Vol. 14, No. 5 November 2006

www.cubanews.com

In the News Democratic control of Congress could

Shared interim lead to big changes in U.S. Cuba policy How will Fidel and Raúl fare under a “col- BY ANA RADELAT al agenda or allow Cuba legislation to languish lective leadership” scenario? ...... Page 3 he Nov. 7 general elections may usher in in GOP-controlled committees. His likely re- the greatest opportunity to change U.S.- placement as leader of the House — Rep. Nancy Money talks T Cuba policy since President Bush Pelosi (D-CA) — is expected to allow votes on assumed office nearly six years ago. Cuba issues. Two Florida fund managers have potenti- If Democrats take over the House of Repre- Meanwhile, Ros-Lehtinen would have much ally big plans for Cuba ...... Page 4 sentatives and — though it’s less likely — the less clout to lobby for the embargo as a mino- Senate, lawmakers who have long sought an rity member of the House Foreign Relations Smith and Hays easing of the embargo would suddenly be in key Committee, and Lincoln Díaz-Balart would no longer be able to use his senior position on the Former U.S. diplomats Wayne Smith and positions of power. Meanwhile, Republicans who have used their House Rules Committee to outflank opponents Dennis Hays square off over Cuba policy clout in the majority, like House Speaker Dennis with parliamentary maneuvers. at a recent forum in Vermont ...... Page 7 Hastert (IL) and Florida Cuban-American law- Alex Cruz, press secretary to Ros-Lehtinen, makers Ileana Ros-Lehtinen and Lincoln and told CubaNews the lawmaker was “so swamped Mario Díaz-Balart, to block legislation that with reporters, questionnaires, etc. that she just Newsmakers can’t answer” our inquiries regarding a possible Phil Peters, vice-president of the Lexing- would ease the Cuba embargo would find their influence greatly curtailed. Democratic takeover. Cruz suggested contact- ton Institute, discusses his on-the-ground Hastert and the three Cuban exiles are expec- ing the Díaz-Balart brothers, neither of whom could be reached for comment. research projects in Cuba ...... Page 8 ted to win re-election. But they may not like the But Daniel Griswold was happy to talk to us. jobs they have in the next Congress. Cabinet shakeup Hastert would no longer set the congression- See Democrats, page 2 Raúl Castro sacks transport minister and heads of Etecsa, Copextel ...... Page 10 Cuba’s Sugar Ministry looks to ethanol By the numbers Pew Hispanic Center takes a look at Cu- as home-grown fix for island fuel needs ban-American community ...... Page 11 BY VITO ECHEVARRÍA capacity to produce 180 million liters (48 million ots has been written about Cuba receiving gallons), though additional distilleries would Business briefs Venezuelan crude oil at preferential prices, have to be built to make up the shortfall. No doubt, this will change the dynamic of Sherritt plans nickel expansion; Russia ex- L and about Cuba encouraging foreign giants to explore for oil in the Gulf of Mexico. Cuba’s sugar sector, which has been stagnating tends $355 million credit ...... Page 12 Less is known about the island’s efforts to in recent years, as sugar’s role in the countryís produce home-grown, sugar-based ethanol as a economy had been sidelined by Cuba’s boom- Provinces: Camagüey viable alternative to pricer crude oil, and even- ing tourism industry. In 2004-05, Cuba’s sugar harvest came to only 1.5 million metric tons — Cuba’s largest province in size and its 3rd- tually become a world player in the fast-growing ethanol industry. a fraction of previous production levels. largest in population...... Page 14 That was the focus of this summer’s IX Inter- In response to growing global demand for national Congress on Sugar and Derivatives. ethanol, the Cuban government has created an Ecological disaster Luís Gálvez, director of the Cuban Research outfit called ZERUS, which is charged with su- pervising investment projects in Cuba’s sugar Juventud Rebelde says wire factory is con- Institute for Sugar Cane Derivatives (ICIDCA) said Cuba hopes to generate 500 million liters sector, the Washington Times recently reported. taminating Nuevitas Bay ...... Page 15 (about 130 million gallons) of ethanol annually ZERUS Director José Rivera Ortíz said in an by 2010 — a five-fold increase from current pro- interview with the business magazine Opciones CubaNews (ISSN 1073-7715) is published monthly duction levels. that Cuba’s Ministry of Foreign Investment has by Luxner News Inc. © 2006. All rights reserved. During the congress, Gálvez said that in already approved the group’s initiative to revive Subscriptions: $429 for one year, $800 for two years. order for Cuba to meet this goal, it would have the sugar industry — with an eye on ethanol. For editorial inquires, please call (954) 970-4518 Now, with sugar commanding prices 13-14 or send an e-mail to: [email protected]. to modernize 11 of the country’s 17 pre-existing distilleries. Together, those 17 would have the See Ethanol, page 6 2 CubaNews ❖ November 2006 head the powerful Ways and Means Commit- fashion, and the issue of remittances. We Democrats — FROM PAGE 1 tee, which has authority over the tax code, need a policy that forces Cuba to recalculate “All the ingredients will be there for major government programs like Medicare on a daily basis. The United States also needs approval of new [Cuba] legislation,” said and Social Security — and the embargo- to do the same thing. Cuba policy has become Griswold, director of the Cato Institute’s Cen- enforcing Treasury Department. too easy because it’s strictly rhetorical.” ter for Trade Policy Studies in Washington. Rangel has for years introduced legislation Doing things like easing restrictions on But he said the Bush administration, even that would scrap the embargo, but failed to Cuban-American travel and allowing mail to as it operates as a lame duck for the next two win majority support for his bills. Cuba “would remove some of the vitriol of the years, is likely to continue its veto threat of Another working group winner would be Cuban-American lawmakers in the House and any bill that would weaken U.S. trade sanc- Rep. Collin Peterson (D-MN), who is likely to allow [Bush] to negotiate with more moder- tions against the Castro government. be the next Democratic chairman of the ate people,” García told CubaNews. He added that President Bush will keep House Agriculture Committee. talking tough on Cuba in an effort to shore up Peterson would replace Rep. Bob Goodlatte EXILE ATTITUDES CHANGING? GOP support strong among the nation’s (R-VA) as head of the committee. Goodlatte is A recent NDN survey showed that most Cuban exile community for the 2008 presi- one of the few members of the agriculture recent immigrants from Cuba and the chil- dential elections, but that “there’s likely to be panel who doesn’t support easing restrictions dren of exiles who came to the United States more legislative action and more of a willing- on the sale of U.S. agriculture products to Cu- in the ‘60s and ‘70s want to end the embargo. ness to challenge the president on a failed ba, despite pressure from U.S. farm groups. Garcia cited the poll as evidence that exile Cuba policy, and that’s going to bring about a Other Democrats who have challenged the positions on sanctions are changing, and that healthy discussion.” embargo may also be elevated to key posi- the White House should take notice. tions. These include Rep. George Miller (CA), Democratic control of the House would DEMOCRATS LIKELY TO WIN CONTROL OF HOUSE who’s likely to become chairman of the also result in pressure to wrest control of According to Griswold, determined Demo- House Education and Workforce Committee; Radio and TV Marti — U.S. government prop- crats are far more willing to ease sanctions on Rep. John Conyers (MI), who’s in line to chair aganda broadcasts to Cuba — from anti- travel to and trade with the island. He said the House Judiciary Committee, and Rep. Castro exiles, as well as revamp a U.S. 25% of House Republicans and 90% of House Bennie Thompson (MS), who could assume Agency for International Development pro- Democrats have voted for to ease sanctions. control of the House Homeland Security gram that funnels millions of dollars to hard- Because some Republicans were willing to Committee. line exile groups. If the GOP loses the Senate, the push to defy their pro-embargo leadership on the NDN’S GARCÍA ADVOCATES ‘CALIBRATED STEPS’ issue, some legislation that would chip away change Cuba policy would garner even more at the embargo was approved in the House. Joe García, executive vice-president of the political strength, as embargo critics are pro- But House GOP leaders always managed to centrist NDN (formerly the New Democrat moted to head key committees. strip it out of final bills. Network) and former executive director of They include Sen. Tom Harkin (D-IA), who That could change after Nov. 7. the Cuban American National Foundation, would head the Agriculture Committee; Sen. Political experts say it’s likely Democrats said a Democratic takeover would give the Chris Dodd (D-CT), who would head the will win at least the 15 seats they need to take White House a chance to take “calibrated Banking Committee; Sen. Patrick Leahy (D- over the House and may win the six seats steps” towards Cuba, especially since an ail- VT), who would become the new chairman of needed to seize control of the Senate. ing Fidel Castro may never resume power. the Judiciary Committee, and Sen. Joe Biden In contrast, few, if any Democratic House “The embargo is the excuse of perceived (D-DE), who would chair the Foreign or Senate incumbents will lose re-election. action with calculated inaction, which benefits Relations Committee. If Democrats wrest control of the House the status quo. U.S. policy towards Cuba is Says García: “There are many voices within from the GOP, some of the biggest winners completely predictable, and Cuban policy the administration who want to try calibrated would be members of the Cuba Working towards the U.S. is completely predictable. responses with Cuba. My hope is that those Group, a bipartisan group of House and Sen- That’s the way both sides want it,” he said. people will use this opportunity. We’ve got ate members that aims to relax Cuba policy “Anyone who wants to see progress in about a year to effect real significant calibrat- (see box below). Cuba needs to look at smaller issues, like re- ed steps before the [2008] presidential elec- Rep. Charlie Rangel (D-NY) would likely establishing family visits in a more orderly tion overwhelms us.” MEMBERS OF THE HOUSE CUBA WORKING GROUP The bipartisan Cuba Working Group is composed of 47 members the travel ban and do away with the Helms-Burton Act. Working- of the U.S. House of Representatives — 24 Democrats and 23 group members also hope to reform Radio Martí, shut down TV Republicans — who want to change U.S. policy toward Cuba. The Martí and reach a settlement with the Cuban government over $1.2 group’s main objectives are to remove credit and other restrictions billion in U.S. property claims. Here are the group’s members (cur- on food sales to the Castro regime; restore family remittances; relax rent as of October 2006), the states and the districts they represent: Democrats: Republicans: Neil Abercrombie (Hawaii-01) Dennis Moore (Kansas-03) Mary Bono (California-45) Jerry Moran (Kansas-01) Tammy Baldwin (Wisconsin-02) Collin Peterson (Minnesota-07) John Boozman (Arkansas-03) Tom Osborne (Nebraska-03) Howard Berman (California-26) Charlie Rangel (New York-15) Kevin Brady (Texas-08) Butch Otter (Idaho-01) Marion Berry (Arkansas-01) Mike Ross (Arkansas-04) Dave Camp (Michigan-04) Ron Paul (Texas-14) William Lacy Clay (Missouri-01) Janice Schakowsky (Illinois-09) Jo Ann Emerson (Missouri-08) Jim Ramstad (Minnesota-03) Peter DeFazio (Oregon-04) Vic Snyder (Arkansas-2) Jeff Flake (Arizona-01) Dennis Rehberg (Montana-at large) William Delahunt (Massachusetts-10) Tom Udall (New Mexico-03) Sam Graves (Missouri-06) Rosa DeLauro (Connecticut-03) Hilda Solis (California-31) Wally Herger (California-02) Paul Ryan (Wisconsin-01) Mike Doyle (Pennsylvania-14) John Tanner (Tennessee-8) Tim Johnson (Illinois-05) Chris Shays (Connecticut-04) Sam Farr (California-17) Mike Thompson (California-1) Ray LaHood (Illinois-18) John Shimkus (Illinois-20) Stephen Lynch (Massachusetts-09) Edolphus Towns (New York-10) Jim Leach (Iowa-01) Pat Tiberi (Ohio-12) Jim McGovern (Massachusetts-03) Chris Van Hollen (Maryland-08) Donald Manzullo (Illinois-16) Ed Whitfield (Kentucky-01) November 2006 ❖ CubaNews 3 POLITICS CARIBBEAN BRIEFS CUBA, CARICOM TO EXPAND FREE TRADE PACT Fidel and Raúl: Shared interim period Negotiators from Cuba and the 15-nation BY DOMINGO AMUCHASTEGUI select meetings — but he will be around for a Caribbean Community are talking about few more years. adding hundreds of goods to those already or years, political analysts have theo- exempted from import taxes under a free rized considerably about Cuba’s transi- On Dec. 2, a big military parade is to take place at Havana’s Plaza de la Revoluciíon to trade agreement, according to AP. F tion and succession process. Those em- A deal signed in 2000 by the communist-led mark the 50th anniversary of the landing of phasizing the notion of succession took for country and the regional bloc, also known as granted two possible outcomes: first, the the Granma. Fidel is to preside over the event and address the gathering, as part of the Caricom, slashed or eliminated duty on items death of Fidel, and second, his incapacitation. including electrical products, construction In all variations, Raúl would become the posponed celebration of his 80th birthday. In the immediate future, Cuba will be led by materials and pharmaceuticals. new leader, in which case his many short- Ken Valley, Trinidad’s trade minister, said comings and disadvantages compared to a “shared interim” government headed by Raúl and Fidel, along with a host of other Caricom officials want to include more manu- Fidel — mostly related to his lack of leader- factured products such as furniture and agri- ship skills and charisma — would quickly leaders who appear frequently in the media. These include Carlos Lage, Felipe Pérez Ro- cultural goods, as well as tourism services. lead to Raúl’s collapse. que, Ricardo Alarcón, Jorge Luis Sierra Cruz Caricom officials said Cuba wants to add But the real world is different than acade- and Yadira García Vera. Provincial Commu- some 200 products to the treaty. mia. Fidel is not dead and, according to vari- nist Party leaders like Miguel Díaz-Canel Cuba has strong ties with Caricom nations. ous reports, very much recovering from (Holguín), Misael Enamorado Dager (Santia- More than 1,300 students from member whatever illness he may be facing, very much go de Cuba) and Pedro Sáez Montejo (Ciudad nations are studying in Cuba, while more than alert — and very much in command. de La Habana) will also take center stage. 1,000 Cuban doctors, nurses and other techni- Still many in those same academic circles The term “shared interim” conveys the cians are working throughout the Caribbean. say Fidel is terminally ill and therefore will notion of a shared arrangement between the not come back to exert effective power, and two brothers leading to a new set of circum- TCCC PLANS JAMAICA-CUBA FIBEROPTIC CABLE that the succession has already taken place. stances. This collective leadership may lead Trans-Caribbean Cable Co. Jamaica Ltd. Again, this is not the case. During the to reforms that seek more market-oriented recent Non-Aligned Summit, Fidel didn’t pre- (TCCC Jamaica) has applied for an expansion economic improvement. of its license to construct fiberoptic links to side over the sessions but opted to meet many As Fidel fades away slowly, Raúl and the of those who attended. Those who saw him Cuba, but Kingston’s Jamaica Gleaner reports new leadership will gain power and boost that — with the matter still under review by face-to-face reported that he was active, stand- their clout over policy and decision-making, ing, alert, walking, lucid, making decisions regulators — its principals are cagey about along with their visibility as public figures. their plans. and giving instructions over the phone. If, in addition, the economic and social con- Of course, for any man of 80 — sick or not TCCC Jamaica, one of three companies text should improve, as it is already the case, licensed to construct and operate an interna- sick — life is coming to an end, just like the preconditions for a continuity of the Cu- Churchill, Adenaur, de Gaulle, FDR, Joaquín tional undersea fiberoptic cable facility to ban Revolution will be laid down in this “inter- Jamaica, wants to build another link between Balaguer and other statesmen who remained im period” between now and Fidel’s death. politically active well into their senior years. Kingston and Santiago de Cuba, and has And if such events should take place as asked the Office of Utilities Regulation (OUR) Is death around the corner for Fidel? described, most Cubans will be ready to play to amend its license accordingly. Apparently not. Reports from Havana tend to along and follow actively or passively. The suggest that he will remain active and very riots, rebellions and bloodbaths — all of TCCC Jamaica is a joint venture between much in command for a longer period of time which were predicted and even encouraged Jamaica Network Access Point Ltd. (JNAP) than expected. by others abroad — never took place. Calm and Trans-Caribbean Cable Co. LLC (TCCC), Is Fidel going to rule as before? Of course and control prevailed, as acknowledged by based in New Jersey. TCCC President Brian not. Fidel cannot keep the pace he’s come to numerous foreign observers stationed in Crawford directed all inquiries to the local rep be known for. Rather, he’ll be limited to a desk Cuba. The shared interim will have then for JNAP, who in turned declined to comment. job, making key decisions and attending proven to be successful. In December 2004, Jamaica awarded two separate licenses to Trans-Caribbean and FibraLink Jamaica (a partnership between Group investigates Raúl’s role in early killings Merit Communications and Caribbean Crossing) to construct and operate fiberoptic Cuba Archive, an initiative of the nonprofit Free Society Project Inc., said it is “systemat- cables linking Jamaica to North America and ically documenting the loss of life during the Cuban Revolution.” the rest of the world. According to the group’s director, María Werlau, “the project has already documented Another company, Digicel, was unsuccessful 228 victims of extrajudicial assassinations in attempts to escape Cuba. The deaths involve in its go-it-alone bid, and later pulled out of mostly civilians, including many children, and have been perpetrated by Cuban border the TCCC consortium, which had over 30 guards under the command of Raúl Castro as Cuba’s defense minister.” partners. Cable & Wireless Jamaica, prior to Cuba Archive says this tally is a gross underestimation, yet it already exceeds the num- that point, was the only entity with a fiberoptic ber of people killed while trying to cross the Berlin Wall during the Cold War. facility to link the country internationally. “In addition, Raúl Castro is directly responsible for 550 executions in 1959 alone, the first Trans-Continental’s original license allowed year after the Castro takeover,” according to Werlau. “In Santiago de Cuba, in the first 15 it to construct an undersea cable from days of January 1959, Raúl had 278 members of the Batista government and of the Armed Kingston to Santo Domingo, connecting to Forces executed. Just on Jan. 12, Raúl ordered the execution without trial of over 100 men. additional facilities that extended to Puerto Policeman Benito Cortés Maldonado, an American citizen by birth, was one of the victims.” Rico. In January 2005, this investment was Werlau says her Free Society Project Inc. was established in Washington in 2001, and is estimated at $32 million. “dedicated to advancing human rights, primarily through research and publications.” “What they applied for and whatever com- Details: María Werlau, Director, Free Society Project, Chatham, NJ. Tel: (973) 219-7000. mitments they have under the existing license Fax: (973) 701-0521. E-mail: [email protected]. URL: www.cubaarchive.org. still stands. It’s just an addition,” said OUR deputy director Courtney Jackson. 4 CubaNews ❖ November 2006 MONEY Florida investment advisor takes a closer look at Cuba BY LARRY LUXNER political change, and obviously, were the established 12 years ago by Miami money et another investment advisor has its embargo to be lifted. manager Thomas Herzfeld (see story below). eye on Cuba: INTL Consilium LLC, “Over time, there will be a gradual opening “They’re broadly allowed to invest in any- Y based in Fort Lauderdale. of economic opportunities within Cuba, and thing that might benefit from political change The fund manager sponsored a Sept. 20 from foreign investors,” Binder said. “I don’t in Cuba,” Binder said of Herzfeld’s fund, seminar at the Conrad Hilton Hotel in Miami think it’s necessary for the embargo to be lift- which trades on Nasdaq under the symbol entitled “You Only Live Once: The Outlook ed, but it would be helpful in speeding up the CUBA and has assets of less than $14 million. for Economic Reforms in a Post-Fidel Cuba.” process of creating economic opportunity.” “Our fund is a global fund. We invest in Latin More than 100 people attended the meet- INTL Consilium manages $520 million in America, Eastern Europe, Africa, the Middle ing, which featured several well-known Cuba combined assets among its four products. East and Asia. So Cuba would only be a small experts including the University of Miami’s “In addition to the diversification benefits part of that investment.” Jaime Suchlicki; Florida International Univer- and investment talent associated with the new Binder explained that “for us, the percent- sity’s Damian Fernández; National Defense strategy, this acquisition gave INTL Consi- age that we invest in any particular country or University’s Frank Mora, and the Lexington lium an important foothold for expanding our security is totally dependent on the value we Institute’s Phil Peters (see our exclusive profile research coverage of investment activities in think we’re able to capture. So while Cuba of Peters, page 8). Europe, Africa and the Mideast,” said Binder, might be a small country, if we saw huge num- “While an overnight transition is unlikely, adding that his clients include banks, broker- bers of opportunities and good value, we the process of change in Cuba will have age firms, “sophisticated institutional inves- might invest 10% or more of the fund in Cuba.” important implications for investors and busi- tors” and accredited individual investors. Details: David Binder, Managing Director, nesspeople,” said Charles Cassel, managing Binder says there’s a major difference INTL Consilium, 350 E. Las Olas Blvd., Suite director of INTL Consilium and one of the between his fund and the Herzfeld Caribbean #1240, Fort Lauderdale, FL 33301. Tel: (954) firm’s two founders. Basin Fund, a closed-end investment fund 315-9380. E-mail: [email protected]. “As an emerging market fund manager, we place a premium on understanding those changes early on — and the opportunities Fidel’s illness pushes Herzfeld Fund into high gear that often accompany them,” he continued. “Russia and Eastern Europe have seen enor- here’s never been a better time to Because the U.S. bans direct investment mous growth since the Berlin Wall came invest in Cuba, suggests the Toronto in Cuba, the CUBA fund invests primarily in down in 1989. We are hopeful that Cuba and T Star, in an article portraying closed- U.S. companies that have a stake in the lift- its people will likewise benefit from reform.” end fund guru Thomas Herzfeld. ing of the embargo, along with Latin Ameri- Cassel and his founding partner, Jonathan “When it comes to mutual funds, there is can firms like Copa Airlines, which flies Binder, are the two principles behind INTL only one that offers a strong play on the three times a day from Panama to Havana. Consilium; they also have a team much anticipated emancipation of Cuba’s About 30% of the portfolio is invested in of analysts and traders help- economy: the Herzfeld Caribbean Basin Florida East Coast Industries, which oper- ing manage the project. Fund,” says the newspaper. ates the Florida East Coast Railway, unique- “It’s a privately placed Touted as the world’s only closed-end ly positioned to hook up to rail barges en fund we started two and a mutual fund heavily invested in Cuban- route to Cuba once trade resumes. half years ago. We invest in related business, the fund — The fund’s next two largest holdings are sovereign bonds, corporate which is now valued at $14 mil- the Royal Caribbean and Carnival cruise bonds, stocks, local-curren- lion — was started with about lines, whose business Herzfeld predicts will cy bonds and private equity,” $8 million in 1994 by vision- thrive when the so-called “gateway to the Binder said. ary money manager Caribbean” opens up. Thomas J. Herzfeld. The fund also invests in a U.S. shipping CUBAN OPPORTUNITIES ‘AT SOME STAGE’ “We’ve doubled the company equipped to service Cuba’s 14 “We have essentially a multi-strategy ap- money in the fund since we ports, only 3-4 of which can accommodate proach to investing in emerging markets. started it,” Herzfeld told the the deep-draft ships that transport most of We’re not seeking to produce the highest Canadian daily. “As soon as com- the world’s ocean-bound commerce. returns possible, but in an asset class that merce is resumed with that nation, Even with the embargo firmly in place, many investors perceive as risky, our main there will be a boom in Cuba, and we think the fund has prospered, with a three-year goal is to give them a low-risk type of invest- it will boom throughout the Caribbean.” annual return of 23% to Sept. 30, and will ment profile.” Though Herzfeld has long stopped pre- continue to thrive due to the nature of the He added: “We’re allowed to hedge our risk dicting when the embargo will be lifted, he underlying investments, Herzfeld said. through shorting securities. In that respect, said, “I certainly don’t think the embargo Asked by the Star if he’s traveled to Cuba we’re very different from most other emerg- will outlive Castro by many years and his to research his fund directly, Herzfeld ing market funds, which tend to invest with a health is certainly on the decline.” becomes coy. “That’s a lose-lose question. leveraged, long approach to the market.” Reuters reports that the Caribbean Basin I’ll tell you why. If the answer’s yes, the U.S. Born in Colombia and raised in Great Fund is a small piece of the $100 million government’s angry. If I say no, the share- Britain, Binder came to the United States in Herzfeld has under management. But it’s holders say, why not? So I don’t answer at 1988 and has been involved in emerging mar- seen a 95% gain in net asset value and a near- all. I have a boat that has a range of 1,000 kets ever since. ly 80% gain in its share price since inception. miles so draw your own conclusions.” “We clearly see Cuba as a country near to On Aug. 1, after Castro’s hospitalization Details: Thomas J. Herzfeld Advisors, PO us that at some stage will offer opportunities,” for intestinal surgery, CUBA fund units Box 161465, Miami, FL 33116. Tel: (305) soared 20%, briefly touching $9.75 before he said. “Our interest in Cuba at this stage is 270-1900. Fax: (305) 270-1040. E-mail: settling back around $9 per unit. to try and explore the types of opportunities [email protected]. that might become available were there to be November 2006 ❖ CubaNews 5 POLITICAL BRIEFS

ACLU: FLA. LAW BANNING CUBA TRAVEL IS WRONG In their own words … The ACLU seeks to suspend a Florida law that bans universities from allowing travel to Cuba, so “Now, when our enemies have prematurely declared me dead or moribund, that professors and students can pursue travel I am pleased to send out this small video to my compatriots and our friends plans for research and academic exchanges. around the world. I am coming along just as planned. I feel whole.” The American Civil Liberties Union argues that — Fidel Castro, appearing Oct. 29 on state TV and reading aloud some the law banning trips to Cuba and five other headlines from that day’s newspapers as proof of the broadcast’s authenticity. countries on the U.S. terrorist watchlist is uncon- stitutional and should be overturned. “I am a lover of the Cuban Revolution. I only regret that Fidel Castro did not But state attorneys say Florida has the right to carry out a process of political opening while he was alive. In my opinion, he oversee money managed by its universities. could have taken Cuba on a great leap forward. He did not do it.” “It’s not the professors’ monies; it’s the univer- — Brazilian President Luiz Inacio Lula da Silva, misspeaking on the state of Fidel’s sities’,” Louis Hubener, acting solicitor general health in an Oct. 19 interview with the newspaper Folha de São Paulo. for Florida, told the Miami Herald. He argued the law applies to state universities as well as pri- “Cuba’s blacks are probably as bad off as any blacks there are in the whole vate universities in Florida that get state funds. world. And that’s why I say that the improvements of the condition for blacks At issue: the law, approved by the Florida in Cuba will result in the improvement of blacks in all of Latin America.” Legislature this year, seems to be inconsistent — James Meredith, who broke U.S. color barriers to attend the University with federal law, which currently allows travel to of Mississippi in 1962. Meredith was among several blacks participating in a these countries for academic research. live Radio Martí broadcast about racism in Cuba. “They have stopped the flow of these funds that are sitting there ... and are also stopping academ- ic exchange,” said Paul Brinkman, an attorney “Cuba is a nation in waiting. Everyone is waiting, in that we’re all the same, with the Washington firm of Alston and Bird who from the comandante’s brother to the simplest of us.” is arguing the case pro bono for the ACLU. — Veteran dissident Elizardo Sánchez, in an interview with the Houston Chronicle that appeared Oct. 23, three months after Fidel gave up power. HONDURAS TO SEND ENVOY TO CUBA IN JANUARY Honduras announced Oct. 11 it’ll post an am- “He’s nothing but a dictator. His grand promises were only propaganda. bassador to Cuba in 2007, exactly 45 years after He’s caused a lot of suffering in Cuba, and he has achieved no real improve- the country yanked its envoy out of Havana in ment for the country.” the wake of President Kennedy’s 1962 imposition — Héctor Contreras of Fort Lee, N.J., one of a growing number of Venezuelan of an embargo against the Castro regime. immigrants who have forged alliances with anti-Castro exiles in the U.S. The two countries renewed diplomatic ties in 2002 but still has no envoy in Havana. Cuba sent “Rather than sit around and mope and whine, I decided to come here an ambassador to Tegucigalpa four years ago. instead. I’d like to highlight my opposition to the embargo.” Foreign Minister Milton Jiménez said — Independent candidate Brian Moore, 63, who’s challenging U.S. Sen. Bill Honduran President Manuel Zelaya wants to Nelson (D) and Katherine Harris (R) for one of Florida’s two Senate seats. “open Honduras to the world” and is already con- sidering candidates for the January posting. “The current irregularities in the country’s services, in the midst of the RADIO, TV MARTÍ BEGIN AIRBORNE BROADCASTING search for a better economic model, has meant Cuba still does not have a retail and services sector that satisfies people’s expectations.” Radio and TV Martí officially launched their — Oct. 23 article in the Communist Youth newspaper, Juventud Rebelde, which new aircraft-based broadcasts, the Miami Herald ran a three-part series on graft and corruption in Cuba’s shops and restaurants. reported Oct. 25. The new G1 twin turboprop, based in Key West, is to be airborne between 6 and 11 every “Many Cuban intellectuals have spent years asking for this absurd regula- night except Sunday in an attempt to bypass tion for entering and departing the country to be annulled. We have not Cuban government jamming of the stations’ pre- received any answer, except for the classic, ‘it’s under discussion.’” viously stationary broadcasting facilities. — Amir Valle, author of a book about prostitution in Cuba, in an Oct. 20 e-mail According to an official quoted by the Herald, to the Associated Press from Berlin, where he’s been living for the last year. Amir anecdotal evidence suggests some Cubans have says he lacks permission from his own government allowing him to return. been receiving the airborne transmissions, espe- cially outside the Havana area. “Fidel Castro has continued over the years to be aggressive against human The new aircraft is broadcasting on TV’s rights. If his brother takes over, there appears to be some interest in changing Channel 20 frequency and will not broadcast the way things are, which may create an opportunity to deal with the Cuban Radio Martí on the FM frequency. government. Until that happens, I don’t advocate any change of policy.” The Bush administration hopes the aircraft, — Ron Klein, Democratic candidate for Florida’s 22nd Congressional District, which replaces broadcasting blimps once teth- currently occupied by Rep. E. Clay Shaw Jr. (R), in comments to CubaNews. ered in the Florida Keys but destroyed by hurri- canes, will prove a more robust platform for “Songs are a powerful weapon. Important statements disappear from the defeating the Cuban jamming. newspaper the next day, but songs remain. They penetrate walls and keep But the plane can only fly within U.S. airspace important ideas alive in the human spirit.” to avoid violating international broadcasting reg- — French crooner Charles Aznavour, who spent 10 days in Cuba, where he and ulations. Yet some Cuban-American lawmakers jazz piano virtuoso Chucho Valdés recorded 11 new songs — including want to let the plane fly in international airspace, tunes about environmental decay and last year’s race riots in France. making it even harder on the Cuban jammers. The Cuban government argues that all Radio and TV Martí broadcasts are illegal. 6 CubaNews ❖ November 2006 duction, sugar’s new-found relevance in the “This means that they can run with a mix- Ethanol — FROM PAGE 1 country’s economy will require the govern- ture in any proportion, of what we call ‘gaso- cents a pound, Cuba is looking for investors ment to reverse its plan to shut down another line’ but which in fact is a mixture of gasoline to help get the industry back on track. Spain 39 mills, as well as improve the efficiency of and 20-25% of a hydrous ethanol, and hydrat- is reportedly interested, as is China, already a some of the poorer-performing ones that are ed ethanol,” he said. “Most of the Brazilian partner with Cuba in its efforts to develop off- still in operation. manufacturers — GM, Ford, VW, Fiat — have shore oil fields. According to official sources, the Sugar Flex Fuel vehicles. The only companies that Yet Jorge Piñón, an energy specialist affili- Ministry is working to expand production by don’t offer flex fuel vehicles at the moment ated with the University of Miami’s Institute planting an additional 30% area, thus increas- are Toyota and Honda.” ing the annual harvest So far, the leading automakers selling cars to 3 million tons — a with flex fuel engines in Brazil are Ford and tall order, considering GM. The embargo prevents the importation that only 1.2 million and sale of U.S.-made flex fuel cars to Cuba, metric tons will be har- but wouldn’t stop non-U.S. automakers like vested this year. VW, Fiat, Citroen, Peugeot and Renault that This brings up the already manufacture such engines from sup- issue of how Cuba will plying them use ethanol to cut its to Cuba. gasoline bill. As both CubaNews locals and visitors attempted to know, most cars on contact Cy Cuban roads tend to be Tokmakjian, either Soviet-era Ladas head of the or American gas-guz- Canadian zlers from the 1950s — firm Tok- along with a small but makjian growing fleet of late- Ltd., which model Japanese, Koren has import- Cuban campesino transports sugar cane, which can be used to make ethanol. and other vehicles, like ed a number for Cuban and Cuban-American Studies, says Brazilian tour buses of Japanese the island has a long way to go. and rental cars reserved for dollar-paying and Korean “You need to have basic sugar production tourists. cars to Cuba in order to produce ethanol,” Piñon told Whatever Cuba does to achieve ethanol- over the CubaNews. “Right now, they have nothing. In induced self-sufficiency in alternative fuels, years, to see it’ll likely turn to Brazil for help. Earlier this if car impor- the 1960s, Cuba had 1.7 million hectares of Ethanol is half the price of gaso- sugarcane. By the 2004-05 season, they had year, thanks in part to ethanol, Brazil declared ters serving line at a Brazilian service station. only 517,000 hectares.” itself free from dependence on foreign oil in Cuba like Furthermore, yields have dropped dramat- meeting its fuel needs. him plan to sell flex fuel cars there in the near future. ically, from a high of 54.9 tons/hectare in the FLEX FUEL ENGINES 1990-91 season to only 22.4 tons/ha in the No reply so far, but it is likely that either he 2004-05 season. Much of the credit in ethanol’s increased and other foreign entrepreneurs will eventu- popularity among Brazilian motorists is due ally move to supply such cars — or at least the ETHANOL DREAM PIE IN THE SKY? to the introduction of cars with “flex fuel” flex fuel engines — in the near future. It remains to be seen how other vehicle Piñón said that under private management, engines. These engines are designed to run on either ethanol, gasoline or a blend of both importers will deal with the eventual intro- Cuba could potentially produce 770 million duction of ethanol into Cuba. gallons of ethanol annually. That assumes one — giving consumers a choice, in the event that gasoline prices are low enough to justify One of the biggest is Busscar Onibus S.A., million hectares of sugarcane, with 50% going headquartered in the Brazilian state of Santa to sugar (approximately 4.7 million tons) and using it again, instead of ethanol. Vicente Lourenço, product engineering Catarina. José Francisco Lopes of Bussca’s the other 50% for ethanol production. export division told CubaNews in an e-mail Assuming prices of 12c/lb for sugar and director of General Motors do Brasil, told CubaNews in an e-mail sent from his São that “the 900 units that Busscar has already $2.50/gallon for ethanol, that could bring rev- exported to Cuba have diesel engines, and do enues “in excess of $4 billion a year,” he said. Paulo office that at present, about 90% of the automobiles produced in Brazil have the not have the capacity to adapt for functioning “But for that, you would need an invest- with alternative mixed fuels.” ment of $4.4 billion, and we’re assuming it capacity for flex fuel. would have to be from scratch,” he added. “If Cuba starts producing ethanol, sure they can use some of it for their own con- CubaNews assures readers: No conflict of interest sumption by selling E-85 gasoline in the local n light of the scandal that gripped The governments or any state-controlled entity. market. But gasoline consumption is only Miami Herald and its sister publication, This includes Radio Martí, TV Martí, the 12,000 barrels a day. I El Nuevo Herald, last month, CubaNews U.S. Information Agency and the U.S. Agen- “This is totally insignificant,” Piñón said, wishes to assure its subscribers that our cy for International Development. calling Cuba’s plans to become a world newsletter is committed to objectivity, accu- In early October, Jesús Díaz, publisher of ethanol player “pie in the sky.” racy and fairness in its coverage of Cuba. both The Miami Herald and El Nuevo Her- As we reported earlier this year (see Under no circumstances do the editor and ald, resigned after an uproar over the firings CubaNews, March 2005, page 10) , the Cuban publisher of CubaNews, Larry Luxner, or any of three writers who had been moonlighting government had 71 of the island’s 156 sugar for Radio and TV Martí while writing for El mills shut down as part of its original plan to of the freelance correspondents who write restructure the sugar sector — and as much regularly for this newsletter — Domingo Nuevo. One of the three, Pablo Alonso, had as half of the country’s sugarcane fields real- Amuchastegui, Vito Echevarría, Helen received nearly $175,000 in compensation located to raise other crops. Simon, Ana Radelat and Armando Portela — over a five-year period. With Cuba’s plans to increase ethanol pro- receive money from either the U.S. or Cuban All the journalists later got their jobs back. November 2006 ❖ CubaNews 7 US/CUBA RELATIONS Smith, Hays face off at Vermont forum on Cuba policy BY HELEN J. SIMON “Chances are Raúl Castro will be in power Hays said Raúl and others poised to assume ayne Smith and Dennis Hays are on relatively soon, and we will see real change,” power admire the current Chinese system opposite sides of the spectrum when he said. But since Fidel opposes economic that promotes private enterprise while limit- Wit comes to U.S. policy toward Cuba, reforms, nothing will happen until after he ing political freedom. but they agree on at least two things: No. 1, dies, he said. “Who knows when that will be? “That’s a very attractive model for the peo- there will be no change in Cuba until It could be another year.” ple around Raúl,” he said, “but as long as Fi- President Fidel Castro dies, and No. 2, his del is breathing, nothing is going to change.” For now, he said, the United States should successor, Raúl Castro, will implement eco- continue the embargo and other policies nomic reforms, but keep a firm hold on politi- aimed at denying support to the Castro cal activity. regime. Anyone seeking to help Cuba should Smith is a former U.S. State Department work directly with the people, not the govern- official-turned-academic who is affiliated with ment, he said. Johns Hopkins University and the Carnegie “Stand with the oppressed, not the oppres- Endowment for International Peace. Among sors,” said Hays, insisting that he’s against other things, he served as head of the U.S. In- allowing tourists to visit Cuba because tourist terests Section in Havana from 1979 to 1982. ventures cooperate with the regime to guar- Hays is a former U.S. ambassador to antee stability and thus profits. Tourism Suriname and Cuba desk officer at the State “doesn’t spread the benefits of democracy to Department. He’s also served as a top official Former diplomats Wayne Smith (left); Dennis Hays the Cubans,” he said. of the Cuban American National Foundation Smith, on the other hand, thinks U.S. policy and is now in the private sector. While Smith doesn’t anticipate a return to capitalism, he does expect a greater role in toward Cuba is counterproductive. Both men spoke about prospects for “Nothing that we do helps bring about pos- change in Cuba at an Oct. 26 forum in Bur- the economy by small businesses run by itive change in Cuba,” he said, urging the lington, Vt. The event — attended by about Cuban entrepreneurs. Bush administration to relax travel restric- 130 people — was co-sponsored by the Ver- Private enterprise was allowed to operate tions to the island and start a low-key dia- mont Institute on the Caribbean, the Vermont starting in the early ‘90s and flourished before logue with Cuban officials, beginning with Council on World Affairs and the Vermont being shut down again by Fidel Castro. assurances that it does not intend to over- Global Trade Partnership. “That’s what Cubans want,” said Smith. “They throw the Castro regime. Smith, who opposes the decades-old U.S. are very entrepreneurial. They know what While Smith said he supports a more open embargo of Cuba and efforts to topple the needs to be done to jump-start the economy.” society in Cuba, he warned that as long as the regime, said he traveled to the island in mid- Of any opening toward political freedom, White House keeps putting Havana on the October and found no one who expects the he said: “The political changes will have to defensive, “you won’t have an atmosphere for ailing Fidel to return to power. come later.” liberalization.” Officials claim embargo cost Cuba $4 billion in 2005 BY LARRY LUXNER the embargo has cost the island more than Stepped-up U.S. measures include stepped he U.S. embargo cost Cuba $4.1 billion $86 billion. That includes income lost as the up action to freeze Cuban assets and the cre- last year in higher financial and ship- tally of Cuban-American visitors fell 54%, from ation of a task force to chase Cubans nickel, T ping costs, lost business and cancelled more than 115,000 in 2003 to less than 62,000 Cuba’s top export with annual sales of $1.1 bil- contracts — double the amount in 2004 — as in 2005. Visits from other Americans fell 45%, lion, mined in part by Canada’s Sherritt tougher U.S. rules took a bigger bite out of from over 85,000 in 2003 to 39,000 in 2005. International. Washington has cracked down on Ameri- Cuba said there had been a marked the island’s recovering economy, cans who go to Cuba without special licenses Cuban officials quoted by various media increase in U.S. pressure on foreign banks to by fining 487 people a total of more than cut correspondence relations with Cuban say the island saw sharp declines in the num- $500,000 for breaking a ban on travel to Cuba. ber of Cuban-Americans coming on family vis- banks over the last year. It is also increasingly chasing companies in Swiss bank UBS AG and HSBC in London its, while restrictions on money transfers and third countries who do business with Cuba packages meant less cash and fewer goods closed dollar accounts held by Cuba, the and threatening banks to close down Cuban Cuban report to the UN said. And Trinidad’s arriving in Cuba for friends and family. accounts and transactions in dollars, he told a Republic Bank Ltd. has stopped processing “This is not an embargo, but an act of eco- news conference. nomic war,” said Cuba’s vice-foreign minister, “The blockade intensified and its extraterri- payments that Cuba makes to U.S. agricultur- Bruno Rodríguez, at a mid-October news con- torial reach has been extended,” Rodriguez al exporters. ference. He complained that Cuba had to said during the release of Cuba’s annual In July, the Netherlands Caribbean Bank spend far more on insurance and freight in report to the UN General Assembly on the (NCB), a subsidiary of Dutch financial servic- 2005 because Cuba was forced to trade with impact of the embargo. es group ING Groep NV, was put on a U.S. nations more distant than the United States. Last month, the U.S. Treasury Department blacklist for doing business in Cuba. Last year, 182 countries voted in the United fined Dresser Rand Group Inc. $171,300 for An ING spokesman confirmed a report in the Nations against Washington’s 44-year-old trading with the island. The New York-based Volkskrant daily that the U.S. government put embargo on Cuba, up from 59 in 1992. Only supplier of energy products was penalized NCB on July 28 on a list which bans U.S. com- Israel, Palau and the Marshall Islands voted because its Brazilian subsidiary had pur- panies and citizens from doing business with with the United States. This year’s annual UN chased raw materials from Cuba. the bank. vote on the bloqueo is set for Nov. 8. “U.S, policy against Cuba is totally isolated “ING is viewing what the implications might In all, Rodríguez said “conservatively” that and destined to fail,” said Rodríguez. be,” the spokesman said. 8 CubaNews ❖ November 2006 NEWSMAKERS Lexington Institute’s Phil Peters does his homework BY LARRY LUXNER including national security, immigration and Nor does TV Martí — or Radio Martí for hese days, Phil Peters is in hot demand education reform; even though it was started that matter. on the Cuba lecture circuit. With Fidel by Republicans, Peters says its reports are “Radio Martí gets through on shortwave, T Castro laying in a hospital bed and the nonpartisan. and has a very small audience, in the single island’s immediate future up in the air, Peters’ “We don’t get any USAID funding, and I’ve digits. And TV Martí? I’ve met just one person views on Cuba are more highly sought after never applied for a grant from USAID,” he said. in Cuba who said he saw the first seconds of a than ever before — which explains why he’s program, then the jammer turned it into snow,” been a panelist at just about every Cuba con- he said. ference from Miami to Washington. “Last year, I went all across the island, ask- The reason: Peters, vice-president of the ing people including dissidents and journalists Lexington Institute, is one of the few US-based incidentally about TV Martí. I think it’s a waste Cuba experts who’s actually been to Cuba. of money. For 15 years, it’s been the same “I go under a general license as a profes- story. We broadcast, they jam and the U.S. gov- sional researcher. If that’s your job, you can get ernment tells us there’s some solution right a license,” he said. “If I’m going to study agri- around the corner. Now we’ve got an airplane culture, for example, then I will want to talk to flying figure-8s just south of the Florida Keys. people in the Ministry of Agriculture. I also The fundamental problem is that you can’t talk to farmers and everybody else I can.” repeal the laws of physics. If the airplane is in CubaNews caught up with Peters last month Florida and the jammer is in Cuba, you can’t after a Cuba conference at which he was one of beat the jammer.” four panelists. The first thing we asked him RESEARCH HAS TAKEN HIM TO CUBA 20 TIMES was what’ll happen when Fidel dies. “I don’t assume that the political system in Peters, 50, is originally from Newark, N.J. He Cuba will change just because Fidel Castro graduated from Georgetown University with a dies,” he replied. “He has not left the presiden- bachelor’s degree in international economics, cy, he’s pulled back and delegated powers, so and a master’s in government and national the post-Castro era is not here — but it’s com- Phil Peters, VP of the Lexington Institute security studies. Peters had a particular inter- ing into view. That realization did not have any “Lexington in general gets support from est in the Soviet Union and its strategy in Latin significant consequence in Cuba.” foundations, individuals and corporations — America. We asked the academic if he had ever worked for the CIA. about one-third each. These Cuba research PETERS OPPOSES BUSH ‘TRANSITION PLAN’ “No!” he said, laughing, though he does ad- papers are funded by the Ford Foundation.” “To me, it’s a sad thing to say, but one of the mit to a lifelong fascination with all issues per- Peters doesn’t hide his irritation with the taining to the Cold War. things it really brought to light was the gap current Bush administration policy towards between Cuba itself and some of the activists in His first job after college was working for Cuba — particularly its recent announcement Miami. There was an assumption here in Rep. Jim Courter, a New Jersey Republican. Miami that with Fidel in the hospital, there was that it would channel $80 million to dissidents “I did everything from opposition research a new political dynamic in Cuba, so they called seeking a “democratic transition” in Cuba. to carrying mailbags,” he said. “I ended up for civil disobedience and assumed a transition “It’s an extraordinarily expensive way to go being his chief of staff.” was underway. about it, but it’s been this way for years,” Peters eventually landed a position with the “But none of that happened, and leading dis- Peters told CubaNews. Reagan administration, specializing in Central sidents including Oswalda Payá explicitly re- “USAID gives grants to American organiza- America. He became a speechwriter and the jected the calls for civil disobedience. Payá did tions, and the grantees distribute books in chief spokesman for the State Department’s so because he didn’t want anything that would Cuba. They buy the books, then they send Latin America bureau. cause any rupture, or disturb social peace.” them back to the government so that the U.S. “I had a small travel budget, so in 1991, I The Lexington Institute, a small think tank Interests Section can distribute them. One of went to Cuba for the first time. That was when based in Arlington, Va., has a dozen employees the distinguishing features of the USAID pro- all the changes in the Soviet Union were begin- and an annual budget of around $2 million. It gram is that none of the grantees actually go to ning to take place.” investigates different areas of public policy, Cuba, so I don’t see it having any real impact.” Since then, Peters has been back to Cuba 20

Research papers Phil Peters has written for the Lexington Institute cover a wide range of topics from sugar and tourism to self-employment and health care. November 2006 ❖ CubaNews 9 times. Those trips have resulted in a dozen spe- report, but he also puts them on the Internet income jobs and private activity. There are taxi cial reports documenting a particular area of where they’re viewed by thousands more. drivers, artisans, people who rent rooms in the Cuban economy: sugar, health-care, “I really try to reflect what’s going on there, their homes, and a whole chain of cuen- tourism, energy and self-employment are all the way from Castro’s speeches down to the tapropistas that only exists because of foreign among the topics he’s delved into. way it affects the workers and their families, tourists traveling to Cuba.” Unlike dry academic papers, however, and what they have to say about it. Pure journa- Peters fills his reports with anecdotes, charts, lism has great value, but I try to steer between SELF-EMPLOYED SECTOR TAKES A HIT stories and man-on-the-street interviews; he something that’s in newspapers and something Peters is an expert on the subject of cuen- even takes his own photographs. that would appear in an academic journal. I tapropistas — Cuba’s league of self-employed give data, but also some storytelling, and let people whose number hit a high of 209,000 in TALKING TO REAL PEOPLE individual Cuban voices be heard.” 1996. That’s since fallen to 149,000, according “Take sugar, for example. There’s a lot of Not surprisingly, Peters is a loud critic of the to Peters’ latest study, released in September. information to gather here. I want to hear the U.S. travel ban. Having been to Cuba as many That report, entitled “Down But Not Out,” is official point of view. There’s been some very times as he has, Peters thinks all Americans based on interviews with Cubans from all interesting policy changes. The downsizing should be allowed to go there. walks of life, including 73 whose income infor- was a huge decision in Cuban history, for them to decide to close all those mills. “But I also go around to academics, eco- nomic observers, foreign diplomats and people “When tourists spend money in Cuba, it contributes to high-income on the street. I rent a car and go out and inter- view workers. I go to towns where the mills are jobs and private activity. There are taxi drivers, artisans, people functioning,” he said. who rent rooms in their homes, and a whole chain of cuentapropis- “For that paper on sugar, I went to Matanzas province. Four mills were closed around the tas that only exists because of foreign tourists traveling to Cuba.” town of Jovellanos, so I went out there and — PHIL PETERS, VICE-PRESIDENT OF THE LEXINGTON INSTITUTE interviewed people living in the bateyes.” Are people ever suspicious of Peters? “Well, sometimes, they don’t want to talk,” he conceded. “If I talk to a guy who used to “First of all, we made illegal a whole lot of mation was used in a survey conducted by manage a sugar mill that’s closed down, I’ll say travel that has nothing to do with tourism,” he Peters while on the island recently. I’m a researcher from the United States, and said. “Academic travel has been severely “The self-employment sector has been re- I’ll tell him I won’t quote him by name. So it’ll restricted, as well as religious fellowships and duced by taxation, government regulation and appear that a farmer in Matanzas said this or humanitarian activities. People-to-people pro- competition, but they’re still there,” he said. that.” grams have been eliminated. Even programs “I talked to shoe repairmen, taxi drivers, car- Peters mails out around 1,000 copies of each that are designed to put Americans and Cu- penters, people who ran guest houses, you bans in contact name it. There’s no question that the govern- with each other ment muscled out many of these people in jobs RELATIVE PURCHASING POWER IN CUBA have been elimi- where they wanted the state to come back in nated because it and take over, but at the same time, you can go To illustrate the purchasing power of Cubans in various occupations, does not fit with to a bicycle or watch repair guy, and plenty of the following table shows how much work time is required to pay for a the policy. them are doing fine. They’re able to work with shopping trip to buy food at farmers’ markets using pesos (one pound “Tourism has the current level of taxation and I don’t think each of tomatoes, pork chops, rice, and black beans, plus a lime and a has an impact on the government sees them as a threat.” head of garlic), plus a few purchases in dollar stores: a tube of Cuba too, a posi- Pepsodent toothpaste, a pound of detergent, a pair of Chinese pliers, tive impact, be- PETERS: HEED REAGAN’S WORDS OF WISDOM cause it brings and a liter of soy oil. The cost, with the dollar purchases converted to Peters added that “these people are only part pesos, add up to 248 pesos. The disparity in purchasing power among information and ideas. Obviously, of the story. There are many more entrepre- different lines of work explains why many engage in moonlighting, neurs in Cuba who don’t have licenses — i.e. small-scale pilfering of state resources, or other black-market activity. your average American travel- the black market — than those who do.” er is not engaged Other recent reports Peters has published include “Rescuing Old Havana” (2001); “Cuba OCCUPATION WORK TIME REQUIRED in a science proj- ect but they’re Goes Digital” (2001); “International Tourism: Retiree earning minimum pension 1.6 months entitled to learn if The New Engine of Cuba’s Economy” (2002) Day-care worker earning minimum salary 1.1 months that’s what they and “Cutting Losses: Cuba Downsizes Its Professor 21 days want to do.” Sugar Industry (2003). State worker earning average salary 17 days Peters takes We asked if Peters had any advice for the Cuentapropista hairdresser 14 days issue with the Bush administration. His reply: Physician 11 days notion that tour- “To follow Reagan’s policies toward the Sov- 5 days ism keeps the iet Union. First of all, engagement and contact Varadero hotel housekeeper don’t equate with moral approval. We should 5 days Castro regime in Cuentapropista streetside snack vendor power. Rather, he engage as much as we can with actors who Meat vendor in farmer’s market 4.5 days says, it puts badly matter in Cuba. The point is, what Reagan did Average cuentapropista (earning pesos) 4.1 days needed cash into with the USSR was maintain a very firm moral Unlicensed bicitaxi 3 days the hands of indi- stance about the nature of that government, Cuentapropista tire repair 2.8 days vidual Cubans. but he engaged with those officials. At his Cuentapropista home rental (provincial) 2.7 days He added: level, he promoted engagement. Average cuentapropista (earning dollars) 6 hours “When tourists “Reagan saw private Americans traveling to spend money in *Calculations are based on salaries and prices observed in Havana, Santiago de Cuba, Ciego de Avila and Hol- those countries as a good thing,” Peters said. guín. Farmers’ market prices were 9% higher in Havana than in the provinces. Source: Lexington Institute. Cuba, it contri- “It was a way of expanding our influence. He butes to high- wanted government to get out of the way.” 10 CubaNews ❖ November 2006 POLITICS Transport minister, chiefs of Etecsa, Copextel dismissed uba’s Politburo has ousted Carlos Man- for failing to control the fixed-line and mobile backs from foreign companies. uel Pazo as transport minister, replac- services monopoly, the sources said. Etecsa’s new president, Maimir Mesa C ing him with Jorge Luís Serra — in the Etecsa reported in excess of $400 million in Ramos, and Copextel’s new boss, Antonio second ministerial cabinet change since Raúl 2005 revenues. Orta Rodríguez, were both promoted from Castro assumed the interim presidency three Valdez also fired the president of the pow- within the ranks. months ago. erful state-run Copextel conglomerate, which Reuters, quoting anonymous local and for- Cuba’s 31-member Council of State imports, assembles and distributes advanced eign sources, reported that the shake-up at approved the appointment Oct. 21. Public communications, computing and other tech- the companies “did not appear to be aimed at transportation was one of the Cuban indus- nology. Copextel, with annual revenues of opening up the sector to foreign capital or to tries that shrank most with the end of Soviet more than $200 million, has been caught up in information and entertainment from outside subsidies in the early ‘90s. Cuba has in- recent corruption scandals involving kick- the country.” creased commercial ties with China in recent years to replace its aging vehicle, train and fluvial technologies. For bird enthusiasts, Cuba’s a real paradise The sacking of Pazo came in response to “the priority that this important sector o birding in the United States these days, and you'll likely be tapped on the shoulder requires” — meaning that there had been no by an officer who will want to know what’s with the binoculars and camera equip- improvement whatsoever in Cuba’s inade- Gment. Go birding in Cuba, and you will likely find friendly host biologists who offer quate transport sector under Pazo’s watch. to take you almost anywhere to track down exotic species. A case in point: Cuba recently purchased Those species include the world’s smallest hummingbird, the zunzuncito or bee hum- dozens of diesel-fueled Chinese buses but mingbird, which is only about two inches long. Add to this the pygmy owl, Cuban green par- most have been assigned to the tourism in- rot and zapata wren, and you have enough to make a real birder’s blood race. dustry — while average Cubans wait hours All told, Cuba has 338 species of birds comprising 54 families, 14 endangered species and for a crowded ride home on older city buses. 25 endemic (birds found just about only in Cuba). The stable climate also helps birders to In late September, the Castro government locate and document their quarry, resulting in good reports from visiting birders. fired the heads of two of Cuba’s most influen- tial companies in a bid to bring the computing In a website run by Bird Tours in the United Kingdom, birders are enthusiastic in their and telecom enterprises back under firm state trip reports, speaking of “lifers” or “life ticks” (a bird first seen outside an aviary), and birds control amid a national anti-corruption drive. in “full song” (a sound counts as a sighting in bird-watching lingo). Revolutionary hero Ramiro Valdes Menen- In 2001 trips, Alex Kirschel reports seeing the “highest total of lifers in one day,” and John des, 74, was named information technology Van der Woude says he “saw practically all of the endemic species.” All of the reports were and communications minister — overseeing a positive, stressing easy entrance to birding areas, while several mentioned the dean of Cuba sector that controls Cuba’s telecom, comput- birding, Orestes Martínez García, a.k.a. “El Chino.” ing, Internet and software development. El Chino, who operates out of a national park near the Zapata Swamp on Cuba’s south Valdes replaced Ignacio González Planas, coast, told CubaNews that December through May is the best time to bird in Cuba. El Chino who had previously held the post of Minister recommends a stay of “at least two weeks” with three days in Pinar del Río, four in Zapata of the Steel and Mechanical Industry (SIME). and a final five in Cayo Coco. Entrance to birding areas costs from $12 to $19 a day not A brief note published in the Communist including transportation and guide fees. All in all, expect birding to cost about $100 a day in Party daily Granma said only that González Cuba, including hotels and meals. Planas would be given other public tasks. Consider Cuba to the one of the most birder-friendly countries around, and expect a flood Valdes immediately fired the president of of birders from the United States whenever travel to Cuba is legalized. Empresa de Telecomunicaciones de Cuba SA – DOUGLASS G. NORVELL (Etecsa), José Antonio Fernández, and the vice minister for information, Nelson Ferrer, Despite tensions, Cuba-Spain trade hit $1 billion in 2005 ilateral trade between Spain and Cuba As for Cuban exports to the European member Association of Spanish Businessmen reached $1 billion in 2005, said Raúl Union, Spain is exceeded only by Holland, in Cuba (AEC), said Cuba has “enormous BBecerra, president of the Cuban Cham- with tobacco and rolled cigars the most economic importance” for Spain. ber of Commerce. important export of all. Moro, who runs a food-sector and fishing He said Spain is now Cuba’s No. 3 trading Javier Gomez Navarro, president of the company, said the AEC is interested in the partner, with 8.5% of total trade. It is the most Spanish Chamber of Commerce, says links mining, renewable energy and hospital sup- important trading partner within the Euro- with Cuba could go much further if new for- ply sectors. The AEC — the only foreign busi- pean Union, which represents 32% of Cuba’s mulas are introduced to improve financing of ness association accredited by the Cuban gov- overall trade. both trade and investment operations. ernment’s National Register of Associations Juan Arenas, president of the Spanish sec- The warming trade ties come even as the — was created in 1994 and has been headed tion of Cuban-Spanish Bilateral Committee two countries differ politically; Spain has been for the last five years by Moro. for Business Cooperation, said Spain ac- quite vocal about human-rights abuses. Details: Víctor Moro Suárez, President, counts for 62% of total EU exports to Cuba. Spanish firms participating in the Cuban Asociación de Empresarios Españoles en Cuba, The island, in turn, ranks 6th among Latin market are involved mainly in cement, food- Edif. Santiago de Cuba, Ofic. #216, 5ta Ave. nations in terms of imports of Spanish goods, stuffs, graphic arts, perfumes, textiles, water e/76 y 78, Miramar, La Habana. Tel: +53 7 with machinery and equipment, chemicals, supplies and energy. 204-0729. Fax: +53 7 204-0728. E-mail: wire and cables heading the list of exports. Víctor Moro Suárez, president of the 180- [email protected]. November 2006 ❖ CubaNews 11 EXILE COMMUNITY ENERGY BRIEFS FIRE DAMAGES MAJOR HAVANA OIL REFINERY U.S. group pledges $10m in microloans A major fire ripped through the Nico López oil refinery in Havana the night of Sept. 27, he Cuba Study Group, a nonpartisan by training to Cuban entrepreneurs. injuring at least two people, reported Platts group headed by Miami banker Carlos Saladrigas told AP his group doesn’t want Commodity News. to see Cuba repeat the mistakes made in Latin T Saladrigas, has pledged $10 million in Flames from the Nico López refinery, locat- America and violence-torn Iraq, where the seed money for small-business startup loans ed on the fringes of Havana’s port quarter, focus was on large-scale reforms and too little aimed at entrepreneurs inside Cuba. were visible all over the Cuban capital “for at But the novel microloan plan must first has emphasis was placed on economic develop- ment at the grass-roots level. least six or seven hours,” the source said. to overcome restrictions enforced by the U.S. The refinery, formerly owned by Esso and and Cuban governments. “Democracies are not phoenix birds, they don’t just rise out of the ashes of collapsing Shell, predates the 1959 revolution. It has a Saladrigas told AP the idea is to give micro- capacity of 122,000 barrels a day and is one of loans to people who want to start businesses societies,” he said. “This is a way to begin at the bottom of society and empower the indi- only two in Cuba. The other refinery, such as selling food in the street. Hermanos Díaz (formerly Texaco) is in The Cuban government prohibits most pri- vidual and help them become a stockholder in Santiago de Cuba on the island’s eastern tip, vate enterprise, while U.S. law sets strict lim- the new society.” its on sending money the island. In a Sept. 14 editorial, the Miami Herald and is rated at 102,000 b/d. “We have to take risks and seize opportuni- wholeheartedly endorsed the proposal. According to independent reports, however, ties, and we believe change is under way in “Such a constructive approach is refresh- both antiquated facilities have been running Cuba,” Saladrigas said. “Raúl Castro is not a ing. Criticizing Cuba’s dictatorship for bank- recently at about half their stated capacity. spring chicken, and collective leadership rupting its economy and human-rights abus- State-owned Petróleos de Venezuela SA is always harbors the seeds of reform.” es, legitimate as those issues are, doesn’t currently involved in an $83 million project to AP said Mexican bank Compartamos, change the facts on the ground,” the paper complete construction of the Soviet-designed which has offered microloans of less than editorialized. “Fundamental change should be refinery at Cienfuegos on Cuba’s southern $1,000 for more than 15 years, has agreed to initiated by Cubans on the island. Offering coast (see CubaNews, June 2006, page 2). work with the group if it gets the necessary ideas and incentives helps encourage Cubans Construction was abandoned with the 1991 permission. to take the needed plunge.” collapse of the Soviet Union. Similar microloan programs have become Details: Carlos Saladrigas, Chairman, Cuba Capacity is slated initially at 70,000 to 80,000 popular throughout Latin America, in parts of Study Group, 5900 Bird Road, Miami, FL b/d, rising to 120,000 b/d later. Asia and even in some areas of the United 33155. Tel: (305) 740-6000 x237. Fax: (305) PEBERCAN PURSUES BLOCK 7 OIL POTENTIAL States. The loans would also be accompanied 740-7474. E-mail: [email protected]. Montreal-based junior Pebercan is gearing up for further development of its Santa Cruz field in Cuba’s Block 7. CUBAN-AMERICANS BY THE NUMBERS Pebercan’s exploration manager, Patrice Bedu, told Upstream magazine on Oct. 20 it 1,448,684 — total number of Cubans living in the United States and their descendants plans to spud three more wells this year as 912,686 — number of Cuban-Americans who were born in Cuba (63% of the total) part of its Cuban oil program. Santa Cruz is currently producing about 41 — average age of the U.S. Cuban population 6,000 barrels per day, with output expected to 27 — average age of the rest of the U.S. Hispanic population reach commercial levels by the end of this 990,000 — approximate number of Cubans living in Florida (two-thirds of the total) year, possibly in November. Ongoing develop- 81,000 — approximate number of Cubans in New Jersey (which ranks No. 2 after FL) ment and well drilling at the field should allow the company to take crude output to 15,000 1,356 — number of Cubans living in Alaska b/d by the end of 2007, he said. 62 — number of Cubans living in Wyoming Block 7 is located off Cuba’s northern coast 2 — number of states that have no Cubans at all (Arkansas and South Dakota) between Havana and Matanzas. It holds three oil fields, including Santa Cruz, where hori- $38,000 — average wage of Cubans who arrived in the United States before 1980 zontal wells on the shoreline tap deep into a 13% — Cuban-Americans under 18 years of age who are living in poverty stack of carbonated thrust sheets offshore. 24% — Cuban-Americans aged 65 and older who are living in poverty The other two fields in the block are Canasi 60% — Cuban-Americans who are U.S. citizens and Seboruco. Pebercan owns a 60% stake in Canasi and 56% — Cuban-Americans who support dialogue between the U.S. and Cuba 55% in Seboruco, with the two fields operated 74% — Cubans in Miami-Dade who think Fidel Castro is terminally ill* by Canada’s Sherritt International. 55% — Cubans who think a “major transition to democracy” is likely Total production on Block 7 currently stands at between 22,000 and 23,000 b/d, but 72% — Cubans in the above poll who are registered Republicans Bedu said output could be increased to as 51% — Cubans who approve of the way Bush is handling current U.S. policy on Cuba* much as 30,000 b/d by 2008, largely in part to 72% — Cubans who think the United States should negotiate with a new Cuban govern- development of Santa Cruz. ment “if it shows interest in a gradual improvement of relations with the exile community”* Upstream said Pebercan also hopes to renew concessions in central Cuba and 20% — Cubans in the above poll who believe that residential properties in Cuba “should expects to conclude talks for blocks 12, 13 belong to those who have title to that property predating Fidel Castro’s revolution”* and 15 later this year or in early 2007. SOURCE: All items except those marked with an asterisk (*) were taken from the Pew Hispanic Center 2006 study. URL: Details: Patrice Bedu, Exploration Manager, http://pewhispanic.org/files/factsheets/23.pdf. *All other items come from a poll of 600 Cuban and Cuban-American Pebercan, 750 Blvd. Marcel Laurin, Suite adults in Miami-Dade and Broward counties conducted Sept. 14-20 by Bendixen & Associates. #220, St. Laurent QC H4M 2M4. Tel: (514) 825-8427. E-mail: [email protected]. 12 CubaNews ❖ November 2006 nance Co., which is arranging the plane sale. which cannot buy Boeing or Airbus airplanes BUSINESS BRIEFS Andrey Dmitriev, Russia’s ambassador to due to U.S. trade sanctions, has ordered two Cuba, said the goal of Fradkov’s visit was to more wide-bodied Il-96-300s and three medi- 800 FOREIGN FIRMS TAKE PART IN FIHAV SHOW remove financial obstacles to a rebirth in bilat- um-range Tupolev Tu-204s with an estimated Cuba’s 24th annual Havana International eral trade. value of $250 million. Trade Fair (FIHAV 2006), running Oct. 30 “The potential is unlimited. Russia can sup- through Nov. 4, is expected to generate even ply anything the Cubans need,” Dmitriev said CZECH EXPORTS TO CUBA UP 57% IN 2005 more business than in 2005, when contracts during a visit by Fradkov to a transport fair in Despite years of diplomatic tensions, trade came to over $400 million. Havana, where Russian companies had on dis- between Cuba and the Czech Republic is surg- Cuban Foreign Trade Minister Raul de la play GAZ trucks and vans, Volga sedans and ing ahead. The Prague newspaper Pravo, quot- Nuez said participation in FIHAV reflects shiny new Ladas, the small car used by com- ing the Czech Ministry of Industry and Trade, Cuba’s sustained growth in trade, which is munist-run Cuba’s chauffeur-driven ministers. said Czech firms increased exports to Cuba likely to reach $10 billion this year, a 27% Cuban officials said buying vehicles from by 57% last year to $21 million. jump over 2005 figures. Russia is a good option because many of Cu- Sales of motorcycle parts, beer and power- De la Nuez said nearly 800 foreign firms are ba’s aging trucks and cars are Russian-made plant supplies have helped the Czech Republic taking part. and the technology is familiar to Cubans. enjoy a modest trade surplus with Cuba, China, Spain and Russia were the countries Russia’s 2006 budget allocated $325 million which exports rum and cigars to the Czechs. with most space at the Expocuba fairgrounds, for Cuban trade guarantees that would go The Jawa motorcycle and Brisk Tabor spark- located southeast of Havana. largely to cover private bank financing for the plug companies ship Czech-made parts to Other nations well-represented at FIHAV purchase of Russian commercial aircraft. their assembly plants in Cuba, said the news- included Brazil, Canada, Italy, Panama, Vene- Cuba’s flag carrier Cubana de Aviación, paper. Bilateral business could increase even zuela, South Korea, Mexico and Germany; for- eign firms occupied over 186,000 sq feet of exhibition space. U.S. companies also extended their pres- ence with an area smaller than Venezuela but larger than South Korea.

About 100 U.S. companies have booths at LARRY LUXNER the fair, down from 188 last year, according to Pedro Alvarez, chairman of Cuba’s Alimport. He said Cuba plans to import $500 million worth of U.S. goods this year. Cuban exports have increased and diversi- fied, with traditional products like sugar and nickel expanding their sales by 15% and generic medicine and biotechnology products by 23% year-to-date, he said. FIHAV also included 87 stands showcasing the products and services of almost 300 Cuban enterprises, headed by medical and Entrance to the J-V nickel refinery Sherritt operates with CubaNiquel, in Moa, Holguín province. biotech firms. This is no surprise, since Cuba’s health sector generates more income than any other excluding nickel exports. Despite uncertainty, Sherritt plans expasions RUSSIA OFFERS CUBA $355 MILLION CREDIT anada’s Sherritt International said its ritt’s Fort Saskatchewan facility in Alberta joint-venture Pedro Sotto Alba nickel (see CubaNews, September 2006, page 8). Russia has extended $355 million worth of C plant operated in a venture with state- The company said it wants to upgrade its credit to Cuba for the purchase of Russian owned Cubaniquel would produce only annual mine and processing output by cars and trucks, as well as energy and trans- 30,000 tons a day this year, compared with 16,000 tons by 2011, up from the current port infrastructure projects including air navi- the 33,000 tons it has shipped to Canada level of about 34,000 tons. The expansion gation systems. daily in previous years. That means Cuba’s project would cost $500 million, though the The Putin government has also won a com- unrefined nickel production would fall short company is reviewing the capital plan. mitment from Cuba to buy $100 million a year of the 76,700 tons planned for the year. Bentinck told reporters he’s counting on in civilian aircraft. the company’s investment in key parts of The fresh credit line — repayable over 10 “Taking into consideration process bottle- necks experienced in prior quarters, full- Cuba’s economy and relationships with the years at 5% interest — was announced during government and workers to secure its year nickel production is expected to be a visit by Russian Prime Minister Mikhail investments after Castro leaves office. Fradkov. Moscow, which has set aside a $26 approximately 30,000 tons,” Reuters quoted “Our relationships in Cuba are exception- billion debt it says Cuba owes it from the Sherritt as saying. al, and no matter who’s in power, that will Soviet era, also agreed to restructure $162 Bloomberg News quotee Guy Bentinck, continue,” Bentinck was quoted as saying. million in debt run up by Cuba with Russia Sherritt’s chief financial officer, as saying “We operate all the assets and control the since the demise of the Soviet Union in 1991. earlier that nickel production at the compa- technology. That’s one of the reasons our Reuters reported Sept. 28 that Cuba, which ny’s Moa facility will rise almost 50% to position is so strong in Cuba.” early this year received two long-haul Ilyushin 50,000 tons a year by about 2010. The com- Shares of Sherritt are discounted because Il-96s passenger jets, committed to buying two pany also will produce more than 20% of its business in Cuba prevents it from aircraft a year for seven years to overhaul its Cuba’s electricity within the next few years, accessing U.S. capital and markets, he said. vintage fleet of Soviet-era planes, including said Bentinck, speaking at the recent RBC The company is grappling with a shortage regional and medium-range planes. Capital Markets nickel meeting in Toronto. of workers in both Alberta and Cuba, where “Cuba agreed to spend $100 million a year Sherritt’s asset base is split 50-50 between investments to improve the island’s infra- in purchasing all sizes of Russian civilian air- Canada and Cuba. Nickel is mined at the structure are stoking demand for laborers, craft over seven years,” said Alexander Rub- Moa deposit in Cuba, and refined at Sher- Bentinck said. tsov, general director of private Ilyushin Fi- November 2006 ❖ CubaNews 13 more if power plant supplier Skoda Export single European currency is worth so much Paul Nabavi. wins proposed contracts to refurbish Cuba’s less here than it is in other countries. CariFin has operated in Cuba since 1997, coal-fired power plants. “German bookings are running at a high providing working capital and short-term Details: Czech Embassy, Avenida Kohly #259, level,” says Wilson Cardoso of the Cuban trade finance to Cuban and foreign companies e/41 y 43, Nuevo Vedado, Habana. Tel: +53 7 Tourist Office in Frankfurt. This is echoed by through loans and the purchase of bills of 833-3201.. E-mail: [email protected]. Gunter Traeger, spokesman for Neckermann exchange at a discount. Travel: “Cuba is definitely ‘in’ again.” Nabavi said the decision to pull out of Cuba CUBAN-CHINESE TRADE TAKING OFF Other travel firms in Germany report had no connection with the U.S. government’s Trade volume between Cuba and China steady or increased interest for the destina- tightened enforcement of sanctions against jumped to $890 million as of July this year, up tion. Both the Condor airline and Germany’s Havana that has led several global banks to 80% from the year-ago period, said China’s giant TUI holiday concern see demand close dollar accounts used by Cuba. ambassador to Cuba, Zhao Rongxian. increasing this winter and early next year, “This had absolutely nothing to do with it,” Total 2005 trade volume was only $830 mil- although German visitors no longer top the Nabavi told Reuters. “I wouldn’t read too lion, said the envoy, whose comments were list of foreigners travellng to Cuba. much into this. It shouldn’t be a surprise carried Oct. 3 by the Xinhua news agency. The peso convertible has no value outside given that we have been reducing our pres- “Cuba is now a destination for Chinese Cuba and it has been used by tourists as pay- ence in the region.” tourists and businesspeople; that is why we ment since 2004. It is pegged to the U.S. dol- have to promote this market,” Zhao said. lar which is no longer accepted as legal ten- HOUSING DEFICIT BEING DEALT WITH — SLOWLY Cuba was the first Latin country to establish der. In Varadero, many traders accept euros. Cuba’s National Institute of Housing report- diplomatic ties with China in 1960, he noted, ed 79,751 homes finished out of a plan to CUBA BACK ON STANDARD TIME adding that “the last 10 years have seen great build 100,000 houses this year. progress in bilateral trade relations.” After two years operating year-round with- This program is a social priority for the In mid-October, the two countries agreed to out changing from “summer” to “winter” country, said Fidel Figueroa, head of Cuba’s launch a biotechnology venture to develop time, Cuba re-established standard time on Ministry of Construction (Micons). Recent neurotechnology products in China. Oct. 29. housing census show that over half of Cuba’s Raúl Morgalo, deputy chief at Cuba’s Neuro- According to experts, the change actually dwellings need major repairs. He said Micons sciences Institute, and Xihong Wu, a represen- increases the demand for electricity. For aims to set up a sustainable construction tative of the University of Beijing, signed a let- example, in 2003 the national electrical grid’s materials industry in each province. ter of intent on the deal after two-day bilateral maximum demand jumped from 2020 With a new plant in Havana that produces talks here, the Communist newspaper megawatts to 2130 MW. The forecast for this 2.2 million sq meters of flooring yearly, Granma reported. year, after the time shift, is estimated to be Micons aims to boost Cuba’s total production The venture will be the third between the around 2450 MW, with the residential sector to 7 million sq meters a year. Contributing to two countries. The first two biotech ventures accounting for most of this increase. the plan are 10 more tile factories and two produce and market products from Cuba’s Cuba has remained on summer time since plants that have increased their capacites. Molecular Immunology Center and its Bio- Mar. 28, 2004. The decision to turn back to There are also plans to produce 52,000 high- technology and Genetic Engineering Center. the generally accepted practice of daylight quality sanitation fixtures, as well as $400 mil- savings time was based on the fact that lion worth of imported construction materials CUBA TO HELP TRINIDAD BOOST FOOD OUTPUT Cuba’s national grid has greater generating from Venezuela. Cuban farmers will help Trinidad & Tobago capacity thanks to new investments. Figueroa said Cuba expects to apply a tech- revive its anemic agriculture sector, says In addition, massive use of energy-saving nique developed by its engineers to manufac- Trinidadian PM Patrick Manning. fluorescent light bulbs — which have al-most ture ceramic bricks that are cheaper and with The Associated Press reports that Trinidad totally replaced incandescent bulbs — means a resistance similar to concrete. Micons also — hoping to curb inflation fueled by high- the jump in power demand due to lighting expects to obtain roofing and intermediate priced food imports — will set up 10 large needs will be less than in previous years. floor components from expandable polyethyl- farms, two of which will be run with the assis- ene and maintain the volumes of prefabricated tance of Cuban agricultural experts. Each CUBAN RICE IMPORTS FROM VIETNAM STEADY coverings as well as produce 6 million sq farm will measure at least 40 hectares. Cuba wants to buy 400,000 metric tons of meters of asbestos cement roofing. Food costs are rising by 25% a year in this rice next year from Vietnam, the world’s sec- twin-island Caribbean nation, compared to ond-largest rice exporter. WORLD’S COSTLIEST CIGAR DEBUTS AT $440 overall inflation of only 9%. Manning, in pre- Reuters, quoting the official Vietnam News At $440 each, this cigar costs more than senting the 2007 budget to Parliament, said Agency, said Cuba made the proposal at an most Cubans earn in a year. the only way to counter this trend is to rejuve- inter-government committee meeting in Welcome to the Cohiba “Behike” — the nate the farm sector. Manning’s budget would Hanoi to boost trade between the two commu- world’s most expensive stogie. Named after a increase agricultural spending by 25% from nist countries. Since 2004 Vietnam has been tribal chief of Cuba’s indigenous Tainos, the last year to more than $12.5 million. selling 400,000 to 600,000 tons of rice per year Behike can only be bought in special humi- to Cuba — one of its key rice buyers — often dors — $18,860 for a box of 40 cigars. DESPITE COST, EUROPEANS STILL FLOCK TO CUBA with interest-free deferred payment. Reuters reports that these smokes are so Cuba expects to end 2006 with a record 2.5 This makes Vietnam the 2nd-biggest food precious that no one has actually lit one yet, million tourists, up from 2.32 million in 2005. supplier to Cuba after the United States. although the blend was tested by a group of Even if business fails to live up to such high- tasters before the cigar went into handmade flying expectations, Cuba remains a popular CDC LIQUIDATES STAKE IN CARIFIN VENTURE production, according to Norma Fernández, destination, say travel companies. CDC Group, a British government develop- the torcedora or cigar-roller from Havana's El Yet Germany’s Deutsche Press Agency says ment finance corporation, will sell its 60% Laguito factory. many European tourists are complaining that stake in CariFin for an undisclosed sum, The Behike was launched in Spain last Cuba has become too expensive, citing the Reuters reported Oct. 16. month by Altadis, the exclusive Spanish rising cost of dining out in a restaurant and CariFin is a joint venture with Cuban banks importer of Cuban cigars. the price of organized tours. that offers short- and medium-term financing “I’ve been doing this for 39 years but I still The poor conversion rate for euros offered in Cuba. love it,” said Fernández, who personally rolled by the state-run Banco Nacional de Cuba is “This was a decision of our shareholders all 4,000 cigars and who admits to smoking another source of irritation for tourists who and we are selling to our Cuban partner, the cigarettes. “But I’m not going to reveal the say they simply cannot understand why the Grupo Nueva Banca,” said CariFin president formula,” she told reporters. 14 CubaNews ❖ November 2006 PROVINCES When it comes to sheer size, Camagüey leads the way

This is the 3rd in a series of monthly articles on Cuba’s 14 provinces by geographer Armando H. Portela, who has a Ph.D. in geography from the Soviet Academy of Sciences.

BY ARMANDO H. PORTELA amagüey is Cuba’s largest province, covering 14% of the island’s territory. Its 15,615 sq kms (6,031 sq C miles) make it bigger than Jamaica, Puerto Rico or the U.S. state of Connecticut. Camagüey’s size was even larger before 1976, when the government took away its western part to form the new province of Ciego de Avila. Camagüey has been shaped by geography and history into a land of cattle raising, sugar-cane plantations and low popu- lation. Most of the land is flat, rising 120 meters (390 feet) to the watershed, with the exception of a few scattered step hills — a relic of prolonged erosion processes — topping 330 meters (1,083 feet) at Sierra de Cubitas.

POPULATION With only 50 inhabitants/sq km (130/sq mile), Camagüey is the loneliest province in Cuba. In 2004, it had only 786,657 inhabitants, or around 7% of Cuba’s total population. But population growth has virtually stagnated. Its pace of growth between 1993 and 2004 averaged only 0.27% a year, a fact apparently linked to dwindling living standards. That contrasts with annual growth of 2.5% during the 1970s, and 1.3% in the 1980s. The provincial capital, also named Camagüey, had 307,763 people in 2004, making it Cuba’s third-largest city after Hav- ana and Santiago de Cuba. Other key cities, according to the 2002 census, are Florida (53,847); Nuevitas (38,995); Vertien- tes (28,368) and Guáimaro and Sibanic (about 20,000 each).

ECONOMY Sugar is the backbone of Camagüey’s economy, a condi- tion likely to endure even after the industry’s dramatic down- sizing last year. That left the province with seven active mills producing sugar and another two making only molasses, out of 14 in existence until the 2001-02 harvest, when Camagüey still accounted for 10-13% of national sugar production. Current daily grinding capacity has fallen from 77,700 tons of sugar cane a year ago to around 50,000 tons today. Camagüey has some of Cuba’s largest sugar mills. The Brasil (formerly Jaronú) and Panamá (Vertientes) mills have a daily grinding capacity of 10,200 tons of sugar cane each, among the highest in Cuba. The Batalla de las Guásimas sugar mill, built in the 1970s, can grind up to 6,800 tons a day. All together, these three mills account for 54% of the province’s grinding power. But in the last few years, the sugar sector has fallen from grace. About half the province’s mills remined idle during the last zafra, or harvest, while the rest could barely grind at 70% of capacity. This wretched performance forced authori- ties to dismantle the following mills: Haití (formerly Macareño); República Dominicana (Estrella); Alfredo Alvarez Mola (Najasa); Noel 23-25% of the island’s fresh milk. This serves as the basis for an important Fernández (Senado) and Jesús Suárez Gayol (built in the 1980s). dairy industry, but herds have dramatically diminished in size in recent The Brasil and Siboney mills are slated to produce only molasses, years, and over 55% of grazing lands are infested with marabú, a woody, but can be switched back to sugar as soon as world market prices thorny shrub that makes the lands impenetrable. climb above production costs. A dairy processing plant at Nuevitas, which currently produces yogurt Half of the arable lands in Camagüey province are devoted to pas- from soybeans instead of milk, illustrates the sector’s crisis. At its pinna- ture. The province has the largest cattle herd in Cuba, and produces cle in the mid-1980s, Camagüey enjoyed annual fresh milk production of November 2006 ❖ CubaNews 15 125 million liters, or 13% of Cuba’s total. By 2001, milk production had The 10 de Octubre thermal power plant in Nuevitas is one of Cuba’s fallen to 64 million liters, and by 2002 it had dropped further, to 60 mil- leading power plants. With a capacity of 442 megawatts, the facility has lion liters. been adapted to burn domestic crude oil. Citrus groves, introduced by U.S. immigrants over a century ago, In 1985, a brewery are cultivated in a coastal belt of ferralitic soils over an area of 10,800 using East German hectares (26,690 acres); two-thirds of that consists of orange groves. technology opened in In addition, rice is grown in the southwest, with 16,500 hectares the city of Camagüey (40,770 acres) yielding 10-15% of Cuba’s total rice production. under the brand name Tínima. The brewery INDUSTRY can produce up to 100 Camagüey has some industries of national significance. million liters, equiva- lent to 11.9 million Cement production at Nuevitas tumbled in the 1990s, but is making cases of 24 bottles each. a slow comeback, thanks to a joint venture with foreign investors that In 2002, the brewery plans to export 144,000 tons annually for the next five years to produced 5.69 million Caribbean countries. cases, most of which Last year, the cement plant produced 167,700 tons of gray cement. Monument at entrance to province of Camagüey. was exported to Italy, That’s roughly 10% of Cuba’s output, but still a far cry from the record Spain, Great Britain, Japan and the Caribbean island of Martinique. 553,000 tons in 1989. The Ignacio Agramonte weapons factory was inaugurated in 1988 in Camagüey, with nominal production capacity of 100,000 semi-automatic Kalishnikov rifles a year. Due to lack of raw mate- rials and possibly falling demand, the plant has been reconfig- ured to make tools and parts for other industries. The fishing port of Santa Cruz del Sur is among the most important in Cuba. White shrimp and lobsters are the most valu- able captures, though overexploitation and environmental degra- dation have led to a decline in volume and quality.

INFRASTRUCTURE The old two-lane Central Highway and the Central Railroad link Camagüey with the rest of the island, and a network of sec- ondary roads and railroad branches reaches all settlements and economic hubs. Roads are narrow and generally in poor shape. For most of the 20th century, the Tarafa sugar terminal at Nuevitas was the world’s leading sugar port. Tarafa still ranks as Classic ‘52 Chevy cruises down a virtually traffic-free street in downtown Camagüey. one of the most important in Cuba, but its volume has fallen dras- tically over the last few decades as new terminals have been A fertilizer plant built in 1975 with Soviet technology remained idle developed and overall sugar output has declined. The port also han- for years as a result of Cuba’s economic collapse in the mid-1990s. dles cement, chemicals, fuels and general cargo. Theoretically, the plant is capable of producing 200,000 tons of nitro- Ignacio Agramonte International Airport, not far from downtown gen-based fertilizers and herbicides a year. Camagüey, is one of the oldest airports in Cuba. Newspaper exposes ‘extreme contamination’ of Nuevitas Bay by wire factory report by the newspaper Juventud Rebelde describes the “ex- cialist quoted by the paper. treme pollution” caused to Nuevitas Bay and the water table The acid wastes have dissolved the underlying limestone, pro- A by improper waste disposal at a wires and electrodes factory. ducing a partial caving in the plant and, as result, “the facilities are Built in 1962, the plant operates with outdated technology that at risk of collapse.” This is the only plant in Cuba that produces a requires large volumes of acids to clean the raw material used to large variety of ferrous wires, from the ubiquitous barbed wire to manufacture up to 38 different products. welding electrodes and raw materials for other factories. Quoting a study by authorities of the Ministry of Science, To mitigate the problem, specialists recommend the installation Technology and the Environment (CITMA in Spanish), the report of a waste treatment plant designed by the CITMA at a cost of says the plant is discharging directly into the bay 28,000 cubic $300,000 to $600,000. But a more radical solution is the replacement meters (7.4 million gallons) a year of untreated wastewater contain- of the whole chemical cleaning process with one using mechanical ing 32 tons of sulfuric acid and 6.4 tons of hydrochloric acid through abrasion of the raw material with much fewer residues. an open culvert. The refurbishing cost would be around $143,000, or less than half Also contained in the discharge, reports the newspaper, is 63 tons the cost of the waste treatment plant. Moreover, the factory would of a non-specified ferrous compound and “other heavy metals in save over $71,000 per year just not using chemicals in the process. non-specified quantities.” The use of water currently supplied by the city of Nuevitas would be Part of the liquid waste leaches directly into the ground, reaching cut by 152 cubic meters (40,300 gallons) per day. the shallow water table; authorities have no idea how badly the dis- CubaNews previously reported on the extreme environmental charge has contaminiated soils or groundwater. Both mangroves hazard posed by this plant. We also noted that workers were totally and oysters disappeared in the area when the factory was working unprotected from noise, dust, gases and fumes, leading to some at full capacity and dumping untreated wastes at full capacity as well. cases of deafness. “Extremely toxic heavy metals contaminate the marine sediments For a complete report on environmental damage in Nuevitas, see and the ground cavities, disturbing the biota,” said a CITMA spe- CubaNews, October 1998, pages 10-11. 16 CubaNews ❖ November 2006 CALENDAR OF EVENTS CARIBBEAN UPDATE If your organization is sponsoring an upcoming event, please let our readers know! You already know what’s going in Cuba, Fax details to CubaNews at (954) 977-2923 or send e-mail to [email protected]. thanks to CubaNews. Now find out what’s happening in the rest of this diverse and Nov. 8: Unveiling of “Fidel Castro’s Deathbed Portrait.” Described by promoters as “a fast-growing region. colossal portrait of a solemn Castro at rest,” this controversial work of art will be unveiled Subscribe to Caribbean UPDATE, a monthly newsletter founded in 1985. Cor- at 10 a.m. in Central Park, just north of the José Martí monument. Details: David Kesting, porate and government executives, as well Capla Kesting Fine Art, New York. Tel: (917) 650-3760. URL: www.caplakesting.com. as scholars and journalists, depend on this publication for its insightful, timely cover- Nov. 8: UN General Assembly to vote on annual Cuba-sponsored resolution condemning age of the 30-plus nations and territories of U.S. embargo of Cuba. Last year, the resolution passed 182-4, with one abstention. the Caribbean and Central America. When you receive your first issue, you Nov. 12: Casa Bacardi Cuban-American Film Festival, University of Miami. Two films in have two options: (a) pay the accompany- Spanish (“En Nombre de la Libertad — La Historia de Bahia de Cochinos” and Che Gue- ing invoice and your subscription will be processed; (b) if you’re not satisfied, just vara: Anatomía de un Mito”) and one in English (“The Cuban Americans”) will be shown. write “cancel” on the invoice and return it. Cost: $10 for all 3 films. Details: ICCAS, 1531 Brescia Ave., Coral Gables, FL 33124. Tel: There is no further obligation on your part. (305) 284-2822. URL: http://casabacardi.iccas.miami.edu/FilmFestival/FilmFestival.htm The cost of a subscription to Caribbean UPDATE is $267 per year. A special rate of Nov. 25-Dec. 4: Agriculture research delegation to Havana, co-sponsored by Global Ex- $134 is available to academics, non-profit change and the Center for Agroecology & Sustainable Food Systems at the University of organizations and additional subscriptions mailed to the same address. California-Santa Cruz. “During the 10-day delegation you’ll get the chance to talk with Cu- To order, contact Caribbean UPDATE at bans you would otherwise never meet — agronomists, government officials, community 116 Myrtle Ave., Millburn, NJ 07041, call us leaders and ordinary Havana residents. This is a unique opportunity to see for yourself an at (973) 376-2314, visit our new website at www.caribbeanupdate.org or send an internationally recognized example of how to grow closer connections to our food.” Cost: e-mail to [email protected]. We accept $2,350. Details: Masumi Patzel, Global Exchange, 2017 Mission St. #303, San Francisco, Visa, MasterCard and American Express. CA 94110. Tel: (415) 255-7296. Fax: (415) 255-7498. URL: www.globalexchange.org.

Nov. 30: Cuba’s Jewish community celebrates its 100th anniversary. Special events are planned at Havana’s Museo Nacional de Bellas Artes, Old Havana’s Hotel Raquel and the Sinagoga Hatikva in Santiago de Cuba. Details: Adela Dworin, Casa de la Comunidad Heb- rea de Cuba, Calle I, #259, e/13 y 15, Vedado, La Habana. Tel: +53 7 832-8953. Fax: +53 7 33-3778. E-mail: [email protected] or [email protected]. URL: www.jewishcuba.org. Editor & Publisher Dec. 2: Fidel Castro’s official birthday celebration (his actual birthday was Aug. 13, but ■ LARRY LUXNER ■ illness forced him to postpone the party); event also marks the 50th anniversary of the Washington correspondent landing of the Granma, and establishment of the Fuerzas Armadas Revolucionarias (FAR). ■ ANA RADELAT ■ Dec. 4-6: 30th Annual Miami Conference on the Caribbean Basin, Hotel Inter-Continen- Political analyst ■ ■ tal. Confirmed speakers include Jamaican Prime Minister Portia Simpson-Miller, Haitian DOMINGO AMUCHASTEGUI President René Preval, many other heads of state. This year’s theme: “Uniting the Third Feature writers ■ VITO ECHEVARRÍA ■ Border.” Cost: $600. Details: Caribbean-Central American Action, 1818 N Street NW, #310, ■ HELEN SIMON ■ Washington, DC 20036. Tel: (202) 466-7464. Fax: (202) 822-0075. URL: www.c-caa.org. Cartographer ■ ARMANDO H. PORTELA ■

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