Chronicle on Cuba - February 2006

Economy

February 1: Cuba, Venezuela trade amounted to USD 1.2 billion in 2005, said Venezuelan ambassador to Cuba Adán Chávez, brother of President Hugo Chávez. In a news release published by the Venezuelan President's Office, the diplomat stressed that "by the end of 2005, the economic flow boosted by Venezuela-Cuba agreements was around USD 1.2 billion." "Based on production this year, we have a goal to reach USD 2 billion in the two periods," the communiqué added. Adán Chávez added that in October 2005, Caracas and Havana initialed 182 new agreements in the framework of the sixth joint committee intended to assess progress in bilateral relations in the fields of education, health, energy and petroleum. He added that Cuba granted 10,000 scholarships for Venezuelans willing to study community integral medicine. Some 4,500 Venezuelans started these studies last year. (El Universal, 1/2/06)

February 2: Cuba and Trinidad and Tobago will increase their relations with the creation of an office to facilitate trade, announced Jerry Narace representative of the Trinidad and Tobago Ministry of Tourism and Trade in Havana. Narace explained that the office will have its headquarters in Havana and will facilitate exchanges, contributing to the elimination of linguistic barriers and differences among the two country's commercial systems. (Ahora, 2/2/06)

February 3: Cuban Basic Industry Minister Yadira Garcia toured Havana Province to check on the national energy program. In visits to San Nicolas de Bari, Nueva Paz, Madruga and Santa Cruz del Norte municipalities Garcia voiced satisfaction with the quality of the power generators installed there. The new sets will contribute 280 mw to the National Energy System, the minister was quoted as saying by Granma daily. (Prensa Latina, 3/2/06)

February 5: Fidel Castro offered to send half a million tons of cement to Venezuela, which could be paid for with products, said Venezuelan President Hugo Chávez. In a letter read by Chávez in his Sunday radio and television program Aló Presidente, Castro wrote. “I decided to communicate to Chávez that we are in a position (...) of offering half a million tons of cement which can be paid for with Venezuelan products or any other surplus that may be available”. (Reuters, 5/2/06)

February 10: Mexican trade surplus with Cuba rose 28.7 percent year-on-year to $181.9 million (152 mln euro) in the period January to November 2005. Over the last three years Mexico reversed the downward trend that marked its trade relations with Cuba before 2002. While diplomatic relations between Mexico and Cuba have been strained in recent years, trade relations between the two countries have been improving. Mexican exports to Cuba stood at $200 million (167 million euro) in the first 11 months of 2005, a 26 percent year-on-year increase. The growth rate in Mexican exports to Cuba in the first 11 months of 2005 was the highest one registered since 1995, according to foreign trade data of the Bank of Mexico (Banxico). (Latin America News Digest, 10/2/06)

February 10: Cuba sold about 160 million of its world-famous cigars in 2005, in line with recent years' sales, a tobacco executive said in announcing plans for this year's annual international cigar festival. Sales numbers in recent years have averaged around 150 million cigars. Manuel Garcia, vice president of the island's cigar-marketing firm Habanos SA, told reporters that the world market for premium cigars is about 400 million, about half of which are sold in the US. Cuba cannot legally export cigars or any other products to the US under a 45-year-old American trade embargo against the island. European countries are the largest market for Cuba's $350 million annual cigar business, especially Spain and France, followed by Germany. Asia is also a growing market for Cuban cigars, Garcia said. (AP, 10/2/06)

February 10: A Cuban delegation visited a Russian airplane manufacturing plant in Ulyanovsk, about 550 miles east of Moscow, and expressed interest in purchasing three Russian passenger airliners. Cuban Ambassador to Russia Jorge Marti Martinez, who headed the delegation, said Cuba wanted to buy three of the Tu-204 from the plant in Ulyanovsk for Cubana Air Lines. (Novosti, 10/2/06)

February 12: Fidel Castro met with visiting Chinese State Councillor Chen Zhili, at the Chinese embassy in Havana. Castro said the rapid economic development of China has become one of the engines behind the growth of world economy. He also spoke highly of the "putting people first" governance philosophy upheld by the Chinese Communist Party and the Chinese government and the "scientific concept of development". On Cuba's domestic situation, Castro said that in view of the hiking world oil prices, his government has placed high priority on energy conservation in the country's economic work. Cuba is ready to cooperate with China in this field, he added. (Xinhua, 13/2/06)

February 13: The success of biotechnology research in Cuba is the main pull-factor for a Swiss delegation arriving in the country for a one-week official visit.   Leading the delegation is the State Secretary for Education and Research, Charles Kleiber, the highest-ranking Swiss government representative to travel to Cuba on official business. "There are very few relations in the field of science and we think that it's the moment now to strengthen our cooperation," Kleiber, who was previously in Cuba in 2002, told the press. He said the aim of the trip was to see where Cuban science was at the moment, mainly in the field of biotechnology. (SwissInfo, 13/2/06)

February 14: Carib Cement has turned to Cuba to help supplement its cement production, following the shortfall that the company says was due to inclement weather in October last year. The cement manufacturer had initially publicly stated that it was looking to its sister firm Arawak Cement in Barbados to make up the deficit. However, the company's marketing manager Alice Hyde confirmed that the bulk version came from Cuba. While the cement imported from Cuba was far less expensive than the brand out of Barbados, it attracted a 40 per cent duty because Cuba is not a member of Caricom. (Jamaica Observer, 15/2/06)

February 14: Over 88,000 house electrical-system protectors will be installed in the eastern city of Camagüey, in the first half of 2006, as part of the Cuban project to optimize power. The protectors will be used to replace the faulty or inappropriate switches between the public electric supply and houses, according to local-electric-company officials. This measure is part of the Energy Revolution that Cuba is developing and includes the change of switches with an amperage capacity under 32, they said. The program to increase energy efficiency in Cuba also includes installation of thousands of emergency generators connected to the national system, devoted to eradicate power outages due to generation shortage. (Prensa Latina, 14/2/06)

February 15: The government of Venezuelan President Hugo Chávez is set to make a new disbursement of petro-dollars to further cement trade ties with Cuba. Luis Quiaro, president of Banco Industrial de Venezuela, the largest Venezuelan state bank, explained that, "We are making a contribution of capital amounting to US$50 mn for our branch in Cuba. Obviously, this money goes to the parent company, and is then deposited in our Cuban branch." This money is intended to fund "Venezuelan, Cuban or joint companies," in order to fuel bilateral trade. (El Universal,15/2/06)

February 15: C ompleted down to 3 465 metres in the west part of Bloc 7, the Tarara 100 well, operated by Pebercan, was successfully production-tested. The oil quality is similar to that of the Santa Cruz find which is significantly better than Canasi and Seboruco. The well has found a new shallow field different from the conventional objective of Veloz carbonates. The company is running long-term production and pressure tests to assess the extent and quality of this new potential field, which is at the limit of the available seismic data. Depending on the results of these tests, an evaluation program will be prepared to develop this new oil reservoir. However, pending the result of the current surveys and tests, there is still nothing to confirm that the productive structure revealed can have a significant impact on the company's reserves. (Pebercan Press Release, 15/2/06)

February 15: Venezuela and Cuba invested some US$26 million (euro21.9 million) in joint agricultural projects last year, the government news agency reported. Cuban specialists have helped set up chicken, rabbit and pig farms that have benefited 2,500 low-income Venezuelans, under a series of cooperative projects, said Francisco Galan, a vice minister at Cuba's Agriculture Ministry, in a Bolivarian News Agency broadcast. The projects include 33 Cuban advisors in sugar cane and coffee plantations in the Venezuelan state of Lara. The Cuban specialists have also been training Venezuelans in agricultural techniques in the cultivation of aromatic plants and other farming projects, Galan said. (Business Week Online, 15/2/06)

February 17: During his address at the official ceremony of the delivery of Chinese buses to the island, Fidel Castro highly praised the importance of the collaboration with China in the field of transportation. Castro said that the deal for 800 of the 1,000 buses bought in July prove the remarkable moment Cuba is living. The Cuban leader extolled the Chinese authorities’ respect during the negotiations and said that the deal to purchase buses, like the purchase of 12 locomotives last January, were calmly and consciously transacted, in accordance with the practice of meeting financial obligations without the smallest delay. He also referred to a deal with the Chinese firm Yutong for the purchase of 8,000 inter-provincial, municipal, urban, school and tourism buses. (Prensa Latina, 17/2/06)

February 18: Iran Export Development Bank and Cuba Foreign Bank signed an agreement to facilitate export of Iranian goods as well as engineering and technical services to Cuba. The Majlis press and news affairs department reported that the two countries' speakers of parliaments were present in the signing ceremonies. The agreement stipulates for the Iranian bank to allocate up to a 90 million dollars ceiling for credit facilities. It is estimated that Tehran-Havana trade will top 50 million dollars this year. Iran has a positive trade balance with Cuba. (IRNA, 19/2/06)

February 20: Trade between Cuba and China is growing at a breathtaking rate, and is the most visible expression of the close ties between the two countries, which appear to have overcome past differences and reached a high point in their relations. In the space of just one year, from October 2004 to October 2005, bilateral trade increased from 551 million dollars to 775.3 million dollars, moving the Asian giant up from fourth to second place among Cuba's trading partners. Trade with China is likely to climb quickly to the one billion dollar level, and Cuban foreign trade experts call Beijing "the most dynamic agent" in the economy of this socialist nation. Chinese exports to Cuba include domestic appliances, the machinery for manufacturing bicycles, and equipment to modernize the country's telecommunications, for a total cost of 200 million dollars. Havana in turn exports sugar, nickel, tobacco, Biorat rat poison, the medical drug interferon, high-technology medical equipment, vaccines and shellfish. So far, the two nations have entered into ten joint ventures, according to the Ministry for Cooperation and Foreign Investment. Official sources informed IPS that China has extended credit of 400 million dollars to pay for infrastructure and development exports. ( IPS , 20/2/06)

February 22: A recent study has confirmed that drought is intensifying in Cuba since it rains much less now than 46 years ago. The situation is worst in the eastern provinces of the island, says the study carried out by the Cuban National Institute of Water Resources (INRH). INRH experts warned that the average annual rainfall has decreased, between 1961 and 2000, from 1,468 millimeters to 1,335, as posted on Granma newspaper online. In the eastern part of the country the situation is critical since the average rainfall has dropped to 1,279 millimeters. Rainfall in all five eastern provinces has diminished by 260 millimeters, adds the report.  (AIN, 22/2/06)

February 22: Cuba broke the record of foreign tourists accommodated in a day when reporting 65,280 travelers in pleasure facilities, according to an official note issued by the Tourism Ministry (MINTUR). Released by the MINTUR website, the report adds this number was last broken on March 25, 2005 with 64,956 people lodged in Cuban hotels. (Prensa Latina, 22/2/06)

February 23: In 2005, Cuba increased its foreign trade 23 percent, a reversal of the situation in the 90s, triggered by Cuba’s loss of its traditional partners when socialist countries in the Soviet Union and Europe disappeared. Cuba´s main trade partners now are Venezuela and China, followed by Spain and Canada. This weekend at Expocuba, Cuban Foreign Affair Minister Raul de la Nuez also highlighted the increased trade with the region. The island´s total trade with Latin America and the Caribbean has grown from 50 percent to 72 percent. (Prensa Latina, 232/06)

February 24: A Swiss delegation has recently visited Cuba in order to learn from the country's biotechnology sector, which is one of the most advanced in the developing world. Switzerland has scant relations with Cuba in the field of science and is looking to strengthen co-operation in this area. Cuba currently exports biotechnology products to 50 countries in the world, mainly in Latin America and Asia, and overseas sales total around US$300mn per year. Cuba is one of the top three drug exporting nations in Latin America. (Emerging Markets Daily News, 24/2/06)

February 24: Tang Rouxin, president of SINOSURE, China’s leading export and credit insurance corporation, concluded a visit to Cuba with promising results for trade between the two nations. SINOSURE is the official Chinese institution that finances the country’s exports. It has growing annual operations in world trade, which exceeded 22 billion dollars in 2005. As a result of the visit by the Chinese official, a memorandum of understanding was signed between SINOSURE and Cuban authorities, which offers a financial framework to cover the dynamic growth in commerce between Cuba and the People’s Republic of China. Government Minister Ricardo Cabrisas and Central Bank Minister-President Francisco Soberon signed the document on behalf of Cuba, in a ceremony that was presided over by Fidel Castro. (Granma, 27/2/06)

February 25: The number of crimes in Cuba’s state economy increased in 2005 due to lack of control by State agencies. During an annual general meeting of the Ministry of Domestic Trade it was reported that in 2005 there were “45 more crimes than in the previous year”, for which no figures were given, raising the losses to 6.5 million pesos ($260,000 dollars). In 2005, 890 audits were conducted of companies under this department, “and more than half of the audited entities were assessed as poor or inadequate in terms of economic control”, according to newspaper Juventud Rebelde. (AFP, 27/2/06)

February 26: Havanatur international tour operators and the Ecuadorian air company TAME have endorsed an alliance to promote the Caribbean island as a tourist destination. Havanatur General Manager Pedro Hernandez highlighted that TAME is sending one flight a week to the Cuban capital from February 11 in order to consolidate that route and open new tourist opportunities for his agency and the Ecuadorian airline. (Prensa Latina, 26/2/06)

February 27: Rum, Cuba's "national drink," is getting scarce due to a shortage of alcohol supplies for its producer/distributor in the Cuban capital. Dora Carbonell, assistant production manager for the Drinks and Soda Company who is in charge of production and distribution in the Havana area, said in a statement published in the weekly magazine "Trabajadores" that in January there was already no way to supply rum to the distribution network (“cadena de distribución”) for products sold in Cuban pesos. "In January we sold nothing to the “cadena” and in February only 2,170 cases, but since this month we have received none of the necessary raw materials, there's a danger we will not even be able to export what we had projected for March," Carbonell said. Cuba produces some 34 commercial brands of rum and has 11 plants dedicated to its production for export. The island produces a total of 43 million cases of rum for both export and domestic sales per year, according to statistics of the Food Industry Ministry. (EFE, 27/2/06)

February 27: More than a thousand cigar lovers from 60 countries ringed the center of the cigar universe in Havana, comparing notes and celebrating Cuba's finest smokes. Distributors, specialists and simple aficionados packed opening day of the Eighth Habanos Festival, an annual event sponsored by Habanos, a global distributor of the esteemed Cuban cigar. British actor Joseph Fiennes was among a hundred celebrities on hand for the festivities, dedicated this year to Habanos' leading brand, Cohiba. The presence of the 36-year-old actor at the event, who played the lead of Will Shakespeare in the 1998 film comedy "Shakespeare in Love," coincided with an opening performance based on the Bard's "Romeo and Juliet" at the Havana Grand Theater. The performance of "Shakespeare and His Masks" by the Cuba National Ballet marked the 131st anniversary of the Romeo y Julieta brand. "We dedicate this festival to the emblematic brands of premium Cuban cigars" which total 34 brands of pure, hand-rolled tobacco, said Enrique Babot, marketing director of Habanos SA, the Spanish-Cuban-French company that virtually holds a monopoly on Cuban cigars. (AFP, Canadian Press, 27/2/06)

February 28: Smoking bans around the world have cast a pall of uncertainty over the Cuban cigar business which is angling for emerging markets such as China to keep growing, retailers said. In Cuba, where the government has been unable to enforce a year-old smoking ban, hundreds of wealthy aficionados and cigar sellers are enjoying unrestricted smoking in public at the annual festival of the Habano, Cuba's premium hand-rolled cigar. "Despite the world's determination to stop people smoking, the sale of cigars is bearing up quite well," said Hong Kong entrepreneur and international socialite David Tang. "We had a very good year in 2005, but the uncertainties are growing hourly," said Simon Chase marketing director at Hunters & Frankau, exclusive Habanos distributors for Britain. British lawmakers voted to ban smoking in all pubs, clubs and indoor public spaces in England from mid 2007, adding to the growing list of countries taking a tough stand against smoking. Spain, Cuba's largest cigar market, banned smoking in all offices and certain other public places as of January 1. Cuban cigar maker Habanos S.A., a joint venture between the state-run tobacco industry and Franco-Spanish tobacco group Altadis, is preparing for a difficult year in 2006. Habanos is turning for growth to new markets in the Middle East, Latin America and Asia, including China where the rise of capitalist entrepreneurs has increased cigar smoking. (Reuters, 28/2/06)