Vol. 12, No. 10 October 2004

www.cubanews.com

In the News Cuba’s elusive underground economy provides important goods and services More than maple syrup Vermont sells Alimport $7 million worth BY LARRY LUXNER economy are nearly impossible, given publicly available information,” he said. “Only direct ob- of milk, apples and cows ...... Page 3 rom watch repairmen in Holguín and ice- cream vendors in Sancti Spíritus to lock- servation and generalization from anecdotal evi- F smiths in Matanzas and prostitutes selling dence is possible at this time. But Cuba’s under- OFAC’s blacklist themselves along Havana’s Malecón, Cuba’s so- ground economy is so obvious that it’s frequent- Publishers, writers say obscure Treasury called “underground economy” is evident near- ly observed by tourists and journalists.” ly anywhere you look. In the United States, he told ASCE delegates, rule smacks of censorship ...... Page 4 Yet trying to get a handle on its size or eco- the “shadow economy” constitutes only 8.7% of nomic impact is extremely difficult, given the total GDP — a percentage that rises to 15.8% for Chile’s juice mogul scarcity of reliable Cuban government statistics Canada, 18% for Western Europe and an astounding 41% for Latin America. Veteran leftist Max Marambio cashes in and the reluctance of those operating outside the official economy to talk about their some- “In most countries, policymakers view the on his Cuban connections ...... Page 6 times illegal activities in detail. underground economy negatively, but not in Archibald R.M. Ritter is a professor of eco- Cuba’s case,” he said. “The underground econo- Not an easy year nomics and international affairs at Carleton Uni- my produces a lot of relatively low-cost goods versity in Ottawa. A former Canadian ambassa- and services for the Cuban people, and it evades All in all, 2004 is shaping up to be a tough dor to Cuba, Ritter conducted an informal sur- direct taxation, but not indirect taxation.” year for the Cuban economy ...... Page 8 vey of self-employment in Cuba between Feb- Ritter added: “Like other countries, Cuba has ruary and April 2003, and presented his findings an underground economy, but it includes enter- Diplomacy at work at the recent Association for the Study of the prises that are legal everywhere else.” These Cuban Economy (ASCE) meeting in Miami. include household activities like child-rearing, Cuba wins respect overseas in effort to “Conventional measures of the underground See Underground, page 2 counter U.S. pressure ...... Page 9 Port problems Power blackouts threaten GDP growth Cuba’s ports need big investment to han- dle future cargo volumes ...... Page 10 as factories are shut to save electricity BY OUR HAVANA CORRESPONDENT Business briefs Castro, warning that supply problems could ubans — plunged into darkness for five persist for another five months or more, prom- Israeli-run citrus venture expects record hours a day or more — have one main ised to invest in new capacity and suggested that strict measures be taken to regulate elec- crop; Bacardi USA indicted ...... Page 12 Ctopic of conversation lately: blackouts. Earlier this year, the power situation had tricity supply for residences and small private improved considerably, but by late May, author- businesses consuming large amounts of power. Ripping off the regime ities began cutting electricity again. The hot Lage announced that the state would close 118 factories in an effort to conserve energy. To survive, Cubans steal from the state, summer months, which locals found more suf- focating than ever, made things even worse — This includes Havana’s Antillana de Acero steel often in clever ways ...... Page 14 and not even hurricane damage can be blamed mill and the Artemisa cement plant in La for the current disaster. Habana province. The H makes debut An in-depth official explanation came only last School and work hours will be cut by 30 min- utes for a 4-month period starting Oct. 25, while New upscale lifestyle magazine to appear month, when three TV programs featuring Pre- sident Fidel Castro, Vice President Carlos Lage, indoor lighting in workplaces will be reduced on U.S. newsstands Dec. 8 ...... Page 15 Lt. Col. Nestor Borrero of the Interior Ministry and the retail sector — except for restaurants — and other top officials addressed the issue. will shut down at 7 p.m. The energy situation is so serious, according CubaNews (ISSN 1073-7715) is published monthly “We are all to blame. We have a weak sys- by Luxner News Inc. © 2004. All rights reserved. tem,” Castro told a national audience on the to Lage, that the current schedule of power cuts Subscriptions: $429/year. For subscription or edito- “Mesa Redonda” TV talk show. “The socialist will be maintained until October 2005. This rial inquiries, call us at (301) 365-1745, send a fax to means power cuts for residential areas lasting (301) 365-1829 or e-mail us at [email protected]. state is subsidizing this electricity which costs them 10% of what it costs us to produce.” See Blackouts, page 7 2 CubaNews ❖ October 2004 the strong who are surviving,” he explained at And such activities are likely to remain Underground — FROM PAGE 1 the ASCE conference. “Remember that they totally outside the law as long as Fidel Castro cooperative work around the home and the started in 1993, and the peak of 209,000 was is in power. barter of legal goods and services. reached in 1996. At that point, the govern- Ted Henken, a professor at Baruch Col- The underground economy also encom- ment revived the income tax, so that obvious- lege, has outlined four distinct stages in the passes “private economic activities embedded ly had an impact, taking out a certain part of Castro regime’s changing policies toward the within the state sectors, like manicurists and those who were marginal. At the same time, Cuban private sector: elevator repairmen who will provide service if there was also an increased effort to enforce The first (1959-70) saw the rapid and near- you give them a bonus,” as well as criminal regulations.” total eradication of the private sector, with activities such as the selling of stolen goods. Some of those regulations would hardly be Cuba’s last 58,000 small businesses national- Among factors that promote the growth of considered objectionable in a capitalist coun- ized in 1968. The second stage (1971-85) saw any nation’s underground economy: the in- try, i.e., imposing sanitary regulations for the gradual reintroduction of material incen- tensity of regulations; the burden of tax and street food vendors; others are quite objec- tives and small-scale private enterprise. social-security contributions; social transfers tionable, like not letting owners of paladares The third stage (1986-89) marked the “rec- that permit individuals to work unofficially; a (private restaurants) serve beef or shrimp. tification process” and the eradication of pri- very high tax on such transfers should the Yet many cuentapropistas operate without vate markets and material incentives. The individuals graduate from the underground any serious problems to speak of. fourth and current stage (1990-2004) is char- economy into the formal economy; forced “They have a simple business, the regulato- acterized by the re-emergence and unprece- reduction of official working hours; early ry scheme is simple, and their business is not dented importance of the private sector. retirement, and high unemployment rates in competition with the state,” Peters ex- Yet overshadowing everything in Cuba is which push people into the informal economy. plained. “For instance, I met a guy in Cabar- the “recurring tug-of-war between radical There are also social and psychological fac- tors at work, especially if people feel the gov- ernment is treating them badly. “All these factors exist in an extreme way in the case of Cuba. The tax system is excruci- ating for cuentapropistas,” said Ritter, lament- LARRY LUXNER ing the fact that “all of this entrepreneurship is being frittered away.” “A reasonable policy would be to legalize these activities, but that’s not going to be done for some time,” he said. “Many activities that are normally permitted elsewhere are prohibited entirely in Cuba, or limited through the refusal to grant licenses to appli- cants, who then must operate clandestinely if they are to exist at all.” CUENTAPROPISTA LICENSES DOWN SHARPLY Roadside vendor illegally peddles onions near Havana; dollmaker sells her creations in Sancti Spíritus. In 1996, according to official figures, 82.3% ien, a tire repairman who’s also an evangelist. communist ideology on one side and econom- of the 46,248 applications for self-employment His tax is only 80 pesos a month, and he ic pragmatism on the other,” says Henken. licenses were granted. By 2001, only 23,531 of clears nearly 2,000 pesos. I also spent time in “Radical Guevarist ideological campaigns the 97,687 applicants got their cuentapropista the apartment of a family who had a very suc- that target the private sector have often been licenses, translating into an approval rate of cessful lunch stand, selling roast pork sand- carried out as ends in themselves, regardless just 23.9%. wiches and making 2,600 pesos a month. of their impact on the economy,” he said. “If Phil Peters, vice-president of the Lexington Another example is a woman in Vedado who there is a hidden agenda behind the ideologi- Institute, has spent several years researching sells ice cream with help from two assistants.” cal justifications of anti-market campaigns, it Cuba’s self-employment sector. Overall, said Peters, the conclusions he is not economic but rather political. The In an informal survey of 61 cuentapropistas reached in 1999 are still basically true when it growth of the private sector has correctly — 31 of whom operate in pesos and 30 in dol- comes to self-employment in Cuba. been seen as a threat to centralized control.” lars, Peters found that the average self- “The cuentapropia is a way for people to Indeed, says Peters, the pendulum is employed Cuban had been in business for six leave state employment and work on their swinging back. years and two months. Of those operating in own,” he said. “A major problem is the lack of “The government has promulgated a reso- pesos, average profits came to 1,409 pesos — inputs and supply. While some can get their lution and a new set of regulations that will more than five times the average monthly supplies legally, many resort to black-market affect cuentapropia. They’ll continue to allow salary in the state sector — while the average supply relationships to keep themselves 107 lines of work but will stop granting licens- monthly tax paid was 676 pesos. going. There continues to be capricious regu- es in 22 occupations. The most notable is that Of those operating in dollars, the average latory enforcement.” of food vendors and paladares, where the monthly profit was $301, and the average tax state wants to resume its role. So they’ll let was $137. Typical cuentapropistas charging PENDULUM IS ‘SWINGING BACK,’ SAYS PETERS those who are in business continue, but allow pesos for their services included a tire repair- Interestingly, those involved in renting out the rest to disappear through attrition.” man, a watch repairman, a pedicurist who had their rooms to tourists are doing quite well, Despite the risks of getting caught, those been in business for over 40 years, and a wo- despite the “harassing new tax law” which operating in the underground economy are man who sells herbs used in santería rituals. was recently imposed on casas particulares. obviously willing to take the chance. In the dollar sector, cuentapropistas were “Those who get themselves listed in Lonely “These people are certainly happier run- generally taxi drivers, painters, artists, book- Planet are golden. They’re even passing off ning businesses than working as a clerk in the sellers and owners of casas particulares, or clients to others. There’s lots of ingenuity in Ministry of Transport,” he said. “But the lack rooms for rent in private homes. this sector.” Likewise, he said, “you can hire of a proper small-business law that lets people Yet the government feels threatened by moving companies — people with their own exercise some private initiative — whether these self-employed Cubans, says Peters. trucks and crew — even though it’s totally they’re carpenters, music teachers or soft- “This sector has been weeded out. It’s only outside the law.” ware engineers — is a terrible loss.” October 2004 ❖ CubaNews 3 AGRIBUSINESS Vermont to ship $7m in milk, apples and cows to Cuba BY HELEN SIMON now, he told us, Vermont will establish con- Kavulich, who opposes what he calls the mix- ermont, the nation’s 2nd-smallest state nections and learn the rules of doing business ing of commerce with politics (see box below). in population, has forged an agreement — putting itself in a good position for a future The Vermont cattle going to Cuba include market opening. to sell farm products to Cuba that local 50 Holstein and 50 Jersey pregnant heifers. V Food and agricultural sales are allowed officials hope will pave the way for more Under Cuban law, they must be registered under the 2000 Trade Sanctions Reform and with papers, following the discovery a BSE- exports, and possibly imports, in the future. Export Enhancement Act (TSRA). Volumes In early September, Agriculture Secretary infected cow in the United States last Decem- are rising quickly, totaling almost $680 million ber, said Gerardo Quaassdorff of Holstein Steve Kerr traveled to the island for a week to since the first goods went to Cuba in help fine-tune the sale of nonfat powdered Association USA. December 2001, said John Kavulich, presi- The deal will benefit both the Vermont far- milk, dairy cows and apples worth an esti- dent of the New York-based U.S.-Cuba Trade mated $7 million. mers who raise the heifers and the Cubans, and Economic Council Inc. who will get top-class genes for their herd, “It’s a new market for us,” agriculture agen- Trade in the first seven months of 2004 cy spokesman Mark Bosma told CubaNews. said Quaassdorff, who is based in Brattle- alone totaled $277.3 million, about $20 million boro, Vt. “It was 100% a business trip to make money more than in 2003, he said. Roughly 60% of It also sets the stage for a strong commer- for Vermont farmers.” these exports under TSRA are controlled by cial relationship between Vermont and Cuba, he said, adding that he hopes the first ship- ment of animals will lead to more very soon. Transportation to Cuba will be arranged by John Parke Wright IV, a cattleman based in “If we can be competitive, there’s no reason not to compete Naples, Fla. successfully and have a share of the sales [to Cuba].” Kerr said the trickiest part of the negotia- tions involve the powdered milk, which com- — STEVE KERR, VERMONT’S SECRETARY OF AGRICULTURE prises the bulk of the deal — about $6 million. There’s lots of competition from other states, he said, and Cuban officials have set require- ments that Vermont milk producers may not be able to satisfy. He declined to elaborate. Vermont covers 9,614 sq miles — about the three major food conglomerates — Archer Vermont apple growers plan to send some same size as the provinces of Camagüey and Daniels Midland, Cargill and FCStone — and another 30% by about five others. samples of their signature fruit, the Villa Clara combined. About 616,000 people McIntosh, to Cuba in the next few weeks. live in Vermont; of the 50 states, only Wyo- Although Cuba has pressured many U.S. companies and state delegations to sign so- While Cuba traditionally has imported Red ming has a smaller population. The state’s $21 Delicious apples from sources such as Wash- billion economy is dominated by manufactur- called advocacy agreements in the course of trade discussions, Kerr said Vermont was not ington state and Chile, Vermonters hope the ing, agriculture and tourism. McIntosh will also appeal to the island palate. Kerr’s visit followed an exploratory trip by asked to do so and would not have signed one had such a request had been made. Kerr said Vermont hopes the export deal Vermont Lt. Gov. Brian Dubie in April to find will lay the groundwork for Vermont to im- out what products the Cubans might want. “It just didn’t come up with me,” he said. The advocacy agreements ask companies port Cuban products — especially coffee — Cuba’s government-run food purchasing when the embargo is over. agency, Alimport, has also shown an interest or states seeking trade with Cuba to support in Vermont’s world-famous maple syrup for a lifting of the U.S. embargo against Cuba. Helen Simon, a freelance writer in Vermont, the tourist industry. “The state of Vermont did it correctly,” said previously lived and worked in the Caribbean. “If we can be competitive, there’s no reason not to compete successfully and have a share of the sales,” said Kerr, praising Vermont’s Sysco rips up ‘advocacy agreement’ with Alimport products for their high quality. ysco, the country’s largest food-serv- Yet Spigelmyer told USA Today that the The heifers are expected to head to Cuba in ice provider, has notified Cuban parent company, based in Houston, ripped the first quarter of 2005. Details of the pow- S authorities it’s tearing up an agree- up the deal because the executive who dered milk and apple deals are still being ment signed a week earlier by a Sysco exec- signed it — presumably Dickson — “wasn’t worked out. utive attending a convention in Havana. authorized to make a political statement.” With the Alimport agreement, Vermont USA Today reports that the original deal Cuba has carefully spread its spending joins a growing list of state and corporate enti- called for Alimport to buy Sysco products. among scores of congressional districts in ties trying to break into a nearby market that In return, Sysco agreed to push the White dozens of states to build political support U.S. policy closed for decades. House to relax the embargo against Cuba. for an end to the embargo. Kirby Jones, a Washington-based trade con- Sysco Food Services of Alabama has Others that have signed advocacy agree- sultant who specializes in Cuba, estimates at already sold $500,000 worth of canned ments include the Indiana Farm Bureau; least a dozen states have sent official delega- tomatoes, ice cream and frozen produce to Port Manatee in southwest Florida; econo- tions to Havana to test the waters. Cuba, said spokeswoman Toni Spigelmyer. mic development officials from Iowa, and While most have been from the South and In late August, the CEO of that Sysco elected officials from Idaho, Montana, the Midwest, the recent start of shipments to subsidiary, David Dickson, told reporters California, South Carolina and Kansas. Cuba from ports in New York and Philadel- in Havana that he was working with Alim- These deals are “a corruption of the com- phia has made it cheaper for eastern states port “on a strategic plan to provide world- mercial process” and hurt efforts to deve- such as Vermont to sell to the island, he said. class food products to the tourism indus- lop trade with Cuba, says John Kavulich of “It’s a good market, and Cubans have dol- try” and other potential markets in Cuba. the U.S.-Cuba Trade and Economic Council. lars to spend,” said Jones. By going into Cuba 4 CubaNews ❖ October 2004 WASHINGTON POLITICS Publishers, authors blast OFAC regulations as ‘censorship’ coalition of leading publishers and ector of the American Institute of Physics. ices to citizens of the countries in question. authors’ associations is suing the Trea- “How can the United States uphold our posi- “Publishers are free to reproduce, trans- A sury Department’s Office of Foreign tion as a beacon for the free exchange of ideas late, style and copy edit and engage in peer Assets Control, calling OFAC’s “continued and science if we ourselves censor authors review with respect to informational materials attempts to exert control” over publishing because of where they live?” from countries subject to sanctions,” says an activities involving literature from Cuba and Added PEN’s president, noted author Sal- OFAC statement. other blacklisted countries “a violation of the man Rushdie: “The OFAC regulations are Millerwise added that “there’s a line be- essential right of all Americans to learn about arbitrary and counterproductive. For exam- tween informational material being exempt the world.” ple, OFAC says publishers are free to publish and providing a service.” Among such servic- The Association of American Publishers ‘pre-existing’ texts from these countries. Yet es: making deals with writers for unfinished (AAP), the Association of American Univer- the countries currently under U.S. embargo works, and altering, collaborating on, promot- sity Presses (AAUP), PEN American Center routinely prevent important work by writers ing or marketing new or existing works. and Arcade Publishing have all asked a New and scholars from seeing the light of day. Details: Anna Kushner, PEN, New York. Tel: York federal court to strike down OFAC rules “American writers and publishers are being (212) 334-1660 x106. E-mail: [email protected], that require publishers and authors to get an told that unless they get a license from OFAC, URL: http://aaupnet.org/ofac. OFAC license to perform the routine activi- they may not work with their censored col- ties necessary to publish foreign literature leagues in these countries to bring their Bob Werner to head OFAC from countries under U.S. trade embargoes. works into print.” Representatives of the plaintiffs’ organiza- Peter Givler, executive director of AAUP, On Oct. 1, Robert Werner replaced tions expressed frustration over a series of said this isn’t a hypothetical situation; these Richard Newcomb as director of Trea- OFAC rulings that have created uncertainty rulings are already having a chilling effect. sury’s Office of Foreign Assets Control. and confusion among publishers afraid of “For example, the University of Alabama Werner, who was Treasury’s assistant incurring prison sentences of up to 10 years Press has had to suspend publication of two general counsel for enforcement and or fines of up to $1 million per violation. books by Cuban scholars in the fields of intelligence, previously served in the Jus- Those rulings and the regulations they archaeology and history. Both include materi- tice Department’s Office of Legal Coun- interpret mandate that Americans (1) may not al otherwise unavailable to their colleagues sel. He was also a federal prosecutor in enter into transactions for works not yet fully abroad,” he said. Connecticut, and once headed that state’s completed, (2) may not provide “substantive “The journal Mathematical Geology cancel- gaming regulatory agency. or artistic alterations or enhancements” to the led publication of a paper by Iranian geolo- In the private sector, Werner was a works, and (3) may not promote or market gists that presented a new methodology relat- partner at Bingham Dana LLP (now Bing- either new or previously existing works from ed to earthquake prediction. These are only ham McCutchen) and an officer at The the affected countries. two examples of the books, articles and scien- Phoenix Home Life Mutual Insurance “Our most basic liberties are violated when tific research that Americans may never have Company (now The Phoenix Companies). we, as publishers, have to either ask the gov- access to because of OFAC’s regulations.” Newcomb, who in August announced ernment for permission to publish, or risk OFAC spokeswoman Molly Millerwise his intent to leave OFAC after heading the serious criminal and civil penalties if we do counters that her agency’s rules aren’t meant agency for 17 years, will work for the not obtain permission,” said Marc Brodsky, to curtail “the free flow of information and Washington law firm of Baker Donelson. chairman of the AAP/PSP and executive dir- exchange of ideas” but to ban providing serv- Why does U.S. welcome Cuban dancers, but not scholars? The following guest editorial was written by tion in Las Vegas. It should be noted that the Havana Night crowd were “independents,” Nelson Valdes, a sociology professor and Latin Cuban scholars were to give papers and lec- while the scholars were government employ- American specialist at the University of New tures and engage in intellectual exchanges ees. Yet Havana Night is a joint enterprise be- Mexico who also runs a Cuba news service. with their colleagues. At LASA no one was tween a German corporation and the Cuban The views expressed in this article are those getting paid. The Cuban scholars represented Ministry of Culture. So in that sense they are of Valdes and do not necessarily reflect those of numerous disciplines and perspectives. just as much, or as little, “employed by the CubaNews or its owners. Comments should be It is clear that the Bush administration con- Cuban government” as the many talented per- directed to [email protected]. siders the exchange of ideas a threat, while 53 formers the State Department recently ac- skimpily dressed men and women from Cuba cepted, or as the professors and researchers BY NELSON VALDES can go and entertain Americans in Las Vegas who were just denied. It should be pointed month ago, Siegfried and Roy present- casinos. Perhaps the anti-Castro fanatics in out that the LASA scholars were invited for ed Havana Night Club at The Stardust Miami and Washington believe that, in some the academic work they have done in the past. A Hotel and Casino in Las Vegas. unstated fashion, Havana Night was contri- Granted, singing and dancing is more in The dance/entertainment company Hav- buting to “regime change” and the “democra- line with what Cubans, traditionally, are sup- ana Night managed to get visas to work in Las tization” of Cuban society, while those Cuban posed to do rather than think. That, after all, Vegas. Fifty-three performers plus support scholars were not. fits in with the nostalgic “Cuba de ayer.” personnel from Cuba stayed in that city and Just a few weeks ago, former members of Perhaps next time, Cuban scholars wishing had room and board as well as pay for their the Cuban American National Foundation lob- to enter the United States should dress up for excellent show. Apparently the Bush adminis- bied to have visas issued for the Havana Night the occasion and show the officials in tration thought that was OK. performers. But they certainly did not do the Washington that they can dance and show Now, 61 Cuban scholars and writers have same for the LASA conventioneers. some flesh. Chanting “babalú” might even been denied the right to participate in the We have heard from the U.S. Treasury help. In the so-called Battle of Ideas, the U.S. Latin American Studies Association conven- Department and the White House that the government prefers not to get involved. October 2004 ❖ CubaNews 5 POLITICAL BRIEFS CCD BESTOWS AWARD ON ELOY GUTIÉRREZ MENOYO In their own words … The Cuban Committee for Democracy (CCD) has selected Eloy Gutiérrez Menoyo to receive “I was only disappointed by one thing about the debate tonight: there was its annual Juan Gualberto Gómez Award. not one question on Cuba. Let me tell you my question: Cuba libre! Cuatro Each year, the Miami-based CCD chooses an mas años! I’ve got a plan to spread freedom, not only in the greater Middle individual who has been consistent in his/her East, but in our own hemisphere, in places like Cuba.” commitment to national reconciliation among — President Bush, in comments to supporters following his Sep. 30 debate with Cubans, respect for Cuban sovereignty and a Democratic presidential candidate John Kerry at the University of Miami. peaceful transition to democracy on the island. “These are also the principles upon which the “He’s been saying exactly what we want to hear — words like freedom, CCD was founded and few people are more rep- democracy, liberty. But he hasn’t done anything to bring this about in Cuba.” resentative of those principles than Eloy Joe García Gutiérrez Menoyo,” said Ricardo González, presi- — , former executive director of the Cuban American National Foun- dent of the CCD. dation, deriding President Bush at a Miami rally for Sen. Kerry. Previous recipients of the award include Cuban Cardinal Jaime Ortega; former President Jimmy “We commend Republicans for withstanding strong-arm tactics from the Carter; María Cristina Herrera, director of the White House in pressuring them to vote against easing the travel ban just six Center for Cuban Studies; CCD founder and soci- weeks before the presidential elections.” ologist Alejandro Portes and others. — Rachel Farley of the Washington Office on Latin America, reacting to a House Gutiérrez, who fought along with Castro’s bill sponsored by Rep. Jim Davis (D-FL) to ease strict travel regulations against rebels and later took up arms against the revolu- Cuba imposed Jun. 30 by President Bush. The bill passed by a vote of 225-174. tionary government, spent 22 years in prison. After being released, he founded Cambio “By voting to reverse cruel new restrictions on Cuban-Americans traveling Cubano and dedicated himself to fostering to Cuba to visit family members, representatives voted in favor of family unity national reconciliation. He now lives in Havana as and family rights.” a democratic opponent of the government. — Mavis Anderson of the Latin America Working Group, reacting to same bill. It was unclear at press time whether Gutiérrez, 69 and nearly blind, would be present to accept “We’re not saying with absolute certainty that they don’t [have a biological the award personally, though González said “we weapons program]. What we’re saying is that we’ve lost some confidence in hope both the Cuban and U.S. governments will that judgement, that they do ... When I see this thing characterized as a rever- grant him the necessary visa and exit permits to sal, that is incorrect.” allow him to come to Miami.” — Unidentified U.S. official, telling the Miami Herald that the intelligence com- Details: CCD, 600 Brickell Avenue, #301-H, munity has revised its assessment of Cuba’s biological weapons capabilities in the Miami, FL 33131. Tel: (305) 673-5354. Fax: wake of the failure to find weapons of mass destruction in Iraq. (305) 373-4755. E-mail: [email protected]. MEXICO: CUBA MEDDLING LED TO BILATERAL CRISIS “What they’re asking for is to be granted political asylum in the United States, or for the U.S. to expedite political asylum, or for the minimum a third The Mexican government says Cuba’s needling country, but to not keep them in Guantánamo any longer because that violates in Mexico’s internal affairs led to the May 2 international law and because their stay there is unbearable.” expulsion of the Cuban ambassador and the sub- — William Sánchez, an attorney for Luís Grass Rodríguez, one of 13 Cuban sequent withdrawal of Mexico’s ambassador in refugees who tried to escape to Florida aboard a boat made from a 1959 Buick. Havana, according to El Universal. The Cubans have begun a hunger strike to protest their legal limbo. The Mexico City newspaper, which obtained a government report after filing a freedom-of-infor- mation request, said that roughly a fourth of the “The exaggeration of the Cuba threat is another example of a White House material had been blacked out by censors on that is willing to shape intelligence and amplify fear to advance ideological national security grounds, leaving several ques- agendas. Cynical distortion is its own destructive weapon.” tions unanswered. — Sep. 22 editorial in the Palm Beach Post. The Associated Press reported Sep. 24 that the document was produced by Mexico’s Center on “Family is the center of who we Cubans are. You could be my best friend, Investigation and National Security. but come between me and my family and there’s no choice there for me. It’s “Since the start of the current government, over. I’ll push you out of the way. Because blood is thicker than politics.” Mexico has suffered constant pressures and — Miami resident Jorge Mursuli, telling the Los Angeles Times he won’t vote for interference in internal affairs on the part of Bush out of anger that he can no longer visit his aging aunt in Cuba every year. Cuban authorities, who sought to influence the position of our country in the United Nations,” it “We rely on the nobility and the sense of justice of the American people. We said, referring to Cuba’s persistent efforts to pre- don’t hold them accountable for our suffering. We believe that, just like us, vent Mexico from voting against it at the UN they have fallen victims to a policy that has been designed to serve the inter- Human Rights Commission. ests of a small minority.” The report also mentioned attacks against ex- — Felipe Pérez Roque, Cuba’s foreign minister, in a Sep. 23 interview foreign minister Jorge Castañeda and Cuba’s sud- in New York with Edith M. Lederer of the Associated Press. den deportation of businessman Carlos Ahumada as factors that led President Vicente Fox to expel “They can’t even make an issue out of George W. Bush keeping Cuban- the Cuban ambassador and sever bilateral ties. Americans from seeing their relatives in Cuba.” The Mexican government had initially said the Ralph Nader report could not be released for 12 years, but a — Presidential candidate , chiding the Democratic Party new committee formed to rule on such cases during a campaign appearance Sep. 28 at the University of Miami. decided it should be handed over to El Universal. 6 CubaNews ❖ October 2004 FOREIGN INVESTMENT Veteran Chilean leftist cashes in on his Cuban connection BY VITO ECHEVARRÍA CubaNews attempted to reach the elusive began a venture to raise geese for the pro- hoppers at Cuba’s dollar stores are like- Marambio and others at his Río Zaza’s office duction of paté. He also teamed up with ly to have come across a diverse line of in Havana, but their only listed phone number Chilean businessman Carlos Cardoen to set S orange, mango, apple and other fruit wasn’t operating, and no one responded to up a firm responsible for planting 12,000 juice under the brand name “Tropical Island.” our e-mails. hectares of citrus trees to produce fresh fruit That ubiquitous label — Cuba’s answer to It was no accident that Marambio built his and concentrated fruit juices, and started a Tropicana-brand Florida orange juice — conglomerate in Cuba. Marambio, who was a cinematography firm that involved the works is the creation of Alimentos Río Zaza, a of Colombian novelist Gabriel GarcÌa joint venture between the Cuban govern- Márquez. ING came along in the 1990s. ment and Chilean conglomerate ING Marambio has become a big enough player (International Network Group). in both Cuba and Chile to consider buying

Río Zaza also produces other food LARRY LUXNER part of the beleaguered Italian food giant items for the Cuban market, including Parmalat’s Chilean facilities. milk products, ketchup and tomato sauce In January 2004, he told the Santiago daily under the brand names La Niña, Mambo El Mercurio he was interested only in Parma- and Doña Tina. Most of these products lat’s Chilean factories, not its brands. are made in Cuba, though Río Zaza also “What we are looking for,” he said, “are in- buys raw materials and finished products stallations to produce raw materials, because from Chile, Brazil and Spain. in Cuba we have two plants that make over ING is owned by longtime Chilean left- 100 finished products and we want to have a ist Max Marambio. According to the complete [production] chain.” Santiago newspaper La Tercera, Río Zaza After careful consideration, however, alone projects 2004 sales of $50 million, Cuban girl enjoys Tropical orange juice in Old Havana. Marambio backed away from the Parmalat up from $30 million in 2003. deal. The following month, Jorge Echeverría, Besides the food business, Marambio is member of the Chilean leftist guerrilla group executive director of ING, told La Tercera that also a big player in Cuba’s tourism sector, MIR (Movimiento Izquierdista Revoluciona- with business having grown by 100% over the controlling the Havana-based travel agencies rio) and later became a bodyguard for Presi- past five years, ING will now focus its efforts Sol y Son and Cosmo Service. These compa- dent Salvador Allende, left for Cuba after on the Chilean real-estate market. Allende was deposed by Gen. Augusto Pino- nies, run as 50-50 joint ventures with the Cu- ANOTHER ENTREPRENEUR: ANGEL DOMPER ban government, operate in 28 countries and chet — as part of a wave of leftist Chileans bring an estimated 120,000 tourists to the who came to Cuba in the 1970s and 1980s. Max Marambio isn’t the only Chilean leftist island annually. Together, the two agencies In Cuba, Marambio became chummy with who came to Cuba to seek a fortune. are the 2nd-biggest companies of their kind in Fidel Castro and his inner circle, which at the Angel Domper, a leftist student leader in Cuba, outranked only by state-run Havanatur. time included Col. Tony de la Guardia, who Chile during the 1980s, was disenchanted by The agencies, run by Max’s brother Marcel was later tried and executed for corruption the new Chilean leadership, which allowed — along with Río Zaza and other ventures in charges as part of the 1989 “Ochoa case” that Pinochet to continue running Chile’s military both Cuba and Chile under the ING umbrella involved Gen. Arnaldo Ochoa Sánchez. Dur- even after its transition to democracy. — posted total revenues of $100 million, 80% ing the late 70s, Marambio ran the Cuban So in 1991, Domper, then 30, went to Cuba of which was generated in Cuba. ING cur- conglomerate Cimex. along with another Chilean friend, Alejandro rently has over 300 employees. In the early 80s, the Chilean entrepreneur Sule, son of the deceased leader of Chile's Partido Radical Social Demócrata. The two set up an import-export firm called Jamaica’s Grace Foods sells indirectly to Alimport Santa Ana S.A. in Havana’s Vedado district. that venture had among its partners Jørgen efore the United States loosened the In fact, Gregory Solomon, business man- Paulmann, owner of the Chilean supermarket trade embargo in 2000 to allow U.S. ager of Grace Kennedy & Co.’s export unit, chain Las Brisas, and brother of Horst Bfood companies to sell directly to Cuba claimed he had no idea his company’s prod- Paulmann, owner of Chile’s Jumbo and Easy on a cash-only basis, the island’s food pur- ucts were being sold in Cuban dollar stores. supermarket chains. chasing agency, Alimport, shopped the world “I am somewhat surprised that you have During his early years in Cuba, Domper over to stock the shelves of its hard-currency found Grace items in Cuba, as Grace Ken- also worked with Max Marambio and his firm stores to satisfy hungry foreigners and dol- nedy hasn’t shipped products to Cuba in over ING, an association which only lasted until lar-wielding Cubans. 10 years,” he told CubaNews. “We do find, 1995. Afterwards, Domper set up his own The result was an oddity of supermarket however, that in markets where we are not company which handles the distribution of items from unlikely places, like watery ket- officially represented, our products are intro- various imported goods in Cuba, ranging chup from Spain, second-rate Bavaria beer duced and sold in those markets. We found from wines to apparel. from Holland, canned Coca-Cola from Mexi- the same to be true in Haiti some years ago.” In late 2003, Domper told a Chilean maga- co and pretzels from Israel. Solomon told us that Grace Food products zine that he earns less than the typical One brand that continues to crop up in are currently sold in over 30 countries, in- Santiago executive: “I make a good living,” he Cuban grocery stores is Grace Foods from cluding the entire Caribbean and also the said. “I live well, but I only drive a Kia jeep, Kingston, Jamaica. U.S., Canada and Great Britain, which have and live in a small apartment that measures The red beans, Vienna sausages and bot- large Jamaican communities. He added that 96 square meters.” tled hot sauces sold by Grace Kennedy & Co. if the Cubans really want to buy directly from However, Domper’s claim to fame in Cuba Grace Kennedy in the future, he’d happy to is his ex-wife: Celia Guevara, the youngest Ltd. seem more at home in Jamaica, N.Y. — daughter of revered Argentine revolutionary home to thousands of Jamaican immigrants arrange a deal. Che Guevara. Their marriage lasted eight — than in nearby Havana. – VITO ECHEVARRÍA years and produced two daughters. October 2004 ❖ CubaNews 7

— FROM PAGE 1 cient of its kind on the island. Castro made his point clearly: the national Blackouts Cuba has a strict program of maintenance power grid — operating at only 50% capacity up to five hours a day, and no air-conditioning and repair of power plants. But schedules are — is in serious trouble, given that the chaos in government offices during peak hours of tight, and Guiteras could not finish its annual that erupted when only one of Cuba’s seven 11 a.m. to 1 p.m. and 7 p.m. to 11 p.m. except overhaul on time (it usually takes 20-30 days main facilities went offline. in facilities where A/C is absoutely critical. for general maintenance work and two one- The other six plants named by Juan Borrero, meanwhile, made it clear that the week intervals for minor repairs during the Manuel Presa, director of power generation at blackouts are being caused by operational dif- year). On May 5, the plant had to be shut Cuba’s Unión Electrica, are: Antonio Maceo ficulties and not sabotage or high oil prices. down when a rotor in one of its turbines mal- (formerly Rente) in Santiago de Cuba, built Yet the absence of Marcos Portal, Cuba’s functioned. Local engineers decided to send with Soviet technology, 450 MW; Lidio Ramón minister of basic industry, led some analysts believe he’s about to be removed from his post. Others think his absence may be an attempt at preserving his image, since Cuba’s

energy deficit is mainly due to the lack of LARRY LUXNER investment in new generating capacities. Cuba has an installed capacity of 3,200 megawatts, compared to just over 300 MW in 1959. During hours of maximum demand, the country now requires 1,500-2,000 MW, leav- ing a theoretical margin of over 1,000 MW to fill in the gaps. But that’s not the way it works in Cuba. Power plant technology has changed over the last decade in order to accommodate Cuba’s heavy domestic crude, whose high sulfur con- tent tends to erode pipelines and anything else made of metal. POWER PLANT BREAKDOWN TRIGGERS CRISIS Before the 1990s, Cuba produced half a mil- Highway billboard near Havana’s JoseMartí International Airport urges Cubans to conserve electricity. lion tons of crude oil. Now, with production exceeding 4 million tons of crude equivalent the rotor abroad for repair, but even after it Pérez in Felton, Holguín (two 250-MW units); (including natural gas), the island can cover was repaired, the Matanzas plant could not be 10 de Octubre in Nuevitas, Camagüey (Czech almost 90% of its energy requirements. connected back to the national power grid. technology, 425 MW); Habana Este in Santa There’s nothing in the numbers to raise That sparked the current crisis, forcing Cruz del Norte; Mariel, with four 100-MW concern about Cuba’s capacity to generate Cubans to return to programmed blackouts units and one 50-MW unit, for a total of 450 enough power. Yet that’s precisely what hap- like in 1993. It’s better, however, than losing MW, and Energas in Varadero, built in a ven- pened when the Antonio Guiteras thermo- power without previous warning, since at ture with Canada’s Sherritt International, with electric plant in Matanzas broke down, least it lets people organize their schedules. a capacity of 180 MW and very efficient be- depriving the island of 15% of its daily power Specialists believe that power plants utiliz- cause it also uses natural gas (see map below). needs. The facility, built with Japanese and ing domestic crude need double the mainte- In addition, the Cuban government signed Czech technology, has a design capacity of nance and repair periods than those which a deal with Sherritt in July to build a new fa- 330 MW, making it the biggest and most effi- consume conventional light crude. cility with 250 MW of installed capacity.

NATIONAL ELECTRIC SYSTEM 8 CubaNews ❖ October 2004 MACROECONOMICS All in all, 2004 shaping up to be a tough year for Cuba BY OUR HAVANA CORRESPONDENT encouragement. Tourist arrivals during the the driest of the last decade. And the rainy conomically speaking, the 21st century first eight months of 2004 are up 12% over the season, lasting from May to October, was one — at least so far — has not been very same period last year, with the total likely to of the poorest, and the worst for Holguín E kind to Cuba. hit a record 2.1 million this year. Nickel prices province since 1961. Hurricanes, low prices for its chief export were up, and domestic oil production went up. By the end of April, Cuba’s water reservoirs commodities, the deterioration of its trade On the other hand, sugar production was were the lowest in 10 years, holding only 1.5 terms and the tightening of U.S. restrictions still below 3.0 million tons — a dismal per- billion cubic meters of water. That’s equiva- against Cuba have all combined to paint a formance that didn’t even match the 3.7 mil- lent to 17.1% of Cuba’s total reservoir capacity rather gloomy picture. lion tons registered in 2002. of 8.7 billion cubic meters, according to the According to Hiram Marquetti of the Uni- And the measures adopted Jun. 30 by the National Institute of Water Resources. versity of Havana’s Center for Studies on the Cuba has a total of 224 big dams and 780 Cuban Economy, the combination of these smaller dams supplying water to agriculture elements has led to increasingly unstable eco- and the sugar industry. Annual per-capita con- nomic conditions, with average annual sumption is only 1,200 cubic meters, and this growth of only 1.7% from 2001 to 2003. That covers all uses: irrigation, industry, cattle-rais- compares with an average 3.7% GDP growth ing and human consumption. That ranks as rate since 1994. among the lowest in the world, on par with More importantly, gross domestic invest- Arab desert nations. ment has fallen sharply, from 16.2% of GDP in To improve the situation, Cuba is trying to 1997 to 10.8% in 2003. revamp its water supply network. In Havana The lower investment rate has slowed alone, about 2,000 miles of pipelines would modernization of the productive sector, while have to be rehabilitated, at a cost of $120 mil- reducing exports and jeopardizing efforts to lion. A comprehensive solution to Cuba’s increase Cuba’s hard-currency income. water problem would require an investment According to official projections, the econo- of $4 billion — though Cuba is spending only my will likely grow by around 2.6% in 2004 $8 million on that problem at present. (see chart at right), though most experts say RISING ENERGY PRICES ADD TO DIFFICULTIES GDP growth will probably be much less. With oil prices already topping $50 a barrel, ASIDE FROM TOURISM, NEWS IS GENERALLY BAD Cuba has poured enormous effort into the As foreign financial restrictions have inten- search for petroleum at home, while trying to sified, Cuba’s official economic policy has be- limit consumption among an already energy- come more austere and selective. The Castro starved population. regime has returned to the kind of centralized Bush administration not only slashed Cuban- Cuban oil consumption is around 7.0 mil- economic policy that prevailed before the American visitor arrivals by 25% but also lion tons per year. The island imports 53,000 beginning of the crisis, paralyzing most eco- sharply reduced remittances, on which barrels daily of Venezuelan crude oil and nomic reforms that had begun in the 1990s. Cuban families depend heavily. derivatives at preferential prices, accounting By the end of 2003, some negative tenden- Also hurting Cuba over the last four years for nearly half the oil consumed by Cuba. The cies had been reversed, though new prob- was severe weather — ranging from long other half comes from domestic production. lems appeared, adding to Cuba’s already diffi- periods of drought in the eastern provinces, Over the past 10 years, Cuba’s oil and gas cult financial situation. Among last year’s to the fierce hurricanes that lashed the island production has risen from under 20,000 bar- encouraging developments were a 10% rise in in 2001 and again this year. rels a day to some 75,000 barrels, enough to the number of tourists visiting the island, and Hurricane Michelle, which struck Cuba in meet 90% of the electric industry’s demands. an 18% jump in nickel and citrus exports. late 2001, and two more storms — Isidore and Yet because Cuban crude is high-density The year also saw higher dollar-store sales, Lili — which swept over the island in 2002, and laden with sulfur, it corrodes the machin- a drop in the trade imbalance and increased caused a combined $650 million in losses. On ery and forces power plants to close down for commerce with the United States (virtually all Aug. 13 of this year, Hurricane Charley ripped maintenance as frequently as three or four of it imports of U.S. food). through the provinces of La Habana and Pinar times a year, instead of just once or twice. On the other hand, 2003 also brought a rel- del Río, leaving damage worth $1.6 billion — Among measures adopted to face the ener- ative paralysis in the renegotiation of Cuba’s about the same as the total value of Cuba’s gy crisis, Cuba has resorted to agreements foreign debt, an increase in the retention of exports in 2003. with foreign investors. These have contribu- tangible Cuban assets by foreign creditors, ted significantly to higher oil production. the accumulation of payment arrears by HURRICANE DAMAGE STRAINS RESOURCES According to projections by the Ministry of Cuban companies, higher oil prices, a sub- The magnitude of losses due to weather Basic Industry, local oil production will reach stantial reduction in foreign investment, a fall greatly surpassed the budget allocated to 5.0 million tons this year, with gas production in sugar production, deterioration of relations such circumstances, forcing the Castro reg- likely to exceed 1.0 billion cubic meters. with the European Union, the impact of an ime to reassign resources already earmarked In 2003, domestic production covered 82% expensive euro on Cuban export competitive- for modernization and improvement of other of Cuba’s energy requirements for power gen- ness and the reduction of coverage margins economic sectors. eration, and all of the demand for the cement to support international credit. Charley’s negative effects came on top of and nickel industries. The news was so bad that Cuba’s Central the extended drought which, by the end of Advances made in the energy sector also Bank suspended publication of its Annual June, had already caused losses of $20 mil- contributed to the export of petroleum Economic Report, resulting in a lack of exact lion, mainly in the eastern provinces. byproducts. In 1990, exports of such products data on foreign debt performance. According to the Institute of Meteorology, netted $38 million, but with the cut in oil sup- So far this year, there is some reason for the 12-month period ending April 2004 was See Economy, page 9 October 2004 ❖ CubaNews 9 INTERNATIONAL RELATIONS New diplomatic thrust pays off, from Brasília to Beijing BY DOMINGO AMUCHASTEGUI significant, especially his assurance that being negotiated in friendly terms between ast month witnessed what could be char- “China has set an unswerving policy in con- the Mexican entity and Cuba’s Banco Central. acterized as a major Cuban diplomatic solidating ties with Cuba, and this policy will Just as important to Cuba’s re-acceptance L offensive dans tous les azimut. Major not alter regardless of changes in the interna- in the Western Hemisphere has been Brazil’s world powers such as China and Russia, along tional situation.” efforts at promoting some form of dialogue with Latin American nations like Argentina, Echoing such statements, China’s ambas- between Cuba and the Grupo de Río. Mean- Brazil, Mexico and Venezuela, were among sador in Havana, Li Lianfu, stated that “bilat- while, other developments in South America those targeted by the Castro regime. eral relations are at their best in history,” and have benefitted Cuba, among them the growth in trade with Argentina, and the an- Behind this flurry of activity is Fidel that trade has already passed the $400 million mark so far this year (see CubaNews, Septem- nouncement that President Nestor Kirchner Castro’s concern over the impact of tough will visit Cuba in early 2005. new restrictions imposed against Cuba by the ber 2004, page 7). That’s a contrast to the decline and conflicting negotiations concern- The imminent victory in Uruguay of the Bush administration, not to mention the dis- center-left Frente Amplio in this month’s elec- tinct possibility that Bush will win re-election. ing trade and payments of the early 1990s. Chinese backing of Cuba is seen as a coun- tions could also open the door to a resump- A high-level Politburo delegation sent to tion of diplomatic relations between Monte- Beijing met with Chinese President Hu Jintao terbalance to U.S. support of Taiwan; it’s also aimed at influencing other Caribbean islands video and Havana; the current president, while Russian Foreign Minister Sergei V. Jorge Batlle, broke off ties in April 2002. Lavrov was dispatched to Havana, seeking to as well as Central America, where Taiwan’s diplomatic influence is particularly strong. Finally, relations between Cuba and improve bilateral relations. Venezuela — following President Hugo Both Moscow and Beijing offered strong, Amid strong rumors of weapons deals be- tween Cuba and Ukraine as reported by Jane’s Chávez’s victory in the Aug. 15 referendum public reassurances in support of Cuba’s right on his presidency — seem to be warming up to self-determination, the struggle “against all Intelligence Digest, a Ukrainian delegation vis- ited Havana, acknowledging the growth in even more. Trade has now surpassed the $1 forms of terrorism” and their continued oppo- billion mark (most of it Cuban purchases of sition to the U.S. embargo — glossing over bilateral trade and signing a wide range of Venezuelan oil), and in September, 116 coop- Cuba’s massive debt to both countries. agreements in biotechnology, pharmaceuti- eration projects were signed in Havana. Many Cuba is said to owe more than $20 billion in cals, metallury and power generation. of these will be bartered; Venezuela will pro- Soviet-era debts to Moscow, while Cuba has MAKING UP WITH SPAIN AND MEXICO vide oil in exchange for various services. estimated the debt at closer to $11 billion. Cuba has already sent 15,000 doctors, edu- Relations have also suffered since Moscow’s Talks held by Cuba’s minister of foreign cators and other specialists to Venezuela. Last 2001 decision to close Lourdes, a key Russian affairs, Felipe Pérez Roque, during the UN month, Chávez proposed that he and Castro electronic listening post — a move that cost General Assembly in New York are already together help struggling Caribbean nations Cuba $200 million a year in rent, not to men- paving the way for normalization of relations like Grenada recover from recent hurricanes. tion the departure of 1,500 Russian engineers, with both Mexico and Spain. Cuba’s diplomatic offensive extends all the technicians and soldiers. Ministers from both nations stressed how way across the Pacific Ocean, where it recent- Lavrov described his meetings with Castro constructive those meetings were, reminding ly sent 11 doctors to the tiny island nation of and Vice President Carlos Lage as “very use- the Cubans they had strongly criticized the Nauru. The country’s health minister, Kieren ful and interesting” but offered no details. new U.S. restrictions during the recent EU- Keke, called the Cuban gesture “a major con- Hu’s statement in support of Cuba, mean- Latin America Summit in Guadalajara. In fact, tribution,” considering that Nauru had only while, was considered extremely positive and Cuba’s $483 million debt to Bancomext is now three doctors for its 11,000 people.

Economy — FROM PAGE 8 JAILED ACTIVIST ON HUNGER STRIKE TO PROTEST CONDITIONS plies from the former Soviet Union, this swaldo Payá, coordinator of the Chris- he was brutally beaten by seven State source of income disappeared. By 1996, how- tian Liberation Movement, issued the Security and prison officials, who forcefully ever, Cuba began exporting again thanks to following statement Sep. 26 on behalf of stripped his clothes from his body, leaving higher local crude production, reaching $50 O Luís Enrique Ferrer García, who is serving a him completely naked. million in 2000. This has led the government Today he reported to his wife that one of to include among its long-term plans the con- 28-year jail sentence for promoting the Varela Project in the province of Las Tunas: his guards forcefully strangled him by the struction of a new refinery. neck, mistreated him and gravely threatened Interestingly, back in 1990, crude oil im- Luís Enrique Ferrer García, the youngest him in his punishment cell. Prison officials ports represented 61.9% of energy supplies of the Prisoners of the Cuban Spring and the liked to lock him away with common and and only 39.1% of byproducts, while in 1994, one with the longest prison sentence, has very dangerous criminals and his protest the situation had reversed itself. Byproduct declared himself on a hunger strike. As was punished with confinement in this cage, imports that year comprised 77.2% of energy reported by Luis Enrique himself to his wife where he is now. supplies, while crude represented only 22.8%. Milka, the mother of his one and a half-year- Finally, his wife informed us that Luís The situation remained unchanged until 2000, old daughter, Marí Libertad, he will be on a Enrique reported today that what looked like when things returned to pre-1990 conditions. hunger strike “until the end.” the corpse of a prisoner who had hung him- Unfortunately, the prospects of Spanish He made this decision — despite our rec- self was taken outside, after having been vio- conglomerate Repsol-YPF finding commer- ommendations and those of his family not to lently beaten and humiliated by the prison cially viable oil deposits in the Gulf of Mexico do this — due to the cruel treatment and guards the day before. are still rather remote, and don’t offer a last- beatings he has received, which have forced We condemn this cruel and horrible treat- ing solution to Cuba’s energy crisis. him to take this drastic decision. ment in Cuban prisons and call for defending A jump in domestic oil production — no In August, Luís Enrique was moved to the the life of Luís Enrique Ferrer, who we will matter how heavy and sulfurous that oil may so-called Youth Prison of Santa Clara. There, not abandon under any circumstance. be — is the island’s only real hope for now. 10 CubaNews ❖ October 2004 INFRASTRUCTURE Cuba’s ports inadequate to handle growing cargo traffic BY OUR HAVANA CORRESPONDENT Facilities at the Port of Cienfuegos for the condition with no difficulties projected at cur- ubstantial investment is needed to export of sugar, citrus fruit and cement, and rent volumes. upgrade cranes and other equipment at the import of lumber and general cargo. The same is true of port facilities that han- S Cuba’s aging port facilities, and also to In spite of all this massive investment, by dle molasses (Nuevitas and Cienfuegos) and dredge the island’s harbors so that they can the late 1990s, Cuba’s port facilities still alcohol (Guayabal). Specialized facilities for accommodate larger vessels. lacked the ability to load and unload cargoes bulk cement exports at Mariel and Nuevitas In addition, Cuban officials concede they’ll in a timely manner. The government was los- seem to be in good shape as well. have to spend hundreds of millions of dollars ing millions of dollars a year due to inefficien- In Holguín province, the Port of Nicaro spe- to help clean up waterways and bays that cy at the docks, with ships not able to meet cializes in handling nickel exports, while Moa have become dangerously contaminated with contractual obligations to disembark cargoes has developed into a commercial port. toxic waste. on time. Handling of bulk cargo is far more limited. Before 1959, according to documents made Facilities weren’t repaired, and things like For example, the Turcios Lima and José Anto- nio Echeverría terminals are in bad condition, and suffer especially from deteriorating pneu- matic lift systems. The scales are out of serv- CUBA’S LEADING PORTS ice and electrical systems have decayed, among other problems. Facilities in Cienfue- gos, Antilla (Holguín province) and Santiago de Cuba are also said to be in poor condition. TOP PRIORITIES: MARIEL, SANTIAGO DE CUBA According to official sources, only 36% of Cuba’s port facilities can be considered in good condition, with most of the rest in fair or bad condition. Officials say 7% of Cuba’s port infrastructure is closed due to “maritime security problems.” However, that 7% should be taken with a grain of salt. Experts estimate the real per- centage is much higher due to difficulties with maintenance and repair schedules. In general, port capacity has dropped signifi- cantly. In 2002, Cuba’s ports handled only available to CubaNews, the island had 44 ports 42.2% of the traffic recorded in 1990, meaning and subports with very few facilities; the dredging and maintenance were regularly that recovery is still far off in the future. island rarely received ships weighing more neglected, leading to a crisis that substantial- Anaíza Rodríguez, director of Cuba’s than 6,000 tons. ly reduced cargo volumes. Investment Promotion Center, said that “on Development of the maritime industry and The government therefore decided to several occasions, we have met with repre- the economy in general led to gradual spe- redistribute port capacity. Storage areas were sentatives of the U.S. shipping industry. It is cialization of port areas. Huge amounts of offered as customs warehouses, while mer- obvious that Cuba needs to enhance its two money were spent to decentralize cargo oper- chandise on consignment was assigned to ports: Mariel and Santiago de Cuba.” ations that previously had been concentrated duty-free zones. Cuban officials signed con- While declining to name the officials or mainly in Havana. tracts with foreign investors and ratified col- entities involved, Rodríguez told CubaNews laboration accords with foreign countries. that Mariel — located 60 kms west of Havana MASSIVE INVESTMENT IN PORTS A Spanish firm won a contact to modernize — “should become the port with the greatest Havana’s container terminal, while another commercial activity on the island, because the Between 1960 and 1989, the Cuban govern- agreement signed last year — this one with ment poured around $1.2 billion into port Port of Havana is emphasizing tourist activi- Brazil — establishes a comprehensive pro- ties. The cruise terminal is there, so we want infrastructure. From 1975 to 1985, Cuba’s for- gram of dredging and technical assistance. eign trade jumped from $6 billion to $14 bil- to transfer all commercial activity to Mariel. lion, with cargo volumes increasing 10-fold SOME PORTS IN GOOD SHAPE, OTHERS NOT But this requires a lot of investment.” during that same period. Mariel would have to be dredged, she said, Cuba’s massive investment in port infra- At present, Cuba has 34 ports with 172 “because the current depth does not allow the structure resulted in the following: docks totalling 25,667 meters in length. entry of very large vessels.” Also, the port Eight totally mechanized sugar bulk Depths range from 3 to 17 meters, with half needs substantial investment in infrastructure export terminals, with a combined capacity of the docks in operation for 35 years or more. such as cranes and machinery. 5.5 million tons. The main ports are located in Havana, The same is true of Santiago de Cuba, locat- One container terminal capable of hand- Nuevitas, Cienfuegos and Santiago de Cuba. ed 800 kilometers east of Havana along ling up to 150,000 containers a year. In addition, the port at Matanzas can handle Cuba’s southern coast. Several terminals for the handling of bulk supertankers of up to 150,000 dwt; it’s linked “The idea is that both Mariel and Santiago cargo. by a 187-km pipeline to the oil refinery in de Cuba should be converted into transship- A fishing port with cold-storage facilities Cienfuegos, along Cuba’s south coast. ment ports handling cargo coming from and cranes. Specialized facilities and warehouses that Europe. Cuba has the best geographical loca- One naval repair shop capable of receiv- handle bulk sugar in Mariel, Cienfuegos, Palo tion in the Caribbean for this,” Rodríguez told ing in its dry dock vessels of up to 15,000 Alto, Carupano, Boquerón and Ceiba Hueca CubaNews, adding that “even if the U.S. does- tons. This project is now part of a joint ven- are in good shape. Those of Matanzas and n’t increase trade with us, this project has to ture with investors from Curaçao. Guayabal are limited, and are in fairly good take place independently.” October 2004 ❖ CubaNews 11 ACADEMIC AFFAIRS Ohio school establishes Center for Cuban Business Studies BY LARRY LUXNER munity, and providing advice and suggestions nent topics that have a high value for practical hio Northern University has estab- “upon request and in confidence” to govern- application; closely monitor developments in ment agencies and the private sector. lished a Center for Cuban Business Stu- Cuba that have potential commercial or eco- ONU’s College of Business Administration nomic implications for various sectors of the Odies “to serve the needs of businesses, is accredited by AACSB International (Associ- American business community; conduct government agencies, researchers, faculty, ation to Advance Collegiate Schools of Busi- Cuba-related briefings, workshops, and sym- students and others interested in the current ness) and offers majors in accounting, man- posia in order to raise awareness among busi- and future state of Cuban commercial affairs.” agement, marketing and international busi- ness and government leaders, and engage in Terry L. Maris, executive director of the ness and economics. commissioned studies at the request of par- Cuba Center and dean of ONU’s College of Running the Cuba Center is Maris, a for- ties interested in doing business with Cuba. Business Administration, said the university mer management consultant who has lec- The Cuba Center aims to produce a collec- has been granted a license by the U.S. Trea- tured and conducted research in more than tion of Cuban case studies to be used for edu- sury Department’s Office of Foreign Assets 60 countries. Under license from OFAC, cational and training purposes; it’ll also host Control (OFAC) to conduct credit study pro- Maris visits Havana frequently to meet with an annual business paper competition to fos- grams in Cuba for ONU students. He added local faculty, administrators, students, gov- ter awareness of the island’s trade potential. that ONU has also forged links with Cuban ernment officials and executives of state and The center is currently researching a num- university researchers. mixed enterprises. ber of issues including the following: telecom- “We are committed to preparing members munications needs and opportunities in a of both the U.S. and Cuban business commu- CUBA CENTER TO OFFER RESEARCH FOR HIRE post-transition Cuba; energy trade with the nities for a peaceful and successful transition The Cuba Center is housed at the universi- United States, and analysis of the projected to a Cuban free-market economy,” said Maris, tiy's James F. Dicke Hall. In addition to 200 impact of Cuba’s transition to a market econ- telling CubaNews the center “was created to network connections, the building offers 100% omy on Cuba’s energy sector. mobilize Cuban business and policy re- wireless coverage and is linked to the campus Advisory services to be offered by the search, and to conduct advisory projects.” fiberoptic backbone via gigabit Ethernet. Cuba Center include economic analysis, mar- Maris hopes an initial $2,500 grant from Classrooms are equipped with state-of-the- ket research, business environment analysis, Ohio State University and matching funds art instructional technology. Students also location analyis, business partner research, from ONU will be supplemented by funding have available a computer classroom, compu- social/demographic analysis, risk assess- from corporate and government sources. ter lab, computer workstations and kiosks, as ment, import/export, microenterprise devel- The center’s activities will focus on conduc- well as a range of support services like high- opment and workforce training. ting research into regional and international speed network laser printing, document scan- Details: Terry L. Maris, Executive Director, public policy questions linked to Cuba; com- ning, CD-ROM burning, desktop publishing, Center for Cuban Business Studies, Ohio municating the results of that research to the digital photography and videoconferencing. Northern University, 525 South Main Street, public, government agencies, legislative bod- Among other things, the Cuba Center will Ada, OH 45810. Tel: (419) 772-2070. Fax: ies, business, industry and the academic com- conduct original research on timely and perti- (419) 772-1498. E-mail: [email protected]. ASCE seeks scholarly papers for privatization competition he Association for the Study of the Cu- holders in the privatization program. session of the Allied Social Science Associa- ban Economy is soliciting original, pre- Participation in the Privatization Competi- tion’s annual meeting in Chicago in 2007. T viously unpublished scholarly papers tion is open to anyone wishing to submit a ASCE has appointed a panel of five special- on the topic of “Privatization of State-Owned paper. Membership in ASCE isn’t required, ists to judge the submittals. The decision of Enterprises in Cuba.” and multiple authorship of papers is allowed. the judges on the winner of the Privatization The best papers will be judged in ASCE’s All papers must be written in English, in 12- Competition will be final. The judges may also Padial-Ramírez Corria Privatization Prize point type, and must be no more than 50 dou- decide that no award should be made. Competition to be conducted between now ble-spaced pages in length. The papers must Papers are expected to outline a recom- and Feb. 28, 2006. follow one of the standard writing style mended privatization program for Cuban Terms of reference for this privatization guides, and must include a full bibliography. state-owned enterprises, support it by persua- competition are as follows: Footnotes should take the form of endnotes sive analysis, historical precedents and other The scope of the competition is limited to and are included in the page limit. The bibli- relevant evidence and data. Papers will be papers that propose and describe the process ography is not included in the page limit. graded on the basis of relevance, originality, and principles that should be utilized by the All entries must be accompanied by a cover quality, importance of the contribution, and Cuban government to privatize the country’s letter stating the name, mailing address, clarity of exposition. state-owned enterprises. phone number, and e-mail address of the The winning paper, and — at ASCE’s sole In addition to presenting proposed privati- author, and must include an abstract of no discretion — the entirety or abstracts of one zation methods, the papers should illustrate more than 800 words summarizing the paper. or more of the other submitted papers, will be the recommended approach with a detailed In addition, all submitted papers and published in “Cuba in Transition Vol. 16,” and discussion of how it would apply to enterpris- accompanying abstracts become the property posted electronically on ASCE's web page. es in a key sector of the Cuban economy. of ASCE and may be published, at the sole A hard copy of the manuscript must be sub- The issues raised by the joint ventures that discretion of ASCE, in its written and elec- mitted, along with an electronic version in MS have been established by Cuban state-owned tronic publications. Word. Entries must be postmarked by Feb. entities and foreign investors — including One single cash prize of $10,000 will be 28, 2006. The winner will be announced in those protected by bilateral investment awarded, along with an invitation to present May 2006. treaties — should be addressed. the paper at the ASCE's annual meeting in Details: Matias Travieso-Díaz, Committee Papers should also address the participa- Miami, in summer 2006. The winning paper Chair, ASCE, PO Box 0567, McLean, VA tion of enterprise workers and other equity may also be presented at an ASCE-sponsored 22101-0567. URL: www.ascecuba.org. 12 CubaNews ❖ October 2004 Cuban dissidents to its annual national day who has been dogged by allegations of favor- BUSINESS BRIEFS reception in Havana on Oct. 2. ing Bacardi. Last June, outgoing Texas law- But he said Cuba understood what the con- maker Chris Bell filed an ethics complaint in CUBA SAYS EMBARGO HAS COST $79.3 BILLION ditions were for improved ties with Madrid, the House, accusing DeLay of trading finance The U.S. embargo against Cuba has caused and that Spain would abide by EU policy, for favors. The House ethics committee has $79.3 billion in damage, according to Cuba’s which calls for a dialogue with democratic yet to decide whether to investigate Bell’s foreign minister, Felipe Pérez Roque. That’s forces in the former Spanish colony. complaint. up from $72 billion when the diplomat made a DeLay told reporters he’s not been indicted, similar speech last year. COURT INDICTS BACARDI FOR ILLEGAL PAYMENT dismissing the charges as electioneering. Pérez Roque made his charges Sep. 30 dur- The Bacardi rum empire has been indicted The charge against Bacardi is the latest ing the UN General Assembly in New York, by a Texas grand jury on charges of making twist in the decade-long “rum war” between where he presented a document entitled “The an illegal $20,000 payment to a Republican the exiled anti-Castro rum dynasty and the Necessity of Ending the U.S. Economic, Com- political group whose founder lobbied against Cuban government, which produces Havana mercial and Financial Blockade on Cuba.” rival Cuban rum brand Havana Club. Club in a 50-50 joint venture with French The document noted that 69% of all Cubans On Sep. 21, Miami-based Bacardi USA was drinks giant Pernod Ricard. were born after 1959; therefore, “seven of 10 accused by a grand jury in Austin, Tex., of Cubans have faced the U.S. blockade’s unilat- making an “unlawful political contribution” to CHE GUEVARA’S IMAGE RAKES IN MILLIONS eral sanctions.” Texans for a Republican Majority. The political This fall season, iconic revolutionary Pérez Roque said that technological restric- action committee was founded by — and is Ernesto “Che” Guevara is conquering the bas- tions by the United States have cost Cuba $8.6 closely linked to — GOP House Majority tion of capitalism: the mall. billion, while the “incitement to immigration” Leader Tom DeLay, one of Bacardi’s Thirty-seven years after his death in the jun- has cost the island another $4.4 billion. staunchest supporters in Washington. gles of Bolivia, reports the Washington Times, A government press release said Cuba’s The charge is one of 32 indictments against it’s hard to miss the classic image of a beret- National Economic Research Institute, backed a dozen companies and individuals, and is part clad and bearded Che on T-shirts, posters, by experts from various ministries, firms and of a sweeping investigation into whether cor- books, beanie hats and even kiddie clothing. bodies, provided the data for the document. porate cash was illegally used to help Opening amid this heightened interest in DROUGHT CAUSES HUGE LOSSES IN HOLGUÍN Republicans win the 2002 Texas state elec- Guevara is the movie “Motorcycle Diaries,” tions. DeLay has not been charged himself, distributed in the U.S. by a unit of NBC’s The harsh drought in eastern Cuba has but some of his aides have. Universal Pictures. Another film directed by translated into the loss of over 30,000 tons of Check #00189933 — issued Jul. 3, 2002, and Steve Soderbergh and starring Benicio del food worth $30 million in the eastern province bearing the world-famous Bacardi bat logo — Toro that will touch on Guevara’s days as a of Holguín. has become a thorn in the side for DeLay, revolutionary is scheduled to open in 2005. Rafael Vivar, a local official of the Ministry of Agriculture, told Prensa Latina that dairy production decreased by 18 million liters in the last 19 months, and that 15,176 cattle ISRAELI-RUN CITRUS OPERATION EXPECTS BUMPER CROP heads have been lost. uba’s largest citrus processing plant Drought made impossible to sow 183,300 expects a banner year despite the two hectares of pasture during the same period, Churricanes that ravaged the island in he said, explaining that the drought has August and September. depleted the underground water reserves, “The Victoria de Girón citrus plant began prompting the government to adopt measures production for export, with the facility due to alleviate the situation and fend off a food to process more than 70% of 500,000 tons of emergency. fruit at the Jagüey Grande orchard,” report- According to Vivar, the lack of rain over the ed Caribbean Update, quoting a state radio last seven years, has caused a severe drop in broadcast. Output at Cuba’s largest citrus production of roots, vegetables and grains. So far this year, he said, Holguín province has orchard in western Matanzas province was had 36 forest fires, causing a further loss of 434,800 tons of grapefruit and oranges dur- ing the previous harvest. 713 hectares of farmland. division of the Ministry of Agriculture. The government said higher production Grupo BM has never spoken to the media RELATIONS WITH SPAIN FINALLY IMPROVING at Jagüey Grande would compensate for los- and declined to give any statistics during a ses caused in August by Hurricane Charley Spain says its relations with Cuba are on the recent visit by CubaNews to its offices in at the Ceiba orchard in La Habana province, way to normalization, following a long period Havana’s Miramar Trade Center, which was where 65,000 tons of fruit were lost. of estrangement under Spain’s former conser- also built by Israeli investors. vative prime minister, José María Aznar. The picking season runs from late August According to official sources, Some 60% of The new foreign minister, Angel Moratinos, through June, with grapefruit harvested into Cuba’s orchards are dedicated to oranges, told a press conference after meeting Cuban December and oranges after that. Jagüey 30% to grapefruit and 10% to limes, of which Foreign Minister Felipe Pérez Roque that “it Grande reported exporting 19,500 tons of 80% is processed into juice, 5% exported was a very constructive atmosphere by my fresh fruit in 2003-04, with the remainder fresh and sold to the tourism industry, and Cuban counterpart and another step toward processed into 39,000 tons of concentrate the rest used for domestic consumption. the prospects of normalization between Cuba and 600 tons of extract. Citrus products are Cuba’s second-largest and Spain. The orchard accounts for around 50% of agricultural export after tobacco, earning This was the second meeting between the Cuba’s citrus crop, 40% of fresh fruit exports close to $100 million a year. Fresh fruit and ministers since a socialist government took and nearly 80% of all citrus-related exports. concentrate go mainly to Europe. office in Spain. The first was on the sidelines Israeli investors, operating through the Details: Percy Ruíz, President, Grupo of an EU-Latin America summit in the Mexi- Panama-based Grupo BM, have a 50% stake Empresarial Fruticola, Avenida Independen- can city of Guadalajara in May. in Victoria de Girón and provide financing cia 11111, Altahabana. Tel: +53 7 649-8850. Moratinos refused to say whether Cuba had for the crop. The other 50% is owned by Fax: +53 7 649-5217. E-mail: [email protected]. given any commitment to release political state-run Grupo Empresarial Fruticola, a – LARRY LUXNER prisoners, and whether Spain would invite October 2004 ❖ CubaNews 13 Major film releases often spawn a number United States remains possible in the event school students to educational centers in the of tie-in promotional and retail deals and John Kerry wins the Nov. 2 election. But cities of San Antonio de los Baños, Güira de Guevara is no exception despite the fiery anti- many, including “some pretty powerful Melena, Güines and Batabanó, all in La Ha- capitalist views he espoused. names,” according to Henry Avis-Vieira of bana province. The Provincial School Trans- “The movies are making middle America WesBruin Capital, are simply betting on the port Co. has already received 36 of the buses. more aware of Che,” said David McWilliams, inevitable: mortality. In addition, the Transbus Industria S.A. as- president and founder of Fashion Victim, an One specialist asset manager told the FT: “If sembly plant signed a letter of intent with Co- apparel and accessory company based in Castro died, I would have several hundred mercial MCV (representing Mercedes-Benz) Atlanta that makes a “substantial portion” of million dollars” in client fund inflows. and Busscar Omnibus S.A. together with the its $4-5 million in yearly sales on dozens of Havana Bus Co. to assemble 255 buses at a items emblazoned with the most recognizable INDIA, CUBA SIGN RENEWABLE ENERGY ACCORD rate of 24 per month beginning next year. image of Che. India and Cuba have agreed to cooperate in The buses, to be built at a plant in the muni- McWilliams, who wore Che T-shirts and the field of renewable energy, following the cipality of Guanajay, will be used for urban worked at a store that sold them in the late signing of a protocol by America Santos, transportation. 1960s and early 1970s as a student at Ohio Cuba’s vice-minister for science, technology Over the last five years, this Brazilian-Cuban State University, told the Washington Times and environment, and by B. Balakrishnan, joint venture has produced over 600 Busscar his company acquired exclusive licensing India’s ambassador in Havana. brand buses, using Mercedes-Benz frames rights in North America for the Alberto Korda The protocol, based on an earlier 1978 bilat- and engines. image from French legal firm Legend LLC, eral agreement, envisages exchange of scien- The Cuban company Metrobus purchased which represents Korda’s daughter. tists, joint research and workshops on a vari- seven buses which will soon be serving the Korda, whose real name was Alberto Diaz ety of areas. M-5 line, covering a route from San Agustín in Gutiérrez, died in 2001. The year before he The Indian side offered its expertise in the La Lisa municipality to Vedado. successfully fought an attempt by Smirnoff fields of biomass energy generation, co-gener- Carlos Manuel Pazo Torrado, Cuba’s minis- vodka to use the image on an advertising ation from bagasse, small hydropower genera- ter of transport, said more than 70% of the campaign in London’s High Court. tion and solar energy, and offered the possibil- trade agreements signed during ITF 2003 After the ruling that granted him copyright ity of financing specific activities. have already been put in place. He highlight- protection of the photograph, Korda said he Cuba is undertaking a Global Environmen- ed the construction of two catamaran-type sea was against the exploitation of the image for tal Facility-supported project on the Isle of vessels in Santiago de Cuba, using cutting- the promotion of alcohol, “or any other pur- Youth involving biomass and wind energy edge technology. pose that denigrates the reputation of Che.” generation, and is also developing bagasse- based cogeneration from its sugar industry. CUBA NAMES ENVOYS TO EGYPT, NORTH KOREA GLOBAL ALZHEIMER’S STUDY INCLUDES CUBA The Castro government has appointed Cuba is being included in a project spon- STATE: U.S. ISSUED 23,075 VISAS IN FY 2004 Angel Dalmau Fernández as ambassador to sored by the World Alzheimer’s Association The United States issued 23,075 immigrant Egypt, and Rubén Pérez Valdés as ambassa- aimed at researching on the risks that may visas to Cuban nationals in the fiscal year end- dor to North Korea. cause the disease. ing Sep. 30, an increase of around 2,000 com- Dalmau was previously deputy minister at Some 1,000 people over 65 years of age in pared to the previous 12-month period. the Foreign Affairs Ministry. Cuba and Egypt western Matanzas province will participate in Under the Migration Accords with Cuba, established diplomatic relations in 1949, the study to determine the factors that lead to the State Department is obligated to ensure which were raised to embassy level a decade the development of Alzheimer’s. The project, that a minimum of 20,000 Cubans are docu- after Che Guevara visited Cairo. which covers 36 countries, will also include mented for travel to the United States for per- The two countries collaborate in agriculture, people from several Havana suburbs. manent residence each year. health and education. Around 100,000 Cubans suffer from A statement issued Oct. 1 by the State Before his appointment, Peréz Valdés was Alzheimer’s, which causes gradual and irre- Department, “the burden is now clearly on assistant director of the Foreign Affairs versible deterioration of mental functions the Cuban government to grant exit permits Ministry’s Asia and Pacific Office. linked to the cerebral cortex. to the more than 1,600 Cubans who have Pyongyang and Havana, which established received U.S. travel documents but have not diplomatic relations in August 1960, maintain EXOTIC DEBT TRADERS WAIT FOR FIDEL TO DIE received permission from the Cuban govern- friendship and collaboration links in several Cuban sovereign paper is known as “hyper ment to depart Cuba. social-economic sectors. Fidel Castro visited exotic” in default, and owed by a country with “In particular, we call on the Cuban govern- North Korea in 1986. a politically isolated regime. ment to cease its discriminatory practices of The Financial Times reports that, like dis- denying exits permits to doctors, information ANGLO-CARIBBEAN GETS NEW DIRECTOR tressed corporate debt, such hyper-exotics technology professionals and family members Daniel Hung has been appointed director of can offer spectacular returns, with Vietnam of Cubans who have sought freedom in the Anglo-Caribbean Insurance Agents Ltd. in being the “textbook example.” From 1990 to United States,” said the statement. “We also London. As such, he will be the point of con- 1996, said the FT, a 4¢ initial investment rose call on the Cuban government to remove all tact for Esicuba, following that company’s to more than 100¢. Serbia and Iraq have also impediments it has placed to full implementa- merger with Reaseguradora de la Habana S.A. seen huge jumps in their debt’s market value. tion of the Accords.” “In accordance with a strategic plan, we This tiny sector of the international bond have decided to strengthen our involvement market is highly illiquid, with under $1 billion TRANSPORT FAIR NETS $100 MILLION IN DEALS in the placement of Cuban reinsurance portfo- of turnover in the first quarter, less than 0.1% Cuba’s 7th International Transport Fair lios, ensuring a continued quality perform- of emerging-market debt activity. (ITF 2004) generated 200 business transac- ance of the company and its excellent relation- The search for the next Vietnam is focused tions worth a combined $100 million, reports ship with the reinsurance community,” said a on Cuba and North Korea, says the FT. the daily Communist newspaper Granma. corporate press release. Cuba’s debt turned over $256 million in the Viewed as the most important industry Gustavo George, whom Hung replaced, has first quarter. Currently priced at up to 12.5¢, event of its kind in Cuba, ITF 2004 attracted returned to his duties as managing director of its sensitivity to U.S. relations is high. In the 73 exhibitors from 19 countries, as well as 58 Heath Lambert de Cuba S.A. in Havana. year preceding February 1994, prices tripled Cuban state firms. Details: Daniel Hung, Anglo-Caribbean Insu- to 33¢ on hopes that President Clinton would Among the deals was Cuba’s purchase of 50 rance, 201-203 City Rd., 3rd Fl., London EC1V promote a Vietnam-style reconciliation. new buses from Russia for $1 million. These 1QH. Tel: +44 207 490-5586. Fax: +44 207 The FT says a diplomatic thaw with the vehicles will be used to transport boarding- 490-5065. E-mail: [email protected]. 14 CubaNews ❖ October 2004 ECONOMICS Cubans ‘resolve’ to make ends meet by cheating the state BY TRACEY EATON of doing business with Colombia’s Medellín auditors and finance officials, also recruit iding rocks in frozen chickens may drug cartel. thousands of university students, professors seem like a silly pastime. But for some In July, Raúl Castro reminded Communist and other professionals for a flurry of inspec- Hfolks, it’s serious business — a way to Party members that corruption would not be tions nationwide every November. tip government weight scales and purloin poul- tolerated. When irregularities are found, all the try for dinner. “Corruption will always be with us, but we employees on duty when something is stolen Welcome to Cuba, where ripping off the must keep it at our ankles and never allow it — and not just the offender — face possible socialist regime is a gentle, sophisticated art. to rise above our necks,” Castro, the armed dismissal. It’s risky, too. Those who steal can lose their forces chief and second-in-command to his “That’s because the inspectors assume that jobs or go to jail. Despite that, employee theft brother, Fidel, told party militants in a May the other employees had to have seen some- is widespread, anecdotal evidence suggests. address, Reuters news service reported. thing,” explained Sylvia, a gift-shop manager who asked that her last name not be used. A hypothetical: If 470,000 people — 10% of THEFT, CORRUPTION GETTING WORSE the Cuban labor force — stole $1 in merchan- Retail losses are also a problem in the dise from the government every week, that But employee theft has proved especially United States. In 2002, workers stole an esti- would amount to $24.4 million per year difficult to combat, according to a July report mated $15.7 billion in merchandise, or 1.65% “Almost everyone steals something, any- by the University of Miami’s Institute for Cu- of total annual sales, a University of Florida thing, to survive,” said a former cafeteria ban and Cuban-American Studies (ICCAS). survey showed last year. Shoplifters weren’t worker. “But we don’t call it stealing or rob- “Corruption, cheating and pretending” are far behind, making off with more than $10.7 bing. Those words are too strong.” part of daily life in Cuba, according to the billion in goods. Cubans use a kinder term, resolver, meaning ICCAS report, which is based on the views of What makes Cuba different, experts say, is to resolve. So if a man makes off with a chick- recent Cuban arrivals who took part in a that the vast majority of culprits are govern- en, he can proudly tell his wife, “I resolved a series of focus groups. ment employees, not shoplifters. chicken.” Or, “This chicken stuck to me as I “Theft of food and merchandise from state The most successful thieves usually follow was leaving work.” enterprises is seen as normal and necessary a few rules: They don’t get too greedy, they Unconvinced, state inspectors fan out to make ends meet,” notes the report, which cover their tracks, they change jobs frequent- across Cuba every day trying to catch thieves. quotes one participant as saying, “No one ly, and they share their loot with willing The socialist government, many experts asks where you work, but where you rob.” inspectors, bosses, co-workers and friends. say, is not corrupt, as President Bush alleged The recent arrivals also reported a sharp Some restaurant heists are elaborate, in a Jul. 16 campaign speech. In fact, Trans- rise in materialism, though it wasn’t always involving precise measurements of things parency International ranks it as the 5th most that way. like animal fat, number of servings and honest government in the Americas, behind During the early years of the revolution, excess bones. Canada, the United States, Chile and Uruguay. materialism largely disappeared along with Other thefts — including the frozen chick- But employee theft in Cuba is rampant, say “traditional forms of corruption,” according en caper — are quite simple, a former restau- many workers, whose average monthly wage to a 1999 study by Beatriz Casals and Sergio rant worker said. is $12. Díaz-Briquets of the Virginia-based Associa- Say you receive a 40-pound shipment of tion for the Study of the Cuban Economy. chicken. An inspector could arrive at any RIPPING OFF THE STATE: LET ME COUNT THE WAYS “Puritanical revolutionary fervor” reigned, moment, so you act fast. You take three or Among the most common ways to steal: they said. “Money was no longer the path to four pounds of poultry from the box and add Falsely claiming a product is damaged, power,” and an absolute commitment to exactly the same weight in rocks, stuffing then taking it home instead of throwing it socialism was the key. That ensured success them inside the remaining birds. away. and allowed at least some access to such You’ve suddenly got enough for dinner — Overcharging, a practice known as “fin- perks as travel, cars, imported electronics, and it didn’t cost a cent. beach vacations and choice housing. ing” the customer. Tracey Eaton is the Havana correspondent for Diluting drinks with water or cheap liquor. WATCH OUT, INSPECTORS ARE EVERYWHERE the Dallas Morning News. Reducing the size of customers’ meals. Buying goods at cut rates on the black Cuban officials deny giving anyone prefer- market and selling them at higher government ential treatment. But outside experts ques- BUSINESS GUIDE TO CUBA prices. tion that, and say some party loyalists enjoy Underreporting sales, then cooking the more perks than the rest. The Business Guide to Cuba is the most books. If someone falls from grace, however, the comprehensive research report on Cuban Pilfering is especially common at cafeterias, same perks are sometimes used to label the business and politics available today. refreshment stands and other spots selling person as corrupt. With more than 300 pages of exclusive basic necessities, workers say. So the govern- No matter, many ordinary Cubans want a information, data, charts and maps on all ment requires employees to inventory those piece of the action. The problem is, there productive sectors of the economy — as products twice a day. aren’t enough perks to go around these days. well as a list of official contacts, business “It’s a lot of work,” said Pavel Bermúdez, So they “resolve” whatever they can when practices and even Cuban street slang — who was busy counting 5- and 10-cent candies inspectors aren’t looking. the Business Guide to Cuba is your No. 1 at the thatched-roof stand where he works east It’s no easy task because the government’s resource on potential investment opportu- nities and pitfalls in this emerging market. of Havana. “But we have no choice.” eyes seem to be everywhere. Over the past Copies of the guide are available for only Government officials declined to comment. five years, inspectors have conducted 76,440 $99 each, shipping and handling included. They have said employee theft is an isolated, surprise audits and 53,300 price inspections To order your copy, call us toll-free today yet growing problem. And they have severely at state-run businesses, official Cuban media at (800) 365-1997, fax us at (301) 365-1829 punished officials caught enriching them- reported in June. or send an e-mail to [email protected]. selves. In 1989, for instance, authorities exe- Cuba’s National Association of Economists Visa, MasterCard and Amex accepted. cuted a Cuban general and two others accused and Accountants, along with government October 2004 ❖ CubaNews 15 MEDIA TOURISM BRIEFS MELIÁ TO INVEST $12 MILLION IN CUBAN HOTELS Havana lifestyle magazine debuts Dec. 8 Spain’s Grupo Sol Meliá will invest $12 mil- lion to renovate and enlarge its hotels The H definitive fter more than a year of planning, throughout the island, according to Gabriel — a glossy bilingual English-language guide to Hav- García, director of sales and marketing for magazine printed in Spain — will finally ana’s “in” pla- A Meliá’s Cuba division. make its debut on Dec. 8 at an inaugural party ces for eat- “This will permit us to maintain in top condi- in the Cuban capital. ing, dancing tion the 21 hotels and resorts we currently Billing itself as “Havana’s essential lifestyle and drinking. magazine,” The H will be on newsstands by De- And for operate in Cuba,” said García, noting that cember, just in time for major cultural events extremist ex- Meliá now has 8,479 rooms containing 16,878 such as the 26th Latin American Film Festival perience beds under its management. and the Havana Jazz Festival. freaks who García made his announcement during a “Bravely going where no magazine in Hav- want to taste, presentation to a network of travel agencies ana has gone before, The H gives voice to the wear, breathe that work with Mexico’s Taíno Tours, which sights, sounds and styles that so many visitors and dream has generated over $1.7 million in revenues overlook,” editor-in-chief Rómulo B. Sans told Havana, The for Meliá’s Cuban operations during the first CubaNews. “Havana is so much more than long H is support- eight months of 2004. cigars and short rum.” ed by a grow- “Together with this magnificent partner, our The first 25,000 commercial copies of The H ing family of Actress Juliet Cruz on H’s cover. goal is to reinforce our promotional efforts in are being made available by Ceiba Publications, websites — the market, so that for Mexicans who travel to www.thehmagazine.com a division of Ceiba Finance Ltd., a British (video and music Havana, the Meliá chain will become, neces- downloads), thehonline.com (weekly Havana investment fund based in the Channel Islands sarily, their home away from home,” he said. listings), thehmusic.com (MP3 Havana) and a In Havana, Meliá runs three hotels with a that has invested $500,000 in the project. host of related products including The H wear, The 164-page magazine, published in an combined 1,400 rooms: the Meliá Cohiba, the models, services, events, awards and film. Meliá Habana and the Tryp Habana Libre. unusual square format, boasts outstanding dig- Says Sans: “Havana is the human zoo that ital photography and paper quality of a type everyone’s talking about, but it takes a maga- CUBANACÁN, GRAN CARIBE MAKE TOP 100 INDEX almost never seen in Cuba. zine like The H to track down and capture the Cuba’s state-owned Grupo Cubanacán S.A. Sans said the magazine will be distributed wildest urban living in the world.” throughout the U.S. and Cuba for $9.95 per ranks 65th in this year’s survery of the The H is being printed by Comgraphic S.A. world’s top 100 hotel chains by Hotels maga- copy, and in Europe for 10 euros. Subscriptions of Barcelona, which Sans considers one of the zine — moving up from 69th place in 2002. will cost 25% off the cover price for four issues best printers in Spain. Since it is not coming including postage, though these are only esti- from Cuba, the magazine isn’t subject to Another Cuban government entity, Gran mates since all prices are still being finalized. restrictions under the U.S. embargo. Caribe S.A., moved up one notch, from 83rd to The premier issue of The H contains every- Details: Romulo Sans, Editor-in-Chief, The 82nd place. Both companies are among the thing from profiles of six of Havana’s brightest H, Calle Manuel Moreno 116, Vilassar de Dalt, largest hotel chains in Latin America, out- young acting stars, to exclusive fashion shoot- 08339 Barcelona, Spain. Tel: +53 7 264-8181. ranked only by Mexico’s Grupo Posadas. ing by Johann Sahuti of Hugo Boss, to the E-mail: [email protected]. In addition, Gaviota S.A. — which is run by Cuba’s armed forces — ranked 115th among the top 300 hotel groups in number of rooms; HISTORICAL IMAGES OF CUBA NOW AVAILABLE ON CD-ROM Gaviota didn’t make the 2002 list. Among foreign hotel chains with properties in Cuba are France’s Accor (4th place), fol- lowed by Spanish conglomerates Sol Meliá (12th place) and NH Hotels (24th place). Details: Hotels Magazine, 2000 Clearwater Drive, Oak Brook, IL 60544-8809. Tel: (630) 288-8260. URL: www.hotelsmag.com. WRI: MOST CARIBBEAN CORAL REEFS IN DANGER About two-thirds of coral reefs in the Carib- bean “are directly threatened by human activi- ties,” says a new report issued by the Washington-based World Resources Institute. The WRI — saying the reefs need urgent protection — based its $500,000 study on in- formation from scientists, park managers and officials, mapping out perceived threats to reefs in places from Puerto Rico to Panama. The study concluded reefs face multiple ob- stacles to survival, including coastal develop- Beaufort Publishing Group has released a CD-ROM archive containing over 500 images of Cuba. ment, sediment-laden runoff and overfishing. The archive contains many historically important photos of key figures from the Cuban revolution, Cuba, on the other hand, has some of the as well as countless images of ordinary Cubans in the early 1960s. Pricing information for the healthiest coral reefs, along with Belize, Col- CD-ROM isn’t yet available. The archive was gathered by Deena Stryker in the process of writing ombia, Nicaragua, Mexico and the Bahamas. a book about Fidel Castro, “When the Revolution Was Young,” which is also available from Beau- Details: WRI, 10 G Street, NE, Suite #800, Details: Craig Johnson, Beaufort Publishing Group, 3026 Churchill Rd., Raleigh, NC 27607. fort. Washington, DC 20002. Tel: (202) 729-7600. Tel: (919) 420-0322. E-mail: [email protected]. URL: www.beaufortpublishing.com. Fax: (202) 729-7610. URL: www.wri.org. 16 CubaNews ❖ October 2004 CALENDAR OF EVENTS CARIBBEAN UPDATE If your organization is sponsoring an upcoming event, please let our readers know! You already know what’s going in Cuba, Fax details to CubaNews at (301) 365-1829 or send an e-mail to [email protected]. thanks to CubaNews. Now find out what’s happening in the rest of this diverse and Oct. 5: Evening sail aboard World Yacht’s “Princess,” Pier 41, New York. Event to bene- fast-growing region. fit the Center for Cuban Studies features singer Harry Belafonte, academic Saul Landau, Subscribe to Caribbean UPDATE, a monthly newsletter founded in 1985. Cor- mojitos, dinner and live Cuban salsa music. Cost: $150 and up. Details: CCS, 124 West porate and government executives, as well 23rd Street, New York, NY 10011. Tel: (212) 242-0559. URL: www.cubanartspace.net. as scholars and journalists, depend on this publication for its insightful, timely cover- Oct. 8: 3rd Annual National Summit on Cuba, University of Tampa. Politicians, execu- age of the 30-plus nations and territories of tives and lobbyists to present views on US-Cuba policy and assess impact of 2000 Trade the Caribbean and Central America. When you receive your first issue, you Sanctions Reform Act. Sponsored by World Policy Institute, Alliance for Responsible have two options: (a) pay the accompany- Cuba Policy and other groups. Cost: $150. Details: Lissa Weinmann, WPI, New York. Tel: ing invoice and your subscription will be (212) 229-5953. E-mail: [email protected]. URL: www.nationalsummitoncuba.org. processed; (b) if you’re not satisfied, just write “cancel” on the invoice and return it. Oct. 9: “Cuban History in One Lesson,” Casa Bacardi, Miami. Noted columnist and There is no further obligation on your part. author Carlos Alberto Montaner covers the essentials of Cuban history in six hours. The cost of a subscription to Caribbean UPDATE is $267 per year. A special rate of Cost: $95 including lunch. Details: Institute of Cuban and Cuban-American Studies, 1531 $134 is available to academics, non-profit Brescia Ave., Coral Gables, FL 33124. Tel: (305) 284-2822. URL: www.miami.edu/iccas/. organizations and additional subscriptions mailed to the same address. Oct. 13-15: 5th International Wine Fest, Hotel Nacional, Havana. Wines from 15 coun- To order, contact Caribbean UPDATE at tries to be represented. Details: Damian Fuentefria, Hotel Nacional, Calle O y 21, Vedado, 116 Myrtle Ave., Millburn, NJ 07041, call us at (973) 376-2314, visit our new website at La Habana. Tel: +53 7 873-3896. Fax: +53 7 873-3899. E-mail: [email protected]. www.caribbeanupdate.org or send an e-mail to [email protected]. We accept Oct. 21: “Weighing the Evidence for Keeping Cuba on the U.S. List of Terrorist States,” Visa, MasterCard and American Express. National Press Club, Washington. Free. Details: Tiana Gierke, CIP, 1717 Massachusetts Ave. NW, Washington, DC 20036. Tel: (202) 232-3317. E-mail: [email protected].

Oct. 25-29: 12th Int’l Congress on Comparative Education, Hotel Palco, Havana. “Bring- ing comparative education to bear on the major educational problems of the day.” Details: Angela García, Marazul Charters Inc., 725 River Road, Edgewater, NJ 07020. Tel: (201) 840-6711. Fax: (201) 840-6719. E-mail: [email protected]. URL: www.marazul.com.

Editor & Publisher Oct. 31-Nov. 7: XXII Feria Internacional de La Habana, Havana. Considered one of the LARRY LUXNER Caribbean’s top trade events. Details: Pabexpo, Havana. Tel: +53 7 271-6614 or 271-0758. Washington correspondent Fax: +53 7 271-9065. E-mail: [email protected]. URL: www.complejopalco.com. ANA RADELAT Political analyst Nov. 27-Dec. 4: Humanitarian trip to Baracoa, Cuba. Visits to institutions for the blind DOMINGO AMUCHASTEGUI and handicapped, museums, etc. Only members of the St. Augustine-Baracoa Friendship Feature writers VITO ECHEVARRÍA Association may participate. Cost: $1,100 (including round-trip airfare Miami/Holguín, HELEN SIMON overland travel, meals, lodging). Details: Soledad McIntire, St. Augustine-Baracoa Friend- Contributing editor ship Association, PO Box 861086, St. Augustine, FL 32086-1086. E-mail: [email protected]. DOUGLASS G. NORVELL Cartographer ARMANDO H. PORTELA Graphic designer IMAGES OF LATIN AMERICA JESSICA MUDJITABA If your business needs high-quality photo- graphs of Cuba — or anywhere else in the (ISSN 1073-7715), founded in 1993, Americas — to illustrate annual reports, is published monthly by Luxner News Inc., 10454 articles, brochures or presentations, Parthenon Court, Bethesda, MD 20817, USA. Subscriptions: US$429 per year ($200 for indivi- you’ve come to the right place. Luxner dual scholars and non-profit groups only). Please News Inc. has nearly 15,000 color trans- view our website at www.cubanews.com to learn parencies on file from South America, more about the newsletter. Central America, Mexico and the Carib- To order a subscription, call custo- bean, depicting a variety of topics from mer service at (301) 365-1745, fax us at (301) 365- 1829 or send an e-mail to [email protected]. aerospace to zoology. We also have a Contents may not be distributed by any means growing selection of images from Europe, without prior written permission of the publisher. Africa and the Middle East. For more de- Luxner News Inc. grants authorization to photo- tails, call Luxner News Inc. toll-free at copy items for internal or personal use, provided (800) 365-1997 or search our website at: the appropriate fee is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, www.luxner.com MA 01923. For details, visit www.copyright.com.