1159 Luxner 10/29/02 9:45 AM Page 1

Vol. 10, No. 10 November 2002

www.cubanews.com

In the News Meliá to invest millions in 2 new resorts; chain already manages 22 Cuban hotels Cohiba confrontation Cuba sues General Cigar over ownership BY LARRY LUXNER vestments in places where tomorrow there will of the famous name ...... Page 3 pain’s Grupo Sol Meliá will sink at least $15 be an adequate return, and in hotels where an million into two huge beach resorts being American tourist would really want to stay when Sugar restructuring S developed in separate ventures with the he comes to Cuba,” Cánaves told CubaNews by Cuban government and various investor groups. phone from his Canary Islands headquarters. CubaNews map shows which of 156 sugar The first project is an 800-room hotel on Cayo At present, Meliá manages 8,321 rooms in 22 mills will close, which won’t ...... Page 4 Largo, a resort island off Cuba’s southern coast. hotels across the island, making it the leading Tentatively known as the Meliá Paradisus Cayo player in Cuba’s rapidly growing tourism sector. Where’s the Party? Largo, this $80 million property is the brainchild Cánaves confirmed that Meliá also has equity of Leisure Canada Inc. (LCI), a Vancouver-based in four of those hotels: the Meliá Habana, the Doubts plague Cuban Communist Party’s company that has at least three other Cuban Meliá Varadero, the Meliá Las Américas and the upcoming Congress ...... Page 5 beach resorts on the drawing board. Sol Club Palmeras. The second Meliá-related project is a tourist The Cayo Largo project, however, represents Real estate in limbo complex at Bacunayagua, halfway between Hav- the largest single Cuban investment to date by ana and Varadero, that could ultimately grow to Meliá, which manages 350 hotels worldwide and Despite legal tug-of-war, investors see a five hotels with a combined 1,200 rooms. had sales of just over $1 billion last year. gold mine in real estate ...... Page 7 Gabriel Cánaves, director of Sol Meliá’s Cuba “We’re negotiating with Meliá right now,” said division, said his company, along with other Marcelo Montenegro, president of Wilton Pro- Newsmakers Spanish investors, is negotiating with LCI to buy perties Ltd., a wholly owned subsidiary of LCI. a 30% stake in the Cayo Largo development. “It’s quite possible they’ll end up with 30% of the Politician and author Enrique Oltuski dis- “We think it’s important to make strategic in- See Melia´, page 2 cusses the revolution, the U.S. embargo and Cuba’s future after Fidel ...... Page 8 Once-proud coffee industry falls victim Predicting the future Academics analyze a range of post-Castro to drought, theft and mismanagement transition scenarios ...... Page 10 BY LARRY LUXNER that when it comes to putting Cuba on the world Business briefs hen José Gavinia was a boy, his family coffee map, the Marxists have really blown it. owned a farm just south of Tope de Co- “The industry is completely destroyed,” Gavi- Cuba exempts tourists from baggage fee; W llantes in the old province of Las Villas. nia said by phone from Los Angeles. “The only Canada chicken exports fall ...... Page 12 About a third of the Gavinias’ 390 acres was good coffee coming out of Cuba these days is planted with coffee, and the operation had both being exported to Europe. Before the revolu- Videos for rent a dry and a wet mill. Cuban coffee was highly tion, most of the good coffee stayed in Cuba. Today there isn’t even enough to go around.” A look at how Havana’s clandestine video sought after, and the family business flourished. “Whatever we exported would get a premium According to the official daily newspaper outlets stay in business ...... Page 13 over the world market, and most of our coffee Granma, Cuba’s 2002-03 coffee crop will be 11% went to Holland and Germany,” Gavinia said. smaller than the previous one — mainly be- Provinces: Pinar del Río “We didn’t sell to the U.S., because the Ameri- cause a prolonged drought has made some pro- Cuba’s westernmost province, recently cans wouldn’t pay the price at the time. It was cessing centers inoperative. much better to sell the coffee domestically.” And a mid-level official in eastern Cuba told ravaged by hurricanes, is still the island’s Then disaster struck in 1960, when the farm Reuters that “there was some rainfall at the start top tobacco producer ...... Page 14 was confiscated and the Gavinia family — along of the year, but this summer was exceptionally with thousands of other landowners — fled the dry. An 11% decline might be a bit optimistic.” CubaNews (ISSN 1073-7715) is published monthly island, eventually settling in the United States. Assuming it isn’t, the 2002-03 harvest now by Luxner News Inc. © 2002. All rights reserved. And the Cuban coffee industry has never underway will produce around 13.4 million to Subscriptions: $429/year. For subscription or edito- been the same. 14.4 million kg, based on a Reuters estimate of rial inquiries, call toll-free (800) 365-1997, send a fax 15 million to 16 million kg for the 2001-02 crop. to (301) 365-1829 or e-mail us at [email protected]. Interviews with government officials, diplo- mats and industry experts all to the conclusion See Coffee, page 6 1159 Luxner 10/29/02 9:45 AM Page 2

2 CubaNews ❖ November 2002 “featuring a swimming pool that meanders in equally huge 2,400-room tourist resort on 5.5 Meliá — FROM PAGE 1 and around the restaurant complex.” Set back square kilometers of beachfront property. total project, but it hasn’t been finalized yet.” from this central area will be rooms housed in When finished, LCI’s resort could boast six He said that if Meliá and the other two-story structures built in groups of eight. hotels, a marina and two 18-hole champion- Spaniards take 30%, LCI would be left with a Second-floor units will have ocean views. ship golf courses, as well as retail shops, ten- 20% share of the project. The remaining 50% Finally, the far west corner of the Cayo nis facilities, equestrian trails and more. Total would remain in the hands of Gran Caribe, a Largo development, accessible only by silent investment could reach $240 million. division of Cuba’s Ministry of Tourism. electric carts, will conceal 14 luxury villas hid- Cánaves said this coastal area, which is rel- Montenegro told CubaNews that his team den in an exclusive area of the resort. atively undeveloped, has become popular chose Meliá to manage the Cayo Largo ven- with foreign investors because “there’s practi- ture because of the chain’s 11 years of experi- UNRELATED MELIÁ RESORT AT BACUNAYAGUA cally no more room in Varadero,” where Sol ence in the Cuban tourism sector. The second hotel project in which Meliá Meliá now runs seven hotels under the Meliá, “We had lots of offers from other interna- plans to invest is along Cuba’s north coast at Sol, Tryp and Paradisus brand names. tional companies, but we selected Meliá Bacunayagua, located halfway between Vara- Cuban tourism authorities are said to be because it’s a very prestigious company, and dero and Havana in the province of Matanzas. very interested in the Bacunayagua project, it’s well-established in Cuba,” he said. Last year, a Spanish-Cuban joint venture which would mean new jobs and a new source According to a slick, full-color investor was signed in the presence of Cuba’s vice- of dollars for the cash-strapped government. brochure published by LCI, the resort — to president, Carlos Lage Dávila. The venture, WAITING FOR THE AMERICANS begin construction in late 2003 — is situated known as Desarrollo Turístico Bacunayagua on the underdeveloped west end of Cayo S.A., is comprised of Cuban state tourism enti- It wouldn’t be a moment too soon for Meliá, Largo, on “breathtaking beachfront proper- ty Cubanacán (50%) and Valle Yumurí S.A. either. At present, the hotel chain — which ty.” Three hotels are to be constructed here, (50%), which itself is made up of Meliá and at employs 8,000 people at its 22 properties — each targeting a particular market and linked least 10 other Spanish investors. says Cuba generates $190 million in annual by natural landscaping and gardens. Under the 2001 agreement, investors will revenues. But Cánaves says the average “The most spectacular rooms at Cayo spend $50 million in the first phase to build occupancy rate is only 64% this year, due to a Largo will rise above the surface of a tranquil two hotels and an 18-hole golf course, in addi- 20% drop in tourist arrivals compared to 2001. lagoon — accessible by raised wooden walk- tion to a small shopping mall. Within a de- Even worse is a 34.7% drop in Cuban man- ways strung with handmade railings of twined cade, the Bacunayagua tourist complex could agement fees during the first half of 2002 compared with the same period a year ago. rope reminiscent of pirate days,” says the bro- have two championship golf courses, a mari- “The slowdown of the Canadian market is chure. “Each unit has its own small jetty and na and as many as five hotels with a total of strongly affecting business, especially in the private sailboat. Inside, modern features will 1,200 rooms, representing an overall invest- Varadero region,” according to Meliá’s 2nd- deliver guests into a world of unique luxury.” ment of more than $200 million. quarter earnings statement. “Nevertheless, The resort will also have a Central Village, Meliá has a 10% interest in Bacunayagua, the company is witnessing an improvement in which translates into the Canadian market and expects a recovery Area enlarged Florida Strait an initial investment of the region before year’s end.” of $5 million. In Octo- But Cánaves isn’t spending millions just to ber, the Spanish inves- lure Canadians. What he and virtually every tors visited Matanzas e other hotelier in Cuba yearns for is an end to o v C to meet with Cuban the U.S. travel ban. When that happens, as a u tourism authorities, many as five million Americans could be g a 35-boat with the goal of outlin- streaming into Cuba annually — many of y marina a ing future construc- them driven by curiosity to visit an island that n 250-room u 18-hole tion at Bacunayagua. has been off-limits to them for over 40 years. hotel H c golf course Coincidentally, Ba- a “There’s a lot of movement now to lift the B cunayagua happens to embargo,” he said. “It’s a fact that every day 300 m Bacunayagua be located 15 minutes’ more Americans come to Cuba. I don’t think 0 drive east of Jibacoa, it’ll be long before the ban is lifted, and U.S. 1,000 ft where LCI plans an tourists will be able to visit Cuba freely.” LARRY LUXNER

Sol Meliá’s five-star hotels in Havana (left) and Santiago de Cuba; above, map of proposed Meliá resort at Bacunayagua, located just west of Matanzas. 1159 Luxner 10/29/02 9:45 AM Page 3

November 2002 ❖ CubaNews 3 TOBACCO Cubatabaco, General Cigar to settle Cohiba case in court BY LARRY LUXNER name in the United States in 1978, and since that somehow our registration should be can- hose Cohiba is it anyway? That ques- the ‘80s has been making Cohibas at its huge celled,” said Simeonidis. “If that were the tion will be answered in a New York factory in the Dominican Republic. In 1997, it case, then no one would be able to sell a Wcourtroom sometime early next year, introduced the famous “red dot” Cohiba. Cohiba in the U.S. But we don’t think that will following a trademark infringement lawsuit “You can’t sell Cuban-made Cohibas [in the happen. At trial, it’ll be proven that we were brought by state-owned Empresa Cubana del United States], but we’ve been selling Domi- right in our claims.” Tabaco (Cubatabaco) against New York- nican Cohibas in the United States for quite Miguel Angel Casas, president of ICT — a some time,” Simeonidis told CubaNews. “Co- joint-venture cigar factory owned 50% by based General Cigar Holdings Inc. hiba is now a very well-known brand for Cubatabaco and 50% by Madrid-based Altadis Nick Simeonidis, senior vice-president and General Cigar, and it’s one of several very S.A. — says he wouldn’t count on that. general counsel for General Cigar, said the “Cohiba is the indigenous Taino word for case was originally supposed to be heard last tobacco,” Casas told us. “We month, but it’s been delayed and now won’t began producing Cohibas come to trial until April 2003. 37 years ago. Cuba initiated Both sides had moved for summary judge- the lawsuit because this is theft of ment since no material issues of fact were in our trademark.” dispute, but that motion was denied over the Meanwhile, a federal court in summer by Judge Robert Sweet of the Miami has dismissed an unrelated Southern District of New York. lawsuit by General Cigar against competitor “In sum, we’re arguing that we own the high-quality brands that we manufacture.” Altadis and its U.S. affiliates, Altadis USA Inc. trademark,” said Simeonidis in a recent In February 1997, Cuba attempted to can- and Consolidated Cigar Holdings Inc. phone interview. “Cubatabaco knew about cel General’s trademark with the U.S. Patent In its lawsuit originally filed in November this for years and years, and didn’t do any- and Trademark Office, but suspended that 2000, General Cigar had alleged that Altadis thing about it until very late — too late in action when it sued Culbro Corp., the former USA was forcing cigar wholesalers and retail- fact.” parent of General Cigar, later that year, accus- ers to buy its brands as a condition for future The Cohiba brand, created in 1965 by Che ing that company of trademark infringement, supplies of Cuban cigars once the U.S. em- Guevara, was the first cigar brand established false designation of source of origin and other bargo was lifted. It also claimed Altadis had by the Castro government following the 1959 allegations. In January 1998, the parties violated U.S. antitrust and trademark laws. revolution. It was conceived as a super-premi- agreed to attempt to settle out of court. But Judge Federico A. Moreno ruled that um cigar for Castro’s private use, and to be Earlier this year, Judge Sweet found that General Cigar had failed to make a case either given out to heads of state and other VIPs. General Cigar’s first registration of the for illegal monopolization or violation of Thanks to their superior quality and rela- Cohiba trademark had been abandoned in the antitrust laws. Moreno also dismissed claims tive scarcity, Cohibas quickly attained a cult 1980s, and that the case should be resolved that Altadis employees had made false state- status among cigar lovers and, by the early on the basis of its second registration in 1992. ments about General Cigar products, and he ‘70s, was on sale in some Cuban cigar shops. The judge also dismissed Cubatabaco’s threw out the latter company’s claims for In 1982, Cuba began exporting Cohibas to claims of ownership to the trademark based actual, treble and punitive damages. Europe, where they were an instant hit. upon two intellectual property treaties. Simeonidis said his company is appealing General Cigar first registered the Cohiba “Cubatabaco is trying to make the claim Moreno’s ruling. CUBAN CUSTOMS OFFICIALS LAUNCH CRACKDOWN ON COUNTERFEIT CIGARS HAVANA — The elderly waiter at the Hotel Neptuno was clearing Last year, Spain was Cuba’s best customer for cigars, buying 45 off our table when he casually leaned over, asking in a hushed voice million of them, followed by France, which bought 16 million cigars. if I’d like a bargain on a genuine Cohiba. Sources within Habanos S.A. say increasing enthusiasm over How much, I asked out of curiosity. Cuban cigars in Europe, combined with rising tourism to Cuba and “For you, two dollars, and only a dollar for a Montecristo,” he whis- the island’s continuing economic crisis, have all fueled the imagina- pered — to which I quickly responded, “no thanks.” tion of falsifiers, traffickers and suppliers of false cigars. Aside from the fact that I don’t smoke, logic told me that at that These con artists aren’t limited to waiters at the Hotel Neptuno. such ridiculously low prices, the waiter’s cigars had to be fakes. They hang out in tourist areas like the Malecón and Habana Vieja — Apparently, the proliferation of falsified stogies has become a big especially near the Partagas and H. Upmann factories — where, in headache for the Cuban government, which recently began applying broken English, Italian or French, they offer boxes of cigars for $20- a series of measures aimed at stopping the problem before it begins $30 each whose authentic version costs 10 times as much in shops. bringing down the image of Cuban cigars in general. Tourists who buy these phony cigars may have them confiscated Theoretically, though not always in practice, tourists must now anyway at the airport. Customs official Héctor de Moya Martínez declare purchases of three or more boxes of cigars — regardless of said that in 2000, his office recorded 5,163 infractions involving brand — upon leaving the country. Bills of sale for any purchases 22,000 boxes of 25 cigars each. Thanks to greater scrutiny, in 2001, must be presented, with the original and copy; meanwhile, the docu- the number had dropped to 4,581 infractions involving 19,241 boxes. ments themselves are being perfected to avoid falsification. Meanwhile, the Castro government is asking the World Trade Also being studied is the possibility of inserting in cigar boxes a Organization to grant Cuban cigars the same protection that wines “new element of identification, whose reproduction or imitation will and other alcoholic beverages enjoy under “denomination of origin.” be completely impossible, like banknotes,” according to Cuba’s chief “In the past 10 years, Cuba has earned $400,000 in judicial rulings customs inspector, Reinaldo Robaina. to respect these denominations of origin,” explained the vice-director In declarations to the weekly Granma Internacional, Robaina said of Cuba’s Office of Intellectual Property, Emilia Lara. his agency is coordinating its efforts with the Spanish government. – LARRY LUXNER 1159 Luxner 10/29/02 9:45 AM Page 4

4 CubaNews ❖ November 2002 AGRIBUSINESS DOWNSIZING THE SUGAR INDUSTRY HAVANA MARIEL MATANZAS Cabañas Cárdenas DOWNSIZING THE SUGAR INDUSTRY Bahía Honda 11 25 Isabela 7 12 3 18 1 6 5 23 19 3 de Sagua Sugar Mills: 1 2 2 12 17 13 16 8 5 7 35 40 1 3 10 9 20 24 9 4 6 16 21 8 18 22 26 Active 4 6 38 1 2 11 13 23 31 19 2 22 24 14 15 34 28 39 Dismantled 14 10 33 7 29 32 15 5 43 30 44 26 21 36 30 17 8 51 13 Molasses production 42 41 20 27 47 31 25 37 49 27 28 29 35 52 Sugarcane plantations 45 50 32 46 33 CIENFUEGOS 38 Sugar loading port 40 34 36 9 10 Sugar bulk terminal 39 Nuevitas Casilda 48 37 54 42 43 57 44 Manatí Júcaro 41 CARÚPANO 59 SUGAR MILLS TO CIEGO DE AVILA 46 9 Vita 56 50 49 35. Enrique Varona 47 REMAIN ACTIVE 61 Antilla 36. Orlando González 12 55 48 51 Guatemala (Preston) 37. Ecuador 45 58 57 Sagua de Tánamo 53 11 55 53 38. Ciro Redondo 54 62 PINAR DEL RÍO Santa Cruz 56 60 1. Harlem 39. Venezuela del Sur 63 52 40. Primero de Enero GUAYABAL 66 2. Treinta de Noviembre MANZANILLO 60 67 Armando H. Portela CAMAGÜEY 67 65 Campechuela 63 65 68 69 14 7070 LA HABANA 62 66 13 69 71 41. Ignacio Agramonte 58 68 64 3. Abraham Lincoln 59 71 4. Héctor Molina 42. Carlos M. de Céspedes SUGAR MILLS TO Niquero 61 43. Argentina 64 Santiago 5. Gregorio Arlee Mañalich de Cuba BOQUERÓN 6. Boris L. Santa Coloma 44. Sierra de Cubitas BE DISMANTLED Pilón 7. Habana Libre 45. Cándido González 46. Panamá MATANZAS 47. Batalla de Las Guásimas PINAR DEL RÍO VILLA CLARA MILLS PRODUCING 8. México 1. Pablo de la Torriente 26. Mariana Grajales 9. España Republicana LAS TUNAS 27. Osvaldo Herrera MOLASSES 10. Jesús Rabí 48. Colombia 2. José Martí 28. Braulio Coroneaux 49. Jesús Menéndez 11. René Fraga LA HABANA 29. Carlos Caraballo PINAR DEL RÍO 12. Juan Avila 50. Antonio Guiteras 30. Hermanos Ameijeiras 51. Majibacoa 3. Rubén Martínez Villena CAMAGÜEY 1.Manuel Sanguily 13. Mario Muñoz 4. Osvaldo Sánchez 31. Unidad Proletaria 53. Haití VILLA CLARA HOLGUÍN 5. Orlando Nodarse 32. Luis Arcos Bergnes 54. República Dominicana LA HABANA 14. Abel Santamaría 52. Loynaz EchevarrÌa 6. Augusto César Sandino 33. Marcelo Salado 55. Jesús Suárez Gayol 2. Manuel Fajardo 15. José María Pérez 53. Ramón López Peña 34. Veintiseis de Julio 56. Alfredo Alvarez Mola MATANZAS 54. Cristino Naranjo 7. Amistad con los Pueblos 35. José Ramón Riquelme 16. Quintín Banderas 8. Eduardo García 57. Noel Fernández 3. Esteban Hernández 17. Chiquitico Fabregat 55. Antonio Maceo 36. Juan P. Carbó Serbiá 4. Cuba Libre 56. Urbano Noris 9. Manuel Isla 37. Benito Juárez LAS TUNAS 18. Panchito Gómez Toro 58. Perú VILLA CLARA 19. El Vaquerito 57. Fernando de Dios 10. Pablo Noriega 38. Emilio Córdova 11. Camilo Cienfuegos 39. Batalla de Santa Clara 59. Argelia Libre 5. Heriberto Duquesne 20. Efraín Alfonso GRANMA 6. Perucho Figueredo 21. Diez de Octubre 58. Bartolomé Masó 12. Manuel Martínez Prieto 40. Antonio Finalet HOLGUÍN 22. Héctor Rodríguez 59. Juan Manuel Márquez MATANZAS CIENFUEGOS 60. Frank País SANCTI SPÍRITUS 23. Carlos Baliño 60. Arquímides Colina 41. Martha Abreu 61. Rafael Freyre 7. Obdulio Morales 13. Granma 62. Guatemala 8. FNTA 24. George Washington 61. Roberto Ramírez 14. Australia 42. Ramón Balboa CIENFUEGOS 62. Enidio Díaz 43. Primero de Mayo GRANMA CAMAGÜEY 63. Grito de Yara 15. Reynold García 44. Espartaco 63. Francisco Castro Ceruto 9. Siboney 25. Mal Tiempo 16. Puerto Rico Libre 26. Ciudad Caracas SANTIAGO DE CUBA 45. Pepito Tey 64. Luis E. Carracedo 10. Brasil 27. Guillermón Moncada 64. Salvador Rosales 17. Fructuoso Rodríguez SANCTI SPÍRITUS 65. Ranulfo Leyva 18. Horacio Rodríguez 66. José Nemesio Figueredo LAS TUNAS 28. Catorce de Julio 65. América Libre 46. Remberto Abad Alemán 11. Amancio Rodríguez 29. Elpidio Gómez 66. Paquito Rosales 19. José Smith Comas 47. Simón Bolívar 67. La Demajagua 30. Cinco de Septiembre 67. Julio A. Mella 20. Jaime López 48. Siete de Noviembre SANTIAGO DE CUBA HOLGUÍN 31. Antonio Sánchez 68. Dos Ríos 21. Sergio González 49. Aracelio Iglesias 68. Rafael Reyes 12. Nicaragua SANCTI SPÍRITUS 69. Chile 22. Seis de Agosto CIEGO DE AVILA GUANTÁNAMO SANTIAGO DE CUBA 32. Ramón Ponciano GUANTÁNAMO 23. Victoria de Yaguajay 50. Bolivia 69. Costa Rica 13. Los Reynaldos 33. Melanio Hernández 70. Argeo Martínez 24. Julio Reyes 51. Máximo Gómez 70. Honduras GUANTÁNAMO 34. Uruguay 71. Manuel Tames 25. Humberto Alvarez 52. Patria o Muerte 71. Paraguay 14. El Salvador

Fidel assures nervous workers that Cuba’s sugar industry won’t disappear Nearly five months after the Cuban government announced its another 40,000 will move into non-sugar jobs in the agricultural sec- decision to drastically reduce the island’s sugar industry, President tor. Workers designated to start taking classes will continue to draw Fidel Castro has finally made his first public remarks on the subject. salaries of 300 to 1,000 pesos (equivalent to $11-38) a month. “The sugar industry will not disappear, far from it,” Castro said in “This restructuring means we will save $200 million and earn an Oct. 21 speech to 10,000 people gathered at a shuttered sugar $100 million during the next harvest,” said Castro. The coming har- mill outside Havana. “We had to act or face ruin.” vest will yield about 3.6 million metric tons of raw sugar from In his three-hour monologue, Castro told his audience that the December to May — similar to the previous crop, but with less old Cuban saying — “sin azúcar, no hay país” (without sugar, there’s sugar cane and far fewer mills. no country) — no longer applies in the wake of the restructuring, Reuters noted that Castro’s speech, broadcast by state-run radio, which has shut 71 of Cuba’s 156 sugar mills. appears designed to counter discontent in sugar towns, where work- Another 14 are being retooled to produce molasses, leaving ers are angry at losing jobs they’ve held for most of their lives. meaning that only 71 mills will produce sugar from now on. “This is not a terrible trauma,” said Cuba’s leader. He argued that The hardest-hit provinces are Villa Clara, where 15 mills have the restructuring — ordered last June in the wake of rising petrole- shut down or are being dismantled, followed by Matanzas (13) and um prices and dismal sugar prices as low as 5 cents a pound on the La Habana (10). To one degree or another, every province except world market — will ultimately mean more food for everyone. Isla de la Juventud has been affected by the move (see map above). According to the Sugar Ministry, 3.1 million of the 5 million acres An estimated 25% of the 400,000 Cubans who worked in sugar- of Cuban land now dedicated to sugar cane would be shifted to other cane fields and mills have been left without jobs, though the gov- uses, such as growing vegetables, raising livestock and harvesting ernment is paying for 60,000 workers to learn new skills, while non-traditional products like wood pulp. 1159 Luxner 10/29/02 9:45 AM Page 5

November 2002 ❖ CubaNews 5 POLITICS In their own words … Party Congress in doubt Political pundits in Havana — members of “I believe our government’s policy towards Cuba is cruel and unfair, pro- the Cuban Community Party (PCC) included — foundly unneighborly, and I felt morally obligated to help the island defend are asking the same question again and again: itself from our efforts to impose our values and our political system on it.” Will there be a Sixth Party Congress after all? — Ana Belén Montes, explaining in court why she spied for Cuba. On Oct. 16, the And no one has a sure answer. According to former Washington-based DIA analyst was sentenced to 25 years for espionage. PCC rules, a Congress must be held in December at the latest, and Party members are “Her actions were moved by ethics and by an admirable sense of justice.” expecting that to happen, but no official — Felipe Pérez Roque, Cuba’s foreign minister, in praise of Ana Belén Montes. announcement or confirmation has been made. At the same time, not one line has been writ- “Since no one can predict which faction of the Cuban Communist Party will ten on this topic in the official media. be stronger when Castro departs, it certainly is not inevitable that Cuba will Another curious sign is the lack of any inner- undergo a transition to multiparty democracy. China and Vietnam are as likely circle debates as to what to do or expect with to be bellwethers for Cuba as are Eastern Europe or the former Soviet Union.” this coming Congress. So far, no documents — William M. LeoGrande, professor of political science at American University’s whatsoever have been circulated within the School of Public Affairs in Washington. Party membership for discussion prior to the holding of the Congress. “I can’t see how lifting the embargo would benefit the Cuban people and Informal conversations point to the urgent promote the growth of a civil society. At present, all flows of foreign funds into need for more updated economic policies, con- Cuba are under government control. If the embargo were lifted, Castro would sidering the lengthy agenda of pending matters simply have more resources at his disposal in order to conduct his policies.” such as the restructuring of Cuba’s sugar indus- — Antonio Jorge, professor of political economy and international relations at try and agriculture; changes in land tenure and Florida International University. cooperatives; foreign investment and foreign debt; real-estate laws, and the future of cuenta- “Since 1992, we have seen more ‘transition in Cuba’ seminars, panels, lec- propismo (self-employment), including activities tures and workshops than varieties of Baskin Robbins ice cream.” which compete with Cuba’s state-run tourist — Nelson Valdes, noted Cuba expert at the University of New Mexico. industry such as paladares (private restau- rants), the private renting of rooms and private “At the moment, everything looks pretty bad. It’s early yet, but this could taxis. have an impact on prices next year.” Other controversies include the pace and — Simon Chase, marketing director at London-based cigar importer Hunters & expansion of the policy of perfeccionamiento Frankau, discussing hurricane devastation of tobacco crops in Pinar del Río. empresarial; an array of social problems led by unemployment, Cuba’s decaying health-care “He is in high spirits and intent on continuing his peaceful struggle for system and the severe housing shortage. human rights in Cuba. He wants to continue to live and work inside Cuba.” The current battle of ideas and a host of sen- — Elsa Morejón, wife of Dr. Oscar Elías Biscet, one of Cuba’s most prominent sitive cultural issues are key components of the political dissidents, who is to be released Oct. 31 after three years in prison. PCC’s current ideological campaign, both with- in Cuba and abroad. They cannot go on without “There is no recourse but to file in Cuba. We are finalizing a strategy for our important clarifications and a clear body of case with a Cuban lawyer.” ideas that will avoid current gaps and loopholes. — Najeeb al-Nuaimi, chairman of a committee set up to defend the rights of 100 Last, but not least, is the issue of leadership. mainly Arab prisoners being held at the U.S. naval base in Guantánamo. This Congress will be the last for many elderly members of the Politburo and the Central “I can’t really believe that a group of kids going to play baseball with a group Committee; new young faces and names will of kids from Cuba is detrimental to the national security of the United States.” replace old ones and those who, for various rea- — Rich Fortmann, member of the Marathon Cuba Committee in the Florida Keys, sons, have already been kicked out, like which seeks State Department permission to send 16 baseball players to Havana. Roberto Robaina and Nelson Torres. Party organizations at all the various levels “There are three things in the film: the history of Fidel, the man; the history will have to start naming pre-candidates to the of Cuba and its revolution, and interviews with many personalities who know Central Committee soon, yet this important pro- him.” cedure is nowhere in sight. — Estela Bravo, whose controversial new documentary, “Fidel: The Untold Story,” For some observers, the most probable sce- features exclusive interviews with Castro, political leaders, historians and friends. nario is that, with the Oct. 20 elections now out of the way, some last-minute preparations will “I have extremely strong feelings standing on this site where the photos be undertaken. Nothing serious is expected to were taken — the photos we were shown in the briefing room. It could have take place concerning previous debates of reso- been the end of the world, but here we are 40 years later — Americans, lutions aimed at defining various policies. Cubans, Russians.” What is expected is that Fidel Castro will — Ted Sorensen, former Kennedy aide, visiting a nuclear warhead bunker west of deliver a lengthy speech, where he’ll list what Havana. Photographs of that bunker taken Oct. 23, 1962, convinced JFK he thinks are the most urgent topics — with that Soviet missiles were indeed being stockpiled in Cuba. this speech helping to shape the course of action and policies for the immediate future. – DOMINGO AMUCHASTEGUI 1159 Luxner 10/29/02 9:45 AM Page 6

6 CubaNews ❖ November 2002 of electricity, good schools and modern med- lower-quality domestic grades and some roast- Coffee — FROM PAGE 1 ical care to even the most remote areas. ed wheat to supply local demand. Some 90% of the island’s coffee crop comes But experts say the Soviet collapse wasn’t At present, Japan and France are the top from eastern Cuba, another 8% from the cen- the only factor. A misguided campaign in the importers of Cuban coffee, and Crystal Moun- tral provinces, and the remaining 2% from the early ‘60s had tried to create a coffee belt tain — grown in central Cuba and exported to western province of Pinar del Río. Coffee no around Havana’s barren plains, using volun- the Japanese market — is reportedly one of longer grows in the deforested and exhausted teer labor exclusively. Despite the advice of the five most expensive coffees in the world. soils in the plains and hills around Havana. specialists — and common sense — the proj- The United States, of course, imports not a Isidro Fernández, the Cuban Agriculture ect consumed millions of dollars before it was single coffee bean from Cuba and hasn’t since Ministry’s director of coffee production, told abandoned. Meanwhile, traditional farms in 1962, when the Kennedy administration im- Granma that “improved processing, new con- the mountains received less attention. posed a trade embargo against the island. trols to stop theft and other measures” might From 1986 to 1996, coffee exports aver- Veteran roaster Paul Katzeff would like to make up for part of the shortfall. aged 12,600 tons a year, compared to 11,200 change that. In July, CubaNews reported that Local analysts say rules obliging farmers to tons exported in 1957 when the output totaled Katzeff — CEO of Thanksgiving Coffee Co. in sell all their coffee to the state at far below 43,600 tons. However, poor harvests in the Fort Bragg, Calif. — had launched a new line black-market prices results in low production late ‘90s have taken their toll on exports, fall- of beans called “End the Embargo Coffee.” and the diversion of 10-20% of the crop. ing from just over 10,000 tons in 1990 to only The coffee inside the packages actually Cuba’s harvest begins in late August and 5,000 tons in 2000 and 2001 (see chart below). comes from Nicaragua, Mexico and Guate- ends in February, with approximately 35% of Today, export revenue from coffee comes mala — though Cuban coffee is just as good the beans exported. to just 1% of the total value of Cuban exports, and could conceivably find a huge market in FROM IMPORTER TO EXPORTER According to historians, coffee was intro- COFFEE PRODUCTION AND EXPORTS 30 duced into Cuba in the mid-18th century. Be- In metric tons (000s) tween 1831 to 1835, Cuba’s average coffee output was equivalent to 56% of the output of 25 Production the best years of the 20th century (1956-60). Export By 1902, the year José Martí declared inde- 20 pendence from Spain, coffee production was falling, and sugar and tobacco were booming. But the imposition of tariffs in 1927 — mainly 15 against Puerto Rico — sparked a rebirth. From 1900 to 1925, imports averaged 10 12,000 tons annually, though in the 1930s im- ports virtually disappeared and Cuba gradual- ly began to export coffee. By 1956, the coun- 5 try was exporting over 20,000 metric tons of coffee beans valued at $21.5 million. In 1962, 0 thanks to agricultural and industrial improve- 1986 1990 1995 2000 ments, Cuba achieved a yield of 316.6 pounds Source: International Coffee Organization per acre, its highest ever. Unfortunately for Cuba, the Marxist revo- down from 3.9% in 1956. the United States once the embargo is lifted. lution that swept Castro into power occurred The loss of experienced workers has forced “Cuban coffee is excellent, like the quality just as coffee production was at its peak. After the government to rely on tens of thousands of Cuban cigars. But that’s deteriorated, and Castro’s nationalization of the Cuban agricul- of unpaid middle- and high-school students to now the best cigars in the world come from ture sector, coffee entered into a long and harvest the coffee crop. While enthusiastic, the Dominican Republic,” said Katzeff. “On severe period of decline. Output, which had their lack of experience and stamina is one the other hand, Cuba’s coffee potential is phe- exceeded 60 million kg a year in the early 60s, reason the sector continues to languish. nomenal. The climate hasn’t changed. The fell to just 19 million kg a year by 1976-80 — a And despite massive foreign investment in soil hasn’t changed. And it’s all organic.” level not seen since the dismal 1920s. tourism, nickel mining, oil exploration and cit- Yet serious problems remain, says Gavinia. SOVIET COLLAPSE HASTENED COFFEE’S DECLINE rus, foreign investment in the coffee sector is “When we had our plantation, if we had a virtually non-existent, and most of Cuba’s pro- breakdown in one of the machines, we’d get Finally, in the late ‘70s, a slight recovery duction remains in the hands of three state began, and about 45,000 hectares were plant- that part, whatever and wherever it was. Now, entities: the Cooperativa de Producción that everything belongs to the government, ed with coffee between 1979 and 1982. The Agraria (CPA), the Cooperativa de Caña y effort was aimed at reducing imports — people don’t care that much.” Servicios (CCS) and the Unidades Basicas de Gavinia today is chief financial officer at F. which by then had surpassed 30,000 tons Producción Cooperativa (UBPC). annually — and to increase exports, which Gavinia & Sons Inc., a $60 million-a-year Los accounted for nearly half of the total harvest JAPAN, FRANCE ARE TOP COFFEE CLIENTS Angeles-based empire that sells 22 million in those years. By the 1980s, production had At present, about 361,000 acres of Cuban pounds of coffee a year to McDonald’s, climbed back up to 27 million kg. farmland are dedicated to coffee, of which Costco and private labels. And even though But the Soviet collapse devastated Cuba’s state-run farms account for 26%, the CPA 18%, he has permission to visit his homeland, Gavi- economy and encouraged massive emigration the CCS 31% and the UBPC 25%. nia — like thousands of other Cuban exiles — to the cities, which only hastened the coffee Domestic coffee consumption is limited refuses to do so out of principle. sector’s further decline. through rationing. While Cubita-brand coffee “I will never go to Cuba as long as Castro is By the early ‘90s, average coffee yield had sells for $6.10 a kilo in the dollar markets, there,” he says. “Why would I give any money fallen to 135.7 pounds per acre, and mountain most Cubans don’t have access to dollars and to a guy who destroyed my country? We real- dwellers were fleeing to Havana, Santiago de are forced to make do with their ration of two ly hate his guts.” Cuba, Holguín and other cities as coffee areas ounces of coffee every two weeks per adult. Asked if he’d consider investing in his rapidly become depopulated and plantations Cuba typically exports its highest-quality homeland once Castro is gone, Gavinia says were abandoned — in spite of hundreds of coffee to Europe and Japan, and imports “of course. We’d have to rebuild the country. kilometers of new roads and the introduction cheap coffee from Vietnam and mixes it with And we’re eager to do that.” 1159 Luxner 10/29/02 9:46 AM Page 7

November 2002 ❖ CubaNews 7 REAL ESTATE Despite legal tug-of-war, Havana building boom continues BY DOMINGO AMUCHASTEGUI The owner of one of these condos, an into Cuba once the embargo is lifted. or the last five years, major legislation Italian citizen, looks at Miramar and says that Castro may continue to object to the appli- regarding Cuba’s real-estate sector has in the, future much of Havana and other cation of international standards in the fields F been awaiting final approval, but Fidel places in Cuba will be very much like this. of property, subcontracting, leasing, inheri- Castro has turned down a draft of this impor- In Vedado, closer to downtown Havana, tance, unrestricted sales and eviction, and tant bill three times — leaving the industry in another trend is afoot: nearly a dozen of the may keep trying to postpone the adoption of a frustrating legal limbo. largest, fanciest buildings from the booming final real-estate legislation. But this hasn’t prevented real estate from ‘50s are now being completely renovated, Such an attitude certainly won’t encourage becoming one of the island’s most dynamic after having been used as student dormitories rapid expansion of the real-estate business sectors, at least in Havana. Despite Castro’s and government offices for the last 40 years. beyond Havana into Varadero, Matanzas, objections, business seems to be booming. The aim: to convert them as quickly as pos- Cienfuegos and the rest of Cuba — but Cuban In Havana’s upscale Miramar district, luxu- sible into hotels and aparthotels, either for experts and their European and Israeli part- ry condos have been built and sold — some of sale or for rent. Yet one wonders who’s going ners know that real estate is already a very them sold even before they’re finished — and to buy or rent these properties. profitable venture. Something almost identical has happened with the new bill on cooperatives and their growth at the expense of state farms and state property. In both 2000 and 2001, Castro turned down that bill; the current draft, sup- LARRY LUXNER posed to be approved last June, was post- poned yet again. And that’s not the only example. In 1995, when the National Assembly finally approved the new law on foreign investment, it included a special section that held open the possibility for foreign firms to be able to own 100% of their investments. This was designed to make the new law more attractive to foreign capital. At that time, Castro made public his reluc- tance to such investments — and since then, there hasn’t been a single case in which 100% ownership of property has been granted, Cranes tower over construction site in Miramar, home to many new office buildings and condos. except one very small experiment with a power plant on Isla de la Juventud. property deeds have been turned over to Some Europeans will be interested, along These three examples show — again and owners in Spain, France, Monaco and else- with a growing number of foreign firms. But again — the never-ending tug-of-war between where. Other condos, aparthotels and office these will represent only a small percentage. Cuban experts who recognize the urgent towers are under construction, while an In reality, the eyes and expectations of the need to expand the reform process and jump- Israeli-built international trade center was real-estate business are focused on “the big start Cuba’s economic recovery, and Fidel recently inaugurated in the same area, near wave” — meaning American executives, Castro, whose fear of losing political control the Meliá Habana and other upscale hotels. retirees, tourists and others who will flood prevents him from supporting the process. HARD-CURRENCY CRISIS PROMPTS CUBA TO ROLL BACK ECONOMIC REFORMS

Despite all the optimism oozing out of the recent U.S. food expo in Havana, all indications are that the Castro government is dealing with its current economic difficulties not by introducing urgent reforms — but by resorting, once again, to a useless effort at state centralization. To begin with, cash purchases from U.S. food exporters — in spite of the bargain prices — are seriously draining Cuba’s hard-currency reserves, leaving the state economy with very little liquidity. That has led the Castro regime to adopt some rather extreme measures. On Sept. 4, the government ordered that “all government institutions and other entities whose main activity is not commerce must cease their current retail and service activities.” Effective Jan. 1, 2003, all such activities will be carried out by state corporations such as Cimex, Cubalse, Caribe, Habaguanex, Caracol, Universo, Rumbos and Palmares. This means that non-state entities like Spanish-descent associa- tions and private restaurants in Havana’s Chinatown will be forbidden from conducting hard-currency operations. At the same time, the parallel or “free” farmers’ markets will be placed under strict state regulation. Starting Jan. 1, campesinos and mid- dlemen will have no choice but to sell their products to the public at prices fixed by the government — putting an end to existing free price mechanisms within such markets. Serious consideration is also being given to forcing hard-currency holders to change their dollars into “convertible pesos” — whose value may be considerably less than the actual dollar value — before shopping in state-owned stores. Many Cuban institutions have already been told to turn in their hard-currency accounts and savings, jeopardizing their financial autonomy and stability with no guarantees whatsoever. Given the unexplained postponement of the National Assembly’s summer sessions and the uncertainties surrounding the holding of the Sixth Congress of the Cuban Communist Party in December, the government’s recent actions suggest a very gloomy path ahead. – DOMINGO AMUCHASTEGUI 1159 Luxner 10/29/02 9:46 AM Page 8

8 CubaNews ❖ November 2002 NEWSMAKERS Cuba’s Enrique Oltuski: a lifetime of revolution BY LARRY LUXNER “I was born in 1930 in Santa Clara [a city initiating urban military activities — including ver 100 years ago, José Martí said that about 150 miles east of Havana]. My parents bombings of army headquarters and assassi- to be a man, one must plant a tree, have were hard-working people, and they be-came nations of police officers. Oa child and write a book. very rich. That’s why I had everything I want- He also spent countless nights in the fields, By that definition, Marxist revolutionary ed,” said Oltuski, noting that his father, a arguing philosophy with his friend and com- Enrique Oltuski is a real mensch. He’s planted shoemaker, owned tanneries and shoe stores rade, Che Guevara. an extensive backyard garden filled with all over Cuba. “Che used to write about his fighting days banana trees, vegetables and royal palms. He “But I didn’t feel a part of the Jewish colony in the Sierra Maestra, and sometimes we had and his wife Martha have fathered four chil- in Santa Clara. My great hero wasn’t Theodor different points of view,” he said. “I felt he dren — all members of the Communist Party. Herzl [the founder of modern Israel] but José underestimated the importance of the under- And now, at the age of 72, Oltuski has writ- Martí. I drifted away from my parents’ reli- ground fight in the plains and cities. For him, ten a book. It’s called “Vida Clandestina: My gion, maybe influenced by the fact that I was the guerrilla forces in the Sierra Maestra Life in the Cuban Revolution.” a descendant of religious people, and most of were everything. So Che told me, ‘if you don’t Published in English a few months ago by the people in Cuba had a different religion.” agree with me, write your own story.’” John Wiley & Sons Inc., this 302-page autobi- ography tells the story of a young man — the son of wealthy Jewish immigrants from Poland — who despite his privileged life in the United States decides to return to Cuba to fight alongside Fidel Castro and Che Guevara LARRY LUXNER in the 26th of July Movement. “I wrote this book as a historical novel with the young people in mind, especially young Cubans who don’t know the Cuba of the 1950s,” Oltuski told CubaNews. “I have pre- sented our revolutionary leaders as human beings and not as gods.” Alan Rinzler, executive editor at Jossey- Bass — the division of John Wiley & Sons responsible for publishing Oltuski’s memoir — says the book “offers a rare, behind-the- scenes portrait of the early days of the Cuban revolution, a very warm, often humorous per- sonal story of a brash and handsome young Jewish kid who falls in love and marries his Catholic high-school sweetheart, and recon- Enrique Oltuski shares a laugh during our three-hour interview in the library of his Havana home. ciles his liberal democratic idealism with the hard-boiled brutality of violent revolution.” Oltuski eventually went to study at the When Castro and his fighters finally over- University of Miami, graduating in 1954 with threw the Batista dictatorship, Oltuski, only FROM RICH KID TO REVOLUTIONARY a degree in architectural engineering. A year 28 years old, was appointed minister of com- later, he was hired by Shell Oil Co. to design munications. One of his first official acts was Oltuski, today Cuba’s deputy minister of gas stations throughout Cuba. to nationalize the Cuban telephone company, fisheries and merchant marine, is only too It wasn’t long, however, before Oltuski was then owned by ITT. happy to share his controversial views on living a dangerous double life, using his job at But he never forgot Che’s challenge, and in U.S.-Cuban relations, the Cuban exile com- Shell as a cover for his real mission — helping 2000, after four decades of government serv- munity in Miami, the “cruel injustices” of Castro and his band of ragtag revolutionaries ice, Oltuski finally published his memoirs in globalization and the future of his own coun- in the struggle against Gen. Fulgencio Batis- Spanish, in a book entitled “Gente del Llano.” try once Castro passes from the scene. ta, who had grabbed power in a 1952 coup. The English-language version that went on CubaNews recently caught up with Oltuski “Why did we revolt? Why did we become sale in U.S. bookstores in mid-September is at his comfortable middle-class home in revolutionaries? Because Cuba wasn’t like it is an expanded version of that original work. Havana’s Nuevo Vedado neighborhood. today,” he recalled. “A majority of people were After a 90-minute wait — he was talking VISA DENIAL INFURIATES AUTHOR with two Cuban TV journalists filming a docu- very poor, and a few were very wealthy. In the mentary on the 35th anniversary of Che evenings, women would sleep in parks with Oltuski was scheduled to begin a U.S. book Guevara’s death — Oltuski beckoned us into their children. The society in which we lived tour last month that would have taken him to his second-floor study. was so unjust. How could I be happy when I speaking engagements at Harvard Law There, amid photographs of Che and Fidel, saw all that poverty around me?” School, Stanford University and the World various awards, medals and tchotchkes from REMEMBERING CHE’S CHALLENGE Affairs Council in San Francisco. countless trips abroad were shelves crammed But at the last minute, the Bush adminis- with over 3,000 books, all of which he’s read. By 1956, Oltuski was chief of the 26th of tration denied Oltuski a travel visa, so he went “I’ve been a great reader since I was a child. July Movement in the central Cuban province to Canada instead. Rinzler blames the visa Maybe that’s why I’m a free thinker,” Oltuski of Las Villas, a mysterious figure known only denial squarely on Otto Reich, assistant secre- said, beginning what would turn into a 3-hour by his nom de guerre, Sierra. tary of state for Western Hemisphere affairs. interview. “I’m against dogmas, and some As such, Oltuski spent his time launching “We think Oltuski’s exclusion is unwarrant- people have made a dogma of Marxism.” the official underground newspaper, raising ed and against the stated U.S. policy of im- But Oltuski wasn’t always a Marxist. money for weapons and medical supplies and proving Cuban-American relations,” Rinzler 1159 Luxner 10/29/02 9:46 AM Page 9

November 2002 ❖ CubaNews 9 said in a press statement. “This book is the Republicans to reverse a 42-year-old policy population — a measure of support that can’t author’s personal story of his experiences as that many politicians are increasingly coming be claimed by any other world leader. an idealistic young man fighting to overthrow to view as counterproductive. “The secret of the Cuban revolution is unity the vicious and corrupt Batista regime, and it “As Fidel himself said about a year ago, we of the Cuban people, not the Cubans in is his hope that the book will help Americans know that those who want to lift the embargo Miami,” he said. “Everybody views Fidel as to better understand the real Cuban people.” and allow Americans to travel freely to Cuba the great guerrilla commander. But to me, Oltuski himself says he’s furious at being belong to two groups: one who thinks that that’s not his greatest accomplishment. He denied the visa, despite the fact that he holds way from a moral and ethical point of view, was the first Cuban leader to be able to unite a diplomatic passport and has visited the and the other who says it’s the best way to the people behind a just cause. I’ve told him United States several times in the past. bring down the revolution,” he says. that personally.” “Since Cuba was classified as a ‘terrorist’ “Well, we accept the risk. Come over and country, everyone [applying for U.S. visas] let’s see who wins. Of course, we know that CUBA’S POST-FIDEL FUTURE now has to visit the Interests Section,” he once we have five million American tourists What about suppression of free speech, pri- said. “I can’t accept that someone with my walking through our streets, it won’t be the vate enterprise and other individual freedoms background, who travels on a diplomatic same anymore.” since 1959, we asked him. Aren’t those things passport, should be interrogated behind a Meanwhile, the lifelong Marxist concedes the hallmark of a dictatorship, despite the glass window like a terrorist.” that “as Cuba opens up to the world, adjust- Cuban revolution’s impressive achievements Oltuski’s hostility toward the Bush admin- ments will have to be made” in certain areas. in health and education? istration is obvious, especially when he refers “We will have business together, we will “No, to us Fidel is not a dictator,” Oltuski shot back. “I don’t follow Fidel because I’m in love with him, but because of his ideals. The day he changes, I won’t follow him anymore.” And what will happen when his hero, now “To us, Fidel is not just another president. He is a world 76 years old, passes away? “Nothing,” says Oltuski. But then he adds figure that happens once every 100 years. Compare quietly: “Cuba will not be the same without Fidel. To us, he’s not just another president. He’s the father of the revolution. Fidel is a Fidel to Washington, Jefferson or Lincoln, but not to W.” world figure that happens once every 100 years. Compare Fidel to Washington, Jefferson or Lincoln, but not to W.” A moment later, Oltuski adds: “Do you to Otto Reich, the “Jamaican traitor [Colin] have joint ventures together,” he said. “If we know what Fidel is doing now? He’s dedicat- Powell” and the 2000 presidential elections. could have free economic relations, we could ing most of his time to preparing Cuba for “Your press is not such a free press, and so do incredible things together. when he is no longer here.” much for your wonderful democratic govern- “Our challenge is how to combine a social Castro himself has left no doubt that when ment. Now to elect the president, you don’t conscience with personal interest. For exam- he dies, his brother Raúl will assume control need the people. You need the Supreme ple, in fisheries we are developing systems by of the government and the revolution. But Court,” he says in disgust. which the worker gets a higher income as the Raúl is only five years younger than Fidel. And President Bush, whom Oltuski consis- enterprise he works for becomes more effi- What will happen after he’s gone too? Is tently refers to as W, “is completely against cient. So it’s normal. If you work better, why there a short list of other Cuban figures such lifting the embargo because his little brother shouldn’t you receive a higher income? What as Carlos Lage, Ricardo Alarcón or Felipe Jeb needs the votes of those Cuban terrorists we don’t want is to have billionaires.” Pérez Roque who might be groomed to take who live in Miami.” Oltuski, who enjoys quoting statistics on Raúl’s place for eventual leadership of Cuba? Oltuski thinks it’s unlikely the embargo will everything from Latin America’s foreign debt “There is no such list,” Oltuski responds be lifted before the 2004 elections, despite to Cuba’s low infant mortality rate, claims firmly. “Fidel and Raúl are our two main polit- growing pressure by both Democrats and Fidel Castro is backed by 87% of the Cuban ical figures. After them, who knows?”

STATE DEPARTMENT EAGER TO BEGIN SCHOLARSHIP PROGRAM FOR CUBAN STUDENTS WASHINGTON — Several hundred Cuban students could soon be cial, who asked not to be named. “The whole thing could be accom- pursuing degrees at community colleges across the Midwest — pro- plished with less than half a million dollars.” vided the Bush administration gets funding for the project and the Initially, the State Department is “looking to start with a couple Castro government allows the students to travel in the first place. dozen people to get the program underway,” said the official, who CubaNews has learned that 10 community colleges in Midwestern conceded that Cuban authorities are not very happy with the idea. states have tentatively been selected by the Center for International Nevertheless, he said, “hundreds of Cubans have presented them- Education and Development to receive the first group of students. selves [at the U.S. Interests Section in Havana] and filled out forms in “The fundamental idea behind this is to increase contacts between an effort to hopefully get selected for one of these scholarships. I normal Cubans and normal Americans, on the presumption that this think we’ve received and processed around 400 applications.” would have a beneficial effect on civil society, broadening Cubans’ Under the proposal, students would begin with an intensive English perspective,” a State Department official said. He added that “a lot of class, followed by a two-year course of study of their own choosing. these colleges are looking at broadening their student base and ensur- The official, referring to Bush’s speech, said “it would be important ing they have a diverse participation.” to focus on providing scholarships to disadvantaged people, including CIED, based in Washington, is to handle administrative details of the children or relatives of political prisoners and dissidents.” the plan, first proposed by President Bush in his May 20 speech to But Luís Fernández, a spokesman at the Cuban Interests Section in Cuban exiles in Miami. The project will utilize $500,000 in taxpayer Washington, said the program’s aim is to “destroy the revolution.” He funds allocated in support of Section 109 of the so-called Libertad Act. told CubaNews the money should instead go “to educate poor, disad- “We want to make this program similar to other programs that we vantaged students here in the United States.” developed in the 1980s with respect to Central America,” said the offi- – LARRY LUXNER 1159 Luxner 10/29/02 9:46 AM Page 10

10 CubaNews ❖ November 2002 POLITICS U.S. academics analyze post-Castro transition scenarios The following are summaries of four papers going in, but we reallly don’t know what hap- don’t take place, Cuba would still be a difficult prepared for the Cuba Transition Project of the pens after that. It’s not environmentally place to make a profit. All things being the University of Miami’s Institute for Cuban and friendly to foreign investors.” same, the Dominican Republic and other Cuban-American Studies, with funding from Cruz says one of the fastest and most effec- countries would make better choices.” the U.S. Agency for International Development. tive ways for post-Castro Cuba to attract large The full text of these papers, which were pre- amounts of foreign investment will come from ALTERNATIVE REGIMES AND U.S. POLICY sented Sep. 5 in Washington, is available on the the restructuring of existing special export Edward González, professor of political sci- CTP's website at: http://www.miami.edu/iccas. zones for offshore manufacturing facilities — ence at UCLA and a consultant for Rand an arrangement that’s generated billions of FOREIGN DIRECT INVESTMENT IN CUBA Corp., foresees three “regime-types” and cor- dollars for the economies of such countries as responding sub-types emerging in an post- Noted Cuba expert Robert David Cruz says the Dominican Republic, El Salvador, Hondu- Castro scenario: that in order to promote foreign direct invest- ras and Costa Rica. The first is a communist successor regime ment (FDI) to Cuba after Castro is gone, one “Duty-free import of components for manu- led by hardline, centrist and/or reformist lea- must understand why the island’s efforts to facturing, assembly and/or further process- ders; the second is a military-led successor attract FDI have failed so miserably until now. ing and then ultimately exporting would give regime controlled by Raúl Castro and/or his “Cuba’s experience with FDI since 1993 has raulista followers, and the third is a democra- much to teach us about what not to do, and tic-transition regime drawn from the ranks of which approaches and policies are likely to current dissidents, human-rights activists and fail,” says Cruz, an associate professor of eco- other opponents of the Castro government.

nomics and international business at Miami’s LARRY LUXNER “In a communist successor regime,” Barry University. González argues in his 53-page paper, “the “Despite all the fanfare, Cuba hasn’t really hardline and centrist leaders represent vary- succeeding in attracting FDI. This lack of suc- ing degrees of continuity with the current cess has less to do with U.S. policy toward post-totalitarian order, but neither appears Cuba, and more to do with Cuba’s FDI strate- capable of undertaking the reforms neces- gy and policies. Cuba’s institutional infra- sary to jump-start the economy and put it on structure is basically incompatible with FDI the path of sustainable growth. in a global market environment. That’s why it “While a communist regime led by reform- hasn’t been successful.” ers would be more inclined to adopt such Cruz says Cuba has attracted only a fraction reforms, they would first require the backing of the $2 billion in FDI the Castro govern- of Cuba’s Revolutionary Armed Forces. The ment claims has poured into the country over FAR, however, would most likely seize power the last 10 years. if the civilian leadership were unable to gov- “There are a lot of reasons to wonder about ern, much as Gen. Wojceich Jaruzelski did in their statistics,” he told CubaNews. According Poland in 1981. to UNCTAD and ECLAC —two UN-affiliated “However, a military-led successor regime agencies — annual flows of FDI dropped from would be faced with its own difficulties — $15 million in 1998 to $9 million in 1999, rising international isolation, corruption and divi- slightly to $13 million in 2000. sion within its own ranks, an inability to chart Overall, between 1991 and 2000, Cuba had “I’ll be faithful to you” vows Havana propaganda an effective economic course, and mounting accumulated only $98 million in FDI, the sec- billboard, in a not-too-subtle reference to Fidel. unrest. A democratic-transition regime, on the other hand, would be hobbled by the dem- ond-lowest of all Caribbean and Central [Cuba] an immediate boost to employment, ocratic process itself in trying to tackle American countries. The $98 million figure Cuba’s lingering problems, while history and was more than the foreign direct investment even while the nation designs and builds a new regulatory structure for commerce and a especially Fidel Castro have left the island ill- recorded over the same time period by the prepared for democracy.” tiny island of Montserrat (with $77 million in new tax system,” according to Cruz. “The development of new export zones to González says U.S. national interests and FDI), but far less than Barbados ($300 mil- democratic values “compel it to adopt a proac- lion), Belize ($263 million), Dominica ($276 encourage regional decentralization of eco- nomic development, and application of the tive policy to speed the island’s democratic million) and even Haiti ($216 million). transition,” and he recommends the following special zone concept to tourism may be nec- If the rate of annual inflow holds up, then strategies to be adopted depending on which Cuba’s stock of foreign direct investment will essary to maintain FDI momentum.” regime-type emerges in a post-Castro Cuba: reach between $115 million and $127 million Even so, he says the scholar, “an unwaver- toward either a communist successor by the end of 2002 —still a drop in the bucket ing commitment to macroeconomic stability regime led by hardliners and/or centrists, or given Cuba’s population of 11.2 million. is essential for promoting economic growth. a military-led regime, the objective should be Cruz blames that on “the high risks associ- Stability requires low rates of price inflation, “regime replacement through the use of coer- ated with investing in a fairly unpredictable low interest rates and avoidance of sudden cive diplomacy.” environment as well as the high investment and large variations in exchange rates, espe- toward a successor communist regime costs associated with negotiating the regula- cially currency depreciations.” led by reformers, the goal should be “regime tory bureaucracy.” And how would an end to the U.S. embargo change through conditional engagement.” “Officials seem to go out of their way to cre- against Cuba change things, even if Castro toward a democratic-transition regime, ate obstacles, according to EU investors’ com- remained in power? the objective should be “one of regime sup- plaints. Corruption and theft is a big problem, “It certainly would make a differerence be- port through closer political, economic and and so is excessive overhead. And bank and cause you would have the ability to use Cuba people-to-people ties.” customs charges are prohibitively high. as an export platform to the United States,” The last scenario, while obviously the most There’s always a big fanfare of investments Cruz answers. “But if the regulatory changes desirable, could also prove to be the most dif- 1159 Luxner 10/29/02 9:46 AM Page 11

November 2002 ❖ CubaNews 11 ficult for the United States “because the task reliance on small and medium enterprises, “Managers of joint ventures and externally is infinitely more complex, involving an open- instead of state enterprises — whether re- oriented industries already are having to ended process of democratic development structured or not — in attaining higher levels adapt to market discipline. As subsidies for over a very long term.” of growth.” state enterprises dry up, other Cuban man- However, González says “if Cuban-Ameri- In addition, Cuba has an advantage not en- agers also will be forced to adapt and presum- cans show leadership and mobilize broad sup- joyed by any of the former Soviet republics, ably will press for government policies that port for a national project of reconstruction with the exception of Armenia: the existence make their jobs easier.” and prosperity, democratic forces inside Cuba of a wealthy diaspora in the United States. LeoGrande argues that democratic transi- could ensure that democracy prevails.” According to the 1997 U.S. Economic tion in Cuba will ultimately depend on the Census, there are over 125,000 Cuban-owned emergence of elite conflict in which reform- THE ROLE OF INTERNATIONAL ORGANIZATIONS firms in the United States, 70% of them in ers come to have more in common with Ernesto F. Betancourt, former director of South Florida. Some 30,000 of these firms regime opponents than with elite hardliners. Radio Martí and a consultant on government have paid employees, and they generate over “Since no one can predict which faction of reforms, discusses the assistance that would $24 billion in annual sales. the PCC will be stronger when Fidel Castro be required from various international organ- “If only a fraction of the owners of these departs, it certainly is not inevitable that Cuba izations to support the Cuban transition after firms can be encouraged to enter into part- will undergo a transition to multiparty democ- Fidel Castro’s demise. nerships with relatives or friends still left in racy. China and Vietnam are as likely to be In his arguments, Betancourt assumes that Cuba with some experience as self-employed bellwethers for Cuba as are Eastern Europe a transition government not only has re- entrepreneurs, or make direct investments in or the former Soviet Union. If a transition to placed Castro, but that this transition govern- totally new enterprises,” writes Betancourt, multiparty democracy does take place, how- ment “is committed to restore democratic “Cuba could experience a much more signifi- ever, the Eastern European experience sug- rule and a market economy, and that it has cant recovery than if they are ignored or, even gests that the PCC, in a reformed guise, could attained the minimum legitimacy required to worse, discouraged from participating in the retain considerable political appeal.” rule Cuba in pursuit of such objectives.” transition.” LeoGrande says the PCC will enjoy organi- A large part of Betancourt’s 37-page report Finally, Betancourt argues that “since Cuba zational superiority; a socialist-value culture attempts to find lessons in the experience of isn’t a member of the IMF, the World Bank or that favors continuation of social programs; Eastern European and former Soviet states the IDB, preparatory work should be started strong nationalist sentiment that will impugn following the collapse of communism there. before the actual transition occurs to cut the the patriotism of rivals too closely tied to the A World Bank report on the subject groups time lag in securing access to urgent financial United States, and a formidable base of sup- these countries into four categories: competi- resources for Cuba’s reconstruction.” port among social groups that stand to lose if a transition to democracy in Cuba is accom- tive democracies, concentrated political COMMUNIST PARTY IN POST-CASTRO CUBA regimes, non-competitive political regimes panied by a transition to capitalism. and war-torn regimes. In 70 pages of well-documented research, “External actors can improve the prospects Betancourt says the competitive democra- William M. LeoGrande, professor of political for peaceful democratic transition by pursu- cies — a group of countries that includes science at American University in Washing- ing policies that reduce the political elite’s Hungary, Slovenia, Estonia, Latvia, Lithu- ton, traces the development of the Partido siege mentality, reward liberalizing reforms ania, Poland and the Czech Republic — are Comunista de Cuba (PCC) from its birth in and abstain from actions that could be regard- most relevant to Cuba’s case. 1965 to the present. ed as interference in Cuba’s internal affairs, “One characteristic of competitive democra- He points out that the PCC was the world’s lest such actions spark a nationalist backlash. cies is that they generate substantial con- first communist party created after the tri- “In this regard,” he concludes, “Latin Ameri- testability and a high government turnover, umph of the revolution it was intended to can and European actors are better positioned and contrary to usual assumptions, this has lead. Yet it was years before the Party was than the United States.” not prevented them from achieving signifi- able to command the authority it does today. cant reform and high rates of economic Even by 1969, the PCC had only 55,000 VOTER PARTICIPATION IN growth,” he writes. “Therefore, they offer a members — just 0.6% of the population — model that is most consistent with the desired making it the smallest ruling communist RECENT CUBAN ELECTIONS outcome of the Cuban transition.” party in the world. But by 1975, membership As a group, these competitive democracies had grown to 212,000, and by 1985, the PCC ELECTION REGISTERED TURNOUT showed a smaller cumulative output decline had over 520,000 members. YEAR VOTERS (%) in the initial recession that followed the col- In 1997, on the eve of the Fifth Congress, 1976 5,655,837 95.2 lapse of communism (22.6%) and a shorter membership had surpassed 780,000, thanks 1979 6,001,890 96.9 duration of that recession (3.8 years) than did to changes that allowed believers in God to 1981 6,272,189 97.2 the Commonwealth of Independent States, in join, and an end to the requirement of spon- which GDP declined by 50.5% and the reces- sorship by existing members or prior mem- 1984 6,494,488 98.7 sion lasted for 6.5 years. bership in the Unión Juventud Comunista. 1986 6,865,344 97.7 “Since Cuba has undertaken some econo- Today, says LeoGrande, the PCC has been 1989 7,240,039 98.3 mic reforms already — mostly to decentralize redefined as the party of the “Cuban nation” 1992 7,762,958 97.2 enterprise management and reduce budget- rather than the party of the working class, 1993 7,886,039 99.6 ary subsidies — the transition recession may with the ideas of José Martí carrying equal 1995 7,795,623 97.1 be even shorter and milder,” writes weight to those of Marx and Lenin. Betancourt. “However, if chaos and conflict Yet as market reforms weaken the PCC’s 1997 7,952,599 97.6 prevail, it may take longer and be deeper. control over the economy, its political mono- 1998 8,064,205 98.3 Then Cuba will fall under the ‘war-torn’ cate- poly gradually unravels as well. 2000 8,069,804 98.1 gory of transitions.” “Emergent entrepreneurs, both farmers 2002 8,362,010 95.6 It is also imperative, says Betancourt, to and small businessmen, depend less and less Data derived from CubaNews sources in Havana. “not only pursue policies that encourage the on the state for their well-being,” he writes. privatization of state enterprises, but also to “As they accumulate wealth and grow In Cuba’s Oct. 20 elections for the National encourage the emergence of new small enter- increasingly indispensable to the health of the Assembly, 7,997,983 citizens actually voted out prises” until they represent at least 40% of the economy, their desire for less government of 8,362,010 registered voters. That translates country’s added value and labor force. “There interference is certain to take a more explicit- into turnout of 95.6% — impressive by U.S. stan- is ample evidence of a correlation between ly political direction. dards but the lowest Cuba has seen since 1976. 1159 Luxner 10/29/02 9:46 AM Page 12

12 CubaNews ❖ November 2002 “is seeking to do business and cooperate in goods, services and consultancies.” BUSINESS BRIEFS Cuba’s development, because producing and Invecosca says it offers legal and financial advice; help with customs procedures, POULTRY EXECUTIVE URGES END TO EMBARGO exporting more items will place the island in a position to buy more machinery.” imports and collections; merchandise insur- James L. Baker, president of Atlanta-based Details: Istituto nazionale Commercio Estero, ance and claims; promotion and distribution of Cherokee Trading, has won a contract to sup- Via Liszt 21, 00144 Rome. Tel: +39 06 59921. goods and services; market studies; person-to- ply Cuba with 1,400 metric tons of frozen Fax: +39 06 5964-7382. Internet: www.ice.it. person contact with Cuban officials; humani- chicken worth $630,000. tarian donations; local knowledge and know- The contract, a result of the recent U.S. food CNP TO SEND HIGH-LEVEL DELEGATION TO CUBA how, and VIP arrangements. expo in Havana, follows the sale of $200,000 The Washington-based Center for National “Our personnel can save U.S. companies worth of frozen turkey by Cherokee to state Policy is sponsoring a Nov. 17-20 visit to Cuba much time and expense by helping them agency Alimport since May. of former U.S. government officials, diplo- develop and then undertake a targeted Baker, a board member of the U.S. Poultry mats, business leaders and scholars. approach to Cuba and its potential market,” and Egg Export Council, estimated that Cuba CNP says the group has been examining Romero told CubaNews. “Invecosca will en- is buying 5,000 to 6,000 tons of frozen chicken U.S. policy on Cuba and “preparing a set of re- sure that their entrepreneurial image will al- legs per month at 21 cents a pound. commendations for an approach that more ef- ways be present in markets of their interest.” But there may be no more sales to Alimport fectively promotes U.S. interests and values.” Details: José Rafael Romero, Invecosca, Apdo. for awhile, says Baker. This special Cuba Policy Advisory Group is #728-1260, San Rafael de Escazú, San José, “I believe they’ve maxed out on food pur- headed by James R. Jones, former U.S. envoy Costa Rica. Tel: +506 288-2863. Fax: +506 chases for the time being,” he told CubaNews to Mexico, and includes 15 other dignitaries 288-2701. E-mail: [email protected]. in a telephone interview, adding that until the including Max Castro, senior research associ- U.S. trade embargo is lifted, the Cuban gov- ate at the University of Miami’s North-South CUBA AIRS ITS DIRTY LAUNDRY IN PUBLIC ernment would have little hard currency to Center; Ann Richards, former governor of spend on further commodities. Cuba has 14 industrial laundries that togeth- Texas, and Elizabeth Frawley Bagley, former er process over 60,000 kilograms of textiles That’s why Baker is lobbying hard for an U.S. ambassador to Portugal. end to the embargo, and praises the Georgia (sheets, towels, tablecloths, etc.) on a daily Details: Shawn Malone, CNP, One Massa- basis for the tourism industry, according to Legislature for passing a resolution calling for chusetts Avenue, NW, Suite #333, Washington, normal relations between the U.S. and Cuba. figures released at a recent convention in DC 20001. Tel: (202) 682-1800. Fax: (202) Varadero for the global industrial laundering Details: James Baker, President, Cherokee 682-1818. E-mail: [email protected]. Trading, PO Box 1508, Conyers, GA 30012. and dry-cleaning industry. Tel: (770) 922-9600. Fax: (770) 483-3047. CUBA SHELVES PLAN TO IMPOSE BAGGAGE TAX All 14 laundries belong to the Unicornio E-mail: [email protected]. division of Servisa, which is part of state entity Only a few days before it was to take effect, Cubanacán. Unicornio provides laundry and CANADIAN CHICKEN EXPORTS TO CUBA TUMBLE the Cuban government has abandoned plans dry-cleaning services to hotel chains, restau- to charge arriving air passengers a so-called rants, airline companies, marinas and other Canada’s chicken exports to Cuba fell “welcome tax” for carry-on and other luggage tourism facilities throughout Cuba. sharply in the first half of 2002, down almost weighing more than 20 kilograms. 40% from the 16,764 metric tons exported to Beginning Nov. 1, Cuban authorities were FIHAVCOULD ATTRACT 1,000 FOREIGN FIRMS Cuba during the same period last year. going to assess visitors a $25 fee for every This drop coincides with a dramatic kilogram of carry-on and other luggage that Companies from more than 50 nations will increase in U.S. exports of frozen chicken to together exceeded 20 kg. send representatives to the 20th Annual the Caribbean island, led by Tyson Foods, That would have made Cuba the first coun- Havana International Fair (FIHAV), set for Cherokee Trading (see above news item) and try to charge tourists twice for overweight Nov. 3-10. Abraham Maciques, president of other leading U.S. poultry processors. luggage — once upon boarding their plane the organizing committee, said he’s expecting The USDA’s Foreign Agricultural Service and again when arriving at their destination. over 1,000 companies, with a total exhibition says, however, that much of the decline in Yet Cuban exile groups in both the United area of around 15,000 square meters. Cuba’s Canadian chicken exports to Cuba was offset States and Canada opposed the new tax, fear- Ministry of Foreign Trade said leading compa- by increased export of Canadian chicken to ing it would be used to penalize those who nies from Spain, Venezuela, China, Russia, Russia and the United States. regularly take shoes, clothing and other Holland, Italy, France and Canada have con- firmed their participation. ITALIAN TRADE INSTITUTE OPENS HAVANA OFFICE essentials home to relatives still in Cuba. No explanation was immediately available Maciques said FIHAV — one of the most The Italian Institute for Foreign Trade has from Cuban government authorities. important events of its kind in Latin America won Cuban government approval to establish and the Caribbean — is “far from being an a branch in Havana. COSTA RICAN FIRM SEEKS U.S. CLIENTS economic burden on Cuba since it generates The office, which will be the agency’s 126th Invecosca S.A., a Costa Rica-based company profits” thanks to increased business at area throughout the world, will promote bilateral with offices at Havana’s Wajay Free Zone, is hotels, restaurants and tourist attractions. trade between Italy and Cuba. At present, that looking to represent U.S. exporters who hope DOS GARDENIAS RESTAURANT OPENS IN MEXICO trade is around $800 million a year, though to crack the Cuban consumer market. 95% of it consists of Italian exports to Cuba. Company CEO José Rafael Romero says Cubanacán S.A. has signed a deal to open a Claudio Pascualucci, the institute’s regional Invecosca racked up sales of $12 million last Dos Gardenias restaurant at the Las Velas director, said Italy is interested in selling year. Of that, 40% consisted of Cuban sales to beach resort in Cancún, Mexico. The 250-seat Cuba machinery for the tourism, food pro- the Dominican Republic, Panama, Haiti, eatery, to be finished by year’s end, is named cessing, footwear and leather industries, as Jamaica, the Cayman Islands and the after a song popularized by the Buena Vista well as other manufactured items. In return, Bahamas. The remaining 60% were products Social Club and will feature live bolero music. Italy would like to buy Cuban pharmaceutical imported into Cuba from that same region. The Cancún restaurant is the sixth such and biotech products. Romero, who has been in the import-export establishment run by Cubanacán subsidiary “We have confirmed that Cuba has incredi- business for 11 years, said that with the mod- Palmeras; other Dos Gardenias outlets are ble know-how, so it would be very good to est opening in the trade embargo which now located in Italy, Portugal and Spain. establish contacts with Italian pharmaceutical allows U.S. companies to export food to Cuba Separately, Palmares plans two new Daiquiri companies or medical equipment firms,” on a cash-only basis, “we’re ready to offer vari- Sabroso restaurants in Shanghai and Moscow. Pascualucci told the official daily Granma. ous types of services to those interested in Details: Palmares, Ave. 5ta 18002, Havana. The Italian official added that his country carrying out commercial operations involving Tel: +53 7 33-1392. Fax: +53 7 33-1387. 1159 Luxner 10/29/02 9:46 AM Page 13

November 2002 ❖ CubaNews 13 SMALL BUSINESS Clandestine video shops cater to Cubans on tight budgets BY LARRY LUXNER while others prefer to have the movies deliv- who work in tourism — hotel employees, taxi nterested in catching a kung-fu action flick, ered to them by a teenager hired by Graciela. drivers and owners of paladares (private a sappy Leonardo DiCaprio romance or the The boy collects the money and keeps two restaurants),” she said. “These people earn Ilatest Austin Powers comedy? pesos for himself, bringing the remaining dollars, so they have purchasing power for If you happen to be a tourist or a Cuban three pesos back to his boss. luxuries like movies, even they pay in pesos.” with access to dollars, you might drop by one Graciela keeps all her records in a well- A young woman visiting Graciela quickly of 40 or so state-run Videocentro rental stores worn looseleaf book, with each client repre- objects. around Havana. There, you’d find a selection sented by a number in her ledger. And like “No,” she says. “In Cuba, watching videos of state-sanctioned movies at $1 per 24-hour Blockbuster, there are rules: clients must is not a luxury. It’s a necessity, because we’re rental — plus a $10 annual membership fee. rewind the movie when finished, and if a cus- fed up with listening to Fidel.” But for the vast majority of Cubans who tomer keeps a video one extra day, he has to Interestingly, Graciela recently opened a have only pesos in their pockets, clandestine pay another five pesos. neighborhood paladar with some friends in video shops that charge the equivalent of only “Our family has been doing this for more hopes of boosting her profits. “We believe in 20 cents a movie are the only way to go. than five years,” says Graciela, estimating that socialism,” she says proudly — not seeing any No one knows how many such outlets her business generates between 500 and contradiction between socialist ideals and a exist, but it’s believed that in Havana alone, 1,000 pesos (about $20 to $40) a week. That’s little private enterprise on the side. these so-called “video banks” number in the just enough to support herself, her aging Although the kind of business she runs is hundreds, maybe even more than 1,000. mother and her teenage son. illegal, Graciela isn’t worried because 20 to 30 The people who run these operations are “We convert the dollars into pesos at 26 to policemen are among her regular clients. called “banqueros,” and CubaNews recently one, and use the dollars to buy shampoo, “I’m not scared, but I am careful,” she says. caught up with one of them — Graciela (not meat, chicken, soap, detergent and cheese.” “I guess what we’re doing is illegal only her real name), a middle-aged woman living The money from her video rental business because we’re not paying for the rights to the in the Havana suburb of Marianao who likes also enables Graciela to enjoy one small luxu- movies. Legalizing [operations like ours] to refer to her business as Blockbuster Video. ry: an illegal, $50-a-month Internet connec- would oblige the government to pay the dis- Plainly visible in a narrow hallway of tion so she can communicate by e-mail with tributors of the movies in order to avoid being Graciela’s three-room apartment are shelves her family in Miami for one hour every night. accused of piracy.” and shelves of pirated videotapes, ranging But Graciela used to earn 1,200 or 1,500 And does Graciela feel guilty for violating from “How the Grinch Stole Christmas” to pesos, and sometimes as much as 3,000 pesos Hollywood’s intellectual property rights? “The Spy Who Shagged Me.” Their titles, in an especially good week. “Para nada,” she responds with an indiffer- translated into Spanish, are neatly printed “After Sept. 11, our earnings dropped off ent wave of her hand. “For us, this isn’t just a with a magic marker and carefully alphabet- because the majority of our clients are people business. It’s a way to stay alive.” ized as in any legal video store. “The police don’t care as long as nobody talks,” said Graciela, who estimates she has U.S. handout of shortwave radios likely to continue 800 videos at home. That may sound like a lot, but it pales in comparison to others in the The U.S. government has distributed sources including public diplomacy funds same line of work, some of whom have up to nearly 10,000 shortwave radios throughout and Section 109 funds.” 3,000 or 4,000 videos to rent out. Cuba, as part of a State Department initiative Earlier this year, Washington’s shortwave Like other banqueros, Graciela charges five that began about a year ago. radio giveaway sparked anger among Cuban pesos per 24-hour rental — a fifth of what A State Department official told officials, who threatened to suspend bilater- Videocentro gets. Her business is helped con- CubaNews that the multiband radios are al immigration talks and close the U.S. siderably by the fact that Cuba has only two shipped to Havana by freight-forwarding Interests Section in Havana. TV stations, both state-controlled, with few services and other unspecified methods. Castro himself angrily condemned the other entertainment options available. “We work through the Cuban opposition, “smuggling of goods in diplomatic pouches” “Our movies are generally more recent human-rights monitoring groups and the and the policies of Washington’s former top than what they have at Videocentro,” she tells dissident community,” said the official, who diplomat in Cuba, Vicki Huddleston, who CubaNews, noting that her customers are asked not to be identified. “We give these would personally hand out radios to passers- especially fond of movies starring Julia radios only to people who want them. We by on the streets of Havana, only to learn Roberts, Harrison Ford and Mel Gibson. don’t want to give anything to anyone who that the radios would be quickly confiscated “The public prefers subtitles in Spanish,” will feel uncomfortable.” by security police once she was out of sight. she says. “Cuban people don’t like dubbed The Chinese-made radios cost under $40 While the official agrees that Huddle- movies because the dubbing isn't authentic.” each, including a rechargeable battery pack ston’s replacement, James Cason, has taken Graciela’s films are more current because and a recharger. Because they pick up short- a more low-key approach on the issue, he she doesn’t have to wait until the films come wave transmissions, Cubans can use them to told CubaNews that the State Department out on video. Instead, she buys them for 10 tune into Radio Martí, a U.S. anti-Castro sta- will likely continue to give out shortwave pesos each from Cuban pirates with satellite tion whose AM broadcasts are often jammed radios to Cubans who ask for them. antennas who record them in flagrant viola- by the Cuban government. “Our belief is that there’s a fledgling civil tion of all international laws on intellectual But the official denies that the free radios society developing there. It’s a tough road, property.. She then makes three or four are programmed in advance to receive only and the Cuban regime opposes it every step copies of each movie herself, using blank Radio Martí. “That’s just Cuban propagan- of the way. We’re trying to plug into those videotapes purchased in dollar stores. da,” he told CubaNews. “They’re not pro- civil society elements, and it’s through them “We also have a lot of friends who are in the grammed to anything. It’s just a radio.” that we reach out,” he said. “In that context, merchant marine,” she says. “When they trav- So far, the initiative has cost U.S. taxpay- we’re just trying to provide better informa- el to Europe, they bring back the latest ers around $400,000, the official said, with tion to the Cuban people.” movies, and we copy them.” money coming from “a variety of funding – LARRY LUXNER Some customers come to her apartment, 1159 Luxner 10/29/02 9:46 AM Page 14

14 CubaNews ❖ November 2002 GEOGRAPHY Pinar del Río: Tobacco still king in this troubled province

BY ARMANDO H. PORTELA This is the 5th in a series of monthly arti- ECONOMY ith the Gulf of Mexico to its north cles on Cuba’s 14 provinces by geographer The economy of Pinar del Río is in serious and the Caribbean Sea to its south, Armando H. Portela, who has a Ph.D. in geo- trouble. WPinar del Río is the westernmost and graphy from the Soviet Academy of Sciences. The tobacco industry suffered a devastat- the third-largest province in Cuba, covering ing blow this year as hurricanes Isidore and 10,925 sq kilometers (4,218 sq miles). That’s POPULATION Lili swept over the most valuable growing equivalent to 9.8% of Cuba’s total land area. zones (see CubaNews, October 2002) just as As of mid-2002, Pinar del Río had approxi- the government was shutting down 60% of the The province’s distinctive landscapes — mately 745,000 inhabitants, equivalent to 6.6% along with its relative isolation and its unusu- province’s sugar-cane grinding capacity. At of Cuba’s total population. The provincial cap- the same time, Pinar del Río’s rice industry is al agricultural profile — set it apart from the ital, also called Pinar del Río, was founded in rest of the country. It is shaped by a contrast- dwindling and seems unable to recover. 1669 and is currently Cuba’s seventh-largest Unfortunately, there are no major manufac- ing and scenic combination of forested moun- city, with 150,000 people. tains and towering hills with cultivated land- turing industries in Pinar del Río, the once- Other smaller cities in the province include productive copper mines are exhausted and locked valleys and wide flat plains. Consolación del Sur (23,000); San Cristóbal The Guaniguanico mountain system is tourists are rarely seen here. (23,000); Los Palacios (17,000); Bahía Honda Pinar del Río is invariably identified with formed by two very different ranges: the (15,000); Guane (13,000); San Juan y Martí- Sierra del Rosario to the east and the Sierra tobacco cultivation, even though tobacco nez (12,000); Candelaria (12,000) and accounts for only 9% of the province’s crop- de los Organos to the west. The system rises Matahambre (10,000). to 692 meters (2,270 feet) above sea level at land. Tobacco farming and trade has driven the Pan de Guajaibón. To the south, an ample INFRASTRUCTURE the territory’s assimilation since late 17th alluvial plain is the ground for most agricul- Pinar del Río’s paved road network reaches century. The Vueltabajo region, an appellation tural activities and the largest settlements. all settlements and agricultural zones. Its of origin that eventually became the Pinar del Río’s natural drainage has been main arteries are the four-lane National High- province’s surname, produces the best-quali- largely diverted in the last 40 years to serve way and the old, two-lane Central Highway, ty black tobacco in Cuba. agricultural needs, particularly rice paddies. both linking the province to Havana. The Tobacco is cultivated in the west, on high, Total water capacity in the province’s 31 Central Railroad stretches west to the small sandy, loose and well-drained acidic soils that major reservoirs is 900 million cubic meters. village of Guane. demand constant fertilization. Tobacco An extensive network of channels and cul- Despite possessing deep, ample and well- requires a skilled workforce and is cultivated verts built in times of abundant energy has sheltered bays at Bahía Honda and Cabañas, in relatively small plots cared by hand — leaf radically transformed the natural water runoff Pinar del Río lacks of major port facilities. by leaf — by a single family or a few laborers. of the southern alluvial plain. But Cuba’s cur- Sugar is shipped through Bahía Honda and Consequently, in the tobacco-growing areas, rent economic crisis makes it impossible to the port of Mariel in Havana. rural population is dense. properly maintain and operate this system, Tobacco, by far the province’s leading ex- Cured tobacco leaves are sent to factories which lies largely neglected. port, has traditionally been shipped out of in Havana, where cigarettes and cigars are Salinized soils and aquifers in the southern Havana, home to all the top cigar factories. manufactured. coastal flatlands pose a different threat, espe- Pinar del Río has no civilian airport with Pinar del Río accounts for 20% of the rice cially for rice farmers, and have ruined soil regular services, but a military airport six produced in Cuba. It is grown in the low, flat productivity in some areas. Excessive regula- miles south from the provincial capital has in alluvial plains south of Los Palacios. Yet agri- tion of the runoff, careless irrigation practices the past supported limited charter flights to cultural yields at the large state-run rice and seawater intrusions are blamed for the Havana and Nueva Gerona, capital of Isla de farms have dropped dramatically since the problem, which now affects 54,000 hectares, la Juventud to the south. A military air base onset of the “special period” in the early ‘90s. or 10% of the province’s agricultural lands. exists at San Julian, to the west. Unable to restore that lost capacity, the Cuban government now favors the develop- ment of small family-grown rice paddies which are far less demanding in resources. Sugar also plays a role in the province’s agricultural economy. The same soggy condi- LARRY LUXNER tions that make Pinar del Río a good rice- growing region work against it when it comes to sugar. Five sugar mills, all located in the eastern portion of the province, produce just under 3% of Cuba’s total sugar output. Two of them are being dismantled as part of the industry’s current downsizing effort, leaving only Harlem (formerly Bahía Honda) and 30 de Noviembre as sugar producers (see sugar map on page 4 of this issue). A third mill, Manuel Sanguily (formerly Niagara) will pro- duce molasses. In 2000, Pinar del Río exported 121,260 tons of raw sugar, worth $21.9 million at world market prices. That’s down dramatically from the 250,000 tons produced annually during the 1980s, worth $125 million at the preferen- Billboard advertising the beauty of Pinar del Río aims to tempt tourists driving west from Havana. tial prices paid by the former Soviet Union. 1159 Luxner 10/29/02 9:46 AM Page 15

November 2002 ❖ CubaNews 15 Pinar del Rio accounts for about 7% of Cuba’s total citrus output. In 1989, citrus orchards covered 1,435 hectares, or 13% of the country’s total. Production peaked in 1988 at 65,362 tons, but a decade later, as many farms were abandoned, it had fallen to about a third of that. Oranges comprise 56% of citrus Bay da as production, and grapefruit another 34%, though hurricanes Isidore and Lili nearly destroyed this on añ H b a year’s entire citrus harvest. ía h C Gobernadora Point a Cultivated and spontaneous pastures, often overgrown, comprise one-third of Pinar B Cabañas

del Río’s agricultural lands. Authorities claim 39% of the province is still covered La Mulata P. DE LA with forests, an unusually high ratio compared to other provinces. Pine Bay HARLEM TORRIENTE Cayo Levisa Bahía forests — many planted after the 1960s — cover 137,000 hectares La Mulata Honda o (338,500 acres); they grow well over the schist and serpentine Quiñones r i Cayo Inés Pan de a A1 Guajaibón s Soroa hills to the west, but have disappeared from the loamy de Soto M. SANGUILY o N r2,270 ft. l R H La Esperanza d e plains in the south to make rooms for agriculture. La Palma S i e r r a Cinco Pesos FC Semi-deciduous forests and rainforests cover the Cayo San Cayetano Rancho Mundito Jutías s Los Perdidos Candelaria Guanahacabibes peninsula and part of the moun- Santa Lucía o Santa Cruz n H San Cristóbal G a San Diego tain ranges which have been decimated by g San Andrés r de los Baños Jejenes careless farming practices. c O Tabaco Point Viñales cc J. MARTÍ 30 DE NOV. After Cuba lost its supply of cheap tim- Matahambre s Entronque de Pons o H Herradura Los Palacios ber from the former Soviet Union, Cayo l Pilotos Rapado Santo Tomás Herradura

authorities turned to the island’s own S e Cabeza

Dimas Consolación a limited reserves. Domestic timber c d del Sur n Sumidero D production jumped after Hurricane Puerta de Golpe i Cayo a e

c Pinar del Río g Michelle hit central Cuba in Buenavista r A H o Arroyos j i o r. n Majaguas- c r G e o d . de Mantua r j Cantera November 2001, and again after e u o t n a a u a r e m . the blow of Isidore and Lili a g l a á y Dayaniguas i r u r Mantua San Juan y . few months ago. This year, C . Cove r . S Martínez San Luis a La Coloma u production of timber is t Galope Avalos n a Guane Sábalo likely to top 170,000 Point M cubic meters. Isabel Rubio Galafre Cortés Guadiana La Coloma Sandino Bay Plumajes Point Bay Cove Cortés int La Fe Po n El Cayuco Area of Detail jó Cayos de a la Leña e s P e n i n s u l a C i b C a b Las Martinas a y o c La Bajada s S e Armando H. Portela a a n F e l i p Cape h Cape a Corrientes San G a n Francés Antonio u Cove Population Agriculture María La Gorda H Pinar del Río (150,000) Tobacco Cape Corrientes 20,000 - 30,000 Citrus orchards 10,000 - 20,000 Rice pads One by-product of foresting is pine resins. Last year, Pinar del Río pro- 5,000 - 10,000 Grasslands duced 1,238 tons of mostly unprocessed resins worth $430,000 to $500,000 Less than 5,000 at market prices. Experts believe the province’s pine forests could one day Sugar cane yield up to 5,000 tons of resins annually. Transportation Pine forest Copper mining was a traditional endeavor in Pinar del Río, but low world Evergreen forest market prices discourage this activity. The Matahambre copper mine, an cc Central highway epitome of the island’s mining industry, was closed in 1997 when its ore National highway reserves ran out after 84 years of activity. A1 Mineral deposits Some small deposits of lead, zinc, copper, gold, quartz sand and phos- Paved road phorite have been mined in the past, while iron, bauxite and nickel reserves FC Central railroad c Copper have been discovered. Gold is exploited at the Castellanos mine, yielding Domestic airport N Nickel some 9,600 ounces a year. Fisheries and the canning industry complement the economy of the pro- Port G Gold vince. Lobster and tuna are the most valuable species captured and Industrial facilities processed at La Coloma, whose canning facilities are among the most Miscellaneous important in Cuba. Sugar mill H Hotels TOURISM Cave So far, Pinar del Río has missed the heavy investment in tourism Cuba has Sugar mill (dismantled) made over the past decade elsewhere across the island — and there’s no Citrus processing plant r2,300 ft. Peak indication that this will change in the foreseeable future. What little tourism Water reservoir activity there is seems to be concentrated in the Viñales area, known for its Rice mill outstanding natural beauty. Military range Fish canning plant The province has 448 hotel rooms, only 1.2% of Cuba’s total hotel capaci- Military air base ty. Fewer than 200 rooms in third-category hotels meet the lowest standards of international tourism; the rest don’t even come close. Fishing port Before the revolution, the hot springs at San Diego de los Baños lured thousands of visitors — many from the United States — and the town had 20 40 60 80 kilometers several hotels. Today, a 30-room hotel and spa serves a handful of visitors. 0 In 2000, the province hosted only 64,384 foreign tourists, accounting for 10 20 30 40 50 miles just 3.6% of all visitors to Cuba. 1159 Luxner 10/29/02 9:46 AM Page 16

16 CubaNews ❖ November 2002 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 (301) 365-1829 or send an e-mail to [email protected]. thanks to CubaNews. Now find out what’s happening in the rest of this diverse and Nov. 3-9: 20th Havana International Fair. Fully hosted trip to Cuba for U.S. executives. fast-growing region. Cost: $2,598 (inc. airfare from Cancún, 6 nights at Hotel Nacional, meals, etc). Details: Subscribe to Caribbean UPDATE, a Jim Hitchie, Cuban Investment Newsletter, Vancouver. E-mail: [email protected]. monthly newsletter founded in 1985. This publication has been praised by corporate Nov. 4: “Nation, Society and Economy: Post-Castro Cuba” Luncheon seminar at Casa and government executives, as well as by Bacardí, Miami, with moderator Jaime Suchlicki and panelist Antonio Jorge of FIU. Cost: scholars and journalists, for its insightful, timely coverage of the 30-plus nations and $20. Details: Institute of Cuban and Cuban-American Studies, University of Miami, 1531 territories of the Caribbean and Central Brescia Ave., Coral Gables, FL 33134. Tel: (305) 284-2822. E-mail: [email protected]. America. When you receive your first issue, you have two options: (a) pay the accom- Nov. 17-26: Sustainable agriculture “reality tour” to Havana, Pinar del Río, Viñales, or- panying invoice and your subscription will ganic farms, cooperatives, etc. Cost: $1,830 from Miami. Details: Alvaro Eduardo, Global be processed; (b) if you’re not satisfied, Exchange, 2017 Mission St., #303, San Francisco, CA 94110. Tel: (800) 497-1994. Fax: simply write “cancel” on the invoice and (415) 253-7498. E-mail: [email protected]. Internet: www.globalexchange.org. return it. There will be no further obligation on your part. Nov. 19: “The Cuban Revolution and the United States: 1958-60” Forum led by scholar The cost of a subscription to Caribbean Mark Falcoff of the American Enterprise Institute. Details: Cato Institute, 1000 Massa- UPDATE is $267 per year. A special rate of $134 is available to academics, non-profit chusetts Avenue, NW, Washington DC 20001. Tel: (202) 789-5229. Internet: www.cato.org. organizations and additional subscriptions Nov. 22-Dec. 1: “Eco-Bicycle Adventure” through provinces of La Habana, Villa Clara, mailed to the same address. To order, contact: Caribbean UPDATE, Matanzas and Cienfuegos. Cost: $1,600 from Cancún. Details: Alvaro Eduardo, Global 52 Maple Ave., Maplewood, NJ 07040. Tel: Exchange, 2017 Mission St., #303, San Francisco, CA 94110. Tel: (800) 497-1994. Fax: (973) 762-1565. Fax: (973) 762-9585. (415) 253-7498. E-mail: [email protected]. Internet: www.globalexchange.org. E-mail: [email protected]. We accept VISA, MasterCard and American Express. Nov. 30-Dec. 28: Cuban Language and Culture, University of Havana. One-month intensive Spanish course. Cost: $1,875 from Cancún. Details: Alvaro Eduardo, Global Exchange, 2017 Mission St., #303, San Francisco, CA 94110. Tel: (800) 497-1994. Fax: (415) 253-7498. E-mail: [email protected]. Internet: www.globalexchange.org. Dec. 2-5: 26th Annual Miami Conference on the Caribbean, Loews Miami Beach Hotel. Speakers include Sen. Bob Graham, USTR Robert Zoellick, various heads of state. Cost: $625. Details: Caribbean/Latin American Action, 1818 N St. NW, Suite #500, Washington, DC 20036. Tel: (202) 466-7464. Fax: (202) 822-0075. E-mail: [email protected]. Editor & Publisher LARRY LUXNER

Dec. 5-12: B’nai B’rith humanitarian mission to Havana, Cienfuegos and Santa Clara. Washington correspondent Cost: $2,400. Details: Stanley Cohen, International Chairman, Cuban Jewish Relief Project, ANA RADELAT 5600 Munhall, #515, Pittsburgh, PA 15217. Tel: (412) 421-4859. E-mail: [email protected]. Miami correspondent DOMINGO AMUCHASTEGUI Dec. 6-15: “A Musical Journey Through the History and Culture of Cuba” Excursion to Havana, Matanzas and Pinar del Río. Sponsored by New England Conservatory of Music. Cartographer Details: Common Ground Education & Travel Services, 165 Amory St., Cambridge, MA ARMANDO H. PORTELA 02139. Tel: (877) 661-7653. Fax: (617) 491-1543. E-mail: [email protected]. Art director IVAN SCHWABE

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