henry (D-TX) $6,000 DeWine, Mike (R-OH) $5,000 better funded and better Fitzpatrick, Michael G (R-PA) $6,000 Kyl, Jon (R-AZ) $4,000 organized: Their U.S.- Hastings, Alcee L (D-FL) $6,000 Dole, Elizabeth (R-NC) $3,000 Cuba Democracy PAC Kuhl, John R Jr (R-NY) $6,000 Bunning, Jim (R-KY) $2,200 gave $559,624 to Melancon, Charles J (D-LA) $6,000 Salazar, Ken (D-CO) $2,000 federal campaigns last Whitfield, Ed (R-KY) $6,000 Talent, James M (R-MO) $2,000 year. Nearly half that Wilson, Heather (R-NM) $6,000 amount went to Rehberg, Denny (R-MT) $5,500 Democrats. Terry, Lee (R-NE) $5,500 Fortenberry, Jeffrey Lane (R-NE) $5,264 Source: FEC
8 E c o n o m y Elections may formalize transition The nomination of candidates for local elections in Cuba ends Sept. 30; elections will be held in October. There is no began Sept. 1, without any announcement whether Fidel timeline yet for provincial and national elections. Castro would run again in his native town of Birán in eastern Municipal elections are held every two-and-half years, Holguín province. An absence of the ailing president from provincial and national elections every five years. the electoral process would automatically eliminate him as a candidate for the chief executive post, thus officially marking the end of his era. According to the 1976 constitution, the president is picked by the Council of State from among the members of the national assembly. In Cuba’s bottom-up electoral system, the national assembly consists of delegates from provincial assemblies, who in turn got elected from municipal assemblies. In March, Parliament President Ricardo Alarcón said he wouldn’t see a reason why Castro couldn’t run again. But one observer speculated that — given Fidel’s Castro’s delicate health — election organizers might hold off on the next elections for provincial or national assemblies. The handlers of the electoral process likely don’t want to force Castro into a decision. Nomination of municipal candidates The Cuban president must be a member of parliament
MILITARY EYEING EXPENSIVE ARMS? ‘PERFECTION’ MOVING SLOWLY Communist Party daily Granma in August prominently Vice President Carlos Lage said that the government is reported about the deployment of a new anti-aircraft missile consolidating — rather than accelerating‘— the defense system by the Russian air force, highlighting that Perfeccionamiento Empresarial program at this time. Russia is trying to Lage blamed the program’s slow expansion on “the lack of export this sytem. discipline and control” at state companies, “accounting Russia’s S-400 deficiencies,” and”“superficial and unsystematic attention” by Triumf can shoot down the government. stealth aircraft, cruise Planning is a major challenge, Lage said. Most state missiles, and ballistic companies are way off target with revenue and profit missiles. The system projections made in this year’s central plan. Also, 38 of nearly can hit a dozen fast- 800 companies were forced to drop out of the business moving targets at a management program, due to lack of internal control. time. Russia has S-400 Triumf However, Lage said he hoped the program, started by Cuba’s offered the S-400 to armed forces in the early 1990s and applied to civilian state Greece, the United Arab Emirates, and China — which has companies since 1997, would accelerate in the next few years. reportedly spent $500 million on it. As of now, 797 state companies of 2,732 are taking part in “We will continue to buy the necessary material and fire Perfeccionamiento. Although they only represent 20 percent power,” even if the Cuban economy doesn’t grow, Fidel Castro of revenues of Cuban state companies, they concentrate 51 recently wrote in an editorial. percent of profits and 72 percent of hard-currency generation. Cuba’s military spending was very low during the Special As of the end of 2006, revenues of participating companies Period of the 1990s. Although no figures are published, official on average rose 21 percent, hard-currency generation 20 media have said that the military budget rose in 2006 and 2007, percent, profits 5 percent, employment 5 percent, and both in absolute figures and relative to total expenditures. productivity 7 percent compared to 2005, according to Lage. Cuba is also boosting its domestic weapons industry. Col. Promising relief for Cuba’s enormous price-wage gap problem, Arturo Torres, chief executive of Empresa Militar Industrial median salaries at participating companies rose from 399 pesos (EMI), told Trabajadores weekly in August that Cuba’s armed to 484 pesos last year. forces have been upgrading their arsenal over the past year, to Lage, the main architect of economic reforms in Cuba, defend the island against a possible U.S. invasion. EMI has headlined a national seminar on the program in August. Some increased its capacity four-fold since 1998, including for 650 executives participated in the event at the defense ministry munitions, grenades, land mines and anti-tank missiles. in Havana.
9 E c o n o m y PDVSA BEGINS OFFSHORE TESTS HONDURAS AGREES ON SEA BORDER Corporación Venezolana de Petróleo (PdVSA CVP) and joint venture partner CubaPetróleo began seismic tests in six offshore blocks it contracted in the western part of Cuba’s exclusive economic zone. The first-stage tests include 4,000 square kilometers offshore and 530 square kilometers in shallow waters (a total of 3,861 square miles). This is the first deepwater exploration project undertaken by PdVSA. Observers in Washington say this might convince some Congressional players to support a pending law proposal that would exempt oil exploration from the U.S. embargo. “It’s one thing when it’s Canada and China, another when Hugo Chávez comes knocking,” Dan Whiting, an aide to Sen. Larry Craig (R-Id.) told Bloomberg News. “This might push folks over the edge.”
Oil bill in limbo The future of a law proposal in Congress that would exempt Honduras said it has agreed with Cuba on a maritime border, oil exploration from the U.S. and that a treaty is ready to be signed, probably during a visit embargo is in doubt after of President Manuel Zelaya to Cuba in October. A Idaho Sen. Larry Craig memorandum of understanding was signed earlier this year, resigned effective Sept. 30 and both nations agreed on a draft of the treaty. The agreement after stumbling over a sex would expand Cuba’s exclusive economic zone, formed by a scandal. Craig was a major treaty signed in 1977 with the United States and Mexico, to force in the Republican camp the area south of the island. Geologists assume that there are considerable oil reserves in the area.’ Sen. Larry Craig for normalizing relations with Cuba. AND WHERE IS OTIS? GRID OVERHAUL STILL IN FULL SWING Half of the 562 elevators in Havana’s high-rise residential buildings must be replaced due to their deteriorated states, a Hundreds of thousands of small projects are still pending Juventud Rebelde article said. Over the past four decades, in the overhaul of Cuba’s outdated electric grid, as blackouts only nine elevators were substituted. In many buildings, on a neighborhood level are still a frequent occurrence, elderly and sick residents must climb stairs because the Granma reported. elevator is out of service, the article said. State firm UNISA, Low-voltage problems have actually increased in aging in charge of maintaining all elevators, said it recently spent secondary circuits, as the number of appliances is rising. Some $4.4 million to buy 83 new elevators. households had to unplug their brand-new Chinese pressure cookers and return to kerosene stoves, an Unión Eléctrica (UNE) official admitted. STATE OPENS THEME PARK More than 90 percent of the service failures are due to A theme park that opened its gates in late July at the Parque problems in faulty secondary circuits and building feeder lines, Lenin in suburban Havana received 130,000 visitors during Antonio Pía, UNE director of distribution grids, told the the first month of operations. The Mariposa park, which Communist Party daily. doesn’t charge hard currency, is open Thursday through The utility has been prioritizing projects that solve the Sunday; on several days in August, the administration had to biggest problems. While the overall overhaul is 48 percent close the doors at complete, only 37 percent of secondary-circuit problems have noon because it was been solved, Pía said, adding that the low-voltage problem is filled to capacity. now a top priority. The theme park According to Pía, UNE has yet to replace nearly 200,000 features 28 Chinese- electric poles, the feeder cables to more than 2.3 million made rides. A ticket residences, 23,000 transformers, and tens of thousands of is 1 peso MN, the miles of cable; more than 300 electric substations must be equivalent of 4 cents overhauled, and 400,000 circuit breakers and 1.4 million US, and the rides electric meters must be installed. cost between 1 and Mariposa Park in Havana The overhaul is expected to be completed by mid-2009. 6 peso MN.
10 C O N F E R E N C E S & E V E N T S NewsNews fromfrom thethe
•The Cuban Economy: Challenges and Options (academic SalesSales DepartmentDepartment conference), Carleton University, Ottawa, Sept. 9-11 ++North Dakota will ship 100 tons of seed potatoes to •The Trade Show (annual ASTA tourism convention), Las Cuba. The amount is small — worth some $15,000 — but Vegas, Sept. 9-11 this is the first shipment of seed potatoes from the United •6th Meeting of Nature Tourism (Turnat, ecotourism), States to the island in decades, state agriculture commissioner Baracoa, Sept. 18-21 •12th Intl. Transportation Fair, Havana, Sep. 27-30 Roger Johnson said. Cuba imports up to 40,000 tons of seed •10th Intl. Convention of Metals, Metalmechanic and potatoes annually from Canada and Holland, but the country Recycling Industries (METANICA), Havana, Oct. 8-12 wants to find other sources, Cuban officials said. The deal •Non-Aligned Movement Business Forum, Havana, Nov. came together after two Cuban inspectors toured seed potato 2-3 fields in the state’s Red River Valley in August, a rare occasion •25th International Havana Fair (FIHAV, general trade under the Bush administration, which has not granted visa to fair), Havana, Nov. 5-10 Cuban government officials for years. The inspectors are th •Universidad 2008, 6 Intl. Congress of Higher Education, scheduled to return in fall when the potatoes are ready to be Havana, Feb. 11-15, shipped, Johnson said. North Dakota has sold some $30 •10th Habano Festival (cigars), Havana, Feb. 26-March 4 •10th Intl. Meeting on Globalization and Development million worth of peas and lentils to Cuba since 2001.++ Problems (economics), Havana, March 3-8 ++One private exporter in August reported to USDA sales •10th Intl. Congress of Information (INFO 2008, of 100,000 metric tons of hard red winter wheat, to be information technology and business administration), delivered to Cuba from June 2007 to June 2008. The seller Havana, April 21-25, was not disclosed.++ •Int’l. Meeting of Rice (rice cultivation and processing), Havana, June 2-6 InIn andand OutOut Call (941) 330-0303 or send an e-mail to ++The Foreign Trade Ministry renewed the license of Total [email protected] for more information on Overseas Development, a subsidiary of French oil major events Total SA. Total performed offshore exploration in Cuban waters of the Gulf in the early 1990s, but hasn’t been active in Cuba since. Total’s Tenesol subsidiary operates a solar energy E m b a r g o project in rural Cuba.++ ++Conservas de Cambados S.A. of Spain opened an office OFAC FINES TRAVEL COMPANIES in Cuba. The fish and seafood canning company based in Travelocity agreed to pay a $182,750 fine to the U.S. Galicias province sells tuna, sardines, squid and more under Treasury Department. Treasury’s Office of Foreign Assets the Bogar, Alamar and Gourmet brand names.++ Control (OFAC) accused the second-largest online travel E m b a r g o agency, owned by Southlake, Tx.-based Sabre Holdings, to have booked 1,453 reservations for travel to Cuba between COURT DISMISSES TRAVEL LAWSUIT 1998 and 2004. A federal court in Washington, D.C. on July 30 dismissed a Travelocity didn’t voluntarily disclose the alleged lawsuit against the Bush Administration’s 2004 travel violations; the violations most likely involved foreign restrictions to Cuba. The suit, alleging that the restrictions subsidiaries of the Internet company. infringe on free-speech and academic freedom rights, is “The trips to Cuba were unintentionally permitted to be backed by the Emergency Coalition to Defend Educational booked by consumers online because of some technical Travel (ECDET), a group of 500 academics. ECDET said it failures several years ago and it’s just now being finally settled would appeal. “We look forward with enthusiasm to the with OFAC,” a appeals process,” the group said in a press release. Travelocity spokesman said in Florida college sends group to Cuba a statement. Twelve faculty members of Saint Leo University in OFAC also fined Tampa visited Cuba for a 10-day research trip. Under a American Express law passed in 2006, Florida prohibits the use of public Travel $16,625. funds for academic visits to Cuba. Saint Leo is a private Amex Travel’s school. A Saint Leo spokeswoman told the Tampa Tribune Mexican the trip is paid with privately funded faculty development subsidiary booked money.David Rivera, a Republican state representative two Cuba trips in from Hialeah who sponsored the law, told the Tampa 2002 and 2003. Tribune Saint Leo “should be ashamed of itself.”
11 C o m p a n y B r i e f s Ilyushin Finance Venezuelan aluminum company Alcasa is providing Cuba Co. said it signed a with technical assistance to develop a downstream aluminum memorandum of industry on the island. Alcasa is 92 percent owned by understanding with Venezuelan state holding company CVG, but 8 percent of Cuba’s Aviaimport Alcasa are owned by U.S. aluminum giant Alcoa Inc. Alcasa S.A. for the sale of is putting together a study on how Cuba could best enter the five additional aluminum business. Since aluminum production is very aircraft through energy-intensive, Cuba is most likely to develop an aluminum 2011, at an transformation industry, an Alcasa executive said. An-148 aggregate price of *** $150 million. The new agreement, signed at an aviation Canadian energy company Sherritt International late this industry show in Moscow in August, includes two mid-range year expects to conclude seismic tests at its Cuban offshore Tu-204 jets and three An-148 regional jets, which are made blocks, CEO Jowdat Waheed said in a webcast. Norway’s by Ukraine-based Antonov. The Cubans pay an estimated $20 SCAN Geophysical ASA earlier this year completed two million in financing cost. Ilyushin Finance already financed marine seismic 3D programs for Sherritt. In other news, the sale of five long- and mid-range jets to Cuba over the past Sherritt posted a record profit of $132.4 million in the second two years. Aviastar-SP in August delivered the first of three quarter, more than twice as much than last year. Tu-204 jets Aviaimport has ordered. *** *** Hoteles Encantos, a new state-owned chain of historical Because its takeover of Altadis SA won’t be concluded boutique hotels, opened its first outlet in the city of Cienfuegos. until late this year, Britain’s Imperial Tobacco PLC says it The seven-room Palacio Azul hotel is the first of 50 planned doesn’t expect to begin talks anytime soon with the Cuban outlets. Encantos has already identified buildings in Santiago government over Corporación Habanos, the joint venture de Cuba, Baracoa, Camagüey, Havana and Cienfuegos, that markets Cuban cigars worldwide. In July, Paris and Tourism Minister Manuel Marrero said. Work on the La Unión Madrid-based Altadis agreed to merge with Bristol-based hotel in the historic center of Havana has already begun. The Imperial,. Cuba could throw a wrench into Imperial’s plans Palacio Azul, built in to inherit Altadis’ 50-percent stake in Habanos. State company 1921 as a residence of a Cubatabáco has an option to take over Corporación Habanos wealthy tobacco baron, is entirely in the case of a substantial change of shareholders. next door to the Imperial Tobacco CEO Gareth Davis said his company Cienfuegos Yacht Club promised Cuba it wouldn’t make any changes to Habanos. and a short walk from the Asked whether Davis already traveled to Cuba and whether city’s main square. he expects Cubatabáco to exercise its option, an Imperial Encantos spokesman said, “No developments on either point — and Palacio Azul unlikely to be until the deal is concluded, which we expect to
in Cienfuegos happen by the end of the year.”
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