Vol. 15, No. 1 January 2007

www.cubanews.com

In the News Despite the obstacles, Cuba’s Alimport is spending more than ever on U.S. food Rice exporters hopeful Cuba’s a big market, despite Alimport ban BY LARRY LUXNER since passage of the Trade Sanctions and on genetically modified rice ...... Page 3 elations between the United States and Reform Export Enhancement Act (TSRA) — a Cuba have never been worse — but that’s loophole which authorizes such exports in the hardly dampened the island’s ravenous first place — Cuba’s purchases from the United No more excuses R States have gone up. Raúl Castro tells National Assembly that appetite for American food products. And it’s not just food the Cubans are buying. In 2006, state-run purchasing agency Alim- Cuba must get its act together .....Page 4 Utility poles — because they’re made of wood port says it contracted for just over 1.4 million — qualify as an agricultural export under TSRA metric tons of U.S. agricultural commodities rules. In the last eight months, around 30,000 of Encouraging signs? worth $544.1 million. That was up slightly from them have been shipped to Cuba, 99% of them The number of political prisoners in Cuba the $540.9 million Alimport spent on 2005 pur- from Alabama (see our interview with Alabama and migrants stopped at sea by the Coast chases from U.S. suppliers, even though volume Agriculture Commissioner Ron Sparks, page 8). dropped from the 1.8 million tons of food com- Likewise, Alimport CEO Pedro Alvarez says Guard both fell in 2006 ...... Page 5 modities shipped in 2005. his agency has purchased $37 million worth of It should be noted that not everyone accepts U.S. paper products since TSRA’s passage more Ethanol future Alimport’s numbers. John Kavulich of the U.S.- than six years ago. With proper planning, Cuba can cash in Cuba Trade and Economic Council Inc., quoting But grains still dominate U.S. exports to U.S. Commerce Department and USDA figures, Cuba, the most important being wheat ($402.7 on world ethanol boom ...... Page 7 says 2005 U.S. food exports to Cuba came to million in 2006 exports) and yellow corn ($368.5 only $350.2 million, down 11% from 2004 sales. million). Other leading commodities include Newsmakers Yet if Alimport’s figures are to be believed, chicken; milled and paddy rice; soybean meal; Ron Sparks, Alabama’s commissioner of the obvious conclusion is that in every year See Alimport, page 2 agriculture, has become a poster child for U.S. food sales to Cuba ...... Page 8 Regional cellular operators can’t wait Raúl ready to deal? Jaime Suchlichi says U.S. must play hard- to crack Cuba’s pent-up mobile market ball with Cuba’s new leader ...... Page 9 BY VITO ECHEVARRÍA Formerly communist countries there enjoy uba — a country known around the globe some of the planet’s highest mobile penetration Nickel rebounds for its advances in education, medicine rates, led by Estonia (108 cellphones per 100), Record high prices make up for a drop in Cand biotechnology — is light-years behind the Czech Republic (115) and Lithuania (127). Cubacel (www.cubacel.cu), the cellular spin- Cuban nickel production ...... Page 11 its neighbors when it comes to telecom. According to a 2006 study by the UN Confer- off of Cuban state telecom monopoly Etecsa, ence on Trade and Economic Development controls cellular services on the island, and lim- Business briefs (UNCTAD), Cuba has one of the world’s lowest its availability of such services to foreigners and Norway protests hotel’s anti-Cuba policy; mobile telephone penetration rates, with only Cubans who happen to reside abroad. Even without that restrictive policy, most IT revolution underway ...... Page 12 134,480 cellular subscribers for its 11.2 million inhabitants in 2005. Cubans would be priced out of the market even That translates into a penetration rate of just if they were allowed to have cellphone accounts, Provinces: Ciego de Avila 1.2 per 100, which is on par with Eritrea, the far- since current rates far exceed the monthly earn- Sparsely populated province hopes tour- flung Solomon Islands and the Democratic Re- ings of most local residents. For instance, Cubacel charges 50c per minute ism will take sugar’s place ...... Page 14 public of Congo. Even impoverished Haiti, the poorest country in the Western Hemisphere, for calls made to other cellphones, and 60c/min has far more cellphone lines in use than Cuba. for calls made to land lines. Unlike most cell CubaNews (ISSN 1073-7715) is published monthly Five years ago, the situation was even worse. operators abroad, Cubacel actually charges its by Luxner News Inc. © 2007. All rights reserved. subscribers for incoming calls (44c/min). Subscriptions: $429 for one year, $800 for two years. In 2001, according to UNCTAD, Cuba had only For editorial inquires, please call (301) 452-1105 8,579 subscribers. Yet the example of Eastern There’s no shortage of foreign telecom oper- or send an e-mail to: [email protected]. Europe suggests those numbers would sky- ators hoping to claim Cuba as their next emerg- rocket in a post-Castro Cuba. See Cellular, page 6 2 CubaNews ❖ January 2007 one of the major constraints we have in exported food to Cuba under TSRA. Since Alimport — FROM PAGE 1 exporting to Cuba,” complained Jim Guinn, December 2001, total contracted tonnage VP of international promotions for the USA comes to 8.16 million metric tons, with total soybeans; milk powder; refined soybean oil; peas, chickpeas and lentils; animal feed; Rice Federation, based in Virginia. “Cuba actual deliveries amounting to just under 7.0 beans and supermarket products (see chart at would seem like a natural market for us be- million tons valued at $2.08 billion. bottom of this page). cause long-grain rice is produced in Louisi- All these exports were transported by 815 One reason Cuba is buying more U.S. food ana” (see related story, page 3 of this issue). vessel journeys, 72% of that via U.S.-flagged — despite the Bush administration’s ever- Guinn’s organization is one of dozens ships. Alimport has made contact with over increasing hostility toward Havana — is that across the United States that have been lob- 4,300 companies in 45 states, and with 132 it has more money to spend. With a GDP growing at 12.5%, thanks to Venezuelan oil and record-high prices for nickel and other export commodities, Cuba’s economy is in better shape than at any time since TSRA was passed by Congress in 2000. But that’s not the only reason. “People are getting used to dealing with the obstacles,” says Kirby Jones, president of the US-Cuba Trade Association. “Everybody has to deal with them — the seller, the port, the shipper and Alimport. They all suck it up and jump through the hoops and over the hurdles. Having said that, I believe Pedro [Alvarez] when he says that if these obstacles were not there, he could buy $200-300 million more in U.S. imports.” RESTRICTIONS GIVE EXPORTERS A HEADACHE Those obstacles, Jones told CubaNews, in- clude OFAC’s demand that Alimport pays for the goods before they leave a U.S. port, as well as the letter of credit requirement. “The letter of credit process is very clum- sy,” said Jones, whose Washington-based organization has 55 member companies and bying Congress to force OFAC to relax its farm associations and federations in 32 states. associations. “It has to go from a Cuban bank rules on selling farm commodities to Cuba Barring any dramatic developments in to a third-country bank, which sends it to under TSRA. Cuba, that trade will continue into 2007. their corresponding bank in the U.S., and that “Obviously, we support opening up the Veteran Cuba analyst Phil Peters, vice-pres- bank sends it to the seller’s bank. So there are Cuban market,” said Chris Garza, director of ident of the Lexington Institute, said Fidel four banks involved, and that piece of paper legislative affairs for the American Farm Bur- Castro’s illness and transfer of power to his must be perfect. If a comma is misplaced, the eau Federation. “We’ve been working with the brother Raúl has had absolutely no effect on whole thing has to be corrected. Cubans to make sure they continue to pur- Alimport’s purchases of U.S. farm products. “Or, let’s say the contract calls for a ship- chase U.S. commodities, despite the barriers “I don’t see any real instability there. Busi- ping date of Jan. 15, and for some reason the we face in selling to them. The only way we ness decisions are being made, and the gov- ship is late; there’s a storm at sea, for exam- can justify to Congress and the administration ernment seems to be functioning normally,” ple, and they can’t do it until the 16th or the at this point is because we continue to see our Peters told CubaNews. 17th. The whole letter of credit sales to Cuba increasing.” “I don’t think Fidel’s absence and the 22 1.4 has to be changed.” Garza added: “What we’ve been hearing uncertainty about his health are having any 21 2.3 That frustrates U.S. agribu- from Congress is that their priority is dealing impact on basic government decisions, cer- 20 2.4 siness interests enormously. with the issue of Cuban-American travel to tainly not on something like this,” he said. “The Cubans clearly don’t like the [U.S.] re- 19 4.2 “From our perspective, Cuba, as wellMAIN as remittances. U.S. EXPORTS While those/ do not have a direct impact on our sales, it’s CFI part valuestrictions, in millions but ofthey’re dollars buying a good amount 18 4.6 OFAC’s requirement of cash 1 12 payment prior to shipments is of easing restrictions - Wheat towards Cuba.” - Paperfrom us, and they also don’t put all their eggs 17 14.2 To date, 162 2- companies Yellow corn in 37 states have13- Woodin one basket.” 16 14.2 3- Chicken 14- Beans 4- Milled and paddy rice 15- Supermarket products 15 19.6 5- Soybean MAINmeal U.S. EXPORTS16- Dicalcium / CFI and value monocalcium in millions phosphate of dollars 14 23.5 6- Soybean 17- Wheat flour 13 32.2 7- Milk powder 1- Wheat 18- Eggs 12- Paper 8- Refined soybean 2- Yellow oil corn 19- Ground turkey13- Wood 12 37.0 9- Peas, chickpeas 3- Chicken and lentils 20- Apples 14- Beans 11 37.1 10- Norgold (feed) 4- Milled and paddy21 rice- Cattle 15- Supermarket products 5 16 10 39.0 11- Crude soybean- Soybean meal meal 22- Pork fat - Dicalcium and monocalcium phosphate 6- Soybean 17- Wheat flour 9 59.9 7- Milk powder 18- Eggs 8 92.8 8- Refined soybean oil 19- Ground turkey 9 20 7 95.2 - Peas, chickpeas and lentils - Apples 10- Norgold (feed) 21- Cattle 6 170.6 11- Crude soybean meal 22- Pork fat 5 179.6 4 185.9 3 357.2 2 368.5 1 402.6 50 100 150 200 250 300 350 400 January 2007 ❖ CubaNews 3 US/CUBA TRADE U.S. rice producers expect Cuba market to keep growing BY VITO ECHEVARRÍA rice sales of $175 million, and the creation of States — a situation that John King, an Arkan- n 2000, when the Clinton administration at least 4,700 U.S. jobs. sas rice grower and USA Rice’s chairman, gave U.S. agribusiness companies a loop- Pedro Alvarez, Alimport’s chairman, told wants to restore. Ihole that would allow them to export food attendees at a 2005 USA Rice event at Hav- In an unexpected show of support from the to Cuba despite the embargo, it was a no- ana’s Hotel Nacional that Cuba’s overall rice Cuban side, one of Fidel Castro’s sons, Anto- brainer that U.S. rice sales would take off. imports could grow from the current level of nio Castro, stopped by the USA Rice booth to Indeed, rice exports jumped from $6.2 mil- taste a rice dish prepared by the group’s lion in 2002 to $64 million in 2004 (see chart). chefs. The last time the orthopedic surgeon Even with the U.S. Treasury Department’s was seen in public was March 2006, when he imposition of strict payment requirements for traveled to San Juan, Puerto Rico, as the team state-run Alimport following George W. doctor for the Cuban national baseball team Bush’s re-election in 2004, Cuba didn’t lose its during the World Baseball Classic. appetite for U.S. rice. USA RICE FEDERATION In a flyer that USA Rice distributed last year In 2005 — even as Alimport reduced its to members of Congress, the trade group overall purchases of U.S. food — rice exports complained that a late 2006 sale of 200,000 to the island came to $39.2 million. During the tons of Vietnamese rice to Cuba “could easily first 10 months of 2006, the Cubans bought have been made by the U.S. rice industry another $39.5 million worth of American rice. without OFAC interference.” The USA Rice Federation, based in Arling- RICE COMPANIES LOOK TO POST-CASTRO FUTURE ton, Va., is striving to keep the rice flowing to The group also chastised the Bush admin- Cuba through lobbying efforts in Washing- istration for striking out provisions in fiscal ton, as well as its presence at events such as 2006 Transportation and Treasury appropria- the Havana International Trade Fair (FIHAV) tions bills that would have prevented last November. Treasury’s Office of Foreign Assets Control “If we had a situation where more free from using those funds to enforce measures trade was allowed, business would boom for that require the Cuban government to pay for the United States,” USA Rice consultant Jois U.S. food purchases in advance. Alaby told CBS News during FIHAV 2006. Antonio Castro, one of Fidel’s sons, poses with Regardless of what happens with OFAC Jaber de Almeida, a Cuban chef hired by the USA RICE EXPORTERS PUSH FOR END TO OBSTACLES interference in U.S. rice sales, one aspect of Rice Federation during last year’s FIHAV trade fair. U.S. rice trade that faces its own challenge is Another USA Rice official noted that, as it the sale of retail-packaged, supermarket- is, “because Cuban officials cannot travel to 712,000 tons a year to between 750,000 and ready rice to Cuba. the United States and inspect the loading 800,000 tons annually over the next two years. While Puerto Ricans, Cubans and other facilities and rice warehouses, it takes a great Jim Guinn, VP of international promotions Hispanics living in the United States are ac- leap of faith on their part to buy U.S. rice sight at USA Rice, said world market prices for rice customed to buying major brands like Uncle unseen. The fact they buy U.S. rice at all is a have risen from $7 per hundredweight a year Ben’s and Carolina Rice, those brands are testament to how much they value our rice.” ago to around $9.50/hundredweight today, conspicuously absent in Cuba itself. The group further asserts that if Washing- due to Hurricane Katrina-related salt intru- Antonio Benavides, a marketing executive ton’s trade barriers against Havana were lift- sion in southern Louisiana that has forced at Riviana Foods, explained in an e-mail to ed, Cuba could be a 500,000-ton annual mar- rice production down by about 15%. CubaNews why so far there’s no branded U.S. ket for the United States. That implies annual “At least seven or eight U.S. mills have the rice on Cuban supermarket shelves. capability to export long-grain rice to Cuba,” “To my knowledge, there are no he said. “The quality of U.S.-milled rice is [American] brands sold there, as everything superior to Vietnamese rice, and right now, goes bulk,” said Benavides, whose company Vietnam has halted all exports until the next makes the popular supermarket brand crop is harvested. So availability is very limit- Carolina, as well as Mahatma and various pri- ed at least until the end of February.” vate-label rice brands. GENETICALLY MODIFIED ISSUE HALTS SHIPMENTS “Cubans are not willing to pay a premium One of the biggest problems in 2006 was a for packaged/branded rice. I think U.S. rice, controversy over genetically modified rice. which is sold by the co-ops in Arkansas, is “Exports [to Cuba] have since declined used as a filler whenever there is no precipitiously, and it’s related to the genetical- Vietnamese rice or when they need to use ly modified rice issue,” Guinn told CubaNews. smaller ships. I am sure some of the better “We had an accidental introduction of a her- rice ends up in the Cuban tourism trade.” bicide-resistant trait in long-grain rice in the Such comments support the view by some southern U.S., and that’s pretty much halted that American rice is of a fluffier, higher our exports since August, specifically to grade than the Vietnamese rice which ordi- Cuba. That was the reason given by Alimport nary Cubans ate before U.S. rice became as to why they would not import U.S. rice.” available. But Guinn said “there have been ongoing Benavides predicts that — given the higher discussions with Alimport for some time, and price points sought for popular U.S. brands — we now believe we’re at a point where that’s his firm in particular won’t ship rice into Cuba no longer going to be an issue.” under current political conditions. He added Before 1962, Cuba was the single largest that “we will probably sell Mahatma when market for value-added rice from the United Cuba opens up.” 4 CubaNews ❖ January 2007 POLITICS Raúl to National Assembly: ‘We’re tired of justifications’ BY DOMINGO AMUCHASTEGUI plies from local markets, forcing the economy to through joint ventures. harp criticism prevailed. The need for rig- spend more on imported food. Oil production in 2007 is expected to be orous analysis — free of inaccuracies and In 2006, Cuba spent $948 million on food im- much higher, though no figures were provided Sjustifications — was the straightforward ports, a 35% jump from the year before. Import by Vice President Carlos Lage, who said the message coming from Raúl Castro on Dec. 22, substitution here is crucial. The most productive government has purchased seven new drilling the final day of a two-day session by Cuba’s sector in agriculture is represented by individual rigs to partially meet its 2007 energy goals. National Assembly. campesinos and cooperatives, which produce 65% In 2006, the Castro regime distributed 29 mil- “In this Revolution, we are tired of excuses,” of all food — proving again the low performance lion energy-saving electrical appliances at low he told lawmakers, hammering away, again overall by state enterprises. prices, with credits made available by the and again, at the same theme. “The Revolu-tion According to Raúl, it is totally unacceptable Central Bank. Some 50% of the island’s refriger- cannot lie. This isn’t saying that there have that state entities don’t pay their debts on time to ators have already been replaced. been comrades who have lied, but the impreci- private and cooperative suppliers of food. He said Cuba’s fiscal deficit was 3.2% of GDP, 1% less sion, inexact data, consciously or un-conscious- it was inconceivable to talk about increasing food than in 2005, while the estimated deficit for ly masked, can no longer continue.” production while stiffing those who provide 65% 2007 will be 1.9 billion pesos, also equivalent to Indeed, regardless of how positive some of of total output. 3.2% of GDP. the economic reports were in the course of this HIGHLIGHTS OF NATIONAL ASSEMBLY MEETING To back up the most important programs session, criticism was everywhere. Because of Cuba’s existing limited financial (public health, education, energy, housing, and Even José Luís Rodríguez, Cuba’s minister resources, the huge investment process under- hydraulic infrastructure) with new investments, of economy and planning — and a confidante of way in transportation — railroads, highways and the government allocated 4.5 billion pesos in Raúl — came up with an unexpected reference public transport, all areas on the verge of total 2006. about the so-called “special period” (the eco- collapse just 10 years ago — will have to estab- Cuba’s budget will increase by 9.8% thanks to nomic collapse following the fall of the Soviet lish certain priorities. Cargo transportation vehi- the export of services, sales to the population and bloc in the early ‘90s). cles and trucking infrastructure will be the top growing efficiency within industries and servic- Rodríguez warned delegates that it “has not priority, while urban public transport will receive es. As usual, specific numbers were hard to come been overcome yet” and discussed several of much more limited resources. by, but the government did reveal that biotech the key shortcomings and cases of sheer negli- Cuba’s goal of 150,000 new houses in 2006 fell and pharmaceutical exports jumped by 90% last gence still plaguing the Cuban economy. short by 40,000 houses, mainly because of the year, with sales to more than 50 countries. In the course of the last 10 years, productivi- lack of construction materials from local and for- In 2007, Cuba will assign 22.6% of its GDP for ty has been growing more slowly than av-erage eign suppliers. public health and education, while 3.9 billion salaries, meaning that the distribution of In 2006, Cuba claimed its economy grew by pesos will be allotted to pensions. Social assis- wealth is bigger than production output, some- 12.5%. Excluding free social services, growth tance will benefit 588,000 people, with total thing that is not sustainable over time. would still be considerably high, around 9.5%. funding of 1.2 billion pesos, and the natural dis- This is especially important in agriculture Regarding energy, more than 90% of Cuba’s aster fund will rise by 300 million pesos. and livestock production, where low-cost food power outages have disappeared for good, No statistics regarding Cuba’s foreign debt production for the population is not enough thanks to various strategies put in place over the and hard-currency sections of the budget were and where productivity and the number of last 18 months. Oil and natural gas production disclosed. Francisco Soberón, chairman of hours worked went down in 2006. reached 3.9 million tons, meeting nearly 50% of Cuba’s Central Bank, was not among the speak- This issue is two-fold: the people gets less national fuel demand. Thirty oil wells are now in ers this time, as he was during the December food and the tourism industry gets fewer sup- production — six by Cuban companies and 24 2005 session. January 2007 ❖ CubaNews 5 POLITICAL BRIEFS

COAST GUARD: FEWER CUBAN ‘RAFTERS’ IN 2006 In their own words … The number of undocumented Cuban migrants “Fidel is irreplaceable, and I don’t intend to imitate him. Those who imitate stopped at sea by the U.S. Coast Guard, which fail.” had been rising steadily year by year, fell notice- Raúl Castro ably in 2006, the Miami Herald reported Jan. 3. — , speaking Dec. 20 at a conference of Cuba’s Federation of University Students in Havana. While Cuban interdictions are down, the num- ber of Cuban arrivals in South Florida on smug- gling and other organized trips is up — with 546 “Sometimes people fear the word ‘disagree,’ but I say the more debate and more landings in fiscal 2006 than 2005, according the more disagreement you have, the better the decisions will be.” to Border Patrol figures. — Raúl Castro, during the same speech. There were 2,260 Cubans interdicted in 2006, compared to 2,952 in 2005 — the first decline in “He is in good condition. Within the confines of doctor-patient privilege, I annual Cuban interceptions since 2001, when 777 can say President Castro is not suffering from a malignant condition. It’s a were stopped. benign process, during which there have been a series of complications.” The Herald says these figures may simply — Dr. José Luís García Sabrido, head of surgery at Madrid’s Gregorio Marañon reflect cyclical declines, but they could also repre- Hospital, after returning from Cuba on Dec. 28 to examine Fidel Castro. sent a more complex set of factors such as weath- er and use of alternate routes by Cubans to reach “The bottom line: he is terminally ill.” the U.S., including more efficient smuggling trips. — Ross Feinstein, spokesman for the U.S. Office of the Director of National The drop in interdictions, however, does not Intelligence, casting doubt on the doctor’s assertion that Fidel does not have cancer. reflect the change of leadership in Cuba, where an ailing Fidel Castro temporarily turned over “A tradition that seemed extinct in Cuban society rises again. Although no power to brother Raúl in July. one sees celebrating the millennial festivity of the Three Kings as heresy, the Coast Guard figures can be found at danger could be in [the holiday] accentuating consumerist habits and social www.d7publicaffairs.com. differences.” VENEZUELANS LIKE FIDEL, COSTA RICANS DON’T — Cuban Communist newspaper Juventud Rebelde, warning Jan. 6 against a rise in consumerism associated with Three Kings Day, which is usually celebrated Some 60% of Venezuelans have a positive view in Latin America by giving toys and gifts to children. of Fidel Castro, according to the 18 Latinobaró- metro, released in December by The Economist. Less than half of all respondents in the other 17 “I think it is about time we end the embargo and open up relations between the Cuban and American people. It hurts both sides.” countries surveyed have positive feelings about Castro. Costa Ricans are at the bottom with only — Anti-war activist Cindy Sheehan, who led a rally Jan. 7 outside the U.S. Naval 8% holding a good opinion of Fidel, followed by Base at Guantánamo Bay, Cuba, to protest treatment of terrorism suspects there. 11% of Chileans and 13% of Panamanians. Overall, 27% of Latin Americans said they liked “At the same time you and your noble followers fight for the closure of the the Cuban leader. The survey was based on face- U.S. prison at the Guantánamo naval base, just a few miles away at the provin- to-face interviews with 20,234 adults in 18 coun- cial Guantánamo prison in Cuban territory, peaceful and defenseless political tries last October. The margin of error for each prisoners suffer inhumane conditions, [living] without potable water and with country is 3%. poor nutrition, deficient medical assistance, insects and rodents, limited visits and precarious communication. We exhort you to visit the prisons of Cuba.” FEWER POLITICAL PRISONERS BEHIND BARS IN 2006 — The Ladies in White, in a Jan. 8 letter to Cindy Sheehan, urging the peace The number of political prisoners held in Cuba activist to visit Cuban jails where their dissident husbands are imprisoned. fell in the second half of 2006, but harassment of dissidents continues, said veteran Cuban human- “We find it to be a very serious matter that a Norwegian hotel chain main- rights activist Elizardo Sánchez. tains the U.S. boycott of Cuba. This was a clear breach of Norwegian law, AP quoted Sánchez as saying that his group which forbids discrimination based on nationality.” counted 283 prisoners of conscience, down from — Norway’s main trade union, LO, reacting to the decision of a Hilton-owned 316 in early July. The commission counted 333 hotel in Oslo to deny lodging to a Cuban delegation in compliance with the 1996 political prisoners in Cuba a year ago. Helms-Burton Act. Sánchez attributed the drop to “selective” releases of prisoners, such as Hector Palacios, an “Saddam’s execution was an illegal act in a country that has been driven opposition leader who was recently set free on toward an internal conflict in which millions of citizens have been exiled or medical parole. Palacios was one of 75 dissidents lost their lives. Cuba has a moral duty to express its point of view about the arrested in a broad crackdown in 2003. Besides assassination committed by the occupying power.” Palacios, 15 of those arrested have since been — Cuba’s Foreign Ministry, reacting Jan. 1 to the execution of deposed Iraqi dic- freed for health reasons. tator Saddam Hussein. But Sanchez said that even as some prisoners have been released, the Castro regime continues “The outlook for the year is pretty gloomy. We are appealing for common to harass dissidents with short detentions, inter- sense to prevail.” rogations and monitoring. — Lazaro Cuesta, a Santería priest, speaking Jan. 2 at a press conference The rights activist also said he had no hope for in Havana. The babalawos, making their annual predictions, say they see a major change under Raúl Castro, who's been heightened danger of epidemics, military intervention and increased espi- running Cuba since late July while his brother onage against Cuba in 2007. Fidel is in the hospital. “There is nothing pressuring Raul to make changes,” he said. “My vision is pessimistic.” 6 CubaNews ❖ January 2007

Cellular — FROM PAGE 2 operator back in 2003 as part of our growing Bermuda’s largest mobile operator and owns network of 245 worldwide partners in 130 100% of a broadband data and digital TV com- ing market, assuming significant economic countries,” said David Hall, CEO of Digicel pany in the U.S. Virgin Islands. and political changes take place after the Jamaica Ltd. “We’re interested in Cuba like everyone Castro regime ends. “Any Cuban who calls Jamaica goes across else,” said Michael T. Prior, ATN’s president The most likely of these are two companies our bandwidth, so we have a relationship with and CEO. “With its population and natural re- already present in the Caribbean: London- Cuba,” said Hall, interviewed by CubaNews in sources, Cuba as the biggest island in the based Cable & Wireless Ltd. and Irish mobile Kingston. “The only reason we’re in Cuba is Caribbean has obvious potential.” operator Digicel, both of which have regional because there’s a very strong relationship Prior told CubaNews he suspects Cuba’s headquarters in Kingston, Jamaica. between Jamaica and Cuba.” infrastructure in general is underbuilt. “Look at the wireless carriers that have en- CABLE & WIRELESS LOOKS TO CUBA Hall said Digicel racks up “a couple of hun- dred thousand minutes a month” in calls tered Haiti and the Dominican Republic right C&W has dominated the English-speaking between the two islands. next door. They proved that even in an area Caribbean for more than a century, and is still “If you call Cuba from here, you get fantas- where most of the population doesn’t have a key player in Jamaica, Trinidad, Barbados disposable income, you can make a viable and a dozen other islands, as well as Panama. business,” he said. In Jamaica, where it lost its monopoly in “But anybody considering investing [in 2001 after 109 years, C&W now has 98% of the Cuba] will want to know that there won’t be fixed-line market and 30% of the mobile busi- any major political change that’ll put their ness (Digicel controls the remaining 70%). LARRY LUXNER investment at risk.” With 1.9 million mobile lines for its 2.7 mil- Manuel Cereijo, a University of Miami aca- lion people, Jamaica has one of the Carib- demic who wrote a 2004 research paper on bean’s highest wireless penetration rates — post-Castro Cuba’s telecom sector, predicts over 70%. tht both U.S. and foreign wireless operators In a press statement provided to CubaNews, will make a future play for Cuba. C&W said that as part of its ongoing business However, Cereijo cautions that such a development strategy, it continuously reviews transformation will be contingent upon the opportunities that would fit within its interna- country’s economic performance. tional portfolio from a commercial and geo- C&W isn’t the only telco setting its sights on Cuba. “Cubans would be paying for cellular serv- graphical standpoint. ice in pesos,” he told CubaNews. “Investors “The company already offers integrated will have to take the risk and build a phone mobile, fixed line and broadband services to tic reception,” he said. “We’ve also brought down the cost of calls. Two years ago, the rate system in Cuba in the hopes that the peso will 34 countries, and would certainly be interest- appreciate.” ed in Cuba, seeing it as a good strategic fit was J$120 (US$1.81) per minute. Now, it’s within its large, existing Caribbean opera- J$50/min (75c), of which the Cuban govern- IS THE D.R. A MODEL TO FOLLOW? tions,” according to C&W spokesman Paul ment gets J$45 (68c).” Indeed, one of the Caribbean’s hottest tele- Wood in London. IS CUBA IN DIGICEL’S FUTURE? com markets right now is the Dominican “Cable & Wireless is highly experienced in Naturally, an aggressive telecom player like Republic, home to nearly nine million people developing customer-centric telecom solu- Digicel would want to add Cuba to its growing UNCTAD says the country’s cellular penetra- tion is around 40 lines per 100 residents. Four tions and although no process [for expanding list of markets. Cuba alone could theoretically operators provide wireless service there: into Cuba] is apparent at the moment, would double the number of Digicel’s current sub- respond quickly and positively should the Verizon, Orange, Tricom and Centennial. opportunity arise.” scribers, and there’s some speculation that Orange Dominicana, a subsidiary of France Cuba is indeed on Digicel’s sights. DIGICEL EXPANDS THROUGHOUT REGION Telecom, is the No. 2 provider of cellular serv- The Digicel Caribbean Cup — now being ices in the Dominican market, having pio- Digicel, which was launched in 2001 by held at various venues in the Caribbean — neered the use of prepaid cellular service, Irish entrepreneur Denis O’Brien, is present includes a Cuban soccer team. which allows local residents to buy cheap in 21 Caribbean markets as well as El Salva- Cuba itself played host to some of the earli- phone cards from local Orange outlets, super- dor. It started in Jamaica and has since ex- er round games at Havana’s Pedro Marrero markets and even street vendors. That allows panded to Aruba, Barbados, Bonaire, Stadium last fall; surprisingly, the Cuban soc- them to add prepaid minutes to their cell- Curaçao, Guyana, St. Kitts and Suriname. cer team qualified for the Digicel finals in phones when needed. Digicel now has four million subscribers Trinidad later this month. When asked about Orange’s interest in ex- throughout the Caribbean, with one million Asked if Cuba’s mere participation in the panding to Cuba, spokesman Andrés Ferrei- alone in Haiti — where it launched last May. Digicel Cup is evidence of the company’s ras told us the company “has no plans to enter Total investment in the region now exceeds interest in potential mobile business there, the post-Castro Cuban market at this time.” $1.5 billion. company spokeswoman Maureen Rabbitt had In fact, Orange is more worried about the “Digicel’s progress in 2006 reinforced our this to say: “Given that this is a pan-Caribbean future of the Dominican market right now. A position as the largest GSM provider in the tournament, Cuba was invited to participate subsidiary of América Móvil — the cellular Caribbean region, with sustained growth in along with 20 other Caribbean nations, just as operator owned by Mexican billionaire Carlos our existing markets and unrivaled growth the Dominican Republic, Virgin Islands, Slim — bought out Verizon Dominicana from through our entrance into new markets such Bahamas and St Martin were also invited.” its U.S. parent in 2006, along with Verizon’s as Haiti, Trinidad & Tobago, Guyana and El She added that “as a corporate policy we do operations in Puerto Rico and Venezuela. Salvador,” said Colm Delves, Digital Group not speculate on future plans. As part of our “We have to fight to maintain our position in CEO, in a prepared statement. growth strategy we are considering opera- our own market, with the Mexican purchase While Digicel does not have a VSAT anten- tions throughout the pan-Caribbean region.” of Verizon Dominicana,” said Ferreiras. “The na installed in Cuba, it does operate a satellite ATN EXPRESSES INTEREST TOO Mexicans are very aggressive players.” link between its Jamaica network and Cuba’s Another major provider of cellular services Etecsa, which supports voice traffic for all Yet another potential player is Atlantic Tele- Network Inc., headquartered in Salem, Mass. in the Dominican Republic is Tricom S.A., Digicel networks and is specifically for Digi- which pioneered cheap long-distance service ATN, with annual revenues of around $150 cel traffic only. between the D.R. and the United States. “Digicel was the first regional company to million, owns 80% of Guyana Telephone & establish roaming with the Cuban mobile Telegraph Co. Ltd., controls just under half of See Cellular, page 7 January 2007 ❖ CubaNews 7 AGRIBUSINESS Cuba’s new alcohol/ethanol policy BY DOMINGO AMUCHASTEGUI Héctor Molina and Santa Cruz. The improve- — mainly a greater demand for alternative hen it comes to the ethanol industry, ments are aimed at increasing to refine fuels such as ethanol — are pushing up prices no one denies that Cuba lost some export-quality alcohol and rum. for sugar and its derivatives. For this reason, W important opportunities in the 1980s More recently, a major distillery with he concluded, ethanol-related projects are a by refusing to follow Brazil’s example. updated technology was completed in San long-term process. Unlike Colombia and Costa Rica, the Cu- José de las Lajas (La Habana province) at a Baron predicts annual world production of ban government neglected to expand existing cost of $63 million. At the same time, 11 old ethanol will reach 80 billion liters by 2010, up distilleries and didn’t bother to improve the distilleries are being modernized, and seven from the current 38.7 billion liters per year. overall production of refined oil. new distilleries — each with the capacity to Many experts point to Fidel’s May 1, 2006, This became even more critical when seri- produce 300,000 liters daily — are under con- speech urging an increase in sugar produc- ous problems with Soviet petroleum supplies struction. tion due to favorable prices. became apparent. With this level of investment, the minister Yet nothing of the sort has taken place, for According to rumors at the time, Illinois of the sugar industry, Ulises Rosales del Toro, the simple reason that the strategies adopted agribusiness giant Archer Daniels Midland said Cuba would soon be able to “grind sugar by Cuba’s leadership — and not by Rosales offered to help develop Cuba’s ethanol indus- cane just for the sake of producing alcohol.” del Toro on his own free will — aim to reduce, try, but Fidel Castro brushed ADM aside — TAKING ADVICE FROM BRAZIL modernize and reshape the sugar industry making the lack of vision in this particular not as a net exporter of raw sugar but of deriv- Until recently, the production of alcohol atives with high aggregate value such as field even worse. was based on molasses. Yet since 2004, alco- On the other hand, some Cuban experts refined alcohol, ethanol, raw material for hol is made from what is known as secondary biotechnology and pharmaceuticals, and the say the resources and technologies were not jugos secundarios diluídos yet available for such a huge endeavor. juices or , or . As a production of rum together with glucose, The question now is whether it’s too late for result, the fermentation rate has climbed syrup, sorbitol, and other derivatives. from 87% to more than 95%, very close to the Cuba to cash in on the promising new inter- DEBATE OVER CUBA’S SUGAR POLICY national ethanol market. Cuban experts and highest international standards. scientists are betting that it’s not. The search for the best technoligies and In recent statement, Rosales del Toro made foreign advice — mainly from Brazil but also it clear that there was no turnabout, and that INVESTMENTS IN DISTILLERIES from Spain and Canada — is another impor- only a few sugar mills would be eventually Since the late 1990s, Cuba has begun to tant angle in Cuba’s quest in this particular incorporated into the next sugar harvest. show interest in ethanol, and not only in con- field. Numerous Brazilian experts and busi- He pointed out that the extreme volatility nection with rum exports. Investments and nesspeople have traveled to Cuba, and Cuban and instability of sugar prices from May technologies were suddenly available after a delegations have visited Brazil, to explore trhough September, adding that any opti- long period of decline. potential projects in sugar production, alcohol mism would be ill-advised. The first major project was a huge distillery and ethanol. In sharp contrast to Fidel’s approach in complex at the Antonio Sánchez sugar mill in This process was highlighted last June by May, on Oct. 16 the sugar minister warned Aguada de Pasajeros. The joint venture, 80% Luis Gálvez, chairman of the Cuban Institute that “we should not place our trust in world owned by Spanish investors and 20% by the of Sugar Cane Derivatives (ICIDCA in prices but look to maximize cost-efficiency to Cuban government, was known as ALFICSA. Spanish), when he said Cuba would return to defend ourselves from any situation." It produced molasses from sugar mills in large-scale sugar production in order to Regarding the 10% lost in the 2005 harvest, and around Cienfuegos province at the rate of export alcohol and ethanol, as well as meet Rosales del Toro blamed it on inadequate sup- 355 kgs per hectoliter of highly refined alco- growing domestic demand. ply of sugar cane, low productivity in some of hol (extrafino A, 96 degrees). At the same time, Peter Baron, chairman of the working sugar mills and the late introduc- Other distilleries in major sugar-producing the Sugar International Organization, recog- tion of energy technologies. He reiterated areas have been upgraded over the last six nized the need for Cuban authorities to ration- that Cuba’s full potential output will not be years. These include Antonio Guiteras, Arquí- alize its sugar industry in 2001-02 in view of reached in the near future. medes Colina, Duquesne, Arlee Mañalich, extreme low prices. But new circumstances Planning for the 2007 harvest envisions planting an additional 120,000 hectares, which should produce a modest increase in Cellular — FROM PAGE 6 (which in recent times has been battling with sugar output. Only nine sugar mills will be Verizon and Orange for its share of the coun- incorporated, for a total of 51. But Tricom is shying away from comments try’s booming prepaid cellular sector). Refined sugar will be the top priority, and about its plans for post-Castro Cuba due to Digicel probably won’t compete in the significantly higher levels of alcohol and internal changes. Dominican Republic — but not because it ethanol are expected. CubaNews couldn’t reach Tricom Chairman wouldn’t like to. The reality is that the D.R. All distilleries, large and small, will contin- Ricardo Vélez Albizú, though one of his has too many wireless competitors at the ue to increase their production of refined spokesmen phoned us back to say that moment; thus it wouldn’t be realistic for alcohol — known as Técnico B — for export, “Tricom is in the middle of a financial restruc- Digicel to make a play there. as well as the production of rum for domestic turing process and will probably be bought In comparison, post-Castro Cuba would still consumption. The new refined alcohol will be out by a giant new telephone company. be virgin territory, and it would be hard for the base factor for increased quantities of “It would be up to the new company to Digicel — which signed up one million sub- ethanol in coming years. decide about any expansion plans, including scribers in dirt-poor Haiti in less than eight Cuba’s historic decision to drastically participating in a post-Castro Cuba communi- months — to resist the urge to similarly com- downsize the sugar industry will be debated cations market,” he said. “Due to the restruc- pete for business in Cuba. for years, but all observers knew it was turing process, the chairman refrains from “For us, the ideal opportunity is to go in inevitable. As to whether the current strate- further comment.” against a monopoly,” Digicel’s Hall told gies are working, the trends and figures cited The Tricom spokesman wouldn’t identify CubaNews. “If you already have five operators — at least in this particular dimension — tend the telecom firm that wants buy out Tricom there, you’ll be fighting your ass off.” to suggest that they are. 8 CubaNews ❖ January 2007 NEWSMAKERS Ron Sparks: Cuba is key market for Alabama farmers

BY LARRY LUXNER that have resulted in about $350 million in food commodities to be shipped to Cuba in 40 f he were running for governor of neigh- economic impact for the state of Alabama.” years left from the Port of Mobile. boring Florida, Ron Sparks wouldn’t make During his most recent trip to Cuba — a “I’ve been up-front and honest with the peo- I it past the primaries. four-day trade mission in December that coin- ple of Alabama about why we trade with But Sparks is from the Heart of Dixie State, cided with a 10-member Congressional dele- Cuba,” said Sparks. “My main concern is with not the Sunshine State — and in Alabama, gation — Sparks and his entourage treated two things: I hope the food we’re sending to publicly calling for an end to the embargo Alimport officials to a meal of fried Alabama Cuba in some way gets to the Cuban people, against Cuba isn’t the kiss of death but appar- catfish, cornbread, butterbeans, green bean and I hope it helps my farmers in Alabama.” ently a way to score points with voters. casserole, cole slaw, pecan pie with ice cream The agriculture commissioner added that Sparks is Alabama’s commissioner of agri- and sweet tea. “when I go to Cuba — even when I was culture and “We want to benefit agriculture, create jobs around the president [Fidel Castro] — I never industries. and help Alabama. We’ve increased our staff talked politics. The only thing we talk about is Born and in international trade, and we’re looking at helping the people of Cuba.” raised in Fort Payne, Ala., the 53-year-old Democrat was elected to the “We’ve had obstacles put up in front of us. We’ve tried to state our post in 2002 case in Washington, but we’ll continue to abide by the rules no mat- and re-elected last November ter how tough they make them ... even if we don’t agree with them.” for another four years. — RON SPARKS, ALABAMA’S COMMISSIONER OF AGRICULTURE AND INDUSTRIES Growing up, he worked alongside his every opportunity we can,” said Sparks. He FROM CHICKEN TO UTILITY POLES grandmother noted that other states which haven’t been Alabama ag boss Ron Sparks So far, Alabama’s top export to Cuba has at a local sock shipping products or sending trade missions been poultry. Arkansas-based Tyson Foods is mill while to Havana “will soon realize they may be miss- attending high school. After completing his the top seller of poultry to Cuba, and much of service in the U.S. Coast Guard, Sparks grad- ing out on a great opportunity.” that poultry is sourced from chicken process- uated from Northeast State Community LONG HISTORY OF FRIENDSHIP ing plants in Alabama. In addition, Montgom- College, and in 1978 — at the age of 24 — ery-based Calhoun Foods has shipped over Whether folks in Tallahassee are listening 60 containers of meat products and other became one of the youngest county commis- remains to be seen, but in Montgomery, state sioners ever elected in Alabama history. commodities to Cuba. officials have wasted no time in capitalizing In addition, Bunge Corp., which has a soy- He’s also owned two successful businesses on their trade ties with Havana. in Fort Payne and has worked in television. bean processing and milling plant in Decatur, Sen. Lowell Barron, who was among those Ala., is among companies that will sell farm Sparks — who’s been to Cuba at least three accompanying Sparks on his most recent trip times since taking office —has openly ex- products to Cuba in 2007, though officials at to Havana, told the Huntsville Times “we need Bunge headquarters in St. Louis couldn’t be pressed interest in running for governor of to look at ways to lift the trade embargo. It Alabama in 2010, when Gov. Bob Riley’s cur- reached for comment. makes no sense. It’s obviously not working, But perhaps Alabama’s most unusual rent term ends. and we need to try a different strategy. When And he’s proud of his friendship with Pedro export to Cuba isn’t something you eat. and if that government turns around, Wooden utility poles, as many as 100,000 of Alvarez, chairman and CEO of Cuba’s state- Alabama is going to be in a perfect position.” run food purchasing agency Alimport. them, have been shipped to Cuba with TSRA’s Barron said the state is also trying to sell blessing. According to John Key, internation- CUBA ‘EXTREMELY IMPORTANT’ TO ALABAMA Cuba on purchasing pond-raised catfish from al trade director at the Alabama Department In a lengthy phone interview from Montgo- west Alabama producers. of Agriculture and Industry, 99% of those mery, Sparks told CubaNews that in 2006, “One of their great problems is that they poles came from sawmills in southwestern Alimport spent one-third of its budget for U.S. don’t have enough money to buy the highest- Alabama, primarily Escambia and agricultural commodities — about $140 mil- quality fish,” he said. “They have to get fish Washington counties. lion —on Alabama-sourced products, under they can afford.” “It’s actually an approved product under the 2000 Trade Sanctions and Reform Export Among Alabama’s biggest trading advan- TSRA,” Key told us. “Keep in mind that lum- Enhancement Act (TSRA). tages is its proximity to Cuba. The Port of Mo- ber and utility poles — even wooden doors That includes everything from peanut but- bile is only 545 nautical miles from Havana, and window frames — are on the list to be ter, peanut paste and peanuts from Georgia- and the two cities have a long, historic rela- sold to Cuba. based Mazur & Hockman; peanut butter blen- tionship dating back to 1702, when Mobile “The brokers that sell utility poles and lum- ded with Alaga syrup from Whitfield Foods in became the capital capital of the Louisiana ber are based out of Florida, but they’re sell- Montgomery, and soybean oil, utility poles Territory (see our special report on Mobile in ing an Alabama product,” he said, estimating and various other products from Alabama CubaNews, September 2004, page 14). that $40 million worth of such poles have companies the agency declined to identify. In 1993, Mobile officials traveled to Havana been shipped to Cuba over the last four years. “Cuba has been extremely important to and set up the first sister-city relationship In the last eight months alone, Alimport Alabama,” Sparks told us. “We started three between any U.S. city and Cuba since the has signed contracts for 30,000 utility poles — and a half years ago, when I first came into 1959 revolution. Six years later, Mobile all of them shipped out of Mobile. But Key office, working with Pedro. We have since unveiled a statue at the entrance to Havana had a number of successful trade missions harbor, and in 2001, the first boatload of U.S. See Alabama, page 9 January 2007 ❖ CubaNews 9

OPINION Alabama — FROM PAGE 8 wouldn’t name the companies involved be- Is Raúl Castro ready to deal? cause, he said, “this is highly competitive.” Although Cuba is certainly an important BY JAIME SUCHLICKI where. In 1962, he and Soviet Premier Nikita market for Alabama’s agricultural products, Khrushchev conspired to surreptitiously it’s not the only one. Sparks recently led he visit to Cuba of a U.S. congressional introduce nuclear missiles into Cuba. Alabama’s first-ever trade delegation to delegation led by Rep. Jeff Flake (R-AZ) Raúl supervised the Americas Department Africa, and later this month will be opening a T and Rep. William Delahunt (D-MA) in in Cuba approving support for terrorist, guer- trade office in India. December yielded little results. rilla and revolutionary groups throughout There seems to be an eagerness among Sparks will also be going to Dubai, and is Latin America. In 1996, he personally ordered involved in several deals with Mexico, Japan some members of Congress to begin a pro- the shooting down of two Brothers to the cess of normalization of relations with Cuba, and the European Union. Rescue unarmed civilian planes in interna- But Cuba is the one market that seems to especially after Fidel Castro’s recent illness. tional waters, killing three U.S. citizens and The belief persists that economic consider- get his emotions going. one Cuban-American resident in Florida. “Maybe I am uneducated, but I can tell you ations could influence Raúl Castro’s policy An admirer of the Soviet Armed Forces, decisions and that Cuba’s difficult economic this: I’ve been to Havana, I’ve walked through Raúl displays pictures of Russian military the neighborhoods, and I want to help these situation will force Raúl to move toward a leaders in his Havana office and late last year market economy and closer ties to the U.S. signed a $350 million Russian aid pact to people,” Sparks told CubaNews. We seem to cling to an outdated economic upgrade Cuba’s military. “If somebody wants to look at me wrong determinism in trying to understand events in Raul’s politically motivated speech Dec. 2, because I’d like to help them have a better other societies and the motivations of their in which he expressed his willingness to ne- quality of life, then I’m sorry. It’s not politics leaders. Despite economic difficulties, Raúl gotiate with the United States, was preceded to me, it’s my heart, it’s the way I feel. I just does not seem ready to provide meaningful by a vitriolic attack on U.S. foreign policy and don’t agree with the Cuba policies we cur- and irreversible concessions for a U.S.-Cuba followed by the qualifiers that Cuba is sover- rently have in effect.” normalization. eign and that its revolution won’t change. For SPARKS HOPES DEMOCRATS CAN BRING CHANGE He may offer more consumer goods and the past four decades Fidel has been making food to tranquilize the Cuban population, but similar statements. Sparks says he’s had “very little negative” not major structural reforms that would open In a rare public statement two years ago, feedback from his trips to Cuba, though he the Cuban economy. In Cuba, political consid- Raúl warned that the U.S. should negotiate its admits to being very frustrated with all the erations dictate economic decisions. differences with Cuba while Fidel was alive — restrictions imposed by the Bush administra- Raúl’s legitimacy is based on his closeness since the U.S. would find it more difficult to tion on selling to Cuba — such as letters of to Fidel’s policies of economic centralization, negotiate with him. credit, cash payment up front and the difficul- control and opposition to the U.S. Raúl can For the past four decades, the avenues for ties of actually traveling to Cuba to meet face- not now reject Fidel’s legacy and move closer negotiation and engagement between the to-face with potential buyers. to the U.S. U.S. and Cuba have never been closed. The “We’ve had obstacles put up in front of us. A move in this direction would be fraught U.S. signed with Cuba anti-hijacking agree- We’ve tried to state our case in Washington, with dangers. It would create uncertainty ments and migration accords. but we will continue to abide by the rules, no among the elites that govern Cuba and Yet, negotiations alone are not sufficient. matter how tough they make them — even if increase instability as some advocate rapid There has to be a willingness on the part of we don’t agree with them.” change while others cling to more orthodox the Cuban leadership to offer real conces- Sparks says he hopes things will change policies. The Cuban population also could see sions — in the area of human rights and polit- this as an opportunity for mobilization de- now that the Democrats are controlling ical and economic openings. Congress. “But I don’t think this can all be manding faster reforms. No country gives away major policies with- Raúl is also unwilling to renounce the sup- out a substantial quid pro quo. Only when done in one swoop,” he told us. “We’ve got to port and close collaboration of countries like Raúl is willing to deal, not only to the U.S., but start looking at the travel sanctions. People Venezuela, China, Iran and Russia in ex- more importantly to the Cuban people, then should be allowed to travel freely. Americans change for an uncertain relationship with the and only then we should sit down and play. ought to be able to go wherever they want to U.S. At a time that anti-Americanism is grow- go. And that’s just the beginning.” ing in Latin America and elsewhere, Raúl’s Cuba scholar Jaime Suchlicki is director of He said: “I’m not trying to tell the Bush ad- policies are more likely to remain closer to the University of Miami’s Institute for Cuban & ministration what it should or shouldn’t do, regimes that are not particularly friendly to Cuban-American Studies. His opinions do not but I don’t agree with any country that won’t the U.S. and that demand little from Cuba in even have a dialogue. What’s wrong with talk- return for generous aid. necessarily reflect those of CubaNews itself. ing to them? We ought to be talking.” In September, Russia provided a $350 mil- lion credit package to Cuba to modernize its armed forces and Venezuela’s aid to Cuba will Bailey named U.S. ‘mission manager’ for Cuba surpass the $2 billion mark in 2006. Norman A. Bailey has been appointed to for the Bush administration — which has Raúl is no Deng Xiaoping and no friend of head a one-stop shop for the intelligence five other mission managers specializing in the U.S. He has been the longest-serving min- ister of defense — in power for 47 years. community on Cuba and Venezuela. North Korea, Iran, counterterrorism, coun- He presided over the worst periods of polit- As “mission manager” for the two coun- terproliferation and counterintelligence. ical repression and economic centralization in tries, Bailey will oversee 3-5 staffers who will Most recently senior fellow at the conser- Cuba and is responsible for numerous execu- pore over information from 16 U.S. govern- vative Potomac Foundation, Bailey speaks 5 tions after he and his brother assumed power, ment agencies to spot information gaps, help languages and is the author of a 1999 book, and some while in Mexico and the Sierra craft intelligence strategies and track the “The Strategic Plan That Won the Cold War.” Maestra before reaching power. implementation of those strategies. The 1953 Oberlin College graduate is a Raúl has been a loyal follower and cheer- Bailey was named to the post by John noted expert on regional affairs and a fre- leader of Fidel’s anti-American policies and Negroponte, director of national intelligence quent participant on the conference circuit. military interventions in Africa and else- 10 CubaNews ❖ January 2007 OPINION Time to open a dialogue with Cuba, at last BY ANTONIO C. MARTÍNEZ II who are our adversaries for one reason or Let’s face it, if a foreign government pro- vided funds and resources to you for the pur- ast month, a bipartisan delegation of 10 another. After more than 48 years of failed policies and actions with Cuba, why not begin pose of overthrowing our government, you members of Congress traveled to Cuba would be in deep trouble or behind bars too. to meet with Cubans and assess the situ- anew and have a conversation with Cuba that L has been long overdue? The Cuban government does not need our ation on the island. meddling to let the Cuban people know what In addition to the usual talks regarding the For millions of affected Cubans and Cuban- Americans, it is time for a change. it already knows about the flaws and failures promising U.S. food and agricultural sales to of their system. They have to figure it out, not Cuba (now over $2 billion since 2000), the del- How can Cuba and the United States have a meaningful conversation with each other? For have us as a nation figure it out for them egation — led by Rep. William Delahunt (D- one thing, each country can take steps to cre- Besides, the record shows that such poli- MA) and Rep. Jeff Flake (R-AZ) — held dis- ate an environment upon which a meaningful cies are not effective. Finally, each side can cussions about the future of relations between conversation can occur. agree that on the subject of fugitives and Washington and Havana. However, before we can get there, where is wanted persons, face-to-face discussions Prior to that visit, during a Dec. 2 celebra- each side now in the areas of controversy and should commence on how to resolve this in tion in Havana commemorating the landing of dispute? Among the most critical human order to bring those fugitives and wanted per- Fidel Castro’s guerilla incursion in 1957 to issues right now in both countries is the fact sons to face justice in a courtroom. topple the former Batista regime, Raúl Castro that the United States and Cuba each hold What about a transition to democracy in publicly expressed a willingness to open a dia- political prisoners, wanted men, and fugitives Cuba? The seeds of democracy are already logue with the United States, which the Bush of the other. there in Cuba. The seeds are reflected in the Administration regretfully shot down. Cuba has jailed several hundred Cubans general discontent of the Cuban people and Raúl Castro wants to talk with us with no who are political dissidents; many of them their living and economic conditions. When preconditions for the talks, but the adminis- received funding and support directly or indi- Castro dies, his successors will have to con- tration has said it will only talk when Cuba rectly from U.S. taxpayer resources. front these challenges head-on and will no frees all political prisoners and holds demo- We jailed five Cuban nationals for spying on longer be able to rely upon the charismatic cratic elections. us, when they were really here spying on figure to sustain their system. But we have provided public funding to Cuban-Americans who were planning to re- Castro’s successors will be focused on their those prisoners, directly and indirectly; we sort to violence to change things in Cuba. political survival. In the United States, the broadcast TV and radio programming into Cuba is haven to a number of American seeds of democracy are the Cuban-American Cuba which is ultimately jammed; we embar- fugitives who fled from justice here. We are people themselves. Fifty percent of the island go Cuba; we deny Americans normal travel currently detaining a Cuban exile, Luís population in Cuba has relatives living in the and trade with Cuba; and we are demanding Posada Carriles, who has admitted to being United States. that Cuba, a sovereign nation, summarily involved with killing and acts of terrorism People are the seeds of ideas and the true change its political system at our command as against Cuba. We won’t release him because currency of democracy. It is time to allow a a precondition in order to first have a conver- he once worked for the U.S. government. true flow and exchange to take place. sation. These are not very promising posi- There is enough on both sides to point to. The task to undue 47 years of distrust, fear, tions in order to begin a dialogue. Ask a Cuban official to release prisoners to anger, resentment and revenge will not be The definition of dialogue is a conversation improve relations, and he’ll tell you it's a non- easy. If we are ever going to play a meaningful between two or more parties. Some can argue starter and an issue of national security for role as a nation in the future of Cuba, it will be that tension and conflict in the world has been them. When they have done it in the past, it by us working to reconcile the two sides of increased by our failure to engage in conver- has got them nothing in return from the the Cuban family, those two million here in sations with other countries, especially those United States and our fundamental policies do the United States with the 11 million in Cuba, not change with Cuba. who have been made all the worse by the cur- Group calls broadcasts illegal And as long as it is the policy of our gov- rent policies of both countries. ernment to provide funding and resources to When each side takes a step like freeing A Washington-based watchdog group individuals and groups in Cuba for the pur- political prisoners, an environment for change has called for an investigation into TV and pose to destabilize and overthrow their gov- will have been created and given a great stim- Radio Martí’s use of private South Florida ernment, what is the point? ulus to talk and most importantly, much- media to beam anti-Castro programming In order to truly have a meaningful conver- needed relief to those prisoners and their fam- into Cuba, reported the Miami Herald. sation, remove the thorny issue of prisoners ilies who suffer this firsthand The Citizens for Responsibility and Eth- from the table, not as a precondition to any- If each country truly cares about those ics asked the Government Accountability thing, but simply to remove an issue that is political prisoners, each knows what it can do Office to probe the legality of TV and Ra- required in order to have a meaningful dia- right now to move forward towards resolution dio Martí’s deals with Radio Mambí (WAQI- logue. This is a no-brainer. of the crisis. It is time to begin lifting the fog AM) and Azteca América (WPMF-TV). Cuba agrees to release its several hundred of war that both countries are caught in. Only “Taxpayers should not be paying for the political prisoners with the proviso that they a dialogue can do that. illegal transmission of government propa- may be allowed to emigrate abroad or remain In the peaceful resolution of great conflicts, ganda within U.S. borders,” said Melanie in Cuba with the understanding that they will what is required by both parties is a willing- Sloan, executive director of CREW, a non- not receive funds from the U.S. government ness and the maturity to transcend that con- profit group that gets some of its funding directly or indirectly. flict's history. That can only begin first with a from Democratic-leaning donors. In return, the U.S. agrees to pardon and re- conversation. Let the dialogue begin. “These broadcasts are clearly aimed at lease the five convicted Cuban national spies Cuban-Americans in Florida, not Cubans and return them to Cuba. We further agree, Antonio C. Martinez II is a lawyer and for- themselves,” she said. “We hope that the as a matter of policy, that the U.S. government mer board member of the Latin America Work- GAO immediately investigates and forces will no longer fund and provide taxpayer ing Group in Washington, D.C. His opinions do an end to these illegal broadcasts.” resources to any individual or group to desta- not necessarily reflect those of CubaNews itself. bilize and overthrow the Cuban government. January 2007 ❖ CubaNews 11 COMMODITIES High prices make up for drop in Cuban nickel production BY PATRICIA GROGG / INTER PRESS SERVICE ery, financed with more than $500 million in Moa, is expected to produce 68,000 tons a ickel retained its first place among contributed equally by both partners. year of iron-nickel alloy. Cuban exports in 2006, its earnings The expansion of the Moa-Níquel plant was Conceived as a joint venture, Cuba will own Nboosted by unprecedented high prices intended to increase output by 16,000 tons 51% of the shares and the Chinese Minmetals on the international market, although output year, or about 50%, by the end of 2008. group the remaining 49%. was lower than the government had hoped. But Sherritt itself has now announced that There are plans for China to invest in a fifth Over the past year, the price of nickel ore the plans to increase Moa-Níquel’s capacity processing plant, to be built close to the ore has risen by 157%. On Dec. 15, it was quoted will have to be reviewed, and are now fore- reserves at San Felipe in the eastern province at $34,800 a ton on the London market. casting staged production increases of 4,000 of Camagüey, which would increase Cuban However, experts are now warning that the predicted slow-down in the U.S. economy in 2007, and a temporary oversupply of nickel on the global market, may bring nickel prices down in the near future. Nickel has been Cuba’s top traditional ex- port product since 2000, and in 2005 it was once again the country’s top source of foreign exchange, along with services and the biotechnology sector. However, Canadian firm Sherritt Interna- tional announced an estimated shortfall of 3,000 tons at an ore-processing plant it oper- ates in partnership with Cuba. This means that the national production target of 76,700 tons for this year, a modest increase over pro- duction in 2005, is unlikely to be met. The Cuban-Canadian joint venture Moa- Níquel (formerly Pedro Soto Alba) S.A. said in its report for the first quarter of 2006 that it would have to readjust its planned output tar- get of 33,000 tons for 2006 downwards to 30,000 tons, because of bottlenecks in the pro- duction process, apparently in the 1st quarter. “So far, strong prices have compensated for the decline in production,” a Cuban resear- tons for 2008, 9,000 tons in 2009, and a further nickel production to 120,000 tons a year (up cher who wished to remain anonymous told 3,000 tons by 2011. from its current 76,000 tons) in the future. IPS. Total Cuban nickel production in 2005 The Cuban-Canadian joint venture owns China is to invest over $1 billion in the amounted to 75,900 tons, similar to output for the processing plant at Moa, in the province Cuban-Chinese San Felipe project, according 2004, and a very modest increment of 1.1% of Holguín, a refining facility at Fort Saskat- to the agreements signed by Fidel Castro and chewan, Alberta, and a trading corporation in President Hu in Havana. the Bahamas. Without going into details, Venezuelan Two other nickel processing plants, the President Hugo Chávez said in Caracas on René Ramos Latour and the Ernesto Che Dec. 14 that Venezuela and Cuba are planning Guevara facilities, operated at full capacity in to manufacture stainless steel with Cuban LARRY LUXNER 2005, according to informed sources consult- nickel and Venezuelan iron. ed by IPS. They are both owned and operated At present, it is estimated that China by the Cuban entity Unión del Níquel. absorbs half of Cuba's total nickel output, and Cuba has substantial nickel and cobalt would be capable of buying up the other 50%, reserves located in Moa and Nicaro, Holguín. according to experts, because China is the Proven nickel reserves are estimated at 800 world’s top producer of steel, and its industry million metric tons, and probable reserves at is still expanding. two billion tons. Cuba’s cobalt reserves, Experts concur that until the day when oil meanwhile, account for approximately 26% of starts gushing from the underwater reserves Frank País Center for Nickel Research in Moa. the world’s total reserves. Official statistics in the Cuban zone of the Gulf of Mexico, nick- indicate that the island’s processing capacity el will be important as collateral for the loans was planned for 2006. is about 70,000 tons a year, including all three Beijing has given Havana in recent years. Given the upward trend in international processing plants. According to the U.S. Geological Survey, prices — which surpassed the $20,000-per-ton Expansion plans for the industry include world nickel production stood at 1.5 million mark in 2000 — the Cuban government building a ferronickel plant, a compound of tons in 2005. Russia, the United States, designed an ambitious plan for a gradual iron and nickel used almost entirely in the Canada, Australia, Norway and Cuba are the increase in production. manufacture of stainless steel. The plant will world’s foremost producers of nickel. Last year, Cuba reached an agreement with be built jointly with China, according to an Stainless steel manufacturing uses 60% of Sherritt for expanding production at the Moa- agreement signed in 2005 during Chinese the total production of nickel, which is also Níquel plant, and incorporating the latest President Hu Jintao's state visit to Havana. employed in the chemical, petrochemical, technology at a Canadian cobalt-nickel refin- The ferronickel factory, also to be located electronic, aerospace and auto industries. 12 CubaNews ❖ January 2007 2.5 kg of semi-processed beans, or beans with Cuba’s growers, in exchange for low interest BUSINESS BRIEFS the outside pulp removed. government credits and subsidized supplies, Cuba’s Agriculture Ministry regularly refus- must sell all of their coffee to the state at CUBA REACHES 50% OIL SELF-SUFFICIENCY es to comment on the harvest, and the gov- prices well below what the beans fetch on the Cuba’s 2006 oil output was 57,000 barrels ernment and state-run media rarely report the black market. per day and its natural gas output 920 million total crop, though provincial information is Local analysts said the system led to low cubic meters, similar to 2005, the official more frequently available. production and the diversion of 10-20% of the weekly Opciones reported in early January. Eastern Guantánamo province reported out- crop, most of which is exported. The magazine quoted Vice President Carlos put nearing its 1.5 million-can plan, and Lage, during a tour of gas-fired power plants, Granma province met its 800,000-can plan in RUSSIA LENDS CUBA MONEY TO BUY AIRCRAFT as saying oil and gas output was the equiva- late December, according to provincial media. A syndicate of Russian banks and Cuba’s lent of 3.9 million tons of oil. Reuters estimated another 500,000 cans in Aviaimport S.A. have signed a $203.4 million “Of this amount, the equivalent of 920,000 eastern Holgúin province and a similar credit agreement, Russia’s state-controlled for- tons was natural gas,” Opciones reported, amount picked in central Cuba. eign trade bank Vneshtorgbank said Dec. 22. meaning oil output was 2.98 million tons or Through 2000, Cuba earned around $20 mil- The credit is for 12 years and will be used to 20.86 million barrels (57,150 bpd), assuming 7 lion annually from coffee exports, but in buy Russian Il-96-300 and Tu-204 passenger barrels per ton. recent years low prices and declining produc- planes, said VTB, which is the credit organiz- Lage said local oil and gas production repre- tion have cut export revenues by around 75%, er. Cuba will provide sovereign guarantees as sented 50% of national consumption. according to government export data. loan security, while the aircrafts will be used Information on Cuban oil and gas output Picking begins in August and ends in as collateral. has become increasingly hard to come by in March, though all but around 100,000 cans of The bank said it is the largest deal on the recent years, reported Reuters, with figures beans are harvested from October into early export of Russian airplanes in modern Russian omitted after 2004 from the government’s sta- January. history, and the second-largest long-term proj- tistical abstract and other reports. For 2005, Cuba reported that combined out- put fell 3.7% from 2004 when output was re- Cuba’s IT revolution could help Canadian firms ported as 22.771 million barrels of oil (62,300 bpd) and 704 million cubic meters of gas. he IT revolution taking place in Cuba work on projects for the Canadian compa- Cuban production is concentrated along the is positioning the country as an nies and is also developing domestic IT northwest heavy oil belt, an 80-mile stretch of T attractive outsourcing option for projects. coast in Havana and Matanzas provinces Canadian companies, and a gateway to the “IT is among the main investment oppor- which produces all of Cuba’s heavy crude Latin American market, according to web- tunities in Cuba for Canadian companies with a density rating of 8 API to 18 API and site OffshoringTimes.com. right now,” says Raciel Proenza, economic with a high sulfur content. Cuba has proved masterful in reinventing counsellor at the Cuban Embassy in Most new wells are drilled vertically from its economic priorities in troubled times, Ottawa. “It’s a high-priority sector because the shore from 2-7 kms out to sea. The poor- said the Canadian online news service. it contributes to the development of our quality oil is burned in modified power plants Since 1991, Cuba’s information technolo- country.” and factories. In 2006, Cuba began shipping gy sector has been developing at warp Cuba is also poised to become a gateway small amounts of the crude to Malaysia. speed and now consists of about 45,000 to the lucrative Latin American market by Canada’s Sherritt International and highly skilled workers, 38% of whom have providing software adaptation and localiza- Pebercan Inc., in conjunction with state-run specialized degrees. tion services, offering the added benefit of Cubapetroleo SA, account for 60% of the out- More than 85% of the country’s IT indus- regional economic associations within the put. In addition, Cuba imports up to 98,000 try is concentrated in technical services and Caribbean and Latin American economies. bpd of oil and derivatives, with preferential software development, highlighted “Latin America is starting to roll and they financing, from Venezuela. OffshoringTimes. won’t be far behind in technology down the COFFEE HARVEST UP 30% THIS SEASON “We’ve been investing in this sector for road,” the Canadian insider says. “Cuba the last 14 years and we now have highly offers a front row seat to one of the worlds Cuba’s coffee harvest will be up by 30% this skilled IT workers at every level,” says Luís fastest emerging markets, just a three-hour year, with output of between 180,000 and Marín, general manager of Avante, the mar- flight from Canada.” 225,000 60-kg bags, Reuters reported Jan. 5, keting arm of Cuba’s Ministry of Informa- As the fifth-largest buyer of Canadian basing its estimate on local media reports. tion Technology and Communications. “IT goods in Latin America, Cuba’s IT revolu- Reuters estimated the 2005-06 crop at doesn’t require a lot of investment, except tion is two-way. The country is also moving around 140,000 bags — one of the lowest in in human resources.” at a rapid pace to develop its own infrastruc- 50 years — due mainly to hurricane damage Canada is Cuba’s No. 3 trading partner ture, concentrating on networking all of its to eastern Santiago de Cuba, responsible for and fourth-largest foreign investor, with science and technology institutions the way close to a third of national production, where more than $750 million tied up in the island the University of Havana has been. output was halved. nation, according to Canadian sources. The project eventually will link more than Above-average rainfall has broken a 3-year Cuba is particularly interested in joint 6,000 primary and middle school libraries, drought in eastern and central Cuba, where ventures that will enhance the local infra- 300 university libraries and more than 200 almost all Cuban coffee is grown, and the area structure, while transferring skills to citi- scientific institutions. Those numbers repre- was spared hurricane damage this season. zens. It wants to attract Western partners sent a significant opportunity for Canadian “Santiago surpassed 1,950,000 cans of coffee who can teach more about the standards companies, based on Cubas inability to buy collected, doubling what was collected last and demands of the international market. U.S. goods and services. year,” said the official daily Granma, attribut- Cuba’s Centresoft Corp. and Cimex “It’s a huge undertaking that will require ing the improvement to “more resources, bet- Corp., for example, have partnered with hardware, software and everything in ter labor organization and normal rainfall.” Sentai Software Corp. of Edmonton and between,” says Eduardo Orozco, director- The state increased by up to 100% what it Indcom Trading Co. of Orleans, Ont., to general of the Institute for Scientific and pays for beans this harvest. create an international software consortium Technological Information. “Canadian com- Cuba’s coffee production is routinely quanti- called CubaSoft Solutions Inc. panies with good products at attractive price fied in cans, which Agriculture Ministry offi- CubaSoft is recruiting Cuban IT talent to points have an excellent opportunity.” cials say are equivalent to between 2 kg and January 2007 ❖ CubaNews 13 ect under the state program of financial sup- ship between the Port of Palm Beach and to the whole world. In addition, we strongly port for industrial exports. Cuba,” Haddad said. “We believe that Palm oppose the U.S. boycott of Cuba.” In addition to VTB, the syndicate comprises Beach County can re-establish former ties and Christina Karlegran, regional spokeswoman Russia’s state-run Vnesheconombank and assist the island to develop its economy.” for Hilton and Scandic, said Hilton is a U.S. Roseximbank, which supports government The delegation doesn’t plan on meeting with company and is bound by the Cuba embargo. export operations. any Cuban government agencies or officials, “We have to follow American law,” she said “just everyday people like us exchanging by telephone from Stockholm. “We can’t see CUBA RACES TO COMPLETE HOUSING QUOTA information and getting to know each other’s that we have broken any Swedish or Norweg- Cuba was expected to conclude construc- cultures better,” he said. ian law. If it turns out to be illegal, we will tion and renovation of 110,000 homes by the The Port of Palm Beach, known as a gate- address that.” end of 2006, reported Prensa Latina. way to the Caribbean, could gain from closer In a news release, Norway’s most powerful The National Assembly session, presided U.S.-Cuba ties. labor union, the 830,000-member Norwegian over by Cuban Vice President Carlos Lage, “Those of us engaged in maritime com- Confederation of Trade Unions, demanded heard a detailed report on the issue from merce look forward to the day when normal- that “the government take steps so that com- Leonardo Martínez, chairman of the ized trade relations with Cuba can resume,” panies like Scandic, which clearly abide by Permanent Productive Activity Committee. Lori A. Baer, executive director of the Port of the U.S. illegal boycott and blockade and not Martínez stated that as of November, Palm Beach, said in announcing the trip. Norwegian law, are barred from doing busi- 102,353 houses had been constructed and that Brent Schillinger, a board member of the ness in Norway.” the plan was to conclude the year with Palm Beach trade group and a past president The state Equality and Anti-Discrimination 110,000. Of the total, 31% were begun or were of the Palm Beach County Medical Society, Ombud said it would demand an explanation in the first phase of construction in 2006. said he hopes the trip can forge a dialogue from Scandic and then decide whether to The program’s expense in convertible cur- with medical counterparts in Cuba. In addi- open a case against the company. rency until November was $292 million for tion, the Palm Beach Film and Television In a similar case in Mexico, the government construction materials, fuel and transporta- Institute plans to co-sponsor the Cuba mission in March ordered the Sheraton Maria Isabel tion, said Martínez. and produce a documentary on the visit. Hotel in Mexico City to pay a $112,000 fine for CUPET OWES CANADIAN FIRMS BIG BUCKS CHARTER AIRLINE BEGINS JFK-HAVANA FLIGHTS expelling 16 Cuban guests a month earlier due to the boycott. Cuba’s state-run oil company is behind in C&T Charters Inc. has begun offering $69 million of payments to its Canadian part- direct flights between New York’s JFK LAGE INAURUGATES HAVANA PIPE FACTORY ners in a heavy-oil-producing block on the International Airport and Havana. Cuban Vice President Carlos Lage officially north side of the island, the Toronto Star “We’re very happy to provide this service so opened Cuba’s second high-density hydraulic reported Dec. 27. passengers can fly directly,” said Rick Reposa, pipe factory on Jan. 4, reported the Pebercan Inc. said Cubapetroleo SA, known of C&T Charters. “They don't have to go Communist Party daily Granma. as Cupet, owes it 55%, or $37 million, of that through Miami.” Lage explained that the facility, known as Reposa is chief financial officer at C&T. He amount as spelled out in its production shar- Hidroplast, will contribute to the country’s told New York’s Channel 7 Eyewitness News ing and sales agreements for the concession, waterworks infrastructure, especially in water Block 7. that such flights have been leaving Miami since 1991. But New Jersey is home to the conservation by replacing old pipes. Cupet owes the remainder to the other part- The new plant is located in the Havana ner, Sherritt International Corp., Pebercan second-largest Cuban-American community in municipality of Boyeros, while the other exist- said, noting that it has intensified talks with the country — so JFK was an obvious choice. ing factory is in the central province of Ciego Cuban authorities in its efforts to resolve the The flights are scheduled once every two matter. weeks, though the company says it will de Avila. A third similar facility is scheduled In the meantime, operations on Block 7, increase frequency if demand warrants. to open in the first semester of 2007 in the located on the coast between Matanzas and In related news, El Salvador-based TACA eastern province of Holguín to complete the Havana, are proceeding normally with produc- International announced it would begin oper- nation’s requirements. tion of about 22,000 barrels a day, said ating direct flights to Havana from San José, Speaking to factory and construction work- Montreal-based Pebercan, which is currently Costa Rica — replacing its existing San ers, Lage said the three pipe factories will drilling three wells there. Salvador-Havana route. lower costs by 30% over imported pipes and The company also said it plans to spend $65 accessories. He noted that while the three million on its share of development in 2007 NORWAY PROTESTS HOTEL’S ANTI-CUBA POLICY facilities will all produce large-diameter pipes and hopes to reach an agreement on that with An Oslo hotel owned by U.S.-based Hilton —up to 1 meter — each will have its own line Cupet in the third week of January. Hotel Corp. faced protests, a boycott and a of products. police complaint after refusing to book rooms Lage said Hidroplast will contribute PALM BEACH COUNTY PLANS MISSION TO CUBA for a Cuban delegation because of the U.S. resources needed to revamp Cuba’s water dis- The World Trade Center-Palm Beach plans embargo against Cuba, AP reported Jan. 5. tribution systems. a humanitarian, educational and information The Cuban delegation, set to attend a travel TOBACCO COMPANY LAUNCHES MINUTO CIGAR exchange mission to Cuba in June. fair in Oslo this month, planned to stay at the “We hope to exchange information about Scandic Edderkoppen Hotel in the city center, Cuba’s tobacco industry has launched a new several key resources found in Palm Beach as they had on five previous visits. version of its famous cigars, called Minuto — County: agriculture, ranching and food pro- However, the 140-hotel Scandic chain was designed for smokers “with limited time.” cessing; water purification, irrigation and bought by Hilton in March, and the Cubans The new Cuban cigar is 194 millimeters related technologies; transportation; and med- were informed in December that they’d have long and weighs 7.1 grams. It’s sold in packs icine and life sciences,” Lou Haddad, presi- to find another hotel due to the embargo. of three and boxes of 25, according to the dent of the group, said in a statement picked Following the incident, the 300,000-member weekly Negocios en Cuba. up by the South Florida Sun-Sentinel. Norwegian Union of Municipal and General International Cuban Tobacco Co., which Haddad said the group is working with its Employees announced that it was boycotting makes Minuto cigars under the brand name counterpart in Cuba, the World Trade Center- all Scandic hotels in Norway. Guantanamera, says it’s targeting consumers Havana, to organize the visit. About 30 profes- “We are already looking for other hotels for who are just starting to smoke — young men sionals from South Florida are expected to planned conferences,” said the union’s deputy and women who can’t yet handle longer-last- make the trip, pending government approvals. leader Anne Grethe Skaardal. “For us, it is ing cigars — or veteran smokers with little “There once existed a pre-Castro relation- unacceptable for the United States to dictate time or who are trying to kick the habit. 14 CubaNews ❖ January 2007 PROVINCES Ciego de Avila hopes tourism will replace sugar economy

BY ARMANDO H. PORTELA This is the fourth in a series of monthly from 320,000 tons a year earlier, but still a far he province of Ciego de Avila was born articles on Cuba’s 14 provinces by geographer cry from the 800,000 tons or more being pro- in 1976, when the government Armando H. Portela, who has a Ph.D. in geo- duced annually in the 1980s, when the crop T replaced Cuba’s original six provinces graphy from the Soviet Academy of Sciences. was worth $350 million thanks to preferential with 14 new administrative divisions. prices paid by the Soviet bloc. Ciego de Avila covers 6,910 sq kms (2,668 limestone in the plains, Ciego de Avila has an Three of the province’s nine mills were to sq miles), including 589 sq kms (227 sq adequate supply of groundwater, but con- be dismantled as a result of the downsizing, miles) of adjacent keys — or 6.2% of Cuba’s cerns about saltwater intrusions limit the use after which Ciego de Avila’s nominal daily total land area. of aquifers. Over 77,000 hectares (190,271 grinding capacity will be 40,000 to 45,000 The province is made up almost entirely of acres) of lowlands, or 11% of the territory, tons, representing 13-15% of the industry’s flatlands less than 50 meters (164 feet) high, suffer some degree of saline intrusion into total. with the exception of scattered step hills to the groundwater and soils. Groundwater is The three are Patria o Muerte and Máximo the north, rising to an altitude of 443 meters mostly used to irrigate sugarcane, citrus and Gómez, which both date to 1915, and Bolivia, (1,453 feet) near Florencia to the west, and other crops. Water for irrigation is brought which was founded in 1917. All are located in 332 meters (1,089 feet) at Cunagua. from the Zaza reservoir at Sancti Spíritus lowlands where soaked soils pose an insur- Most of the land is composed of Miocene province and from Camagüey through mountable obstacle to profitable operations. limestone and Quaternary marine and allu- canals. This means at least 29,000 hectares (71,700 acres) of sugar cane will be abandoned, and vial deposits gently sloping toward the sea. POPULATION Some singular geological features have 11,000 workers — 10% of the provincial labor drawn specialist to the area in search of Ciego de Avila is one of the least densely force — will have to find other jobs. hydrocarbons but with limited success. populated provinces in Cuba, with only 59.4 The Patria o Muerte mill near Morón has To the southwest, along the border with inhabitants per sq km. In 2005, estimated been a museum for foreign tourists since Sancti Spíritus province, a Tertiary tectonic population was 418,573, with 38.5% of that 2001, and reportedly raked in $230,000 from basin filled with more than 6,500 feet of sedi- concentrated in two cities: Ciego de Avila, the 4,200 visitors in its first year of operation. The ment holds some deposits of light oil, some of capital (106,000) and Morón (52,000). Pina Venezuela mill, dating from 1906, will also which have been producing for 40 years. has 14,000 people; other settlements have stop producing raw sugar but continue pro- Although the reserves are depleted and its 11,000 inhabitants or less, and are associated ducing molasses. production represents only a fraction of the with sugar mills. Some of the five mills scheduled to remain national output, this oil is sent to a refinery in Population growth in Ciego de Avila aver- active as sugar producers rank among Cuba’s aged 1.7% annually in the 1980s, but fell to largest. This includes the Ecuador mill, Sancti Spíritus, where industrial oils, pesti- 0.8% in 1993 as a result of Cuba’s economic which has a daily grinding capacity of 10,200 cide components and other derivatives are crisis. Nevertheless, it remains above the tons. This particular mill has the only sugar produced. An oilfield near Pina, exploited national average. refinery in Ciego de Avila, with a capacity of since 1990, is the province’s main producer. AGRICULTURE 95,000 tons a year. To the inland, the plains are covered with Roughly 170,000 hectares (420,000 acres) deep red ferralitic soils, ranking among the Ciego de Avila accounts for 9-10% of Cuba’s would remain planted with sugar cane, about most productive in Cuba, though the low total sugar production, but that could rise as a quarter of the province’s total area. coastal plains have poorly drained soils, usu- other provinces shut down their mills as a Citrus fruits are grown on 9,900 hectares ally heavy and partially saline, needing mel- result of the recently announced downsizing (24,500 acres) at farms in Ceballos and ioration to make them fit for agricultural use. of Cuba’s unprofitable sugar industry. Morón. In 1997, the province produced a Brown argillaceous soils are restricted to the In 2002, Ciego de Avila’s nine sugar mills record harvest of 117,000 tons, or 14% of the foothills and valleys. produced 335,567 tons of raw sugar, worth island’s total for that year. Consistent with the abundance of karstic $50 million at prevailing prices. That was up Oranges make up 70% of the citrus orchards in Ciego de Avila. Although low by international standards, citrus yields have traditionally been among the highest in Cuba, reaching 12 tons per hectare in the late

LARRY LUXNER 1980s. A large citrus processing plant was built in 1985 at Ceballos, with the capacity to process over 40 tons of fruit per hour. Pineapple cultivation has declined dramati- cally as costs have skyrocketed, making the crop unprofitable. In 1990, nearly 32,000 tons were harvested, dropping six years later to only 1,400 tons. But thanks to the influx of tourists, the pine-apple industry is recovering. In 2001, Ciego de Avila harvested 4,200 tons of pineapples, rising to 4,800 tons in 2002. Ciego de Avila also produces 15-20% of Cuba’s potato crop, harvesting around 55,000 tons a year. Farmers are also engaged in cat- tle ranching and dairy production. TOURISM Vintage Buick rolls down a rain-slicked street in Ciego de Avila, capital of the province of the same name. As the sugar industry crumbles, Ciego de January 2007 ❖ CubaNews 15

H Cayo Guillermo H C LARRY LUXNER a C o c Cayo y o o Paredón

L o Punta Alegre s C P a e y r o y r R M AXIMO o o S T s m G OMEZ u B a a U r y n i g o T u a I n ó R San Rafael I La Leche Cayo P Chambas Judas S Lagoon r E NRIQUE I 1453 ft. V ARONA

T Falla Florencia H C Tamarindo 1089 ft. N Morón r Cunagua 1010 ft. P ATRIA O B OLIVIA A C IRO M UERTE R EDONDO S r Pina Pina Ceballos Jatibonico P RIMERO DE ENERO Cristales Violeta Billboard welcomes visitors to Ciego de Avila. Majagua Velazco cc H O RLANDO Ciego de Avila G ONZALEZ San Pablo Area of Detail Venezuela V ENEZUELA Gaspar Armando H. Portela FC Baraguá E CUADOR Population Land Use Y E Ciego de Avila (106,000) Sugar cane Júcaro U G Morón (52,000) Grasslands A M A Jatibonico (21,000) Citrus orchards C 5,000 - 14,000 40 kilometers Less than 5,000 Industrial facilities 0 25 miles Transportation Sugar mill Sugar mill (dismantled) cc Central road Avila has turned to tourism in hopes of saving its economy. Paved road Citrus processing plant Dismantled sugar mills are being converted into museums for Unpaved road Sugar shipping terminal tourists; neglected railroads and century-old engines offer trips through the sugar cane plantations; abandoned pineapple fields are FC Central railroad being revived to feed hungry hotel guests, and new roads, hotels and Secondary railroad Miscellaneous 1010 ft. other infrastructure, including a factory making high-density PVC International airport Height pipes, are rising across the province. r The Jardines del Rey tourist hub, centering on Cayo Coco and Cayo Airstrip (under 5000 ft) Beach Guillermo, now ranks third in Cuba after Havana and Varadero. It has Port Water reservoir over 3,300 rooms — or about 9.7% of Cuba’s entire hotel capacity — Electric y Gypsum deposit and hosted 160,000 visitors in 2001, up from 150,000 in 2000 and 142,000 in 1999. 220 Kv Powerline Swamps And although 6,000 people, or 5.4% of the province’s work force, are 110 Kv Powerline Oil fields employed in the tourism sector, the industry has brought with it seri- Thermal power plant H Hotels ous problems. At $500 to $600, average revenue per tourist is not par- ticularly high. And construction of an 11-mile causeway linking Cayo Coco and Cayo Guillermo to the mainland has led to serious environ- mental problems. By interrupting natural tidal and marine currents on Cayo Coco to handle supplies for the resort, and has managed to within Los Perros Bay, this causeway has annihilated marine life and cut transportation costs from $65 to $27 per ton; Casasa may handle all but eliminated commercial fishing. small passenger cruise ships in the future. Two international airports serve tourists. The first is Máximo INFRASTRUCTURE Gómez Airport, 12 miles north of Ciego de Avila and 45 miles from The Central Railroad and the old two-lane Central Highway link Cayo Coco. In 2001, authorities opened Jardines del Rey International Ciego de Avila with the rest of the island, and a network of secondary Airport in a densely forested area of Cayo Coco — cutting travel time paved roads and railroad branches reaches all settlements and eco- nomic hubs. Highways and railroads other than those serving tourists to the keys but severely affecting the island’s limited natural reserves. are said to be in very poor shape. The Cuban government invested $30 million and 45 million pesos to The province’s only port is located at Júcaro, on the southern coast, build the airport, which boasts a 10,000-foot runway and a terminal and handles a limited volume of sugar and refined products. Most capable of handling 20 flights a week and 1.2 million passengers a sugar production is shipped through the bigger ports of Cienfuegos, year. At the moment, the two airports together serve 12 to 14 inter- Nuevitas and Guayabal. A small port was recently opened at Casasa national flights weekly. 16 CubaNews ❖ January 2007 INDEX OF NEWSMAKER PROFILES: 2002 TO DATE CARIBBEAN UPDATE Here’s a complete listing of the 40 newsmaker profiles that have appeared in CubaNews since You already know what’s going in Cuba, June 2002, when we began running this feature. All profiles start on Page 8 of the issue indicated. thanks to CubaNews. Now find out what’s happening in the rest of this diverse and Alarcón, Ricardo, president of Cuba’s National Assembly (May 2004) fast-growing region. Alvarez, Pedro, chairman of Cuba’s state-run food purchasing agency Alimport (April 2004) Subscribe to Caribbean UPDATE, a Blanco, Kathleen, governor of the State of Louisiana (May 2005) monthly newsletter founded in 1985. Cor- Calzón, Frank, director of Washington-based Center for a Free Cuba (November 2004) porate and government executives, as well Cason, James, former chief of the U.S. Interests Section in Havana (February 2004) as scholars and journalists, depend on this Colás, Ramón Humberto, founder of Cuba’s independent library movement (September 2003) publication for its insightful, timely cover- Cowal, Sally Grooms, president of the Cuba Policy Foundation (September 2002) age of the 30-plus nations and territories of the Caribbean and Central America. Delahunt, Rep. Bill A. 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Oltuski, Enrique, Cuban revolutionary and deputy minister of fisheries (November 2002) Payá, Oswaldo, leading Cuban dissident and founder of the Varela Project (May 2003) Peters, Phil, vice-president of the Virginia-based Lexington Institute (November 2006) Reinsch, Bill, president of the National Foreign Trade Council (September 2004) Roca, Vladimiro, veteran Cuban dissident (April 2005) Rodríguez, Dagoberto, chief of Cuban Interests Section in Washington (August 2002, June 2003) Sánchez, Elizardo, human-rights activist and dean of Cuba’s dissident movement (July 2003) Schwag, Rick, founder of Vermont-based Caribbean Medical Transport (June 2006) Editor & Publisher Smith, Wayne, senior fellow at Washington’s Center for International Policy (June 2002) ■ LARRY LUXNER ■ Sparks, Ron, Alabama commissioner of agriculture and industries (January 2007) Washington correspondent Suchlicki, Jaime, director of the University of Miami’s Cuba Transition Project (February 2003) ■ ANA RADELAT ■ Tamargo, Mauricio, chief of the U.S. Foreign Claims Settlement Commission (February 2005) Political analyst Tokmakjian, Cy, Canadian investor and Cuba’s biggest new-car importer (December 2002) ■ DOMINGO AMUCHASTEGUI ■ Villand, Michel, French businessman, founder of Cuban pastry chain Pain de Paris (October 2002) Feature writers Werner, Robert W., director of Treasury’s Office of Foreign Assets Control (January 2005) ■ VITO ECHEVARRÍA ■ ■ HELEN J. 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