Chronicle on Cuba - November 2004

Economy

November 1: The Cuban Central Bank issued new convertible-peso bills in denominations of five and 10 pesos, the currency that will replace the US dollar on the island starting November 8. The press reported that the new currency will bear the legend "Banco Central de Cuba" and the bank's logo. The watermark will be the portrait of the apostle of Cuban independence, Jose Martí. The bills have a five-pointed star on the front along with a security ribbon bearing the popular revolutionary slogan "Patria o Muerte - Venceremos." The five-convertible-peso bill is green and has a picture of the monument to national independence hero Antonio Maceo. The 10-peso bill is brown and bears a picture of the monument to Maximo Gomez, a Dominican general who fought for Cuban independence. The bank said the previous issue of convertible pesos from 1994 was still legal tender. The convertible Cuban peso, known officially as the "CUC" (Convertible Unit Currency in English) and popularly as the "chavito," will replace the dollar, to which it is pegged, as of November 8, according to an announcement made last week by Fidel Castro. (EFE, 1/11/04)

November 1: More than 1,000 companies from 45 countries are participating in Havana's 12th International Fair (FIHAV), the most important business event in Cuba. Spain once again boasts the fair's heaviest foreign representation, followed by Latin America and the United States, organizing-committee president Abraham Maciques told the local press. Strong foreign presence in the fair, which runs through next Sunday, "once again ratifies interest in the Cuban market, the sense of security it gives (to foreign companies) and the prospects they see for doing business on the island," Maciques said. In addition to developing the local market, FIHAV is also "an opportunity for Cuba to showcase products that could be exported to third countries," he said. According to Cuba's Foreign Trade Ministry, eight official delegations headed by ministers, deputy ministers and presidents of official institutions from China, Vietnam, Venezuela, Argentina, Mexico, Belgium, Germany and South Africa are participating in the event. Meanwhile, governments and business delegations from Germany, the Czech Republic, Argentina, Brazil, Chile, Venezuela, Mexico and Peru are sponsoring pavilions on the grounds. According to the Cuban government, this year's participation in the fair from Colombia, Dominican Republic, Guatemala, Costa Rica, Trinidad and Tobago, Bahamas and the United States signifies an increase in trade negotiations between Cuba and other Western Hemisphere countries. (EFE, Prensa Latina, 1/11/04)

November 1: Chinese Chamber of Commerce vice president Gao Yang said her current visit to Cuba is aimed to increase bilateral trade links. Gao, who participated in the opening of her country´s pavilion at the 22nd Havana International Fair (FIHAV 2004), stated that the Asian exhibition area will mainly present producers of electrical appliances, a sector of great exchange between both states during the last four years. (Prensa Latina, 1/11/04)

November 1: Cuba and Brazil are studying future transfers of technology developed on the island to the South American giant in order to boost the production of sugarcane derivatives. Renato Caporali, head of the International Division of SEBRAE, a Brazilian institution that supports small and medium-sized businesses, took part in the 4th Bilateral Technical Cooperation Commission Work Group that wrapped up its sessions over the weekend. He reported that his organization signed a cooperation agreement with Cuba's Research Institute for Sugarcane Derivatives (ICIDCA). (Radio Habana Cuba, 1/11/04)

November 2: During a visit to the 22 nd International Trade Fair in Havana, Foreign Trade Minister Raúl de la Nuez informed that, in comparison with the same period last year, in the first three quarters of this year, Cuban exports grew by 34% while imports grew by a mere 15%. (IPS, 2/11/04)

November 3: Cuban Sugar Minister Ulises Rosales del Toro said mills would open late for the coming harvest, in the latest indication that drought damaged the crop, the official news agency Prensa Latina reported. "The harvest will start in January, and not in December as usual, to give more time for cane to mature and increase industrial efficiency," Prensa Latina quoted Rosales as saying in an exclusive interview. Around 20 of 85 mills were not expected to operate during the coming harvest, provincial media and sources indicated. Vice President Carlos Lage recently said 26 of those mills would not open until February. The harvest ends in May. (Reuters, 3/11/04)

November 4: Sherritt International Corp.'s earnings doubled in the third quarter, results showed, on the back of higher nickel and cobalt prices and strong sales. The company, which has power, oil and nickel investments in Canada and Cuba, earned $40.2-million or 26 cents a share in the three months ended September 30. That compared with $20.7-million or 11 cents in the same quarter a year ago. Sherritt said that sales of nickel, a metal used to produce stainless steel, increased by 5 per cent in the fourth quarter to 8.3 million pounds. Sales of cobalt, which is mined with nickel, were 900,000 pounds, up slightly over the prior-year quarter. (The Globe and Mail, 5/11/04)

November 4: Due to the huge demand to dispose of the US bills that were legal tender in communist Cuba for a more than a decade, the Central Bank gave Cubans an extra week to exchange the American greenback for a local currency tied to the dollar. The need to extend the two-week transition period indicated that economic planners in Cuba underestimated how many US dollars had accumulated on the island since they were made legal tender as a temporary measure to capture hard currency after the loss of Soviet aid and trade. (AP, 4/11/04)

November 4: Mexican businessmen have asked the Mexican and Cuban governments to help to improve trade relations between the two countries, given that diplomatic disagreements during the last year have had a negative impact on trade. The National Chamber of Manufacturers (Canacintra) has reported that 2004 has been one of the worst years for trade with Cuba, mainly because of the Ahumada case, which resulted in a temporary recall of the diplomatic representatives of both countries. According to data from the Economy Secretariat, Mexico exported 74m dollars' worth of goods and services to the island between January and June this year, in contrast to the 294m, dollars' worth exported during the same period 10 years ago. Before the 22nd International Fair in Havana, Canacintra Secretary-General Rene Ortiz said that the Caribbean island constitutes a major business opportunity for Mexican manufacturers that has not been developed sufficiently. (El Financiero, 4/11/04)

November 5: Tobacco in the eastern province of Pinar del Río - - the biggest producer of tobacco in Cuba -- is recovering from the damage caused by Hurricanes Charley and Ivan, which hit the area in August and September. According to authorities in the province, following weeks of clean-up operations and efforts to repair downed power lines, workers are striving to boost production of export-quality cigars. Four tobacco factories in Pinar del Río have extended their work day in order to fulfill production goals. (Radio Habana Cuba, 5/11/04)

November 7: The 22nd Havana International Fair FIHAV 2004, Cuba's largest trade fair, concluded with more than $193 million worth of contracts and letters of intent for deals, organizers said. Cuban Foreign Trade Minister Raul de la Nuez told local television stations that the organizing committee was "pleased" with the number of contracts signed. He said that $26.6 million of the $193.7 million was for export contracts in industries such as alcohol, seafood products and machinery. The largest contract penned this year was a more than $60 million agreement with a rice company in Vietnam, Cuba's largest rice supplier, the foreign trade minister said. Letters of intent totaling more than $7 million in exports were also signed and should be finalized in the coming months. "I believe this fair has been characterized by its results," the official said. Cuban state-owned food company Alimport alone signed agreements totaling more than $135 million. Alimport head Pedro Alvarez said more than $65 million of the total contracts were with US companies. (EFE, 8/11/04)

November 7: Strains of Cuban sugar cane are to be utilized in Ecuador and the Dominican Republic to generate electricity and serve as stakes for certain fruit and vegetable plants, an official at the National Sugar Cane Research Institute (INICA) said. Dayami Campo Guerra, who represents a business group affiliated with the island's Sugar Ministry, told local reporters that these varieties will be used not only for creating energy, but also as stakes for such plants as plantain. INICA-developed strains with similar characteristics have been used by Mexican farmers as stakes for keeping tomato plants upright, Campo Guerra said. (EFE, 7/11/04)

November 8: Cuban experts advised to give priority to crops resistant to drought in eastern Cuba as a reliable measure to deal with the lack of water caused by the unfavorable climate conditions in the country in the last 10 years. Adolfo Rodríguez, chief of the National Group of Urban Agriculture, called agriculture workers to ration the use of the water in the irrigation of fields, work with efficiency and quality and make an adequate cultivation plans. The local authorities must guarantee the transportation of irrigating systems to other favorable areas -in case the reserves are exhausted- if there are not conditions to solve the problem in a short term, Rodríguez said. It is expected an increase in the production of urban agriculture in 2004 despite the current difficulties, he added. (Prensa Latina, 8/11/04)

November 8: The US dollar disappeared from stores, hotels and restaurants in Cuba in what Fidel Castro has called a move to counter US attempts to stifle the island's economy. Cuban businesses can now only accept the "convertible peso" which has a face value equal to one dollar but which is worthless outside the country. The coloured notes have become known as "chavitos", or "monopoly money", by the local population. Now there will be the local peso and the convertible version. Rene Lazo, deputy chairman of the Cuban central bank, said the use of the dollar prohibited attempts to estimate the amount of money in circulation, the Trabajadores newspaper reported. He said that now the central bank will be able to "maintain an adequate balance between monetary circulation and the offer of goods and services." The official press has called the currency change "a new victory over imperialism" saying that Cuba was regaining its "monetary sovereignty". (AFP, 8/11/004)

November 8: In some areas of large public attendance in Havana, such as the busy produce markets, some “cambistas” (black market currency traders) are offering up to $32.00 pesos per US dollar, nearly 20% more than the government-run exchange offices. Some analysts maintain that the rise of a black market for US dollars was an almost “natural” reaction, to be expected following the recent ban on US dollar-based transactions, while other experts forecast that this type of parallel economic activity is only transitory and should not prosper if the local convertible “peso” remains stable. (EFE, 8/11/04)

November 8: Havana will permit the exchange of Japanese yen, Venezuelan bolivars and Mexican pesos for Cuban convertible pesos starting next week, authorities announced in Havana. Central Bank of Cuba (BCC) President Francisco Soberon denied that the Cuban government is considering extending the use of the euro on the island, because "the convertible peso has come to stay, it is our currency." Nonetheless, he recognized that the use of the euro could grow in some tourism centers, but "in no way is it valid to say that we are considering the introduction of the euro," he said. The Central Bank of Cuba president also denied that a black market in dollars was likely to emerge on the island because "owning dollars is not prohibited." He also rejected any possible impact on the remittances that Cubans receive from family members in the United States, adding that the measure has been well received by foreign businessmen operating in the country. (EFE, 8/11/04)

November 8: The Cuban government has placed orders with Mexican manufactures for 50 new products to be introduced in the Cuban market, said Cuauhtémoc Martínez, president of the National Chamber of the Transformation Industry (Canacintra). These products to be imported monthly by Cuba will include 500 thousand candles, industrial-rated footwear – 2,500 pairs--, two containers worth of flooring and tiles, as well as 2 thousand surgical robes. (Notimex, 8/11/04)

November 10: The South African government has signed a framework agreement with Cuba to help boost the country's plans of providing proper shelter for the poor. Housing Minister Lindiwe Sisulu and Cuban Deputy Minister of Construction, Rene Mesa signed the agreement in Pretoria. Speaking after the signing ceremony, Western Cape MEC for Housing and Local Government, Marius Fransman said the Cubans would be deployed to aid with the People's Housing Process. "That agreement will talk to technical assistance to be rendered by Cuban architects and engineers to support the low cost housing process in South Africa." (AllAfrica, 10/11/04)

November 11: Cuba's state-owned utility said that it is well on the way to remedying the supply problems that have caused blackouts of up to 12 hours throughout the island since May. "The situation of the electric system, if no other unexpected problems arise, will continue to improve once the maintenance cycles are restored" at the Antonio Guiteras plant in the western province of Matanzas, Union Electrica said in a communique, adding that it will soon be able to meet demand for electricity 24 hours a day while maintaining "an indispensable reserve." Union Electrica noted that the rolling blackouts will have to continue for a while and that some of those outages may be longer than originally announced. (EFE, 11/11/04)

November 12: According to the Cuban daily Granma, the first 145 Turkish tourists ever to visit the island arrived in Cuba aboard the maiden flight of a new Turkish Airlines’ charter service between Istanbul and Havana. (AFP, 12/11/04)

November 11: Russia's leading bus manufacturing group, Russian Buses, has shipped 50 buses to Cuba, the company said in a statement. Cuba's Transport Ministry planned to use them as school buses, according to the statement. Russian Buses has also signed a dealership agreement with Cuba's Rusia Automotriz, SA, to sell at least 100 buses a year in Cuba. (Tass, 11/11/04)

November 14: The department of transport in Mpumalanga, Sourth Africa, will be seeking expert engineers from Cuba to beef up its capacity after a long battle to find suitable candidates locally. Roads and Transport MEC Fish Mahlalela said he belied soliciting the help of Cuban experts would help solve the shortage of civil engineers in the province. (AllAfrica.Com, 14/11/04)

November 15: A 10% tax on the exchange of US dollars has come into force in Cuba. The measure was originally planned for November 8, but was deferred for a week to allow people to change their dollar reserves into Cuban pesos. The move will affect Cuban citizens who receive money from relatives overseas as well as foreign visitors. (BBC, 15/11/04)

November 15: Delegates from 15 countries attending the 2nd International Symposium on Agro-Ecological Stockbreeding have visited several central Cuban provinces. The program -- which began in Las Tunas -- is moving west and slated to wind up in the Cuban capital. Ecologists and researchers from the United States as well as countries from Latin America, Africa and Europe are exchanging experiences with Cuban stockbreeders and farmers who produce food from natural resources. The meeting is being sponsored by the UN Food and Agriculture Organization (FAO), the Ibero-American Network for Sustainable Agriculture, the Latin American Agro-Ecological Movement, and the Cuban Ministry of Agriculture. (Radio Habana Cuba, 15/11/04)

November 15: Britain's largest trade mission ever to visit Cuba arrived in Havana, one day ahead of a key EU meeting in Brussels on future European relations with the communist island. The 40 visitors include potential investors in tourism, biotechnology, agriculture, education and energy, said Lord Colin Moynihan, the head of the UK-Cuba Initiative. The size and scope of the British trade mission clearly shows the strength of ties between Havana and London, said Moynihan upon arrival. (AFP, 15/11/04)

November 16: Fidel Castro appeared on TV along with the director of the Central Bank of Cuba, Francisco Soberón to discuss the progress of the de-dollarization of the economy. With more than 2.5 million transactions in the18 days since the measure was announced until its full application, and with more accounts opened during that time than in the total in the last ten years, Soberón considered the change-over to be a success. Castro declared that the recent monetary measures implemented on the island seek, among other things, to “devaluate the United States’ national currency.” While giving an update on the impact of the ban on US dollar-based transactions, Castro said that the other objective of this measure is to respond to Washington’s attempt to block Cuban deposits in international banks of any amounts in US currency derived from Cuban transactions abroad. (Radio Habana Cuba, Notimex, 16/11/04)

November 16: Agreements signed during next week's visit by Chinese President Hu Jintao should allow Cuba to double production of nickel from its current level of 75,000 tonnes a year, according to Fidel Castro. "These are big, big investments," Castro said in a four-hour televised address. He said the Chinese investments would eventually mean that "nickel production, which is now of 75,000 to 76,000 tonnes (annually) -- will double." He stressed that Cuba would retain 51 percent ownership of companies created with Chinese capital. (AFP, 17/11/04)

November 18: The drought affecting Cuba´s East for several years now has spread to the central and western territories, Cuban experts informed. According to the Climate Center studies, rainfall in October, the last month of the rainy season, was very low across the nation. Thus, unfavourable conditions are predicted for the November-April season, which only accounts for 20 percent of the annual rainfall accumulation. Data of the Climate Control Bulletin term the rain deficit "excessively below the usual", causing "the drought expansion to the central and western regions." The country’s 241 reservoirs are currently at 43% of their total capacity, according to specialists Margarita Fontova and Francis Rodríguez from the National Institute of Hydraulic Resources (INRH). For nine of the provinces, this is the lowest quantity of stored water since 1993. The only provinces not lacking stored water are Cienfuegos in the center of the island and, in the far west, Pinar del Río and the Isle of Youth, areas that were hit by the rain associated with Hurricane Ivan and which has aided their supplies. (Prensa Latina, Granma International, 18/11/04)

November 18: Cuba is offering technical assistance to the Dominican Republic in order to strengthen that country's irrigation systems. A commission from the Cuban Hydraulic Research Center has arrived in Santo Domingo, the capital of the Dominican Republic. Engineers will provide collaboration that includes technical assistance and help in designing plans for underground irrigation basins. The Cuban delegation will also carry out research and design hydraulic works systems. (Radio Habana Cuba, 18/11/04)

November 19: A pipeline constructed to bring water from the Cauto River, Cuba's largest, to the drought-stricken city of Holguín is finally up and running and should help bring relief to the more than 300,000 inhabitants of this major urban centre in eastern Cuba. ”It's working well and transporting the 500 litres of water a second that it was designed to handle,” engineer Rafael Aguilera, the director of the pipeline construction project, told the local newspaper Ahora. According to Ahora, attempts to put the pipeline into use were frustrated a full 25 times, as a result of breakages in the Italian-made pipes, which could not withstand the water pressure required. But since last week, the authorities say, the flow of water has been stabilised. Aguilera noted that a project of this scope would normally take up to three years to complete, but the state of emergency declared in the city 15 months ago in response to the drought made it essential to complete the pipeline in the shortest possible time. (IPS, 19/11/04)

November 20: All Cuba's provincial capital cities will boast digital telephone service. The eastern cities of Bayamo and Las Tunas will join the rest of the island's provincial capitals in offering much improved digitized phone service to residents and businesses. Cuba's telephone company, ETECSA, also announced that at the beginning of 2004 the province of Las Tunas was 8.2% digitized and by the end of the year officials expect the area to be 60% covered. (Radio Habana Cuba, 20/11/04)

November 20: Iran is to carry out two industrial projects to supply water and electricity to Cuba. Iran's Export Development Dank Manager Norouz Kohzadi and Cuban Minister of Government Ricardo Cabrisas concluded the agreement to that effect in Cuba, according to the Iranian embassy in Havana. During a meeting, Kohzadi outlined aspects of the current banking cooperation between the two countries and expressed Iran's readiness to provide the necessary financing for the projects at medium rate of return. (IRNA, 21/11/04)

November 22: Chinese companies signed agreements to invest in the production of Cuban ferro-nickel and form a joint venture to explore nickel reserves, in a major move into the island's nickel industry. State-owned Minmetals Corp. signed a memorandum of understanding that will allow Cuba to start up the unfinished Las Camariocas plant in eastern Holguin province, which has been mothballed since the demise of the Soviet Union more than a decade ago. State-run nickel monopoly Cubaniquel will own 51 percent of the plant and Minmetals 49 percent. The venture will produce 22,500 tonnes of ferro-nickel, with financing coming from the China Development Bank and guarantees from Sinosure, the Chinese Export and Credit Insurance Corp. An executive of Minmetals Corp.'s nonferrous unit said China was interested in other projects in Cuba's nickel industry located in Moa, Holguin province, where Cuba has a joint venture to produce nickel with Canada's Sherritt International. "We will be very active in Moa. China needs the resources. It is good for both countries," said Pen Pu Gang, vice president of China Minmetals Nonferrous Metals Co. (Reuters, The Toronto Star, 22/11/04)

November 22: The governments of Cuba and China signed a long list of cooperation accords affecting key areas of the Communist island's economy. The agreements were signed in the context of Chinese President Hu Jintao's visit to Havana, the last leg of his Latin American tour. Hu and Fidel Castro presided over the ceremony to sign the accords, which were designed to stimulate economic cooperation and trade in a host of areas, including petroleum, nickel production, biotechnology, education, telecommunications and tourism, among many others. The pacts do not set a figure on Chinese investment in Cuba, but experts expect Chinese funds to flow into the nickel sector, in particular. China also agreed to postpone for 10 years Cuban payments on Havana's financial obligations due on Chinese loans to the island between 1990 and 1994. Hu will conclude his visit to Cuba with a meeting with Defense Minister Raul Castro, and he will also deliver a speech to about 200 Chinese businessmen and Cuban officials. (EFE, 22/11/04)

November 22: Biotechnological cooperation between Cuba and China continues to move forward with the conclusion in Havana of clinical tests of a humanized monoclonal antibody created by Cuban scientists. According to Dr. Joaquín Villán, the second phase of clinical trials of the TheraCIM h-R3 recently ended successfully. Dr. Villán, a Cuban scientist participating in this technological transfer, noted that registration of the medicine for production and trade in the Asian nation could be given by the State Administration of Food and Medicine of China before the end of this year. TheraCIM h-R3 is an antibody used in a treatment combined with radiotherapy on patients with advanced cancer in the head and neck. The antibody has been created and produced by scientists from the Cuban Molecular Immunology Center, with patents in several countries including the United States. (Radio Habana Cuba, 22/11/04)

November 23: The first Iran-Cuba economic conference was held in the Cuban capital. An Iranian delegation comprising private sector officials and Cuban businessmen and industrialists attended the conference, the Iranian embassy in Havana announced. Speaking at the conference, the president of Iran's Chamber of Commerce, Industries and Mines, Ali Naqi Khamushi, described the trend of commercial ties between the Islamic Republic of Iran and [the] Republic of Cuba as "good". (IRNA, 23/11/04)

November 25: Malaysia and Cuba should strengthen bilateral co-operation in biotechnology, biomedicine and agricultural research and development, Prime Minister Datuk Seri Abdullah Ahmad Badawi said. Speaking to the Malaysian Press after bilateral talks at the Cuban Palace of the Revolution, Abdullah said these areas had also interested Fidel Castro. Several agreements, especially on biotechnology and production of vaccines, have been signed between Cuban research and medical institutes and Malaysian companies during the Prime Minister’s visit. (New Straits Times, 25/11/04)

November 25: Low energy supplies and equipment breakdowns that have forced some power plants to shut down could increase the number and frequency of blackouts around the island, Cuba's state-run Union Electrica said in a press release. The company noted that "electric service has been negatively affected by energy leaks at key generating units in the nation's power system." The same day, an official television newscast said several generators are out of service for maintenance purposes. "The level of technical interruptions is high. Insufficient reserves and unexpected leaks may impair electric service," the communique warned. Union Electrica also noted that scheduled rolling blackouts would remain in place, and occur more often than previously planned. (EFE, 25/11/04)

November 28: Full digitalization of telephone systems in the 14 Cuban provincial capitals was called a step forward in communications, after respective works were finished in Bayamo and Las Tunas, in the island´s East. The two modern plants substitute analogical ones, and will also benefit people from Puerto Padre and Manzanillo, the second cities of Las Tunas and Granma provinces, respectively, the Juventud Rebelde daily reported. (Prensa Latina, 28/11/04)

November 29: The Guatemalan minister for the Economy, Marcio Cuevas, visited Cuba seeking more trade exchanges with the island. The Minister stayed for three days in Havana, where he met with the Cuban minister for External Trade, Raúl de la Nuez, and the Cuban minister for Internal Trade, Bárbara Castillo. (EFE, 29/11/04)