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Vol. XI, No. 12 www.cubatradenews.com December 2009 Caracas-Havana alliance ... ... fuels Cuba’s sputtering ... reinvigorates push engine with $3 bln for a growing Bolivarian bloc ignaling that economic he heads of state of ALBA cooperation with Cuba member countries met at a continuesS at the top of his priority summitT Dec. 13-14 in Havana, list amid a year of bad economic celebrating the fifth anniversary of the news for Venezuela, Hugo bloc’s founding and reinvigorating Chávez was in Havana Dec. photo: Presidencia Venezuela the push for integration. 11-12 for a bilateral ministerial Raúl Castro highlighted the meeting preceding the ALBA summit. potential of the trade and integration agreement as a tool to Chávez said in the closing session of the 10th mixed overcome the current economic crisis. commission Cuba-Venezuela Dec. 12 that 264 new “United we can overcome the crisis, taking advantage bilateral agreements worth $2.952 billion were signed for of the ALBA market and using the complementarity of out implementation in 2010. economy to access third markets,” the Cuban president They include creation of a joint venture for oil exploration said in his opening speech to the in Venezuela’s Orinoco basin, a joint venture for gold mining summit. in both countries, and a joint venture to process Venezuelan Bringing the long-neglected bauxite — a raw material used in aluminum production — trade aspect to the forefront, at Empresa Conformadora de Aluminio Lenin (Alcuba) in the members agreed to begin Wajay, near Havana. The partners also agreed to study how negotiations early next year for to increase production of construction raw materials by the “Trade Agreement of the Empresa Geominera de Cuba, to be used in both countries People,” which is part of the and Central America. ALBA agreement. Venezuelan- “This is not only about trade exchanges, but about Cuban trade aside, there is no Continued on next page Continued on page 5 Direct banking, pay-on-delivery passes n a small-step success for the anti-embargo caucus in the U.S. Congress, the Senate passed an amendment that makesI it easier for U.S. companies to sell food to Cuba. The amendment had been quietly inserted into a $446.5 billion INSIDE spending bill by Sens. Byron Dorgan (D-N.D.) and Max Baucus (D-Mt.). Send in the marine... scientists.............................page 3 The 2010 Omnibus Appropriations Act already passed the First Sucre transaction scheduled.......................page 5 House and only needs to be signed by the president. Barack Japan wants debt talks..........................................page 7 Obama has not indicated he would veto any embargo-easing Long-time food supplier struggling.......................page 7 legislation. He is expected to sign the Act Dec. 18. Kuwait funds water project.................................page 10 The amendment in the massive budget bill allows Cuban buyers to make payments directly to U.S. banks, and spells out Forecast 2010.......................................................page 3 the definition of “cash in advance” as payment when goods are delivered in Cuba. Continued on page 12 ‘Caracas-Havana,’ from previous page The weak spot: Getting things done, Venezuela’s energy when the boss isn’t micromanaging and oil minister, Rafael enting his frustration at the bilateral meeting Ramírez, presides about customary delays in implementing Cuban- over talks in Havana. VenezuelanV projects, Chávez urged participating ministers The partners signed to start projects as fast as possible. agreements for oil, gold, Taking a page from Fidel Castro, Chávez warned that, aluminum and sand, while U.S. bases in Colombia won’t be able to achieve it, among others. red tape could kill his Bolivarian revolution. “One of the most serious enemies is not the crazy creating production, increasing productivity, creating jobs, and opposition, which inflicts a lot of damage and has a lot of definitely continuing to generate social well-being among the power. It’s not that, not even the empire,” Chávez said, people of both nations,” Venezuelan mining minister Rodolfo alluding to the United States. “It’s bureaucracy.” Sanz said at the meeting. Taking a positive view, Raúl Castro said this was the first Other agreements included creation of a fishing joint venture time in a decade that the annual cooperation plan would and cooperation projects in agriculture, industry, tourism, food begin to be implemented in January. production, science, and technology. In another sign of the priority given to Cuban-Venezuelan Cabrisas, Cuba’s point man for strategic economic relations. cooperation, the bilateral meeting was preceded by an intense Other participants included Transport Minister Jorge Luis and high-level travel agenda. First, on Nov. 22, Chávez and Sierra Cruz, Metalmechanics Industry Minister Salvador his ministers of foreign relations, energy, mining, health, Pardo, Basic Industries Minister Yadira García, Foreign Trade agriculture, economy and finance, science, technology and and Investment Minister Rodrigo Malmierca, and the deputy housing and construction welcomed a high-profile Cuban ministers of telecommunications and foreign relations. Finally, delegation for a “private meeting” at the presidential palace in Chávez traveled to Havana Nov. 25 for a midnight meeting Caracas. The Cuban group was led by Vice President Ricardo with Raúl Castro. Note from the Publisher f you observed the U.S. House of Representatives’ Foreign Affairs Committee hearing on travel to Cuba, you may Cuba Trade & Investment News is a monthly publica- haveI been overwhelmed by the absence of independent inquiry tion of Trade & Investment Publications LLC (TIPs), Tampa, FL, USA. CTIN is distributed to subscribers via from many committee members. Member after member read mail or e-mail. from the same script clearly prepared by the committee’s vice chairperson. Yes, those opposing any consideration of lifting Publisher Andrew Goddard the travel ban outnumbered members who favor travel to Cuba. P.O. Box 13752 But little if any substance emerged from those opponents. As if Tampa, FL 33681-3752 USA in tandem, House Speaker Nancy Pelosi has moved the travel Tel: 813 839 6988 ban bill back in line. Meanwhile, for our U.S. readers, you Fax: 813 831 3811 might want to take note of what positions your representative [email protected] holds and suggest sources of information that allow for a sound www.cubatradenews.com Editor Johannes Werner assessment of Cuba. Tel: 941 330 0303 On the other side of the Florida Strait, things are moving, [email protected] as Venezuela keeps pumping billions of dollars into the Cuban economy. A weighty cluster of players from the “other” Gulf is Editorial Advisors emerging: The DPW Mariel container terminal deal continues Chris Aberle, FCStone, Des Moines on the table, despite turmoil in Dubai; a Qatari fund’s hotel Kirby Jones, US-Cuba Trade Assn., Wash. DC plans are on track and keep growing; and a Kuwaiti fund David Lyons, Daily Bus. Review, Miami provides dollars for infrastructure projects. John McAuliff, FFRD, New York As always, we appreciate your support of our publication. Phil Peters, Lexington Institute, Washington In addition, we wish to extend to you our best wishes for a SUBSCRIPTIONS Call 813 839 6988. One year joyous and safe holiday. $350. In Canada and Mexico, add $15 postage. COPYRIGHT NOTICE No part of this publication Andrew Goddard — [email protected] may be copied, photographed or duplicated without TIPs’ consent. 2 Other Views Forecast 2010 By Phil Peters Is the worst over? ollowing a year of , at best, zero growth and bad surprises — the government Send in the marine ... Fhad to implement drastic budget cuts twice mid-year after its assessments scientists for 2009 turned out to be overly optimistic — Cuba projects modest growth for 2010. ou can chalk it up to an In an insecure global environment, numerical predictions are hard to make. So accident of history, the dead here is our summary of factors that will play a role in shaping Cuba’s economic weightY of socialism, or a triumph of environmental preservation, but the Liquidity and debt: members. It remains to be fact is that the marine environment Gradual easing seen whether Cuba can off the southern coasts of Camagüey Expect tourism make good use of the and Ciego de Ávila provinces — r e v e n u e s t o new tool in its trade the site of the Jardines de la Reina remain level, with Venezuela. archipelago and preserve — is nickel revenues Circumventing preserved like none other in the to recover at the U.S. dollar Caribbean because it simply hasn’t slow pace, and in ALBA been touched by economic activity. service export transactions by Here’s author Peter Benchley’s r e v e n u e s t o using the Sucre description of a dive in a 2002 article grow slowly in could help Cuba from National Geographic: 2010. New sources save a bundle. “I had flopped overboard from a o f h a r d - c u r r e n c y dinghy on a glassy Caribbean sea revenues, such as refined Venezuela/ALBA in the summer of the year 2000 and fuel and biotechnology Venezuela has been the in an instant, apparently, slipped exports, and savings via main source of foreign backward nearly half a century into import substitution i n v e s t m e n t f o r an underwater realm that had not are advancing Cuba, to the tune existed, so far as I knew, since the slowly. The of probably more 1950s.” cash crunch should be than $2 billion this year. “Residents swarmed over me, gradually easing. Expect 2010 Despite a tough economic welcoming me to the neighborhood, a gradual unfreezing of The Look Ahead environment for Venezuela, animals in numbers and diversity the bank accounts that President Hugo Chávez I hadn’t seen in decades, not since have been locked since has stated his political Lyndon Johnson was President early this year, and a round of one- commitment to raising Venezuelan and man had yet to set foot on the on-one renegotiations of debt.