Chronicle on Cuba - March 2004

Economy

March 1: Cuba will offer cell phone service to local residents for the first time, the official media reported, as the Caribbean island scrambles to modernize its telecommunications. "Starting the second half of the year the population will benefit from the installation and distribution of cellular telephones, a service up to now available only in dollars," Villa Clara province's official weekly, Vanguardia, said. "In the future the basic development of telecommunications will be cellular and wireless," Vanguardia reported. The island's 11.3 million people have almost no access to mobile phones. Cell phones are available to tourists and other foreign visitors. (Reuters, 1/3/04)

March 2: Cuba closed the first month of 2004 with a 12.4 percent increase in tourist arrivals, as compared to the same period last year, tourism industry sources informed. A total of 214,242 visitors traveled to the island in January, surpassing the number of arrivals in the same month last year by 23,573, according to statistics by the Ministry of Tourism. In January 2000, 163,786 tourists had visited the Caribbean island, 188,652 did so in the same month of 2001, and 140,792 in 2002. Canada, Italy, France, Germany, the United Kingdom, Venezuela, Spain and Mexico are still the island’s principal markets. (Prensa Latina, 2/3/04)

March 2: Kenya and Cuba have stated their interest to strengthen cooperation links at the second intergovernmental joint commission in session in Havana. Kenya´s Assistant Foreign Affairs Minister Moses Wetangula and Cuba´s Foreign Investment Minister Marta Lomas are focusing on expanding collaboration in the next two years. The parties will close their meetings Friday by signing an agreement. Wetangula thanked Cuba´s hospitality and friendship towards his country, with which it is collaborating in culture and sports. Some 21 Kenyan youths are currently studying in Cuban universities. Kenya and Cuba signed several cooperation agreements in sports and culture in the first intergovernmental joint commission in Nairobi. (Prensa Latina, 2/3/04)

March 2: Eshagh Yahanguiari, Iran’s Minister of Industries and Mines, arrived in Havana, invited by the Cuban Minister of Foreign Investment and Economic Collaboration. The Iranian minister said his country can supply raw material to Cuban industries, while stressing that Iran is interested on cooperation with Cuba in medical and biotechnological fields. (AIN, 2/3/04)

March 3: Cuba's plans to produce 2.6 million tonnes of raw sugar during the 2003/2004 harvest appeared further out of reach at the close of February, sources close to the industry said, as mills sputtered along and broke down. No official milling and yield information was available as the state-run media fell silent on the harvest's progress, a sure sign of problems, local analysts said. Cuba's top sugar reporter, Juan Varela, announced that the amount of sugar produced was not that important. "What is important is economic efficiency," he said. Varela's daily radio spots, usually filled with harvest information, have focused on Sugar Ministry efforts to produce food, electricity and livestock ever since. "I think the Sugar Ministry decided not to provide information on the harvest because it is not going well," a local sugar expert said. (Reuters, 3/3/04)

March 5: The head of Sherritt International says the company needs to "make something happen" in the next six months to get expansion of its Cuban nickel project underway or it will miss a chance to take advantage of the recent strength in nickel prices. "We're sitting down with our counterparts in Cuba and it's really a matter of negotiations to define the terms that are satisfactory to both parties," Dennis Maschmeyer, Sherritt's chief executive, said during a conference call with analysts. Last year, Sherritt's Moa mining and processing facilities in Cuba produced 7,715 tonnes in the fourth quarter and 32,042 tonnes for the full year of nickel plus cobalt contained in mixed sulphides. That compared with 8,159 tonnes during the fourth quarter of 2002 and a record 33,382 tonnes during the prior year. The company attributed the lower production rates to lower-grade ore and additional maintenance activities in 2002. (The Toronto Star, 5/3/04)

March 9: Cuba's efforts to use biogas as a source of renewable energy have been acknowledged during a workshop on the subject in the central Cuban province of Camaguey. One of the participants at the workshop, Italian engineer Enrico Turin, who also serves as vice president of the Eurosolar Association, noted that Cuba has the advantage of great volumes of residuals from agriculture and fishing that can be used to develop biogas. (Radio Habana Cuba, 9/3/04)

March 10: Pernod Ricard's fastest-growing product is the famous Cuban rum Havana Club, which sold 1.9 million 9-litre (2.4-gallon) cases last year. Pernod Ricard's joint venture with Cuba, Havana Club International, has been selling the rum worldwide for 10 years, and sales have soared an average 17 percent a year. But the largest rum market, with 42 percent of the world's total sales of 38 million cases a year, is closed to the Cuban rum brand by a 4-decade-old U.S. trade embargo against Cuba's communist-run government. "We have won a battle but not the war," Ricard said at a news conference in Havana. "If the embargo is lifted tomorrow morning, we are ready to start selling in the United States." (Reuters, 10/3/04)

March 11: Cuba has taken more steps to restrict the circulation of the US dollar in the country as the Communist government continues efforts to roll back the market reforms of a decade ago. A circular from the Economy and Planning Ministry orders state companies to stop using the US dollar as of April for any services and products not considered their core business. A government official said state companies would now have to charge in pesos for nonessential services or close them down. Cuban businessmen said the latest restrictions range from a ban on some companies engaging in foreign trade to caps on the prices charged in an economy that is 90 percent controlled by the state. "We all think there will be more measures and each time they will move closer to controlling everything again," the manager of one company said. (Reuters, 11/3/04)

March 13: Coffee growers in central Villa Clara province have kicked off a recovery strategy in local coffee plantations, which is expected to be completed by 2007. The program includes replacement of plantations and soil improvement, based on organic techniques. The initiative also includes the use of worms as organic fertilizer and the cultivation of alternate crops. Studies prior to the implementation of the strategy in that mountainous area of central Cuba indicated a sharp decrease in productivity due to inappropriate planting and soil management. Over 63% of all local coffee plantations in the central province are older than 16 years, which affects the plants' productivity, since the best productive stage of such plantations is around 10 years. (Radio Habana Cuba, 13/3/04)

March 13: The Cuba-Canada joint venture in the energy sector, known as Energas, will make important investments in East Havana to increase power generation this year. Energas executives say that the project is expected to allow for the improved use of gas reserves on the northern coastal strip of Havana province and make a considerable contribution to environmental preservation. The company’s station in central Matanzas province, with a 200-megawatt-hour potential, contributed 144 million kilowatt-hours in January, which satisfied all local consumption needs during hours of the highest electrical demand. Also in that central province, Energas produced tons of pure sulphur and liquefied gas, which is distributed throughout the island as kitchen fuel. (Radio Habana Cuba, 13/3/04)

March 13: A group of 20 new local products have been added to the export list of eastern Santiago de Cuba province. The initiative, which is part of efforts aimed at increasing hard-currency revenues in that province, includes ecological bee honey, whose local production increased to 520 tons; fresh water fish; physiotherapy equipment, refined sugar, canned fruits, juices and concentrates, waste paper and crafts, among other products. (Radio Habana Cuba, 13/3/04)

March 15: The Bangalore-based Biocon Ltd, in joint venture with Cuban pharmaceutical firm Cimab SA, will commission a facility in Bangalore, India, to manufacture the latter’s biotech products based on the monoclonal antibodies (Mab). The facility, in which Biocon will invest Rs 125 crore, is expected to begin commercial production of Mab products in 2006. Initially the Rs 372 crore Biocon will market Mab products only in the domestic market. (Business Standard, 15/3/04)

March 16: China Petrochemical Corp., or Sinopec, has signed a memorandum of understanding with Cuba's national oil company, Cuba Petroleo, or Cupet, to explore four oil blocks in Cuba, a Sinopec official said. The MoU will allow Sinopec to conduct geological studies of the four Cuban blocks over six months, which could lead to the signing of a production sharing contract between the two companies, he said, without giving details of the blocks. "We will do a survey on these blocks first and then decide if we will enter into a PSC," he said, adding the blocks are likely to contain mostly crude oil, as opposed to natural gas. The MoU marks the first attempt by Sinopec, China's second largest oil and gas company, to enter oil and gas exploration and production in Cuba. (Dow Jones, 16/3/04)

March 17: Cuba aims to keep driving up rice production by encouraging cultivation in small paddies through a programme involving 190,000 farmers across the island. More than 130,000 hectares are already planted with rice as a result of the initiative, and is expected to increase with the incorporation of fallow farmland and the sugarcane fields that have been abandoned since the restructuring of the socialist-run country's sugar industry in 2002. Another 30,000 hectares of rice belong to public entities that benefit from strong infrastructure but are lacking in the organisation necessary to improve yields and reduce costs. Rice is a staple of the Cuban dinner table. This country of 11.2 million people consumes 670,000 tonnes of rice a year, but almost 60 percent has to be imported, mostly from Vietnam, China and the United States. (IPS, 17/3/04)

March 17: Mexico's foreign trade bank Banco de Comercio Exterior (Bancomext) will close its representative office in Cuba, the bank's official said, without disclosing the reasons for the decision. The bank was the main intermediary between the Cuban Government and Mexican businessmen, interested in operations in Cuba. Bancomext was running business in Cuba with the island’s Central Bank to find a solution to a 380 million external debt with Mexico. (La Jornada, Latin American News Digest, 17/3/04)

March 17: Eight Canadian Companies representing the sectors of fresh, processed and natural foods and alcoholic beverages will be visiting with respective producers and suppliers in Havana, Cuba and at their places of work. The purpose of this visit is to introduce Canadian buyers to Cuban suppliers in order to increase Cuban exports to Canada, assist in the development of Cuban production and export capacities, and to generally enhance the trade relationship between Cuba and Canada. (Trade Facilitation Office Canada, 17/3/04)

March 17: Under the Caracas Accord, Venezuela's state-owned national oil company, Petróleos de Venezuela, currently ships to Cuba 13,000 barrels of Vitol Fuel, 10,000 of Shell, as well as 53,000 barrels of crude oil, on a daily basis. Now, the company has approved the shipment of an additional 25,000 barrels, for a grand total of about 100,000 barrels per day. (El Nacional, 17/3/04)

March 17: Thailand and Cuba have formally started to co-operate in trade and investment, with whisky, sports and sugar their priorities. During talks between Foreign Minister Surakiart Sathirathai and Deputy Investment and International Economic Co-operation Minister Ramón Ignacio Ripoll Díaz of Cuba, Thailand expressed its interest in deepening technical and economic co-operation with Cuba. Charoen Siriwattanapakdi, a well-known Thai whisky producer, was reportedly interested in tapping Cuba's rum whisky market and would like Cubans to invest in Thailand's liquor industry as well. The two countries also agreed to study co-operation in sugar pricing and tourism, according to Mr Surakiart. (Bangkok Post, 17/3/04)

March 18: Cuba's once-large cattle herd has been hit hard over the years, leaving many Cubans longing for beef. The situation also has forced Cuban officials to take tough measures to protect cattle, even as the government turns to the United States for help in restocking its herd. The beef industry never recovered, but dairy herds were built back up through huge investments and imported animal feed, experts said. Years later, when the Soviet Union collapsed and ended $5 billion in annual subsidies, Cuba lacked the money for feed, and much of the dairy herd also was lost. The problems have been exacerbated by severe droughts and by what some experts describe as Cuba's ill-fated attempts to breed a superbovine that could thrive in a tropical climate. The government today imports huge quantities of milk from New Zealand, Canada and other countries and distributes it at subsidized prices for infants, children up to age 7, the elderly and the infirm. Most everyone else has to purchase powdered milk on the black market for $1 a pound. Cubans earn an average of about $10 a month. At the same time, per capita beef and veal consumption in Cuba has fallen from about 3.7 pounds per month in 1961 to just over 1.2 pounds per month in 2001, according to the United Nations. (The Chicago Tribune, 18/3/04)

March 18: The Conran empire is about to get bigger, with a new Cuban bar and restaurant concept coming to London this autumn. Floridita - serving food, cocktails, cigars and live music - is a joint venture with new company Havana Holdings. Havana Holdings was set up last year and is backed by the Cuban government. It is a joint operation between Cuban bar operator Boisdale, Cuban hotel group Gran Caribe, which owns the Floridita brand name, cigar producer Habanos and drinks producer Pernod Ricard. The first bar is scheduled to open in a central London landmark location in the first week of October, and the company hopes to roll out the brand across the UK and the continent. (Caterer & Hotelkeeper , 18/3/04)

March 22: The total number of buses making up Havana's mass transit fleet shrank from 543 in 2002 -- when there were already too few to meet demand -- to 524 last year. The fleet serves a total population of 2.2 million, and local authorities are trying to cover the shortage by reorganising routes and schedules to make better use of the available vehicles. In this Caribbean island nation of 11.2 million, a total of 900 mass transportation vehicles serve the cities, 183 serve suburban areas, and 1,036 cover the inter-urban routes, according to official figures. Although the statistics show that buses continue to form the backbone of the mass transit system, the number of passengers they carry fell 13.3 percent from 2002 to 2003, mainly due to fuel shortages. In 2002, buses picked up an average of 78.33 passengers along their routes, which dropped to 75.92 in 2003. (IPS, 22/3/04)

March 22: Central Camagüey became the first Cuban province to produce 200,000 tonnes of raw sugar in the 2003/2004 season, the local media reported, as the industry struggled to top last year's 2.2 million tonnes by early May. "Camaguey has become the first in Cuba to produce 200,000 tonnes of sugar during the current harvest," the province's official weekly, Adelante, said. Analysts say less-than-expected yields, harvesting and milling problems mean this year's harvest will weigh in at around 2.3 million to 2.4 million tonnes, though efficiency has improved. On April 7 of last year western Villa Clara province became the first of 13 sugar-producing provinces to reach the 200,000-tonne mark, followed by eastern Las Tunas on April 15, while Camaguey did not reach the mark until May 27. (Reuters, 22/3/04)

March 23: The Cuban industry is planning to expand its cement output from the 1,357,200 tons produced in 2003, to 2 million tons in 2004, with a growth in national consumption of that product. According to Isaac Alayón, president of the Grupo Empresarial Cemento-Vidrio (Cement & Glass Manufacturers Consortium), in contrast with a previous slump in that sector, improved performance by the country's six cement and clinker manufacturing plants allowed for an increase in exports. (Notimex, 23/3/04)

March 23: Cuba continues to generate interest among foreign investors, with the total number of investment projects currently operating on the island totaling almost 350, a high-ranking a Cuban source said in Havana. Cuba presently has 342 foreign investment deals, with a committed capital of over US$ 6 billion, said the Cuban Ministry of Foreign Investment and Economic Cooperation. Spain is the largest investor in Cuba. It is followed by Canada, Italy, France, Mexico and China. Spain has 98 joint venture companies and commercial offices operating in Cuba. (Radio Habana Cuba, 23/3/04)

March 24: Virgin Atlantic Airways Ltd plans to order two more A340-600 aircraft, recruit 1,400 staff, add new routes to Cuba and the Bahamas, and expand capacity on existing routes, said the British airline. (Reuters, 24/3/04)

March 24: Effective in July, Air Canada will boost its non-stop flights between Toronto and Havana, Cuba to daily service operated with Airbus A319 aircraft. In the meantime, the carrier has introduced a larger Airbus A320 aircraft on the route in response to customer demand for the popular new service launched only last December. (CNW, 24/3/04)

March 24: Iran is to export cars to Cuba, said Iran's ambassador to Havana Ahmad Edrisian in a meeting with Cuban Minister of Foreign Trade Raul de la Nuez in Havana Edrisian said Iran is also to enter a joint venture with Cuba for the production of shoes, basic materials for textiles and plastic bags. Nuez said his country is ready for any cooperation with Iran to upgrade trade with the Islamic state. (IRNA, 26/3/04)

March 25: Reporters Without Borders has asked to meet the chairman of Telecom Italia's board of governors about the implications of the company's ties with Cuban telecommunications operator ETECSA, that has been made responsible for Internet censorship. "We would like to meet you to discuss together the problems arising from your investment in Cuban telecommunications", the international press freedom organisation said in a 25 March 2004 letter to Marco Tronchetti Provera. "We believe that your company should broach the issue with ETECSA and the Cuban government to bring an end to relentless censorship of the Net in Cuba and so that 27 journalists jailed in March 2003, accused in particular of putting the Internet to "counter-revolutionary" use, can be released." (RSF Press Release, 26/3/04)

March 26: More than 20 years after the first sowing of camomile in Pinar del Rio, Cuba´s most western province, a recent research study showed the high quality of its essential oil, including of export quality. The study, led by Dr. Maria de Lourdes Rodriguez, showed that the camomile oil can be produced in industrial amount by a distillation method that uses water vapor at the SUCHEL company facilities. (Prensa Latina, 26/3/04)

March 26: The devastating effects of the drought affecting East Cuba became more evident as the local water reservoir was unable to meet the demand, forcing water tank trucks to make more than 100 trips to distribute water. The local paper says the dams in the territory currently store less than 140 million cubic meters of water, and access to 100 million is limited by pumping capacity. Las Tunas is in the worst situation, as its population of 100,000 is barely supplied one fourth of the 17 million cubic meters of water required to provide stable service. Underground water has decreased by more than one meter and dried out many wells. This is why the population is hoping for a miracle downpour to ease their desperate situation. (Prensa Latina, 26/3/04)

March 29: Alexandre Sirech, a 37-year-old Frenchman from Bordeaux is director-general of Havana Club International S.A. and presides over one of the most successful joint ventures ever launched between foreign investors and Cuba's communist government. In 2003, the company -- a partnership between French drinks giant Pernod Ricard and Cuba's Ministry of Food Industry -- shipped 1.92 million nine-liter cases of Havana Club rum. That's up from 1.73 million cases in 2002, when the brand ranked No. 53 on Impact magazine's list of the world's top 100 premium distilled spirits. "Demand has been exploding in Europe," he said, noting that Havana Club is now 50th on the Impact list. "If we keep up with this momentum, we should rank in the top 40 very soon." Havana Club has been able to score these gains even though the US embargo bars sale of Cuban rum in the United States where 42 percent of the world's rum is consumed. (The Miami Herald, 29/3/04)

March 30: The Cuba-based representative of Mexico's state-run foreign trade bank, Bancomext, said the institution would close its Havana office next month. "We have already let our staff go, the office shuts in mid-April and I leave in 20 days," said Cesar Lajud Desentis, in charge of Banco Nacional de Comercio Exterior S.N.C's Cuba operations. Bancomext has functioned as an intermediary for more than 200 Mexican companies doing business with Cuba and worked unsuccessfully for over a decade to recover $400 million in overdue debt. Bilateral trade was $255 million in 2003, said Lajud. Some Mexican companies have urged Bancomext to reconsider shutting down the office established in 1975, the largest of 14 the bank says it is closing for budgetary reasons. (Reuters, 30/3/04)

March 31: In a recent poll conducted for the South Florida Sun-Sentinel and WTVJ Channel 6 by Florida International University, 54 percent of Cuban-Americans surveyed in Miami-Dade and Broward counties said they send money to Cuba. According to the survey, the average amount sent per household in 2003 was $387 for an estimated total of about $100 million annually from South Florida. (Sun Sentinel, 31/3/04)