Chronicle on Cuba - June 2005

June 2: The blackouts that have affected Havana and other parts of Cuba were caused by breakdowns in power plants and damage to transmission lines, the state electric utility said. For several days, blackouts lasting up to six hours have plagued Havana and some areas in Matanzas and other provinces during both daylight hours and at night. The damage was caused by the severe weather that has affected different parts of the island, the utility said. The current blackouts are similar to those experienced at the end of last year, when there were outages lasting an average of 10 hours a day after a major breakdown at the Antonio Guiteras plant. (EFE, 2/6/05)

June 2: Cuban-Canadian joint venture ENERGAS will increase electric power generation with natural gas this year, starting with important investments in the west of Cuba, it was announced. Specialists estimate that ENERGAS will exceed 300 MW/h by the end of November 2005, and has the fringe benefit of preventing 100 tons of sulphur being released into the atmosphere daily. ENERGAS is a joint venture comprised of Cuban Unión Eléctrica and Cuba Petróleo, and Canadian Sheritt, and has national recognition by the Cuban Science, Technology and Environment Ministry. It commenced operations at the end of 1998, and was the first initiative to produce cheaper electric power, and foster the aspiration to generate all electric power in the country from national crude oil, now at 90 percent. (Prensa Latina, 2/6/05)

June 2: The Canadian conglomerate Sherritt International reported $16.9 million in revenues for its oil and natural gas operations in Cuba during the first quarter of 2005. The report, posted on the website of the Cuban Ministry of the Basic Industry, states that this figure represents a 21.3% increase in company revenues. Sherritt is planning to step up production by early 2006, when drill sites currently being assessed in Santa Cruz, north of Havana, become fully operational. (EFECOM, 2/6/05)

June 3: Spanish oil-prospecting company Repsol YPF resumed subsurface sounding in Cuban waters, following a failed attempt last year. With a new joint-venture deal that entitles it to 40% of all revenues and puts it at the helm of the drilling rig, the company is planning to pick up where it left off. Other shareholders in the joint-venture will be Chinese state-owned CNOOC, with a 30% stake, and Norwegian Norsk Hydro, with the remaining 30%. (Notimex, 3/6/05)

June 7: It has been more than a decade since Cuba opened its door to foreign businesses. Now many investors -- mainly European -- who took the plunge are being asked to leave. Only half the homes rented to expatriates by the state's real-estate monopoly are now occupied, and at the Havana International School enrollment is down about a third from two years ago and falling. On average, one joint venture and two smaller cooperative production ventures have closed each week since 2002, when there were 700 in the country. ''I would not be surprised if in the end there are only around 50 joint ventures in the country and just a handful of cooperative production agreements,'' said an employee at the Cuban Foreign Investment and Economic Cooperation Ministry. Cuba is now interested in partnering only with well-known companies in strategic sectors of the economy, said Marta Lomas, foreign investment and economic cooperation minister. European investors whose joint ventures are liquidating complain of endless haggling with state companies and ministry officials over how and when their share of investments will be paid, and the often millions of dollars they are owed for financing operating costs. (Financial Times, 7/6/05)

June 7: Cuba has begun a top-level review of its once-powerful sugar industry after a 2002 restructuring failed to halt its decline and improve efficiency, industry sources and foreign traders said. The Communist-run Caribbean country shut down 71 of 156 mills and relegated 60 percent of sugar cane plantation lands to other uses in the 2002 restructuring. Twenty-three of the remaining mills remained closed this season, and cane output was less than 30 tonnes per hectare due mainly to drought conditions. Local experts said many of the mills would remain closed next year as output would still fall well short of 2 million tonnes, compared with 2.52 million tonnes in 2003. They said general neglect of the state-run industry was the underlying reason for its precipitous decline. The industry once employed 400,000 workers and two million of the country's 11 million residents depended on it, most living in the countryside. Some 200,000 workers have been laid-off in recent years, with the government paying their salaries while they are retrained mainly for agriculture-related jobs. (Reuters, 7/6/05)

June 7: Cuba is experiencing a shortage of electricity, with blackouts this summer expected to average six hours daily, despite Fidel Castro's pledge to improve the nation's power supply. Recent severe weather caused breakdowns in power plants and damage to transmission lines that affected Havana and other parts of Cuba for several days, state-owned Electric Union of Cuba, or UE, said this month. UE also warned that blackouts could last on average six hours daily. “I do not truly believe that we are going to recover -- even with the capital maintenance that we are carrying out," said Yadira Garcia, Cuban minister of basic industry, late last month. "These plants date back to the 1980s and 1970s. We are still having problems financing the maintenance". "The technology for these plants, some of which are Soviet and Czech, is really no longer manufactured by the factories that produced certain parts," the minister said. The blackouts are similar to those experienced at the end of 2004, when outages lasted an average of 10 hours daily. Cuban Basic Industry Minister Marcos Portal was dismissed after those outages. (UPI, 7/6/05)

June 9: Arlene, the first cyclone of the 2005 season, brushed the western tip of Cuba on its way northwards bringing more benefits than harm to the drought-stricken Caribbean country. No human casualties have been reported. The tropical storm, with winds up to 75 kilometers/hour, brought much needed rain to the island, which Cubans have seen as a blessing for their dried lands. (Prensa Latina, 9/6/05)

June 10: Despite its sugar industry currently being in dire straits, Cuba shipped 400 tons of sugar out to North Korea by way of contribution to a United Nations World Food Program (WFP) relief effort in that country. The sugar will be used to improve the diet of 6 million people in that nation, said Rosa Inés Antolin, WFP representative on the island. (AP, 10/6/05)

June 13: The latest economic report from the Spanish Commercial Office in Havana stresses that the current situation of the Cuban economy “has a noticeable impact on the numerous Spanish firms with stakes on the island” and “many of them have seen a drop in their sales or are having difficulties getting paid.” About a dozen Spanish companies received an official communication informing that their operating licenses would not be renewed. (Marca, 13/6/05)

June 14: The Cuban government will spend at least $412 million on products made in Venezuela under a trade agreement signed between the two nations, according to terms of the deal published in the Venezuelan press. Cuba will purchase foodstuffs including canned sardines, gelatin and condensed milk, as well as work clothes and boots "for an initial sum of $412 million," according to the Official Gazette, a government publication listing the details of recently approved diplomatic deals and legislation. The Venezuelan goods exported to the communist-led island will be "exonerated of all taxes" and "given preferential treatment within the policy of economic and social development" in Cuba, the Gazette reported. (Dow Jones International, 14/6/05)

June 15: According to a source with the Housing Department, in the municipality of Old Havana 19 homes were left partially destroyed in the wake of torrential rain accompanying tropical storm “Arlene.” There were no fatalities reported. (Cubanet, 15/6/05)

June 16: Canada is Cuba's third-largest trading partner, with about $900 million in two-way exchange in 2004, behind only Venezuela and Spain. Canadian firms manage to do business with Cuba in the shadow of restrictive US policy. Carpets, computer hardware and newsprint are some of the household items crammed into large containers and loaded onto one of four cargo ships that leave the port of HaIifax on a non-stop Atlantic voyage to Havana each month. "Cuba needs a lot of products," said Bill Shatner, a sales representative for the Cuban-based shipping company Melfi Container Lines. "It's not an easy market to deal with, but it's been busy." (Embassy Magazine Canada, 16/6/05)

June 17: French hotel group Accor SA has taken over management of Cuba's Riviera and Capri hotels, two notorious haunts of the Mafia in pre-revolutionary Havana, according to the company's representative. "We are very excited. Our imaginations are already hard at work. We can do many things with these two classic establishments and their nightclubs," Accor executive Eric Pyre said. Ginger Rogers was flown to Havana as a star attraction when Mafia boss Meyer Lansky opened the Riviera and its domed casino on Havana's waterfront in 1957. The Capri, which will get a $15 million overhaul, was run for the mob by American actor George Raft until Fidel Castro swept into power in a 1959 revolution that sent the gangsters running. Accor's move is the latest indication of renewed investor confidence in the Communist-run country's leisure sector after last year's replacement of the tourism minister and other top officials created uncertainty. (CNN, 17/6/05)

June 17: The World Food Programme (WFP) has launched an emergency food aid operation for 773,000 people affected by the ongoing drought in Cuba, WFP representative Rosa Inés Antolín told the press. The operation, which will involve a total of 3.7 million dollars in assistance for three months, could go into effect in July, Antolín noted. The WFP will also be counting on support from donors, including the European Union (EU), Canada and Japan, to provide aid over subsequent months, she added. The food aid operation will be carried out in coordination with the Cuban Ministry of Foreign Investment and Economic Cooperation (MINVEC) and the United Nations Children's Fund (UNICEF). (IPS, 19/6/05)

June 19: Communist authorities in Havana have shut down hundreds of private entrepreneurs in a drive to reorganize the tiny private sector and ensure the businesses obey the law, the capital's official weekly said. "The process has included personal interviews, the checking of the skills of the self-employed and the study of where raw materials come from (…) up to now the licenses of 2,000 have been revoked," the weekly Tribuna de La Habana said. The process will conclude at the end of the month and take place every two years, Odalys Gonzalez, a regional labor ministry director, told the newspaper. The government has repeatedly complained about growing inequality associated with self-employment. A private worker can earn more in a day than the US$12 (euro10) than the average state worker makes in a month. Officials also say private workers often compete with the government or steal state goods. (Reuters, AP, 19/6/05)

June 19: The 13th Expo Caribe International Trade Fair kicked off in the Heredia Convention Center of Santiago de Cuba. Over 70 national exhibitors will be showing their products and services, representing the ministries of Agriculture, Light and Basic Industry, Culture, Health, Higher Education, Fishing, Tourism, Iron and Steel, Transportation and Hydraulic Resources, among others. Various foreign firms will also be present, from Italy, the Dominican Republic, Venezuela, and Spain among others. (Radio Habana Cuba, 20/6/05)

June 20: Cuba's Foreign Trade Minister Raúl de la Nuez has announced that, despite US hostility, climactic adversity and the high prices of fuel, Cuban trade has surpassed the seven billion dollar level of 1991. Speaking at the opening of the XIII International Fair of the Caribbean in Santiago de Cuba, the minister explained that notwithstanding cut-backs necessitated by the crisis, imports grew 20 percent in 2004, while exports increased 38 percent, both in relation to the previous period, Granma daily reported. (Prensa Latina, 20/6/05)

June 21: Persistent electricity shortages, which last year cost a government minister his job and forced enterprises to curtail working hours or close altogether, augur an even-hotter-than-usual summer for this Caribbean island nation. Power outages increased in May due to breakdowns in supply lines and several power plants, though not to the level of last year, when blackouts lasted an average of 10 hours a day. Though the official press regularly publishes lists of scheduled outages - some as long as seven hours - in different urban areas, reality fails to conform to the notices, and blackouts often take the population by surprise. The blackouts not only strike private homes, but also businesses, shops and some health centers, which are in the dark for hours. The Cuban Electric Union says service should improve in the latter half of the year, as plants are repaired and 17,000 kilometers (10,500 miles) of cable and 43,000 lampposts are replaced or restored. Even if the power supply were stabilized, it could not meet the island's growing demand, especially in the summer, when electricity consumption goes up 15-20 percent, experts say. (EFE, 21/6/05)

June 20: The MERCOSUR member countries agreed to begin negotiations to sign a free trade accord with Cuba within the framework of the Latin American Integration Association (ALADI). The initiative was mentioned in a joint declaration signed by the presidents of Argentina, Brazil, Paraguay and Uruguay. (Reuters, 20/6/05)

June 21: Habanos SA, the world’s leading company in the commercialization of premium cigars, recently has opened its first franchised store, La Casa del Habano, in Shanghai. The latest Shanghai store is its fourth outlet in China. The new store will sell about 20 Cuban cigar brands and more than 30 kinds of cigar products, according to the related report. Habanos SA had set up its first cigar store La Casa del Habano in Chinese mainland in Guangzhou in September 2003. (Business Daily News, 21/6/05)

June 22: Over the last decade, hurricanes have cost Cuba an estimated 4.5 billion dollars in losses, according to figures from the United Nations Development Program (UNDP). The damage caused by the passage of Hurricane Michelle in November 2001 alone was calculated at close to one billion dollars. Razed crops, uprooted trees, houses left in ruins, flooded streets and cuts in basic services like electrical power and water, sometimes lasting days, form part of the bleak aftermath once the storm has passed and it is time to appraise the damages. The poor physical condition of many homes makes it necessary to evacuate thousands of families who could otherwise be killed by crumbling buildings. (IPS, 22/6/05)

June 23: Venezuela, with 22 production and trade companies, is the widest represented country in the 13 th Caribbean International Fair (ExpoCaribe) running in Santiago de Cuba. Marcial García, president of the Corporación Industrial de Venezuela, said that such a wide Venezuelan exhibition in ExpoCaribe implies an effort of his country to increase trade with Cuba, which reached 1,500 million dollars in 2004. (AFP, 23/6/05)

June 23: Cuba increased the salaries of its teachers, doctors and nurses, highlighting the importance the nation's communist government puts on its health and education sectors. Workers in these fields will receive an average of 40 to 50 additional Cuban pesos a month, or the equivalent of about US$2. The increase was to take effect July 1. "It's very modest, and can be improved upon," Fidel Castro said in a live televised address to announce the news. The average Cuban worker earns 300 pesos a month, or the equivalent of about US$12. Many of those to receive the new salaries also benefited from an earlier increase to the island's minimum wage, under which the salaries of nearly 1.7 million low-wage workers were doubled May 1. The positive economic news has come on the heels of new optimism based on oil prospects off Cuba's northern coast and strengthened economic ties with China and Venezuela. (Prensa Latina, AP, 23/6/05)

June 26: Mexican carrier Magnicharters started offering direct flights from Monterey to the main tourist destinations in Cuba, airline management said. "Magnicharters launched the first direct flights to Cuba with Cayo and Varadero the principal destinations," the airline's marketing chief, Rafael Carpio Blanco, told the press. (EFE, 26/6/05)

June 26: Repairs are taking longer than expected at Cuba's Felton theremoelectric plant - the country's largest - and the resulting widespread blackouts are inconveniencing residents in Havana and at other locations on the Communist-ruled island. The oil-powered plant, located in the eastern province of Holguin, is undergoing major repairs to one of its power generation units with the aim of achieving greater efficiency in the consumption of petroleum, the official AIN news agency reported. Initially, authorities had planned for the repairs to the steam generation mechanism to take about 60 days, but once the operation was under way other problems were found in the electric generator, forcing more complicated repairs to be undertaken and the time required for the task to be extended. Engineer Eric Kinzan, one of the Felton chiefs, said that the repairs will finally be done about mid-July, and the plant will be operating at full capacity and can then be reintegrated into the National Electricity Generation System. For several weeks, the blackouts have been gradually getting longer and now amount to five or six hours per day - or night - in the capital and the central province of Matanzas. (EFE, 26/6/05)

June 27: An illegal operation for the production and sale of pharmaceuticals, working out of a government-owned laboratory and involving a network made up of some 40 individuals, including executives, technicians and a chief of security, was uncovered in Cuba. The weekly “Trabajadores” reported that 43 people received punishment ranging from facing criminal charges to workplace disciplinary action. (Notimex, 27/6/05)

June 27: Virgin Atlantic launched an inaugural flight to Havana for its regular, twice-a-week service from London's Gatwick Airport beginning in July. British billionaire and Virgin Express Holdings PLC chief Richard Branson stuck Cuban and UK flags out of a small hole in the airplane as it rolled up on the Havana runway. "I think there are billions of people who'd like to come to Cuba," he told reporters at the airport. "I think (our venture) will be enormously successful. We'll make it so." (CNN, 27/6/05)

June 27: Cuba is carrying out hydraulic works of over 160 million dollars as an emergency solution against the persistent drought affecting the country for a year and a half, Trabajadores weekly informed. The president of the National Water Resources Institute (INRH), Jorge Luis Aspiolea, said these are highly expensive investments with priority for the most affected zones, adding the Cuban government is seeking other responses to cope with this problem. Rains in the past three weeks have brought some relief to the drought-striken island, but still not enough to cover all the needs. (Prensa Latina, 27/6/05)

June 27: Cuba's largest citrus orchard reported final tonnage would be 425,000 tonnes of grapefruit and oranges, 75,000 tonnes less than expected due to dry weather, official radio said. "Despite irrigation difficulties, Matanzas citrus workers have collected 400,000 tonnes (…) with 25,000 tonnes of oranges still to be harvested before the season ends," official Radio Reloj said. Matanza's state-run Jaguey Grande orchard, just east of Havana, accounts for around 50 percent of Cuba's citrus crop and 70 to 80 percent of all citrus-related exports. A prolonged drought in central and eastern Cuba began spreading west this year, before June rainfall eased the situation in the area. The orchard produced 435,000 tonnes during the 2003/2004 season and planned to produce 500,000 tonnes this season. Citrus products are the country's second agricultural export after tobacco, earning around $100 million. Fresh fruit and concentrate go mainly to Europe (Reuters, 27/6/05)

June 28: C uba has begun preparing sugar workers for mill closings in the wake of this year’s record-low crop and the prospect that next year’s will be more or less the same. Estimated output of 1.3 million tons of raw sugar was the lowest since 1908 and has forced the country to import sugar to meet contracts and cover its 700,000-ton domestic consumption commitment. Juan Varela Perez, Cuba’s top sugar reporter who often speaks for the Sugar Ministry, confirmed to Reuters that a top-level review of the industry was underway and that some mills would close down. “Another group of mills will cease operations so that in the coming harvest the most efficient and economically justifiable operate,” Varela said. “The mills that are closed will be transformed into agricultural companies or ranches and the land freed from cane production will be planted with other crops or used as pasture.” The government hasn’t commented directly on the harvest and future plans, but Fidel Castro called the industry the country’s ruin earlier this year. (Reuters, 28/6/05)

June 29: Fidel Castro, Venezuelan leader Hugo Chávez and top officials from 14 other Caribbean countries met for talks on a Venezuelan plan to sell fuel more cheaply to the region as world oil prices remained at near record highs. Most of the delegations were expected to sign an accord to set up a cooperative program for Venezuela to distribute fuel across the region on preferential terms. Castro called the plan an important step toward greater solidarity, "the only method of survival for our countries" as oil prices continue to rise. The initiative, called Petrocaribe, would extend and improve
special financing arrangements under past oil deals and use an expanded fleet of Venezuelan tankers to deliver fuel directly to bypass costly intermediaries, Chávez said. (AP, 29/6/05)

June 30: The Che Guevara nickel refinery in Moa, Holguín province, has begun mining a new field, replacing a previous one, Yagrumaje, that had been depleted after 20 years in use. Industry sources say this will guarantee the necessary raw material to obtain nickel plus cobalt at the Che Guevara refinery, which has a capacity of 30,000 tons a year. To exploit this field, the enterprise has introduced new equipment and will comply with strict environmental norms for the conservation of the site. This follows an agreement between the Cuban government and Canada’s Sherritt International to expand their joint venture, which includes the Pedro Sotto Alba nickel processing plant in Moa and the refinery in Fort Saskatchewan, Alberta. The 50-50 venture, valued at $450 million, foresees expansion of the Pedro Sotto Alba plant to 16,000 tons a year, an increase of almost half its original capacity. (Cuba News, June 2005)