Chronicle on Cuba - May 2006

Economy

May 1: Fidel Castro painted a rosy picture of the Cuban economy, telling more than a million workers and students gathered for the island's annual May Day celebration that the current rate of growth was higher than 12.5 percent. Cuba has grown stronger, Castro said, in part because of the hardships imposed by the US government's long-standing trade embargo against the island. "Thank you, Yankee empire, because you've made us grow, you've made us reach new heights," he said in a speech of more than three hours. Castro said the economy grew 11.8 percent in the first quarter of this year as compared to the same period in 2005. The current rate of growth on the island has since surged to more than 12.5 percent, he said. Cuba uses its own new method to calculating economic growth that takes into account the country's vast social safety net and subsidized services. That makes Cuba's growth figures difficult to compare with those of other countries, prompting the United Nation's Economic Commission for Latin America and the Caribbean to leave the island's numbers out of its report last year. Castro reported growth in sectors including construction, transportation and domestic commerce, which has soared 30 percent thanks to an increase in the purchase of household appliances under a government campaign to prod Cubans to buy more energy-efficient devices, he said. (AP, 1/5/06)

May 1: Fidel Castro took advantage of the massive May Day celebration in Havana to emphasize the economic achievements of the Bolivarian Alternative for the Americas that Cuba had signed with Venezuela and which Bolivia has just joined. The accords with Caracas, he said, are "a big step on the road to unity and to true integration among the peoples of Latin America and the Caribbean." He said that trade with Caracas exceeded $3.67 billion last year and in this year's first quarter had already amounted to more than $1.2 billion. (EFE, 1/5/06)

May 1: Cuba's raw sugar output amounted to 1.1 million tonnes as of April 30, Fidel Castro said. That would be below last year's harvest of around 1.3 million tonnes which marked the lowest since 1908. Castro, speaking at a May Day rally, said many mills would grind on into May though he admitted harvesting and milling would become more difficult as summer set in. Summer heat and rain usually begin by May, slowing the harvest and dropping yields. Cuba planned to produce 1.3 million to 1.5 million tonnes, similar to the 2005 crop, and shut down by May. But a slow start and supply problems have meant milling has averaged around 70 percent of capacity, below the 79 percent planned, according to official media reports, Castro said that on February 14, when he held an industry meeting, just 200,000 tonnes had been produced. He praised the efforts since then, in particular planting for future seasons. The Caribbean island consumes a minimum 700,000 tonnes of sugar per year and 400,000 tonnes are destined for a toll agreement with China. Cuba, once the world's biggest raw sugar exporter, has reduced acreage by more than 60 percent since 2003 and dismantled 71 of 156 mills. (Reuters, 1/5/06)

May 2: The Cuban Association of Agricultural and Forest Technicians (ACTAF) is solidly behind deforestation activity taking place across the island through a planting program being carried out in every community of the country. Eduardo Martinez, the secretary of Information and Communication of ACTAF, which gathers more than 17,000 experts, said the initiative includes the implementation of urban and rural silviculture, and the promotion of the importance of forests. Martinez highlighted the involvement of young people in the sowing and care of plants in vacant spaces within cities, such as parks, school yards, workplace grounds, and thoroughfares, where trees can provide many benefits. (AIN, 2/5/06)

May 2: The National Foreign Trade Bank (Bancomext) followed through on a court order issued by the Italian Court that allowed the bank to recover, initially, more than 35 million dollars’ worth of resources deposited in Italy in accounts corresponding to the debt of National Bank of Cuba (Bancuba). (Notimex, 3/5/06)  

May 4: Russia’s economic relationship with the island is regaining the momentum lost following the collapse of the Soviet Union, affirmed Russian Ambassador to Havana Andrei Dimitriev. The Russian diplomat pointed that one of the areas in which his country is interested in expanding its trade relations with Cuba is the transport sector. (AFP, 4/5/06)

May 4: All 105 farmers belonging to the “Emilio Herriman” co-operative of credit and services, in Granma, mainly rice producers, announced the loss of more than 58 wagons’ worth of rice due to the decision made by the sector’s leadership to stop the rice harvest in the province, causing the grain to over-ripen and, consequently the loss of this years’ crop. In an open letter, the signatories denounced a number of violations that have been taking place in Granma, which have prompted many to consider selling their land. Issues such as a delay in excess of three months in the payment of the crops on the part of the state, as well as an outstanding debt of approximately 17 million pesos to the local farmers were brought to the fore. Furthermore, arbitrary adjustments in the prices of the product have caused some of the affected farmers to give up on this year’s crop. (Cubanet, 4/5/06)

May 6: Fidel Castro handed over the keys of vehicles to two electrical workers representing 101 technicians from Havana’s electricity works. The new Chinese-manufactured motor vehicles will be used in the upgrading of the national electric grid. This was the first consignment of specialized vehicles which will replace the old fleet of gas guzzling Zil 130 and 131, GAZ and KAMAZ trucks. The Cuban leader explained that though the primary purpose of the vehicles was to conserve electrical power, the new more efficient vehicles will also contribute to fuel savings. Castro described these improvements as being vital for humanity, at a time when the planet is burning 84 million barrels of oil daily —with the United States squandering 22 million of that sum— while potential and proven world reserves have begun to shrink. (Granma, 5/5/06)

May 7: More than 1,000 firefighters were working to put out a blaze in western Cuba that has destroyed between 600-700 hectares (1,500-1,750 acres) of forest. Brigades of workers from the forest protection corps, or CGB, along with volunteers, were trying to control the blaze stretching from the El Caguazal area, where it started, to Punta de la Sierra in far western Pinar del Rio province, local media reported. The media said that fighting the fire was being complicated by the fact that access to the area was very difficult, adding that steam rollers, cistern trucks, helicopters, and water-carrying airplanes were all being used to try and douse the blaze. An expert with the CGB's fire management department, Raul Gonzalez Rodriguez, said the fire was detected on May 3 and since then it had "affected the (region's) plantations and natural pine forests, according to preliminary reports." (EFE, 7/5/06)

May 8: A team of Cuban experts which is in Ghana to assist in the eradication of malaria through the use of Biolarvicides called on the Minister of Health, Major Courage Quashigah (rtd). The team from the Labiofam Grupo Empresarial, a biological research and technological enterprise in Havana, Cuba, specializes in the production of vaccines for plants, animals and humans. Led by Mr Felix Quintanar Pulido, Vice President of Labiofam, they would explore the possibility of constructing a Labiofam plant, conduct a feasibility study and visit most endemic areas during their one-week stay. The Cuban experts would meet Ghanaian stakeholders, have a roadmap and sign a Memorandum of Understanding for the implementation of the project. (ANDnetwork , 8/5/06)

May 9: Cuba has struck a deal with Spanish, Norwegian and Indian oil companies to drill in the mile-deep (1.6-km) waters of the Gulf of Mexico, industry sources and diplomats said. The possibility of striking oil in Cuban waters just 90 miles (120 km) off US shores at a time of soaring fuel prices and rising global demand has set off a political debate over whether US companies, sidelined by American sanctions, should be allowed to explore there. Contracts will be signed May 23 in Havana between Spanish major Repsol YPF, Norway's Norsk Hydro and ONGC Videsh Ltd, the overseas arm of India's state-owned Oil and Natural Gas Corp., they said. Drilling will most likely not begin until 2008 due to a tight market for deep-sea exploration rigs as the world's search for oil intensifies under pressure from the high prices, one industry official said. Repsol found good-quality light oil in Cuba's economic exclusion zone of the Gulf of Mexico in 2004, but not in commercially viable quantities. (Reuters, 9/5/06)

May 9: Cuba successfully drilled a sloped well more than five kilometers in length from the coast out to sea and proclaimed it a commercial success as it will produce 200 tons of crude oil daily. The Canadian company Sherrit Oil and Gas International and the state-owned oil company Cuba Oil concluded the joint venture’s largest project to date, announced Granma newspaper. (AP, 9/5/06)

May 9: In 2005, Cuba received over 2,3 million of tourists, an increase of 13,2% in relation with 2004, the Minister of Tourism, Manuel Marrero, announced. Marrero was opening the 23th Fair of International Tourism, FITCUBA 2006, in Hav ana. (Europa Press, 10/5/06)

May 10: A new exclusive brand of rum will be released shortly onto the international market, as part of the activities to commemorate the centenary of the Pinilla distillery in Manzanillo. The product, to be called Ron Viejo (Old Rum), will be at least twelve years old and aged in American oak casks. This will impart the distinctive aroma and flavor for which the rums from this distillery are famous. The new rum will be sold in ceramic bottles in a presentation pack and will include a set of small ceramic mugs to commemorate the centenary of the distillery and the new brand. (ACN, 10/5/06)

May 10: Cuba launched a campaign to attract tourists from Venezuela and China, a goal that has become the focus of the 26 th International Tourism Fair. “They are two developing markets and we are putting our money on them," said the Cuban Minister of Tourism, Manuel Marrero, during the opening remarks of the Fair. Canada, Great Britain, Spain and Mexico - followed by Holland, Brazil and Argentina - were the main sources of tourists for Cuba in 2005. (AFP, 10/5/06)

May 13: Venezuelan Petroleos de Venezuela, or PDVSA, has joined the hunt for oil in Cuba that has already attracted companies from Canada, Europe, China and India to the communist-ruled island, the government in Havana said. In a statement published in the internet edition of the Communist Party daily Granma, the Cuban government said that state-owned PDVSA had signed an accord with its counterpart, Cuba Petroleo, or Cupet, for exploration and production "in the short and medium term". PDVSA is already heavily involved in downstream activities in Cuba. The government statement said the new accord followed a two-day meeting in Havana of senior PDVSA and Cupet officials. (Platts Commodity News, 14/5/06)

May 15: According to released reports, Cuba closed the year 2005 with a fiscal deficit of 4.2 % of the Gross Domestic Product (GDP), whose growth, estimated at 11.8 %, is calculated by the government using parameters different from those established by international standards. The balance sheet for the 2005 budget, reviewed by the Cuban Parliament, indicated an income of 25, 211,4 million pesos and placed expenditures at 27,156,4 million pesos, pointing to a deficit of 1,945 million pesos. The report does not clarify whether the authorities factored in the USD/CUC rate of exchange when making these calculations. (AFP, 15/5/06)

May 15: Cuba's central bank has sold 400 million euros in bonds to Cuban and foreign banks, the authority's president said. Francisco Soberon, appearing on television with Fidel Castro, said the one-year bonds were successfully placed in London at an interest rate of seven percent. "They were all bought by foreign and Cuban banks on the very day of the issue," he said. Financial sources told the press the bonds were bought by Cuban banks and "friendly" foreign banks operating in Cuba. Cuba defaulted on its Paris Club debt in 1986 and has been considered one of the world's biggest credit risks since the collapse of the Soviet Union. (Reuters, 15/5/06)

May 16: Heavy rainfall forecast across Cuba will most likely end the sugar harvest with output at no more than 1.2 million tonnes, according to scattered media reports and local experts. "At least half of the 42 mills opened this season have already closed, and with summer heat and rain setting in most, if not all, of the remainder should end operations," said a local expert, who requested anonymity. Summer heat and rain usually begin by May, slowing the harvest and dropping yields. Cuba planned to produce 1.3 million to 1.5 million tonnes of raw sugar, similar to the 2005 crop, and shut down by May. Fidel Castro said when the month began that output was 1.1 million tonnes and implied just 100,000 tonnes were produced the last two weeks of April. "Not even a magician could have produced more than an additional 100,000 tonnes this month. With luck we will reach 1.2 million," another local expert said. (Reuters, 16/5/06)

May 17: The Public Transit Association (ASTRO) has considerably increased the prices of bus fares. In the case of the route Santiago - Havana it went from 55 to 145 pesos. Fares for the bus trip between Santiago de Cuba and Bayamo escalated from 8 to 24 pesos, while in the case of the routes providing service from Palma Soriano to Holguín, it shot up from 5.50 to 29 pesos, and from 11.50 to 52 pesos for the trip to Camagüey. (Cubanet, 17/5/06)

May 17: Fidel Castro said the 2006 sugar harvest was 10 percent below a plan of around 1.3 million tonnes, but said output would have been lower if not for a big push by workers in recent months. "The plan is 100,000 tonnes more, around 10 percent," Castro said in a speech broadcast on Cuban TV. The day before, in a closed-door speech of current output, Castro said output was just 13 percent of plan on February 14, when he held an emergency meeting with the industry. Castro met again with industry leaders earlier this month to review plans to increase raw sugar production in 2007 and 2008 in order to take advantage of high prices. Castro did not say how many mills were still in operation. (Reuters, 18/5/06)

May 22: Venezuela's crude sales to Fidel Castro's Cuba stand at 98,000 barrels a day, the Venezuelan oil minister said. "They stand at 98,000 b/d and they should remain there this year," Oil Minister Rafael Ramirez told reporters. The figure is slightly higher than the 90,000 barrels a day announced in early January, and an indication that Venezuela's economic ties with the island nation continue to strengthen. Oil sales to Cuba increased to 90,000 b/d last year, sometimes reaching 92,000 b/d in some months, according to government estimates. (Dow Jones, 23/5/06)

May 23: Spanish oil company Repsol YPF teamed up with Norway's Norsk Hydro and India's ONGC Videsh to explore six offshore blocks in Cuban waters where good-quality oil was found two years ago, the companies said. The prospect of finding commercial quantities of oil in Cuban waters of the Gulf of Mexico at a time of soaring prices has set off a political debate over whether US companies, sidelined by American sanctions against Cuba, should be allowed to explore there. Under the deal signed with Cuba's state-owned Cuba Petroleo (Cupet), operator Repsol will have a 40-percent share in the project, while Norsk Hydro and ONGC Videsh will each have 30 percent. Exploration plans include 1,158 square miles (3,000 sq km) of three-dimensional seismic studies to be completed in June, said Egil Gloppen, Hydro Oil & Energy international business development director. But drilling is not expected to begin until 2008 due to a tight market for deep-water exploration rigs as the world's search for oil intensifies to take advantage of tight demand and high prices for crude. (Reuters, 23/5/06)

May 23: Cuban and Chinese officials met in Havana to evaluate new ways to enhance cooperation in the field of transportation. The meeting was attended by Cuban Transport Minister Carlos Manuel Pasos; the director of the Cuban Institute of Civil Aeronautics Rogelio Acevedo and the vice-president of China’s CATIC company Yang Ying. CATIC company is one of China´s major twenty enterprises, out of a total 500 dedicated to import and export operations. (CAN, 23/5/06)

May 24: A fair promoting exchange and integration among Bolivia, Cuba and Venezuela began in Bolivia´s capital. The event, within the framework of the Bolivarian Alternative for the Americas (ALBA) Latin American integration project that promotes solidarity and mutual social and economic development, includes the participation of a wide gamut of businesses from the three countries, said Julio Montes the Venezuelan ambassador in La Paz. Montes noted that business people from Argentina and Brazil will also be on hand. Those two countries, along with Bolivia, Cuba and Venezuela, have opposed the competing Free Trade Area of the Americas plan promoted by the United States. (Granma, 24/5/06)

May 24: Bolivia is planning to develop a project on the industrialization of the coca leaf with a donation of a million dollars provided by both Venezuela and Cuba, the vice-minister for the Coca and Global Development, Félix Barra, said. “These two countries would be giving us one million dollars”, Ibarra said to the press. (El Universal, 24/5/06)

May 25: Sherritt International Corp. held its annual meeting in Toronto. The bulk of Sherritt's businesses are based in Cuba, where it has nickel and cobalt mining operations, oil and gas production facilities, and an electricity-generating operation using natural gas. The importance of the Cuban assets was reflected by the fact that two ministers from the Cuban government flew to Toronto to attend the Sherritt annual meeting. (Globe & Mail, 26/5/06)

May 26: The governments of Laos and Cuba have entered into an agreement to continue cooperation in the health care sector from 2006 to 2010. A Memorandum of Understanding (MOU) was signed in Vientiane by Mr Chaleun Yearpaoher, President of the Laos-Cuba Friendship Association and Mr Pedro Luis Hildalgo Pardo, Deputy Minister for Health in Cuba. Under the agreement, Cuba will dispatch medical and healthcare experts, including heart specialists and obstetricians to help upgrade medical personnel in Laos. (KPL, 26/5/06)

May 26: A business fair among Bolivia, Cuba and Venezuela closed in the Bolivian capital city of La Paz after two days of activities resulting in business plans estimated at USD 12.1 billion, Bolivian authorities reported. A second event is expected soon. Bolivian Vice-Minister of Industry, Trade and Exports Gustavo Barberi, noted positive achievements in this first event, within the framework of the Bolivarian Alternative for the Americas (ALBA) and the Peoples' Trade Treaty (TCP). "These are accomplishments and strides. This is what is intended for progress, welfare, reduced poverty, and generation of opportunities. This fair has meant it. In this regard, it has been quite a success," Barbieri told the press. (El Universal, 27/5/06)

May 28: The woes of Cuba's service sector, including low quality and slowness, especially in the administrative area, are a drag on the island's economy, with workers wasting countless hours on bureaucratic procedures, the official Juventud Rebelde newspaper reported. Leocadio Pascual Diaz, the Labor and Social Security Ministry's top specialist on the service sector, told the newspaper that current work schedules led to absenteeism, with workers taking time off to deal with paperwork. The newspaper said "everything gets complicated" if to slowness and deficiency in services and procedures were added "the multiple difficulties of transportation and the inopportune and short periods available for acquiring many foods and other products." "You either go to work or stand in line to avoid losing them," Juventud Rebelde said, adding that "the time has come to take a look at the rigid and overprotective structure under which most services were established." (EFE, 28/5/06)

May 30: Cuban customs officials seized nearly 25,000 boxes of contraband cigars last year in efforts to decrease smuggling of the world-famous stogies, the island's domestic news agency AIN reported. Travelers to Cuba can leave the island with 23 cigars without receipts, but for any amount above that, they must have proof of purchase from cigar stores approved by Habanos S.A., Cuba's cigar marketing firm. Cigars are one of the island's most important exports, worth about $340 million annually. But the prestige of Cuban cigars and a rise in tourism in recent years have combined to increase the black market for the product, prompting customs agents to tighten their controls. Eighty percent of the cigar contraband is discovered at Havana's Jose Marti International airport, often found on people traveling to Panama or Mexico, customs official Colonel Pedro Pupo told AIN. Officials seize the rest at airports in Santiago de Cuba, Varadero and Holguin, he said. (AP, 30/5/06)