Chronicle on Cuba - April 2004

Economy

April 5: Cuban citrus fruits enterprise Ceiba excelled its production record in 3,000 tons up to now, a total of 89,000 tons, and could possibly surpass this figure since it might end the harvest season with 95,000 tons. In statements to the press, Jorge Perez, director of Ceiba Enterprise, added citrus fruits plantations counted on enough reserve to reach the aforementioned number of tons, though it is already surpassed their best production record ever, reached in 1998. Among the immediate plans, they want to plant 350 hectares this year to produce 100,000 tons of fruits, a goal suggested by Fidel Castro. (Prensa Latina, 5/4/04)

April 5: The worst year for rainfall in a decade is the description for the period between May 2003 and this April in Cuba, given that precipitation has only been at 84% of its historic average. The provinces suffering the most dramatic drought of the last 10 years are Camagüey (76% of average rainfall since last May); Holguín (74%) and Guantánamo (69%). Scarcity of is also reported in Las Tunas (78%), although that province’s worst year for rainfall was 2001. Granma, which also reports low rainfall (79%), had its worst year during 1999-2000. Holguín is in the worst situation, suffering from two consecutive years of the poorest rainfall in the last decade. During the 2002-2003 period, the eastern province only received 83% of its average rainfall, now standing at 74%. (Granma International, 5/4/04)

April 7: Cienfuegos is now home to the only yacht basin on the Caribbean coast of Cuba with the opening of a joint venture between Cubanacan and Bluesail, subsidiary of the German ConImpex. ConImpex, based in Berlin and with interests in Russia, Spain, Hungary and Bulgaria, was founded in 1990 and has been in business with Cuba since 1995, chiefly in finance and commerce, but also renting motorboats in Varadero and Jardines del Rey. (Prensa Latina, 7/4/04)

April 6: Germany's ConImpex Company and Cuba's Cubanacan Corporation have opened a yacht club in Central Cienfuegos City for on-board tourist crews. ConInpex president Klaus Apel told reporters that his company will initially contribute eight boats to the international marina, located 250 kilometers East of Havana. The local fleet is expected to count on 15 boats over the coming months and is the only business of its kind along Cuba's southern coast, said Apel, who added that at present an increasing number of tourists are seeking yachting vacations. (Radio Habana Cuba, 11/4/04)

April 7: The trade turnover between Argentina and Cuba is seen to double in 2004, the Argentine Ambassador to Havana, Raul Taleb, said. According to the ambassador, the trade turnover stood at $40 mln (33.1 mln euro) in 2003. The trade turnover is expected to be boosted mainly by a purchase, made recently by Cuba from companies from Entre Rios province, eastern Argentina, but no figures were available. (Latin America News Digest, 8/4/04)

April 7: A 750-million-dollar investment undertaken by the Cuban oil sector has led to steadily increasing yields based on expanded exploitation of local reserves over the past few years. Energy industry statistics indicate that as a result of such continuing investment, as well as the setting up of joint ventures with foreign companies, local oil production has grown sevenfold over the past decade, allowing for significant import reduction. The oil industry in Central Matanzas province is leading the local production increase with a current exploitation of 170 oil wells, followed by other reserves in Havana and eastern Ciego de Avila provinces. (Radio Habana Cuba, 11/4/04)

April 7: Cuban biotechnological products have begun to garner a place in the complex pharmaceutical market, which is controlled by first world companies. Doctor Mauro Alfonso, Commercial Manager of CIMAB Ltd., a medium-sized firm dedicated to the marketing of Cuban pharmaceuticals, said the island's biotechnology products are currently being sold in 14 Latin American, Middle Eastern and Asian countries, while 40 new sales contracts have already been signed with businesses with other nations of the world. The executive gave details on some of the most promising products including anti-cancer vaccines and monoclonal antibodies, which are being used in Canada, Spain and Italy. Dr. Alfonso said that CIMAB Enterprise is also promoting the setting up of joint ventures with Chinese and Indian companies in order to build pharmaceutical processing labs that meet the current demand of monoclonal antibodies and other pharmaceuticals. (Radio Habana Cuba, 11/4/04)

April 8: Cuban officials and eight Canadian import companies met in Havana to foster Cuban exports to Canada, Business in Cuba weekly informed. The meeting, sponsored by the "Centro de Promocion para las Exportaciones de Cuba" (CEPEC) and the Trade Facilitation Office Canada (TFOC), focused on food products such as nutritional supplements, drinks, organic products as well as sugar by-products, medicine and others. The Canadian business representatives met with at least 25 Cuban export companies. (Prensa Latina, 8/4/04)

April 8: Venezuela is looking at options to further economic ties with Cuba which includes the possible purchase of an oil refinery and opening a bank branch in Havana to expand trade. The new Venezuelan ambassador Adán Chávez, the elder brother of Venezuelan President Hugo Chavez said at his first news conference in Havana that he had come to strengthen economic and ideological ties between the two political allies. Chavez said the purchase of the unfinished Soviet-built oil refinery in Cienfuegos was being studied as part of an oil supply agreement signed in October 2000 under which Venezuela ships Cuba 53,000 barrels a day on generous terms. He revealed Cuba will help Venezuela build low cost housing and will also build a plant to produce medicine in Venezuela. Cuban sugar industry technicians have helped Venezuela restart abandoned refineries and build a new one the state of Barinas, Chavez said. (Reuters, 9/4/04)

April 9: The Angolan Foreign Minister, João Miranda, has invited in Havana (Cuba), the economic operators of that country to invest in Angola, having into account the peace climate in this state. The Minister, disclosed it while assessing his four-day visit to Cuba. (Angolan Press, 9/4/04)

April 9: Cuba's raw sugar output passed 2 million tonnes as the industry struggled to surpass last year's 2.2 million tonnes before the rainy season sets in, local analysts said. "They will have to mill into May to reach 2.3 million tonnes," said a Cuban economist who follows the harvest closely. Cuba planned to end the harvest by May at 2.6 million tonnes, but mills have operated at less than 70 percent of capacity, compared with the 80 percent planned, while yields have been more or less as expected at just above 11 percent, industry sources reported. No national milling and yield information has officially been available since mid-February. (Reuters, 9/4/04)

April 11: Corruption in Cuba does not only involve big corporations and branches of foreign firm, but it includes smaller domestic retailers as well. The most resounding case was that of the TRD Caribe, under the control of the Ministry of the Armed Forces and managed by General Julio Casas Regueiro. The store chain has a turnover of US$250 million a year. The investigation is being conducted by the Military Counter-Intelligence. The CUBALSE Meridiano stores chain, administered by the Council of State, has not been exempt from similar irregularities. Since 1999, the so-called “verification of internal controls” carried out by the government show that 90% of the audited entities are operating properly. However, the Vice-President of the Association of Economists of Cuba (ANEC), Blanca Rosa Pampín, admitted last year that the number does not correspond with the reality, due to the use of inaccurate audit and control methods. (El Nuevo Herald, 11/4/04)

April 12: The intense drought in Cuba accounted for 14 forest fires last week and brought the total for this year to 218, with damage to 4,732 acres, according to the fire management chief of the National Forest Ranger Corps, Granma newspaper reported. The drought in Cuba, particularly in March and April, has set the stage for the fires, which have been chiefly in the Isle of Youth and the provinces of Villa Clara, Camaguey, Holguin, Guantanamo, and Cienfuegos, Chief Martin Chavez Blanco informed. Although most of the forest fires have been small, two were of greater magnitude, one of them affecting 395 acres in Mayari Arriba, Holguin, before being brought under control. (Prensa Latina, 12/4/04)

April 12: The oyster-processing industry in Eastern Granma province is increasing production and expanding the commercialization of its product to foreign markets. The local oyster sector in Granma has so far processed over 165 tons of that marine specie, which is translated into 10 tons of edible oyster flesh, considered one of the seafood products in most demand around the world. The effort is part of a sales strategy aimed at including oysters on the list of Cuban exports for the foreign market. (Radio Habana Cuba, 12/4/04)

April 13: Managers of Cuba's state enterprises have been told to hand over their expensive cars like Toyotas and Mitsubishis and stick to the more proletarian Russian-made Ladas or smaller vehicles. It's part of Fidel Castro's campaign to roll back the market-oriented reforms that gave rise to social differences in an officially classless, communist-run society. The most recent clampdown has targeted executives of state companies, whose perks are under fire. "Cuban officials feel they have weathered the crisis and it's time for the state to take an even more central role in the economy," said Phil Peters, an expert on Cuba at Washington's Lexington Institute think tank. Western diplomats said Cuba is retrenching economically as well as politically. They point to a crackdown on dissent last year and increased regulation of foreign companies too. "The number of joint ventures fell by 70 last year, and will decline by a similar number this year. Tens of thousands of small independent business have folded in recent years under government pressure and small foreign trading companies are packing their bags," a European commercial attache said. Dozens of executives of the two largest corporations, Cimex and Cubanacan, were removed over alleged mishandling of dollars, charging of commissions and the use of foreign bank accounts. The government also ended the freedom most state companies had gained to import goods. "It's a double blow. First the dollars were taken away, and now the right to trade and make independent decisions," a Cuban economist said. "We are going back to the 1980s when everything was centralized." (Reuters, 13/4/04)

April 13: Cuba opened its energy sector in 2000 for the extraction of crude oil in association with foreign companies. The contracts grant foreign investors the right to commercialize a portion of the resources while the Cuban government uses the rest in refineries and electricity generation plants, said Eduardo Andrade, president of the Asociación Mexicana para la Energía y Desarrollo Sustentable de México. At the end of 2002, Spanish company Repsol YPF obtained the rights over six of Cuba’s offshore blocs for oil exploitation. Sherrit International, a Canadian oil company, invested $110 million last year in oil and gas exploration activities within the Cuban maritime territory. (Grupo Reforma, 13/4/04)

April 14: For years, Cuba's cash-starved businesses and state-run agencies have been allowed to develop specialities far outside their mandates to stay afloat. This practice appears to be ending. A government directive from April 1 has demanded that such secondary businesses cease and desist. The order's objective, the circular says, is "to adjust entities' social objectives to their primary function and suspend payment in hard currency for services that do not correspond to those functions". The shift on keeping companies to their primary objectives is likely to reverse many of the market mechanisms introduced to help the government survive the downfall of the Soviet Union. The move reflects the renewed embrace of centralised state-planning by Fidel Castro. Western diplomats say the changes follow Mr Castro's increasingly conservative trend. "Cuba's economy is moving in one direction and China's and Vietnam's another," one European diplomat said. (Reuters, 14/4/04)

April 14: Iranian Ambassador to Havana Ahmad Edrisian said that while Tehran and Havana have widespread cooperation in the political field, their economic relations are not satisfactory. Edrisian told the press that although Tehran and Havana have good cooperation in international fora, "but, the distance between the two nations has hindered their economic ties." "However, recently important steps have been taken in this regard," he added. Edrisian said the bilateral trade volume stood at dlrs 50 million in 2003. The exchange includes Iran purchase of sugar and medicine from Cuba, while Iranian export to Cuba consists of raw material for textiles, plastics, sugar cane production machinery and electrical parts, he stated. (IRNA, 14/4/04)

April 15: The important role of biomass fuel as a means of sustainable development was underlined during the second day of the 6th CUBASOLAR International Workshop on Renewable Energies. Engineer Julian Torres, of the Cuban Observatory of Science and Technology asserted that biomass conversion notably reduces the emission of contaminating gases in relation to those of fossil fuel. In Cuba, biomass conversion is used to generate 30% of the electricity in the country. ( Radio Habana Cuba , 15/4/04)

April 16: The Spanish company Repsol YPF is to start drilling the first oil well in Cuba’s exclusive zone in the Gulf of Mexico, announced Juan Fleites, vice president of the Cuba-Petroleo company. Fleites was detailing developments in the Cuban oil industry during the first Cuba-US trade round of 2004, attended by 400-plus businesspeople and authorities from 30 US states. He noted that Cuba owns 112,000 square kilometers of 59 blocs to a depth of 1000-3000 meters in that area and contracts have been signed with European countries for 10 of those blocs. He announced that, to date, 16 prospecting and drilling contracts have been signed with foreign companies, essentially from Canada, France and Spain. However, the blockade obstructs US companies from participating in Cuba’s oil development. The principal oil drilling area of the island is located on the northwest coast and ranges from Habana province to beyond the city of Cárdenas in Matanzas province. (Granma International, 16/4/04)

April 19: An Argentinean Trade Mission formed by representatives of 37 companies met with its Cuban counterpart to strengthen and expand economic bilateral relations. South American businesspeople participated in an Economic Seminar held at the Hotel Nacional with the purpose of exploring business and commerce opportunities in the island. After that, they met in a one to one negotiating round that includes the signing of several commercial agreements. The Argentinean business mission is organized by the Direction of Export Promotion of the Ministry of Foreign Affairs of that country, headed by Jorge Lapsenson, director general of Commerce Strategy and includes Abraham Taleb, Argentinean ambassador to Cuba and Ruben Guillen, director general of the Banco de la Nacion. (Prensa Latina, 19/4/04)

April 19: Argentina’s Banco de la Nación will open a branch in Havana to offer loans and consultancy services to the increasing number of Argentine businesspeople in Cuba, said officials with a delegation of businesspeople from the South American nation visiting the island. The bank will open branch “in a short time,” said Rubén Guillén, head of the Bank. (AP, 19/4/04)

April 19: Telecom Italia will disburse $50 million (41,6 million euros) to take part in the Cuban mobile telephone system. Until now, the Italian operator had participation only in the fixed sector with Cuban company ETECSA. The Cuban company announced the purchase of two cellular operators with a license for fixed and mobile offerings until 2019. ETECSA will pay $185 million for these companies, while Telecom Italia will add $50 million to maintain its equity interest of 27% in ETECSA. (Bloomberg, 19/4/04)

April 19: A drought in eastern Cuba has reduced the amount of cane available for milling as the harvest enters its final weeks, the country's top sugar reporter said, adding to the problems of a beleaguered industry already behind schedule. "The cane remaining in the five easternmost provinces is less than expected, due mainly to drought," Juan Varela Perez said during his daily radio spot dedicated to the harvest. Varela gave no further details, except to say that estimates for the other eight sugar-producing provinces remained above what was needed to meet their plans. Cane was drying up fast in central Camaguey province, also affected by drought, an industry source said. The official Granma International reported rainfall in the area was the lowest in a decade. (Reuters, 19/4/04)

April 20: The 9th International Alimexpo 2004 Fair begins in Havana with the participation of exhibitors of 160 companies from 16 countries. The event, taking place at the EXPOCUBA fair grounds, includes the participation of representatives of Cuban enterprises of the Food Industry, the Light Industry, the Agriculture Ministry and the Sugar Ministry interested in strengthening trade relations and carry out business with foreign companies. Alimexpo 2004 includes lectures on graphic techniques, integral food and special diets for people with certain dietetic requirements. Companies from France, Canada, Italy, Spain, Switzerland, Chile, Mexico, Brazil, Argentina, Belgium, Dominican Republic, New Zealand, Czech Republic, China, Venezuela and Cuba are taking part in this exhibit. (Prensa Latina, 20/4/04)

April 21: Bárbara Castillo, minister of Domestic Trade (MINCIN), announced the reinstatement in May of the so-called “deregulated eggs” (which are not distributed as part of the ration card and are sold at market price). (Cubanet, 21/4/04)

April 22: Cuba said the tobacco harvest in western Pinar del Rio province, home of its highest quality leaf, was all but over at around 22,000 tonnes, ensuring supplies for its much sought after cigars. "Pinar del Rio met its plan for this year's tobacco harvest and is at the point of ending it," the country's official radio reported. Pinar del Rio's 2003 crop weighed in at around 17,000 tonnes. Official reports when the harvest began indicated the plan would insure enough tobacco for cigar production and to build up a reserve. The tobacco that goes into Cuban cigars comes exclusively from Pinar del Rio, except for 50 percent of the rapper leaf grown in neighboring Havana province, which reported a bumper crop. (Reuters, 22/4/04)

April 26: Cuba is looking for an international distributor for two new varieties of coffee, which it expects to launch to the market under the name of its most well-known cigars. The Cohíba Atmosphere and the Montecristo Deleggend are high quality coffees from specially developed plantations with very little or no chemical fertilizer at all, according to representatives from the state-owned company Cubacafé. According to specialized sources, organic coffee is valued at 30% higher than varieties cultivated with chemicals. In spite of some recovery, the value of a pound of coffee (450 grams) is under 70 U.S. cents in the international market. (Opciones, 26/4/04)

April 26: Cuba is meeting restructured short-term debt payments to some governments, diplomats said, apparently using increased tourism and nickel revenues, as well as cash gleaned from recently imposed hard currency controls. But the same sources cautioned the effort was not sufficient to free the Communist nation from its status as one of the world's worst credit risks. A Japanese diplomat said Cuba had paid on time $50 million in principal under a 2002 restructuring of $120 million in short-term official debt. European diplomats said Havana was paying France's and Germany's restructured short-term debt on schedule too. Other European Union governments also reported some payments, though at times late and on an irregular basis, with Spain an exception and owed more than $300 million in short-and medium-term trade cover. Most foreign and Cuban analysts said Cuba's foreign debt, excluding former communist countries, has increased from $11 billion in 2001 to between $13 billion and $14 billion due to borrowing, accumulated interest, and a weaker dollar. (Reuters, 26/4/04)

April 26: Cuba's main hard currency earner, tourism, increased more than 13 percent in the first quarter, according to a government report. Top officials have told foreign bankers they expect nickel plus cobalt profits to be around $400 million this year due to high international prices. Tourism generates more than 40 percent of Cuba's hard currency, or some $2.1 billion in 2003, while nickel has replaced sugar as the top export earner. "The first three months of the year were very good, especially because tourism put in a strong showing on top of last year's record arrivals," said Juan Triana, head of Havana University's Center for the Study of the Cuban Economy. Most foreign and Cuban analysts expect Cuba's GDP to increase at least 3.5 percent this year, compared with 2.6 percent in 2003 and 1.1 percent in 2002. (Reuters, 26/4/04)

April 27: 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 venture with Cuba for 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, 27/4/04)

April 27: Cuban tropical geographers are studying the Zapata marshland in southern Matanzas Province, one of the six internationally-declared Biosphere Reserves on the Island, to determine a managed development plan. Cuban Tropical Geography Institute specialists have preliminary results on an environmental and socio-economic history of the Zapata swamp, as well as an analysis of the natural and economic elements characteristic of the area. (Prensa Latina, 27/4/04)

April 27: Mexicana Airlines is increasing its promotion of flights to Havana and Varadero. According to Armando González, the regional director of the airlines, the company will step up its advertising in the coming months -- with the view to increase travel to the top two tourist destinations on the Caribbean island. During a news conference in Mexico City, Armando González noted that Mexicana Airlines moved more than 83,000 passengers on round-trip flights between Mexico and Cuba last year. (Radio Habana Cuba, 27/4/04)

April 28: Resolution 11/2004 of the Cuban Ministry of Labour establishes that from October onwards no new licences—required for self-employment activities—will be issued on 40 different trades. The document indicates that those who already have a licence may continue their activities, but transfers from licence-holders to relatives will not be permitted nor new licences will be issued. (BBC Mundo, 28/4/04)

April 27: The Sixth Caribbean Annual Conference on Development of Sustainable Tourism takes place in Havana with the participation of 200 delegates to analyze aspects related to a balance between land development and underwater conservation. "Maintaining a Correct Balance - Meeting of Land and Sea," includes conferences, workshops and technical visits that begin in Old Havana, declared World Cultural Heritage in 1982 by the UN Organization for Education, Science and Culture (UNESCO). (Prensa Latina, 27/4/04)

April 30: Ciego de Avila province has introduced new Cuban agricultural exports, which have increased the island´s presence in the international market, agriculture sources said. ASEMAG trading company expert, Jose Luis Tapia, told the press that his company has exported tomatoes, pimiento, papaya, aubergine, haricot and cucumber to Europe and Canada with good acceptance for the quality and presentation of the products. The expert said that the country is developing a variety of Neapolitan pumpkin in Ceballos town, 267 miles east of Havana. Farmers have obtained fruits of up to 189 pounds. The country is selling the pumpkin directly to Italy. (Prensa Latina, 30/4/04)

April 30: British tourists seeking Caribbean sun and beach have spurred the recovery of Cuba's tourism trade, which grew 13.6 percent in the first quarter of this year, the Cuban government said. British tourists have flocked to communist-run Cuba in growing numbers, and charter companies are increasing weekly flights from eight to 12 a week. Rebeca Jara, sales promotion director at Cuba's Ministry of Tourism, said British tourism grew 37 percent in the first quarter to 32,616 visitors, and became the fastest growing European market for Cuba in March, though still behind Canada Italy, Germany, France and Spain in overall numbers. British charter operators Monarch and Britannia are adding new weekly flights to Cuba this year, Jara said, and the first charter flight from Ireland operated by SunAir will arrive in Varadero, she said. (Reuters, 30/4/04)