Chronicle on Cuba - March 2006

Economy

March 2: Communist Cuba, whose state-controlled press generally refrains from pursuing the traditional Western journalistic task of exposing corruption, is pushing in official media a campaign against what has been denounced by Fidel Castro as burgeoning illicit enrichment by pilferers large and small. Leading the way has been Granma, the organ of the Cuban Communist Party, whose recent series about the agricultural sector uncovered sharp practices that end up hurting consumers. "The incorrect marketing of (farm) products is a breeding ground for the flowering of undesirable factors, such as the middleman who buys and pays instantly, as well as the diversion of resources and discontent among the rural masses," the newspaper said. Juventud Rebelde, the other big official daily, is also looking at corruption. The denunciations in the press are part of what has become a crusade led by Fidel Castro against the skimming, siphoning and stealing of property, almost all of which is in practice the patrimony of the state under the 47-year-old Communist regime. The battle has been joined by Cuba's plethora of government-directed "popular" organizations and by Cuba’s Workers Central (CTC), the only legally recognized labor federation on the island. (EFE, 2/3/06)

March 2: Havana Club Inc. unveiled in Cuba its “Máximo Extra Añejo”, a rum that will set buyers back up to $1,600.00 USD per bottle. This year, the company hopes to sell 100 units of this luxury brew, 10 of them in Cuba, a communist country where the cost of living is heavily subsidized but the average salary is about $15.00 USD. Havana Club, a joint venture between state-owned Cuba Ron and the French group Pernod-Ricard, only brewed 500 Máximo bottles, 200 of which have already been distributed. (Reuters, 3/3/06)

March 4: The Havana Cigars’ Festival closed in Havana with the traditional auction of humidors autographed by Fidel Castro, during which nearly €600,000 were collected that will be used to finance Cuban health programs. Castro's absence disappointed many of the 850 in attendance who paid $500.00 each to take part in the closing event of a smokers' festivity that aims to become one of the highest-ranked of its kind in the world. (EFE, 5/3/06)

March 6: Cuban Minister of Economic Cooperation and Foreign Investment Marta Lomas and her Kuwaiti counterpart penned an economic and technological agreement, Viet Nam's News Agency reported from Cairo. The accordd stipulates that both sides will set up a joint committee under the co-chairmanship of the Kuwaiti Finance Minister and the Cuban Minister of Economic Cooperation and Foreign Investment. The committee will meet annually to discuss ways to promote bilateral cooperation between the two countries. (AIN, 6/3/06)

March 7: In the course of the last three years, the district attorney's office confiscated illegally obtained property, including vehicles and houses, in the framework of a campaign led by Fidel Castro to eradicate the so-called "nouveau riches". According to the official newspaper Granma, "37 % (of the cases) were self-employed workers, mainly landlords who breached the terms of their permits (...) and others who engage in this type of activity without authorization." Without quoting percentages, the newspaper identified other means of acquiring illegal wealth including the misappropriation of State resources by members of its workforce and the unauthorized husbandry of animals for self-sustenance or the theft of feed to raise those animals. (AP, 7/3/06)

March 7: Cuban authorities in eastern Santiago de Cuba province have implemented a series of initiatives to boost bee honey production. According to experts, the plans include increasing the number of beehives and transferring them to places where there are lots of flowers to counter last year's drop in production. In 2005, Hurricane Dennis affected plantations of a plant species known as "bejuco indio", which contributes 68 percent of the bee honey collected in the province. (Periódico 26, 7/3/06)

March 7: The Venezuela-Cuba Industrial Bank (BIV) will receive $50 million USD, that is to say, $107 billion Venezuelan bolivars, to finance joint ventures by companies from both countries that are looking to invest in areas of interest to the Cuban economy. Luis Quiaro, President of the BIV, said that this new influx of resources stems from the success of loan transactions from 2005 that aimed at developing the construction sector, sardine exports and the uniform and boots manufacturing plant. (El Nacional, 7/3/06)

March 7: Cuba is turning to Chinese companies rather than western ones to modernize its crippled transportation system at a cost of more than $1bn, continuing a trend of favouring the fellow Communist country that has made Beijing Cuba's second trading partner after Venezuela. Buses plying Cuba's highways increasingly come from the Yutong Bus Company and railway locomotives from the 7th of February works on Beijing's outskirts. Cuba's ports are being revamped with Chinese equipment, in part, to handle millions of Chinese domestic appliances that began arriving last year. Oil rigs along Cuba's northwest heavy oil belt boast Chinese flags, and this is only the beginning, Fidel Castro has said. Cuba's "maximum leader" announced in February he was negotiating personally the purchase of 8,000 buses to be partially assembled on the island. In addition, was a deal for 500 Chinese railway cars and thousands of trucks and cars. China reported 2005 bilateral trade between the two countries up to November was $777m, up 62.5 per cent year-on-year. The increase was mainly due to $560m in Chinese exports to Cuba, up 91 per cent. China has provided Cuba with about $500m credit to cover the development of communications and electronics. But direct investment between the countries is only about $100m. Plans jointly to produce nickel and cobalt have yet to materialise. (Financial Times, 7/3/06)

March 8: While speaking at the 15th anniversary of the Central Computer and Electronics Palace, Fidel Castro asserted that the island is on solid bases in different fields. "Our people will be surprised about the speed of the Energy Revolution and the economic resources it will provide," Fidel said, noting that energy generation grows at 80,000 kw per week and the battle against power shortages is succeeding. The program, emerging from serious energy problems in 2004, has been constantly analyzed, along with the experience of dealing with hurricanes, and has enabled acquisition of safer and more efficient generators, which are strategically combined with engines. (Prensa Latina, 8/3/06)

March 9: Cuba has purchased a top-of-the-line Russian airliner for Fidel Castro. The plane is one of two Russian planes being purchased by the communist island for a total price of $110 million. The other plane will reportedly be used to transport Cuban workers back and forth from Venezuela. Russian manufacturer Ilyushin said Castro`s plane was completely customized for the long- time Cuban leader and included state of the art electronics and a sofa bed. To finance the deal, Cuba has paid 15% of the total sum up front, the rest coming from a 10-year loan from Russian banks. (BBC, UPI, 10, 11/3/06)

March 9: Ukraine and Cuba have plans to develop their cooperation in the sector of transportation. The Ministry of Transport and Communications' press service told the press about an official meeting between the Acting Transport and Communications Minister Viktor Bondar and the Cuban Ambassador to Ukraine Julio Garmendia. According to the press service, both parts said it was necessary to establish a direct regular flight between Cuba and Ukraine. The aviation industry, in the opinion of the meeting participants, is one of the most promising sector to step up cooperation between the two countries. ( Ukrainian News , 9/3/06)

March 9: China will auction 200,000 tonnes of raw sugar from state reserves and another 200,000 tonnes arriving from Cuba during the first half of the year, the Ministry of Commerce said. For the Cuban sugar, the refining fee was set between 240 and 280 yuan ($29.80 and $34.79) a tonne. China expects to import three cargoes of Cuban sugar in April and another three in May, the document said, for a total 100,000 tonnes each month. (Reuters, 9/3/06)

March 10: Cuba and Venezuela prepare for future joint commercialization of tourist package deals. "One of the offers under study would sell Cuban beach-Orinoco jungle excursion bundles," revealed the Cuban vice-minister of Tourism, Oscar González, head of the Havana delegation to the International Tourism Burse (ITB), held in Berlin. González pointed out that there has been a noticeable increase in the number of Venezuelan tourists visiting his country, although “there are many Venezuelans who are going to Cuba to train in different areas and others for something called 'Mission Miracle',". Last year, approximately 80,000 Venezuelans traveled to Cuba for this purpose, "disadvantaged people who, at no charge, can avail themselves of Cuba’s world-class health care system," he added. "Our goal now is to put together an offer that turns into a reality what the tourism and hospitality industry in the region has been unsuccessfully trying to achieve for quite some time: an attractive and compact multi-destination bundle," he said. (EFE, 10/3/06)

March 10: According to official statistics , the European Union-Cuba trade balance grew significantly in 2005, following a 31% increase in EU exports to the island and an increment of 28% in European Community imports from the Caribbean nation. European exports to Cuba last year reached 1,272 million euros (approximately $1,590 million USD) propelled by sales of electrical equipment and optical instruments, as indicated by a report from the Office of the European Commission in Havana. Cuba spent more than 440 million euros ($550 million USD) purchasing generators and electrical machinery from European manufacturers, mainly power generators from German and Spanish companies to alleviate the energy crisis that besets the country. Also, the island invested next to 140 million euros ($175 million USD) in the purchase of European optical instruments, mostly from German companies and destined for the so-called "Operation Miracle." (EFE, 11/3/06)

March 11: Iran and Cuba signed an agreement based on which Iran will build a cement plant in this Latin American country. In addition to the $200m agreement concluded for building the cement production plant, Iran has also agreed to construct a power plant aimed at generating at least 500 to 1,500 megawatts of electricity in the island. Also, the Islamic Republic will supply the raw materials and chemicals needed for rubber and plastic production in Cuba, the report quoted an official at the Islamic Republic’s Ministry of Industries and Mines as saying. Based on a short-term agreement Iran has undertaken to, through its tractor manufacturing plant in Venezuela, provide tractors needed by Cuba, Mohsen Shaterzadeh said in Tehran. Trade volume between Iran and the Caribbean island state has increased from the earlier $20m to about $90m, he commented predicting that, “the trade volume between the two countries is expected to hit $600m soon.” (Tehran Times, 11/3/06)

March 13: Not long after an overhaul of the sugar industry that saw the shutdown of scores of refineries, Cuba is seeking to breathe new life into what for decades was the motor of the national economy in light of rising prices for this commodity. Fidel Castro personally has taken over the relaunching of the sugar industry and has given instructions to increase production to take advantage of higher international market prices. The Cuban leader met on February 14 with the heads of sugar mills and top Communist Party officials to ask for their cooperation in the effort, the official daily Granma reported. "Guarantees, organizational and financial measures were adopted and (the meeting) was oriented toward seeking urgent solutions, with all possible speed, to refine more sugar given the (…) good prices in the market," Granma wrote. The new sugar policy is a response to the rise in international prices for the sweetener and the high cost to Cuba of importing some 100,000 tons of sugar from Colombia. In March 2005, Castro said that the industry "today is ruining" the Cuban economy because of the high cost of fuel, an expense that figures heavily in the harvest, transport and processing of cane. "Now, the sugar price rose a little, but I know that this country won't ever live off sugar again. It belongs to the epoch of slavery and of a people full of semi-literate" citizens, Castro said at the time. (EFE, 13/3/06)

March 13: Cuban authorities are trying to improve their auditing techniques to augment their chances of detecting skimming and other forms of corruption. As the monthly Cuban magazine Bohemia reported in its latest issue, in some cases poor accounting procedures have contributed to "weaving nets of disguise" around public firms who then acquire a false image of "efficiency." Auditing and Control Minister Lina Pedraza acknowledged to the magazine the deficiencies in current controls and the need for auditors to change their "mentality" to detect the crimes. "We're asking (…) questions (about) how to make audits more useful, how to prevent a firm from getting audited two or three times a year and apparently being fine and then (having) the bomb explode," she said. As an example of the limitations to current audits, Bohemia discussed the case of the Matanzas Pharmacy and Optical Company, located 100 kilometers (62 miles) east of Havana, from which almost 4,000 liters (1,056 gallons) of methyl alcohol were diverted in November 2002. (EFE, 13/3/06)

March 13: The Cuban coffee harvest experienced a 25% decline as compared to the previous cycle, which translates into fewer than 140,000 60 kg bags, according to Reuters estimates based on Cuban media reports and other local sources. Reuters had projected the 2004-2005 harvest to be in the neighborhood of 180,000 60 kg bags, one of the lowest-yielding crops in the last 50 years. According to local radio broadcasts, production in the areas east of Santiago de Cuba, which account for one third of the crop, fell by 50% after being hit by hurricane Dennis in July in its path through the coffee-growing regions of the easternmost provinces of the island. (Reuters, 13/3/06)

March 14: The Haier Corporation Industrial Park in China’s port city of Shandong, was the site of a ceremony marking the shipment of the first batch of home refrigerators that Cuba has contracted to buy from that nation. The initial purchase is for 300,000 refrigerators of the highest quality, distributed as three different models, and bought as part of the National Energy Saving Program that Cuba is implementing. The delivery ceremony was attended by Cuban Minister of Government Ricardo Cabrisas, and Commander of the Revolution Ramiro Valdes Menendez, President of the Electronics Group of Cuba. Also attending were Cuban Ambassador to China Alberto Rodriguez Arufe, business persons and officials of the Cuban diplomatic mission in Beijing. (Granma, 15/3/06)

March 16: Swedish industrial technology group G & L Beijer AB said it was awarded a 1.2 million euro ($1.4 mln) order to deliver dry coolers to a major infrastructure project in Cuba. G & L Beijer won the deal via the collaboration of its subsidiaries, Danish distributor TT-Coil A/S and Swedish heat exchangers manufacturer Asarums Industri AB. The order represents a first sub-order to the project, which has a potential of at least 7.0 million euro ($8.4 mln). Dry coolers conduct away surplus heat from the compressor plant in a cooling system or other industrial processes. They include components such as heat exchangers and fans. (Swedish News Digest, 16/3/06)

March 16: The anti-corruption drive that has become the new warhorse of the 47-year-old Communist regime turned its sights on the public health sector, with the official newspaper saying the theft and clandestine sale of medicines is contributing to their shortages. The newspaper Granma said that "unscrupulous elements" were "taking advantage of a lack of order and lapse of vigilance" over the medications and profiting from illegal sales of remedies. The daily gave details of a police operation carried out on February 16, in which government authorities seized a large quantity of stolen medicines and arrested three suspects. Granma said the medicine-skimming case "is cause for reflection by directors and workers at laboratories, pharmacies, warehouses, polyclinics and hospitals." (EFE, 16/3/06)

March 18: After having strung more than 272,000 poles with tobacco leaves, four percent above production targets, it has been estimated that growers in eastern Las Tunas province will set a new record during the current tobacco-leaf harvest. The figure represents nearly a third of the estimated total harvest, which will soon enter its peak stage and should be wrapped up by the end of April. Las Tunas has an overall area of over 1,700 hectares of tobacco fields. Romilio Lopez, assistant director of the Tobacco Company in Las Tunas, told the local press that some 34,000 quintals of the leaf (over 1,500 tons) are expected to be harvested in Las Tunas this year, thus surpassing the local production record set in 2001. (Cuban News Agency, 18/3/06)

March 21:More than 600,000 Canadian tourists will visit Cuba this year, which confirms the North American nation as one of the main tourist sources for the island, reported Alexandra Bugailiskis, Ambassador of Canada in Havana. In declarations to the local media, the Canadian ambassador added that commercial bilateral relations are "very good" and that her country is one of the largest investors in the Caribbean island. (Europa Press, 21/3/06)

March 21: Havana feels that Russia could take part in the exploration and development of oil-bearing fields located in the island’s economic zone in the Gulf of Mexico, the Cuban Deputy Minister of Foreign Affairs, Eumelio Caballero, announced in Moscow. At the end of his negotiations with the Russian authorities in Moscow, Caballero said that "a favorable climate has been created for possible Russian investments" in the island and added that Cuba "is experiencing an economic boom." (EFECOM, 21/3/06)

March 21: Sixty per cent of the fresh drinking water supplied in Cuba goes to waste due to breaks and leaks in decades-old pipes and mains, a luxury the island cannot afford due to low levels in water reserves. To deal with the water deficit, the Government approved a batch of measures and investments submitted for expert assessment in 2004. The above mentioned plan is backed by an initial budget of $182 million USD. (Reforma, 21/3/06)

March 22: Cuba's ruling Communist Party has sent thousands of its members, including retirees turned into detectives, to track corruption that Defense Minister Raul Castro warns is spreading like a "deadly cancer," government sources said. Fidel Castro's younger brother, in a video making the rounds of the country's leadership, says 6,000 party cadre and 2,000 retired members working in pairs have discovered "the situation is far worse than we imagined." Raul Castro, 74, number two in Cuba's political hierarchy and constitutionally in line to succeed his 79-year-old brother if he were to retire or become incapacitated, heads the party's Commission against Corruption and Illegalities set up three years ago. "The deadly cancer has metastasized from our knees up to here," Raul Castro, pointing to his chest, told national-level leaders and administrators in a recent meeting, according to sources who had seen the videotape. Castro singled out the East Havana municipal wholesale food company as an example of how managers and their government superiors appear to be "blind" to the diversion of resources to the black market. Despite 14 visits by ministry officials, 21 inspections and an audit, it took a pair of party retirees to discover 2,000 tonnes of products were missing, the younger Castro said. "How can you explain that a couple of retirees are able to discover in a week grave problems that were not detected by management in the same companies, nor by their superiors, during months and years," Castro asked. Attorney General Juan Escalona reported 5,800 cases of economic crimes in 2000, including embezzlement, theft and bribery. But the current anti-corruption campaign led by Raul Castro is the most serious since he and his brother swept to power in a 1959 revolution. (Reuters, 22/3/06)

March 22: The Cuban Minister of Government, Ricardo Cabrisas, briefed a group of Japanese businessmen, government officials and lawmakers on the current situation of the island's economy. The performance of Cuban commerce in 2005 and its future perspectives, especially in relation with Japan, were topics that generated great interest among the participants. Mr. Cabrisas, on an official visit to Japan since March 19, held talks with deputy and former Prime Minister, Yoshiro Mori, and with Parliamentary Secretary, Takuya Hirai. (AIN, 22/3/06)

March 23: Venezuela will begin to receive the first consignments of 500,000t of Cuban cement to help resolve the existing supply deficit in the market, local press quoted housing minister Luis Figueroa as saying. However, despite the claims by Venezuela's President Hugo Chávez that the agreement to bring in cement from Cuba was because of shortages in the local market, domestic cement industry sources said that the real problem was the low market prices for the product. These imports of cement from Cuba are merely aimed at forcing the companies to lower their prices even more, said the sector insiders, who were not named by the press. (Business News Americas, 23/3/06)

March 23: Fiagro 2006, the 11th International Livestock Trade Fair, began in Havana, with the participation of over 20 foreign companies from ten countries. Exhibitors from the US, Spain, Holland, Israel, Germany and Canada are among participants in the event, which will be taking place in the outskirts of Cuba’s capital. (Prensa Latina, 23/3/06)

March 25: New power plants are being installed in Havana to save energy, cut costs and ease chronic summer blackouts, Cuba's state news agency said. Officials from Cuba's Basic Industries Ministry said the new generators will help ensure "optimum quality" in electrical service for the capital's 11.2 million residents, Prensa Latina reported. Havana has historically suffered from outages when demand rises in the hot summer months. The plants are part of the government's Energy Revolution, a nationwide program aimed at ending blackouts by May 1. Cuba has contracted to buy 4,158 of the generators, more than 3,000 of which have already been installed. They form a key part of a plan to replace the island's huge thermoelectric plants -- which consume huge amounts of petroleum -- with smaller, more cost-efficient energy facilities. (AP, Xinhua, 25/3/06)

March 26: Efforts and hard work for a more efficient use of industrial capacity currently mark the Cuban sugar harvest. Sugar Minister Ulises Rosales del Toro has asserted the 2006 harvest is so far better than that of 2005. The island nation has increased its industrial efficiency during the last harvests and present conditions are favourable to raise sugar production, said Rosales del Toro. The minister assured industrial performance and the hike of the international price of sugar have encouraged to draw up strategies to produce more sugar for export in the coming seasons. Cuba is also planning to expand sugar plantations for the 2007 harvest. (Prensa Latina, 26/3/06)

March 27: Cuba maintains a foreign debt of more than $37 billion USD with 27 countries, informed the Cuba Transition Project of the University of Miami. According to the Project, one of the main creditors is Venezuela, to which it is believed that Castro owes $3,532 million USD. Another major creditor is Russia, with $20,848 million USD. In addition to a previously disclosed sum of $682 million USD in trade and financing that Cuba owes China, the Asian nation revealed at the close of 2004 the existence of nearly $38 million USD worth of commercial credit that dates back to the period 1990-1994. China also issued another loan estimated at $150 million USD so that Cuba could purchase one million TV sets, and announced an investment of $500 million USD to be financed through Chinese loans to a new nickel mining joint venture in the East of Cuba. Cuba owes Canada $97 million USD. (Martinoticias, 27/3/06)

March 27: In a meeting with Iranian Foreign Minister Manouchehr Mottaki in Tehran, Cuban Minister of Transportation, Carlo Manuel Pazo Torrado, gave him a letter from his Cuban counterpart, Felipe Perez Roque, dealing with cooperation between the two states. According to a report released by the Foreign Ministry Media Department, Torrado briefed Mottaki on his talks with the officials of Iranian Ministry of Roads and Transportation on his country's intention to purchase train wagons from Iran. Meanwhile, he expounded on Cuba's high economic development in Latin America, despite the 15-year economic sanction against it under the leadership of Fidel Castro. (IRNA, 27/3/06)

March 27: Cuba's flagship airline will buy five more Russian jets, with PS90A engines, the newest engines available. Cubana de Aviacion will buy two Il-96-300s, two Tu-205-100s and a Tu-204S, Novosti. Three weeks ago, Cuba received a second Il-96-300 furnished with a VIP cabin for use by Fidel Castro that can be reconfigured for commercial flights, he said. "It is not only for travel by the Comandante," he said, referring to Castro. For trips abroad, Castro has been flying an IL-62 built 30 years ago. Civil aviation authorities in the European Union and other countries no longer allow the plane to land because it does not meet safety standards. Cuban officials had to scramble to get special permission to land Castro's plane in Japan during a trip to Asia in 2003, an Asian diplomat said. (UPI, Reuters, 27,28/3/06)

March 29: Cuba is interested in setting up joint venture pharmaceutical industries in Bangladesh to share its advancement in the treatment of cancer and other diseases. This was stated by Delhi based Cuban Ambassador to Bangladesh Juan Carretero Ibanez, when he called on Prime Minister Begum Khaleda Zia at her office. The Prime Minister welcomed Cuba's eagerness and called for importing quality medicines that are being manufactured in Bangladesh. ( Bangladesh Observer , 31/3/06)

March 29: Fidel Castro received the Latin American Energy Organization (OLADE) Executive Secretary Alvaro Rios, who is visiting local power generation centers and other energy related facilities in western Cuba. Castro and Rios, on his first visit to the island nation, discussed the global energy situation and the Latin American and the Caribbean panorama. The statesman explained to the OLADE leader the national energy revolution afoot that guarantees a rational and efficient consumption of fuels, enables a planned and diversified policy of energy production plus a considerable saving of financial resources to use them in other sectors and social programs. Rios hailed Cuban projects and expressed interest in sharing these experiences with other regional nations. (Prensa Latina, 30/3/06)

March 30: Cuba does not aim to sustain its whole economy on sugar production alone. Instead, it seeks to diversify its sugar industry enough that it can meet the demands of its domestic market and fulfill its international commitments, said the minister of the sector, Ulises Rosales del Toro. This year, Cuba expects the sugar harvest to increase to approximately 1.5 million tons. The Cuban sugar industry has deteriorated progressively in the last decade, with its steadily declining output finally hitting a low of 1.3 million tons in 2005, the worst results in a century. (EFE, 30/3/06)

March 31: A forest fire destroyed 1,000 hectares of pine in the Cuban province of Camaguey, said the official media. The fire, of still unknown causes, is located in one of Cuba’s most important coniferous reserves, nearly 600 kilometers to the east of Havana. The drought affecting the island might intensify the risk of such occurrences. According to the National Institute of Water Resources, today in Cuba it rains an average 133 mm less than 40 years ago. (Reuters, 31/3/06)

March 31: Cuban authorities last year imposed more than 26,000 fines on individuals for irregularities at markets selling farm products across the country, the local press reported. The national director of prices at the Finances and Prices Ministry, Ines Arguelles, told the official daily Granma that "excessive charges to the consumer" were the cause of 30 percent of the fines, which ranged as high as 150 pesos (just over $6) and were doubled if the offense was repeated. (EFE, 31/3/06)