Our 10th year

Vol. X, No. 6 www.cubatradenews.com June 2008 Brazil wants to be ‘Partner No. 1’ During a two-day visit of Brazilian Foreign Minister Celso Mexico’s La Jornada. To Also see Amorim, Brazilian and Cuban officials talked about: negotiate these contracts, Petrobras, p. 2, and •a Cuban request for a $635 million, four-year line of Brazilian construction Russia and India, p. 7 credit for infrastructure projects. Negotiations for a $350 giant Odebrecht opened million Brazilian loan to finance expansion of the Autopista an office in ; Nacional, ’s main east-west axis, and of Cuban ports •providing technical support for large-scale soybean are “advanced,” according to a Cuban source cited by cultivation via state entity Embrapa (see page 2); •the interest of Brazilian bus builder Marcopolo in Cuba’s urban bus market; •and the interest of steel concern Votorantim to tap Cuba’s nickel reserves. Meanwhile, a Brazilian $90 million revolving credit line for the purchase of food and agricultural products agreed in January has grown to $200 million, according to Amorim. Brazilian desires: Amorim had a three-hour lunch with Raúl Castro. Building roads, “We are convinced Cuba is opening up to a new phase of its selling buses, buying development, of its evolution, and Brazil wants to be at the side nickel for steel. of Cuba in this new phase,” Amorim said at a press conference Photos, clockwise from top left: Odebrecht, Marcopolo, Votorantim Cont’d on next page Embargo Economy ELITE POLICY GROUP: EASE EMBARGO UK group seeking $538m to build golf resort The Council on Foreign Relations, the private organization considered to be most influential on U.S. foreign policy, London-based Havana Holdings formed a subsidiary to advises the next president to, among others, partially end the build a golf hotel and condo resort in Cuba at a cost of at nearly total travel ban on Cuba and revoke the Helms-Burton least euro 350 million (US$538 million), the London Times Act, handing back Cuba policy from Congress to the White and Telegraph report. House. In an effort to diversify its tourism industry, Cuba is “If there was an era of U.S. hegemony in Latin America, trying to attract affluent visitors to the island via golf. The it is over,” assumes the report titled “U.S.-Latin America Havana Holdings subsidiary, Esencia Hotels & Resorts, Relations: A New Direction for a New Reality.” The authors is the first group to come through on five golf resorts the blame a loss of U.S. influence in the hemisphere on profound Cuban tourism ministry would like to see go up. change in Latin America — not U.S. policy — and make a set “Cuba is similar in size to Britain, which has over of recommendations to improve relations. 2,000 golf courses, so there is plenty of scope to develop The report was authored by a task force headed by Charlene continued on p. 8 Barshefsky, U.S. trade representative under Clinton, and Gen. James T. Hill, former head of the U.S. Southern Command. Five more The report stops short of recommending to repeal the to come? embargo altogether, but Hill personally argued for normalizing Cuba’s only relations. 18-hole “One [benefit] is that you could begin to develop a trade golf course in Varadero. continued on p. 5 ‘Brazil,’ from previous page Petrobras to sign on offshore block soon afterwards. Brazilian state oil company “In this new, very Petrobras is negotiating important moment Cuba a contract for one offshore is living, Brazil doesn’t block in Cuban Gulf waters, want to be partner company officials said. Citing number two or three. an anonymous Cuban source, We want to be partner Mexican daily La Jornada said number one.” Petrobras could sign as early as “We are favorably this month. inclined towards this Amorim Agência Brasil Oil companies from Spain, objective,” Cuban Vice Canada, India, Malaysia, President Carlos Lage Norway, Venezuela and Vietnam responded to Amorim’s embrace. have already signed up for Amorim’s visit to Havana was a follow-up to President Luiz offshore blocks, but few have Inácio ‘Lula’ da Silva’s signing of 10 bilateral agreements in Petrobras platform on the necessary technology and January, ranging from road construction to building a lubricants U.S. side of the Gulf. experience to actually drill in plant in Cuba. Photo: Petrobras depths of more than two miles. Excluding Venezuelan fuel imports, Brazil is already Cuba’s Petrobras, with long-standing biggest trade partner in Latin America. Bilateral trade reached deepwater drilling experience, could be an alternative to $450 million last year. U.S. technology for Cuba. Amorim said he believed Cuba will be “a kind of Asian Tiger Cuban Energy Minister Yadira García was in Rio before of Latin America,” comparable to Vietnam. the Amorim visit, to talk with Petrobras officials about The foreign minister was accompanied by a 39-member seismic studies. García also talked about construction of business delegation representing 22 companies. a lubricants plant in Havana. BRAZIL PROVIDES SOY KNOW-HOW Pioneering industrial-scale foreign involvement in Cuban food production, Brazilian agriculture officials agreed to conduct a feasibility study for a joint venture in soy cultivation. Under the agreement signed by the foreign ministers of the two countries, technicians from the Empresa Brasileira de Pesquisa Cuba Trade & Investment News is a monthly publication Agropecuária (Embrapa), a division of Brazil’s agriculture of North American Partners (NAP), Tampa, FL, USA. CTIN is distributed to subscribers via mail or e-mail. ministry, will provide seeds and technology. The partners identified 40,500 hectares of land in central Ciego de Ávila province for soy Publisher Andrew Goddard cultivation. The size could be expanded, said Foreign Trade Minister P.O. Box 13752 Raúl de la Nuez. Tampa, FL 33681-3752 USA Cuba is currently importing all the soy consumed on the island, Tel: 813 839 6988 most of it from the United States and Canada. Reacting to rising food Fax: 813 831 3811 prices, Cuba made it a priority to boost food production. [email protected] In a separate project, the government began planting soy beans www.cubatradenews.com on 5,000 hectares in Matanzas province. Editor Johannes Werner Tel: 941 330 0303 Embrapa is also interested in obtaining Cuban know-how on [email protected] biological pesticides and herbicides. The agreement was signed during a visit by Brazil’s Foreign Editorial Advisors Minister Celso Amorim. Chris Aberle, FCStone, Des Moines CUBA, BRAZIL TEAM UP ON VACCINE Michelle Butler, Navarretta Group, San Diego Kirby Jones, US-Cuba Trade Assn., Wash. DC Responding to a request by the World Health Organization, a David Lyons, Daily Bus. Review, Cuban-Brazilian joint venture is providing vaccines to African John McAuliff, FFRD, New York countries, Granma reported. Vacunas Finlay S.A. in Havana Phil Peters, Lexington Institute, Washington partnered with the Instituto de Tecnologia e Inmunobiologia de Bio- Manguinhos, in Rio de Janeiro, to produce a meningitis vaccine. The SUBSCRIPTIONS Call 813 839 6988. One year vaccine, called Men AC, was developed in “record time,” according $350. In Canada and Mexico, add $15 postage. to Cuban media. The WHO resorted to the Cuban-Brazilian joint venture in 2006 COPYRIGHT NOTICE No part of this publication because major drug companies don’t provide this type of vaccine may be copied, photographed or duplicated without NAP’s consent. for use in poor countries.

2 Cuba Documentation: Obama’s Cuba policy ‘Strong and smart diplomacy ’ in Focus Presidential hopeful Barack Obama has entered a strategic alliance with the By Kirby Jones Cuban American National Foundation, and this is coloring his Latin America policy. The anti-Castro organization has eased somewhat its stance on the embargo, but the Sometimes, change Foundation’s traditional anti-Communism also seems to reflect on Obama’s positions regarding Cuba, Venezuela and Colombia. Obama is steadfast, though, on seeking happens quietly direct conversations with all players. Below we are reprinting excerpts of a campaign speech Obama gave in Miami before members of the Cuban American National Make no mistake about it: Cuba Foundation May 23. is well on its way to yet another “It is my privilege significant economic, financial, and to join in this week’s social change. It is and will be its I n d e p e n d e n c e D a y fourth in just the last 50 years. celebration, and in The first occurred in January 1959 honoring those who have when assumed power and stood up with courage within two years Cuba’s economic and conviction for Cuban and political entanglement with the liberty. I’m going to take United States that had lasted since this opportunity to speak the beginning of the 20th century about Cuba, and also ended. The second occurred in the U.S. policy toward the early 90s when Cuba’s dependence Americas more broadly. on the Soviet Union ended even more We meet here united suddenly after thirty years. in our unshakeable At both times, Cuba had to undergo commitment to freedom. The candidate on the campaign trail photo: Obama for America radical changes to adapt to its new And it is fitting that we world. reaffirm that commitment the truth. I won’t stand for this injustice, From the early 90s to 2006, there here in Miami.” you won’t stand for this injustice, and was a third reality for Cuba as it faced … together we will stand up for freedom a world without any such unilateral “I grew up for a time in Indonesia. in Cuba. dependencies as it had enjoyed for It was a society struggling to achieve Now I know what the easy thing is to almost 100 years with the United meaningful democracy. Power could do for American politicians. Every four States and the Soviet Union and one be undisguised and indiscriminate. years, they come down to Miami, they based on free markets, capitalism, and Too often, power wore a uniform, and talk tough, they go back to Washington, hard currency. was unaccountable to the people. Some and nothing changes in Cuba. That’s While there were (and still are) still had good reason to fear a knock what John McCain did the other day. He many who predicted the collapse of on the door. joined the parade of politicians who make Cuba, Fidel Castro and the Cuban There is no place for this kind of the same empty promises year after year, people proved these people wrong tyranny in this hemisphere. There is no decade after decade. Instead of offering as it legalized hard currency, opened place for any darkness that would shut a strategy for change, he chose to distort its doors to foreign investment and out the light of liberty. Here we must my position, embrace George Bush’s, and tourism, expanded trade with such heed the words of Dr. King, written from continue a policy that’s done nothing to new players as China, initiated his own jail cell: “Injustice anywhere is advance freedom for the Cuban people. exploration for oil, and was integrated a threat to justice everywhere.” That’s the political posture that John into the political family of nations. Throughout my entire life, there McCain has chosen, and all it shows is All of these moments of change has been injustice in Cuba. Never, in that you can’t take his so-called straight were sudden and arrived with my lifetime, have the people of Cuba talk seriously. great fanfare. Americans measure known freedom. Never, in the lives of My policy toward Cuba will be guided politicians and change by big events, two generations of Cubans, have the by one word: Libertad. And the road to rose garden press conferences, people of Cuba known democracy. This freedom for all Cubans must begin with candidate proclamations as to how is the terrible and tragic status quo that justice for Cuba’s political prisoners, the their 10 point programs will solve one we have known for half a century – of rights of free speech, a free press and problem or another. elections that are anything but free or freedom of assembly; and it must lead to fair; of dissidents locked away in dark elections that are free and fair. Continued on next page prison cells for the crime of speaking Continued on next page

3 Documentation: Obama on Cuba ‘Diplomacy,’ from previous page heard enough empty promises from politicians Now let me be clear. John McCain’s been going like George Bush and John McCain. I will turn around the country talking about how much I the page. want to meet with Raúl Castro, as if I’m looking It’s time for more than tough talk that never for a social gathering. That’s never what I’ve said, yields results. It’s time for a new strategy. There and John McCain knows it. are no better ambassadors for freedom than Cuban After eight years of the disastrous policies Americans. That’s why I will immediately allow of George Bush, it is time to pursue direct unlimited family travel and remittances to the diplomacy, with friend and foe alike, without island. It’s time to let Cuban Americans see their preconditions. mothers and fathers, their sisters and brothers. It’s There will be careful preparation. We will set a time to let Cuban American money make their clear agenda. And as president, I would be willing families less dependent upon the Castro regime. to lead that diplomacy at a time and place of my I will maintain the embargo. It provides us choosing, but only when we have an opportunity with the leverage to present the regime with a to advance the interests of the United States, and to advance clear choice: if you take significant steps toward democracy, the cause of freedom for the Cuban people. beginning with the freeing of all political prisoners, we will I will never, ever, compromise the cause of liberty. And take steps to begin normalizing relations. That’s the way to unlike John McCain, I would never, ever, rule out a course bring about real change in Cuba - through strong, smart and of action that could advance the cause of liberty. We’ve continued on next page

‘Focus on Cuba,’ from previous page is a refrain heard for 50 years: first it was that things were so bad that Cubans would rise up but now they will rise up But what is happening in Cuba now does not fit that because things are going so well. Go figure! expectation for a variety of reasons not the least of which is Other than wishful thinking, such analysis out of Miami that such a style has never been the practice in Cuba. The is once again flawed but reflects a theme echoed by many difference today is that it no longer is Fidel who is leading — and all of those critics share one common feature. They the change effort as he had for the previous 45+ years. It is have not and do not visit Cuba. his brother - his sole mate, his colleague from his days in jail Would the recent changes have been made if Fidel was and in the mountains, his backstop in government. still in control? Maybe, or maybe not. What we do know is Just because there has been no big announcements and just that Fidel, as described above, has demonstrated his capacity because the current leader is not out in public with speeches, to change with the times and conditions. But it is also true does not at all lesson the importance of what is happening. that Raul is different with his own priorities and own style. And I am not talking about cell phones despite the press It would be fair to argue that Fidel looked at worldly macro attention to this and despite the importance that President issues while Raul has concentrated — at least so far — Bush apparently places on such trivial matters (It reminds me on domestic issues. But even with those differences, one of the folly of providing portable radios to Cubans of several should not automatically conclude that this represents any years ago). Radios and cell phones do not a policy make! fundamental conflict with these two brothers. Our attention should be focused on the direction that is But what can be concluded is that the accumulation of all being set in Cuba: a still developing wholesale change in these recent new developments will change Cuba in many agriculture - land ownership, incentives, foreign investment, ways as significant as any other period in Cuba’s history. But and reorganized distribution of inputs and supplies; pay rather than seeing these happen as a result of any cataclysmic incentives for workers who produce more; ease of ownership international change or with a series of Presidential of apartments and houses; destruction of regulations to allow announcements, we will see them evolve more slowly. more flexibility of daily life; access to hotels and other As countries around the world adapt their policies to this facilities for those with hard currency based CUCs; and new Cuba reality — Brazil announces a major investment testing of an increase in licenses for small entrepreneurs. to grow soy beans in Cuba, China expands its trade and To those who do not live in Cuba or have not visited influence, Canada signs more contracts to sell wheat to Cuba, Cuba, these changes may not rise to any significant level and more countries sign agreements to drill for oil 60 miles off of importance. But if you just talk to Cubans one can feel the coast of — the United States. is expected to soon not only a positive reaction to these efforts but a renewed publish regulations how cell phones can be sent to Cuba. optimism about what is still yet to happen. A recent analysis by one academic in Miami (who is one Kirby Jones is founder and president of the U.S.-Cuba of the largest recipients of U.S. government grants) says such Trade Association and has been a consultant to companies changes may cause Cubans to demonstrate and rise up against and organizations conducting business in and with Cuba the government if changes do not come more swiftly. This since 1974

4 E m b a r g o Interests Section chief carrying tainted money The Cuban government accused the head The letter was facilitated by the U.S. Interests Section. of the U.S. Interests Section in Havana of According to the Havana correspondent of the South Florida passing on money from a Miami-based Sun Sentinel, Roque defended Álvarez and demanded airtime non-government organization with terrorist on state television to respond. links to a dissident in Cuba. “They want to make a terrorist out of somebody who isn’t Foreign Minister Felipe Pérez Roque a terrorist,” she said. said his government has videotapes and Cuba brought up the charges against Parmly in a Foreign Parmly e-mails that show Michael Parmly in one Ministry press conference and on state TV. instance paid $8,350 to Martha Beatriz No U.S. official responded to the alleged Álvarez link. State Roque, a Cuban dissident closely aligned Department spokesman Sean McCormack said in a press with the Bush administration. Cuba accuses the U.S. diplomat briefing that the government would not “stand in the way” of of violating the Vienna Convention and a bilateral treaty, but private organizations helping relatives in Cuba. the charges are particularly explosive because at least part Pérez Roque, in turn, said Álvarez didn’t send money to of the funds originated with Fundación Rescate Jurídico, a relatives but to “mercenaries” in Cuba. Miami-based organization founded and presided by Santiago Álvarez. Álvarez, a close associate of suspected terrorist Luis U.S. Interests Section gets new head Posada Carriles, is currently in U.S. federal prison for illegal Barely a week before Cuba launched a campaign focusing possession of an arsenal of weapons and explosives to be used on his role in funding dissidents, the U.S. State Department in an armed incursion to Cuba. announced Michael Parmly would be reassigned this In 2006, Martha Beatriz Roque signed a letter in defense of summer, three years after he assumed the post in Havana. Álvarez in his illegal weapons possession and conspiracy trial. A three-year term is considered normal in State Department postings. Documentation: Obama on Cuba Parmly will be replaced in June by Jonathan D. Farrar. Since 2005, Farrar has been serving as Principal Deputy from previous page Assistant Secretary of State in the Bureau of Democracy, principled diplomacy. Human Rights and Labor. Farrar served at the U.S. And we know that freedom across our hemisphere must embassies in Mexico, Belize, Paraguay and Uruguay. go beyond elections. In Venezuela, Hugo Chávez is a democratically elected leader. But we also know that he does ‘Elite policy group,’ from page 1 not govern democratically. He talks of the people, but his relationship with Cuba,” actions just serve his own power. Yet the Bush Administration’s Hill said in an interview blustery condemnations and clumsy attempts to undermine about the report. “At Chávez have only strengthened his hand. least business could go We’ve heard plenty of talk about democracy from George down there. In the best Bush, but we need steady action. We must put forward a vision of times there would be a of democracy that goes beyond the ballot box. We should democratic Cuba, ninety increase our support for strong legislatures, independent miles from Miami, that judiciaries, free press, vibrant civil society, honest police would become a huge Barshevsky, Hill forces, religious freedom, and the rule of law. That is how we trading bloc just for can support democracy that is strong and sustainable not just Miami alone. I envision on an election day, but in the day to day lives of the people for example large condo complexes in Havana with American of the Americas.” retirees living pretty well, a ferry-ride from Miami, which is … in fact the hospital center for Latin America. That would be “At a time when our leadership has suffered, I have no good for Cuba. That would good for the United States. There doubts about whether we can succeed. If the United States would be a flow of goods.” makes its case; if we meet those who doubt us or deride us Even harsh critics of U.S. foreign policy had cautious praise head-on; if we draw on our best tradition of standing up for for the report. those Four Freedoms - then we can shape our future instead “When the essentially pro-establishment Council on Foreign of being shaped by it. We can renew our leadership in the Relations asks to ease the Cuba embargo and to reject the hemisphere. We can win the support not just of governments, century-old hegemonic policies towards Latin America, one but of the people of the Americas. But only if we leave the knows that there is at least a tiny bit of 21st-century reality in bluster behind. Only if we are strong and steadfast; confident Washington’s collective political mind,” analyst Saul Landau and consistent.” wrote in Progreso Weekly, a Miami-based Web site.

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E c o n o m y Cuba seeking business in... Russia...... and India A C u b a n t r a d e Cuba would like to mission to Russia led see the Tata Nano on by Transport Minister its roads, said Cuban Jorge Luis Sierra met Deputy Minister of with high-ranking trade Foreign Trade Eduardo officials and business Escandell Amador, executives. according to India’s Some of the results Business-Standard. include: The Nano, developed •Meetings between by Indian conglomerate Tata Nano Ukraine-made AN-148 R o g e l i o A c e v e d o , Tata Motors Ltd., is the head of Cuba’s Civil world’s cheapest car. Aeronautical Institute, Escandell led a 19-member trade delegation to India in and Russian Trasport Minister Igor Levitin were “fruitful,” May. according to Prensa Latina. No details were released. Cuba is Motor vehicles aside, Cuba seeks food and healthcare considering buying another TU-204 mid-range passenger jet products in India, and hopes for Indian investments in wind as well as three Antonov AN-148 regional jets from Ilyushin and hydro energy, oil and gas, road construction, water Finans, a company official recently said during a fair in Berlin. infrastructure, and in the tourism sector. Cuba is also wooing Over the past two years, Cuba bought a half-dozen Russian- Indian tourists. made passenger and cargo jets from Ilyushin Finans, which India, in turn, could buy Cuban healthcare products recently opened an aircraft maintenance center at the Havana and services, tobacco and rum. According to the Calcutta International Airport. Also, the Russian ambassador in Havana Telegraph, Cuba made an offer to have Havana Club rum bottled in India. continued on next page continued on next page Dredging, tug boats may ease bottleneck It usually takes T h e P o r t o f three hours Cienfuegos, which has of maneuvering become a destination to get the for oil tankers from Foor Moon, l., Venezuela since a major from sea oil refinery opened early to the dock this year, is dredging the of the newly bay to accommodate opened refinery bigger tankers, putting to in the Bay service two new tugboats, and adding “modern and powerful of Cienfuegos equipment” “to improve port maneuvers,” according to

official media. The narrow entry to the Bay of Cienfuegos Photo: Vik-Sandvik Group is a major bottleneck for large tankers, which require three hours of maneuvering in often strong currents before docking Matanzas. at the refinery. The port handled 3.5 million tons of cargo CIENFUEGOS last year, up 22 percent from the previous year, but traffic is . expected to double this year, thanks to oil and fuels. The project in Cienfuegos is part of a $30 million dredging program for several ports, including Havana, Batabanó- Gerona, Santiago de Cuba, Casasa and Mariel. The dredging of the La Estopa canal will allow workers in Dredging at the Port of Santiago de Cuba will increase the Cayo Largo del Sur resorts to use a catamaran ferry to the depth to 11 meters, allowing larger vessels to enter the reach their jobs. Currently, workers on the key are shuttled bay. to work by plane.

7 E c o n o m y UK group seeking $538m for golf resort from page 1 with bank debt, Esencia said. facilities,” Esencia CEO Andrew Macdonald told the Carbonera will be anchored by an 18-hole championship Telegraph. “There is only one golf course today.” golf course designed by UK-based PGA Design Consulting, The other four golf a subsidiary of the Professional Golfers Association. The resorts might be built by resort will feature a 150-room boutique hotel, a Boisdale and one Canadian and three a D&D restaurant, a spa, and other sports facilities. Spanish investor groups. The 900 Carbonera units, ranging from $300,000 to $2 Vancouver-based hotel million, will be marketed by Savills Real Estate. and resort developer Esencia also looks at building another resort near Leisure Canada recently Carbonera. added a deep-pocketed company based in Dubai The men behind the project as a major shareholder. The driving force behind Havana Holdings: privately owned Havana From mojitos to golf Esencia’s would be the first direct investment Holdings and its Esencia by a British company in Hotels & Resorts subsidiary Cuban tourism, according to the Telegraph. is Chairman Michael Phair, Havana Holdings, which has an office in Havana, has a former telecom industry been Cuba’s partner in the Floridita bar chain since 2001, investment banker with Bear operating clones of the famous Havana bar in London, Stearns who now controls Madrid and Dublin. Two more outlets are planned to open Boisdale plc. Its stake in Conran in Moscow and Leeds. Havana Holdings also owns a travel the Floridita venture aside, subsidiary, Floridita Travel. London-based Boisdale Esencia holds 50 percent of the resort joint venture with operates several restaurants, one hotel and a jazz club. an undisclosed Cuban state company. Esencia officials told The CEO of Esencia is Andrew Macdonald whose brother, the Telegraph they are negotiating a 75-year lease on the Ranald, is the founder of and a major shareholder in London’s 150-hectare property with the Cuban government. Cuba does Boisdale restaurants. not allow foreign ownership of land. The other main shareholder in Havana Holdings is D&D The flagship project, the 900-unit Carbonera Country Club, London, a company controlled by high-profile designer and is due to open in 2011. According to the Telegraph, Esencia architect Sir Terence Conran. D&D operates 26 high-profile and its Cuban partners have injected euro 20 million (US31 restaurants and clubs around the world. million) upfront and are talking to commercial property funds London-based Conran & Partners, also owned by Sir in Europe to raise more. The remainder would be financed Terence Conran, was hired to design the Carbonera resort.

‘Russia,’ from previous page biotechnology, and culture. The 30-member delegation was first received by the Chamber of Commerce of St. Petersburg, said military cooperation with Cuba had “a great future.” and then went on to Moscow. •The Railroad Union of Russia agreed to participate in unspecified joint projects on the island. ‘India,’ from previous page •Cuban officials negotiated with heavy truck manufacturer Among others, the delegation met with Tata Motors and KAMAZ a contract to rebuild thousands of Soviet-era competitor Maruti Udyog Ltd. in Mumbai to talk about cars, KAMAZ trucks in Cuba, as well as buying new ones. buses and trucks, the Cuban ambassador in New Delhi said. The •The delegation also visited the IAZ bus assembly factory group attended a round of negotiations with Indian companies near Moscow, which produced 200 urban buses recently organized by the Indian chamber of commerce. sold to Cuba, and talked to representatives of a GPS systems In a follow-up to the visit, India’s minister of renewable manufacturer, as well as of shipyards in St. Petersburg and energy is expected to visit Cuba soon. Vladivostok. The Cuban ambassador said Cuba intends to raise bilateral Finally, Mosfilm Studios and Cuba’s Institute of Film trade from $27 million in 2007 to $300 million over the next Arts and Industry (ICAIC) signed an agreement covering three years. production and technology exchange. EXIM Bank and Export Credit & Guarantee Corporation of The Cubans are also interested in wood processing, India (ECGC) are in the process of resuming credit facilities information technology, telecommunications, textile, and export guarantees for Cuba, after renegotiating $84 million printing, and furniture; the Russians are interested in rum, of old debt.

8 E c o n o m y New European funds betting on Cuba Two Cuba-related mutual funds launched by Société Société Générale, which charges a 0.5 percent management Générale Effekten GmbH, a German investment subsidiary fee, is touting Cuba’s fast economic growth to investors. The of the French bank with offices in Havana, funds’ shares, traded in euro, have shown modest began trading on the Frankfurt and Stuttgart increases since their launch. The managers are stock exchanges in March. The portfolios of reinvesting 80 percent of the dividends. Cuba Certificate (symbol: SG5D60) and Cuba The portfolio includes Mexican cement giant Quanto (symbol: SG5D61) consist of 16 non- Cemex, Mexican Coca-Cola bottler FEMSA, Cuban companies, which already do business mining company Freeport McMoran Copper in Cuba or stand to gain considerably from an & Gold, Mexican media giant Grupo Televisa, end of the embargo. The closed-end funds are Britain’s Imperial Tobacco, which already due in three years. markets Cuban cigars worldwide, Brazilian oil The Société Générale funds use an investment giant Petrobras, which is considering entering model similar to that of Miami-based Thomas offshore drilling in Cuba, U.S. hotel operator J. Herzfeld Advisors Inc. The Cuba-centered Starwood Hotels & Resorts, Miami-based Herzfeld Caribbean Basin Fund has been trading cruise operator Royal Caribbean Cruises, on Nasdaq since 1992. Miami-based home builder Lennar Corp., U.S. Since Cuba doesn’t have any publicly traded retailer OfficeMax, Canadian mining and energy companies, ownership of stock in foreign company Sherritt International, whose business companies that do business in Cuba or stand to depends to a large degree on Cuba, Panamanian gain from Cuban economic growth is the only airline Copa Holdings, Spanish hotel operator way of investing in the Cuban economy. Only Sol Meliá, Florida-centered cargo rail company three companies in the Société Générale portfolio Seaboard Corp., Miami-based cable digger have considerable exposure to Cuba. MasTec (which is controlled by the politically ambitious “Many of the companies in the basket have little more than Mas family), and Panama-based Banco Latinoamericano de just hope to sometime in the future take advantage of Cuba,” Exportaciones. criticizes German business magazine Wirtschaftswoche. Cuba Quanto has the same composition as Cuba Certificate, “Considering this, three years are too short a time period.” but it includes currency protection. Venezuelan-Cuban hotel joint venture ready to go Nearly one year after the planned start, Cuba and Venezuela ministers talked about two more hotels to be built by the joint set up a joint venture to build and operate hotels in both venture in Cayo Coco and Cayo Guillermo — also part of countries. the Jardines del Rey area — for a total of 2,872 rooms. The According to the Cuban tourism ministry, the joint venture more recent announcement didn’t mention these projects. The will build a hotel on Cayo Paredón Grande, part of the Jardines start date for the hotel joint venture was set for July 2007 in del Rey keys on Cuba’s northern coast. Another hotel will be the letter of intent. built on Isla Tortuga, in the Venezuelan state of Miranda. Venezuela initiated a program of “social tourism” for state A letter of intent signed in January 2007 by the two tourism employees, under which some 100,000 Venezuelans per year could vacation in Cuba at subsidized prices. CHAVEZ: CUBA SHOULD ENTER OPEC Venezuela would support a candidacy of Cuba and Brazil ECUADOR WON’T JOIN ALBA for OPEC membership, President Hugo Chávez said After lingering for two years whether to join the ALBA Even though it has begun to export small amounts of heavy trade and integration agreement, the Ecuadorean foreign oil, a Cuban participation in the Organization of Petroleum ministry announced in a communiqué the country wouldn’t Exporting Countries is a long shot. become a member. Ecuador had conditioned its joining ALBA to the return of ALBA STEEL COMPANY GETS $5M Venezuela to the Andean Community (CAN), which it left Venezuela and Cuba set up an Aceros del ALBA joint in 2006. In addition to the two founding nations, Venezuela venture and funded it with $5 million, to supply ALBA and Cuba, ALBA includes Bolivia, Nicaragua, and the small member nations with stainless steel. The Caracas-based Caribbean island nation of Dominica. Ecuador and Haiti have company, which reports to the mining ministries in both been sending officials to ALBA summits as observers. countries, would be supplied with ferronickel from a yet-to- Conservative observers interpreted the move of Rafael be refurbished processing plant in eastern Cuba. Venezuela Correa’s administration as “pragmatism” and an effort to holds 51 percent of the company’s shares. distance himself from Hugo Chávez’radical foreign policy.

9 E c o n o m y State farms start ambitious rice program Reacting to the tripling of rice prices forces, the official said. in less than a year, Cuba is investing in Before the fall of the Soviet Union, Cuba machinery and other supplies to increase produced 260,000 tons of rice on 150,000 rice production by at least 250,000 tons hectares. Today, state farms produce some within five years, an agriculture ministry 70,000 tons, in addition to 150,000 tons official said. The new program will be produced on small plots in urban settings or applied at nine state farms. on private farms and cooperatives. The production goal must be met in Cuba recently had to import 500,000 tons the “least amount of time possible,” an a year. Vietnam leads the United States as agriculture ministry official said during an international rice the biggest provider of rice, with 400,000 tons of Vietnamese conference in Havana. The effort must involve cooperatives, rice expected to reach Cuban shores this year. private farmers, and other ministries as well as the armed Only half of Cuba’s arable land is currently being used. Fallow land on the island grew from 933,300 hectares in 2002 E m b a r g o to 1.232 million hectares in 2007, according to the Oficina Nacional de Estadísticas. WOMEN IN WHITE PRAISE OBAMA To meet the goal of increased rice production, Cuba must The “Women in White,” a group of female relatives of not only recover to the 150,000 hectares of cultivated land of political prisoners, announced it was supporting the position the 1980s, but bring new areas under cultivation. of U.S. presidential candidate Barack Obama of seeking direct In other news, Cuba is implementing a plan to boost talks with the government of Raúl Castro, BBC reported. The agricultural production near cities, Granma writes. The idea Women in White told Obama in an open letter they hoped is to bring production closer to consumers, according to a their husbands and sons might be freed as a result of direct Communist Party official quoted by Granma. The official talks. The letter also lauded Obama’s plan to lift the Bush urged cooperatives and small landowners to take “maximum Administration’s restrictions on travel and remittances. advantage” of land in up to 6 miles distance from cities. E m b a r g o MCCAIN HIRES MIAMI VETERAN Presidential candidate John McCain CUBA ARRESTS PEOPLE SMUGGLERS reactivated Otto Reich, an old Latin Amid a rising wave of Cubans leaving the island using America hand from Miami, as campaign “coyotes,” Cuba captured the crews of 17 vessels implicated adviser. The 62-year old, in charge of the in human trafficking this year, Juventud Rebelde reported. State Department’s Latin America desk Most of the detained crew members were Cuban Americans, during a failed coup against Hugo Chávez but they also include Mexican citizens. One of the alleged in 2002, has a long history of anti-Castro traffickers lost his life, according to the official newspaper. activism. He had been attacked for not Cuban law provides for between seven and 30 years of prison Reich condemning the coup plotters. for human smuggling. Cuba “categorically” rejected its inclusion in the U.S. CUBA EXTRADITES U.S. FUGITIVE State Department blacklist of countries that promote human At the request of U.S. law enforcement, Cuba on June 13 trafficking, and said it is the United States that triggers human returned a U.S. citizen who had sought refuge on the island trafficking with its “Wet foot dry foot” immigration law that to avoid prosecution on child pornography charges. favors Cubans. There is no extradition treaty between the two countries, but Today’s Cuban emigrants don’t leave on home-made rafts after years of non-cooperation, Cuba has recently extradited as they used to, as organized smugglers with speedboats several U.S. citizens. who charge up to $10,000 per head have taken over. Many Leonard B. Auerbach, 61, had been sought on charges of smugglers are using the route via Mexico, as the U.S. Coast child sex abuse and possession of child pornography. Guard is patrolling the Florida Strait more intensely. The mortgage specialist from California had been detained Meanwhile, U.S. authorities have begun to crack down on since May 7 in Cuba, thanks to information provided by U.S. human traffickers in South Florida. After several very public authorities. Auerbach had entered Cuba April 8 via Mexico. cases of drownings, prosecutors in Miami have charged 41 Communist Party daily Granma published a verbatim Cuban Americans for trying to get Cubans to Florida by boat. Foreign Relations Ministry communiqué on the issue that said Coast Guard Rear-Admiral David Kunkel recently appealed to Auerbach was extradited because he had committed crimes Cuban Americans to “put the criminals who engage in human that are “grave and fought strongly by our authorities.” smuggling out of business by not using them.”

10 C O N F E R E N C E S & E V E N T S News from the •Int’l. Meeting of Rice (rice cultivation and processing), Sales Department Havana, June 2-6 ++Texas Agriculture Commissioner Todd Staples led a •Int’l. Congress of Dentistry and Stomatology (congress and 24-member trade delegation to Cuba to open more venues exposition), Havana, June 9-13 for food and agricultural sales. This was the first visit of •Cuba Initiative Business Executive Committee Meeting an elected official from the state in at least 46 years. The with new UK ambassador in Havana (board members only), London, June 19 & 30 delegation, which included rice, corn, wheat, cattle, goat, •Cuba’s Engagement with China: Domestic and Regional sheep and processed-food sellers as well as port executives, Implications (presentation by Dr. Adrian Hearn), London met with officials of state food buyer Alimport and toured Metropolitan University, London, July 30 Cuban farms. Dallas-based commodity trader Paul Reinhart •6th Int’l. Scientific Seminar on Vegetable Health, Havana, Inc. signed two contracts for the sale of $400,000 worth of Sept. 22-26 raw cotton. Contracts for poultry and powdered milk are •31st Pan American Convention of Engineering (UPADI 2008, pending, said consultant Cynthia Thomas, the Dallas-based conference and exposition), Havana, Sept. 29-Oct. 3 consultant who put the trip together. Frank Walker, president •Int’l. Conference for Food Science and Technology (CICTA), of Dallas-based manufacturers’ representative Walker Ltd., Havana, Oct. 13-17 •26th International Havana Fair, Havana, Nov. 3-8 said he would return to Cuba in September to negotiate the sale •Medical Education for the 21st Century (WHO-sponsored of packaged desserts, including Caribbean rum cakes and New conference), Havana, Nov. 30-Dec. 3 York cheesecake. Other participants in the delegation included •Informática 2009 (information technology fair), Havana, Ernest Bezdek, Port of Beaumont; Louis Broussard, Feb. 9-13, 2009 Beaumont Rice Mill; John Chumbley, Dorchester Grain Co.; Rosalee King Coleman, Independent Cattlemen’s Call (941) 330-0303 or send an e-mail to JWerner@ Association of Texas; Samuel Brian McCuistion, Texas cubatradenews.com for more information on events Sorghum Producers; Michael David Perez, Port of Corpus Christi; Karen Provost Wimberley, Lavender Farm; Michelle Tubilla, Moose Milk; Patrick Wallesen, WestStar E c o n o m y Food Co.; and Michael Edward Wilson, Port of Freeport. More than $90 million worth of goods — some 20 percent of BRITISH EMBASSY GETS NEW CHIEF U.S. goods exported to the island — were shipped to Cuba The British embassy in Havana will be headed by a new via Texas ports last year, but only $25 million originated in ambassador starting July. Dianna Melrose previously headed the state.++ the Enlargement and Southeast Europe Group, Europe ++Colorado businesses are planning Directorate with the Foreign and Commonwealth Office. Prior to convince Gov. Bill Ritter to join a to that, she held a variety of posts in the Foreign Office and trade delegation to Cuba after national Department of International Development. elections in November, the Rocky Ambassador John Dew will be transferring to another Mountain News reported. The Colorado diplomatic assignment, according to the Foreign Office. Office of Economic Development and UNDERSEA CABLE DELAYED International Trade will begin researching Colorado’s trade potential with Cuba this Telecomunicaciones Gran Caribe, the Cuban-Venezuelan summer. Meanwhile, Basalt, Co.-based joint venture in charge of laying a fiberoptic cable from the Miller Farms Exports held a wine tasting Venezuelan port of La Guaira to a beach near Santiago de at the Hotel Nacional in Havana, complete Cuba, said it would select a company to build the cable by with Californian Merlot, Cabernet and August, start construction by early 2010, and have the project Gov. Ritter white wines as well as Wisconsin cheese. ready for the first half of 2010. The original start date was set Miller Farms President Jack Miller has for 2009. The joint venture of Telecom Venezuela and Cuba’s been trying to sell Cuba products ranging from instant ramen Empresa de Transporte de Señales de Telecomunicaciones noodles to catfish and dentistry equipment.++ (Transbit) has reportedly been talking to Chinese companies. ++A traveling fair of products from Spain’s Basque region This is the first fiberoptic undersea cable built and operated through Cuba’s provinces has reached its second-to-last stop by state companies. in Camagüey, Granma reported. The fair, organized by the ALBA FARM RECEIVES FUNDING Asociación de Empresarios Vascos en Cuba (AEVC), A joint Venezuelan-Cuban agriculture project in Cienfuegos includes tools, kitchenware, engines, locks, job safety province has received more than $5 million in funding. The equipment and more from 11 participating companies. This “endogenous” project, modeled after a Venezuelan idea, is the first fair of this kind organized by foreigners in Cuba. includes 10 sites, an agriculture belt around the city of The Cuban Chamber of Commerce supports the event. The Cienfuegos, cooperatives, seed farms, a research center, small AEVC has 40 members.++ reservoirs, and farmer’s markets.

11 C o m p a n i e s

Egyptian mobile phone tycoon Naguib State hotel chain hoteles E (Encanto) has opened four Sawiris is eyeing the Cuban market again, boutique hotels in historical buildings — two in Cienfuegos, the Financial Times reports. The chairman and one each in Santiago and Sancti Spiritus. A fifth E hotel of Orascom Telecom unsuccessfully tried is going up in the center of the city of Holguín. Thirteen more to enter Cuba six years ago. Sawiris is used hotels are planned for the chain. Construction should begin to difficult markets, with investments in soon on those. Iraq, Zimbabwe and North Korea. Forbes *** Sawiris magazine listed Sawiris, a member of As part of a multi-destination agreement, Cuban regional Egypt’s Christian minority, as the third- airline Aerocaribbean will begin shuttling tourists between richest man in the Middle East. Varadero and Punta Cana in the Dominican Republic, starting *** July 8 on eight ATR-72 aircraft. British travel insurance provider Insure and Go Insurance *** Services Ltd. switched from AIG to West Sussex-based Hotetur, a hotel operator subsidiary of Spain’s Grupo Europ Assistance Group as underwriter, travel industry Marsans, is introducing its BlueBay luxury brand in Cuba publication Post Online reported. The British subsidiary of with a new resort at Cayo Coco. The 328-room BlueBay Cayo New York-based AIG stopped providing insurance for Cuba Coco , which is owned by state company Grupo Gaviota SA, travelers in April, causing British tour operators to scramble is slated to open in November. Hotetur already operates three for alternatives. hotels in Cuba. *** *** Brazilian tour operator Sanchat Tour teamed up with The Islamic Republic of Iran’s Shipping Lines (IRISL) Brazilian carrier TAM to open a route between São Paulo and began weekly cargo service to Venezuelan and Cuban ports in Havana. Beginning in July, a TAM Boeing 767-300 will cover May. The first shipment by this line was the route once a week. Sanchat contracted with Sol-Meliá for from Bandar Abbas Port to Havana hotel packages in Havana and Varadero. and Puerto Cabello, via Malta and *** Barcelona. Due to the lack of shipping Sunwing Charter Airline is starting weekly charter flights opportunities, Iranian railcars made by from Sault Ste. Marie to Varadero from December through Pars Wagon Co. recently had to wait at February. Sunwing will use Boeing 737-800 aircraft. least four months until the Cubans found IRISL container advertisement a ship to take them to the Caribbean. vessel

LOVE, LOSS AND LONGING — THE BOOK The Latin America Working Group Education Fund (LAWGEF) and the Washington Office on Latin America (WOLA) are pleased to announce the publication of Love, Loss and Longing: The Impact of U.S. Policy on Cuban-Amer- ican Families, a stunning photo and text book. The photos and testimonies in the book movingly capture how Cuban- American families feel at being separated from their family members on the island. This new book is based on the photographs and stories exhib- it that toured across the country for the past year and a half. With venues in over 20 cities throughout the United States, the photo exhibit reached thousands of Americans and is aimed at moving policymakers towards a policy of engagement with Cuba. The book includes expanded text on the background and implications of current restrictions.

To order your copy today, go to: www.lawg.org/misc/Sign_up_pubs.htm. Proceeds will contribute to LAWGEF’s work to educate the American pub- lic and policymakers about the impact of the Cuba travel ban. To preview a free version of the book go to: www.lawg.org/misc/Publications.htm