Vol. 11, No. 12 December 2003

www.cubanews.com

In the News Despite Bacardi threat, Club J-V

GDP inches up enjoys booming rum sales in W. Europe Cuban officials say the island’s economy BY LARRY LUXNER 100 premium distilled spirits. “Demand has been exploding in Europe,” he grew by 2% in 2003 ...... Page 4 ’m just a humble rum merchant,” protests Alexandre Sirech as he sits in his cheerful, said, noting that total sales in the first 10 months Isunny office decorated with posters of 1950s of 2003 were 11% higher than the comparable Washington briefs Havana and shelves lined with liquor bottles of period in 2002. “If we keep up with this momen- OFAC devotes 17.5% of staff to embargo; every size, shape and brand imaginable. tum, we should rank in the top 40 very soon.” What makes this achievement really impres- Dennis Hays has new job ...... Page 5 Of course, Sirech is joking. As director-general of Havana Club Interna- sive is that Havana Club has been able to score tional S.A., the 37-year-old Frenchman from Bor- these gains without selling a drop of rum in the Daiquiri diplomacy deaux — who speaks English like a Londoner , the world’s largest rum market. Florida-based Splash wins $500,000 deal and Spanish like a madrileño — presides over Sirech said that in order to prevent his bosses for frozen cocktail mixes ...... Page 7 what may be the biggest, most successful joint from violating the 1996 Helms-Burton Act and venture ever launched between foreign in- lesser manifestations of Washington’s 40-year- vestors and ’s communist government. old trade embargo against Cuba, “we don’t com- Newsmakers In 2003, the company — a 10-year-old part- municate with Pernod Ricard, we don’t speak on Arizona lawmaker Jeff Flake leads efforts nership between French drinks giant Pernod the phone, we don’t exchange e-mails. We want in Congress to change Republican think- Ricard and a division of Cuba’s Ministry of Food to avoid any problems.” Industries — expects to sell 1.92 million 9-liter Sirech, interviewed for two hours at Havana ing on U.S. Cuba policy ...... Page 8 cases of Havana Club rum. That’s up from 1.73 Club’s small but lavishly decorated headquar- million cases in 2002, when the brand ranked ters in the residential Havana suburb of Vedado, Better luck in 2004 53rd in Impact Databank’s list of the world’s top See Havana Club, page 2 Despite low prices, officials hope for big- ger sugar crop next season ...... Page 10 Cuban-American developers want a say New hotel chain? U.K. growth fund to develop 8 boutique in ambitious Havana restoration efforts hotels throughout Cuba ...... Page 11 BY VITO ECHEVARRÍA ments in Havana’s ritzy Miramar district. These s anyone who’s visited Cuba knows, most experts want a say in Havana’s future develop- buildings in Havana are crumbling and ment efforts — especially if and when there’s a Business briefs significant improvement in U.S.-Cuba relations. Corruption denied in Cubanacán scandal; A haven’t had a lick of paint in over 40 years. Thanks to Cuba’s tourist boom, however, a William Delgado, executive vice-president of BNDES to fund new buses ...... Page 13 limited but growing number of structures in Old the Latin Builders Association (LBA), is among Havana have been restored; these include the those Cuban-Americans hoping to shape Helping Plaza de San Francisco church, built in 1738, Havana’s future skyline. and the Lonja de Comercio, a 1903 building “In our mind, the first priority will be to build Cuba sends 705 doctors, teachers to des- restored with Spanish funds. homes, at least a million of them, so that people perate neighor...... Page 14 Such restoration efforts have been made to who are living in crowded apartments — as enhance Old Havana — a UNESCO World Heri- many as two, three or four families together — Bookshelf tage Site — as a destination for tourists drawn to will be able to enjoy what we have here, with the city’s rich architectural history. Some of each family in its own home,” he said during an Falcoff, Evenson offer contrasting views these buildings such have been converted into interview in Miami. At an average cost of of realities of life in Cuba ...... Page 15 elegant hotels such as the 25-room Hotel Raquel $20,000 apiece, he estimated, the price tag could (see CubaNews, November 2003, page 7). well exceed $20 billion. CubaNews (ISSN 1073-7715) is published monthly Across the Florida Straits, Cuban-American “The No. 2 priority will be rebuilding Old by Luxner News Inc. © 2003. All rights reserved. architects, developers and scholars have taken Havana to the standards of City, Santo Subscriptions: $429/year. For subscription or edito- note of the Castro government’s promotion of Domingo or Old San Juan [],” he rial inquiries, call toll-free (800) 365-1997, send a fax said. “If you plan it and you do it with taste, you to (301) 365-1829 or e-mail us at [email protected]. Old Havana as a “living time capsule,” as well as various residential and commercial develop- See Developers, page 6 2 CubaNews ❖ December 2003 French. After a one-year stint in Miami with a — FROM PAGE 1 Havana Club French software company, he moved to was reluctant to give us actual production fig- Scotland in 1990 and joined Pernod Ricard in ures or say how much Pernod Ricard has the whiskey division. invested in the venture. LARRY LUXNER Sirech was sent to Cuba four years ago to That’s not so much because of the U.S. head the Havana Club venture, and said he’s embargo, but because of ongoing litigation been amazed at the results. between his company and Bacardi-Martini “We’re in a venture with a Cuban company over rights to the Havana Club trademark. controlled by the government. As such, “You have to be paranoid,” he told Cuba- employees are paid in pesos rather than in News. We need to be extremely cautious, dollars, though we can offer our people incen- because we know we are being listened to.” tives. This is legal under the Investment Law With fears of Bacardi spies ever-present in of 1997,” he said. his mind, Sirech refuses to say exactly how “I’m a demanding boss, and when I arrived, many distilleries Havana Club operates, how I thought it would be impossible to have this big they are or even where they’re located, level of quality.” But even without monetary outside of the large bottling plant in Santa incentives, he said, “many of these people Cruz del Norte, along Cuba’s northern coast believe that what’s good for Havana Club is just east of Havana. good for the country.” Sirech also doesn’t discuss sales, although Sirech oversees 203 employees, of which Havana Club’s annual revenues are believed 136 work in the local division; the rest are in to exceed $300 million (last year the Pernod Alexandre Sirech at Havana Club headquarters. exports, marketing and finance. That doesn’t include another 800 distillery workers, with Ricard conglomerate reported revenues of Bacardi declined to comment for this story, 4.836 billion euros, or around $5.3 billion). whom Sirech has little or no contact. And despite repeated attempts to reach company fewer than five Havana Club employees know Havana Club’s profits are estimated to be officials in , Miami and the Baha- around $20 million, or just under 3% of Pernod the brand’s proprietary formula, he said. mas, where various subsidiaries of the “Because of our legal battles with Bacardi, Ricard’s 2002 profits of 750 million euros. Bacardi empire all have offices. “We are a fully decentralized, autonomous we keep our production process extremely The issue is an emotional one, particularly secret. There’s a typical process for a Cuban entity,” Sirech said proudly. “Outside of pro- for patriotic Cubans who believe that Havana duction, everything’s actually done here in rum, which is very different from the way Club rum — along with Cohiba cigars and the people do rum in the or this little building — strategy, pricing, adver- famous Tropicana nightclub — lend great tising and promotions.” Puerto Rico. On top of that, there’s a very spe- prestige to a country whose traditional sugar- cial process for Havana Club which was based economy is rapidly crumbling, at least developed by the Cubans in the 1970s. If the SIRECH: BACARDI ABANDONED TRADEMARK partly due to the U.S. embargo. Havana Club was born in 1993, producing way we do light rum is ever imitated, we “We’re suffering a lot at the moment from would lose a big competitive advantage.” 300,000 cases of rum in its first year. Most of our absence in the American market. The that was exported to Russia via barter deals. United States is half of the world rum market, INCREDIBLE SUCCESS IN ITALY “Bacardi was the leader in the local market, and we can’t sell there,” said Sirech. “But but they left the island several years before we’re patient. We’ll wait to see what evolves At present, Havana Club ranks as Pernod Castro took over,” he explained. “They were before embarking on anything. The Cuban Ricard’s sixth-biggest spirit brand in volume in big trouble with Batista. Legally, the Arich- government wouldn’t have any problem with after Ricard, Seagram’s Gin, Chivas Regal, ebala family more or less abandoned the us doing business with the U.S., but any U.S. Pasils 51 and Larios. Interestingly, the brand’s brand before the revolution. That’s why a company that does business with Cuba largest overseas markets are all in Europe: Cuban entity, Cubaexport, could register it. should be very careful.” Italy (485,000 cases this year); Spain (318,000 Anyone could have done that, because the cases) and Germany (187,000 cases). brand was free to be registered.” HAVANA CLUB’S BIG SECRET “We started the Italian market from scratch He added: “When we started, there were Sirech, who began working for William in 1998,” Sirech told CubaNews. “Before that, many doubts about the Havana Club brand. Pitters in at the age of 18, got his MBA the brand was distributed by Diageo. Then, It’s funny to remember, because now it’s the in Barcelona and speaks fluent English, Ramazotti began distributing Havana Club fastest-growing spirit brand on the market.” Spanish and German in addition to his native and it went flying. In Italy, it’s not only the top- selling rum but also the top-selling spirit.” HAVANA CLUB RUM EXPORTS In millions of nine-liter cases In Europe, the cheapest Havana Club brand goes for 11.90 euros, and the 7-year-old costs 2.0 around 20 euros. Using a benchmark price of 14 euros per 750-ml bottle, that means a 9-liter 1.92 case consisting of 12 bottles would retail for 168 euros, or just over $200. At 1.3 million 1.73 1.5 cases this year, this translates into a European 1.48 market of over $260 million for Havana Club. 1.35 Asked why the brand has become so popu- 1.23 lar in Italy and Spain, Sirech had this to say: 1.0 “The name is good, and a good name in our 1.00 industry is very important. It’s exotic, it links to a magic town, Havana. There’s a mystique, 0.70 0.5 which is well-deserved. And it’s easy to pro- 0.60 nounce; it flows in your mouth.” 0.46 0.44 But most importantly, he said, the rum is superb. “We didn’t choose to do Havana Club for nothing. We studied so many countries 1994 1995 1996 1997 19981999 2000 2001 2002 2003 and so many brands, and in our view, every Source: Havana Club time we did a blind test with different rums, December 2003 ❖ CubaNews 3 this one always came in first.” city’s hundreds of parking attendants with AN END TO THE TRAVEL BAN? KEEP DREAMING The company says the successful launch of free Havana Club T-shirts. What would really boost Havana Club’s two new products, Añejo Blanco and Añejo The company also promotes its brands worldwide sales would be an end to the Oro, has contributed to the brand’s unusually through music. At any given moment, three restrictions that prevent most U.S. citizens strong performance. The first of these, a pale “Bandas de Havana Club” groups are touring from visiting Cuba. straw-colored rum, is the base for most popu- the world; each consists of 12 musicians and “I’m very pessimistic about the travel ban lar Cuban cocktails including the mojito. The dancers, and they do three shows a day. being lifted as long as President Bush is in second, which acquires its golden hue This summer, Havana Club launched ready- office,” said Sirech. “Cuba now gets two mil- through ageing in oak barrels, is particularly to-drink 275-ml bottles of Loco, a premixed lion tourists a year, and I think this could dou- popular in Spain, where it’s mixed with Coca- product of 5.5% alcohol content made with ble if Americans were allowed to visit the Cola to make a cuba libre. Havana Club rum and real fruit juices. island. Americans are very inclined to drink Yet France, which imported just over Loco is currently available in two flavors — Havana Club, and our sales would take a fan- 80,000 cases this year, is “a very tiny rum tastic jump.” market” for Havana Club. The Caribbean WHERE DOES HAVANA CLUB RUM END UP? He’s equally pessimistic about seeing islands of and — the repeal of Section 211, a provision that both rum exporters — are overseas prohibits U.S. courts from protecting the departments of France and as such U.K. - 1.0% rights of expropriated Cuban trade- receive a substantial tax rebate and can SWITZERLAND - 1.3% OTHERS - 11.6% CHILE - 1.2% marks. The arcane law was slipped into a offer their rums at much lower prices. massive 1998 spending bill at the behest “As long as it stays like this,” said Sirech, MEXICO - 2.3% ITALY - 25.3% of Bacardi, which has been fighting for “France won’t be a priority.” FRANCE - 4.2% years to wrest control of the Havana Club - 1.6% trademark away from Pernod Ricard and FIGHTING THE COUNTERFEITERS the Cuban government. Much of the Havana Club rum sold in GERMANY - 9.7% Yet Section 211 is bitterly opposed by Europe is shipped in bulk from Cuba to groups like the National Foreign Trade the company’s distillery south of Madrid. Council, which warns that the provision “Our long-term strategy is that we’ll SPAIN - 16.6% CUBA - 25.2% threatens more than 4,000 U.S. trade- bottle everything here in Cuba, though marks currently registered in Cuba. it’s not that easy to get all that equipment Sirech said U.S. companies should fear in place,” said Sirech, noting that in a backlash by the Castro government. September, Havana Club switched its “So far, Cuba has been very gentle and European production from plastic to soft on this issue, hoping that one day the metal bottle caps, but not only because it same policy would apply to them. There was a looks classier. lemon and passion fruit — and sells in Europe lot of hope when the WTO ruled against the “It’s good against counterfeiting,” he said. for E1.20. In Cuba, it’s now being launched at United States, but nothing has happened “With aluminum bottle caps, you can’t glue hard-currency shops for $1.00 per bottle, since then. We found it extremely strange that them back. And an unrefillable fitment pre- where the biggest buyers are expected to be so much could be done in favor of Bacardi vents you from pouring rum in.” Cubans with dollars in their pockets. when the company is not even American. It’s Sirech said counterfeiting is a “huge” prob- At the other end of the price spectrum is beyond understanding.” lem, particularly in Spain. “That’s why we’ve Maximo, which took four years to develop For now, Sirech says he just wants to see an invested so much money in all these and “is a mix of very old things and very end to the never-ending litigation between the changes,” he said, adding that in Cuba, the young things.” two drinks giants, which according to the victims are more often Cubans than tourists, Sirech wouldn’t say much more about Max- Communist Party daily Granma has cost since the tourist shops are carefully managed imo, except that it’ll be bottled in Cuba, that Havana Club over $625,000 in legal fees. and controlled by professional buyers. only 400 cases of it will be produced every “I don’t think Bacardi will win anything by Most of Havana Club’s distributors over- year for the whole world, and that it’ll sell legal action,” he said. “This has been going on seas are affiliates of Pernod Ricard, though locally for an astounding $200. That’s more for eight years, we’re going nowhere, and since May 2003 the company distributes its than an entire year’s salary for many Cubans. both of us are spending enormous amounts of own products in Cuba. Before that, Havana (In Europe, the 700ml bottle will go for 200 money on lawyers. I think we should call it a Club was distributed here by an outside firm. euros, or $240 at current exchange rates). day and make peace.” FROM LOCO TO MAXIMO Cuba itself accounts for one-fourth of Museum promotes Havana Club brand to tourists Havana Club’s total sales. At present, Havana Club controls around The Museo Ron Havana Club, along the whiskey barrels as they watch a six-minute 30% of the local market by volume, and waterfront in Old Havana’s restored historic video explaining how rum is made. The smell around 75% by value. That local market is district, represents one of the company’s of molasses permeates the air, while nearby divided evenly between foreign tourists in most ambitious efforts to promote its brand displays feature original French copper alam- Cuba and Cubans with access to dollars. name among foreign tourists visiting Cuba. biques, or rum stills. “For some Cubans, a bottle of Havana Club The museum, inaugurated in March 2000, After the tour, visitors can enjoy traditional would be a once-in-a-lifetime occasion like a is open every day from 10 a.m. to midnight. Cuban cocktails such as a mojito, cuba libre wedding,” said Sirech. “Other Cubans have Admission is $5 and includes a free drink and or daiquiri for $3.00 each. They can also access to dollars through their families in the the services of a guide fluent in English, choose from a menu featuring tuna and veg- States, and these people have the means to Spanish, German, French or Italian. gie salad ($4.00); shrimp ceviche ($5.00) and buy Havana Club on a more regular basis — This year, the museum will receive 110,000 filet mignon ($9.00). Those who really want and they wouldn’t buy anything else.” tourists, most of them from Western Europe. to splurge can order the chef’s special — The brand’s main rivals are Ron Varadero Housed in a colonial mansion dating from gran grillada de carnes y mariscos — for $22. and Ron Santiago de Cuba. Billboard and TV 1878, the museum features a large scale The museum employs 12 people. Waitress- advertising has been banned in Cuba, so model of a fictional 1930s sugar mill, “Espe- es receive 171 Cuban pesos a month — about Havana Club promotes itself to the tourist and ranza,” complete with a working choo-choo enough for one bottle of Havana Club Añejo local market through other ways. train. On the second floor, tourists sits on oak Blanco rum at current exchange rates. One clever method has been to supply the 4 CubaNews ❖ December 2003 ECONOMY Officials say Cuba will finish 2003 with GDP growth of 2% BY OUR HAVANA CORRESPONDENT “foreign investment is gaining ground in ments: technology, new markets and capital,” The Cuban economy will show 2003 Cuba’s economy, where foreign capital is Lomas told government officials. growth of 2% “despite the U.S. blockade present in 32 specific activities.” The ministry said Cuba has signed 62 T against the island and other adverse cir- Officials of the Ministry for Foreign Invest- agreements on protection and promotion of cumstances,” said Osvaldo Martínez, chief of ment and Economic Cooperation (MINVEC) investments with 71 countries, and 11 accords the Cuban Economic Affairs Committee. say 52% of foreign firms operating in Cuba are to prevent double taxation. Among the most This rosy prediction exceeds the 2003 reg- based in Europe. The top-ranking countries promoted sectors are biotechnology, sugar- ional growth projected by the UN Economic among foreign investors are Spain, Canada, cane byproducts, tourism, power generation Commission on Latin America and Caribbean Italy, France, Great Britain and Mexico. and information technology. (known by its Spanish acronym, CEPAL). Marta Lomas, minister of foreign invest- Lomas said Cuba has “economic coopera- Martínez said Cuba’s GDP has grown by ment, said 355 “associations with foreign cap- tion” with 165 of the 182 nations with which it 4% over the last few years, though he acknow- ital” are operating in Cuba, down from 400 at maintains diplomatic relations. But she added ledged that “low sugar prices and high oil the end of 2002. that, as a basic principle of cooperation, “we prices on the international market, along with “Foreign investment, which began in the can’t allow any meddling in the internal damages caused by three hurricanes in less 1990s, looks for support from three basic ele- Cuban affairs by our trade partners.” than a year and intensification of the econom- ic blockade” have hurt on the economy. On Nov. 17, Economy Minister José Luís FEARING BUSH VETO, CONGRESS KILLS CUBA MEASURES Rodríguez said the government expects GDP As expected, Republican leaders in the Sen. Richard Shelby (R-AL), a key mem- growth to exceed its 1.5% target, helped along House and Senate bowed to White House ber of the Senate Appropriations Commit- by high nickel prices, recovering tourism and wishes and scuttled an effort to change tee, said the Cuba language had to be good weather. Cuba travel policy. removed to save the $90 billion spending Nickel has surpassed sugar as Cuba’s top Provisions to strip the Treasury Depart- bill, given Bush’s veto threat. export ,and the Cuban sugar industry is still ment of funding to enforce Cuba travel pro- “There was no alternative other than to reeling from the closure of half its unproduc- vision were included in both House and Sen- remove the Cuba travel provision” from the tive sugar mills last year. ate spending bills this year. The amend- bill, Shelby said. Tourism, meanwhile, continues to recover from the slump caused by the Sept. 11, 2001, ments had broad bipartisan support in both A Cuban Foreign Ministry statement said terrorist attacks, said Rodríguez. Tourist chambers. GOP leaders and Cuban-American exiles in arrivals grew 15% in the first half of 2003. But President Bush’s vow to veto any leg- Miami “were trying to block the advance of “Growth will be higher this year, thanks to islation that weakened the U.S. embargo on the forces in the United States and in the higher performance in some areas, such as Cuba prompted GOP leaders to strip the world working for a change in the irrational agriculture, and a favorable international envi- provision from a final Treasury-Transpor- U.S. policy toward Cuba.” ronment,” Rodríguez told Reuters. “We have tation spending bill before House and Sen- Rep. Jeff Flake (R-AZ) and other support- no figure yet, [but] no doubt it will be higher ate negotiators had a chance to discuss it. ers of a change in Cuba policy say they’ll try than the 1.5% we planned for this year.” The move to delete the travel ban — to change the law again next year. But they After a growth spurt of more than 6% in the chiefly the effort of House Majority Leader aren’t expected to prevail, since Bush is not 1999-2000 period, growth in Cuba’s centrally Tom DeLay (R-TX) and Senate Majority likely to abandon his tough stance against planned economy slowed to 3% in 2001 and Leader Bill Frist (R-TN) was made in the Havana in a presidential election year. 1.1% last year. late hours of Nov. 18. – ANA RADELAT Meanwhile, the Cuban government claims Sherritt may sell its stakes in Cuban hotels, agribusiness he Cuban oil, gas and power generation rect interest in Procesadora de Soya S.A., a Just a few months ago, Sherritt sold its 40% activities of Sherritt International Corp. 500-ton-a-day food processing plant in share in mobile operator Cubacel to a Cuban T have grown to the point where the Santiago de Cuba. The plant produces textur- state agency in a $45.1 million deal. Cubacel, Toronto-based multinational may liquidate ized soy protein, soy flour, soymeal and crude with an estimated 18,000 subscribers, is now some of its tour-ism and agribusiness hold- soy oil as well as lecithin. 100% in the hands of the Castro government ings throughout the island. Sherritt also holds 50% of an agribusiness (see CubaNews, October 2003, page 3). The Canadian Press reported Nov. 7 that joint venture known as Sherritt Green, which “We’d gone about as far as we can go on the Sherritt — which has invested over $300 mil- operates a 200-hectare farm in Matanzas. cellular business, so we sold that back to the lion in Cuba during the last decade — will “In our desire to touch as much of the Cubans,” Delaney said. “I think our concen- focus capital spending on its nickel and ener- Cuban economy as we have, we’ve made tration, our principal capital expenditures [in gy assets while pursuing “strategic options” those investments. We feel it’s important for Cuba] will be in oil, gas and nickel and, poten- for its limited hotel and soybean operations. our relationship with Cuba to be represented tially, electricity.” Chairman Ian Delaney said Sherritt’s hotel across as broad a span of that economy as we Possibilities include the expansion of met- interests have been “terrific earning assets, can be,” said Delaney, whose company re- als operations to produce 50,000 more tons of but they’re not really meaningful” to the cor- ported third-quarter profits of $20.6 million. nickel and cobalt annually. Reducing tourism poration, compared to its more lucrative “But we’ve grown significantly in the oil and agriculture holdings could come as law- investments in Cuba and in western Canada. and the electricity business, such that we makers in Wash-ington turn up the heat to Sherritt has a 25% interest in the Meliá Las don’t have the same need these days, and we repeal the U.S. ban on travel to Cuba. Américas hotel and bungalow complex in certainly don’t want to get into the tourist “Any relaxation of that travel ban will make Varadero, as well as a 12.5% stake in the Hotel business in a big way. We’re not a consumer- Cuba a better place to visit, and a better place Meliá Habana. In addition, it has a 49% indi- products company.” to do business,” said Delaney. December 2003 ❖ CubaNews 5 WASHINGTON BRIEFS OFAC: 17.5% OF STAFF FOCUSED ON CUBA EMBARGO In their own words … The Treasury Department’s Office of Foreign Assets Control has informed the Senate Finance “We will be back in the next session of Congress to continue the fight, and Committee that 17.5% of its workforce is dedicat- we will fight harder than ever.” ed to enforcing the U.S. embargo against Cuba. — Sen. Max Baucus (D-MT), in a statement released Dec. 9. The senator’s amend- OFAC’s responses to a series of questions from ment to lift the U.S. travel ban against Cuba was removed Nov. 13 from the final the committee come amid growing criticism from $89 billion transportation bill, despite support from both the House and Senate. groups denied licenses for travel to the island. According to Cuba Trader, “OFAC appears to “The Republican leadership should be ashamed of this action, which is a be under political pressure to deny applications clear violation of democratic procedures and the will of a majority in Congress. for licensed travel to Cuba in the wake of Presi- These are the same people who are calling for democracy in Cuba, yet they dent Bush’s October speech in which he said his don’t seem to practice it here.” administration would bring closer scrutiny to — Ricardo González, president of the Miami-based Cuban Committee for these applications in order to ensure the process Democracy, a group that advocates dialogue between the U.S. and Cuba. is not being abused.” Separately, Asa Hutchinson, undersecretary for “Everyone who goes helps Castro a little bit more. The [people] who go, the border and transportation security at the Depart- longer he will be there, so we need to end all travel now and help him get out.” ment of Homeland Security, said that inspectors — Nelido Gil, a former taxi driver in Cuba who now lives in Miami’s conducted 45,461 baggage examinations on the Little Havana, as quoted recently in The Christian Science Monitor. 54,160 passengers who traveled between the U.S. and Cuba in the 60 days since Bush’s Oct. 10 speech announcing tougher measures. “Our people will pay a terrible price, but we will exact from the aggressors a high cost, be they Yankees alone or with their cousins the British or Spanish.” Hutchinson said that in the 60-day period, 592 embargo violations were discovered — 415 on — Raúl Castro, warning reporters Dec. 7 that, should the United States invade flights from Cuba, 177 on flights going to Cuba. Cuba, it will pay a far heavier price than the U.S. troops now occupying Iraq. In addition, DHS personnel inspecting inbound flights reported 283 seizures of rum, cigars and “The U.S. government’s wish to invade and occupy Cuba is real, but it is other contraband; 42 narcotics seizures, 32 immi- something more than a wish... Cuba is not just a territory to be conquered. It gration violations, 44 “travel without license” vio- is, above all, an affront — an intolerable dent in the luxury automobile of lations and 14 other violations. neoliberal modernity.” DHS inspections of outbound flights uncovered — Comandante Marcos, leader of Mexico’s Zapatista guerrilla group. 171 travel without license violations, four forged currency reports and one currency seizure. “We are not making a lot of money. It’s not even break-even at this point, but we had to do this to get into Cuba.” EX-CANF OFFICIAL HAYS IS LOBBYIST FOR LAW FIRM — Don Gentile, vice-president of Y & Y Agriculture of Savannah, Ga., which sold Dennis Hays, former Washington chief of the Alimport 80 tons of soy-based ice cream formula, worth $350,000. Cuban American National Foundation, has joined Tew & Cardenas LLC as managing director. “The U.S. government knows our position on the issue, and we look forward “Ideally, we’d like to work with U.S. companies to the lifting of the economic sanctions against Cuba.” interested in doing business in Latin America,” — UN Secretary-General Kofi Annan, following the UN General Assembly’s 179-3 Hays told CubaNews. While his new job doesn’t vote condemning the embargo. Only the United States, Israel and the Marshall focus on Cuba, he said, “when the day comes, Islands voted against the measure; Micronesia and Morocco abstained. we’d be well-placed to work on those issues.” Hays, a former U.S. ambassador to Suriname, “In general, embargoes normally, usually don’t work, and they certainly quit his job at the CANF in September following haven’t worked in the case of Cuba as far as ending the Castro regime. We his unhappiness with the exile group’s increas- don’t want to give a gift to Fidel Castro. But we do want to help the Cuban peo- ingly sharp and bitter attacks on President Bush. ple achieve the same rights as everybody else in this hemisphere.” Details: Dennis Hays, Tew & Cardenas, 1717 — Gen. Wesley Clark, Democratic presidential candidate, speaking with reporters Pennsylvania Ave. #650, Washington, DC 20006. Dec. 1 during a visit to South Florida. Tel: (202) 974-1396. E-mail: [email protected]. PUBLISHER PULLS PLUG ON CUBA NEWSLETTER “We are pioneers of what is to come. We are paving the road.” — Mercedes Costa, Cuban-born executive of Miami-based IBC Airways, the first After a 3-year run, Washington-based journalist cargo airline to fly directly to Havana, with three flights a week. Pete Kasperowicz has decided to close his week- ly publication, , effective Dec. 15. Cuba Trader “Cuban researchers have progressed notably in taking basic biosciences The newsletter, which usually ran six or seven to clinical use with applications designed to help people with certain illnesses. pages, was faxed every Monday to hundreds of The only thing I have seen here is the medical use of basic knowledge. lawmakers, lobbyists and companies with an I haven’t seen anything else, and I greatly admire that.” interest in Cuba-related issues on Capitol Hill. — Dr. Stanley Cohen, noted U.S. physicist, dismissing Bush administration Kasperowicz said the decision was prompted accusations that Cuba is developing biological weapons of mass destruction. by his desire to pay more attention to two other weekly publications, Inside US Trade and Inside US-China Trade and their related online services. “To judge from the photographs, he has a lot of muscle, but they have not “With more to do in those two areas, the possi- tested him to see how much muscle he has in the brain.” bility of maintaining the high quality of Cuba — Fidel Castro, commenting on California Gov. Arnold Schwarzenegger, Trader seemed more than in doubt,” Kaspero- who is being urged by fellow Republicans not to do business with Cuba. wicz wrote Dec. 1, “and so the choice was clear.” 6 CubaNews ❖ December 2003 in Cuba from the time somebody put a Cuban cities to protect them for the future.” Developers— FROM PAGE 1 machine gun to my father’s head and de- Cuban-American architects and urban plan- can achieve something like Madrid, where manded the family business. I’m not going ners are also following developments in Mira- people have their businesses downstairs and back to rebuild what Castro has destroyed for mar, and are dismayed by what Quintana calls their apartments on the upper floors.” the last 40 years until Castro is gone.” the “totally low quality” of the hotels, condos The LBA was founded in 1971 by a group of However, Eloy Cepero, a Miami mortgage and office buildings erected there so far. broker of Cuban origin, says: “Many Miami Complaining about the fact that some of the Cuban subcontractors. Today, the organiza- Cuban architects are going to Havana now. tion has 56 members representing 90% of all new hotels like the Meliá Habana and the They are meeting with Cuban architects, dis- German-built LTI have been built along Mira- residential construction in Miami-Dade cussing what will happen when Castro is not mar’s shoreline — restricting beach access to County. Nearly all its members are second- around. Housing is a big problem, and how to locals — Quintana says “the master planning maintain Havana as a of a city is no longer in existence. Now it’s colonial city. They more difficult than ever to control cities.” want new condos Some are also concerned about the poten- built outside of Old tial “McDonaldization” of Old Havana and the Havana.” seaside Malecón should the U.S. embargo be lifted. Quintana says Havana’s architectural INPUT FROM FIU heritage “is the pride of the Cuban people” Besides Delgado and for that reason should not be turned into and Cepero, Miami- “another Miami.” based Florida Inter- Delgado, however, seems confident that national University the “strip-mall ugliness” evident throughout has gotten involved South Florida will not be replicated in Hav- in studying restora- ana, saying that “when you plan ahead, you tion and urban plan- come out a winner.” ning efforts for the In the meantime, architects associated with Havana metro area. the Cuban government vow that no such com- Nicolás Quintana, mercialization — especially in Havana’s his- a pioneer of Cuban toric section — will happen anytime soon. architecture in the Eusebio Leal, Havana’s official historian 1950s and now a pro- and president of Habaguanex S.A., could not fessor of architec- be reached for comment, despite repeated Historic buildings in various stages of restoration along Havana’s Malecón. ture and urban plan- efforts by CubaNews to arrange an interview ning at FIU, has with him at his office in Old Havana. generation Cuban-Americans. helped set up a major academic forum on this But Mario Coyula, a professor at Havana’s “There’s a desire in the industry here in topic. In 1998, a seminar entitled “The Future Instituto Politécnico José Antonio Echevarría, Miami to participate in the rebuilding of of Cuban Cities” attracted over 500 partici- and a former director of Havana’s school of Cuba’s infrastructure. We want to do it from pants; a similar forum is scheduled at FIU for architecture, told CubaNews that “many Ame- the business point of view, but also because sometime next year. rican architects and planners have been inter- we want to help the people on the island,” said “We are planning next year a seminar to be ested in helping Cuban preservation efforts, Delgado, a 59-year-old native of Santa Clara. held jointly with LBA,” said Quintana. “I’m and especially to show us ways to resist a “But as long as Castro is in power, I will not totally convinced we will move ahead. We are potential invasion of American investors once go back. In my opinion, nothing has changed organizing a series of academic courses on the embargo is lifted.”

CancerVax seeks import license WHITE HOUSE TEAM PLANS FOR CASTRO’S END San Diego-based CancerVax Corp. has asked the U.S. government A U.S. commission is expected next year to suggest ways the for permission to acquire a Cuban anti-cancer vaccine from Havana’s United States can hasten Fidel Castro’s removal without using force. Molecular Immunology Center (CIM), where it is manufactured. The White House said Dec. 9 that the President’s Commission for The drug is known as the Theracim h-R3 monoclonal antibody, reg- Assistance to a Free Cuba will issue recommendations by May 1, istered in Cuba for the treatment of advanced brain and neck tumors in combination with radiotherapy. The treatment has led to remission 2004, for bringing a “peaceful, near-term end” to the Castro regime. in more than 60% of patients. The team also hopes to “establish democratic institutions, respect Research on the vaccine was originally funded by Canada’s YM for human rights, and the rule of law; create the core institutions of Bioscience Inc., which later suspended the project. CancerVax is now a free economy; modernize infrastructure and meet basic needs in proposing to take on the cost of the research, acquiring the product the areas of health, education, housing, and human services.” through a trilateral accord with YM and paying the Castro government Also in attendance for the commission’s inaugural meeting were with unspecified “items” whose shipment would have to be authorized Commerce Secretary Don Evans, Secretary of Homeland Security by the Bush administration. Tom Ridge and National Security Advisor Condoleezza Rice. Normando Iznaga, head of the CIM Business Development team, Bush appointed Secretary of State Colin Powell and Housing Sec- informed reporters at the Havana 2003 Biotechnology Conference that retary Mel Martínez to co-chair the commission back in October, a signed agreement doesn’t yet exist, but that “there are good possi- when he created the commission to “plan for the happy day when bilities, given that it concerns the subject of cancer, which goes beyond Castro’s regime is no more and democracy comes to the island.” any national or political commitment.” On Dec. 9, however, Martínez announced his resignation from In a statement to Reuters, CancerVax noted that there is no certain- the Bush cabinet in order to run for the Florida Senate seat being ty it’ll be granted a license. A definitive agreement would also depend vacated by Sen. Bob Graham. It’s unclear who, if anyone, will on a license from the Treasury Department’s Office of Foreign Assets replace Martínez on the commission. Control, which enforces the U.S. embargo against Cuba. Details: Commission for Assistance to a Free Cuba, Washington. Details: William R. LaRue, CFO, CancerVax, 2110 Rutherford Road, URL: www.whitehouse.gov/news/releases/2003/12/20031208-8.html. Carlsbad, CA 92008. Tel: (760) 494-4200. URL: www.cancervax.com. December 2003 ❖ CubaNews 7 FOREIGN TRADE Florida firm makes splash with exports of frozen-drink mix BY LARRY LUXNER plastic jugs of concentrate made from an all- “We are currently in 50 to 55 restaurants he Trade Sanctions Reform Act of 2000, natural, fresh fruit base. One jug of concen- and hotels including the Hotel Habana Libre, which allows U.S. food sales to Cuba on trate is enough to make 64 drinks. Guilmartin Restaurante El Patio [in Old Havana], the Jazz a cash-only basis, was aimed at helping said available flavors include piña colada, Café and at SuperClubs in Varadero,” said T Guilmartin, who spends a great deal of his Cuba recover from a disastrous hurricane. strawberry daiquiri, mango daiquiri, margari- ta, banana daiquiri and blue lemonade. time in Cuba. We’ve sold half a container to Now a Florida company is using the huma- Cubalse, who will put our product in cafete- nitarian loophole to sell frozen daiquiri and rias for the Cuban market, and to Bimbom, piña-colada mix to tourist hotels in Varadero DOLLAR PRICES AT THE CUPET- the Cuban ice-cream store chain. All of our — a far cry from TSRA’s original intent. CIMEX MARKET, CIEGO DE AVILA* success has happened in the last 90 days.” Splash Tropical Drinks, owned by Fort Lau- Habaguanex alone is placing Splash prod- derdale entrepreneur Richard Waltzer, has ITEM PRICE ucts at four outlets in Old Havana: El Patio, La delivered four containers of mix and has six Frozen hamburger patties (340g) $3.00 Mina, Café Oriente and Ambos Mundos. more waiting for delivery to Cuba. Bob Guil- Hot dog sausages in brine (400g can) 1.60 About a year ago, Splash hinted that it had martin, the company’s director of Cuba sales, Nela salted butter (one box) 0.90 reached a preliminary agreement with Hav- estimates the value of sales to food purchas- Nesquik chocolate syrup (400ml) 2.85 ana Club International S.A. to help market ing agency Alimport at $500,000 so far. Havana Club rum throughout Cuba. But no Until Splash’s arrival in Cuba, he said, Tropical pineapple juice (750ml) 0.60 Big Time chewing gum (6-pack) 0.35 deal was ever reached. tourists could only order a lime daiquiri. Guilmartin, who ran three daiquiri bars in “Imagine being in Nassau or Cancún and Nikolo chocolate bar (36g) 0.35 South Florida before going into business with not being able to get a margarita, or being in Havana Club Añejo Oro (1-liter bottle) 7.90 Waltzer, heaps lavish praise on Alimport and and not being able to get a straw- Cosmea sanitary napkins (10 units) 1.20 its president, Pedro Alvarez. berry daiquiri,” Guilmartin told CubaNews. La Pasiega spaghetti pasta (500g) 0.90 “Alimport has got to be the most profes- “Since Cuba right now is tourist-driven, this is Frozen ground Carolina Turkey (16oz). 1.25 sional organization I’ve ever dealt with, even what tourists want. Cuba is doing everything Millwood premium cream liqueur 15.40 more so than any company in the U.S.,” he it possibly can do to improve this market for Ye Olde Oak canned ham (454g) 5.60 said. “It’s very much a 21st-century organiza- tourism. This is just one of those items.” tion. They assist you in everything you could Waltzer declined to reveal overall sales, Ciego Montero mineral water (500ml) 0.45 possibly need to do business in Cuba and they except to say that Splash is “a multimillion- Select Mayonnaise (1-liter jar) 4.10 pave the way for everything to go perfectly.” dollar company” present in the U.S., Canada La Bodega smoked sausage (750g) 8.55 Asked what Splash’s future plans for Cuba and over 40 countries throughout the Carib- Minuana frozen sausage (500g) 3.80 are, Guilmartin responded: “To expand into bean, Central America and South America. Río Zaza milk (500ml box) 1.35 virtually every single outlet possible, from all- “I’m an American businessman exporting Café Turquino coffee (125g package) 1.60 inclusive and boutique hotels to restaurants capitalism and helping our export deficit and Maggi Sofrito sauce (400g) 1.30 and cafeterias.” our U.S. economy,” Waltzer told AP. Pepsi (355ml can from ) 0.75 Details: Bob Guilmartin, Dir./Cuba Sales, One container of Splash frozen concentrate Splash Tropical Drinks, Primera 237, #71 e/A contains 1,200 cases, and a case — which Perla wheat flour (1 kg package) 1.00 y B, Vedado, La Habana. Tel: +53 7 830-7318 costs $53.93 apiece — contains six half-gallon *Items priced Nov. 30 at the Cupet-Cimex in Ciego de Avila or 891-0586. E-mail: [email protected]. U.S. dominates trade show as food sales continue to climb BY OUR HAVANA CORRESPONDENT $1.3 million with AJC International of Atlanta. said the port’s chairman, Joe McClash. hirty-six of the 47 companies that won Smaller contracts went to Y&Y Agriculture Despite Florida’s large Cuban-American deals at last month’s Havana Interna- Corp. of Savannah ($350,000 worth of soy- exile community and their hostility to the T tional Fair were U.S. firms, according to based ice-cream); Dallas-based Dean Foods Castro regime, more Florida executives were Cuban food purchasing agency Alimport. ($162,470 of coffee creamer); Langdale Inter- at the show than from any other U.S. state. national Trading of Valdosta, Ga. ($135,000 of A top Cuban official, Angel Delmau, admit- Pedro Alvarez, president of Alimport, said wood); Cadbury-Adams of New Jersey ted as much in a surprisingly candid interview it signed contracts valued at $164.9 million ($163,300 of chewing gum) and Illinois-based last month with Agence France-Presse, telling during the show; that figure includes insur- ConAgra Foods ($76,200 in meat products). AFP that Alimport’s purchases were more ance, shipping and related fees. On Dec. 16, Alimport will host an event at about influencing domestic U.S. politics than One of the largest deals, according to the the port of Havana to mark the 2nd anniver- saving Cuba money. Wall Street Journal, was an $18.6 million con- sary of the arrival of the first U.S. food ship- Yet the very next day, an “official note” tract for soybeans, soy oil, soy flour and corn ment under the U.S. Trade Sanctions Reform appeared on the front page of Communist from Archer Daniels Midland of Decatur, Ill. Act. TSRA allows U.S. firms to sell Cuba agri- Party daily Granma. Minneapolis-based Cargill won a $4 million cultural commodities on a cash-only basis. “We would like to clarify that this functio- deal to supply wheat and soy protein. In the two years since TSRA’s passage, the nary, although acting in good faith, was not Iowa-based FC Stone LLC, representing United States has exported food commodities authorized to make declarations of this type 750 U.S. farm cooperatives, signed a deal for worth $554 million, according to Alvarez. By about the subject in question,” said Granma, $4 million in soybeans, while Michael J. year’s end, that figure could top $600 million. adding that Dalmau “did not correctly inter- Lahanan of Jacksonville won a $5.5 million During the trade show, Alimport signed a pret the objectives of the government” in buy- contract for yellow pine timber. shipping agreement with Port Manatee, on ing U.S. food commodities. Also signed were three chicken deals; $5.8 Florida’s Gulf of Mexico coast. The first ship- It wasn’t clear at press time how the Castro million with Louis Dreyfus Group; $5.8 mil- ment of 250 beef cattle to Cuba from Florida government plans to punish Dalmau for hav- lion with Tyson Foods of Springdale, Ark. and will sail early next year from Port Manatee, ing told the truth. 8 CubaNews ❖ December 2003 NEWSMAKERS Jeff Flake: Castro-hater and anti-embargo crusader BY LARRY LUXNER nation of Namibia, where he ran the Founda- ending the travel ban and normalizing U.S.- tion for Democracy in 1991, the year Namibia Cuban diplomatic and trade relations. housands of people across the United Among the many distinguished photos on States were disappointed last month gained its independence from South Africa. “We monitored the election process and the wall of Flake’s Washington office is one of T when a House-Senate conference com- the lawmaker with a smiling President Bush brought in constitutional scholars to help mittee — fearing a certain veto by President aboard Air Force One. Bush — decided to strip from their $89 billion draft their constitution,” said the lawmaker, who speaks Afrikaans but not Spanish. Yet Flake says Cuba policy is one area transportation bill a controversial amendment where he and Bush couldn’t disagree more. to lift the Cuba travel ban. “When SWAPO [the South West Africa Peo- ple’s Organization] came back and ultimately “It has always troubled me, long before I But few were more disgusted than Rep. Jeff was elected. And it’s not just this White Flake, the Arizona Republican who has led House, it’s administration after administra- the fight against the U.S. embargo in the tion,” he said. “Republican foreign policy is House of Representatives for more than three schizophrenic on this issue. We argue that years now. increased commerce, contact and trade with

“Politics have again triumphed over princi- LARRY LUXNER ple,” he fumed. “Just as we’ll never have a countries like China and North Korea will rational farm policy as long as presidential help bring those countries around, and that campaigns begin in Iowa, we’ll never have a isolation doesn’t work. Yet with Cuba we say rational Cuba policy as long as presidential exactly the opposite.” campaigns are perceived to end in Florida — CHANGING ATTITUDES IN LITTLE HAVANA because the temptation to kowtow to small minorities in one state is too great.” Last year, Flake began airing his controver- On Sept. 9, the House voted 227-188 to strip sial views not only in Washington, but also in the U.S. Treasury Department of money to Miami, where he was the keynote speaker at enforce travel regulations to Cuba; in Octo- a 2002 conference at the Biltmore Hotel. ber, a similar measure passed by a 59-36 mar- “It was the first time any Republican mem- gin in the Senate. ber of Congress had actually spoken against Flake readily concedes that Cuba’s arrest the embargo. More than 300 people came to and jailing of 75 dissidents earlier this year — hear us, and of course there were protests and the execution of three men who tried to outside, but they were small and disorgan- hijack a ferry to Florida — convinced many ized. A couple of years ago there would have lawmakers who had supported his measure been massive protests.” in the past not to do so this time. Rep. Jeff Flake (R-AZ) at his Washington office. The reason, he said, is that most Cuban- In July 2002, the House approved Flake’s formed the government, many of their top Americans now favor some relaxation of the Cuba travel measure on a 262-167 vote, and in officials had since turned away from social- status quo. “There’s been a sea change in July 2001, the same Flake measure passed by ism and communism, and wanted nothing to Florida. You have a solid majority of Cuban- a margin of 240-186. do with SWAPO or the Eastern bloc. Americans who want to lift the travel ban. But “But if you mentioned Fidel Castro, they if it were really enforced in South Florida, CUBAN OBSESSION BEGAN IN AFRICA bowed their heads. Even those who were dis- there would be a far greater majority.” It’s hard to imagine a lawmaker more con- enchanted with the socialist movement had “What bothers me more than anything else servative than Flake. revered Castro because he took them in and is that these people [who enforce the travel A 40-year-old father of five, Flake served as supported them when nobody else would.” ban] are the same people who took those a Mormon missionary in South Africa and That reverence for Castro evidently didn’t Cubans on the boat a few months ago, negoti- Botswana in the early 1980s, then worked for rub off on Flake, who has refused to meet ated with the Cuban government and turned the Goldwater Institute before going into pol- with the Cuban leader both times he’s trav- them back to certain 10-year prison terms. itics himself. He’s now into his second term eled to Cuba. “Those same bureaucrats, who have exhib- as representative of Arizona’s Sixth District, “I think it would send the wrong message,” ited such poor judgement in the past, are which includes the Phoenix suburb of Mesa said the lawmaker, who frequently refers to making decisions about who is worthy to trav- and surrounding areas. Castro as a thug. “With my limited time in el to Cuba and who isn’t. We can’t go on with Flake, interviewed by CubaNews early last Cuba, I don’t want to listen to some has-been this charade.” month, is better known nationally for his talking about the wonders of socialism. opposition to Washington’s current Cuba pol- Anybody who meets with him for five hours WHEN FIDEL CASTRO IS GONE icy than any other single issue — something comes out saying it was a waste of time.” Flake says he’s convinced that “if you have of a surprise considering Arizona’s relatively He adds: “For all the propaganda about Americans freely traveling throughout Cuba small Cuban population. English being taught in Cuban schools, Cas- — subject to the limits Castro puts on them — “I took a poll of all the Cuban-Americans in tro himself uses a translator. And they talk ordinary Cubans will be better off. Some peo- my district, and both of them said I’m on the about free elections, while Castro is dressed ple will go to the beach. Others will go for right track,” he joked, then turned serious. in army fatigues.” educational reasons, and some will meet dis- “It’s an issue of freedom. Arizona doesn’t have sidents.” agricultural sales to Cuba, and that’s maybe AT ODDS WITH THE BUSH ADMINISTRATION During Flake’s last trip to Cuba, he wasn’t why I’m taken more seriously on this issue Early last year, Flake teamed up with Rep. able to see Oswaldo Payá, founder of the Var- than some others, because I don’t have spe- Bill Delahunt — a Massachusetts Democrat ela Project, but he did meet with three other cific business interests. It puts the issue about as liberal as Flake is conservative — to dissidents — all of whom are now in prison. where it ought to be fought.” form the House Cuba Working Group. Today, “Cuba is a gorgeous country ruined by the Curiously, Flake’s obsession with Cuba this group consists of 50 lawmakers — half policies of a dictator,” he said. “Anybody who grew out of a one-year stint in the African Democrat, half Republican — dedicated to travels there is impressed, if not surprised, by December 2003 ❖ CubaNews 9 the fact that ordinary Cubans love Americans. who was 101 years old. With our luck, that guess is that they’ll rethink this thing.” They hold no ill will towards Americans at all.” could be Castro too.” In October, the UN General Assembly Flake is fond of quoting a Cuban joke in In the meantime, he says, the travel ban voted 179-3 to condemn the U.S. embargo. which one man asks “What are the three should be lifted, “and once it goes, the rest Only Israel and the Marshall Islands sided worst failures of Castro’s revolution?” and the will be history pretty soon.” with the United States, and the Israelis are other answers, “Breakfast, lunch and dinner.” “It’s becoming increasingly uncomfortable heavy investors in Cuba’s agribusiness and “The other side of that joke is the three suc- for the administration to continue the travel real-estate sectors. cesses of the Cuban revolution — health-care, ban, because it’s very inequitably applied,” he “We ought to lift the embargo regardless of literacy and sports — but those come at a said. “It’s not enforced against anybody from what the General Assembly says,” Flake in- pretty high price,” he told us. “And things Florida — nor should it be.” sisted. “I never thought what they said meant won’t be rosy as soon as Castro is gone. It Asked how he lobbies against current Cuba anything. In fact, that’s a blow to my cause.” ‘OVERWHELMING’ THE OPPOSITION While Flake’s travel amendment didn’t go “Just as we’ll never have a rational farm policy as long as presiden- anywhere in 2003, the lawmaker says things will definitely open up after next year’s presi- tial campaigns begin in Iowa, we’ll never have a rational Cuba dential elections. policy as long as these campaigns are perceived to end in Florida.” “I’m hopeful it’ll happen before the elec- tions, but certainly directly afterwards,” he — REP. JEFF FLAKE (R-AZ) said. “If we had a secret vote in Congress on what to do about the Cuba travel ban, we’d have not only a veto-proof majority, but there takes awhile to build up a good economic policy, Flake said he relies on common sense, would be very few dissenters.” Flake, now in his second two-year term in infrastructure. That’s the biggest problem persistence and the rules of the game. the House, plans to run for re-election next with our policy now. It’s not very forward- “With some issues, like the one involving Bacardi and Section 211, you bring that stuff year. He’d also like to return to Cuba as soon looking. We act as if once Castro’s gone, as possible. “I’ll continue to make my case. we’ve achieved everything.” out in the open and force them to defend it. “On the broader issue of travel, you just Last time we went, we requested to see politi- THE NUTS AND BOLTS OF LOBBYING overwhelm them. There was a real effort cal prisoners, but we weren’t successful.” Flake — who in early December visited the Flake derides those who say the demise of made this year to keep the Flake amendment from being offered. The reason we haven’t U.S. Naval Base at Guantánamo Bay, Cuba — the 77-year-old revolutionary is imminent. been able to have a straight-up bill is because says the fact that he’s no Castro sympathizer [Kevin Whitaker, the State Department’s in regular order, you can’t bring that on the seems to lend credence to his efforts. coordinator for Cuban affairs, was quoted in floor. But they can’t stop an amendment to an “Sooner or later, if you concede that this is the November issue of CubaNews as saying: appropriations bill.” all about politics, farm-state politics will trump “We’re in the end game. This is the end of the He added: “You also use leverage in other Florida politics,” he said. “It hasn’t happened Castro regime.”] areas. Take the travel ban, for example. Tell yet, but when you look at that vast swath of “Frankly, Castro could last another 20 them that if you want to continue enforcing it, Midwestern states, their combined voters are years,” said Flake. “When I was down there then let’s see that it’s enforced across the greater than Florida’s. Sooner or later, we’ll last time, we met a guy on the side of a road board. I don’t want to go that route, but my overwhelm them.” USAID-funded Cuba Transition Project to publish 15 new reports in 2004 The Cuba Transition Project (CTP), an affiliate of the University of Miami’s Institute for Cuban and Cuban-American Studies, is funded by a grant from the U.S. Agency for International Development. As part of the CTP’s second year of funding, the following studies have been commissioned and will be published in 2004. All publications are available at no cost. Details: Jaime Suchlicki, ICCAS, PO Box 248174, Coral Gables, FL 33124-3010. Tel: (305) 284-2822. Fax: (305) 284-4875. E-mail: [email protected]. URL: http://ctp.iccas.miami.edu. Race Relations in Cuba — Juan Antonio Alvarado Ramos, Labor Policies for a Cuba in Transition — Luis Locay, Former Director, Center of Anthropology, Cuban Academy of Professor of Economics, University of Miami. Sciences, Havana. Training and Education of Judges and Lawyers in a Post- Civil Society in Cuba — Maria del Pilar Aristigueta, Director, Castro Cuba — Laura Patallo Sánchez, Research Associate, ICCAS, Master in Public Administration Program, University of Delaware. University of Miami. The Role of the State in a Democratic Cuba — Roger Betan- The Development of a Code of Conduct for Judges and Law- court, Professor of Economics, University of Maryland. yers in a Post-Castro Cuba — Laura Patallo Sánchez, Research Environmental Issues for a Cuba in Transition — Eudel Cep- Associate, ICCAS, University of Miami. ero, Environmental Assessment Coordinator, Hemispheric Center The Welfare System and Social Safety Net in a Post-Castro for Environmental Technology, Florida International University. Cuba — Lorenzo Pérez, Economist, World Bank, Washington. The External Sector and Commercial Policy for a Post-Cas- Recommendations for Cuba's Transition — Gustav Ranis, tro Cuba — William Glade, Professor, Department of Economics, Pro-fessor of Economics, Yale Center for International and Area The University of Texas at Austin. Studies, Yale University. Economic and Financial Institutions to Support the Market Lessons for Cuba of the Chinese Transition — William Ratliff, for a Cuba in Transition — Ernesto Hernandez Cata, School of Ad- Research Fellow and Curator of American, Spanish and International vanced International Studies, Johns Hopkins University. Collections, Hoover Institution, Stanford University. Lessons for Cuba of Transitions in Eastern Europe — Janos A Strategy for U.S. Trade Relations with Cuba — Eugene Kornai, Allie S. Freed Professor of Economics Emeritus, Harvard Rothman, Justice Solutions, Ltd., , Canada. University, and Permanent Fellow, Collegium Budapest, Institute for Healthcare for a Cuba in Transition — Steven G. Ullmann, Advanced Study, Budapest, Hungary. Vice Provost and Dean, University of Miami. 10 CubaNews ❖ December 2003 COMMODITIES Cuban sugar authorities hope for better crop in 2003-04 BY ARMANDO H. PORTELA start grinding with some anticipation com- million and a half tons than 2 million, because uba’s 2003-04 sugar harvest started pared to last season, and that the mills’ readi- with that 1.5 million tons we could have a rea- even as the bitter taste of the last failure ness is better this time as Cuban media sonable profit.” Cpersists — and amid fears of a perma- claims, then a total of 2.5 million to 2.6 million The export value of a 2.6 million-ton har- nent soft market for the crop. tons (a 19%-24% jump) could be expected, if vest would be $260 million at the prevailing The hard lesson of last year’s harvest — the agricultural yields and other parameters price for March 2004 contracts, after earmar- one of the lowest and most disappointing in a remain at last season’s level. king 700,000 tons for domestic consumption. century — is driving authorities to wait for Any further output gain would depend That’s a far cry compared to the more than $4 better climatic conditions to put all mills to largely on plantations’ improvements, which billion Cuba earned from sugar exports in the work instead of forcing the start or missing seem irrelevant at this time. late 1980s. Poor agricultural yields remain the main RAW SUGAR PRICE, MARCH OPTION In cents per pound impediment for the sector’s recovery. Only Santiago de Cuba enjoys yields of 50 tons of sugarcane per hectare or 59,000 per 11.0 arrobas caballería. That province is distantly followed 2000 by Granma and Camagüey, with 45 tons/ha 10.0 each. The lowest acceptable yield to run an efficient harvest has been set at 54 tons/ha by 9.0 experts. In the past 10 harvests, yields aver- 2001 aged 32.9 tons/ha, compared to 55.4 tons/ha 8.0 in the 1980s. Meanwhile, the news doesn’t look encour- 2003 aging on world commodity markets. 7.0 January 2004 futures contracts on New York’s Coffee, Sugar & Cocoa Exchange aver- 6.0 aged 5.57¢/lb in November, compared to 2002 7.38¢/lb a year earlier. A glance at the March 2004 option — at the AUGUST SEPTEMBER OCTOBER NOVEMBER peak of the Cuban harvest — shows the low- Source: CSCE est level in four years, averaging 6.18¢/lb through last November, compared to 7.30¢/lb the ripening peak of the cane as in past years. Also, if authorities succeed in raising the for the same option in November 2002 and “Sucrose content in the cane will determine industrial grinding pace from the dismal 72% 9.51¢/lb in 2000. the launch of operations,” said Sugar Minister to 75% of last season, a significant amount of Analysts fear a mounting sugar oversupply Gen. Ulises Rosales in late November while sugar could be gained. Just a 5% increase of flooding the world market in 2003-04. inspecting mills in the province of Camagüey, the grinding pace represents an extra 150,000 The U.S Department of Agriculture esti- one of the worst performers last season. tons of sugar. mate from late November foresees a produc- Grinding began Nov. 18 at the Siboney To produce 3.0 million tons, the sector tion surplus of 5.3 million tons through 2003- 04. Large stocks from a significant sugar sugar mill, as reported by official media last would need a 12% jump in agricultural yields, month. But this mill in Camagüey province blowout in 2002-03 are to blame for most of along with significant advances in industrial the market damage. will produce only molasses, in a first phase to operations grinding for more than 200 days. be switched to sugar next year if profitable. Considering the excess of production plus The harvest ideally should end while At present, authorities claim a 15-20% rise the stocks, the USDA estimates this coming weather is still cool and definitely before the in cane yield, which, if accurate, represents a year’s oversupply at 34.5 million tons. west season starts in mid-May, a limit author- gain of 400,000 tons over the last harvest. “It is this accumulation of stocks that is the ities customarily cannot observe as produc- But the ultimate goal of stabilizing produc- reason for the current bearishness of market tion delays force cost-killing grinding well tion at a level of 4 million tons seems unlikely. stocks, plus expectations of another increase into the rainy period. “Imagine how much we would save cutting in Brazilian production next year,” said Paris- Media reported that 23 mills would grind in a smaller quantity of sugar,” Fidel Castro said based broker J. Kingsman at a Nov. 27 meet- the zafra chica or little harvest through De- in early November. “I would prefer to cut a ing of the International Sugar Organization. cember, while the others would begin opera- tions in January and February. Running IN ROLE REVERSAL, CUBA MAY BUY SUGAR FROM N.C. COMMODITIES BROKER through November-December, the zafra chica usually accounts for 3% of the total harvest. The Castro government is negotiating to buy sugar from the United States in order to sat- It has not been disclosed how many mills isfy domestic demand. If the talks succeed, it would mark the first time Cuba — once the would grind this time, but at least Camagüey world’s largest sugar producer — buys sugar from a U.S. supplier. announced that one of its nine mills would Pedro Alvarez, president of food purchasing agency Alimport, said Nov. 5 he was negotiat- remain idle. In 2002, Camagüey dismantled ing a purchase of up to 15,000 tons of sugar from PS International Ltd. of Chapel Hill, N.C. five of its 14 sugar mills. “For our part, there are no objections. If American producers want to sell us sugar and the Analysts estimate that last season, Cuba price is good, why can’t we buy it?” said Alvarez. “The United States is close. It is a country of produced 2.1 million tons of raw sugar, a 42% friends. We want to buy sugar. It would be historic.” drop from the 3.6 million tons produced in Dave Kuntarich, VP of operations at PS International, told CubaNews he’s sold roughly 2001-02 and barely a quarter of the traditional 25,000 tons of peas as well as frozen meats, flour and edible soybeans to Cuba since July 2002. annual output of the late 1980s. “We’ve been working quite hard in the last four weeks to prepare for this. At present, there’s No official target has been announced for no product available, but we hope that’ll change in the short term,” said Kuntarich, whose com- this harvest, but assuming the industry can pany received a Commerce Department license in mid-November to export sugar to Cuba. December 2003 ❖ CubaNews 11 TOURISM CARIBBEAN BRIEFS D.R. OFFICIAL URGES MORE BALANCED TRADE U.K. growth fund to invest in hotel chain A top Dominican official has stressed the BY LARRY LUXNER million euros, Ceiba pays its investors annual need to achieve better equilibrium in the Do- dividends of around 6% a year. minican Republic’s trade balance with Cuba. eiba Finance Ltd., a British growth fund Cuba’s annual exports to the Dominican registered in the Channel Islands, plans The chairman of Ceiba’s board of directors is Sir John Morgan, former British ambassa- Republic total $35 million, while Dominican C to invest in Cuba’s tourist industry — exports to Cuba come to only $15 million, said but not in big beach hotels. dor to Mexico, Poland and South Korea. Berger, who has managed the fund since Danilo del Rosario Valdez, the Dominican sec- Rather, the company aims at converting retary of state for investment and exports. elegant mansions around the island into 2001, is a partner in the Havana legal consult- ing firm of Berger, Young & Associates. “We already have an agreement to protect upscale boutique properties aimed at “the dis- investments, but diplomatic and commercial cerning traveler.” Caribbean Property Corp. Ltd., the fund’s wholly owned subsidiary, has a staff of eight relations need to be strengthened,” he said. As such, the fund will sign an agreement in At the recent Havana International Fair, 17 the next few weeks with state-run Rumbos and is developing the Grand Slam project. The subsidiary, through a joint venture with Dominican companies were represented S.A. to establish a new hotel chain. under the banner of that country’s Centro de “The deal is for the financing, management, Inmobiliaría Cimex S.A., recently constructed and sold two apartment buildings in Miramar. Exportación e Inversiones, while another four sales and marketing of several small hotel and Dominican companies attended on their own. sport fishing areas in Cuba,” said Dutch cor- Ceiba’s present capital structure consists of 35.5 million shares outstanding. As of Nov. 1, Among the range of Dominican products ex- porate lawyer Sebastiaan A.C. Berger, direc- hibited were juices, pulp fruits, marmalades, tor of Havana-based Zapa International Man- the fund’s net asset value (NAV) per share was 0.6775 euros. milk, alcoholic beverages, soft drinks, cigars, agement Ltd., which manages the fund. flour, pasta, crackers and various handicrafts. “These properties will be marketed and “The share price at this point is higher than NAV, which is an indication that there’s confi- Details: Danilo del Rosario, CEI, Apartado branded under the name Grand Slam,” Ber- #199-2, , Dominican Republic. ger told CubaNews during an interview last dence in what we do,” said Berger. “The busi- ness of the fund is to invest in Cuba in the Tel: (809) 530-5505. Fax: (809) 530-8208. E- month in Havana. “We want to make a differ- mail: [email protected]. ence. Although Varadero has good beaches best possible way.” Berger added that “American investors are and high-end hotels, I would not personally CUBA NAMES AMBASSADOR TO ST. VINCENT invest there because it’s big and huge, and it’s prohibited from investing in the fund by their all mass tourism. We would like to focus on own laws, since 100% of our revenues are The Cuban government has designated José tourism for the discerning traveler.” directly or indirectly related to Cuba.” Joaquín Alvarez Portela its new ambassador The company plans to convert six man- In addition, the fund’s articles and private to St.Vincent and the Grenadines. sions into small boutique hotels of six to 15 placement memorandum prohibit U.S. citi- Alvarez Portela will reside in , rooms apiece. Three properties are in the his- zens from investing in the fund. where he’s already accredited as ambassador. toric city of Trinidad, a UNESCO World Heri- Another project Ceiba Finance hopes to Havana-Kingstown diplomatic ties were es- tage Site; the other three are in Cienfuegos, fund involves a tourism-related publication tablished May 26, 1992. The island nation of southern Pinar del Río province and the Cie- supported by websites. Berger calls it a 112,000, led by Prime Minister Ralph Gonsal- naga de Zapata swamp of Matanzas province. “mixed-media project focused on Havana’s ves, is economically dependent on agriculture, A related investment is planned for the cultural life and sports,” and said it will be offi- cattle-raising and fishing. cities of Havana and Pinar del Río, where cially launched Mar. 21, 2004. small hotels will form part of the same Grand “This product will help tourists learn more AI SAYS BAHAMAS MISTREATS CUBAN REFUGEES Slam chain, said Berger. Total investment in about Havana, whether they want to go to a The Bahamian government is mistreating the first phase should come to $2 million, with boxing match, a piano recital or the opera,” he asylum seekers from Cuba and elsewhere by rooms going for $80-100 a night. said without elaborating. “Our general idea is not giving them forms in their own language Incorporated in 1995 as Beta Gran Caribe to provide more information on cultural and and by detaining their children for prolonged Ltd. and denominated in Swiss francs, the sports activities than what’s available now.” periods without much exercise and education, fund was renamed Ceiba Finance Ltd. in 2001 Details: Sebastiaan Berger, Zapa Internatio- charges London-based Amnesty International. and converted into euros. At present, it nal Management, Edif. Barcelona #401, Mira- The group, quoted in an Associated Press finances a broad range of investment projects mar Trade Center, 5ta Avenida e/76 y 78, La story that ran Nov. 5, said the Bahamian gov- in various sectors of the Cuban economy. Habana. Tel: +53 7 204-7934. Fax: +53 7 204- ernment was negligent when interviewing With a gross portfolio currently worth 28.8 7935. E-mail: [email protected]. would-be asylum seekers, sometimes giving English forms to illiterate, Creole-speaking Haitians or to Spanish-speaking Cubans. Meliá to open hotel in Cayo Santa María “The report mentions some things which n Dec. 20, Spain’s Grupo Sol Meliá will mainly from Germany, Spain, France and are true and some things which are not true,” inaugurate its 21st property in Cuba — Italy. Another 35% are Canadians,, and the re- said Mark Wilson, permanent secretary for Othe 260-room Meliá Cayo Santa María. maining 15% are mostly Latin Americans. the National Security Ministry. “Our overall reaction is that the report lacks balance.” The luxury hotel, located in the province of “The Spanish market hasn’t increased as we had hoped, for various reasons,” Benítez In its report, AI noted that when dealing Villa Clara, will be an all-inclusive property, with Cuban migrants, Bahamian authorities said Wilfredo Benítez Alvarez, marketing and told CubaNews last month. “First, because sent information about them — including publicity manager for Meliá’s Cuba division. there have been economic problems in Spain. names, addresses and photos — to the Castro This newest property brings Meliá’s Cuba Secondly, Santo Domingo, Cancún and Salva- government within 72 hours of their arrival. portfolio to 8,600 rooms, with total annual rev- dor (Brazil) have introduced very low-priced “Amnesty International is concerned that if enues of around $300 million. products, and this has affected us a lot. In the authorities provide this information prior By 2006, Meliá will have four hotels in Cayo spite of this, we’ve increased 15% this year.” to considering protection needs, they may Santa María — all of them 4- and 5-star prop- Details: Wilfredo Benítez, Grupo Sol Meliá, potentially put the detainees and the families erties. So far in 2003, Meliá’s Cuban hotels Hotel Habana Libre, Calle 23 y L, Havana. Tel: of the detainees at risk,” said the report. have averaged 70% occupancy. +53 7 832-1900 x2412. Fax: +53 7 832-1969. Unlike the United States, does Half of Meliá’s hotel guests are Europeans, E-mail: [email protected]. not offer Cubans asylum. 12 CubaNews ❖ December 2003 the , Europe and Asia. deposits there, and Brazil’s Petrobras is study- BUSINESS BRIEFS The company was selected as exporter of ing the feasibility of a similar move. the year in 2002 by Cuba’s Ministerio de la “The government of Cuba has no objection BRAZIL’S BNDES OFFERS CREDIT LINE FOR BUSES Industria Sideromecánica y el Reciclaje whatsoever to the involvement of U.S. oil com- Brazil’s Banco Nacional de Desarrollo (SIME). Curef’s increase in productivity has panies in exploration and drilling in our exclu- Economico y Social (BNDES) has granted been helped by the purchase of two special- sive economic zone on mutually beneficial Cuba a $12.7 million credit line of credit to ized trucks from Germany’s Liebherr, as well terms,” said a statement published by the buy buses and cars for Cuba’s tourism sector. as a 600-ton-capacity shearing press that com- Communist Party’s Granma. The loan to Fintur S.A. follows a previous pacts materials down into packages of any U.S. food companies have traded with Cuba credit for $15 million, which was also to shape and size. for two years under an exemption to the em- finance the purchase of tourist vehicles. Details: Recuperación Curef S.A., Arenales de bargo, and in late November, a unit of Halli- BNDES President Carlos Lessa said his Guasabacoa y Cayo Cruz, Regla, Havana. Tel: burton Co. advocated lifting trade sanctions bank is also helping fund the development of +53 7 860-6257. E-mail: [email protected]. against Libya, Iran and Cuba because they biotechnology produced enzymes, along with URL: www.curef.com. prevent U.S. companies from exploring there. several Cuban scientific research centers. Reuters says Cuba’s current oil output of At a signing ceremony for the credit line, PINAR DEL RÍO PRODUCES ANTIOXIDANT about 56,000 barrels a day is drilled from Lessa said the bank’s activities should be eval- Pinar del Río province is producing over onshore rigs. So far, Cuba has found only uated in the context of wide-ranging coopera- 7,000 units of a natural antioxidant marketed heavy oil laden with sulfur and gas used to tion between Brazil and Cuba. under the name Vimang. generate 90% of the island’s electricity. Brazil’s Busscar manufactures buses used The product, derived from the bark of Oil companies hope to find lighter crude far- extensively in the Cuban transport sector. In mango trees, has unique properties as a nutri- ther out to sea, though experts say large 2001, Busscar launched a venture with Cuba’s tional supplement, and delays the skin’s natu- deposits would have to be found to make it Unecamoto to assemble buses with compo- ral aging processes. commercially viable to develop a field in deep nents from both nations and Mercedes-Benz According to experts, a long period of clini- waters, with cost estimates ranging as high as engines, in an entity known as Tranbuss. cal tests backs up the efficiency of this med- $3 billion. In the last year, however, production of ication to speed up the recovery of patients Cuba, once almost totally dependent on for- these buses at Unecamoto’s factory in affected by different kinds of ailments. eign fuel imports, now produces more than Guanajay has been virtually paralyzed for lack Vimang is available in the forms of extract, 30% of its own crude. Nevertheless, the gov- of funds. The BNDES credit will reactivate creams and infusions, and can be bought over- ernment said it was not counting on the possi- the assembly line and also pay for other buses the-counter at pharmacies in Pinar del Río. bility of future oil discoveries for the island’s assembled at a Mercedes-Benz plant in Egypt. economic developments. Narciso Alvarez, sales chief at MCV Comer- CUBA INVITES U.S. FIRMS TO DRILL FOR GULF OIL cial in Havana, said his company has just 2003 TELECOM INVESTMENT HITS $74 MILLION delivered 25 buses to Havanatur, the travel Fidel Castro has invited U.S. oil companies Cuba will have invested $74 million in tele- agency that handles 400,000 visitors to Cuba to join offshore exploration of its Gulf of com during 2003, said the country’s informa- each year. These include 13 49-seat vehicles Mexico waters. and a dozen 34-seat buses. According to Reuters, Spain’s Repsol-YPF tion and communications minister, Ignacio González Planas. Details: Tranbuss Industria S.A., Calle 1ra S.A. plans to sink an exploratory well in B, #15414, e/154 y 156, Rpto. Náutico, La March in waters off Cuba’s northwestern At a mid-November meeting of the Hispanic- Habana. Tel: +53 7 208-8673. Fax: +53 7 208- coast in search of light-oil deposits. A American Association of Research Centers 8675. E-mail: [email protected]. Canadian company, Sherritt International, also and Telecommunications, González Planas has signed risk contracts to search for oil said investment in the telecom sector would BAMBOO FACTORY INAUGURATED IN GRANMA Cuba’s first factory to process bamboo has opened in the eastern province of Granma. Corruption denied in firing of 4 Cubanacán officials The plant is equipped with Chinese technol- uba’s Tourism Ministry has removed “It is completely false that funds have ogy and can produce 20,000 sq meters of the president and three executives of been embezzled or stolen from the Cubana- pressed wood a year for use as building mate- CCubanacán, its largest state-run tou- cán group,” the ministry said, adding the rial and in furniture. The raw material comes rism corporation, but says the four were entity is operating normally under the direc- from 40 hectares of bamboo planted in the dismissed for slack management practices, tion of Tourism Minister Ibrahim Ferradaz vicinity; plans are to enlarge the cultivated not corruption. and that tourism was up 14% over 2002. area to meet the factory’s demand. Cubanacán President Juan José Vega was This is Cuba’s second corruption scandal A bamboo plant takes 4-5 years to mature, fired last month, sparking rumors that mil- within the past few months. and can be harvested for a century or more. lions of dollars had disappeared from the Last month, CubaNews reported that sev- company, which employs 30,000 people and eral middle- and top-level executives of CUREF SUBSIDIARY TURNS TRASH INTO PROFITS owns 51 hotels containing 13,000 rooms Grupo Cimex S.A. had been arrested Established only 11 years ago, the Cuban across Cuba, one-third of the island’s total. because of corruption. subsidiary of Dutch recycling giant Curef has Cubanacán, which has numerous joint Unlike Cubanacán, the scandal within become one of the most efficient industries of ventures with foreign firms such as Spain’s Cimex was kept quiet, and its chief execu- its kind in Cuba, reports Opciones. Grupo Sol Meliá, reported revenues of $331 tive, Eduardo Bencomo, managed to sur- Last year, Curef’s 5,000-sq-meter factory million and profits exceeding $100 million vive numerous audits and investigations, recycled $17 million worth of non-ferrous last year. It handled 40% of the 1.9 million while several of his subordinates — in metals such as copper, aluminum, zinc, brass, tourists who visited Cuba in 2003. Cuba and abroad — were effectively lead and stainless steel — double the sales “They at no time participated in embez- charged, convicted and put behind bars. reported in 2001 — and all this with only 30 zlement or theft, but committed grave Amid rumors of a tourism corruption or so employees. mangement errors related to a lack of con- scandal in August 1999, Cuba’s leadership In 2002, Curef recovered 22,000 tons of met- trol, discipline and other violations,” said replaced then-Tourism Minister Osmany als, its highest ever, compared to 2,000 tons in the ministry in a note picked up by Reuters Cienfuegos with Ferradaz for unexplained 1992, its first year of operation. Of that total, and local media. Besides Vega, two division reasons. The move followed the firing of 20% to 30% is destined for the island’s metal heads and a lesser executive were sacked. several lower-level tourism officials.. industry and the rest is exported throughout December 2003 ❖ CubaNews 13 result in service improvements in cellular zation he formed three months ago after mov- Rehberg (R-MT) signed a memorandum of telephony, particularly in remote areas. ing to Naples. understanding to sell the Cuban government The official said he expects Cuba’s current Adell’s partner is Pedro Prado, a former up to $10 million worth of Montana products national average of 6.0 phone lines per 100 hotel executive who now runs his own hospi- such as cattle, wheat, barley and dry beans. inhabitants (and 14 lines per 100 in the capi- tality consulting firm in Naples and is on the Details: Yellowstone Bean Co., 222 N. 32nd tal) to improve significantly. Cuban American National Foundation’s board St., Billings, MT 59101. Tel: (406) 294-7700. He said that 2.3 of every Cubans now have of directors. computers, and that 150,000 citizens enjoy “It’s a great idea,” said Joe Garcia, the MINERAL-WATER J-V INCREASES PRODUCTION Internet access. CANF’s executive director. “The diaspora is The Ciego Montero Bottling Co., in central Cuba’s state-run telecom monopoly, Etecsa, so widespread and we make a lot of news. Cienfuegos province, produced 983,340 boxes announced plans in November to install more Putting it on satellite really gets it out.” of bottled water in 2002 and will probably than 54,000 new phone lines this year in an Some 2 million Cuban-Americans live in the exceed one million boxes this year. effort to improve service. At present, Etecsa United States, with the heaviest concentration The factory, a joint venture between Los has 700,000 lines in service, around 80% of in South Florida. Portales S.A. and the Nestlé group, has bene- them digital, according to official figures. Adell and Prado discovered that “thousands fited from $600,000 in foreign investment. of hours” of programming is available — New equipment includes a laboratory for HIGH DEMAND BOOSTS CUBAN HONEY EXPORTS everything from documentaries about cigar- quality control, a plant for power generation, a Cuba’s bee honey production has shown making by exiles in Ybor City and vintage labeling machine and a packaging machine signs of recovery in 2003, thanks to a substan- cars in Havana to biographies about personali- that substitutes a plastic cover for cardboard tial increase in prices in the world market. ties such as the late salsa queen Celia Cruz. trays in six- and 12-packs. Apiculturists in eastern Granma province, “We can even pull down Cuban baseball The factory is the main supplier of bottled the island’s major honey producer, expect to games on satellite from Europe,” said Adell, water for Cuba’s hard-currency market. Some produce 1,000 tons of honey this year, exceed- though the channel promises not to do any production is also exported to other ing their plan of 880 tons. business directly with the island. Caribbean islands and Canada. According to experts, 50% of production will Details: Rita M. Piñera, Los Portales S.A. be so-called ecological honey, which has been POLL: FLORIDIANS FAVOR END TO TRAVEL BAN Avenida 3ra. #3404, esq. a 34, Miramar, La certified by specialized international institu- A clear majority of Florida voters, like those Habana. Tel: +53 7 204-4099. Fax: +53 7 204- tions. An increase in the demand for such nationwide, favor lifting the ban on travel to 4197. E-mail: [email protected]. honey — as well as a substantial reduction in Cuba, according to a poll conducted for The exports from top producers China and Miami Herald and the St. Petersburg Times. HABAGUANEX: REVENUES UP 10% OVER 2002 Argentina — have caused world prices to rise. Overall, 64% of respondents to the survey State-owned Habaguanex S.A., which runs Cuban honey is highly coveted because of conducted by Democratic pollster Rob tourist facilities in Havana’s historic center, its excellent flavor, color, smell and qualities, Schroth and Republican pollster Kellyanne reported $50 million in revenues from which differentiate it from honey produced in Conway said they support allowing U.S. citi- January to August 2003, a 10% increase com- other major exporting countries. zens to legally travel to Cuba. Another 26% pared to the first eight months of 2002. oppose lifting the travel ban, and the remain- Hotel occupancy during the period averaged CABLE TV CHANNEL TO OFFER CUBAN PROGRAMS ing 10% had no opinion. 79.3%, up 5.5% from last year, after the open- A Cuban exile and a former Detroit TV exe- Among Hispanic voters, however, the ing of the Palacio O’Farrill, Beltrán de Santa cutive plan to launch a cable channel that will results were different: 55% oppose easing Cruz and Raquel luxury properties. broadcast programs about Cuba in English. restrictions, while 43% favor an end to the ban; Most tourists visiting Old Havana and its Cubana One Network, based in Naples, Fla., 2% had no opinion. 167 hotels, restaurants, shops and other com- is meeting with cable TV providers across As The Herald reported, “the issue could mercial establishments come from France, Florida to sign up the channel on their digital prove complicated for the president’s re-elec- Germany, the United States and Great Britain. tier, reports The Miami Herald. tion. He needs the continued backing of hun- Habaguanex’s 2004 plans include the open- So far, three contracts are pending with sys- dreds of thousands of Cuban Americans, but ing of the 98-room Hotel Saratoga, as well as tems in Southwest Florida, said Kevin Adell, doing so means he risks alienating the rest of the construction of the hotels San Felipe and president of Cubana One, a nonprofit organi- the state and voters in farm states where busi- Santiago, both in Old Havana. nesses are eager to trade with Cuba.” IN MEMORIAM: KEN CROSBY NEW CD-ROM TRACES HISTORY OF U.S. EMBARGO MONTANA COMPANY SIGNS BEAN CONTRACT Cuba’s Foreign Ministry and semi-official Kenneth M. Crosby, a retired executive of Yellowstone Bean Co. of Billings, Mont., has news agency Prensa Latina have unveiled a Merrill Lynch & Co. and longtime member of signed a deal to export 6.6 million lbs of dry new CD-ROM encyclopedia on the impact of AmCham Cuba, died Nov. 30 at the age of 87. beans to Cuba, in the first contract resulting the U.S. embargo against Cuba . Crosby, a native of Tennessee, led an inter- from a recent Montana congressional trade The CD, entitled “No al Bloqueo — No to the esting life and was quite a well-known figure visit to the island. Blockade,” is available in Spanish and English. in Washington diplomatic circles. Jim Stinehagen, Yellowstone’s owner, said According to a Prensa Latina release, “the During World War II, Crosby spied for the the contract is worth about $1.5 million and new resource provides a thorough account of FBI in Argentina, collecting information on required less than three hours of telephone U.S. economic sanctions since their inception pro-Nazi groups. After the war ended, he negotiations. The order requires 34 railroad in the early 60s, a chronology of the actions joined Merrill Lynch and opened the compa- hopper cars and will go to Corpus Christi, taken by U.S. administrations over the past 40 ny’s first overseas office in Havana in 1946. where the beans will be sacked and loaded on years, an analysis of the Helms-Burton and Crosby stayed in Cuba for the next 14 barges bound for Cuba by Dec. 15. Torricelli laws, and transcripts of speeches years, witnessing Fidel Castro’s rise to power. “I’ve been working on this for quite a delivered by Cuban leaders who have When the United States and Cuba broke dip- while,” Stinehagen told The Billings Gazette. addressed the UN General Assembly on the lomatic ties in 1961, he was forced to leave. “The politicians got involved, and it moved issue of Washington’s economic blockade.” Crosby later managed Merrill Lynch fairly rapidly.” Deputy Foreign Minister Fernando Remírez offices in Madrid, Paris and Barcelona, The company contracts with 250 farmers in Estenóz, former head of the Cuban Interests returning in 1966 to Washington, where he Montana and Wyoming; it normally trades Section in Washington, was on hand at the resided continuously until his death. about 40 million lbs of pinto beans a year. launching ceremony. He said the “blockade” CubaNews joins in extending sympathies to In September, a trade delegation including has cost Cuba more than $72 billion since it Crosby’s family and friends. Sen. Max Baucus (D-MT) and Rep. Denny was formally imposed in 1962. 14 CubaNews ❖ December 2003 CARIBBEAN Cuba sends 705 doctors, teachers to impoverished Haiti BY LARRY LUXNER ast month, in a makeshift auditorium on the outskirts of Port-au- Prince, hundreds of Haitian dignitaries and young medical stu-

L dents waited for the arrival of President Jean-Bertrand Aristide. LARRY LUXNER While they sat in their aluminum folding chairs, Cuban bolero music blared from loudspeakers, not far from the plastic sheeting flapping in the wind that ironically advertised, among other things, Univisión Channel 23 — a rabidly anti-Castro TV station in Miami. Ironic, because Aristide had shown up here to cut the ribbon on a new medical school staffed by Cuban doctors and financed (in anoth- er irony) by the staunchly anti-communist government of Taiwan. The Nov. 14 ceremony was symbolic of Cuba’s growing friendship with Haiti, which next month marks its 200th anniversary as the world’s first independent black republic. Located only 45 miles from the eastern tip of Guantánamo province, impoverished Haiti is also Cuba’s closest neighbor in the Caribbean, both geographically and culturally. After Haiti’s slave rebellion in 1804, many French slaves and plant- ers settled in eastern Cuba, where they developed the coffee industry. Their descendants eventually joined in the struggle against Spain; José Martí greatly admired Haitian independence hero Toussaint L’Ouver- Port-au-Prince is home to nearly a third of Haiti’s 8.5 million inhabitants. ture and frequently emphasized Cuba’s brotherhood with nuestra oril- la negra [our black rim]. necessary in this country,” he said, explaining that 628 Haitian doctors During and after World War I, thousands of Haitians were brought have been trained by Cuban experts, both at the medical school that to Cuba as cane-cutters, but after the economic crisis of 1922, most had Aristide inaugurated last month, and in Santiago de Cuba. no option to remain in Cuba. Faubert Gustave, Haiti’s minister of finance, says 82% of all Haitians “With the triumph of the revolution in 1959, our Haitian population have been treated by a Cuban physician or health-care specialist. was integrated into Cuban society and relations with Haiti were sus- “When the people go to a hospital, they ask for Cuban doctors, pended,” said Rolando Gómez González, Cuba’s becuase they know they’ll get proper care,” he told us. “I suppose a lot ambassador in Port-au-Prince. “After 30 years of of people would be dead if they weren’t here.” no relations under Duvalier, there were hardly Cuba also cooperates with France in the fight against AIDS, and any contacts left between the two countries.” works with NGOs like the Pan American Health Organization and In 1991, Aristide — who had been elected by Care to reduce maternal mortality in Haiti. an overwhelming majority of Haitians — was “In three to four months, our doctors learn Creole, since the popu- overthrown in a military coup, but restored to lation they attend to doesn’t speak either English or French,” he said. power three years later under the protection of “Remember that 60% of the people are illiterate.” U.S. forces. Gómez said that “in 1996, relations Which is why Cuban educators are also in Haiti, working on a novel were normalized, and we began a process of approach to dramatically boost the country’s literacy rate. mutual recognition.” Rolando Gómez Slightly smaller than Maryland, the country Fernando Fernández, who’s from Holguín, is an advisor to the Natio- today has over 8.5 million inhabitants crammed into its cities, towns nal Literacy Program on Radio. He directs a 21-member Cuban team and barren hillsides. Haiti’s per-capita GDP hovers around $250 a year, that has already taught over 109,000 Haitians to read and write Creole. making it by far the poorest nation in the Americas. “For us, this is very significant because all the other literacy pro- According to World Bank figures, 80% of Haiti’s population lives in grams have failed. We hope to teach literacy to a quarter of a million abject poverty; 76% of children under the age of 5 are underweight or people,” he said, explaining that classes are given on two FM stations experience stunted growth, and 63% of Haitians are undernourished. — Radio Temu and Radio Guinne. In addition, Haiti accounts for 90% of all AIDS cases in the Carib- Fernández says the program is just over a year old, and is similar to bean, and because there’s only one doctor for every 10,000 people, the what Cuban educators are doing in remote villages from to country’s infant mortality rate stands at 93 deaths per 1,000 live births. New Zealand. “It’s a universal method that can be applied to any lan- “Our objective is to combat Haiti’s extreme poverty,” said Gómez. guage or dialect,” he said. “We don’t actually teach the classes. What To that end, Cuba has sent 705 doctors, educators and agriculture we do is train Haitian personnel who give the classes on the radio.” experts to Haiti, where they work in 95 of the country’s 133 comunas Besides health-care and literacy, Cuba is helping Haiti revive its or municipalities. moribund sugar industry, which is centered on the L’Arbonnite Valley. Of the 705 Cubans in Haiti, 579 are medical specialists — pediatri- Gómez said Cuba is also assisting in the development of Haiti’s cians, surgeons, anastheticians, obstetricians, gynecologists and oth- depressed fishing sector. ers. The Haitian government pays them monthly stipends of 5,000 “We have brought fresh-water species, and have established an arti- gourdes (a little over $100) for basic living expenses, as well as their ficial fish farm that’s now producing 7 million offspring a year. We hope food and lodging. to reach 15 million fish next year. This is an important contribution in “We provide public health services, especially in cities where there Haiti’s struggle for food security.” are no specialists. Our people live with the Haitians in their communi- Although Castro has never been to Haiti, Aristide paid official visits ties,” he said. “And our collaboration is not only in health. We support to Cuba twice — in July 2001 and again in December 2002. veterinary services in Haiti to combat animal diseases such as rabies.” Yet Gómez insists Havana is not motivated by ideology or politics. The Cubans themselves don’t receive salaries, though their govern- “We’re doing this to help the Haitian people who have suffered so ment spends $520,000 a year to transport them to and from Haiti. much during the last 200 years,” he said. “We can’t offer financial assis- “At the same time we're providing health services to the Haitian peo- tance because we’re also a poor country. All we can do is share our ple, we’re contributing to the establishment of human resources so human resources to benefit the Haitian people.” December 2003 ❖ CubaNews 15 BOOKSHELF Mark Falcoff and Debra Evenson: Contrasting views of Cuba he Washington Times calls this book “a with all the restraints removed could even be LAW AND SOCIETY IN CONTEMPORARY CUBA sobering account of precisely what a bigger threat to the United States than the Kluwer Law International has released the T Fidel Castro’s legacy is and what Cuba island posed under communism. 2nd edition of Debra Evenson’s book, “Law has to do to overcome it ... a good map of a Although Cuba has ceased to be a conven- and Society in Contemporary Cuba,” original- very uneven terrain.” tional military or strategic threat since the ly published in 1994 by Westview Press. Says Jay Nordlinger, writing in the National collapse of the Soviet Union, now, with the The revised hardcover edition (ISBN: 9- Review: “Mark Falcoff is a thorough and bal- prospect of nothing to sell and no one to buy 0411-2165-X) sells for $85 and examines the anced scholar. He comes at issues from every it, Cuba may be- transformations that have taken place in Cuba possible angle, offering all available facts and come, like Haiti, a over the last decade. citing a variety of opinions, before weighing in platform for the And it couldn’t arrive at a more different himself. He even gives the regime’s official export of drugs conclusion that Falcoff did in his book. spokesmen their say. Falcoff debunks many and illegal immi- Despite the serious problems plaguing the of the myths about Communist Cuba.” grants and a threat island, Evenson claims that “Cuba stands What both reviewers are raving about is to Washington’s apart, as a small and poor country, which nev- scholar Mark Falcoff’s new book, entitled war on terrorism. ertheless has established standards of access “Cuba: The Morning After.” The book (ISBN It is an open to education, health care and housing that are 0-8447-4175-2) is published by the American secret in Washing- among the highest in the world.” Enterprise Institute and costs $25. ton that for some She says “an understanding of the legal In its 285 pages, Falcoff challenges the time now the Joint system that has fostered and continues to pro- assumption that when Castro passes from the Chiefs of Staff tect this singular achievement offers inar- scene, Cuba will become a free-market demo- have privately ago- guably important lessons for the global legal cracy. On the contrary, he suggests that nized over the and policy-making community.” Marxism has shattered a once-rich civil soci- prospects of a violent transition in Cuba erupt- Evenson, insisting that her book “remains ety, one that cannot be rapidly reconstructed ing into civil war. Under such a circumstance, the only detailed, first-hand treatment of the — particularly in the absence of a small-busi- subject,” analyzes the ongoing “reinvention” ness class and freer access to organized polit- they fear that the U.S. exile community would intervene, forcing the U.S. miltary to invade of socialism that Cuba has chosen to pursue. ical activity. “Cuba’s commitment to a sustainable Fear of the future, declining demographies, the island and separate the contending for- ces. Faced with the choice of stability or socialist economy in the prevailing market- a culture of dependency and a tendency to opt driven global context colors the numerous out for emigration to the United States add to chaos in the post-Castro era, Washington may well choose the former, eve at the cost of sup- recent reforms that introduce decentralized the mixture. decision-making and management at local “Cuba: The Morning After” compares past porting democracy or human rights. According to Nordlinger, Falcoff “warns and enterprise levels,” says Evenson. and present, underscoring the huge changes In her book, the author explains the effects that have occurred in Cuba, the United States repeatedly that Cuba the morning after may of de-subsidization of state enterprises on and the world economy since the triumph of be so bad that we will be nostalgic for the old legal issues arising in labor-management rela- the revolution. Cuba was once one of the most one. But how much worse could the situation tions, banking and taxation, and describes prosperous countries in Latin America. Its be, certainly for Cubans themselves? At a new “private” initiatives such as expanded prosperity was based on a privileged place in minimum — unless the regime survives areas of foreign investment, individual owner- the U.S. sugar market, where it could sell its Castro — the prison cells will burst open, and ship of farms and self-employment incentives. crop at a highly subsidized price. Since 1960, out will walk Marta Beatríz Roque, Oscar Other fields of law covered include criminal the old Cuban quota has been parceled out to Biscet and a thousand other bright lights.” justice, family law, environmental regulation, other producers. Meanwhile, the Cuban Details: AEI, 1150 17th St. NW, Washin- intellectual property and judicial procedure. sugar industry is in ruins. gton, DC 20036. Tel: (202) 862-5800. Fax: While she doesn’t ignore the subject, Falcoff concludes that an economically (202) 862-7177. URL: www.aei.org/publica- Evenson doesn’t spend too much time in her unviable and otherwise dysfunctional Cuba tions/bookID.328,filter./book_detail.asp. book discussing the human-rights abuses committed by the Castro regime. However, she says her analysis “also STRICTLY BY THE NUMBERS reveals the express and persistent U.S. hostil- ity and efforts to undermine the current gov- 6,398 — travel cases opened for investigation by OFAC from Jan. 1996 until June 2002 ernment, which have a direct impact upon 2,179 — travel cases referred for civil penalty enforcement action over same time period reducing the political and legal space for $55,000 — highest penalty OFAC may assess for unauthorized travel to Cuba spontaneous debate inside Cuba.” 180,000 — approximate number of Cubans working as cuentapropistas (self-employed) According to a Kluwer Law press release, “by illuminating the relationship between law 53,000 — barrels of oil Venezuela sells Cuba annually at preferential terms and social policy in a system striving to guar- 71 — number of countries that have signed promotion and investment accords with Cuba antee basic social rights, racial and gender 11 — number of countries that have signed double taxation treaties with Cuba equality and equitable distribution of wealth, “Law and Society in Contemporary Cuba” 17 — number of U.S. ports that have shipped food commodities to Cuba under TSRA appears to be a major contribution to legal 83 — number of vessels that have carried those commodities from U.S. ports to Cuba theory — and invites re-examination of the 1.9 million — number of tourists expected in Cuba this year appropriate balance between social justice and individual autonomy as perceived by the 40,000 — approximate number of hotel rooms in Cuba dominant legal culture.” 180,883 — number of people who visited Cuba from the United States in 2002 Details: Kluwer Law International, The 355 — number of official joint ventures between Cuban state entities and foreign partners Hague, Netherlands. Tel: (800) 447-1717 or +31 70 308-1509. URL: www.kluwerlaw.com. 16 CubaNews ❖ December 2003 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 Dec. 8-10: 27th Miami Conference on the Caribbean Basin, Loews Miami Beach Hotel. fast-growing region. Subscribe to Caribbean UPDATE, a Florida Gov. Jeb Bush, 11 heads of state, many U.S. government officials to attend. Cost: monthly newsletter founded in 1985. Cor- $575 (before Sep. 30). Details: Caribbean/Latin American Action, 1818 N St. NW, #310, porate and government executives, as well Washington, DC 20036. Tel: (202) 466-7464. Fax: (202) 822-0075. URL: www.claa.org. as scholars and journalists, depend on this publication for its insightful, timely cover- age of the 30-plus nations and territories of Dec. 14-18: Conference commemorating 2nd anniversary of first U.S. food shipment to the Caribbean and Central America. Cuba. Event includes speeches, negotiating sessions and visits to ports, farms, other enti- When you receive your first issue, you ties. Details: Raúl Sánchez, Asesor de la Presidencia, Alimport, Infanta 16, Piso 3, Vedado, have two options: (a) pay the accompany- ing invoice and your subscription will be La Habana. Tel: +53 7 55-0573. Fax: +53 7 873-3151. E-mail: [email protected]. processed; (b) if you’re not satisfied, just write “cancel” on the invoice and return it. Dec. 22: St. Augustine-Baracoa Friendship Association humanitarian mission to Cuba. There is no further obligation on your part. Details: Sali McIntire, PO Box 861086, St. Augustine, FL 32086. Tel: (904) 461-3175. E- The cost of a subscription to Caribbean UPDATE is $267 per year. A special rate of mail: [email protected]. URL: www.staugustine-baracoa.org. $134 is available to academics, non-profit organizations and additional subscriptions “The Cuban Revolution: US-Cuban Relations.” Course to be taught at Jan. 5-9, 12-16: mailed to the same address. the University of Miami by Dr. Andy Gómez, senior fellow at UM’s Institute for Cuban & To order, contact Caribbean UPDATE at Cuban-American Studies, and Dennis Hays, ex-lobbyist for the Cuban American National 116 Myrtle Ave., Millburn, NJ 07041, call us at (973) 376-2314, visit our new website at Foundation. Cost: $295. Details: ICCAS, University of Miami, PO Box 248174, Coral Gab- www.caribbeanupdate.org or send an les, FL 33124. Tel: (305) 284-2822. Fax: (305) 284-4875. E-mail: [email protected]. e-mail to [email protected]. We accept Visa, MasterCard and American Express. Jan. 16: “Humanitarian Aid for a Cuba in Transition.” Seminar at Ronald Reagan Build- ing and International Trade Center, Washington. Details: Cuba Transition Project, ICCAS, University of Miami, PO Box 248174, Coral Gables, FL 33124-3010. Tel: (305) 284-2822. Fax: (305) 284-4875. E-mail: [email protected]. URL: http://ctp.iccas.miami.edu.

Jan. 30: “Outlook on the Americas,” Loews Miami Beach. Sponsored by Association of American Chambers of Commerce in Latin America. Speakers include Miami Herald Editor & Publisher columnist Andres Oppenheimer and State Department’s Roger Noriega. Cost: $200. De- LARRY LUXNER tails: Marjorie Brands, AACCLA, Washington. Tel: (202) 463-5485. URL: www.aaccla.org. Washington correspondent ANA RADELAT Feb. 5-15: XIII International Book Fair, Parque El Morro, Havana. Details: Iroel Sán- Political analyst chez Espinosa, Organizing Committee. Tel: +53 7 862-4739. Fax+ 53 7 33-3441. E-mail: DOMINGO AMUCHASTEGUI [email protected]. URL: http://www.cubaliteraria.com/icl/FILH/general/normas_ingles.html. Feature writers VITO ECHEVARRÍA DOUGLASS G. NORVELL Mar. 20-28: International Agricultural Fair 2004, Feriía Agropecuaria, Havana. Details: Cartographer Omelio Borroto Leal, Organizing Committee. Tel: +53 7 57-9077. E-mail: [email protected]. ARMANDO H. PORTELA Graphic designer JESSICA MUDJITABA

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