Vol. XI, No. 1 www.cubatradenews.com January 2009 Forecast: 4% growth in ‘09 — amid cash crunch In 2008, Cuba suffered one of the financially most difficult grew 4.3 percent in 2008. years since the collapse of the Soviet Union, Economy Minister However, lower nickel and sugar prices derailed the original José Luis Rodríguez told deputies at the parliament’s plan of 8-percent growth. Due to the price drop, export year-end session. revenues from nickel were $250 million lower than Even so, Cuba’s gross domestic product should in 2007. rise more than 4 percent in 2009, Rodríguez said. At the same If this comes true, Cuba would be among the time, imports Fewer benefits, fastest-growing economies in the recession-stricken went through the harder work, hemisphere. roof. Hurricanes and maybe a raise Cuba is calculating its GDP in a different way than that caused $10 billion other nations, by including state spending on in damage — 20 Page 2 free healthcare, education, transportation and percent of GDP subsidized food. — forced the Thanks to a 2.1-percent rise in goods exports, a 2009 country to increase expensive food imports and 6.2-percent rise in services exports, and 6.6-percent The Look Ahead buy building materials abroad. Hurricane recovery growth in infrastructure investment, Cuba’s GDP needs and high food and fuel prices pushed up Continued on next page SINGER RAISES VOICE In what could be the prelude to lively reform discussions Leadership keeps 50-year bash low-profile before the upcoming 6th Communist Party congress, Pablo In a low-profile celebration amid the global economic Milanés, the revolutionary bard and long-time supporter of the crisis and cash crunch on the island, Cuba marked Year Cuban state, had frank and harsh words for his government in 50 of its revolution. a recent interview. Plans to stage a ”big extravaganza complete with a For the first time in 11 years, and seven years behind military parade” were scrapped after the hurricanes, schedule, the rank-and-file members of the state party are in favor of “a more austere celebration in tune with the expected to meet late this year to set the stage for reforms. times,” an official told . “Cuban Socialism is stagnating,” the 65-year old singer- During a Revolution Day speech Jan. 1, President Raúl songwriter said in a conversation published by Spain’s Público. Castro did not dwell on the topic of Socialism. Instead, he “This Socialism has given all it promised to give. We’re described the revolution as the culmination of Cuba’s drive paralyzed and we have to make reforms,” he said in what for autonomy and independence from Spain and the . He Continued on page 10 emphasized challenges ahead and the need to be grounded in reality. Castro held the speech on the same balcony from which his older brother Fidel declared victory in 1959. The building in the center of Santiago de Cuba is facing a square that fits only a few Milanés: thousand people. “I don’t trust “Observing the current turbulences of the world, anymore in any we can’t think that [the next 50 years] will be easier,” Cuban leader Castro said. ”I don’t say this to scare anyone, it’s just the older than 75.” Continued on page 8 ‘4% growth,’ from previous page imports 43.8 percent, more than $8 billion. income grew only 5.6 percent. As a result, the trade deficit soared by 70 percent, or $5 Cuba’s cash crunch is likely to continue throughout 2009, billion, to $11.7 billion in 2008, according to estimates by although the government is trying to cut back the rise of Reuters. expenses by more than half from last year. Public spending The budget deficit in 2008 — a whopping 6.7 percent of will increase 3.9 percent in 2009, Barreiro said. GDP — was twice as big as in 2007, and it’s proportionally Cuba, according to its economy and planning minister, the highest in 13 years. Public spending grew 9 percent in will try to “maintain its external financial balance and create 2008, according to finance Minister Georgina Barreiro, while reserves for indispensable contingencies” this year.

Raúl Castro prepares Cubans for more work, fewer benefits, maybe higher wages In his closing speech of the year-end session of the Instead, salaries should rise according to employees’ parliament Dec. 27, President Raúl Castro prepared the productivity, forcing people to get to work, Castro said. country for an austere year. “Let’s not deceive ourselves anymore. If there’s no pressure, “Two plus two is always four, never five,” Castro told the if there isn’t a necessity to work to satisfy my necessities, and parliament. “We must act with realism and adjust our dreams if they’re giving me free stuff here and there, we’ll lose our to the true possibilities.” voice, calling people to work. That’s my way of thinking, and He announced that foreign travel budgets for state that’s why everything I’m proposing is going towards that officials and state company executives were cut in half and goal. Let’s not deceive ourselves.” that highly subsidized employee bonus programs such as “The next year is marked by much uncertainty in the world vacation plans and free meals would be eliminated. Free economy, and we must be prepared to confront this serious government services will be strictly limited to education, challenge, which is already affecting us in significant ways,” healthcare and culture. Castro said.

VENEZUELA: $2 BLN STIMULUS In their own version of an anti-recession package, Venezuela and Cuba during Raúl Castro’s first official visit abroad signed agreements for 36 new joint projects in 2009 worth some $2 billion. The cooperation plans for this year considerably exceed last year’s Cuba Trade & Investment News is a monthly publication volume of 76 projects worth $1.35 billion. However, joint projects of North American Partners (NAP), Tampa, FL, USA. have suffered delays in the past, and 2009 might not be different. CTIN is distributed to subscribers via mail or e-mail. The two most important new projects signed in Caracas are for oil refining and information technology. Publisher Andrew Goddard In a memorandum of understanding, the partners agreed on creating P.O. Box 13752 a new joint venture company. Cuvenpetrol S.A. — 51-percent owned Tampa, FL 33681-3752 USA by PdVSA and 49 percent by CubaPetróleo — will be in charge of Tel: 813 839 6988 Fax: 813 831 3811 building a new 150,000 barrel-per-day refinery in Matanzas that will [email protected] process Cuban heavy oil. The holding will also expand the Cienfuegos www.cubatradenews.com and Santiago de Cuba refineries. Cienfuegos will add 85,000 bpd Editor Johannes Werner capacity for a total of 150,000 bpd. Santiago will expand by 22,000 Tel: 941 330 0303 bpd to 50,000 bpd. [email protected] Cuvenpetrol will also design and build a regasification plant for cont’d on page 5 Editorial Advisors Chris Aberle, FCStone, Des Moines Kirby Jones, US-Cuba Trade Assn., Wash. DC David Lyons, Daily Bus. Review, Miami John McAuliff, FFRD, New York Bolívarian Phil Peters, Lexington Institute, Washington crisis plan: Venezuela invests $2 bln more SUBSCRIPTIONS Call 813 839 6988. One year in its partnership $350. In Canada and , add $15 postage. with Cuba COPYRIGHT NOTICE No part of this publication may be copied, photographed or duplicated without NAP’s Relaciones Exteriores Venezuela consent.

2 Focus Preview 2009 Resources scarce, reforms aplenty on Cuba If you are a businessperson exporting to or doing business in Cuba, here are some of the important things to watch in 2009 By Sarah Stephens “We still have enormous problems Fidel Castro had postponed it without Nine Ways to Talk with Alimport re letters of credit being explanation. opened months after we deliver to the •Continued slow raises for Cuban How can we break the fifty year- docks,” a U.S. exporter complained workers, and a flexibilization of the old diplomatic deadlock between the to Cuba Trade about the state food wage system, giving state companies and United States and Cuba? import company. “It is becoming foreign joint ventures more control over U.S. policy — imposing economic very frustrating.” Don’t the hiring and compensation sanctions to provoke the overthrow expect this situation process. of Cuba’s government — has never to improve anytime • C o n t i n u e d worked and never will. The two soon. Continued restructuring of the nations simply won’t agree on each slow payment Cuban government other’s most basic demands. Cuba from Cuban under Raúl Castro asks for an unconditional end to the buyers will and introduction U.S. embargo; the U.S. demands l i k e l y b e of more market that Cuba unilaterally dismantle its the norm for elements. The political system. With both sides 2009. Although new president is so hopelessly divided, how can we t o u r i s m a n d making his mark even begin a conversation to end this service exports w i t h p r a g m a t i c stalemate? are still growing, e f f o r t s a i m e d a t There are numerous topics of the nickel mining and increasing efficiency and global and mutual interest to talk oil sectors have slowed productivity. He announced about. The Center for Democracy down as a consequence “structural and conceptual in the Americas has identified nine of plunging prices. changes.” critical areas where Washington and That will keep • A s t h e c a s h can communicate, work Cuban coffers crunch continues, together and build relationships of empty. expect cutbacks confidence and trust. •The biggest immediate in government programs CDA recruited a team of scholars economic jolt could come 2009 that had been taken for granted and experts to offer their ideas for in the form of a lifting The Look Ahead by many Cubans. cooperation in military affairs, of the U.S. travel ban. •More centralized control migration, energy, trade, academic President Barack Obama on state company spending, exchange and other fields, which has announced limited embargo relief as Raúl Castro continues to push his could then produce the progress that and a willingness to talk with Cuban project of creating a central fiscal control has eluded our diplomats for five leaders. But progress in U.S.-Cuban institution placed above government decades. In their essays, the experts relations will to a large degree depend ministries. address: on how much energy and resources •Continued investments by Venezuela, Military cooperation: Shared Obama can afford to spend on Cuba. particularly in oil and gas exploration, techniques and training exercises on What’s more, the president has a lot of refining, petrochemical industry, and search and rescue and drug interdiction leeway on many smaller issues, but it’s agriculture. The South American between the Cuban military and the up to Congress to make big changes to country’s revenues are expected to drop U.S. Defense Department could the embargo. significantly this year, due to falling lead to a dialogue involving Cuba in •Many Cubans hope that the sixth oil prices. President Hugo Chávez is international humanitarian programs congress of the Communist Party committed to continue Venezuela’s or defense of the Panama Canal. of Cuba, scheduled for late this year, forging of close economic ties within Security cooperation: By working will instill life into the ossified state Latin America, and he says his country’s together to stop drug smuggling, apparatus. Lively discussion has already hard-currency reserves are big enough criminal financial activities, and begun as to the extent of reforms. to continue as planned. Major projects other law enforcement matters, and The gathering of the rank-and-file in Cuba’s petrochemical industry are membership should have occurred in already underway. But it remains to 2002, but the Cuban leadership under Continued on next page Continued on next page

3 Preview 2009 ‘‘Scarce resources,’ from previous page •Increasing interaction with Latin American economies be seen whether the financial situation allows Venezuela to — particularly Brazil and Mexico. Brazil signed a series of maintain this pace of investment. substantial economic agreements and is providing generous •More integration with ALBA member countries and loans. Mexico expects to quintuple trade with Cuba over the close associates (Venezuela, Bolivia, , , next few years. Ecuador). First steps towards the Sucre, the common currency •Increasing trade and investment with China, Russia of ALBA members. Thanks to initial capitalization and India, thanks to generous loans from these rising committed by Venezuela and Cuba in December, powers. the ALBA Bank may begin granting loans to •Limited financial relief, thanks to debt ALBA projects this year. Further agreements with renegotiation with Cuba’s long-standing partners ALBA member countries should boost medical and in Canada, Europe, Japan and South Korea. educational service exports by Cuba. •There are no indications of rapid change. The •Foreign companies taking advantage of Raúl Castro administration is taking its own pace the Cuban market as a platform to other ALBA at reforming the most dysfunctional sectors of Cuba’s markets. economy. •Although the U.S. media is fixated on Fidel Castro’s health and Cubans are emotional about “We still have enormous prob- 2009 his persona, his eventual passing is of relatively lems with Alimport re letters of The Look Ahead little concern to the subsistence of the system. As one observer said, asked about what he thought will credit being opened months after happen when Fidel dies — “There’ll be a big funeral we deliver to the docks. It is be- in Havana.” More than in Havana, Fidel’s death may have a coming very frustrating.” psychological impact on Cuban Americans. Many hardliners may capture this moment as an opportunity to soften their stance U.S. exporter to Cuba Trade on Cuba. It would also give U.S. politicians an opportunity to save face.

‘Nine ways to talk,’ from previous page Hurricane cooperation: Cuba’s peerless civil defense jointly managing environmental and major security crises, program and mass mobilization in natural disasters the governments could create functional relationships on dramatically reduces the number of casualties from serious which to build trust. tropical storms. With storm activity in the Caribbean rising, Migration cooperation: Cooperation on migration has shared information to improve hurricane forecasting and historically followed migration crises rather than preceding response would benefit both countries. them. Here is a new migration agenda that starts with Academic cooperation: Broad academic cooperation specific policy reforms, such as more family visits and joint between the U.S. and Cuba in public health, biotechnology, anti-smuggling operations, but leads to a new “normal” arts education and environmental issues is impermissible regime that promotes economic cooperation, educational under current sanctions. A democratic society cherishes partnerships, and exchanges. the free flow and exchange of ideas; the U.S. should act in Medical cooperation: U.S. sanctions against Cuba’s accordance with its values and resume academic exchange. health care system have had the paradoxical effect of The role of Cuban-Americans: The passage of time and fostering breakthroughs in Cuban research on cancer drugs a changing political climate in Florida has released the grip and immunizations that are unavailable to U.S. citizens. of hardliners in the Cuban-American community on U.S.- Both countries could benefit from developments in health Cuba policy. This means that travel restrictions on Cuban education and research if medical sanctions were repealed. Americans can be removed, programs like Radio and TV Commercial cooperation: Opportunities for trade and Marti can be reexamined or defunded, and the belligerent commerce with Cuba would help U.S. firms compete against tone of our diplomacy can be replaced. The moderate Cuban- foreign firms, which operate in Cuba without restrictions, American community can now become a vital element of an while improving Cuban living standards and working improved, more creative policy that actually helps to facilitate conditions. a peaceful economic and political opening on the island. Energy cooperation: The expertise of the U.S. energy industry could speed Cuba’s development of abundant Sarah Stephens is executive director of the Center for untapped oil resources, increase Cuba’s ability to produce Democracy in the Americas, an independent non-government ethanol, boost energy supplies to the U.S., and help Cuba’s organization based in Washington. The full text of the report economy. can be found at www.democracyinamericas.org.

4 E c o n o m y $2 billion stimulus,’ from page 2 ALBA trade and integration agreement, which also includes liquid natural gas imported from Venezuela, as well as gas Bolivia, Nicaragua, Dominica and Honduras. pipelines and other gas distribution facilities in Cuba. The Castro’s visit coincided with the 9th meeting of the Cuba- agreement didn’t specify where the regasification plant will Venezuela bilateral commission at the PdVSA headquarters be located. Caracas Dec. 12-13. Of 311 proposed projects, the commission’s The two presidents also signed a memorandum of 24 committees agreed on continuing 137 development projects understanding to create Guardián del ALBA S.A. The already underway, and to start 36 new ones. Venezuela-based joint venture, whose 51-percent owner will During a ceremony in Caracas, President Hugo Chávez be PdVSA Industrial S.A. (with Cuba’s ALBET S.A. holding presented Castro with the Order of the Liberator and a replica 49 percent), will set up “socialist software plants” to produce of Simón Bolívar’s sword. Castro was accompanied by Ricardo integrated solutions for automatization, information technology Cabrisas, the recently appointed vice president in charge of and telecommunications. The partners hope their software international economic relations. The Cuban delegation also will help Cuba and Venezuela save more than $500 million included Rodrigo Malmierca, the new minister of foreign in licensing fees. investment, and Foreign Minister Felipe Pérez Roque. All Cuban-Venezuelan projects are under the umbrella of the Raúl Castro, 77, last visited Venezuela 55 years ago. EXPERTS TALK COMMON CURRENCY Six expert commissions and the finance ministers of the ALBA trade and integration agreement met Jan. 8 at the Confirming Venezuela’s role headquarters of Banco del ALBA in Caracas to analyze details as No. 1 partner for Cuba: of the proposal to create a common currency, Venezuelan Raúl Castro visiting Finance Minister Alí Rodríguez announced in December. Caracas. The results of the expert meeting will be presented at the Relaciones Exteriores Venezuela next ALBA-Petrocaribe summit at a yet to be determined date in the first quarter of this year. The currency, dubbed Sistema Único de Compensación ALBA Bank gets capital infusion Regional (Sucre), is part of an effort to facilitate commercial Bolstering the long-ailing Banco del ALBA project, exchange within Latin America and break free of the Venezuelan Finance Minister Alí Rodríguez announced Dec. dependence on the U.S. dollar and U.S. financial markets. 9 that Venezuela would provide $850 million of the bank’s “When there’s a crisis that has among its causes the weakness $1 billion starting capital. ALBA members Venezuela, of the dollar, which has been profoundly affected by high levels Cuba, Bolivia and Nicaragua officially opened the bank’s of speculation, this obliges — as it’s happening — the different headquarters early last year, but the infrastructure bank regions to go look for their own solutions,” Rodríguez said. has not begun to operate yet. Since then, Dominica and At a December meeting in Caracas, the presidents of Honduras have joined as members, and Ecuador as Venezuela, Cuba, Bolivia and Nicaragua gave green light an observer. However, only Venezuela and Cuba have to study the creation of a common currency. Ecuador and committed funds to the project. Dominica participate as observers. The board of directors met for the first time Dec. 10 at the headquarters of the bank in Caracas. advertisement

5

E c o n o m y Cuba ‘returns’ to hemisphere Taking Cuba to the next level of integration The two main regional powers, Brazil and with Latin America, the long-isolated country was Mexico, had promoted Cuba’s entry to the Rio welcomed as a full member of the Rio Group at a Group, an informal consultation group formed at summit in Costa do Sauípe, Brazil. the tail end of the Cold War to the Washington- The summit was a four-way event by Mercosur, based Organization of American States (OAS). the Rio Group, Unasur, and the Latin American and Caribbean The summit issued a joint statement calling on the Summit (CALC). United States to lift the embargo. “In particular,” the group The Rio Group accession prompted President Raúl Castro asked Washington to end the embargo-tightening measures to declare Cuba’s victory over isolation efforts by the United introduced by the Bush Administration in 2004. States. “We’re living a radically different historical moment,” Bolivian President Evo Morales took the issue one step Raúl Castro told the Cuban parliament in its year-end session. further, suggesting Latin American nations should expel their “The nations in our continent have gone from petitions to U.S. ambassadors until the United States lift the embargo. demands when it comes to ending U.S. aggression against Meanwhile, Brazil offered to mediate between the United Cuba, at multilateral events as well as in individual form by a States and Cuba, Venezuela and Bolivia, respectively. growing number of governments and parliaments.” Ecuadorean President Rafael Correa suggested the Rio Group morph into a more coherent organization that would replace the Washington-dominated OAS. However, on the margins of the summit, Raúl Castro met with OAS Secretary General Miguel de Insulza. Brazilian Group shot President Luiz Inácio Lula da Silva urged the United States at Costa do Sauípe, to accept Cuba as a member of the OAS. still sans At the margins of the summit, Castro for the first time met Raúl Castro with Mexican President Felipe Calderón, overcoming half a

photo: Grupo de Rio decade of diplomatic conflicts between the neighbors. Castro and Calderón agreed to mutual visits this year. Hurricane recovery advancing at acceptable pace Hurricane recovery is proceeding “satisfactorily,” One 100-home Petrocasa pilot subdivision President Raúl Castro told the parliament during the has been built in Cienfuegos, and a similar one National Assembly’s year-end meeting. in Santiago de Cuba is almost finished. Some Agricultural production is coming back, and thanks 50 Petrocasa homes are under construction in to “important investments,” residential construction hurricane-affected areas of Pinar del Río province, is picking up, he said. Four Venezuelan construction and another 48 at Gibara, a port city in Holguín brigades have begun earthmoving on new residential province devastated by Hurricane Ike this fall. projects. However, he warned that the “magnitude of the task” of reconstruction might require three to six years. According to Housing to get private-fund boost Castro, of 500,000 damaged homes in 35 municipalities 77 In a response to the desolate state of housing in the percent have yet to be fixed, in addition to 70,000 still damaged country, Cubans will be allowed to build their own homes from hurricanes in previous years. using private money, Raúl Castro announced Jan. 11, A major drag on reconstruction efforts is a worker according to Granma, while visiting the construction site shortage. of a Venezuelan-made Petrocasa neighborhood. Castro said “As far as construction workers go, I must say that the the measure would trigger the construction of hundreds response [of job seekers to a government call] is very, very of thousands of homes. The privately built homes will be insufficient,” Castro said. “We’ll see what we can do.” subject to strict limitations and guidelines, Castro said. Meanwhile, a Venezuelan modular-home plant under Nevertheless, this is a step towards bringing market construction at Cienfuegos is expected to crank out 4,430 mechanisms to the housing sector. modular “Petrocasa” homes this year made of PVC wall components. The $80 million factory will produce profiles, plumbing components, artificial wood and carpentry elements Petrocasa construction at with machines imported from Germany and Austria, using Cienfuegos some Brazilian-made components. The plant is expected to make 11,000 two- and three-bedroom homes in 2010. Photo: Pequiven

7 E c o n o m y Cuba to Obama: The world is with us In rapid sequence, the heads of state of six fellow Latin Havana Jan. 7-10, accompanied by a large delegation intent American countries are visiting Cuba, on invitation by on strengthening economic ties. The delegation included President Raúl Castro. the ministers of agriculture, cattle, aquaculture and fishing, The President of Ecuador, Rafael Correa, spent four days in electricity, health, education, labor and sports. Correa signed cooperation agreements on economic Mexico: We want 10 percent of Cuba trade complementation, energy savings, irrigation, disaster Now that a political conflict management, culture, healthcare and education during his is set aside, Mexico hopes to visit. recover the 10-percent market Ecuadorean media reported that the agreements also include share of Cuban imports it held the creation of two joint ventures for biotech products and in 1994, Undersecretary of State generic drugs. Gerónimo Gutiérrez said in a press Correa followed Panamanian President Martín Torrijos who conference. Ten percent of Cuba’s was in Havana Jan. 5. imports today would amount to $1 Argentinean President Cristina Fernández de Kirchner is billion. Mexico-Cuba trade dropped scheduled to be in Cuba Jan. 18, after postponing her visit for a from a high of $435 million in the week, due to illness. Chilean President Michelle Bachelet will 1990s to $200 million in 2007, attend the opening of the Havana Book Fair in February, which Felipe Calderón after a series of conflicts. Mexican features Chile as the honored country this year. Honduran exports to Cuba rose 67.4 percent President Manuel Zelaya is scheduled to travel to Havana in during the first three quarters of March to sign a trade agreement. 2008. Mexican President Felipe Calderón plans to travel Mexican President Felipe Calderón will visit later this to Cuba early this year. year. Finally, Guatemalan President Álvaro Colom said he would ‘Low-profile 50-year bash,’ from page 1 visit Cuba during the first quarter. Late last year, President Raúl Castro hosted Brazilian reality.” President Inácio “Lula” da Silva, Chinese President Hu Jintao Castro reminded the audience of the warning of Cuba’s and Russian President Dmitry Medvedev. possible “self-destruction” his older brother gave in November 2005. RAUL SUGGESTS PRISONER EXCHANGE “Our people know each imperfection of [the revolution] Days before the inauguration of President Barack Obama, that the people itself raised with their arms and defended the Cuban government continues to signal its willingness for by risking their lives. We revolutionaries are our main dialogue to Washington. critics. We haven’t hesitated to elucidate deficiencies and During a joint press conference with President Lula da Silva errors publicly.” in Brasilia in December, Raúl Castro said Cuba would be Although they didn’t visit Cuba for the celebrations, willing to exchange political prisoners in Cuba for five spies Cuba’s closest friends in the hemisphere, Presidents imprisoned in the United States since 1998, known as “Cinco Hugo Chávez, Evo Morales and Daniel Ortega, all Heroes” on the island. issued congratulatory public statements to the Cuban Responding to a reporter’s question, Castro said a “former government. president” had urged him in a letter to seek better relations A children’s day Jan. 3 kicked off the public celebrations, with the Obama Administration. followed by 10 street dance events in public places “I told him the time of gestures is over in Cuba, that they throughout Havana. The “José Martí Anti Imperialist have to be bilateral gestures, no more unilateral gestures,” Tribune” on Havana’s Malecón, facing the U.S. Interests Castro said. But under “absolute equality of conditions,” Cuba Section, will host concerts by Los Van Van, Paulo FG, would be inclined to begin talks. and the ensemble of the Tropicana cabaret. A gala show “We’re going to do gesture for gesture,” Castro answered Jan. 21 in the Teatro América in Havana will top out the another reporter’s question on imprisoned political opponents festivities. in Cuba. “These prisoners you are talking about, they want us to release them? They should tell us tomorrow — we’ll send them there with their families and everything. Or they return our Five Heroes to us. That is a gesture by both sides.” 1960s comic book about the Communist Party daily Granma published a transcript of revolution, made in Cuba Castro’s answers.

8 E m b a r g o Anti-embargo groups keep up pressure on Obama In anticipation of Barack Obama’s inauguration Jan. 20, “We are convinced that it is time to change the ineffective many groups — including some that have advocated Cuba’s and counter-productive U.S. policy toward Cuba,” the letter isolation before — are urging the new president to ease the said. “We urgently request you to change the Cuba policy of embargo. the United States in ways that will assist the churches in their The Miami-based Cuba Study Group, which had declined work and benefit all Americans.” in to seek relations with Cuba in the past, joined with the Emergency Coalition to Defend Educational Travel, to ask FLORIDA REP TAKES PUBLIC STAND Obama to lift travel and remittance restrictions not just for As the first acting congressperson Cuban Americans, but for all Americans. in Florida, Rep. Kathy Castor “The consensus on democratic movement in Cuba is that the (D-Tampa) asked publicly for isolation must be broken,” said Cuba Study Group Executive an easing of the Cuba embargo. Director Tomás Bilbao. “We have to listen to the people who In an open letter to President- we’re intending to help.” elect Barack Obama, she asked Washington-based human rights group Freedom House, for a lifting of certain travel and which has been critical of Cuba’s human rights record, asked remittance restrictions. Obama to immediately lift the travel ban and re-examine the “The restrictions have proven embargo. Ending the travel ban would expose Cubans to ideas ineffective in altering the political from abroad, a spokeswoman of the group argued. situation and interfere with Rep. Kathy Castor Also, a coalition of academic, business and humanitarian fundamental family relations and organizations sent an open letter to Obama to allow people- human rights,” Castor wrote. “By to-people exchanges, family travel and remittances. They lifting the burdensome restrictions include the Association of International Educators, American we can provide relief to families while maintaining the Association of State Colleges and Universities, American pressure for human rights and change the island needs.” Friends Service Committee, Church World Service, Fund for Tampa is the city with the second-largest Cuban population Reconciliation and Development, Latin America Working in the United States, after Miami. Group, Latin American Studies Association, National Meanwhile, Rep. Rosa DeLaura (D-Ct.), chairwoman of Foreign Trade Council, Operation USA, Social Science the House Appropriations subcommittee on agriculture, took Research Council, Unitarian Universalist Service Committee, the lead in calling for an immediate end to all travel and USA*Engage, and Washington Office on Latin America. agricultural trade restrictions. Finally, the leaders of the National Council of Churches, “I believe that lifting all of the agriculture trade restrictions Church World Service and more than a dozen other U.S. would help American agriculture, farm equipment businesses, Christian leaders asked Obama in an open letter to lift the and help with public health in Cuba,” DeLauro said. “I think travel ban, restore full diplomatic relations, and end the it’s smart. It’s important.” embargo altogether. DeLauro traveled to Cuba last year to attend the International Havana Fair. FORMER BUSH AIDE PLEADS GUILTY Felipe Sixto, a former White House aide and director of an DIAZ-BALART REALIGNS DEFENSE anti-Castro group in Washington, pleaded guilty to stealing Rep. Lincoln Diaz-Balart, the scion of the hard-line Cuba from USAID funds managed by the Center for a Free Cuba. fraction in the U.S. Congress, is realigning the embargo He overcharged the Washington-based Center by $579,000 defenses, facing Obama’s stated intent to lift some travel and for radios and flashlights. Sixto resigned March 28 last year remittance restrictions. from his White House job. He wants to maintain the embargo intact, but this does not mean that the “usefulness of certain” embargo-tightening PEREZ, FANJUL WANT TO BUY HERALD measures passed by President George W. Bush in 2004 “cannot Jorge Pérez and Alfonso Fanjul, two prominent Cuban be talked about,” Diaz-Balart said, according to Nuevo Herald American businessmen associated with a political hard line, columnist Emilio Ichikawa. Diaz-Balart, who was re-elected have been negotiating with executives of the McClatchy to another two-year term in November, was a driving force Co. about buying the Miami Herald. No agreement has behind all of the Bush Administration’s travel and remittance materialized. The Miami Herald Media Co., owned by restrictions. McClatchy, publishes the Miami Herald and El Nuevo Herald. “We’ll see intents to grant concessions to the regime,” Diaz- Coping with drops in advertising and circulation, McClatchy’s Balart said, according to the Miami Herald. “I expect them, stock has slid more than 80 percent since summer last year. but we’ll fight to maintain the embargo until there’s a genuine The heavily indebted chain owns 30 newspapers. democracy underway [in Cuba].”

9 E c o n o m y British investors end real estate drought Promising an end of a decade-long drought Cuba’s only 18- during which foreigners could not buy hole golf course residential property in Cuba, London-based in Varadero Esencia Hotels & Resorts said it signed a “pre-joint venture agreement” with state company Grupo Palmares SA to build a golf course resort. Esencia is set to begin to market Carbonera Club condos this spring. Varadero. The project includes 105 apartments designed by The joint venture, Cuban Golf Resorts (CGR), plans to begin Conran & Partners, 468 apartments in low-density, three- to construction this year of a 170-hectare beachfront resort near four-story buildings, and 156 private villas designed by Rafael de la Hoz. The club’s plans include an 18-hole golf course, a marina ‘Singer raises voice,’ from page 1 with yacht club, and a hotel with a spa. Buyers, according to some of his critics described as “rude” and party-spoiling CGR, will be granted a visa allowing a stay of up to six months behavior, just as Cuba is celebrating the 50th anniversary of at a time. GCR asks for a $1,000 membership payment in the the revolution. Carbonera Club. Each member is entitled to a reservation for Asked about how Cuba is doing, Milanés said “quite bad an apartment or villa, for a 10 percent down payment. Property — after three hurricanes, a crisis that doesn’t end, and [with] sales at Carbonera are tax-free. leaders who don’t do anything to push ahead the country again “I am delighted that Esencia, which has been working on in the middle of this paralysis. If you add to this the global this project for several years, has been able to make progress, crisis, we’re all set.” and that this important project is now becoming a reality,” said “I don’t trust anymore in any Cuban leader older than 75 Ian Taylor MP, a former British trade minister and chairman years because all of them, in my mind, are past their glory of the British parliament’s Cuba Initiative. Taylor said he had days. There were many, but discussed the project with Cuban minister they’re ready to be retired. Esencia also operates the Victoria, a historical boutique hotel We must pass the baton to in the Vedado district of Havana, says it will open a spa hotel in the new generation so they western Viñales this fall, and plans more projects in Cienfuegos make a different Socialism, and Santiago de Cuba. because this one is stalled. It has already given all it COMPTROLLERS OFFICE COMING IN ‘09 could, moments of glory, Continuing his drive for efficiency and cost controls amid immortal things that persist in a cash crunch, Raúl Castro announced further government the memory and in everyday changes in the course of 2009. Pablo Milanés: Cuba can’t Studies to create a centralized comptroller’s office are “very live off promises anymore facts of Cubans. But we have to make reforms on a lot of advanced,” he told the National Assembly. The powerful office fronts of the Revolution, would take over the functions of the Ministry of Audits and because our leaders aren’t able anymore. Control, but would be reporting directly to the Council of State “The situation that Cubans are living is such that they can’t and be positioned above government ministries. live off promises anymore.” Complaining about the “total absence of norms and “Many people fear to talk, because there’s a system of regulations,” he said he would present the plan for a Contraloría censorship, of quiet and hidden repression that won’t allow General de la República at the parliament’s summer session. you to talk freely. We have to destroy this, question it radically. “During many years I have meditated about these questions, These are things that have been exposed before, including by most of all critically analyzing my own work, and also that of the Cuban leadership, but they haven’t been carried out.” others,” Castro said. “I have arrived at the conclusion that one “I am convinced Pablo’s true opinions and true sentiments of our fundamental problems is the lack of systematic demands are not in this interview,” wrote Nisia Agüero, a friend at all levels.” of Milanés and high-ranking official of the state culture advertisement organization UNEAC, describing his words as “rude.” “Pablo is ours: He’s of Cuba. He’s of the revolutionary people that loves him so dearly,” she wrote in Jiribilla magazine. “Those who try to use him to damage the image of the Revolution on its 50th anniversary know that too.” www.progreso-weekly.com

10 C O N F E R E N C E S & E V E N T S News from the •”U.S. Policy Towards Cuba: A Conversation with American Sales Department Diplomats” (podium discussion), University of Miami, Jan. ++An Oklahoma agricultural trade delegation led by 23 Secretary of Agriculture Terry Peach visited Havana in •Informática 2009 (information technology fair), Havana, mid-December. Peach said that negotiations have begun with Feb. 9-13 Alimport over the sale of wheat, forest products and dairy •International Book Fair, Havana, Feb. 12-March 8. •Cuba Consultation 2009 (annual meeting of anti-embargo cattle. He said he was confident over a 1 million bushels wheat activists), Washington, March 5-6 delivery “sometime in the coming months.” A first Oklahoma •International Tourism Fair, FITCUBA 2009, Havana, May delegation visited Cuba in 2006.++ 4-8 ++Alimport S.A. bought 600 container loads of utility •Cubadisco 2009 (music industry fair), Havana, May 16-24 poles from a Chilean company. The purchase was made on •7th Int’l Meeting on Nature Tourism, TURNAT 2009, Zapata credit.++ Swamp National Park, Sept. ++Argentinean businesspeople met for two days with •18th Latin American Congress of Ethno-Medicine (natural representatives of Cuban state companies and ministries at the medicine), Havana, Sept. 14-18 Hotel Nacional in Havana to negotiate contracts.++ Call (941) 330-0303 or send an e-mail to JWerner@ ++A Pakistani delegation made up of representatives of cubatradenews.com for more information on events the textile and biomedical industries is planning to visit Cuba this year to explore investment opportunities, as Pakistan and Cuba are readying an economic cooperation agreement. E c o n o m y The Cuban ambassador in Islamabad told State Investment Minister Saleem Mandviwala that the two countries should ‘OFFER AND DEMAND’ FOR TAXIS cooperate in textile, medical equipment and biotechnology. In another small reform, the Cuban government published Cuba sent a medical brigade to Pakistan three years ago after new regulations Dec. 22 for private taxi owners that allow an .++ urban service to be “freely agreed on” between client and owner, according to offer and demand. According to Resolution 2008 BREAKS TOURISM RECORD 263/2008, rural taxi owners must follow a set route, schedule Cuba broke a tourism record in 2008, thanks to 2.35 million and pricing. foreign visitors, 9 percent more than the year before, according to Tourism Ministry officials. The previous peak dates from 2005, with 2.31 million visitors. Tourism also generated a record $2.7 billion in revenues, up Tight and noisy, 13.5 percent from 2007, the National Statistics Office (ONE) but better than said in a preliminary report for 2008. the bus — pivate Despite the unpredictability of the global economy, tourism Polski Fiat taxi officials are optimistic about 2009. The ministry expects Cuban tourism to break another record this year, banking on Top “exports”: Doctors, teachers and beaches the arrival of 2.5 million foreigners in 2009. Tourism revenues in 2008 rose 13.5 percent over 2007, net Nickel, sugar and other commodity exports suffered last profits rose 16.7 percent. year — while food and other imports went through the roof The boost in 2008 came mainly thanks to Canadian — but Cuba was able to compensate s by sending doctors, tourism, which was 25 percent up in 2008. Canada hasn’t teachers, engineers, technicians and sports coaches abroad, been affected by the global financial crisis as much as other and by attracting a rising number of tourists. countries, and a cold spell this winter contributed to driving Service exports rose 6.2 percent in 2008 to $9.2 billion, Canadians South. according to preliminary figures released by the National “Cuba really took off this year,” Cynthia Wong, manager Statistics Office (ONE). of CAA Travel in Saskatoon told News Talk 980. “A lot of Neither ONE nor the Central Bank do specify what’s people are getting adventurous and want to see a little bit of included in the services export category. According to history in Havana.” Reuters, officials say it includes services provided by In a warning signal, though, the number of British, Italian, Cubans abroad, tourism, and donations. Spanish and German tourists declined between 3 and 5 percent The rise consolidates service exports as the most in 2008. important source of foreign currency. A big part of the increase went to the No. 1 beach resort. Service exports have exceeded tourism revenues since Varadero for the first time broke the 1-million tourist barrier in 2005. The bulk consist of medical, education and other 2008. The Jardines del Rey area also saw considerable growth services provided to Venezuela. Tourism generated $2.5 in 2008, up 6 percent. In December, the visitor number was billion in revenues in 2008. up 28 percent, with 90 percent occupancy. 11 C o m p a n i e s

After being taken over Havana Journal Inc., a Massachusetts-based company by Wal-Mart Stores Inc., that focuses on Cuban Web business, published data about Santiago de Chile-based D&S some of the top Cuba-related Web sites. Using various traffic S.A. stopped selling not only measurement tools, the survey shows that the top sites are Cuban and Iranian, but also news, opinion and travel related. They include CubaWeb. Venezuelan products, according cu, BabaluBlog.com, TasteOfCuba.com, Cubanet.org, to Chilean media. Iran and TheRealCuba.com, AfroCubaWeb.com, HavanaJournal. D&S Líder supermarket Cuba are subject to U.S. trade com, MyCubanStore.com, CubanFoodMarket.com, and sanctions, but Venezuela CubaGenWeb.org. More information at http://havanajournal. isn’t. The national economic com/images/cuba-select-2009.htm prosecutor’s office in Santiago de Chile is investigating *** whether Wal-Mart’s restrictions violate Chilean competition Rotterdam-based Nirint Shipping BV, the main shipper of law. D&S reportdely sold remaining Cuban and Venezuelan Cuban nickel to Canada and Europe, has recently increased rum at its Líder, SuperBodega and Ekono stores at half shipments of goods to Cuba. Nirint has been shipping industrial price to liquidate its stock. In response, Chilean competitor goods to Cuba on the five multi-purpose freighters it dedicates Cencosud started a publicity campaign saying that in its to regular Caribbean runs, including machinery for an expansion Jumbo stores customers could “find products from all over e project at a Sherritt International Corp. nickel plant in Moa. world, without restrictions.” Other shipments included liquid cargo, containers, construction *** equipment and buses. The shipper offers regular Europe-Cuba- Telecom Italia SpA, the joint venture partner of Cuban state Canada-Europe, Asia-Cuba-Asia, and Canada-Cuba-Canada telecom ETECSA, had informal talks with Spain’s Telefónica runs. Nirint is owned by SA over the sale of its 27-percent stake in the Cuban company, the Fondel Group, the Corriere de la Sera reported Dec. 10. The Italian newspaper Dutch commodity trader said that Telefónica was willing to offer as much as $500 that handles the bulk of million, but that Telecom Italia was seeking $779 million. Cuban nickel sales. The Corriere didn’t attribute the information. Telecom Italia could also auction off its stake in a process supervised by the Cuban government, according to the newspaper. Nirint Commander, docked at Havana advertisement LOVE, LOSS AND LONGING — THE BOOK The Latin America Working Group Education Fund (LAWGEF) and the Washington Office on Latin America (WOLA) are pleased to announce the publication of Love, Loss and Longing: The Impact of U.S. Policy on Cuban-Amer- ican Families, a stunning photo and text book. The photos and testimonies in the book movingly capture how Cuban- American families feel at being separated from their family members on the island. This new book is based on the photographs and stories exhib- it that toured across the country for the past year and a half. With venues in over 20 cities throughout the United States, the photo exhibit reached thousands of Americans and is aimed at moving policymakers towards a policy of engagement with Cuba. The book includes expanded text on the background and implications of current restrictions.

To order your copy today, go to: www.lawg.org/misc/Sign_up_pubs.htm. Proceeds will contribute to LAWGEF’s work to educate the American pub- lic and policymakers about the impact of the Cuba travel ban. To preview a free version of the book go to: www.lawg.org/misc/Publications.htm

12