MARKET RESEARCH REPORT CUBA

Research Unit

A. PURPOSE AND PARAMETERS OF REPORT

Cuba is fast becoming a market of interest to the rest of the world since the US announced that it would be dismantling the 54-year old trade embargo it imposed on that country. This market is deemed to be large in the eyes of Caribbean producers, with over 11 million residents, and is considered a primitive market in dire need of development to bring it up to par with what is globally accepted in 2015.

The nation has had a centrally planned economy for almost 60 years and as a consequence, all industries, mines, refineries, communications, and export-import concerns were brought under a government control and procurement process. Throughout this period, Barbados and its CARICOM allies maintained both diplomatic and trade relations with Cuba but limited trading was realised between Barbados and Cuba. The Cuban economy itself became less and less efficient as low wages acted as a disincentive to productivity under the centrally-planned, sugar-based economy. Within the recent past, additional economic policy reforms have been made and measured concessions to encourage more entrepreneurship and private-sector growth have yielded modest economic improvements. Reforms have been targeted at reducing government expenditure to give the economy a necessary boost. However, they have not been deep enough and price controls and the two-tiered exchange rate still remain, resulting in a distorted pricing structure. The gates to Havana are finally re-opening and policymakers throughout the Caribbean are shifting their focus to this once taboo state. The CARICOM-Cuba Trade and Economic Agreement signed in 2001 allows for considerable duty-free access to Cuba and countries throughout CARICOM have actively begun to seek ways to capitalize on the proposed gains to be seen from trade with this country.

Because Cuba is a relatively untapped market right in our backdoor, coupled with the fact that it has a sizable market is enough incentive for Barbados to at least explore any potential opportunities that might exist and allow our producers to diversify away from traditional export markets in North America, Europe and CARICOM. Situated at the tip of the Caribbean archipelago, Cuba is regarded as an ideal market for most CARICOM producers. This market research project was therefore undertaken to examine the prospects for select Barbadian products in the Cuban market.

Objectives The objectives of the research, as outlined in the research proposal, were as follows:

1. To help Barbadian companies to make sound business decisions on:  Whether or not to enter the market  Whether the product/service is likely to require further development before launching in the market

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 How the product/service could be supplied to the market  How the product could be promoted within the market

2. To collate relevant and timely information on:  Current size of market o Market segmentation o Market trends and opportunities

 Accessibility of Barbadian suppliers to the market o Policy initiatives designed to promote trade o Regulations and Legislation Import policy/Market Access/Licensing Import Tariffs o Customs procedures and practices o Terms of Trade (payments) o The specific mechanisms, formal and informal for entering the market o The general experiences of companies that have operated in the market o Non-Tariff barriers to market entry o Foreign exchange controls o Marking/labeling/packaging requirements

 Distribution channels o Agents or distributors used o How the market is best supplied o Costs of distribution o Pricing and general pricing structure

 Competition o Is existing competition more or less sophisticated o Presence of local/international competitors o Key players‟ activity, strategy and performance

 Potential customers’ views o Customer needs, usage and attitudes o Do they see a need for the product/service o How do they source new suppliers/selection criteria used o Is the product/service acceptable in its current format

 Economic and financial statistics o Recently published trade statistics o Major products traded and major trading partners o Major industries and new developments o Transport and communication facilities o General information on the country

Methodology

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This report will present the findings of the research that was conducted in Cuba’s commercial capital, Havana, and the Fihav Expo at the ExpoCuba grounds. The products, which were presented during meetings with key players, are listed in the following table:

COMPANY PRODUCTS HS CODES Lenstec Inoccular lenses 9021.39.00

McBride Caribbean Ltd. Insecticides, Insect repellent 3808.91.00 Disinfectants 3808.94.00 Aerosol sprays (air fresheners) 3307.90.00 Caribbean Label Crafts Labels 4821.10.00.

WIBISCO Biscuits (unsweetened and 1905.90.10 sweetened) 1905.31.00

Banks Holdings Ltd. Aerated beverages (malt, 2202.10.10 coconut coolers, plus) Beer 2203.00.10 Stout 2203.00.20 Shandy 2206.00.10

Roberts Manufacturing Margarine, 1517.10.00 Shortening 1517.90.10 Soyabean oil 1507.00 Soyabean meal 2304.00 Dog food 2309.10.00 HIPAC Sausages 1601.00 Assorted canned meats (hams, 1602.41.00 luncheon meat, burgers) 1602.50.90.20

Caribbean LED Lighting LED lamps 9405.99.00 Tubes Panel lights Flood lights

Armstrong Agencies Alcolado 3303.00.90 Essences 3302.10.90 Claytons Cola Tonic 2202.10.00 Kick Energy Drink 2202.10.00 Harris Paints Paints (Emulsion paints, enamel 3208.10.30.00 paints, gloss paints,) Varnish 3209.90.30 Colourants, 3212.90.00 Superseal, Overglaze 3210.00.40 Troweltex 3214.10.90

Berger Paints Paints (Emulsion paints, enamel 3208.10.30.00 paints, gloss paints,) 3209.10.20.00

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Paints (primers, varnish, roofing compound, wood stain etc) 3210.00.10 Brushing solutions, wood lacquer, etc.) 3209.90.00 Reducers, thinners

Automotive Arts Not a Manufacturer. Exports mainly labels and plastic bags, occasionally. All exported products are sourced from other manufacturers.

Trowel Plastics Trowel plastics 3214.90.00 Water glaze 3210.00.10 Brushing solution 3210.00.10 Colortrend 3207.1.00

Doyle Offshore Sails Barbados Community College English as a Foreign Language

These products were selected based on companies that expressed interest in the Cuban market, as well as suggestions made from brainstorming on ways that Barbados could lend its expertise to the Cuban economy. The then Export Development and Promotion Department of the BIDC and the Private Sector Trade Team who, at the time, were adopting a collaborative approach to market entry and development for Cuba generated the initial list of companies. The two entities successfully planned and executed a seminar entitled ‘Consultations with Cuba – Charting a New Course,’ which was attended by representatives from many of the interested companies.

The list of products and research needs were provided to Ms. Donna Forde, Barbados’ Charge- de-Affaires in Cuba at the Embassy of Barbados in Havana and her Executive Secretary, Miss Mairobis Tomayo, set up meetings with key institutions who would be able to assist with the research requests.

A market visit was then undertaken in Cuba during the week of November 1st – 7th, 2015. This visit was facilitated by the Embassy of Barbados in Cuba and Miss Mairobis Tomayo was assigned to visiting officers during the period.

The visit comprised of meetings with two consultant firms, a business support organisation, an importer company, a representative from the ExportTT Trade Facilitation Office, and Republic Bank’s EXIM banking facility. All, with the exception of the Republic Bank meeting, took place at the FIHAV Expo. Officers were unable to meet with any key governmental organisations relating to customs, standards and key business support.

This report will present the feedback gathered from initial contacts made with the relevant companies, as well as an outline of the market peculiarities as they relate to the proposed products. Information will also be given on similar products being produced, imported and

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retailed in the country, and suggestions will be provided as to how Barbadian producers can best enter the Cuban market and successfully target the relevant consumers. EXECUTIVE SUMMARY

Situated in the northern Caribbean Sea lies Cuba, the westernmost island of the Greater Antilles, located some 93 miles south of the United States. Cuba, a former Spanish colony with an extremely rich history, has maintained a strong centrally planned political ideology and has become isolated due to a trade embargo imposed by its neighbour, the US. The isolation resulted in grave economic crises that have plagued the nation since the 1960s, affecting production and income levels and causing personal hardships that were felt by almost every one of its over 11 million citizens. As of July 20, 2015, the US and Cuba have been seeking to “normalise relations” as diplomatic relations have been restored since being severed in the 1961 Cold War. Ever since then, there seems to have been a “mad rush” to Cuba. These developments, in addition to Cuba’s own attempts to modernise its economy, are expected to result in a swift liberalisation of the country’s market systems and increased market access to a seemingly untapped market with great potential. The Barbados Investment & Development Corporation has therefore embarked on a mission to explore the potential that the Cuban market has to offer for local manufacturers, given the interest in the market expressed by some key producers. The Cuban market is one that deserves exploration as a potential export market for Barbadian products given its proximity, market size and the fact that for years Barbados and Cuba have had a good diplomatic relationship despite how the rest of the world felt about Cuba ad its leadership. Given Cuba’s current market and political system, price appears to be the overarching factor that determines what is bought and ultimately sold in Cuba. However, since there appears to be an ongoing paradigm shift in how the country operates, chances are that market liberalisation may lead a more democratic and market-driven economy, where quality, brand loyalty, consumer preferences and other factors play more significant roles in determining demand. As Barbados is generally not known for its price competitive output, little is known of Barbados and its products by Cubans. Notwithstanding this, the Cuban (government-run) buying agencies who purchase all consumer goods sold in Cuba seem eager and open to seeing what the countries of the Caribbean have to offer. In addition to gathering information on product demand and potential during the research mission, useful information on doing business in Cuba and the peculiarities of the Cuban market was also obtained. Trade statistics and other useful economic indicators were also obtained and are included in this report. The research has indicated a few high-potential export prospects for Barbados, with interest shown in sweetened and unsweetened biscuits, LED lighting solutions, paints and varnishes and tourism-related services and training.

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Barbadian producers are advised to explore further possibilities of getting their products into Cuba. Research conducted in both retail outlets and at the Feria International de la Habana (FIHAV) Expo revealed that our local products are adequately and attractively packaged for this market. There are however certain packaging and labelling standards with which producers hoping to enter the market will have to comply. This is in addition to certain other sanitary and phyto-sanitary requirements that will have to be met.

It should be noted that because the current consumer market in Cuba is not one that lends to or encourages brand loyalty, Cubans are not very brand conscious people as they have had to settle for the products that their government purchases for them, which have most often been cheaper products of questionable quality. The trade embargo by the US has also resulted in an absence of many of the world’s largest trading conglomerates from the market. This gives hope to smaller competitors like our Barbadian producers, but they need to act swiftly. The CARICOM-Cuba Trade and Economic Agreement established in 2001 provides for considerable duty-free treatment on specific goods which satisfy the rules of origin such as fruit juices, various sauces, condiments, seasonings, meat, seafood, beverages, plastic and paper products, furniture, clothing and other manufactured goods. It also provides duty-free treatment on specific agricultural products at scheduled periods throughout the year. Additionally, a number of products have also been earmarked for reduction and elimination of tariffs on a phased basis, providing Barbadian manufacturers with even greater access to Cuba’s market. The Agreement also addresses the removal of regulatory and administrative barriers to goods services, technology, and exchange through cooperation. There are also components that address investment, trade in services, taxation, trade promotion and facilitation, tourism and intellectual property rights. Talks with key players in Cuba have suggested that it is best for Barbadian businesses to enter into joint ventures with the Cuba government to get a foothold in the market. Successful penetration of the Cuban market will be largely determined by our local producers’ ability to meet the quantities demanded by such a large market that still practises bulk buying. Given the existing potential and level of interest that Cuba has in the Caribbean as a whole, Barbados should consider staging a high-level trade and political mission to Cuba. Most persons engaged during the November visit indicated that Cubans respond favourably to high-level interactions. The sooner this can be achieved, the better for our Barbadian companies.

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FINDINGS AND RECOMMENDATIONS

Biscuits (Sweetened and unsweetened) A variety of sweetened and unsweetened biscuits can be found throughout Cuba and there is no market domination by any one brand. Cuba imports biscuits from all over the world, with brands from Brazil, Colombia and Mexico noted at the time. There seems to be a high demand for sweetened biscuits as the variety was somewhat wide, especially in the case of sweetened, cream-filled biscuits. Experts in the field revealed that there was a strong chance that WIBISCO’s Shirley biscuits stand to do very well once they were able to get a foothold in the market. Currently, no research was obtained about the special sanitary and phytosanitary (SPS) measures controlling biscuit imports in Cuba, however, the information currently available indeed presents an opportunity for Barbadian producers to tap into this potentially viable market. Producers must be aware however that the Cuban consumer market is a very complex one that does not lend to or encourage brand loyalty, which is one of the pillars of traditional markets and marketing in general. The problem comes with Cuba’s purchasing habits. Because it is a communist state, government agencies purchase everything on the country’s behalf. Since the government has over 11 million mouths to feed it focuses on bulk buying and generally buys from any country that is willing to sell its goods at a cheap price. This generally means that that the country imports a lot of brands that are not widely popular and may not be the highest of quality. And unless the Cuban population deems the product exceptional, it may not necessarily be repurchased in the next purchasing cycle as the buyers are continuously in search on cheaper, more affordable options that are able to satisfy such a large demand. In a nutshell, barring those locally produced brands, one cannot guarantee to ever the same brand on the store shelves again. The good news is that Cuba’s unfortunate situation being embargoed by the United States and its allies has meant that many of the world’s large trading conglomerates whose sweetened and unsweetened biscuits dominate world markets are not available for sale in Cuba. This is advantageous because smaller companies are able to penetrate the market of over 11 million persons. No concerns were raised about the packaging of biscuits but market research indicates that Spanish language on the package and labels is what is preferred.

Recommendation There appears to be a market for both sweetened and unsweetened biscuits from Barbados. Local producers should therefore pursue any expressions of interest and seek to provide

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samples, catalogues and pricing for salted and non-salted crackers, chocolate and vanilla flavoured cream cookies, and sweetened biscuits. Pricing and ability to supply to required amounts will be key to determining the competitiveness of biscuits in this market

Alcoholic and Non-alcoholic Beverages Rooted in its colonial past, the market for aerated beverages, beer and stouts in Cuba is vast and well developed. Historically, Cuba was known as a haven of alcoholic beverages like rum with all three types of rum (white, gold and dark) being highly popular. The most popular brand being Bacardi, which originated in Santiago de Cuba. Cuba has also been the birthplace of several famous cocktails known the world over such as the Cuba Libre, Mojito, Piña Colada, Daiquiri, Sangria and Cubanito. Beer has become extremely popular and Cuba is known for a variety of high quality beers including Cristal, Havana Club, Caribbean Club, Bucanero Fuerte, Cagney, Gran Reserva, Hatuey, La-Tropical and Cubay Clasica among several others. However, despite this, one can still find foreign beer brands like Heineken and Corona on the shelves as well. Wine consumption is very low in Cuba and is served mostly in tourist restaurants. Because it is imported it is considered to be quite expensive compared to other alcoholic beverages. There is some local production of wine in Cuba, however their taste is often quite sour as compared to their international counterparts. The consumption of other alcoholic beverages is very common and the average Cuban over the age of 15 consumes around 7.26 litres of pure alcohol in a year. Also, growing disposable income has led to a rise in alcohol consumption as well. Spirits constitute nearly two-thirds of total alcohol consumption while beer is responsible of less than one-third. Rum is the most preferred spirit, followed but Whiskey and Vodka. With respect to non-alcoholic beverages, soft drinks such as colas and sodas are extremely popular in Cuba. Materva (soda infused with a type of herb) and Jupino (pineapple soda) are very common. Brands such as Tukola and TropiCola are also widely known. Cubans have a strong preference for hot beverages as well and coffee consumption is widespread due to the country’s large coffee industry in which they are extremely proud. Cafacito or Café Cubano is a strong black sweet coffee served in a small cup. This renown coffee beverage is popular among locals and tourists alike, as well as Café con Leche (strong coffee with hot milk) and Café Americano (a mild version of real Cuban coffee). The coffee market continues to grow, increasing by 5.2% in the last five years.

Increasing disposable income and growth in tourist inflows are major factors driving Cuban beverages market. Cuba currently exports beverages and spirits to many European and Latin American Countries, with total beverage exports worth US$133.4 million in 2014. Spain was the largest importer of Cuban Beverages and alcohol, followed by France, South Korea, Italy, Germany, Canada and UK.

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Apart from export demand, local demand for beverages is expected to increase even further due to the influx of tourists to the country. As Cuba’s diplomatic relations with the US and other Western nations improves, the tourism sector in Cuba is expected to grow even more resulting in a boom in the Cuban liquor and beverage industry. This will all counteract any negative impact that emigration will have on the industry.

Recommendation The Cuban beverage market appears to be saturated with well-established local brands. Beverages are sold in all major retail establishments and restaurants and even by mobile personnel on the streets. There is limited scope for Barbadian beverages in Cuba using the traditional methods of market penetration via export sales. It may be best for Barbadian companies to consider establishing joint ventures with Cuban companies and setting up a manufacturing presence in the country since much of this market is protected from foreign competition. This approach would require more in-depth market research and possibly follow-up of test promotions in retail outlets and/or restaurants. All in all, Cubans are very proud of their local beverages and while some imports such as Sprite, Coca-Cola and Redbull were noted on supermarket shelves, the supply was restricted to outlets marketed toward tourists.

Sausages and assorted canned meats The Cuban food market consists of two principal segments: the domestic market, which makes most of its purchases in national pesos, and the hard currency market (el Mercado en divisas) which uses the convertible Cuban Peso or CUC. The latter consists of the Hotel, Restaurant and Institutional or HRI sector along with other CUC shops. The government-run food stores are reasonably priced but lack variety and the products offered are of lower quality. Non-government run food stores have a larger variety but generally deal only with CUCs as opposed to national currency, which as harder for Cubans to obtain and the goods are more expensive. The Empresa Importadora de Alimentos (ALIMPORT) is the company responsible for importing roughly 80-90% of Cuba’s agricultural demands. The company is the sole approved importer for specific products such as wheat, fresh fruits, vegetables and meat. This state- owned corporation falls under the Ministry of Foreign Trade who is its largest shareholder. It purchases for its national peso stores (and in support of the Cuban ration booklet) but it also has some CUC stores that will sell its imports. All food products are subject to food rationing and with meat there is no exception. Meat products are usually distributed separately for other consumer food products – usually in a

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designated meat store called a carnicería. Meats are distributed every 15 days and the type of meat distributed will usually rotate. Meats such as beef, ground beef (usually mixed with soy), chicken, sausages, ham and fish are usually rationed with the quantities and prices differing for eat meat product. For example, beef may be rationed at ½ pound per person every 15 days, whereas chicken may be rationed at 1 pound per person every 15 days. Cuban people are major consumers of chicken, beef and pork products. This was evident in both the retail outlets visited and in the local company displays at the Fihav Expo. However, while visitors can find many meat products on the shelves in hotel bodegas, Cuban locals experience prolonged shortages of meat and meat products – especially beef. Beef is in fact one of the hardest food items to come across and is considered “perdido” or “lost.” Beef is rationed so heavily in communist Cuba that it is deemed illegal for anyone to slaughter a cow, as all bovines are the property of the state. Enforcement of this law is severe by Western standards and it is greater crime for a person to kill a cow than it is to kill another person. Someone who kills a cow – even if they raised it themselves – can get a 10-year prison sentence. Anyone who transports or sells a poached animal can be jailed for up to eight years. Even cooking illicit beef can result in jail time and has even resulted in some Cubans preferring to commit suicide than being incarcerated. Needless to say, when it comes to accessing meat, Cubans have a difficult time and there is even a black market for fresh and canned meats where locals get access to the fully stocked meat selections of the CUC tourist shops and sell those goods on the black market to locals for up to three times the price. While it is safe to bring canned meat into the country, fresh meat may be confiscated. While Cuba strives to become self-sufficient in agriculture, local investors lack the funds needed to make investments in key areas like management services for commercial-scale operations, machinery and equipment. The tourism sector has been the driving force behind the increase in the country’s meat demand. While chicken and pork are the standard meats found in Cuban cuisine, beef and beef-based products are highly demanded in the tourist sector. In order to meet this increasing demand, the Cuban Government will have to continue to import pure and processed meats while simultaneously trying to increase the size of their national livestock.

Recommendation The Cuban market for sausages and assorted canned meats is overflowing with opportunity for any supplier who is able to fulfil demand. The true demand for these meats, however, way exceeds what the government is able to afford and therefore does not truly represent actual demand. A need for a dependable supplier of canned and processed meats is indeed a priority in Cuba. The extent to which Barbadian producers can penetrate the market for canned and processed meats in Cuba may be limited to just only the tourism sector. Cuba is continuing to develop its tourist infrastructure, which includes high-end hotels, resorts and restaurants in regions

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outside of Havana such as Varadero, Holguin and Cayos. Tourists in Cuba are also major consumers of food products and in general, establishments that cater to tourists typically offer four types of food service products: gourmet, fresh, seafood and fastfood. The best opportunities for outside companies would be to supply to high-end restaurants and hotels which all fall under the Ministry of Tourism, the Ministry of the Armed Forces and Habaguanex. Opportunities exist for Barbadian companies to export high-quality deli-style meats, frozen pre-packaged meats and canned meats specifically to the country’s growing tourism sector, as it seems that the demand for these meats by local Cubans is restricted due to food rationing. Whether this will change in the near future is unknown. It is recommended that Barbadian producers try to penetrate the market by first targeting the tourism sector. Contact should be made with the abovementioned entities to ascertain the true demands of the sector and then determining whether Barbados can supply. Market entry is however conditional on successfully meeting all sanitary and phytosanitary requirements for food products as well as satisfying all other market entry requirements. It is suggested that local producers also partake in the Fihav Expo 2016 and set up personal meetings with ALIMPORT because Cuban business people prefer face-to-face interactions.

Soyabean oil and margarine The consumption of fats and oils in Cuba is heavily subsidized and provided as a basic foodstuff on the ration card at a quantity of 0.5 lbs per month. Local production of vegetable oil has experienced some growth in recent years, and soyabean oil is the leading oil that is produced in the country. Cuba’s soyabean oil segment consists of oil produced from imported soyabeans in a single processing plant with a capacity of 160,000 metric tonnes of soyabeans annually. Cuba’s plants refine or repackage imported fats and oils for consumer use as either cooking oils or frying fat (shortening) products. Soyabean oil is the leading vegetable oil traded in the international markets, second only to palm oil. During the last decade, the volume of soyabean oil exported has grown at the rate of 4.05%. It accounts for nearly 25% of the world's total fats and oils production. Soyabean oil was the only oil variety noted on the shelves of Cuban bodegas. Soyabeans were first cultivated in Cuba in 1904, and the climate and soil have always been good for growing them. Despite the fact that Cuban scientists have done extensive research on soyabean production over the last couple decades, and have even gone as far as developing new varieties that yield well under Cuban conditions, almost no soyabeans are grown in Cuba today. This is in part due to the country’s historical emphasis on sugar and tobacco. As a result, Cuba imports all 10,000 tonnes of soyabeans it demands per year, but uses these beans to produce soymilk and soy yogurt as a means of generating much needed foreign exchange. Cuba also imports small amounts of vegetable oils from Mexico, Canada and the EU. While Argentine soyabean oil is generally cheaper than the US oil, shipping from US Gulf ports to Cuba is more cost effective and timely.

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With respect to margarine, Cubans generally do not use this product, as butter is the preferred spread with an estimated 85% of the market share. Cubans prefer the salty flavour of butter and the Cuban culinary palate incorporates its use into the majority of dishes. Not only is butter the preferred spread among households but it is also the preferred spread among hotels and restaurants. The small segment of the market that uses margarine would comprise mainly bakeries and restaurants, which use it for baking and therefore purchase it in industrial sizes.

Within the retail outlets, the ratio of butter to margarine was 3:1 despite the fact that the price of margarine was around half the price of butter. The margarines were mainly of Cuban and Guatemalan origin and varied in size. All of the presentations were in the form of frozen sticks, with no soft spreads available. Soft spreads could be of real value to the large amounts of Cubans who do not have access to refrigeration, but the flavour may need to be enhanced to suit this market. A taste testing promotion may also be a valuable exercise.

Recommendation

There is limited scope for these products in Cuba, unless the population could be better educated about the health benefits of margarine and soyabean oil. Since neither of these products are considered basic goods where they can be purchased at subsidized prices in the national ration booklet, they are mainly sold at the CUC shops where affordable prices which are accessible to only a proportion of the population. These products would require a series of test promotions in major supermarkets prior to exploring any large-scale export to the consumer market. Interest in margarine was expressed for industrial use in the baking and tourism segments of the market and it is therefore recommended that Barbadian producers further pursue these avenues.

LED lamps and light bulbs The Cuban government made the decision in 2005 to swap out the old incandescent bulbs used throughout the country for energy-saving ones, thus causing 2006 to be known as “The Year of the Energy Revolution in Cuba.” Like most consumer goods, energy-saving bulbs are considered “perdido” and cannot be found being sold in the Cuban peso shops where the majority of natives purchase their goods. Generic brand 11 and 14-watt bulbs can be found in Havana’s CUC shops, running for as much as 2.15 CUC (or roughly US $2.15), which is equivalent to 50 CUP (Cuban pesos) or one-tenth of the average Cuban’s monthly salary. Phillips or Magnum bulbs of the same wattage can go for 3 CUC. When they can be found in the peso stores, the price at one point was prohibitively high for the average Cuban, with an 18-watt bulb costing 50 CUP and a 14-watt bulb costing 40 CUP. The price has since been

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lowered to around 15 CUP but the bulbs now on sale are wired for 220-voltage despite the fact that all Cuban homes run on 110-voltage. Energy-saving bulbs are also rationed at five bulbs per person to prevent black market activity where person purchase all the bulbs available and then resell them at a higher price. 40 and 60-watt bulbs are not available and what makes matters worse is that with the high-ceiling apartments typical of Havana, one can barely see anything with the low-watt bulbs that they could barely afford. Basically, saving energy has been equivalent to dim house lighting in Cuba. Furthermore, Cubans have to wait well over six months for stores to be re-stocked with energy-saving bulbs. The state-owned enterprise that imports energy-saving bulbs on behalf of the country quotes an international market price of US $1.10 and $1.18 for the average 14 and 18-watt bulbs respectively. So while the local distributor, in one instance, puts in an order for the purchase of 112,447 bulbs, the buyer company could only afford to import 43,061 (38% of demand).

Recommendation Given the high level of interest in energy efficient light bulbs and the country’s overall trending toward employing more renewable and alternative energy, it is recommended that producers consider tapping into the Cuban market. The major determining factors of Barbadian bulbs entering the Cuban market would be the price and conditions of payment. Barbadian companies interested in establishing a manufacturing presence in Cuba are also recommended to pursue this as a viable option since the Cuban government has opened up a special zone in the Mariel district with conditions that are appealing to foreign investor. The details of the Mariel Special Development Zone are provided elsewhere in this document.

Paints, varnish, colourants Cuba’s building stock is considered to be very old, with many of the current structures being in place before the Cuban Revolution. While some of these structures are quite outstanding and lend to the country’s old world charm, most of them are in dire need of repair, both structurally and aesthetically. One thing that stands out for any outsider visiting Havana is that many of the buildings and structures with the exception of those that house the Embassies and tourist facilities are in dire need of painting. According to a report by Cuba’s National Housing Institute (INV), approximately 1.2 million homes in Cuba (39% of the country’s residences) are in merely adequate or frankly poor condition. Crumbling paint and dilapidated buildings are a common site because, quite simply, there is no governmental program for maintaining buildings in Cuba.

In most cases in Havana, families may reside in apartment buildings that have a private owner. Often, the owner of the building may request that the residents pool their money to purchase paint and other construction materials, but residents are not required to do this. In other cases, many apartment buildings don’t even have landlords and individual apartments are owned by the occupants themselves, resulting in a case similar to a condominium association

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but without the association fees. The result of either scenario is that there is no money to improve the aesthetics of the buildings and therefore nothing gets fixed. Given the extremely low average salary most Cubans receive, they simply do not have the extra money to buy paint and supplies to fix up their homes. It is more important for them to put healthy food on the table than buy a can of paint for an outrageous sum of money. And when one can actually afford a can of paint, finding it on store shelves is another task.

State-owned companies lack the money and capacity to repair and paint buildings, but this situation is improving but at a very slow pace. The last few years have seen more and more local and foreign investment being pumped into restoration projects in key cities around the country. Also, over one-third of Old Havana has been restored under the UNESCO programmed that declared Old Havana and the city of Trinidad as World Heritage Sites. It is the goal of policymakers to have the island’s architectural heritage restored but this is an enormous and expensive task that the country just cannot afford in its current state.

Due to the exponential growth rate of the country’s tourism sector in recent years, there has been a surge in the construction sector. There are a select number state-owned construction companies falling under the control of the Ministry of Construction who are charged with importing all construction materials used in Cuba. While they are not permitted to advertise products, these companies have showrooms and warehouses at various locations in the major provinces around the island. These showrooms carry a limited display of items (mainly hardware), with brochures available for special orders of items not stocked. The introduction of any new product of item considered to be of interest to the construction sector would be undertaken mainly through the hosting of seminars by the importing agency in conjunction with the manufacturer/exporter. These seminars are conducted for the benefit of specialists in the various fields to view the products, the applications and the characteristics of the products.

Due to Cuba’s economic and political practices, price is the critical factor in the selection of products to import. The Ministry of Construction would routinely review the prices of items imported with a view to ensuring that the best price is being obtained for imports, and would advise importers on alternative products where cost savings can be realised. Access to many construction and hardware items is denied for regular citizens. Some basic items can be obtained at a very limited number of hardware outlets but the available stock is very narrow in range.

Recommendation The demand for interior and exterior paints in Cuba is expected to rise due to the growth of the country’s tourist sector. While foreign companies cannot sell directly to end users, Barbadian firms should consider tapping into this market as there is a wealth of opportunity since the country is going through a facelift of sorts. The major determining factors of Barbadian paints entering the Cuban market would be price and conditions of payment. Since finding the cheapest price is the overall goal of Cuban buying agencies, quality and environmental standards may not be very stringent. However, the major obstacle is going up against competition from considerably cheaper countries. It is advised that Barbadian

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companies contact the Ministry of Construction to determine whether their product offerings and price points may be attractive to the Cuban market.

There are also opportunities for automotive paint, especially given the fact that one of Cuba’s main attractions are its vintage cars that are still in mint condition. This will most likely continue to be an area of attraction for tourists in Cuba and the demand for automotive paint will most likely rise. Local automotive paint producers in Barbados should also try to capitalize on this niche.

Other Recommendations

 Training in culinary services Another opportunity presents itself in the area of ethnic cuisine. Many resorts and hotels now offer cuisines found across the world like Italian, Polynesian, Chinese and Japanese. Barbados is well positioned to supply the requisite training - given our vast experience in culinary arts. It is recommended that the directorate at the Barbados Hospitality Institute get into dialogue with the Ministry of Tourism in Cuba to ascertain the training needs of culinary staff. Possibly, a Memorandum of Understanding could be drawn up to highlight areas of cooperation between the two countries.

 Cooperation in Renewable Energy It is evident that niche markets and demand exist for renewable energy products in Cuba. What is needed is the research and development to support investment in new products and to ensure that innovations are in tune with target market requirements. Repeated calls have gone out for private sector partnerships in an effort to gain funding to drive research and development and innovation in Barbados. Now is the time for action as Cuba is opening up and the entire world is poised and ready to descend on this market with vast opportunities. For too long Barbadian manufacturers hav been content to produce products and ideas that everyone has already seen and to invest in technologies without ensuring they maximise the potential gains. It is time for us to make use of the unique resources and capabilities that we have and to do it in such a way that nobody does it better.

While Cuba is indeed a very complex and tricky market to get into and manoeuver around, the Research Unit maintains its stance that it is a market with great potential for Barbadian products. BIDC’s main focus should be to:

 Provide direct buyer engagement opportunities for local exporters  Engage with Cuban buyer agencies to get a better understanding of the country’s import needs and how Barbadian companies can supply  Increase Barbados’ market presence in Cuba  Assist exporters in achieving sustainable exports to Cuba

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 Provide market intelligence on Cuba, and especially facilitate a greater understanding of trade nuances  Facilitate increased trade between the two countries

The BIDC’s short and medium-term aim should be to undertake an export strategy aimed at increasing Barbados’ presence in the Cuban market. Elements of the Export strategy and market development should include (but not be limited to):

 Forging strategic partnerships and establishing strategic links with key players that would facilitate the entry of goods into the Cuban market such as the Cuban Chamber of Commerce, CEPEC, EXIM Bank, Caribbean Export, The Barbadian Embassy in Havana.  Conducting more in depth market research to more thoroughly assess the market and its peculiarities  Staging high-level political missions (since Cubans show more respect to persons who have rank and power)  Hosting trade missions and securing the requisite B2B meetings (match-making)  Holding workshops and forums to sensitize exporters about doing business in Cuba  Participation in a joint Caribbean effort at the Fihav Expo

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COUNTRY PROFILE OF CUBA

Geography The Republic of Cuba is the largest Caribbean island, located some 93 miles (150 km) south of Florida, 48 miles (78 km) west of Haiti, 92 miles (148 km) north of Jamaica and 130 miles (210 km) east of Mexico at geographical coordinates 21' 30N, 80' 00W. It is the western most island of the Greater Antilles Islands of the Caribbean and this location – east of the Yucatan Peninsula –positions the island in one of the busiest shipping lanes for vessels leaving the Panama Canal for ports in North America and Europe. Occupying an area of 4,420 square miles (110,869 sq km), it is the largest Caribbean island by land area and the 17th largest island in the world. The territory of Cuba itself is considered an archipelago of islands consisting of more than 4,000 islands and cays found in the surrounding sea and bays of the mainland. These islands are separated into four main groups – the Colorados, the Sabana-Camgüey, the Jardines de la Reina and the Canarreos. For the most part, the island’s terrain is flat with gently rolling hills and wide fertile plains. Rugged hills and mountains may be found in the southeast where the precipitous Sierra Maestra mountain range rises steeply from the sea to reach a height of 6,476 feet at Pico Turquino – the island’s highest point. Other mountain ranges in the island of Cuba include the Sierra Cristal range in the southeast, the Escambray Mountains near the island’s center and the Sierra del Rosario in the northwest. The coastal areas are characterised mainly by white sand beaches like the popular Varadero, as well as numerous mangroves and marshes, the largest being the Zapata Swamp.

Climate The climate in Cuba is similar to that of the Eastern Caribbean islands. With the exception of the mountainous region, the island’s climate is tropical with an average temperature of 23.1°C (73.6°F) in January and 27°C (80.6°F) in July. The island is also moderated by trade winds which make coastal areas more habitable with much sought after sea breeze. The dry season runs from November to April and the rainy season lasts from May to October.

Average yearly rainfall is more than 180 cm (70 inches) in the mountains and around 90-140 cm (35-55 inches) in the lowland areas; however, droughts are common. Cuba lies in the path of hurricanes and the more destructive storms are most common coming on to the end of the rainy season, in September and October. These adverse weather conditions affect the island’s eastern coast and often results in great economic loss. During the dry season, the island experiences occasional cold fronts, especially towards the north.

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National Emblems The flag of Cuba was first raised in the city of Cárdenas (Matanzas Province) in 1850 and was officially adopted on May 20, 1902. The overall design is modelled after the flag of the United States of America. The red equilateral triangle is from the Masonic symbol that represents freedom, equality and fraternity; its red colour symbolises the blood that would be necessary to shed in order to attain independence. La Estrella Solitaria – the white Lone Star – is the symbol of absolute freedom among the other people. The three blue stripes represent the departments that the Island was divided into at the time. The two white stripes evoke the purity of intentions for the people’s independence. The national bird of Cuba is the Tocororo or Cuban trogon (Priotelus temnurus). The Tocororo is a species of bird endemic (native) to the island and was chosen because its feathers exhibit the colours of the country’s flag – red, blue and white. Some Cubans also believe that the bird was also chosen because it cannot live in captivity as it dies of sadness if caged, reflecting the Cuban national character as a freedom-loving people. Cuba’s national flower is the White Mariposa or Butterfly Jasmine (Hedychium Coronarium Koenig). This species of jasmine, though not endemic to the island, grows in humid areas such as the banks and rivers of lagoons, but is also cultivated in yards and gardens of many Cuban homes. The flower was used by the Cuban women to pass messages to their loved ones in the battlefields during the wars of independence. It symbolises purity, rebelliousness and independence.

Population & Principal Cities Cuba has an estimated population of around 11,047,251 (July, 2014 est.), making it one of the most populous islands of the Caribbean despite having a negligible population growth rate of around -0.14%. Any decline in the country’s population is due mainly to low fertility and extensive emigration to the US (both legally and illegally). Cuba is divided into 14 provinces (shown below) with the Isla de la Juventud or “Isle of Youth” being a “special municipality.

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Some 77% of the island’s inhabitants reside in the urban areas, with about 20% of the population (or 2.2 million people) living in ciudad de la Habana or simply Havana, the country’s financial, commercial and administrative center. Havana spans a total of 728.3 square km or 281.2 square miles, thus making it the largest city, the most populous city and the third largest metropolitan area in the Caribbean region.

Other main towns include the port town of Santiago de Cuba, Camagüey, and Holguín.

City Province Population Havana Havana 2,201,610 Santiago de Cuba Santiago de Cuba 423,392 Camagüey Camagüey 301,574 Holguín Holguín 269,618 Santa Clara Villa Clara 210,220 Guantánamo Guantánamo 208,145 Bayamo Granma 144,664 Victoria de Las Tunas Las Tunas 143,582 Cienfuegos Cienfuegos 140,734 Manzanillo Granma 132,789

Almost half (47%) of the Cuban population is between 25 and 54 years of age, while 14% are between 15 and 24 years, and 10% are between 55 and 64 years. The country’s population pyramid (shown here) is a contracting pyramid usually common in highly developed countries with low birth and death rates. The population pyramid also suggests that the country’s population has a long life expectancy, high level of education and good health care. The people of Cuba are represented by three main ethnic groups. In a 2014 estimate it was revealed that some 72% of the Cuban populous identified as White/Caucasian (of Spanish origin), while 20% identified as African and 8% as Native American. While there are some inhabitants that identify as Asian, the numbers are negligible.

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During the 18th, 19th and earlier part of the 20th century, droves of Spaniards from regions such as Andalusia, Galicia, Asturias and the Canary Islands emigrated to Cuba, with a total of 508,455 leaving between 1882 and 1892 and approximately 750,000 leaving between 1899 and 1923. Though many of them would eventually return to the Motherland, their migratory patterns, along with other immigrants from Europe such as the French and Portuguese helped form the base population for the island of Cuba. The trans-Atlantic slave trade brought some 221,000 African slaves to Cuba’s shores between 1842 and 1873, however, many of the Afro-Cuban inhabitants living today are descendants of Haitian immigrants who were either the transplanted slaves of French settlers who fled to Cuba during the Haitian Revolution or Haitian peasants who left Haiti to find work as labourers in neighbouring countries. Indentured servants from China, Japan and Korea arrived in the 19th century to build railroads and work mines and after the Industrial Revolution many of them had no choice but to remain in Cuba because they could not afford return passage to Asia. The indigenous inhabitants of Cuba were the Taíno (Carib) people are mostly found in the eastern part of the island. Some immigrants from U.S.-based Native American tribes like the Cherokee, Choctaw and Seminole people also settled in Cuba during the 19th century. The true number of Cubans of indigenous and Native American descent however remains unknown.

Language

Spanish is the official language of Cuba. Generally, ‘Cuban Spanish’ does not differ significantly from the Spanish spoken in mainland Spain, some of the vocabulary, grammatical structures and pronunciations used are quite different. The Cuban language is most similar to, and originates largely from, the dialect spoken in the Canary Islands due to the considerable wave of emigration from those islands to Cuba in the 19th and early 20th centuries. Cuban Spanish is considered one of the more difficult forms of Spanish as it is heavily influenced by the fusion of Spanish, African and indigenous Caribbean cultures. This is most notable in the variety of unique vocabulary words that exist in the Cuban language but do not appear in the languages spoken in any other Spanish speaking countries. Haitian Creole is the second most spoken language in Cuba, with just under 4% of the population (some 300,000 persons of Haitian descent) using it. Lucumí is a Yoruba dialect originating in West Africa and is only spoken as a second language in a small region of the country. It is the liturgical or holy language of the African religion Santería, a blended religion of Yoruba mythology and Roman Catholicism. Catalan, another Spanish dialect, is spoken by just over 3,000 Cubans. English is commonly studied as a foreign language and is widely spoken by Cuban business people; it is used in the hospitality, health and recreational sectors.

Education

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Cuba’s educational system has been highly ranked for many years. The University of Havana was founded in 1727 and the country also houses a number of acclaimed and well-established colleges and universities. Following the 1959 Cuban Revolution, the Castro Administration nationalised all educational institutions and as a result the country’s educational system is run entirely by the government. This decision came at a time when less than half the children in the country had access to education. The Government’s campaign to eradicate illiteracy has been extremely successful and today the island has the highest literacy rate in the world. By definition, 99.8% of the population who are 15 years and over is literate.

Education continues to be a top priority for the Cuban government, evidenced by that fact that it spends 10% of its central budget on education, compared with 4%in the United Kingdom and just 2% in the United States, according to a UNESCO report.

Education in Cuba is compulsory and free for children between the ages of six and 15 (or 16) years, the end of basic secondary education. All students, regardless of age or sex are required to wear school uniforms which the colour of the uniform denoting the grade level of the student. Primary education lasts for six years while secondary education is subdivided into basic secondary education and pre-university secondary education.

The curriculum in primary and secondary schools is based upon the principles of "hard work, self-discipline and love of country.” On completion of basic secondary education, students can choose between pre-university education and technical and professional education. Those who complete pre-university education are awarded the Bachillerato. Technical and vocational training leads to two levels of qualification - skilled worker and middle-level technician. Successful completion of this cycle gives access to the technological institutes. Academic excellence at the tertiary level is not new to Cuba. The University of Havana remains the flagship institutions, however, higher education is provided by several universities and higher institutes of learning throughout the island. There are currently 47 universities in Cuba, with at least one university in each province. All higher education institutions are public and total university enrollment is approximately 112,000 citizens. The emphasis in the higher levels of education is on technology, agriculture and teacher training. Teachers in Cuba are selected based on the Bachillerato obtained upon completion of the pre- university level of education. Pre-primary and primary/basic school teachers are required to complete a five-year course at the Institutos Superiores Pedagógicos where they obtain their

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Certificate in Primary School Education or "Licenciado en Educación Primaria." Traditionally, many teachers were professionals from the production field, but over the last ten years or so, many have been specially-selected graduate students, receiving initial teacher training simultaneously with their studies. The standard of education in Cuba is held in such high standing that it attracts several international students to its higher education institutions. To qualify, foreign students must already have a Bachelor’s or equivalent degree, possess the requisite visa to enter the country, and agree to participate in compulsory Spanish classes. In 1999 a programme was implemented to attract students from less privileged backgrounds in US, UK, Latin American, Caribbean and African nations to pursue studies in medicine. Currently there are around 22,500 foreign students studying in Cuba, with the country currently hosting approximately 3,500 medical students from 23 nations including Barbados.

Health According to the United Nations’ World Health Organisation (WHO), Cuba’s healthcare system is an example for all countries of the world. The Cuban health system is recognised worldwide for its excellence and efficiency. Despite extremely limited resources and the dramatic impact of the over 50-year old embargo imposed by the US, Cuba has managed to guarantee access to its entire population while simultaneously achieving results similar to those of the most developed nations of the world. It is the only country that has a health care system closely linked to research and development.

In Cuba, public health is an essential pillar of development; it is top priority and is based mainly on preventive medicine. This prevention-based model is heralded as a more efficient and inexpensive counterpart to the existing curative model that most countries employ. Government operates and manages the national health system and assumes fiscal and administrative responsibility for the health care of all Cuban citizens. All health services in the country are government-operated. There is universal health care, and although shortages of medical supplies may persist, there is definitely no shortage of medical personnel. Medical professionals are not paid high salaries by international standards causing many of them to draw to different occupations in other industries like tourism that offer higher earnings. Notwithstanding this, the WHO estimates that Cuba has the second highest doctor- to-patient ratio in the world after Italy, providing a doctor for every 170 residents. Estimates from 2007 show high per capita rates for nurses and dentists as well with 79.5 nurses and 9.4 dentists per 10,000 residents.

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The number of facilities of the Ministry of Health providing services to the population (according to 2008 data) is as follows: 219 hospital centres, 160 dental clinics, 335 mother craft centres, 156 home for the elderly, 229 grandparent homes, 35 homes for the physically disabled, 13 research centres, and 26 blood banks. Among hospital centres, there are 82 general hospitals, 36 clinical-surgical hospitals, 26 paediatric hospitals, 26 child hospitals, and 17 rural hospitals, while 35 hospitals provide specialized services in oncology, orthopaedics, psychiatry, ophthalmology, rehabilitation and against leprosy and tuberculosis.

Additionally, many Cuban hospitals are certified ISO 14,001 (Hygiene, work-place security, and environment) and ISO 9001 (general quality control) which are internationally certified standards of quality that many hospitals in developed countries do not even meet.

The infant mortality rate is 4.2 per thousand births, thus making the island’s rate the best in the Western Hemisphere and among Third World countries in general. This rate is even lower than that of the US. This same ranking is mirrored in the country’s life expectancy rate which is 78 years and on average, Cubans are expected to live 30 years longer than their Haitian neighbours. If the current standard of health care persists, it is expected that Cuba will have the highest proportion of its population over the age of 60 in all of Latin America and the Caribbean. Cuba has also used its expertise in the health sector to assist other Third World countries that are playing catch up. Since 1963 many Cuban doctors and health care professionals have travelled throughout the Third World to treat those persons who need their help the most – the poor. As it stands, nearly 30,000 Cuban medical professionals are working in over 60 countries around the world. Operation Miracle is an iconic example of how Cuba has displayed solidarity with the poorest in the world. This humanitarian programme was launched in 2004 by Fidel Castro and Hugo Chávez as a major vision restoration programme that provides free eye operations on the poor in Latin America and the Caribbean who suffer from cataracts and other eye diseases. As of 2014 over 3.5 million people in the region have had their vision restored through the programme. In addition to surgery, Mission Miracle is a strategy for improving the programme’s reach and performance. It provides free eyeglasses and contact lenses for people with vision impairment. Cuba’s medical solidarity also extends to the African continent where, in 2014, LABIOFAM (Cuba’s chemical and biopharmaceutical research institute) launched a vaccination campaign against malaria in over 15 West African countries. Cuba also trains young physicians worldwide in its Latin American School of Medicine (ELAM). Since its inception in 1998, ELAM more than 20,000 doctors from over 123 countries have graduated from the institution. ELAM is considered by the WHO to be the world’s most advanced medical school.

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Cuba also has an extensive social welfare system that provides benefits for sickness, accidents, maternity, disability and unemployment. Medical services are also available to tourists wherever they go. First aid, emergency care and the first doctor's visit are free, however tourists are charged for medicine prescribed, at the official prices. No special health regulations are applied to travellers unless they come from areas of infection, in which case they must be vaccinated against yellow fever and cholera.

Religion Religion in Cuba is a touchy subject. Roman Catholic religion, the country’s main religion, arrived in Cuba with the original Spanish conquistadores and became the dominant religious institution in the country. From then until 1959, Cuba was like the rest of its Latin American neighbours – a bastion of Catholicism.

While the revolution of 1959 did not restrict religious practice, because religion was contradictory to the Marxist philosophy of the Cuban Communist Party that ruled the country from then until now, religious people were not allowed to join. The Communist Party closed churches, 400 Catholic schools, nationalised properties owned by religious organisations and forced the faithful underground amidst an air of atheism.

There has been a religious revival of sorts sweeping the country over the past 23 years, commencing in 1992 with the revising of the country’s Constitution which allowed Cuba to be a secular state. As Cuban totalitarianism and the memory of enforced atheism both fade, Christian denominations old and new are making inroads. Government has since eased restrictions on open displays of religion and has once again allowed churches to re-open, ending long-standing bans on features like Christmas decorations. In 2014, the Cuban Government even gave approval for the construction of the first new church to be built in the country since the revolution. In September 2015, Pope Francis, the leader of the Roman Catholic Church visited Cuba again and while Cuba’s President, Raul Castro declared his membership in the Cuban Communist Party, he indicated that he might return to the Catholic faith and even attended Mas with the Pope during his visit.

Cuba is also home to a variety of syncretic religions, largely of African cultural origin. An estimated 80% of the Cuban population practices religions with West African roots – mainly Santeria and Yoruba. Santeria blends elements of Christianity and West African beliefs, and as such, made it possible for African slaves transplanted from their homes to retain their traditional beliefs while appearing to practice Catholicism.

Currency

Cuba has two currencies in circulation: the Cuban Peso (CUP) and the convertible Peso (CUC). The CUP is used by government employees to purchase subsidized staple goods and services not meant for use by foreigners, while the CUC is used for the purchase of consumer and

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luxury goods and services not available in peso stores or in the government ration. These goods are usually imported commodities and anything intended for consumption by foreigners. The Cuban peso is pegged to several major foreign currencies, including the Euro. Since March 2005, the rate is 1:25 when exchanging CUC for CUP and 24:1 when exchanging CUP for CUC. Presently, the CUC in Cuba is set at a fixed rate of 1 CUC = US$1. Effectively the value of the CUC is about US$1.03 because the Cuban banks always take a commission of around 3% when exchanging foreign exchange for CUC. This rate is fixed by the Cuban Government and it is subject to change at anytime, should the Government decide to do so. There is an additional 10% fee when changing $US cash to CUC. This fee does not apply to other currencies, or when changing CUC to $US. A summary of effective exchange rates for the CUC (including bank commissions) is as follows:

 1 CUC = US $1.13 (using US cash)  1 CUC = US $1.03 using other currencies)

Government and Politics

The Republic of Cuba is one of the world’s last remaining socialist countries, employing a democratic centralist political system since 1959. The Constitution of 1976, which defined Cuba as a socialist republic, was replaced by the revised Constitution of 1992, which is “guided by the ideas of Jose Marti and the political and social ideas of Marx, Engels and Lenin.” The present Constitution declares the Cuba Communist Party as the “leading force of society and of the state” and as such has the capability of setting national policy. Executive power is exercised by the government. The First Secretary of the Communist Party is concurrently President of the Council of State (President of Cuba) and President of the Council of Ministers (sometimes referred to as the Premier of Cuba). Until February 2008, these positions were held by President Fidel Castro, who was also Chief of State, Head of Government, Prime Minister, and Commander in Chief of the Cuban armed forces. The Ministry of Interior is the principal organ of state security and control. According to the Cuban Constitution Article 94, the First Vice President of the Council of State assumes presidential duties upon the illness or death of the President. Since July 31, 2006, Raúl Castro, brother of former President Fidel Castro is President of the Council of State, President of the Council of Ministers (sometimes referred to as the Prime Minister), First Secretary of the Communist Party, and Commander-in-Chief of the Revolutionary Armed Forces. Esteban Lazo Hernández is President of the National Assembly.

Members of both Council of State and the Council of Ministers are elected by the National Assembly of People's Power. The President of Cuba, who is also elected by the Assembly, serves for five years and there is no limit to the number of terms of office.

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Cuba's has an elected national legislature, the National Assembly of People's Power (Asamblea Nacional de Poder Popular), which is the supreme organ of power. Its 612 members are elected every five years. The National Assembly meets twice a year, and between sessions, legislative power is held by the 31-member Council of Ministers. The Assembly is committed to looking after issues of legislative interest including issues concerning the economy, sugar industry, manufacturing industries, transportation and communications, constructions, foreign affairs, public health, defense and interior order.

Candidates for the Assembly are approved by public referendum. All Cuban citizens over 16 who have not been convicted of a criminal offense can vote. Article 131 of the Constitution states that voting shall be "through free, equal and secret vote." Article 136 states: "In order for deputies or delegates to be considered elected they must get more than half the number of valid votes cast in the electoral districts.” The People’s Supreme Court serves as Cuba’s highest judicial branch of government. It rules on constitutional matter and is also the court of last resort for all appeals against the decisions of provincial courts including all criminal, civil, administrative, labour law, and economic cases. It should be noted that the Cuban Constitution states that all legally recognized civil liberties can be denied to anyone who opposes the decision of the Cuban people to build socialism. No political party is permitted to nominate candidates or campaign on the island, including the Communist Party. In February 2013, Raúl Castro, current Cuban President, announced his resignation for 2018 that will end his current 5-year term, and hope to implement permanent term limits for future Cuban Presidents, including age limits.

Defence

The Cuban Revolutionary Armed Forces consist of ground forces, naval forces, air and air defence forces and other paramilitary bodies including the Territorial Troops Militia, Youth Labour Army and the Defense and Production Brigades.

The Armed Forces has long been the most powerful institution in Cuba. The military controls more than half of the economy through its management of hundreds of enterprises in key economic sectors. The military is also President Raul Castro’s base.

From 1966 until the late 1980s, Soviet Government military assistance enabled Cuba to upgrade its military capabilities to become the top military in Latin America. It has deployed troops to countries such as Ghana, Algeria, Syria, Ethiopia, Nicaragua and El Salvador over the last couple decades.

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A 2009 estimate suggests that Cuba spends about US $91.8 million on its armed forces, devoting more than 10% of its GDP to military expenditures.

Transport and Communication

A good network of roads, railroads and air and sea transportation are key features of Cuba’s infrastructure.

Air Transport

There are a total of 171 airports (2003 est.), with 77 paved and 94 with unpaved surfaces. There are 11 international airports listed below:

 José Martí International (Havana),  Frank País Airport (Holguín),  Jardines del Rey (Cayo Coco),  Ignacio Agramonte (Camaguey),  Antonio Maceo Airport (Santiago de Cuba),  Juan Gualberto Gomez (Varadero),  Santa Clara Abel Santamaria Airport OR Cayo Largo Maria Airport (Santa Clara),  Vilo Acunaa (Cayo Largo),  Jaime Gonzalez (Cienfuegos),  Sierra Masetra (Manzanillo de Cuba), and  Maximo Gomez Airport (Ciego de Avila).

There are good air services from Europe, Canada, Central and South America. International carriers include Aero Caribbean, Aeroflot, Aerogaviota, Aeromexico, Aerotaxi, Air Canada, Air Europa, Air France, Air New Zealand, Avianca, Blue Panorama, Cayman Airway, Copa Airlines, Cubana de Aviacion, Insel Air, KLM, LACSA, and Virgin Atlantic. The national carriers, Cubana de Aviacion, Aero Caribbean, Aerogaviota and Aerotaxi service both local and international flights.

Sea Transport

It is estimated that the merchant marine vessels total 15 ships including 1 bulk, 7 cargo, 1 liquified gas, 1 petrol tanker, and 1 refrigerated cargo ship. Cuba has about 5746 km of

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coastline with the north coast being the longest (3209 km). There are 8 major ports including the U.S. base at Guantanamo, and 44 minor ports.

The most modern port in the country is the Mariel port, located in Artemisa province, within the Mariel Special Development Zone, which is about 45 km to the west of Havana. Since the port is situated in the middle of the Caribbean region and the Americas, in the intersection of the North-South/East-West axes of the maritime commercial traffic of goods, it constitutes the center of a 1000- mile radius circumference in which the main ports of the region are located. It has a modern container terminal with 702 meters of quay, which has the necessary capacity and services for the operation of Super Post-Panamax ships, by means of modern and highly automated equipment to handle, store, connect and control containers.

Tonnes of export and import cargo re handled in Cuba’s ports every year and the country lies in a major shipping lane especially for ships leaving the Panama Canal and en route to North America and Europe. However, because of the American embargo, ships headed for US ports are not allowed to make calls at Cuban ports.

Apart from oil imports from Trinidad and Tobago, sea transport links with CARICOM are not as fully developed as with some other ports in Central America. Nonetheless, Havana accounts for just about 60% of all cargo vessels calling at the island, including most of the fuel traffic for which it has the country's largest refinery installation. Its natural harbour has 50 docks with full loading and unloading facilities and two grain unloading plants, which have equipment with 45,000 tons of storage capacity. Most of the exports of sugar are handled at Cienfuegos and, to some extent Guayabal and Matanzas. Santiago de Cuba is the other principal port engaged in international maritime transport. Other major ports are Mariel (Free Trade Zone), Nipe, and Nuevitas.

Because the US embargo has not yet been lifted, there are currently no scheduled passenger ships calling at Cuba’s ports. Some cruise ships do stop, but these are limited. It is possible to arrive onboard a private yacht, although the authorities must be contacted before you arrive.

In Cuba there are a large number of entities that are devoted to the international maritime service, which covers all necessary aspects to undertake import and export operations, including insurance. These companies transport dry and liquid cargoes, refrigerated, loose loads and by containers. They operate with services of regular lines, direct or combined, as well as TRAMP services. These companies are listed below:

 Coral Container Lines SA  Poseidon  Mar America  Friomar  Nexus Reefer  Melbridge Container Lines  Nirint Shipping BV  Acinox Shipping  Petrocost  Expedimar SA

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 Melfi Marine Corporation SA  Norstrand Maritime and Trading Co. Ltd  Transcargo International Cuflet Chartering  Naviera Cubalse  Navegacion Caribe  Naviera Caribena

Rail Transport

Cuba’s railway began in 1834 and since then it has expanded to 11,969 km. There is one main train line covering the country, from Havana to Santiago de Cuba and it provides both passenger and freighting services. 7,162 km of rail is used exclusively by the sugar industry and the remaining 4,807 km are public service railways operated by the company Ferrocarriles de Cuba. Four trains depart each destination daily. There are also routes from Havana to a selection of other towns and cities, but these services are irregular and often cancelled at short notice. The rail network used to connect the majority of the country, but has been very badly affected by natural disasters, leaving just a small fraction of it working. All railways were nationalized in 1960.

Road Transport

The road network in Cuba consists of 60,858 km of road, of which 29,820 km are paved and 31,038 km are unpaved, with the latter being accessible during the dry season only. The country also has eight toll-free expressways or autopistas, measuring 654 km in total. Seven of them are centralised in the city of Havana and connect to each other via the Havana Ring Road, with the exception of the autopista from Havana to Mariel. The central highway runs from Pinar del Rio in the West to Santiago de Cuba in the south, for a length of 1,114km. There is also a complex network of single carriageway highways names carreteras, with the most important one being Carretera Central which is a west-east highway spanning the length of the island from Sandino to Baracoa. The maximum speed limit in Cuba is 100 km/h.

In Havana, transportation is provided by a colourful selection of buses imported from the Soviet Union or Canada. Many of these vehicles are second-hand, such as the 1500 decommissioned Dutch buses that were donated by the Netherlands in the mid-1990s. Despite the US embargo, American-style yellow school buses are increasingly common, having been imported second-hand from Canada. In 2008, the famous “camello” trailer buses were replaced by Chinese Zhengzhou Yutong buses which provide service on seven key lines in and out of Havana. Several decommissioned buses from Seville and another hundred from Belarus also make up the urban bus fleet seen in Cuba today.

There are an estimated 173,000 cars in Cuba. Until the 1960 embargo, most new vehicles came to Cuba from the US. Subsequent to this, the Soviet Union supplied their models such as Volgas, Moskvichs and Ladas. Since 2009, Cuba has been importing sedans from other European and Chinese automakers. Bicycles and horse-drawn carriages are common as well.

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Communication

The telecommunications sector in Cuba is considerably underdeveloped by Western standards. It consists mainly of analog television, analog radio, GSM mobile telephone services and very limited access to the Internet.

Telephone service is provided through ETECSA (Telecommunications Company of Cuba) who, during a temporary partial privatisation, managed to install fibre optic cables throughout the island as well as digitize all switches and landlines by 2010, causing the number of landlines in the island to triple to just over 1 million. Because of this, telephone density increased to 10 per 100 inhabitants, which is still considerably low.

The island’s main international telecommunications links are via antiquated undersea telephone cables to the US, the Caribbean, Spain and Italy.

Mobile telephone service is provided through the Cellular Telephone Company of Cuba (CUBACEL) but the country’s mobile telephone infrastructure continues to lag behind its neighbours. The mobile network has expanded throughout the island and the number of users has increased dramatically since 2008 when the Cuban government lifted its ban on the purchase of mobile devices and reduced sign-up costs and per-minute rates. The cost of making and receiving mobile calls is still very high, particularly given the limited disposable income of most Cubans. Service available to the general population is based on primitive, second-generation technology that does not support Internet service. The more advance networks with wi-fi capabilities are limited to hotels, and the offices of foreign business executive, government officials, diplomats and foreign news agencies. Significant investment in mobile broadband will be necessary to close the gap and bring Cuba up-to-date with wireless broadband services that widely available and affordable.

Internet connections in Cuba are available exclusively through ETECSA. As wireless Internet service is not available to the general population, dial-up Internet effectively is the sole means of connecting people in Cuba to the Internet. The combination of inadequate infrastructure and the government’s deliberate policy of controlling Internet access have produced extremely slow service that is not widely available to the population. Government statistics claim that 25% of the population has access to the Internet, but it is suspected that this estimate is more in the area of 5%. A clear distinction must be made when referring to Internet access in Cuba: while certain professionals, government officials, and tourists have access to the World Wide Web, most Cubans only have access to an intranet set up by the Cuban government that does not provide open access. ETECSA recently started offering open access via Internet cafes, but at a prohibitive price for most Cubans. Home connections are not available to the vast majority of Cubans, since they require permission from the Ministry of Information and Communication (and this is not routinely granted). And whatever access is available tends to be among the slowest in the world.

Mass communication through television and radio are well developed, although state censorship controls the content of all programmess. The print media conveys newsworthy information as well as government propaganda. Granma is the major newspaper. Joven

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Rebelde and Trabajadores, newspapers for youth and workers, respectively, are also distributed throughout the island. Mujeres and Muchachas are journals published by the Federation for Cuban Women and inform on issues such as fashion, housekeeping, women in the military and in foreign service, health, and political propaganda. Verde Olivo is a journal for members of the military.

Financial System

The Cuban financial system was reviewed and restructured in 1977 in order to facilitate better control and management of the flow and exchange of currency in Cuba. One of the more important actions was the separation of the commercial and the central banking functions, which were formerly conducted by the National Bank of Cuba (Banco National de Cuba). The Central Bank of Cuba (Banco Central de Cuba - BCC) was created in 1977 by Decree Law No. 172 and it’s role remains today to regulate and supervise the banking and financial non- banking institutions within Cuba as well as any foreign representative offices within Cuba. Their role includes the supervision of a stable currency in Cuba and the administration of national reserves. The BCC’s mission is as follows:

 To issue the national currency and seek it’s stability;  To contribute to the macroeconomic balance and orderly development of the economy;  To keep the custody of the country’s international reserves;  To propose and implement a monetary policy which allows for the attainment of the economic goals established by the country;  To ensure normal internal and external payment operations;  To dictate mandatory regulations;  To exercise the functions related to the discipline and supervision of the financial institutions and representative offices authorized to establish themselves in the country and of any other entrusted to it by the laws.

Under the National banking and Financial System, there are nine Commercial Banks, 15 non- banking financial institutions, 10 representative offices of foreign banks, and three representative offices of non-banking financial institutions. The representative offices of foreign banks based in Cuba do not work as banks or branches thereof; they are simply responsible for the management and promotion of bank activities carried out by the bank they represent and by the institutions of the Cuban banking system and other national entities.

Economic Overview

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The Cuban government continues to balance the need for loosening its socialist economic system against a desire for firm political control. In April 2011, government held the first Cuban Communist Party Congress in almost 13 years, during which leaders approved a plan for wide-ranging economic changes. Since then, the Cuban government has slowly and incrementally implemented limited economic reforms, including allowing Cubans to buy electronic appliances and cell phones, stay in hotels, and buy and sell used cars. The Cuban government also liberalised some retail services to "self-employment," leading to the rise of so-called "cuentapropistas" or entrepreneurs. Recent moves include permitting the private ownership and sale of real estate and new vehicles, allowing private farmers to sell agricultural goods directly to hotels, and expanding categories of self-employment. Despite these reforms, the average Cuban's standard of living remains at a lower level than before the collapse of the Soviet Union and the resulting economic downturn of the 1990s.

Basic Economic Data

INDICATOR 2012 2013 2014 Real GDP Growth (%) 3.0 2.7 N/A GDP Current Prices (US$ billion) 73.1 77.2 N/A GDP Per Capita (US$) 6,448.2 6,789.8 N/A Inflation N/A N/A N/A Population 11,342,631 11,362,505 11,379,111

Tourism Tourism is the major sector driving the Cuban economy. With the collapse of the Soviet Union and the dismantling of communism, the country was forced to restructure its economy to mitigate against the negative impacts caused. Once a sugar colony, Cuba opened up to foreign investment mainly in the form of joint venture arrangements with the local government to construct hotels. Today, Cuba attracts more than 3 million visitors yearly and it is expected that once the 54-year embargo is lifted, approximately 10 million Americans will visit the country on an annual basis. Currently, tourism accounts for over 60% of Gross Domestic Product. The majority visitors to the island originate from Canada, Mexico, Europe (mainly Spain), Latin America and the Caribbean. An estimated 2.2 million non-American tourists travelled to the country during the first half of 2015, up 14% from the previous year. This surge in interest is due mainly to persons wanting to experience the country while it retains its unique “old-world” charm before the floodgates are open to US visitors. Cuba however, does not have the infrastructure to support the exponential growth of its tourist product. ATMS are rare and often empty, and food shortages are very common. Most importantly, there is insufficient hotel accommodation as there are currently only 61,000 hotel rooms in the island. There is a current trend to convert private residences into “bed and breakfast” type operations known as casas particulares or private homestays. This option

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increases the number of rooms available by over 20,000. Many of these lodging however, cannot be booked in advance online and provide only basic amenities such as a shared bathroom and no Internet access.

Agriculture The Agriculture sector in Cuba has played an important role in the country’s economy for several years; today, it contributes less than 10% of the country’s GDP, while employing 20% of the workforce. Around 30% of the country’s land is utilised for crop cultivation. As is the case with most of the country’s productive sectors, inefficiency in the sector has resulted in the country having to import large amounts of beef and lard and in total, the country imports between 70 and 80% of all food consumed locally and 80-84% of the food it provides via rations to the public. Following the Cuban Revolution, Cuba’s agricultural sector remained the heart of its economy for over 30 years. Sugar cultivation was the principal agricultural activity, as the country had a guaranteed market in Eastern Europe for sugar, the main export outlet for the commodity. However, with the loss of the Eastern European markets following the dismantling of the Soviet Union, the industry experienced significant declines. Although production is lower, Cuba is still a major producer of sugar, and it continues to export the commodity to some markets in Europe and to China. The country has also entered into an Agreement with Venezuela – a close ally, in which Cuban sugar is exchanged for oil from that country. The Cuban government is actively looking to attract foreign investment in the sugar industry in an attempt to bolster production.

Other food crops produced locally in Cuba include: cassava, citrus, coffee, potato, rice, tobacco and other tropical fruits such as plaintains, bananas, mangos, papaya, pineapple, avocado, guava, coconut and anonaceae. Cuba is the second largest cultivator of tobacco in the world, however tobacco production has remained about the same since the late 1990s. Cuban cigars are known the world over and almost 100% of cigar production is for the export market. Pinar del Rio Province is the center of Cuban tobacco production and the country’s tobacco industry is its third largest supplier of foreign exchange, generating around US $200 million in income annually.

Manufacturing

Manufacturing is another segment of the Cuban economy that has contributed in the fight toward economic recovery following the difficult years of the early 1990s. Ever since the start of economic reform in 2011, the Cuban government has recognised the urgency to revive the

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industrial sector as a way to increase the country’s income from exports, in addition to meeting the demands of the domestic market. Manufacturing is centered chiefly in the processing of agricultural products. Sugar-milling has long been the largest industry, and Cuba is also known for its tobacco products. There is an oil-refining industry as well. Some consumer goods such as food and beverages and clothing and textiles are manufactured, as well as construction materials such as cement, chemicals, steel, agricultural machinery, and pharmaceuticals. These commodities make up the country’s core production base. The country has also been exporting these items to markets in Europe, Canada, Latin America and China.

In recent years, the country has made inroads in developing its industrial sector first with the creation of the Ministry of Industry and the adoption of policies for recycling, packaging, biotechnology and renewable energy. Despite this, Cuba continues to struggle in this area. The causes of the collapse of the country’s industrial sector are complex and multi-dimen- sional, while the consequences have included job and income loss, the loss of an important part of its economic base, the loss of much of the potential for export expansion and diversification, and rust-belt style industrial and urban decay. Unless Cuba’s manufacturing sector can fully recover from its collapse, the nation risks falling into the same trap as its other Caribbean counterparts, exporting services and some resources, while importing almost all manufactures.

 Traditional Agro-Industries (Sugar, Tobacco and Rum) Output in the sugar agroprocessing sector fell from around 7-8 million metric tonnes per year in the 1980s to 1.6 million for the 2014 harvest. Perhaps the sector, focusing also on bio-fuels, can be reconstructed from the ground up. Foreign technology, investment resources, managerial talent and entrepreneurship would be vital in this effort. However, the old dysfunctional state enterprise model seems so entrenched that only successful implemen- tation of dramatic institutional change as well as massive investment can bring about the desired change.

Cuba has a major comparative advantage in cigar production and a thriving agricultural and manufacturing base for future expansion. Market prospects are mixed but modestly positive. The market for cigars in high-income countries may weaken in the future as the baby boomers, the primary market for cigars, get older and become more health conscious. The cigar fad of the 1990s is unlikely to return in those countries with the same intensity. On the other hand, cigars may become a status symbol for males of the burgeoning middle classes of the emerging middle-income countries of Latin America and Asia. Normalization of relations with the U.S. would also increase demand as the product is currently deemed contraband.

The market for rum and alcoholic beverages has been strong and prospects remain high due to increasing demand in emerging countries and the United States after relations improve.

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 Food Processing

Cuba’s food-processing sector is highly dependent on the performance of the country’s agricultural sector. Unfortunately, Cuban agriculture has been in decline, especially since 1990. Some past exports, such as citrus fruits, are virtually non-existent today. The country has the potential to export raw and semi-processed citrus products, tropical fruits and vegetables. This would require major expansion of food production and is thus only a longer- term possibility at this time. However, a diversified range of agro-industrial activities could be considered and should be part of an agricultural revival, and would require a general enabling environment for agricultural and industrial enterprise that does not exist at this time.

 Pharmaceuticals

Since the late 1980s, Cuba’s pharmaceutical sector has been largely successful, with export earnings second only to nickel. To keep the sector afloat, however, there is a constant need to continuously develop new drugs as the sector faces stiff competition from other low-cost producers of generic versions when patent protection expires. Producers are forced to continuously innovate and obtain patents to keep the sector alive.

Additionally, while the sector continues to cast its export net further and further, many of its trading partners, such as Venezuela, purchase these products due to specific trading arrangements that will inevitably expire.

 Light Manufactures

Cuba’s light manufacturing sector has been dealt the hardest blow, experiencing declines of 70% to as much as 90% in some subsectors. These areas include the production of footwear, textiles, clothing and consumer products made of leather, wood, paper, metal, rubber and plastic for household use. This is major fallout especially considering that even in the 1940s, Cuba was a major producer of a range of products such as leather and rubber shoes, cotton and rayon textiles, rubber tires, soap, paint, and clothing, among other goods.

The collapse of much of Cuba’s light manufactures industry is due to the US-imposed trade embargo that halted trade with the US and Canada – the industry’s main export markets. It would be difficult for Cuba to reclaim many of these areas, given the dominance of cheaper producers in China, India, and other Asian countries; however, it is likely that niche-type markets could have some success. For example, the manufacture of some lines of specialty women’s clothing, leather footwear, and Spanish-colonial style furniture are all possibilities.

Foreign Trade Data

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Table 7 Trade between Barbados & Cuba (BDS$) Year Exports Imports (Deficit) Surplus 2010 38,207 271,029 (232,822) 2011 627,688 199,184 428,504 2012 110,588 289,853 (179,265) 2013 14,923 177,303 (162,380) 2014 19,343 123,266 (103,923) Source: Barbados Statistical Service

Main trade partners During 2014, Cuba had commercial relations with more than 160 countries in the last year. Its most recent main trade partners are the following, shown in order of significance:  Bolivarian Republic of Venezuela  People’s Republic of China  Spain  Canada  Netherlands  Brazil  Mexico  Italy  France  Federal Republic of Germany  Algeria  Russian Federation  Vietnam

Cuba’s Main Export Products in 2013 2013 % Total of exports, including: 5,283,142 100.0 Ores and metal waste 767,885 14.5 Chemicals and related products (not specified) 680,960 12.9 Sugar 431,943 8.2 Tobacco 244,684 4.6 Alcoholic drinks 153,668 2.9 Iron and Steel 71,851 1.4 Fishing products 70,822 1.3 Special Equipment for certain industries 36,789 0.7 Cement 27,194 0.5 Honey 16,833 0.3 Coffee, tea, cocoa and spices 10,490 0.2 Source: Based on the information published in Anuario Estadístico de Cuba 2013 (2013 Statistical Yearbook of Cuba).

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Value of Value of Imports Share of Barbados’ SITC Total from Product Imports Market Group Imports Barbados (%) Share (%) (US $’000) (US $’000) '84 Machinery, nuclear reactors, boilers, etc. 861,852 14.4 - - '02 Meat and edible meat offal 215,465 3.6 - - '10 Cereals 512,249 8.6 - - '85 Electrical, electronic equipment 419,848 7.0 - - '23 Residues, wastes of food industry, animal fodder 280,639 4.7 - - '04 Dairy products, eggs, honey, edible animal product nes 245,566 4.1 0.04 - '39 Plastics and articles thereof 243,476 4.1 - - '27 Mineral fuels, oils, distillation products, etc. 231,111 3.9 - - '87 Vehicles other than railway, tramway 221,360 3.7 0.958 - '90 Optical, photo, technical, medical, etc. apparatus 182,557 3.1 - - '38 Miscellaneous chemical products 181,126 3.0 - - '72 Iron and steel 129,306 2.2 - - '73 Articles of iron or steel 127,074 2.1 - - '40 Rubber and articles thereof 121,908 2.0 - - '31 Fertilizers 120,396 2.0 - - '15 Animal, vegetable fats and oils, cleavage products, etc. 110,561 1.9 - - '30 Pharmaceutical products 92,798 1.6 - - '34 Soaps, lubricants, waxes, candles, modelling pastes 88,234 1.5 - - '76 Aluminium and articles thereof 82,605 1.4 - - '07 Edible vegetables and certain roots and tubers 80,327 1.3 - -

Barbados’ Major Exports to Cuba 2010-2014 Product Group 2010 2011 2012 2013 2014 Quicklime (White Lime) 24,727 Personal Effects 8,350 Brandy 2,305 3,008 3,744 9,230 Trade/Advertising Material 900 4 605 10 Aerated Beverages 455 193 198 Electrical Generators 420,690 Metal Office Furniture 178,178 Wooden Furniture 25,000 Black Printing Ink 6,854 Synthetic Sails/Tarpaulins 3,734 Ampicilin/Capsules 3,584 8 Printed Brochures, Pamphlets & Leaflets 232 53,658 710 148

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Instruments/Aparatus for 14,331 measuring/detecting ionizing radiation Corrugated Cartoons/Boxes 6812 Bumpers & Parts thereof for Motor Vehicles 5,874 Shandy 5,549 102 Corrugated Paperboard 3,553 Egg Boxes 3,398 Plastic Tableware/Kitchenware 5,042 Protein Hydrolysates 250 9,029 Air Conditioners 2,000 Paper & Paperboard 2,703 Machines for Balancing Mechanical Parts 1,916

Barbados’ Main Imports from Cuba (2010-2014) 2010 2011 2012 2013 2014 Cigars, Cheroots & Cigarillos 239,569 127,080 186,184 121,778 98,684 Tobacco 23,591 Coffee Beans 3,045 630 178 Ceramic Tableware/Kitchenware 809 857 494 Ice Cream 55,308 46,101 50,296 Paintings, Drawings & Pastels 478 8,460 2,234 Wooden Wall Plaques 627 1,740 4,884 902 2,219 Original Sculptures/Statues 1,593 6,702 Office Supplies 14 1,470 Printed Brochures, Pamphlets & 33 37,524 Leaflets Brandy 6,736 Egg Boxes 188 36 1,557 52 Woolen Womens/Girls Suits 760 482 1,290 Ampicilin/Capsules 10,017 Bells/Gongs 100 2,437

Market Access

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General Import Policy And Market Access

General Import Policy Cuba has gradually opened up its economy to trade in the face of an economic embargo the US has imposed on the island. The country is not part of the several hemispheric integration movements like the Caribbean Community, Central American Common Market, Latin American Integration Association and the Free Trade Area of the Americas. There are therefore strict rules that guide the country’s import policy. To trade with Cuba, exporters must have two licenses: a travel license and an exporting license. Cuba’s tariff regime is outlined in Decree Law 124 of 1990. Decree Law 162 of 1996 sets out the functions and operations of the Custom system.

Import Regulations

Goods can be imported into Cuba only by state entities and by joint venture operations holding permits for the specific goods in question. While agents and intermediaries handle goods on consignment for licensed importers, they cannot import on their own accord and neither can they conduct distribution operations. Import permits are therefore required. Joint ventures with foreign participation will generally obtain their import permits through their Cuban partners. But the right to import specific categories of products may be included in negotiations when seeking approval of the joint venture arrangement. There are no quotas or licenses applied to imports which may restrict or limit trading activity. In addition, there are no special requirements levied against international companies which conduct trading activities. The local regulations in force relate to the importance of protecting the national heritage of Cuba, sanitary conditions and the environment and the prohibition of trade in illegal drugs, ammunition, pornographic materials of any nature, subversive literature and any endangered species of flora or fauna.

The following items are therefore prohibited from entering Cuba:  Drugs;  Explosives;  Pornographic objects, photos, literature or any other article contrary to good manners;  Any article, including literature, that acts against the country’s security and domestic order;  Animals, plants and their parts listed in Annex No.1 of the CITES Agreement (protected or endangered species).

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The following items may not be imported into Cuba for use by private parties except under the limitations established for occasional imports of a non-commercial nature.

 Automobiles, motor scooters, motor cycles and spare parts and equipment for these;  Alcoholic beverages;  Tobacco, cigarettes, and cut tobacco;  Food products of animal origin such as fresh meats subjected to industrial processing or refrigeration, etc.;  Fresh plants and vegetables in their natural state;  Ready-made textiles products and used shoes;  Electric and electronic equipment;  Jewels;  Any other item considered contrary to the good of the nation.

Regulations Governing Sanitary and Phytosanitary Conditions

Sanitary Register for Foods, Cosmetics and personal and Domestic Products

Foodstuff, beverages, cosmetics and personal hygiene products all require sanitary permits to enter Cuba. The importing company can, on completion of preliminary contractual agreements with the supplier, apply for sanitary permission for the products’ entry into Cuba or this can be done by an agent on behalf of the supplier, with evidence of the contract which he is about to embark upon. This is covered under Decree-law No. 54 and Law No. 41, Resolution No. 215, Ministry of Public Health.

Sanitary Register for Veterinary Use

All Animal products and products of animal origin, whether preserved or live destined for consumption, industrial, ornamental or experimental use and for veterinary purposes are subject to sanitary requirements. This permission is issued by the Ministry of Agriculture, and approved products would be registered in the Veterinary Registry. Requests can be made through an agent or by the importing company and must be done at least 15 days prior to shipment of goods, with approval likely to take a period of 10 working days (Decree Law No. 137, resolution No. 121/93, Ministry of Agriculture). Some provisions are made in cases where a certified laboratory exists within the exporting country, to have the product certification done within that country with final approval undertaken by the resident Cuban diplomatic representative. This process however, requires prior approval through the National Office of Standardization (Decree No. 182).

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Phyto-sanitary Register

Products of Plant origin require Phytosanitary Certification prior to entry into Cuba. This approval, unlike the sanitary approval which is valid for one year is granted on a case by case basis and only for the actual consignment. They require authorisation which would take approximately 30 days for approval or denial and therefore such requests should be submitted 60 days prior to the shipment of the products. It is advised that samples should always exceed by three or four, the amounts requested in the documentation in case of spoilage, breakage or any other contingency. All documentary requirements pertaining to sanitary and phytosanitary requirements are attached (Appendix 2A and 2B). Regulations governing environmental controls relate to those products which are potentially dangerous to the ozone layer, regulations regarding toxic substances, explosives, the cross- border transportation of hazardous waste and the protection of endangered species of plant and animal life. (Resolution No. 65, Ministry of Science, Technology and the Environment) refers.

Customs Duties

As a member of the World Trade Organisation (WTO), Cuba is signatory to all of the international trading regulations which this body sanctions. As such, it’s customs procedures and norms are those consistent with other WTO members, and Cuba has several trade treaties with various economic groupings from which zero tariff or Most Favoured Nation (MFN) tariffs apply. Cuba therefore has two tariffs:  The General Tariff which is applied to non-members of the WTO and to countries which have not signed bilateral trade agreements with Cuba, and;

 The MFN Tariff, which applies to WTO member countries and to those with bi-lateral trading agreements with Cuba.

Cuba is due to make amendments to its tariff system, in accordance with the Single Spanish Version of the Harmonised Commodity Description and Coding System. Presently, the largest portion of Cuba’s imports receive the MFN status with the average MFN tariff stated at 10.7% and the general tariff not exceeding 17%. Only 8% of items have tariffs exceeding 20%, with over 90% receiving tariff treatment under 15%. The highest MFN tariff is set at 30% for a very selective group of products. Tariffs are based on the ad valorem value of goods.

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General Most Favoured Nation 51.5% 17.0% 34.0% 14.0% 23.8% 11.9% 16.9% 10.7%

In addition, the Cuban customs regime has the following preferential systems:

A group of goods from countries making up the Global System of Trade Preferences (SGPC) among developing countries are granted lower customs tariffs than those corresponding to MFN Likewise, lower customs tariffs than those corresponding to MFN are granted to products negotiated in the framework of the Agreements of Partial Reach with the member countries of the Latin American Integration Association (ALADI)

Cuba has signed these agreements with Argentina, Brazil, Colombia, Mexico, Uruguay, Bolivia, Venezuela, Chile, Peru and Ecuador. Further to this, Cuba is part of the agreements on seeds and cultural goods signed by ALADI member countries, which derogate customs tariffs for these products. The Cuban Chamber of Commerce is responsible for the issuing of Certificates of Origin for exports under the various trading agreements. Of the 15 preferential scheme favouring goods, the most widely used by Cuba is that of the European Union since this market is a recipient of most of Cuba’s exports under this regime.

Special Customs Provisions

Entry Regulations

Goods which are consigned to the country's Foreign Trade companies must be shipped according to and within the time stipulated in the contracts. Moreover, all imported goods arriving at a Cuban port destined for other ports in the national territory or foreign ports must be declared as being in transit in the Ships Manifest.

Articles may also be admitted into the Republic of Cuba under "temporary admission". Under this system, customs duties are suspended and the items must be used for a specific purpose and for a stipulated term. The following goods are accepted into the territory:  Samples without commercial value.  Raw materials to be used for partial or total transformation in the country.

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 Finished parts requiring no further processing which are destined for use as complementary elements to complete the manufacture of export goods.  Land automotive vehicles, airplanes, boats and remaining vehicles and vessels.  Merchandise for fairs, expositions or other similar displays.  Mining and other exploitation apparatus brought temporarily into Cuba.  Commercial samples and advertising material. o Instruments and cultural or artistic objects brought into Cuba for exhibition or experimental purposes, for a period of one year. o Construction equipment and others for constructive use.

The above items may not be sold, disposed of, encumbered or transferred, but may be donated or sold to the State.

Commercial Samples And Advertising Material

Permission must be obtained from official Cuban sources to carry commercial samples into Cuba personally. Unaccompanied samples should be forwarded to the particular foreign trade organisation dealing in such goods. Samples of value are subject to import duties as specified in the tariff and must be covered by full import documentation. Under certain conditions 75% of this duty may be refunded. Samples of no commercial value are admitted free of duty and must be accompanied by a commercial invoice, except in the case of samples brought in by travelling salesmen. No commercial advertising is permitted in Cuba and any such tools e.g. films, magazines, brochures, etc. must be disseminated through foreign trade organisations and the Cuban Chamber of Commerce.

Documentary Requirements

The requirements for shipping goods to Cuba are similar to other international locations. Two copies of the Bill of Lading are required or the Airway Bill if being sent by Air. At least two copies of the Commercial Invoice and the Packing List are also to accompany the shipment. This list must give full description of the contents of the shipment.

For items claiming CARICOM origin, two copies of the Certificate of Origin must accompany the shipment.

In cases where a sanitary or phytosanitary licence is required, copies of these would be lodged with the importing agency which must present them before the goods are released from Customs.

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Labelling and Marking Requirements

The National Standards Office in Cuba sets out strict guidelines for labelling all products exported into Cuba. These standards are similar to other countries’ regulations. The following are the guidelines:

 Specific name of the product(s)  Labels must be in Spanish  Labels must contain ingredients of products  The expiry date must be cited  Net Content must be listed  Price  Quantity of units

In addition, all documents must be originals and translated in Spanish.

Patents, Trademarks and Copyrights

Patents In Cuba the regulations address the issue of three patents which have to be applied for. These are Patent of Invention, Patent for a complement of Invention, and Patent for industrial models. Cuba is a member of the World Intellectual Property Organization and has its own body the Cuban Office of Industrial Property. The country also subscribes to a number of international conventions.

Trademarks All Trademarks and brand names registered in Cuba are protected under Cuban Laws. Trademark registration with the Cuban Office of Trademarks and Patents is voluntary but it is highly recommended that exporters shipping products to Cuba make every effort to register their trademarks and brand names there.

Copyrights Cuba is a signatory to many treaties and agreements, including the Berne Convention. Based on this factor the protection of copyrights and inventions is enshrined in Cuban laws. A very significant factor as well, is the fact that Cuba’s economic policy involves pursuing sectors where research and product development must be heavily guarded against infringement.

Biotechnology, information services, pharmaceuticals and cultural industries are among the areas that would be vulnerable to infringements outside of the island. As Cuba adheres to copyrights rules it expects similar behaviour from other states.

Investment Policy With the exception of defense, public health care and education, all other sectors of the Cuban economy are opened to Foreign Direct Investment. Provision for FDI is made under the country’s Foreign Investment Act of 1993, which outlines broad areas of investment

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promotion and incentives for foreign investors. The areas identified for FDI are tourism, manufacturing, nickel and mining, agriculture, information technology, pharmaceuticals, and telecommunication.

These areas where foreign investment is being invited are among a list outlined by the Cuban Ministry of Foreign Investment and Economic Cooperation and other official agencies of Government.

The aims of the policy are to diversify the economy, moving it away from being dominated by agriculture, and to earn foreign exchange. The country has signed Bilateral Investment Treaties with other countries to promote investment and to protect investors. There are no limits on repatriating profits by foreign investors and foreign investors are given protection and special safeguards. Financing is provided at concessionary rates and joint ventures are also pursued.

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Mariel Special Development Zone The Mariel Special Development Zone (ZEDM) is a project intended to support Cuba’s sustainable economic development through attracting foreign investment, technological innovation and industrial concentration, all while guaranteeing environmental protection. It is expected to be the main port of entry and exit for Cuban foreign trade and a major development pole located in the center of trade in the Caribbean and the Americas. The Zone is anticipated to become an economic engine for Cuba. Its installment is part of the process of updating and upgrading the Cuban model of development. The port will have a capacity to receive 3 million containers a year and offer new opportunities for foreign investments, guarantees for business, free transfer abroad for utilities and a fiscal regime with tax incentives. The project was conceived with a comprehensive and harmonic approach that should integrate with the rest of Cuba’s economic policy. The Zone aims to attract business that use clean technologies, produce high value added goods and services based on knowledge and innovation; create quality jobs that encourage the intellectual development of human capital, all in an environment of safety and good professional practices. Mariel Special Development Zone offers legal guarantees to investors. Firms operating in the zone enjoy a special tax incentives regime and the Zone features a modern infrastructure, highly qualified human resources, and a fast investment assessment and approval process. The Zone touts its location in Cuba as having the distinct advantage of being located in the center of the Caribbean Sea, at the crossing of the North-South/East-West axis of commercial maritime traffic. With an area of some 465.4 km2, it extends from Baracoa River to Cabañas Bay. Foreign investors are exempted from the following taxes and contributions:

 Use of labour force  Profits earned for the first 10 years of operation  Sales and services for the first 10 years of operation  Contribution to local development *More information on these exemptions can be found in Cuba’s Law-Decree 313 Extraordinary Official Gazette No. 23.

TAXES MARIEL SPECIAL DEVELOPMENT ZONE

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Corporate Tax Exempt for the first 10 years and then taxable at 12%. Exemption may be extended depending on the particular project. Reinvested profits are also tax exempt. Social Security Contribution Fixed at 14% Customs Duties Not payable on capital equipment imported for investment. For other inputs (raw materials) custom duties are payable in accordance with the established tariffs. Services Tax Exemption during first year of operations. 1% flat rate established. Wholesale Goods Tax Exemption during first year of operations. 1% flat rate established. Territorial Contribution None

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