Pact Launches $1 Bln Bank, Expands
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Our 10th year Vol. X, No. 2 www.cubatradenews.com February 2008 Pact launches $1 bln bank, expands Continuing the push to implement During the summit, the the ALBA cooperation and integration members: agreement, the presidents of the member •signed the founding nations met Jan. 25-26 in Caracas for the charter of the Banco del 6th Presidential Summit of the Bolivarian ALBA. The infrastructure Alternative for the Americas. bank, set up to finance At the summit, Cuba, Venezuela, Bolivia the “grandnational” joint and Nicaragua agreed on the founding charter venture companies under of Banco del ALBA, and the small Caribbean ALBA, will initially be island nation of Dominica officially joined capitalized with at least ALBA as the fifth member nation. Dominica $1 billion. It isn’t clear is the first English-speaking member. yet where the funds will Attending the summit were Presidents originate (see sidebar). Hugo Chávez, Evo Morales, Daniel Ortega, and Cuban Vice “While stock exchanges crash, we at ALBA are opening President Carlos Lage, Prime Ministers Roosevelt Skerrit banks,” Chávez said during the signing of the charter. “We of Dominica, Ralph Gonsalves of Saint Vincent and the have no reason to envy Wall Street.” Grenadines, and Baldwin Spencer of Antigua and Barbuda, Cont’d on next page as well as officials from Ecuador, Haiti, Jamaica, St. Kitts Also see and Nevis, Honduras and Uruguay as guests. ‘Banco del ALBA’, p. 2 Embargo Economy Anti-embargo group: Forget 2008 BRAZIL SEEKING CLOSER TIES Changes to ease or lift U.S. Helping Cuba diversify its economic relations, Brazilian restrictions on Cuba this year are President Luiz Inácio “Lula” da Silva during a two-day visit “small,” the Washington-based to Havana carried in his luggage the promise of hundreds Latin American Working Group of millions of dollars worth of financing and an offshore said in a message to supporters. exploration agreement by state oil company Petróleo Brasileiro The anti-embargo group SA (Petrobras). blamed the failure of activists The warm shower from Brazil came five weeks after the and lobbyists to achieve change defeat of a referendum promoted by Venezuelan President in the Democratic-controlled Hugo Chávez, reminding Cuba of the risks of relying too much Congress on a combination of on just one partner. Anderson a “leadership tired of the Cuba Lula's visit, originally scheduled for late last year, was issue, a ‘missing-in-action’ Cuba postponed several times because of the complexity of the Working Group in Congress and … a mobilized and well- agreements sought by Cuba, according to Lula. funded pro-embargo opposition.” The Brazilian delegation, which included four cabinet “We are frustrated, and we know you must be frustrated ministers and the president of Petrobras, José Sergio Gabrielli too,” Mavis Anderson, a senior associate with LAWG, said de Azevedo, signed 10 agreements. in a message to supporters, adding it’s unlikely restrictions “The Brazilian government is attentive to the desire of would be eased in a presidential and congressional election year. (Also see ‘Cuba will not talk to Bush’, p. 10) continued on p. 8 ‘ALBA,’ from previous page the member countries. No details were released as to the Celebrating planned size of the Albanave fleet. Another ALBA shipping in Caracas, company, Transalba, was founded last year. Havana-based from l., Daniel Transalba has already started to charter tankers and counts Ortega, Carlos two ships among its assets, one combined 700-cubic meter Lage, Roosevelt liquid gas tanker and 20,000-barrel clean liquid tanker, and Skerrit, Hugo a 40,000-barrel crude oil tanker. In December, the partners Chávez, Evo agreed to purchase two Panamax-size tankers. Morales •expanded an agreement between Cuba and Venezuela Relaciones Exteriores to build an undersea fiberoptic cable. The cable will run all the way from Venezuela via Cuba to Nicaragua. It can be •created the Grandnational ALBA Energy Company expanded to other Caribbean and Central American nations. (Empresa Grannacional de Energía del ALBA). The joint In August, the Chinese-made “Simón Bolívar” satellite will venture company will implement the 2007 Energy Security be in orbit, covering Venezuela and ALBA member states. Treaty, under which Venezuela guarantees ALBA member During the summit, Venezuela proposed the creation of countries oil and gas supply “for the next 100 years and “compensatory” or “structural convergence” funds to support longer.” The ALBA Energy Company will organize the the least developed countries and regions within ALBA. The member nations’ joint activities in exploring and exploiting program, similar to the European Union’s structural funds, one block of Venezuela’s Orinoco oil field. The joint venture would finance projects in the poorest areas. will also be in charge of expanding and building refineries According to Cuban officials, Haiti will also join ALBA. in member countries, both to ensure domestic supply and The summit took place at the Hotel Alba Caracas. The for export. former Caracas Hilton was renamed last summer after a •created the joint shipping company Albanave. The Venezuelan state cultural institution took over operations to company is in charge of shipping of oil derivatives between turn the 38-year old hotel into a socialist enterprise. Banco del ALBA — how it works The main tasks of the bank are to support the integration of ALBA member countries’ production and promote import substitution. It will finance ALBA “grand-national” joint ventures and create special funds such as a social solidarity and a disaster response fund. Cuba Trade & Investment News is a monthly publication Each member country — so far Venezuela, Cuba, Bolivia of North American Partners (NAP), Tampa, FL, USA. and Nicaragua — has one vote, no matter how big its capital CTIN is distributed to subscribers via mail or e-mail. contributions are. The bank will also seek alliances with other financial entities in the region, such as Banco del Sur. Publisher Andrew Goddard A rotating executive director reports to both the ALBA Council P.O. Box 13752 of Ministers and the ALBA political commission. Tampa, FL 33681-3752 USA The bank aspires to be self-sustaining. Initial capitalization will be Tel: 813 839 6988 between $1 billion and $1.5 billion, with maximum capitalization of Fax: 813 831 3811 $2 billion. The “contributions each country will make correspond to [email protected] www.cubatradenews.com an individual analysis and depend on its possibilities,” Venezuelan Editor Johannes Werner Finance Minister Rafael Isea said. The contributions of each country Tel: 941 330 0303 will be determined within 60 days of the summit. Oil-rich Venezuela [email protected] is expected to be the main source of funds. The bank already opened its offices in an 11-story tower on Editorial Advisors Avenida Los Llanos in central Caracas and should be fully Chris Aberle, FCStone, Des Moines operational within two months. Michelle Butler, Navarretta Group, San Diego Kirby Jones, US-Cuba Trade Assn., Wash. DC Cuban Central Bank David Lyons, Daily Bus. Review, Miami President Francisco John McAuliff, FFRD, New York Soberón, 2nd from Phil Peters, Lexington Institute, Washington right, cutting the ribbon at Banco del ALBA’s SUBSCRIPTIONS Call 813 839 6988. One year $350. In Canada and Mexico, add $15 postage. new offices in Caracas. COPYRIGHT NOTICE No part of this publication may be copied, photographed or duplicated without NAP’s Foto: Banco Industrial de Venezuela consent. 2 Cuba Documentation: Economic performance ‘07 Solid growth, with a few doubts in Focus Cuba’s Oficina Nacional de Estadísticas just published a bulletin with select economic statistics for 2007. The numbers show that, slides in construction and By Kirby Jones sugar aside, growth continues to be strong, particularly in long-neglected areas such as electricity supply, transportation and agriculture. However, Cuban statisticians Notes from Havana include in their GDP calculations services the state provides for free to citizens. I recently returned from several While this makes sense, it isn’t clear how they calculate their value. Also, the GDP days in Cuba with the delegation of statistics don’t reveal the performance of hard-currency earning sectors, which are California companies headed by the crucial for the country’s ability to import goods and services. California Secretary of Agriculture, A.G. Kawamura. We landed the day Although GDP growth was 2.5 Also, the state continued to expand after the January 20 elections for the points below the projected 10 percent, healthcare and education. Public health new National Assembly. official numbers show that fundamental services were up 21.7 percent, education What struck me the most was the economic activities continued on a solid rose 6.9 percent. These numbers include normalcy of it all. In the U.S. media and among Cuba-watchers in Florida, Gross Domestic Product 2007 Washington, and on the email circuit, (million non-convertible pesos, 1997 prices) there seems to be far more angst, 2006 2007 % chge. far more hand-wringing, far more Total 44,063.8 47,346.6 +7.5 analysis that I found among Cuban GDP per capita (pesos) 3,920 4,213 +7.5 officials and taxicab drivers. goods 7,236.8 8,074.0 +11.6 Cuba seems to be taking the agriculture 1,460.6 1,821.0 +24.7 elections and the expected changes fishing 137.1 150.1 +9.5 very much in stride. There is not a quarry mining 267.5 278.2 +4 single piece of evidence of the turmoil sugar 201.2 198.9 -1.1 that has been predicted by some Cuba manufacturing (exc. sugar)5,170.4 5,625.8 +8.8 “experts” – most of whom have never basic services 7,189.4 7,215.6 +0.4 been to or do not visit Cuba.