Vol. 22, No. 10 October 2014

In the News Three golf real estate projects

A new tool in your box nearing joint venture phase The first economic index for Cuba is BY JOHANNES WERNER pany is listed on the Hong Kong Stock now available ...... Page 3 Exchange. No details about the plans at tate company Grupo Empresarial Bellomonte have been released. Extrahotelero Palmares SA con- Original plans for the site by Coral Domingo on Cuba Scluded negotiations to establish a Capital Group Ltd. — a British company joint venture with a Chinese developer whose principals left the country after Church and opposition in Cuba are fac- for construction of a golf real estate proj- ing internal strife ...... Page 4 facing prison terms on allegations not re- ect in Bellomonte, just east of Havana, lated to Bellomonte — included a 1,100- and two more golf projects proposed unit golf community on a 628-acre site a Privates get a slice of the pie by Spanish companies are in “technical few miles from the beach, anchored by Foreign travel firms can now officially do preparation,” a tourism ministry official two 18-hole golf courses, plus a coun- business with private businesses...Page 6 said, according to news agency AIN. try club, spa, and 323,000 square feet of The Bellomonte SA joint venture with commercial space. On a nearby 20-acre Beijing Enterprise Group Real Estate Co. beach property, Coral was planning to Q&A: TV ads, hecho en Cuba is the second golf joint venture, following build a 160-room hotel and beach club. Island Films has covered a rather un- Carbonera Golf and Country Club SA, a The two projects with Spanish partners known niche — in plain spotlight ..Page 7 joint venture with Britain's Esencia Ho- — at El Salado, west of Havana, and at tels and Resorts, which was established Punta Colorada, in Pinar del Río province early last year. — are in “technical preparation,” Daniel Road accidents in Cuba The Chinese company is a subsidiary Alonso said, without elaborating. An analysis of the latest data and trends of Beijing Enterprises Group Co. Ltd., Once the joint ventures are formally es- on road accidents ...... Page 8 a state-controlled company focusing on tablished, the Council of State has to give municipal utility companies. The com- See Golf projects, page 2 Q&A: Frank talk by a diplomat A former Spanish ambassador talks Tokmakjian sentence may cause about big-picture issues ...... Page 10

German company opens at Mariel more strain; details still obscure BY JOHANNES WERNER Otto Bock GmbH is planning a small the crimes for which he was convicted, nding on an exclamation mark a without providing any facts. manufacturing plant ...... Page 12 graft trial that has caused irritation Tokmakjian and his employees, “by Eand fear among foreign investors, way of gifts and privileges, created mech- Cienfuegos gets cruise terminal a Canadian businessman received a 15- anisms of corruption, with the purpose Cuba's second cruise port will have a year prison sentence from a provincial of obtaining illegitimate hereditary ben- court in Havana Sept. 26, his company efits,” the article said.” This has no place ‘world-class' facility, officials say..Page 14 said. in Cuban society.” After three years in prison, Cy Tok- The article added that Tokmakjian and Two dozen banks drop Cuba makjian maintains his innocence, but his his company were responsible for $91.7 Twenty-seven third-country banks yield lawyers are pondering whether to drop million in damages, “particularly fiscal an appeal in order to speed his transfer to evasion.” The sentence includes the con- to U.S. pressure .....Page 14 Canada, Canadian media report. fiscation of the company's assets in Cuba. Tokmakjian Group has also initiated Given the 74-year old's insistence on legal proceedings against Cuba in three innocence and his company's willingness CubaNews (ISSN 1073-7715) is published monthly other venues, seeking hundreds of mil- to fight Cuba in other legal venues, the by CUBA MEDIA LLC. © 2014. All rights reserved. lions of dollars in compensation. hefty sentence could cause more strain, Annual subscription: $398. Nonprofit organizations: Most details surrounding the allega- just as Cuba is seeking to attract foreign $198. Printed edition is $100 extra. For editorial in- tions are still obscure. Eight days after investors. quiries, please call (305) 393-8760, fax your request the company informed international Also, many foreign businesspeople in to (305) 722-4350, or email [email protected]. media about the sentence, official daily Havana believe Tokmakjian was made Granma ran a short article that repeated See Tokmakjian, page 2 2 CubaNews v October 2014 GOLF PROJECTS —FROM PAGE 1 final approval for each project. de superficie) for “99 years or perpetuity” and apartments, the terms of real estate A Tourism Ministry official told the Na- to developers and real estate buyers, re-sales, the visa status of homeowners tional Assembly in July that other proj- Daniel Alonso said. The duration of the and their families, private car ownership ects at La Altura, La Güira, Boca de Ca- joint venture coincides with the “dura- regulations, and more. marioca, Rancho Luna, La Milpa, Punta tion of investment recovery, the size of The Cuban government has since is- Barrera, Playa Inglés, Caleta-La Chorre- the resources involved, and the charac- sued several laws and regulations clari- ra, and Loma Linda are moving towards teristics of the project.” fying the status of foreign real estate the joint venture stage as well. buyers, among them an amendment to Daniel Alonso said the government is FOUR YEARS IN THE MAKING immigration laws, providing long-term now prioritizing the creation of golf joint Some of the joint venture agreements visas to real estate buyers. ventures “preferably in second line of have been four years in the making. One The Esencia project at La Carbonera beach, and in zones lacking necessary week after the 6th Communist Party Con- includes 2,000 real estate units, a golf infrastructure.” He cited golf projects in gress in 2011, Palmares invited several course, a commercial center, and a hotel, Santa Lucía, in the north of Camagüey foreign groups to hold successive three- said José Reinaldo Daniel Alonso, busi- province, and Covarrubias, in Las Tunas day meetings to discuss terms, and at ness director at the Tourism Ministry, province, as examples. These locations least two of the groups agreed to terms. for a total estimated investment of $350 are not farther than 30 minutes from The discussions in these original million. major roads and in proximity to existing meetings were about a chronogram to The company has not provided any up- international airports. form a joint venture with Palmares, the dates about project funding; construction Cuba concedes surface rights (derechos ownership split in the joint venture, and has not started. q ground rules such as who can buy villas

The Bellomonte golf project, just east of Havana, is close to the joint venture phase; next on Grupo Palmares’ to-do list are El Salado, just east of Havana, and Punta Colorada, at the western tip of Pinar del Río province. Palmares Graphic: Armando Portela and Britain’s Esencia Group formed a joint venture for the Carbonera project early last year. The four projects are part of a group of 13 pre- approved sites.

TOKMAKJIAN —FROM PAGE 1 an example for run-of-the-mill behavior reminder that international investors within a dysfunctional system, and Tok- should beware” when dealing with Cuba. makjian Group executives have made an After the two sides battled over guilt or effort to drive home that point. innocence, a fight about dollars and cents Tokmakjian officials and family mem- and Tokmakjian's transfer to Canda is bers have described the corruption trial now taking shape behind closed doors. as “ludicrous,” suggesting that the alle- According to Reuters, Tokmakjian gations are about routine practices most Group Vice President Lee Hacker said foreign companies use in Cuba. Sept. 29 to reporters at the company Peter Kent, a conservative member of headquarters near Toronto that Cuban parliament for Tokmakjian's district and officials told Tokmakjian's lawyers the 15-year sentence: Cy Tokmakjian former minister of environment, called company would also have to pay $55 mil- the conviction a “travesty of justice.” lion, in addition to the company assets al- enues per year in Cuba. “It's obvious an appeal is a waste of ready seized in Cuba, to get the company In response to the trial, the shutdown time, given the Cuban justice system,” founder released from the La Condesa of the company's Cuba operations in Kent said, according to Canadian Press. prison in Havana where he has been 2011, and the seizure of its assets, Tok- But “it's not over yet,” he added, saying locked up for three years. makjian Group filed suits in the Ontario that Tokmakjian could be expelled from Selling vehicles and industrial equip- Superior Court and in Barbados. It has Cuba or transferred to a Canadian prison. ment, the privately-owned company gen- Kent said the case is “a very strong erated an estimated $80 million in rev- See Tokmakjian, next page October 2014 v CubaNews 3 The CSETI: A new tool in your box atural disasters and politics are, of course, unpredictable. But other Naspects that shape an economy can be measured, trends can be laid out, and forecasts can be made — even in a CSETI values above zero market notorious for its information defi- indicate cit and lack of clear signals. Welcome to the Cuba Standard Eco- favorable conditions for GDP growth. THE CURRENT CSETI FORECAST Values below zero indicate Of the five categories included in the unfavorable conditions. CSETI, only one shows improvement in 2014 — the terms of trade, due mainly to a 35% rise in the nickel price, and a 4% rise in the sugar price since the end of 2013. The other categories nomic Trend Index, the first publicly avail- yearly, in the sessions of the National As- (real exports, real imports, real exter- able tool that takes the pulse of the Cu- sembly — or to depend on the reports nal financing, and the proxy variable of ban economy. Put together by a team of the National Information and Statistics exchange with Venezuela) show a con- experts led by Pavel Vidal, the index — Office (ONEI) publishes with much de- traction or deceleration year-to-date. known as CSETI — is a composite of five lay on its website. In the first three quarters of 2014, the basic measures. Indexes that anticipate the official re- CSETI registered average values of “The CSETI will allow the anticipation lease of quarterly GDP figures are typi- -0.19, -0.17 and -0.13. The third-quarter of Cuban GDP growth and offer an up- cally based on data by the statistics office figure is helped by an Index projection to-date signal to investors about the state of the respective country. In the case of for September of -0.03 — in the “neu- of the Cuban economy,” says Vidal, a Cuba, this is impossible, due to the insuf- tral” range of balance of payments. former Central Bank economist and re- ficient and lagging information released The Index trend in 2014 suggests searcher at the Center for the Study of by ONEI. the worst moments of the year for the the Cuban Economy (CEEC) at the Uni- From ONEI, the CSETI only takes economy in terms of foreign exchange versity of Havana, who now teaches at monthly visitor arrival statistics to gauge constraints are over. The data suggest Universidad Javeriana in Colombia. the export of tourism services. The re- we may have hit bottom. However, The CSETI makes it unnecessary to mainder of ONEI reports, on agriculture, there is not sufficient evidence yet to wait until the government announces manufacturing, farmers' market sales, talk about a recovery. partial GDP growth information — twice and on investments, have delays of more than six months, and the historical series are incomplete, which is why they can't TOKMAKJIAN —FROM PAGE 2 be used in the index. tices,” an August statement by Tokmak- To get around this problem, the CSETI also filed an arbitration case before the jian Group said. uses balance of payment data (exports, International Chamber of Commerce in The charge of economic crimes imports, terms of trade, and external fi- Paris, seeking more than $250 million in against the state involved the alleged late nancing), which has a proven high corre- restitution and damages from Cuba. delivery of equipment, while the bribery lation with the Cuban GDP trend. On the In addition to Tokmakjian, two Cana- charges included incentive payments to other hand, the main trade partners do dian employees, were sentenced to 12 employees in joint venture operations, report monthly export and import data and eight years in prison. Five Cuban the company says, according to Reuters. with Cuba. Also available are up-to-date employees and nine former officials at “We would pay incentives to every- statistics on international commodity Cuba's Sugar Ministry, the Ministry of body, from the lowest person to the high- prices, allowing to make estimates of the Basic Industry and the Tourism Ministry est person, and it was clear that there was terms of trade. In addition, it is feasible received between six and 20 years. no link between any incentive payments to count on some proxy variables to esti- The Granma report repeated that the versus any advantage that was given to mate real external financing. Additional- group was convicted for “bribery, actions Tokmakjian whatsoever,” Hacker said, ly, the CSETI incorporates a fifth catego- damaging to the country's economic ac- according to Reuters. ry that approximates Cuba's dependency tivity or its contracting, continuous falsi- Negotiations with the prosecution fell on Venezuela — the monthly trade ex- fication of banking and trade documents, apart because Tokmakjian does not want change between the two countries. q swindling, currency trafficking and tax to admit to crimes he has not committed, The CSETI is available to Cuba Standard Economic evasion.” Earlier official repors said that his son Raffi said, as well as due to lack of Trend Report subscribers. Basic subscribers may the prosecution accused Tokmakjian of direct contact with decision makers. upgrade, by sending an email to johanneswerner@ “illegally expatriating extremely large The Cuban government also wanted cubastandard.com sums of money, altering information in the company to drop its legal cases, he accounting records and sworn declara- said, according to the Reuters report. tions in order to evade taxes, and giving “The problem is, we don't know who Raúl Castro has made a crackdown on kickbacks to workers, who performed we're talking to. It's like we're dealing corruption a hallmark of his tenure. The work that was not legally authorized or with a ghost,” Hacker said. Tokmakjian graft trial followed convic- contracted through Cuban agencies.” In July, the family said Tokmakjian tions against Canadian competitor Sarkis “A simple and objective reading of re- didn't learn about the charges until May Yacoubian, British businessmen Amado cent court decisions will lead to the con- this year, and that the Cuban court re- Fakhre and Stephen Purvis, and Chilean clusion that what is shown as ‘corruption' jected, without explanation, 14 of 18 de- businessman Max Marambio, as well as is internationally accepted business prac- fense witnesses. dozens of Cubans. q 4 CubaNews v October 2014 Church, opposition in Cuba are facing internal strife BY DOMINGO AMUCHASTEGUI White in Santiago economic crisis; b. decreas- e're witnessing another wave of was able to recruit 30 ing flow of Argentine tour- internecine conflict among the members of this orga- ists; and c. the withdrawal WCuban opposition. nization, and forced a of the UK subsidiary of Since 1959 with the founding of La split leading, in Sep- German tour operator TUI Rosa Blanca by Cubans in Miami down tember, to the found- from the Cuban market to, created in 2011, the Unión Patriótica ing of a new organi- and the subsequent decline de Cuba (UNPACU), a recurrent pattern zation by the name in British visitors. of behavior among Cuban exiles and do- of Ciudadanas por la Marrero pointed out that mestic opposition groups in Cuba has Democracia(CxD), or Cuba has improved its in- been internecine conflict, mostly over Citizens for Democracy, calling openly frastructure with now more than 61,000 leadership and money. for the downfall of the Cuban govern- rooms meeting international standards, Tight U.S. control over these organi- ment. Once again, we witness the same 66.5% in four- or five-star hotels, together zations could not prevent the unfolding recurrent pattern; this time the loser with 10 international airports, where 36 of such conflicts — including political seem to be the Ladies in White. airlines arrive regularly. According to assassinations and terrorist actions in Observers have concluded that the Marrero, during the first half of 2014, Miami — even in major projects such as exile community as well as the domestic revenues grew 11.6% from 2013, for a to- the Bay of Pigs (all sorts of brawls and opposition in Cuba have been declining tal of $1.316 billion (considerably higher “conspiracies” during their training in significantly. Mauricio Vicent, a corre- than the figures previously released by Guatemala), Operation Mongoose, and spondent for Spain's El País in Havana the National Statistics Office, ONEI). Plan Torriente. for many years, wrote 15 years ago that Marrero did not say how much of each In Miami and Cuba since 1989, a con- “dissidents cannot even tickle Fidel”. In revenue dollar is spent on imports, and siderable number of groupings and or- 2008, U.S. government sources unveiled how much is net income. The Achilles ganizations have attempted to build an by Wikileaks verified that, after conduct- heel of Cuban tourism continues to be opposition movement capable of over- ing a poll among hundreds of Cubans. the never-ending crisis of the country's throwing the Cuban government. Where “The peaceful Cuban dissidents who re- light industry, incapable of meeting the are they now? ceive the most attention in the U.S. were growing demands of tourists. Another Not only have they failed, again and largely unknown to Cubans seeking to weakness is the lack of sufficient and again, but they have ended in interne- emigrate,” concluded a survey conduct- stable supplies of vegetables, fruits, and cine conflict, decay and self-destruction. ed by the U.S. Interests Section. seafood, items that are essential to any This has been the case from the seem- In a much more insightful approach, tourism industry in the Caribbean. ingly all-powerful Cuban-American Na- Spain's former ambassador to Cuba, *** tional Foundation (CANF) in Miami Carlos Alonso Zaldívar (2004-2009), said down to the early alliance between Eliz- in an interview with Estudios de Política TURBULENCE WITHIN THE CATHOLIC CHURCH ardo Sánchez Santacruz and Vladimiro Exterior (see translation on page 10) that Never in 56 years has a nuncio repre- Roca, of Concilio Cubano, Tamarindo the classic opposition in Cuba cannot senting the Vatican in Havana publicly 34, Fundación Lawton, Arco Progresista, capitalize on existing discontent, because attacked the Cuban government … un- and others in Havana, in spite of the hun- “they do not work with peasants, work- til now. The current nuncio in Havana, dreds of millions of dollars funneled by ers, students. It doesn't try to organize Archbishop Bruno Musaro, in a mass Washington to support them. dissatisfied sectors of society. Instead, in Italy, described the situation in Cuba Since 2012, we have witnessed vari- they dedicate themselves to exporting as one of “extreme poverty and human ous attempts by UNPACU leaders (es- political criticism against the regime, to and civil degradation,” where “the only pecially by the brothers Ferrer García, generate more forceful outside pressure. hope for a better life is to escape the is- in Santiago de Cuba, actively supported That's why their field of action is the em- land.” He stated that “the Cuban people by some within the Catholic Church in bassies and press agencies, rather than are victims of a socialist dictatorship that this city) to become the leading force of work or study centers. This type of op- has kept it subjugated for the past 56 Cuba's domestic opposition. Not only are position lives off subsidies of programs years.” And he added that he hopes “to they most confrontational vis-à-vis Cuban promoted by anti-Castro groups in Mi- leave once the socialist regime has disap- authorities, but they have been trying to ami and cannot channel internal unrest. peared indefinitely.” place every opposition grouping or figure In fact, it is fading…” This is most unusual, to say the least, under their control. A major priority has *** after more than 15 years of very con- been to take the Ladies in White under structive relations and cooperation be- their wing, due to the amount of media FROM THE HORSE'S MOUTH tween church and government in Cuba. coverage and funds they get. Since the 2008-2009 global recession, It's not by chance that two popes, John But the head of the Ladies in White, the Cuban tourist industry has been bat- Paul II and Benedict XVI, visited the Berta Soler, is not buying UNPACU's at- tling to reach the goal of 3 million tourists island in 1998 and 2012, respectively, tempt for supremacy and, subsequently, (2.8 million visited Cuba last year), but together with a number of top Vatican the latter is deploying all kinds of divisive this summer, it became clear that most officials. So far, neither Vatican officials tactics, seeking to create clashes among probably they were not going to make nor Cuban authorities made any public Soler's followers. Since April, we have it. Regardless of the many efforts over comments, but most certainly diplomatic seen small groups of Ladies in White the last five years, the numbers were off channels must have been extremely ac- breaking away from Soler's leadership, a quarter-million towards the expected tive in recent weeks. Since the Second first in Havana and more recently in San- goal, Tourism Minister Manuel Marrero Vatican Council in the 1960s, nuncios in tiago, attacking her unilateral handling told students of Camagüey University in Havana have played very positive roles of funds, and for sending her children, September. as mediators and facilitators in opening relatives and friends to study in Miami. Marrero blamed a. Contraction of some new opportunities and spaces for Cuba's In August, a member of the Ladies in of the source markets resulting from the See Internal strife, next page October 2014 v CubaNews 5 BRIEFS

CUBANA TO RESUME COSTA RICA FLIGHTS The hotel — Meliá's largest in Cuba made up of United States visitors, was Flag carrier Cubana de Aviación will — has 1,176 rooms, arranged in 25 up 6%. resume direct flights from Havana to three-floor bungalows. San José in November, Costa Rica's El The design theme of the hotel is of a AMADEUS EXPANDS TO BUSES IN CUBA Financiero reported. sugar plantation. It includes a boulevard State bus operator Viazul has begun The twice-weekly flights, mainly aiming stretching from the lobby to the beach, using the Amadeus booking system, at tourists, will start Nov. 11. Flights the Melia Jardines del Rey Hotel is rec- through a joint project with flag carrier leave on Thursdays and Sundays. Cu- ommended for families, weddings and Cubana de Aviación, and the collabo- bana will use new An-158 regional jets, honeymoons, as well as meetings and ration of with a capacity of 85 passengers. events, diving, fishing and bird watch- Spanish Cubana discontinued its Costa Rica ing. flag carrier flights in 2008. Iberia. TOURISM RISES IN AUGUST Viazul, MELIA OPENS OPENS 1,200-ROOM HOTEL Setting a roller coaster pattern for the fixed- recent months in tourism, visitor num- route bers rose 6.7% in August, according to tourist bus company, implemented a the latest data released by the National system of inventory control, distribu- Statistics Institute (ONEI). tion, check-in and e-ticketing, which will Visitor numbers were up only slightly also benefit the tourism industry. The in May, and they were down in June and electronic booking mechanism covers July, prompting the tourism minister to all Viazul routes. warn in July that the vaunted 3-million Initially, all travel agencies that are visitor mark may not be reached this clients of Amadeus in Cuba will have The Jardines del Rey is Meliá’s biggest in Cuba year. Now, official media said that with access to the reservation system. The Cuban market leader Meliá Hotels the reversal in August, the 3-million second phase is scheduled for 2015 and International is planning to open a new mark could be reached. includes the distribution of Viazul routes hotel in the Jardines del Rey resort in Visitors from Canada, Cuba's No. 1 through a shared code with Cubana de the upcoming winter season. source market, rose 5.6% in August. Also Aviación for all travel agencies world- Luis Baez, trade specialist from the rising were visitors from Italy (+16.5%), wide. Ministry of Tourism in the province of Venezuela (+102.8%), Spain (+8%), Amadeus, created in the 1980s, has Ciego de Ávila, told Prensa Latina that France (+21.2%), and Germany (+21.2%). offices in Spain, France and Germany, Meliá Jardines del Rey is a five star The numbers were down for Britain with 71 affiliated airlines and other travel beach hotel located in Flamenco beach (-22.3%), Mexico (--7.1%), Argentina companies. Viazul is the tourist bus on Cayo Coco, one of the islands that (-15.7%) and Russia (-17.8%). subsidiary of Omnibus Nacionales; the make up the Jardines del Rey resort. The “Other” category, which is mainly company was created in 1996.

INTERNAL STRIFE — FROM PAGE 4 cision to close down conclusion right after his visit to Cuba; Catholic church. Vitral and dismiss Ortega was the best choice until this day. But the fact remains that the Church in its editor, the State Nuncio Maruso's public remarks Cuba has been starkly divided over the Department sent a against the Cuban authorities have un- years on the issue of whether to follow deputy assistant sec- leashed a new wave of speculations. It is a path of constructive engagement with retary to Rome to pretty obvious that Nuncio Maruso is not Cuban authorities — the pattern headed demand support for only taking a confrontational stance, but by Cardinal Jaime L. Ortega y Alamino Valdés and his journal, which the Vatican extending his support to those in Cuba's that has prevailed until now — or follow rejected. Not an unsual step. In 1998, Catholic hierarchy that advocate for such that of the former Archbishop of Santiago during his visit to Cuba, John Paul II re- a policy, very much against Ortega and de Cuba, Pedro Meurice, and his succes- fused to meet with Oswaldo Payá, head his followers. Is the Vatican supporting sor, Dionisio G. García Ibáñez, as well as of the Christian Liberation Movement. Maruso and those bishops in Cuba seek- the former bishop of Pinar del Río, José When Cardinal Ortega stepped down ing a collision course? Reports and indica- Sirio González, favoring non-cooperation from the chairmanship of the Bishops' tions from Havana are pointing in favor of and open confrontation. Those advocat- Conference of Cuba in 2010, it was the keeping Ortega as the main player, while ing non-cooperation and confrontation turn of García Ibáñez to take over. This Maruso's assignment in Havana may not keep very close ties with the most bellig- event and Ortega's age led many observ- last very long. Pope Francis highly appre- erent organizations in Miami, as well as ers to predict that Ortega's retirement ciates Ortega's performance, and sooner with domestic opposition, and enjoy the was imminent and that Benedict would or a later the former may put in his agen- support of Washington officials. support such an outcome. The Miami da a visit to Cuba. In 2007, the U.S. State Department ac- fire-eaters, as always, bet against Ortega Former Cuban intelligence officer Do- tively supported the views and activities and on García Ibáñez. On both counts mingo Amuchastegui has lived in Miami of Dagoberto Valdés, editor of Vitral, a they were wrong. Ortega continued to since 1994. He writes regularly for Cu- Church journal that increasingly took an be the privileged interlocutor with the baNews on the Communist Party, Cuba’s open course of action against the Cuban Cuban government, with the backing of internal politics, economic reform, and government. Following the Vatican's de- the Vatican. Pope Benedict came to this South Florida’s Cuban community. 6 CubaNews v October 2014 Government steers some tourism to private businesses BY DOREEN HEMLOCK They recall a time when state buses documentation in order, comply with tax n all her years sending U.S. tour would drop off groups at private res- regulations and have comfortable rooms groups to Cuba, Peggy Goldman has taurants called paladares, but leave the in line with international standards,” ac- Inever been able to contract with state- group to find their own way home. Later, cording to official news agency Prensa owned travel companies for her custom- state buses would not take groups to pal- Latina. ers to stay in private guest houses. adares at all. Now, the government wants Even with the new openness, not every Starting this fall, she can, and Goldman a role in bookings, but will things tighten group plans to book all its stops through is thrilled. up elsewhere? state companies. “You're encouraging entrepreneurship Miami-based Copperbridge Founda- with this,” said the owner of Friendly tion, which takes small groups Planet Travel. “And for small groups, on people-to-people tours, long staying in a private home adds the has tried out paladares and casas possibility of really getting to know a particulares and paid directly. family on a more intimate level.” Arts promoter Geo Darder, who The move is part of a growing runs the foundation, visits Cuba openness by Cuba's state-owned regularly to scout out hip new travel companies to include private spots. Darder said he was among businesses in the packages they Scholar courtesy Road Photo the first to bring tour groups to book for visitors from the United dine at Havana's Atelier years States and other nations. back and Cocinero recently. Cuba's inbound tour operators, “Going through Havanatur is such as Havanatur, Amistur and San great for groups who want to go Cristobal, now can contract private to places that have been in the homes, private restaurants and even New York Times or other publi- private arts groups or speakers for cations,” said Darder. “But the incoming groups. The companies coolest, newest is usually off began booking some private restau- the radar. I personally enjoy the rants starting in March, travel lead- A casa particular in Trinidad, used by Road Scholar groups brand new places and find it ex- ers say. citing to discover and promote Many tourist groups have been fre- them.” The increased openness also coincides quenting private restaurants for years, NOT FOR EVERYONE and some groups have stayed at private Allowing groups to stay at private with Cuba's plan to divest nearly 9,000 guest houses too. They pay cash for homes — known as casas particulares — state-owned restaurants to private opera- those meals or stays, directly to the pri- isn't for everyone. tors in a gradual process starting next vate businesses, and their groups do not Ronen Paldi of Ya'lla Tours, a travel year, according to Deputy Trade Minis- book those stops through the state com- service provider, prefers hotels for his ter Aida Chavez. Some restaurants are to panies. upscale groups and individual travelers. be developed as worker cooperatives. In that sense, the government's move Private homes generally lack amenities “The decision... aims to modernize simply recognizes that state enterprises such as TVs with international cable a sector that today demands services are not fully meeting visitor demand and channels, telephones in the room or even with the quality and security the Cuban that many travelers prefer the quality, back-up generators in case the electricity people, and the tourists who visit us, de- variety and service at private enterprises. fails. serve,” she told state media. Plus, it increases government control “We won't do casas particulares be- over the bookings with private business, NEXT: INVIDUAL U.S. TRAVEL? cause of quality and liability,” said Paldi. As Cuba opens tourism more to private travel leaders say. Private homes also are tough logistical- Yet the move also raises new ques- enterprise, the United States could open ly for bigger groups. Most homes offer more too, giving a stronger boost to en- tions: Will the government allow con- just a few rooms, so bigger groups need tracts with all eligible private businesses, trepreneurs on the island, suggests John to spread out sometimes among five or McAuliff of the Fund for Reconciliation or will there be limits? For example, as more casas, making pickup and drop-off more state restaurants become worker and Development, who long has accom- complicated. Hotels make more sense panied U.S. groups to Cuba. cooperatives, will the government favor for bigger groups, travel leaders say. those eateries over others? And will the Washington could simplify U.S. travel Yet in some places where hotel rooms to Cuba by allowing general licenses for government pay private businesses on are limited, such as Trinidad and Viñales, time? If payments are late, will the busi- “people-to-people” or “purposeful” travel, casas particulares are a welcome option. just as it does now for Cuban-Americans nesses have the cash flow they need? Road Scholar, for example, is organiz- Already, one group said it's seen a rise on family visits to the island. That change ing stays in at least one private home in would allow lots more U.S. visitors to in the price of meals at private restaurants Trinidad, said Yves Marceau, director of when booked through the state. Another travel on their own — without needing to program development. join tour groups booked through Cuban worries the state may veto which speak- “It really is the perfect people-to-people ers their group can meet. state companies. experience,” said Marceau. “We actually “With a general license, U.S. visitors have breakfast with the family and din- TWO STEPS FORWARD, ONE BACK could operate in a more spontaneous It's all part of an evolving relationship ner with the family.” way,” said McAuliff. “Now, it's one state In Viñales Valley, state-owned travel talking to another.” between the Cuban government and companies including Cubatur and Cu- private business on the island that some banacan have signed up about 200 of Doreen Hemlock is a staff reporter and for- travel leaders describe as “two steps for- 700-plus private homes to book rooms mer Havana correspondent for the South ward, one step back.” for tourists. The homes must “have their Florida Sun-Sentinel October 2014 v CubaNews 7 A 20-year tradition: TV commercials, hecho en Cuba film crews hired to produce commercials for corporate clients who want to take advantage of the island's allure, be it the beaches or the local music and culture, and tap into Cuban talent. Island Film's TV ad portfolio, consist- ing mainly of European clients, is rather impressive, including Axe, Nestlé Crunch, Citroën, ING Bank, Nescafé, Nivea, Nokia, and Parmalat, among many others. As espite a thriving film industry and a its client list strongly implies, there are lot of talent on the island, Cuba is European, Canadian and Latin subsidiar- Dnot known for producing television ies of U.S. brands such as McDonald's, ads — certainly not for local use. Anyone Bounty, Fox Action channel, KFC, Lipton Vista Production Services (a French entity who has visited the island is struck by the Iced Tea, and Sears. with offices in Havana and Nice). conspicuous absence of commercials on Along with its television work, Island Another rival, Havana Pictures, has Cuban television. However, this doesn't Film also has a variety of photo shoots been operating in Cuba since 1998 (pro- mean that television ads are never pro- and music videos to its credit, ranging viding production services of photo shoots, duced on the island. from British pop group Simply Red to Ital- along with feature films and music videos). For 19 years, a small TV commercial ian pop singer Tiziano Ferro. Havana Pictures' owner, Spanish national production company, Island Film S.A., Island Film's success has drawn in Sergio Doménech Bestard, boasts a long has been operating in Havana, run by competitors, including Buena Vista Films, list of brand names in its portfolio. Italian filmmaker Renzo Trivellini and his owned by former Island Film partner CubaNews reporter Vito Echevarria re- Cuban counterpart Nelson Navarro. Their Frank Vervoorst, and operating in Havana cently asked Island Film's Navarro about job is to fulfill the demands of overseas for the past three years. There is also Bay his company and its business.

Where do you get the majority of your fore, we have a collaboration agreement business from? with Cuban TV and through them we get NN: In the very beginning, our clients all necessary permits to shoot all over came from Italy, Germany and France. the island, as well as all production ser- Then all the rest of Western European vices to support our projects. We do not countries started to come. Later, Cana- dians and East European See TV commercials, page 9 countries came too. We have also worked with Is Island Film based in Italy? Is it part Australian, Korean and of a joint venture with a Cuban state com- Japanese companies. pany? Among Latin American NN: Island Film is based in Havana countries, we can men- Location, ... and works in Cuba on the basis of a col- tion Mexico and Argen- laboration agreement with Cuban TV tina. Altogether, we've (ICRT – Instituto Cubano de Radio y worked on projects from Televisión). We are an off-shore Panama- about 30 countries in the nian registered company. world.

How did Island Film get its start in Has your production Cuba in 1995? Was there a growing de- company worked with mand from European and other interna- U.S. film companies, on tional clients to do commercials and film documentaries and news location, ... productions in Havana? reports in Cuba? NN: We did our first project in Havana NN: We have collabo- back in 1994, and it was very successful rated with some Ameri- because of the power of the new loca- can companies. We will tions shown. not share details, in order to respect their privacy. location ... What kinds of productions does your is Cuba’s biggest asset company put together in Cuba? Is your company affili- for the TV commercial NN: Over the years, we have worked ated in any way with Cu- industry. The other asset on a vast range of audiovisual projects: ban film institutions like is talent; l, film crew on Havana’s Malecón. fashion magazines, catalogues, photo ICAIC? Do members of Top right, Cuban-made advertising, art books, photo exhibitions, ICAIC assist you with get- Crunch commercial. concerts, documentaries, events, shows, ting permits for on-loca- film commercials, music videos, short tion film shoots? All photos provided by Island Films movies and featured films. NN: As mentioned be- Road accidents in Cuba BY ARMANDO PORTELA ccidents rank as the fifth cause of death in Cuba. A That has been the case since 1998, when accidents yielded the regret- table fourth place to deaths caused by influenza and pneumonia. Even so, acci- dents remain the leading cause of death for children and youth between one to 19 years of age. Accidents of all kinds — including falls, industrial and road fatalities, drowning, fires, asphyxiation, electrocution and a sad array of other mishaps — took 4,820 lives per year as an average in Cuba during the period from 2009 to 2013. The overall number of fatalities due to accidents peaked in 1995 with 5,820, to gradually descend to 4,169 in 2006. Since then, this sad statistics is on the rise again with a frightening 3% annual pace of growth — although apparently not due to road crashes. Road accidents take one out of every

five lives lost to accidents in Cuba. Ac- cording to official statistics, the overall number of traffic deaths averaged 952 for the past five years, a sharp decrease from more than 2,680 road fatalities in 1990, the peak reading, when a record 25.2 deaths on the road per 100,000 people were reported for a population of 10.67 million inhabitants. And, despite frequent and prominent coverage of road accidents with multiple deaths in official media, road fatalities continue to de- cline, according to the Ministry of Health (MINSAP). Surely not by coincidence, the good trend started with the onset of the Spe- cial Period in Cuba and therefore could be credited to the overall slowdown of the economy, especially to the collapse of road transportation of passengers and cargo. For example, sugar output, the backbone of the economy 25 years ago, shrank by two-thirds after 1990 in only five years, thus reducing the massive transpor- tation of sugarcane See Road accidents, next page October 2014 v CubaNews 9 TV COMMERCIALS —FROM PAGE 7 receive any support from ICAIC on this matter — it is not necessary. All Cuban institutions authorized by the govern- ment to develop audiovisual projects are independent from each other, and all go through similar procedures when apply- island and vice-versa. It will bring good ing for all necessary permits. things to both countries. If American film equipment companies could ship their gear over to us or settle in our country, What are your current revenues? it would be good for the development of NN: We do not feel comfortable shar- the local film industry. If American com- ing our financial records. panies could finance local film produc- tions, it would also be good. Island Films shoot in Havana Courtesy Island Films What obstacles have you encountered in Cuba? Is the U.S. embargo one of them? What is the main advantage of filming How do you overcome them? NN: We have great locations, cast and in Cuba? Lower costs? Readily available crews. I think this is the main production NN: It would be good if the American talent from Cuba's film and television sec- value of the country. q film community could freely travel to the tors?

ROAD ACCIDENTS —FROM PREVIOUS PAGE Cuba ups commitment to mills during harvest time in a similar showed 142 motor vehicles in circula- in Ebola fight ratio. tion, for a frequency of one motor vehicle uba increased its medical bri- However, it would be unfair to credit in each direction every 1,040 meters. gade in West Africa from 165 the improvement in fatal road crashes In 2010, Cuba had 143.5 fatalities for to 461 doctors and nurses, in solely to the misfortune of the economy. 100,000 existing motor vehicles, accord- Can increasingly global effort to fight After all, the darkest part of the Special ing to the World Health Organization, a the epidemic, which has already Period is behind, and the economy has ratio that puts the island in ninth place claimed more than 3,000 lives. been transforming and reviving here and among western hemisphere countries, The first contingent of 165 left in there, while the numbers of road fatali- behind the car-crowded roads of Ecua- the first week of October. ties keep softening. dor, Venezuela or the Dominican Re- Regla Luz Ángulo Pardo of the Cu- Some credit must be given to a tighter public, but also well above the utmost ban Health Ministry said that 15,000 enforcement of existing traffic regula- congested roads of Mexico, Brazil or the Cuban doctors and nurses volun- tions and to the introduction of new safe- United States. teered, according to Prensa Latina. ty rules, such as mandatory seat belt use, A dreadful mix of facts makes Cuban The Ebola virus is transmitted via and to the alcohol testing kits and speed roads unsafe. Authorities mention neg- body fluids; its mortality rate stands radars now available in police patrol cars. ligence, which includes right-of-way at 53%. Also, the gradual replacement of the violations, as well as distracted motor- The medical Photo RHC outdated Soviet-made fleet of vehicles ists, speeding, unaware pedestrians and teams, which that dominated the Cuban road land- ignoring traffic lights as accountable for include doc- scape two decades ago with new, airbag- three out of four crashes on the road. tors, nurses, and crumple zone-equipped vehicles The numbers on alcohol-related crash- epidemiologists might be in part responsible for safer es are contradictory. Recently quoted by and intensive traffic. official newspaper Granma, Col. Fran- care special- cisco Buzón, head of the National Traf- ists, are being SAFETY STILL AN ISSUE fic Division, mentioned that driving un- deployed in the Despite these dwindling statistics, safe- der the influence is one of the leading three hardest- ty still is a serious issue. causes of road accidents. Other official hit countries Cuban roads are far from crowded. media sources link alcohol to 30-50% of in West Africa, It takes only a short trip on most paved all crashes. But astonishingly, Cuba's Sierra Leone, roads or a quick surf on Google Earth to Oficina Nacional de Estadísticas (ONEI) Liberia and realize how empty they are outside the attributes to drunk driving only 1.8% of Guinea. The Cu- The first Cuban big cities. all crashes in 2011 and 2.8% of all deaths. ban mission is contingent arrives in A 50-mile stretch of the National Ex- Unsafe motor vehicles are a problem, expected to last Sierra Leone pressway — the main road artery in west- including overcrowded and ill-adapted six months. ern Cuba — between suburban Havana trucks for passengers transport that In a meeting with Cuban Foreign and the limit with Matanzas province to too often get involved in deadly crashes Minister Bruno Rodríguez, UN Sec- the southeast shows just 425 vehicles in in the countryside. Poor signaling and retary General Ban Ki-Moon person- circulation (most of them near the capital poorly maintained roads, loose cattle, ag- ally thanked Cuba. He said that other city), which is equivalent to a motor ve- ricultural machinery and ox-driven carts countries should follow Cuba's ex- hicle every 380 meters in each direction. on roadways, and non-existing lighting ample. Another survey, this time on the Central are also accountable for accidents. World Health Organization chief Highway between the towns of Bayamo Margaret Chan said Cuba's commit- and Palma Soriano in eastern Cuba, a Havana-born Armando Portela has a ment was the “largest of a foreign 46-mile segment that directly links more Ph.D. in geography from the Soviet Acad- medical team from a single country.” than 300,000 people along the route, emy of Sciences 10 CubaNews v October 2014 Spanish diplomat: ‘In Cuba, the issue of sovereignty is key’ arlos Alonso Zaldívar, ambassador until now clearly plays into the hands of of Spain in Havana from 2004- the Castros. There'll be more soon. Now, C2009, believes that most factors and will the United States lift the embargo? actors point towards a peaceful transition The answer is that, if Raúl needs time, so in Cuba that has already begun, with ele- does the United States. Raúl has to face ments of continuity. After his four-and-half big problems with difficult solutions. The years in Cuba, he became ambassador U.S. executive cannot change a large part in Brazil, and he is now retired. Zaldívar of its Cuba policy because it depends on granted this interview to Darío Valcár- Congress. Both need time. cel and Áurea Moltó of Spanish journal Estudios de Política Exterior, where it was Who in Cuba works for peaceful change? published in September as part of a series CAZ: The most difficult change in Cuba of articles on Cuba. We are publishing a was that from “with Fidel” to “without shortened version, translated from Span- Fidel.” The retirement of Fidel brought ish, with the kind permission of Política about uncertainty. Many speculate Exterior Política Photo: Exterior. The full translated version can be whether Fidel or Raúl is more in charge. found at www.cubastandard.com But I think that the brothers overcame the uncertainty with ingeniousness. Fi- Who is in charge in Cuba? del supports the changes undertaken CAZ: Fidel certainly isn't. The day Fidel by his brother, giving them legitimacy dressed in a tracksuit, he launched a in the sectors most resistant to change. message to the world that said, “I stopped The two brothers have found a tandem Carlos Alonso Zaldívar, Spanish ambassador being in charge.” This message was well solution. in Havana from 2004-2009 understood by Cubans. Fidel without fa- The Catholic Church, which should not tigues was not the commander in chief. be neglected, works for the peaceful The curious thing is that few outside change the majority of Cubans wants, violent change. The last one to try this Cuba registered this. Those in charge because it is close to many communi- was Eloy Gutiérrez Menoyo, a Cuban now are Raúl and his group of followers, ties of the island (albeit not as much as and Spaniard who died recently. He had who got there by being loyal and because the Spanish communities present in all his personal guerrilla war in the Escam- their age or lack of outside relations 19 provinces). From there emerges a bray mountains while Fidel had his in the impedes them from having their own confluence of the Catholic Church and Sierra Maestra. He first had an under- agenda. Raúl has created a group of loyal Spain's diplomacy: Both touch the bot- standing with Fidel, but then they broke followers who don't have the capacity of tom of Cuban society. The only ones do- up and he returned to guerrilla warfare. shaping a policy that's different from his ing that more are, of course, the Commit- They put him in prison, he got out, sought own. [First Vice President Miguel] Díaz- tees for the Defense of the Revolution. exile in Miami and, after some time, re- Canel could well be in charge tomorrow, The analysis by Cardinal Jaime Ortega turned to Cuba without documents and according to how things are right now. set up his party, Cambio Cubano, which was the most moderate opposition. Since What is Raúl trying to achieve? ‘Those in charge now are then, nobody has taken up arms against CAZ: Change Cuba without losing con- Fidel. The truth is that when someone trol. His problem is not “changing;” his Raúl and his group of loyal doesn't support the regime, they prefer problem is “maintaining control over exile over confrontation. And this, like it change.” What Raúl doesn't want is that followers.’ or not, contributes to peaceful change. in Cuba something happens similar to what happened in the Soviet Union. He Who resists or fears change? will avoid that at any cost. Raúl performs has always been very similar to that of CAZ: There are six million Cubans who the changes, and Fidel, simply by being Spain. The Church was always on good are not active, of a total population close alive, grants them a legitimacy that Raúl standing with Fidel. When Raúl entered, to 12 million, who live off social protec- by himself doesn't have. the Church was fearful because the un- tion in the form of pensions and subsi- derstanding with Fidel had been very dized services and products. Sixty-eight Is U.S. policy towards Cuba changing? personal. Today it's clear that they also percent of the Cuban budget is welfare get along with Raúl. This contributes to, CAZ: Yes, clearly. After 50 years, they expenses. Knowing how they live, noth- and pushes, peaceful change. ing is more natural than the fear of these are tacitly accepting that continuing a lo- Also in favor of peaceful change are the cal Cold War with Cuba turns out to be people that these expenses are being cut generations of well-trained and educated or may even disappear. This generates a counterproductive. Recently, there were Cubans who cannot put to work their three notable manifestaciones in that force resisting change. There are anoth- preparation because the Cuban system er four million active persons working sense. The first, a letter with 44 signers, doesn't function. Young people are very including John Negroponte, directed to directly for the state whose more than motivated to study because they know insufficient salary is complemented with Barack Obama, telling him that a change education is their only resource. Then, in Cuba policy is necessary. The second, subsidized products. Among their jobs, they get depressed when they confirm there are many redundant ones whose a visit to Cuba by the president of the that what they will be able to do on the is- U.S. Chamber of Commerce to talk about disappearance has been announced. land is three of four notches below their This, too, creates understandable fear. economic relations. And third, the leak- preparation. That's terrible, so terrible ing — not unintentional — of a chapter of There is also ideological and political re- that many emigrate. sistance in the Communist Party, even Hillary Clinton's autobiography in which Nobody within the island is promoting she tells Obama that the policy followed See Zaldívar, next page October 2014 v CubaNews 11 What is to be done?, as Lenin would ZALDIVAR —FROM PREVIOUS PAGE degree, the doctors and other professionals who say. My answer is, preserving the as- in some sectors of the armed forces or temporarily work in sets, which take generations to create, the National Revolutionary Police. But Venezuela, in Brazil, or and liquidate the liabilities, which can the authentic resistance that explains in other countries also earn incomes that be done in the course of years with laws the slow pace of the reforms stems from are higher than those of regular Cubans. and decrees. For that, you have to create the difficulty of making the country more Little by little, another one moves over to a social and political climate that allows productive without throwing into poverty the cuentapropistas. This economic dif- applying these laws and decrees, which millions of people. This is the fun- ferentiation is new, and it will generate may be about foreign investment, the damental problem that Raúl and social tensions that will be difficult to currency merger, measures to provide his people have to solve. A shock manage. more market … without seriously frac- therapy applied to Cuba would turing Cuban society. Governing Cuba destroy the country for one or two Does Cuba have growth potential? well means taking close to 12 million generations. Cubans, without excessive trauma, from CAZ: A lot. If things work out where they are today to the much better well, Cuba will surprise. Let's existence they can have tomorrow. What changes are happen- do a balance of Cuba, with its ing? assets and liabilities. Among CAZ: The harshest critique the assets is the fact that they What dynamic is leading the current of the outcome of the Cu- are few but very unified as a changes? ban Revolution is that 50 society. They're very well edu- CAZ: All Cuban politics move within a years later, Cubans who cated; there are one million triangle of tensions: the tension between follow the law can't live people with higher-education maintaining the current economy and in dignity. This is a devas- degrees and half a million uni- opening the economy to private initia- tating critique. I will say it versity students. Women are tive; the tension between maintaining more clearly: To subsist, Cu- present at all levels of the labor the single-party system and broadening bans have to steal. Fidel rec- force. The people are healthy, liberties; and the tension between rescu- ognized this in a speech at the and life expectancy is high. ing sovereignty or trusting Cuba's future University of Havana. Has this Achieving something like this to the patronage of the United States changed? It is changing. To- takes the work of generations. or other countries. The order of priori- day some 500,000 Cubans are Well, Cuba has done this at a ties today is: Sovereignty above all; the cuentapropistas, which means higher degree than most Latin economy must be changed; as far as poli- that their income doesn't depend American countries. When you read so- tics goes — we'll see. I say this to make on the state. In my years as ambassador, cial and economic reports of these coun- it clear that in Cuba the issue of sover- there were about 100,000. The number of tries, it turns out that what they need is eignty is key. Cubans that can live without depending education, skills, health … Cuba already on the state seems to me the best mea- has that. sure for the changes happening in Cuba. Among the liabilities, I would point out ‘You can’t twist Cuba’s arm Five hundred thousand represents 12% the bleeding of young, qualified people of the active population. who leave. Year after year, 20,000 young- on human rights.’ Another important change is that Cu- sters leave the country with U.S. visas bans today have the freedom to leave the (which demonstrates that Washington is country. They can visit tourist hotels. ... not interested in an open crisis in Cuba, There is a new foreign investment law, even though it doesn't say so). If you add And in this scheme of things, where are there are changes in agriculture and oth- visas of other countries and irregular ex- human rights? er sectors. But every change creates new its, there must be some 40,000 leaving CAZ: You can't twist Cuba's arm on hu- problems, and little is said about that. every year. These figures, for a country man rights. The United States hasn't that already has negative population achieved it in half a century, despite us- Are you referring to a social gap in Cuba growth, are a grave problem. The histori- ing all kinds of tactics. That doesn't mean that could originate internal conflict? cal effort to create educated generations that you can't achieve small, important CAZ: I don't have a response to that ques- that then leave — some legally, others things. … There is a way to advance in tion, even though it is important. For half risking their lives — questions the sys- small steps, whenever you truly seek an a century, Cuba has lived in equality — tem. They know that better than we do. improvement of human rights instead of forcedly, if you want — and it has never Another liability: An absurd economic using violations as a weapon against the experienced serious social tensions, but system. Don't even try to understand system. Only Spain has advanced on that now that could come up. I will quote an in which way it is socialist or capitalist, path. No other European country has extreme example. The best Cuban base- no one knows. It's an incoherent sum of liberated Cuban political prisoners. The ball players — they are really good and ideas. There are (few) things that work, United States has done it, thanks to Jesse don't charge anything — have for years and (many) things that don't; the Cubans Jackson and Jimmy Carter. escaped to the Big Leagues in the United really know this. In its evolution, distri- Another essential idea on this issue: The States that pay them a lot. Now they can bution has taken priority over production Cuban human rights policy is a mirror [play abroad] legally. Two of them are and, when there was no other way than image of U.S. Cuba policy. If the United playing in Japan today, and they earn producing, there has been a prevalence States roughs up Cuba, Cuba responds $1.2 million per season (the Cuban state of seeking outside support — Russia, by kicking the dissidents' butt. This keeps 20%). To a lesser degree, dancers Venezuela — and asking people to sac- means that the crucial variable in Cuba's who perform abroad earn way above rifice — in sugar harvests or in the “Spe- behavior on human rights is in the hands average, as do writers or painters who cial Period” — over promoting efficient of the United States. That's why limiting sell in Europe or the United States. I am domestic production. The bottom line is Cuba policy to human rights is an error, talking about artists that live or reside at that they have created some very valu- because then, your policy is set by the least seasonally in the island. To a lesser able assets and some toxic liabilities. United States. q 12 CubaNews v October 2014 FOREIGN INVESTMENT German manufacturer commits to Mariel Zone BY JOHANNES WERNER in a small prosthesis and surgical appli- use and export; promoting medical tour- n a rare announcement regarding ance factory at Mariel. Otto Bock may ism for patients from Latin America to fit foreign companies opening shop at bring technology to produce mechatron- prostheses; and amputee clinics using IMariel, Cuban health officials said a ic devices for people who have lost limbs, Cuba's medical expertise and Otto Bock German orthopedics company will invest Cambras said. know-how. in a manufacturing facility in the Special Álvarez Cambras, who represented The Mexican subsidiary represented Development Zone. the Cuban side in negotiations with Otto Otto Bock in the negotiations in Cuba. Otto Bock GmbH, Bock, said the partners would eventually Cuban media said that prostheses a privately-owned like to produce bio-electric hands and made in Cuba “lack required quality,” company based legs at Mariel. and that the cooperation will help turn near Göttingen The manufacturing plans are part of Cuba “into a benchmark” in the conti- with subsidiar- a $4.5 million cooperation project with nent. ies in 42 coun- Frank Pais Hospital in Havana. The only publicly announced commit- tries, agreed to set up Otto Bock “sees the opportunity to co- ment at Mariel, so far, is that of a Brazilian production in Cuba, operate with Cuba to unite its great clini- biotechnology company affiliated with both for the domestic cal capacity with cutting-edge and high- Grupo Odebrecht, which said in January market and export performance technology, to establish a it would open a joint venture with Cuban to Latin America, reference point in Latin America,” said state company BioCubaFarma to pro- Cuban officials an- Orison Huerta, the company's manag- duce monoclonal antibodies for a cancer nounced during an ing director for Mexico, Central America vaccine. Grupo Souza Cruz, a Brazilian orthopedics confer- and the Caribbean. subsidiary of British American Tobacco, Photo courtesy ence in Trinidad, According to Huerta, the cooperation said at the time it was considering open- Otto Bock Cuba. project includes a “regional technical ing a tobacco manufacturing facility for Dr. Rodri- competence center” to work with dis- its Brascuba joint venture at the Special go Álvarez Cambras, president abled persons at the Orthopedic Science Development Zone. q of the Cuban Society of Orthopedics and Complex Frank País; a manufacturing Traumatology, told Prensa Latina at the plant at Mariel to first produce wheel- INVESTMENTS SHRINK IN FIRST HALF conference that the company will invest chairs and ortheses, both for domestic Investments in Cuba decreased by 1.8% in the first half of 2014, resulting in a low GDP growth of 0.6%, according to a report by the National Statistics New investment portfolio to bow at Fair Institute (ONEI). ore than half a year after She told the news service that officials Investments from January to June this launching a new foreign of “key sectors of the national econo- year were $1.9 billion. Minvestment law, Cuban of- my”, including fast-tracked areas such The sectors that benefited most from ficials at the annual International Ha- as renewable energy, agriculture, investments were business services and vana Fair in November will lay out manufacturing, real estate activities, as well as electricity, much-awaited government priorities construction, gas and water infrastructure. for foreign investment, an official an- pharma and nounced. tourism, will STATE PRIVATIZES 9,000 RESTAURANTS So far this year, the government has provide details Deciding to get out of the food service focused on promoting investments about top-pri- business altogether, the government at the Mariel Special Development ority foreign announced plans to transfer all of the Zone, while providing only spotty investment country's 9,000 state-owned restaurants updates about foreign investment projects. and cafés into private ownership. sought elsewhere on the island. The In reference Since the late 1960s, every restaurant current investment portfolio on dis- to investment in the country was owned by the state. play at the website of CEPEC, Cuba's projects in the Two dozen restaurants already official foreign investment promotion food industry, transferred to cooperatives this year. organization, dates back to 2012. Savigne said Over the next few years, the state will The 2014 Havana Fair, Nov. 2-8, will the govern- gradually hand over all remaining state be themed around the issue of foreign The current investment ment is looking restaurants and cafés to private owners portfolio dates back investment, a report in official daily to 2012 for “integral or cooperatives. Granma said. Organizers expect more projects” that An investment evaluation commit- than 1,500 exhibitors on 20,000 square “generate productive chains” as well tee will examine financial and banking meters, from 60 countries. as those that produce highly competi- records before approving any bid. Also, At the fair, there will be “several tive products for export markets or al- the Central Bank created a special ac- business rounds” for foreign investors low access to high technology. count that will serve as a pass-though for to explain the new foreign investment She said Cuba offers a safe environ- all deposits made from foreign banks. law and interests in specific sectors, ment as well as predictable social, Prices in state-owned restaurants may CEPEC official Yohaney Savigne told legal and regulatory frameworks, stra- be cheap, but quality is often poor. A an AIN reporter at an international tegic location, and a highly educated lot of supplies also disappeared, with food industry congress in Havana. workforce. employees selling it on the black market to supplement their low wages. October 2014 v CubaNews 13 POLITICS Chief coordinator of reforms gets expanded powers wo months after news broke that the Party's and Revolution's economic ty Minister of the Economy Ministry, the Cuba's GDP stagnated in the first and social policy is entering into more job he held under Murillo before he was Thalf of the year, and as currency complex and profound issues,” the state- promoted minister. reform is entering its main stage, the ment said. “To advance this task, it is —Johannes Werner economy minister has been demoted considered necessary to harmonize and and the man in charge of coordinating integrate at a higher level the actualiza- the economic reform process added the tion of the economic model.” Marino Murillo: Chief reform coordinator post to his tasks. Murillo, 53, had been economy minis- and minister of economy In a customarily terse official state- ter before being nominated to spearhead ment in daily Granma, the government the reform process in 2011. He has a announced that the Council of State, at degree in economics from the National the behest of Raúl Castro, “liberated” Defense College. His official biography Adel Yzquierdo Rodríguez from his post states that he has “been linked to the eco- as economy minister, and instead nomi- nomic sphere for more than 20 years,” nated Vice President Marino Murillo among others as Minister of Domestic Jorge, who will continue as head of the Trade from 2006 to 2009, Deputy Min- Permanent Commission for the Imple- ister of Economy and Planning, and as mentation and Development of the eco- an auditor for the Ministry of Food and nomic reforms. Industry. “The implementation of the outlines of Yzquierdo was demoted to First Depu-

BRIEFS “The appropriate measures will be lion patients throughout Latin America STATE COMPANY GETS SCOLDING taken to deal with this serious error,” and 48,000 in Argentina. The Cuban government said it will the statement said. Cuba in 2009 established a small eye take disciplinary action against state clinic in Córdoba that has provided pharmaceutical company Labiofam be- LABIOFAM TO BUILD PLANT IN BOLIVIA 4,800 surgeries. State pharmaceutical company La- The hospital will be named after cause it named perfumes after Ernesto biofam said it plans to build a plant in Che Guevara and Hugo Chávez. Cuban-Argentinean guerrilla fighter Bolivia that would help the country meet Ernesto ‘Che' Guevara. In a statement its entire demand for basic medicine. in official daily Foundation president Claudia Camba, Bolivian President Evo Morales who is responsible for all Cuban medi- Granma, the gov- requested the project and Bolivia will ernment described cal missions in Argentina, called for finance it, Labiofam Director General donations and efforts to contribute to the marketing José Antonio Fraga said. He didn't dis- idea behind the the bilateral project. Operación Milagro close the cost. is mostly funded by Venezuela. Ernesto and Hugo Any excess production would be colognes as “a seri- exported mostly to member countries FOREIGN FIRMS ATTEND CONFERENCE ous error”. of the ALBA bloc, of which Cuba is a An orthopedics conference in Trinidad “The symbols of member. in September attracted a dozen foreign the Revolution are Production will be subsidized, and the comanies, including Germany's Otto and will always be medicine will be sold at a very small Bock, Physiomed and Karl Storz, Spain's sacred,” it read. profit margin. Surgival, France's Prosteel, Teknimed The crackdown came two days after Bolivia in 2012 created a $1.2 billion and FH Orthopedics, Argentina's Bago, Labiofam presented the new per- fund to finance such projects. and Mexico's Solco. Cuban state com- fumes. During the launch event, Isabel panies Ortopedia Técnica, Laboratorios González, Labiofam vice-president for CUBA BUILDS EYE HOSPITAL IN ARGENTINA Oriente, Grupo Empresarial Labiofam, research and development, said that Expanding the Operación Milagro Farmacuba, BioCubaFarma and the Ernesto would be a “woodsy and re- program in Argentina, Cuba is building Centro Nacional de Ortopedia also had freshing citric scent with notes of talcum a training hospital for eye surgery in stands at the accompanying trade fair. powder.” Meanwhile, Hugo, named after Argentina, ACN reported. The 25th Congress of Traumatology the late Venezuelan president, would of- The facility in the city of Córdoba, and Orthopaedics met at the Ancón fer a “softer, fruitier fragrance with hints which will train young Argentinean doc- beach hotel near the historical city of of mango and papaya”. tors, is part of a cooperation project with Trinidad. The perfumes became the target of ire Argentina's Un Mundo Mejor es Posible At the event, Cuban officials an- and ridicule in social networks. Foundation. nounced Otto Bock GmbH agreed to Labiofam said it had obtained the Since 2009, the foundation has man- set up a small manufacturing facility at agreement of the families of Che aged the Argentinean presence of the Mariel Special Development Zone, Guevara and Hugo Chávez to use their Operación Milagro, a decade-old Cuban- to cover demand in Cuba as well as a names, but the statement by the Execu- Venezuelan program that has provided bridge head to other Latin and Carib- tive Committee of the Ministers' Council free eye treatment to more than 2 mil- bean markets (see article on page 12). in Granma denied that. 14 CubaNews v October 2014 INFRASTUCTURE Port of Cienfuegos to get modern cruise terminal BY JOHANNES WERNER nnouncing Cuba's first major in- Avestment in the cruise industry since the 1990s, a tourism ministry official said the southern port city of Cienfuegos will get a modern cruise terminal, Prensa Latina reported. Official reports did not reveal the cost, source of funding, or contractors who may build the terminal, which is planned to go up on the seafront The Ministry of Transportation of the old city of Cienfuegos, a UNESCO will be in charge of con- World Heritage site. struction of a state-of-the- According to José Enrique González, art cruise terminal in the a local official with the tourism ministry, old city. Top: Passengers abord the Louis Cristal, the project will be executed by the Minis- chartered by Canada- try of Transportation (Mitrans). based Cuba Cruise this “We're thinking big, we're talking about season, are looking at the something world class,” González said at Olimpia Medina dock in a presentation of plans in Cienfuegos, ac- downtown Cienfuegos. cording to Prensa Latina. China recently committed to funding construction of a cargo terminal in the Photo: Courtesy Cuba Cruise; eastern port of Santiago de Cuba. Bra- maps by Armando Portela zil has funded construction of a billion- dollar container terminal and free trade zone at Mariel. The investment signals Cuba's com- mitment to reviving cruises in the island, ber to rise this winter season. For one, est cruise port, following Havana, which which have been severely restricted by Canada's Cuba Cruise will home-port the opened the Sierra Maestra cruise termi- the U.S. embargo. The Caribbean's big- 1,200-passenger Louis Cristal in Havana nal in 1996. Fifty-three cruise ship stops gest cruise lines are all based in Miami; for its second season. Also, the 2,000-pas- are expected at Cienfuegos this winter over the past two decades, Cuba has senger Thomson Dreams, operated by season. Thirty-seven of those will be at had to make do with smaller and rather UK-based Thomson Cruises, will return the Olimpia Medina dock at the old city unpredictable Canadian and European to Cuba this year, after several years of in the Bay of Cienfuegos (up from 28 last cruise companies. absence. Also, Panorama and Star Clip- year); 16 are scheduled to drop anchor at In 2013, there were 200 cruise stops in per ships will visit the island this season. nearby Playa Rancho Luna, in the open Cuba; tourism officials expect that num- Cienfuegos is the island's second-larg- Caribbean. q FINANCE More than two dozen banks drop Cuban business .S. pressure on third-country without prior warning, in the middle of due to revenues to generated by exports banks has prompted 27 financial commercial transactions,” said a report of products and services; other factors Uinstitutions to cut ties with Cuba presented by Pedro Luis Padrón,­ trade were Cuba's classification by ratings from April 2013 through June 2014, a policy director for North America at the agencies as a high-risk market, as well as foreign trade ministry official said in the Foreign Trade and Investment Ministry higher transaction costs in imports and run-up of the annual United Nations vote (MINCEX). exports. against the U.S. embargo. Other banks refused to provide one-off Since a record $8.97 billion settle- Apparently pushed by Washington's services and specific operations, or to ment with BNP Paribas this summer crackdown and billion-dollar fine against process letters of credit, the report said. — in which the bank agreed to refrain France's BNP Paribas and pending The report didn't provide any bank from doing business in any currency U.S. investigations against Germany's names. Only the pullout of BNP Paribas with U.S.-sanctioned countries, includ- Deutsche Bank and Commerzbank over and Bank of Ireland has been reported. ing Cuba — U.S. sanctions enforcers transactions with Iran, Sudan and Cuba, Overall, the U.S. trade and financial turned on Germany's Commerzbank 27 banks have closed accounts of Cuban embargo has caused damages of close to and Deutsche Bank, France's Société banks or canceled correspondent bank $4 billion in Cuba's foreign trade during Générale and Crédit Agricole, as well as relationships. the 14-month period, according to the re- Mexico's Banamex. “In some cases, [this happened] port. Most of the calculated losses were —Johannes Werner October 2014 v CubaNews 15

BOOKSHELF “undiscovered” buildings and interiors will probably be the most appealing as- Havana Modern: Twentieth-Century pect of this lavish book, which will be re- Architecture and Interiors leased in early October. The photographs, shot exclusively for Written by Michael Connors, foreword the book, show examples from the Veda- by Ricardo Porro, photographed by do neighborhood, the seaside streets of Nestor Marti. Miramar, Central Havana, and Havana's Rizzoli, posh Country Club Park area. New York Included are also iconic places such as the National School of Arts; the art déco U.S. price: $65 landmark Bacardí building; Casa de Al- fred von Schulthess by Richard Neutra; the stylish Habana Riviera Hotel and its original 1957 interiors; the Hotel Nacio- nal; and the Tropicana cabaret nightclub by architect Max Borges. The foreword was written by Ricardo Porro, a Cuban- Havana Modern features meticulously maintained In Havana Modern, historian and Carib- born architect, 20th century buildings, many of which are not pub- bean design expert Michael Connors and who was des- licly accessible. photographer Néstor Martí take you on ignated in 1961 Photos: Néstor Martí/Rizzoli a tour — inside and outside — of some as the head of well-known, and some rather obscure design for Ha- architectural samples of art nouveau, art vana's National déco and high modernism, spanning the School of Arts. early 1890s through 1965. Seen through the lens of Martí, even iconic places such as the Hotel Nacional, the Bacardí office building, the recently restored Hotel Ca- pri, or the futuristic National School of Arts take on a fresh aspect. But for frequent Cuba travelers, the

BRIEFS

MORE CURRENCY REFORM DETAILS REVEALED Reducing the supply of cheap CUC for made a donation of equipment worth Cuba's central bank president has state businesses will force Cuba to ei- more than $1 million to five pilot-project provided more details about the planned ther raise prices for consumers or spend rice farms in Cuba. unification of the Cuban Peso (CUP) more money on subsidies for basic and convertible peso (CUC), saying that goods. In an interview with official news CIENFUEGOS MAY GET NINE GOLF COURSES the merger will require putting more agency AIN, Central Bank President The province of Cienfuegos may get CUP into circulation and issuing higher- Ernesto Medina insisted that consumer nine golf courses and connected real denomination bills. prices won't change. estate projects with thousands of condos The elimination of the CUC, a process in two separate projects, a Tourism Min- that could trigger inflation, is one of the JAPANESE COMPANIES SEEK OPPORTUNITIES istry official said, according to Prensa most complex reforms ahead. No date Japanese business executives met Latina. has been set for the merger. with their Cuban counterparts at a The two projects, with a combined conference in Havana 2,400 hectares, are at Rancho Luna- organized by the Cuba- Pasacaballos, near the mouth of Cien- Japan Economic Confer- fuegos Bay and the city of Cienfuegos, The arrivals sec- ence to seek opportunies and Playa Inglés-La Tatahagua, near the tion at Terminal and sign agreements. historical tourist city of Trinidad. 3 of José Martí Fishing, pharmaceutical The Rancho Luna project includes six International and tourism were on top 18-hole golf courses, and 16,614 rooms, Airport reopened Oct. 1 after ex- of the agenda. including hotel, apartments and villas. tensive remodel- Foreign Trade and The Playa Inglés project includes ing, which began Investment Minister three golf courses and 5,820 rooms. in the second half Rodrigo Malmierca said Manuel Carcasés, a tourism official in of 2013. Tour op- erators and taxis now have the indoor arrival area exclusively for Cuba looks forward to charge of the projects, said there already themselves. The changes forced thousands of Cubans welcoming more business and receiv- are “intentions of outside funding.” family members and friends to an outdoor waiting area equipped ing a larger number of In the same province, officials are with seats, triggering a very public controversy. The project also Japanese tourists. planning Villa Náutica Residencial, includes new immigration booths and a larger customs area. Meanwhile, the Japa- which includes a class-A marina for 200 Photo: Granma nese International Coop- boats, 100 hotel rooms and 256 aparta- eration Agency (JICA) ments. 16 CubaNews v October 2014

Kathy Castor • Jorge Piñón • Phil Peters • Hugo Can- CALENDAR OF EVENTS cio • Tessie Aral • Tony Zamora • Parke Wright • Jo- hannes Werner • Richard Feinberg • Paolo Spadoni • José Gabilondo • Carlos Loumiet • Gregory Biniowsky If your organization is sponsoring an upcoming event, please let our readers know! Send details to CubaNews at johanneswerner@ Conference cubastandard.com.

Oct. 6, 9 a.m.: The hidden history of dialogue with Cuba. The Brookings Institu- CUBA 2014 tion, Washington. Authors William M. LeoGrande and Peter Kornbluh present their What the U.S. Legal and new book, Back Channel to Cuba: The Hidden History of Negotiations between Business Communities Washington and Havana. Details at www.brookings.edu or [email protected]. Need to Know Keynote by Rep. Kathy Castor Oct. 6-9: Pan-American Congress of Veterinary Sciences — 24th congress on ani- Seven discussion panels mal reproduction, animal welfare, animals in case of disaster, clinical and surgical pa- with dozens of Cuba experts thology, and more. Palacio de Convenciones, Havana. www. http://panvetcuba.com. Nov. 20-21, Orlando, FL, Loews Portofino Bay Hotel Nov. 3-9: 32nd International Havana Fair (FIHAV 2014) — Cuba’s largest trade Contact: [email protected]

fair with major presence of Cuba’s foreign partners. PABEXPO, Havana. Sponsored by

Florida Bar Cuba Media LLC Nov. 6-9: 3rd International Convention on Engineering. Centro de Convenciones Association Plaza América, Varadero. The conference includes six forums focusing on issues such International as women engineers, youth, engineering in the countryside, sustainability, and energy. Section Info at www.ciiccuba.com.

Nov. 20-21: Cuba 2014 — What the U.S. Legal and Business Communities Need to Know. Conference. Loew’s Portofino Hotel, Orlando.

Dec. 1-5: Biotecnología Habana 2014. Organized by the Center for Genetic Engi- neering and Biotechnology of Havana (CIGB), the conference and trade show will focus on “Ag-Biotech for food sustainability.” Info at http://bh2014.cigb.edu.cu or Editor [email protected]. JOHANNES WERNER

Dec. 4-14: Festival Internacional del Nuevo Cine Latinoamericano — one of the Washington correspondent largest film festivals in Latin America. Contact: [email protected]; www.ha- ANA RADELAT banafilmfestival.com Political analyst DOMINGO AMUCHASTEGUI Feb. 12-22, 2015: 24th International Book Fair — the hemisphere’s largest book fair, at the Morro Castle in Havana. Feature writers VITO ECHEVARRIA February 2015: 17th International Habanos Festival — cigars. Havana, several DOREEN HEMLOCK venues. [email protected]. Cartographer ARMANDO H. PORTELA April 4-8: Geociencias 2015 — 6th Cuban Earth Sciences Convention and Fair (min- ing, oil and gas). Havana, www.cubacienciasdelatierra.com CubaNews (ISSN 1073-7715), founded in 1993, is published monthly by Cuba Media LLC, PO Box April 20-24: Salud para Todos — 13th fair on healthcare, pharmaceuticals and bio- 566346, Miami, FL 33256-6346. technology, organized by the Ministry of Health, Palacio de Convenciones, Havana, Annual subscription via PDF delivery: $398. Academic, nonprofit organizations: $198. Delivery [email protected]. via PDF and print: $100 extra per year. Please visit www.cubanews.com to learn more May 5-7, 2015: International Tourism Fair (FITCuba 2015) — Cuba’s biggest about our newsletter. To order a subscription, call CubaNews at (305) trade show and convention for the tourism industry. Cayo Coco, Jardines del Rey, 393-8760, fax us at (305) 722-4350, or send an e-mail [email protected] to [email protected]. Contents may not be distributed by any means without prior written permission of the publisher. June 22-26, 2015: International Scientific Congress (CNIC 2015) — congress and Cuba Media LLC grants authorization to photo- copy items for internal or personal use, provided the convention for medical, pharmaceutical and biotechnology industries. http://www. appropriate fee is paid directly to Copyright Clear- congresocnic2015.sld.cu. ance Center, 222 Rosewood Drive, Danvers, MA 01923. For details, visit www.copyright.com.