Chronicle on Cuba - July 2006

Economy

July 3: A shipment of 250,000 energy-saving light bulbs arrived in Jamaica from Cuba, kick-starting Phase two of the Government's plan to distribute four million fluorescent bulbs to Jamaican households, free of cost. Senator Kern Spencer, State Minister in the Ministry of Industry, Technology, Energy and Commerce, said the bulbs were at the Kingston Wharf and would be distributed to residents of four constituencies. He said also that 100 Cuban technicians would be arriving in the island to help with the distribution. The bulbs were provided by the Cuban government at no cost for Jamaica. However, the overall estimated retail value of the four million bulbs is $2 billion. (Jamaica Gleaner, 3/7/06)

July 4: Experts from the UN Food and Agriculture Organization (FAO) acknowledged Cuba’s willingness to improve the quality of its people’s life. The prestigious world organization has implemented a project in Cuba, aimed at raising quality of life, reducing environmental aggression, fostering sustainable agriculture and assuring a constant production of food. The FAO training program includes talks, conferences, videos and workshops in workplaces or homes of Cuban farmers. (Prensa Latina, 4/7/06)

July 5: Tourist air transportation by Cuba’s Civil Aeronautics Institute grew over seven percent, compared with the same period last year, its president Rogelio Acevedo said. Acevedo told Juventud Rebelde newspaper the country is investing in airports of Santa Clara, Holguin and Manzanillo, with the aim of modernizing runways and other facilities, developing tourism and improving passengers´ attention, among others. The Cuban Civil Aeronautics Institute has firmed up passengers transportation plans scheduled from January to June, the daily reported. (Prensa Latina, 5/7/06)

July 5: Cuban Defence Minister Raul Castro said it was necessary to exploit more land near urban areas for agricultural production, provide incentives for these farmers and balance out the prices of these farm products. During a meeting with the largest producers, Raul Castro said that he was considering the fact that 75 percent of the Cuban people live in cities, and it makes sense for food to be grown on land in and around those urban areas, the Granma official daily reported. The urban-area harvest of vegetables, herbs and spices in 2005, including urban farms, intensive gardens, plots of land and family gardens, total 4.1 million tons, according to official figures. (EFE, 5/7/06) 

July 5: A trade agreement between Cuba and Mercosur (Common Market of the South) will be signed in the Argentine city of Cordoba during the bloc's annual summit meeting, scheduled for July 20-21. Two weeks before, Cuban authorities and a high-level Mercosur delegation worked intensively to harmonize four Economic Complementation Agreements (ECA) that have been in effect since the end of the 1990s between the Fidel Castro regime and the Southern Cone partners: Brazil (ECA 34), Argentina (ECA 45), Paraguay (ECA 52) and Uruguay (ECA 44). Among the principle themes are the question of safeguards, the rules of origin, phytosanitary measures, and the dispute resolution system. The Foreign Ministry believes that Havana will benefit politically. "The harmonization of these accords allows Mercosur to act as a bloc, to eliminate differences in bilateral dealings, and to facilitate the negotiation of a future free trade treaty with Cuba," one high-ranking diplomat explained to the press, on condition of anonymity. He said that the Cuban Government will be able to say that it has an accord with Mercosur. "This carries weight on the international stage, especially in Cuba's case," he assessed. (Correio Braziliense, 5/7/06)

July 10: In a move away from the foreign investment-friendly environment it had created and to re-centralize national economic controls, the Cuban government is rapidly breaking its ties with joint-venture companies formed with Spanish capital that had managed to settle in the island during the last decade. Two major Spanish multinational investors, Acciona Infraestructuras, S.A. and Zell Chemie SL have launched lawsuits against the Cuban government this year, invoking the Agreement of Reciprocal Promotion and Protection of Investments (APRI). (El Nuevo Herald, 10/7/06)

July 11: Cuba hopes to take advantage of high sugar prices and the ethanol boom to revitalise its industry and greatly increase alcohol production, a senior ministry official said. "Our country has begun an accelerated drive to increase alcohol production, modernising existing distilleries and installing new ones to increase by five times installed capacity," Luis Galvez, director of the sugar ministry's Sugar Cane Derivatives Research Institute, said. There has been a sharp increase in worldwide ethanol demand which, Brazil, the biggest supplier may not be able to meet due to its own strong domestic demand. Cuba, which has scaled back its sugar cane industry, is now attempting to refocus the industry on ethanol production. (Jamaica Gleaner, 14/7/06)

July 15: Every square meter of Cuba receives 5 kilowatt-hour of solar energy per day, equivalent to half a kilogram of fuel every 24 hours and uniformly spread throughout the island. Emir Madruga, manager of ECOSOL, state-run enterprise in charge of making and installing solar systems, considers energy from the sun a fundamental strategic element for sustained development. In an interview published by Granma International weekly, the specialist said the country has been able to solve numerous power needs for social and economic targets in areas isolated from the national grid. There are applications such as the photo-voltaic electrification program for family doctor offices in the mountains and isolated rural areas, with more than 400 installations up and working; mountain hospitals, boarding schools, social centers; 2,364-plus elementary schools where TV and VCR equipment was installed. (Prensa Latina, 15/7/06)

July 15: The Iranian ambassador to Havana Ahmad Edrisian met with the Cuban Minister of Light Industries to discuss matters of mutual interest. During the meeting, José Hernández Bernárdez stated he would do anything for broader cooperation with Iran. The Ministry of Light Industries of Cuba is in charge of supplying a variety of products from textile and leather products to cosmetics and toiletries and from detergents to industrial commodities. (Tehran Times, 15/7/06)

July 17: After nearly a decade of urging Cuba to pay off a $22 billion debt to the former Soviet Union, Russia shelved the issue for indefinite time, Deputy Finance Minister Sergey Storchak made clear. Instead, Prime Minister Mikhail Fradkov will offer a new loan of $350 million during his visit to Cuba. During a September tour to Cuba, Russia’s PM Mikhail Fradkov will suggest to restructure Cuba’s debt to Russia and to the former Soviet Union, to fix a settlement schedule and to offer a new loan worth $35 million, according to Storchak. Cuba’s debt to the USSR is around $22 billion, the deputy finance minister said. Other estimates vary from $16 to $25 billion. In Cuba, however, they don’t think they owe anything to the USSR. To the contrary, Fidel Castro vowed some time ago Cuba that he may claim damages worth $30 billion due to the abrupt fall of the USSR. (SKRIN Newswire, 17/7/06)

July 18: The Cuban Ministry of Food Industries will invest more than 10 million USD to expand soy milk production to more than one million liters per day. The technical director of the Dairy Industry Association, Kenya Silvera, told the media that six soy milk plants are expected to open and begin production this year in Havana, Villa Clara, Ciego de Avila and Pinar del Río. Soy milk is currently produced in all Cuban provinces and this year production will be in the neighbourhood of 250 thousand tons. (ANSA, 19/7/06) 

July 18: Scientists in Guantanamo, eastern Cuba, are implementing a project for sustainable food production with efficient handling of natural and human resources. The project, known as Demonstrative Sustainable and Agro-Ecological Production Models in Rural Areas with Adverse Environmental Conditions, is co-sponsored by the UN Development Program. The project also involves Venezuela, Mexico and Colombia. Cuba is represented by the Ministry of Science, Technology and Environment Centro de Gerencia de Proyectos. Guantanamo is a geographic and climatic paradox in Cuba, as it is
the most humid region, contains the driest and most arid region, the Sagua-Baracoa mountain range, and has been severely affected by erosion and salinity in the south. (Prensa Latina, 18/7/06)

July 19: Gustavo Márquez, Minister of State for Integration and Foreign Trade, said that during the summit of the Common Market of the South (Mercosur), the economic bloc is to initial a trade agreement with Cuba. "All of the member countries of Mercosur have relations with Cuba. The current trade embargo is an imposition of the United States, but it does not include the nations of the southern bloc or the Latin American countries," Márquez said. However, the trade complementary agreement between Cuba and MERCOSUR merely covers 0,17 percent of trade between the South American bloc and the island. (El Universal, EFE, 19/7/06)

July 20: British airline Virgin Atlantic described its first year of operations in Cuba as satisfactory, during which it carried 35,000 passengers to the island, Virgin Representative Michelle Southgate said in Havana. In statements to Caribbean News Digital, the executive noted the beneficial ties between the United Kingdom and Cuba, adding that the company reported a 75 percent occupation rate during the period. Virgin Atlantic’s two weekly flights between London’s Gatwick Airport and Havana’s Jose Marti Airport have been well accepted since July 2005. (Prensa Latina, 20/7/06)

July 20: Cuba and Venezuela have agreed to extend their bilateral trade which currently exceeds 3.5 billion USD per year. According to the Venezuelan National Customs and Revenue Superintendent, José Gregorio Vielma Mora, the accord "constitutes the foundation for all the agreements signed by presidents (of Venezuela) Hugo Chávez and Fidel Castro (of Cuba) to promote bilateral trade.” (AFP, 20/7/06)

July 21: Canadian engineering graduate Dwayne Wohlgemuth discovered that unlike many underdeveloped countries, the Cuban population that goes without electricity is limited to 4.5 percent. Dwayne Wohlgemuth traveled to Cuba for an internship to immerse himself in yet another culture while working with solar electricity projects in rural communities, says The Gateway, University of Alberta website. Wohlgemuth participated in an existing six-year program, started by Cuban organizations, to install 60 solar panel systems and four medical clinics. "The first installation we helped with, for example, was a nine kilowatt system for a high school in a remote mountainous area," Wohlgemouth explained. "A nine kilowatt system is quite huge for solar, including 90 solar panels with a total area of approximately 100 square meters. This is now the second biggest solar electricity system in Cuba." (Prensa Latina, 21/7/06)

July 20: The foreign capital in Cuban companies continued decreasing in 2005, under a reorganization of the country's economy, a report of the Centre for Studies of the Cuban Economy said. A total 258 companies with foreign capital operated in Cuba in 2005, compared to 404 companies with foreign capital in 2002. The contracts for production cooperation decreased to 103 in 2005 from 441 in 2003, the report showed.  Spain leads with 77 associations with Cuban companies, followed by Canada with 41 and Italy with 40. Most of the companies operate in the industry sector, mainly mining and crude oil, tourism, and later communications and construction. The retransformation of the free trade areas in Cuba into areas for logistic development, introduced in 2004, led to the dissolution of over 330 businesses between 1990 and 2005. (Latin America News Digest, 20/7/06)

July 21: Cuban Transportation Minister Carlos Manuel invited Iranian companies to attend an international Transportation Exhibition in Havana from September 27 to 30. A report released by the Iranian Foreign Ministry's Information and Press Bureau said that Iran's Ambassador to Havana, Ahmad Edrisian met with Cuban Transportation Minister Carlos Manuel. During the meeting, the two sides surveyed the current level of commercial and business transactions between the two countries and stressed the need for the broadening and continuity of their cooperation. The Cuban Minister emphasized that his Iranian counterpart Rahmati should attend Cuba during his country's International Transportation Exhibition. Manuel added, "The Iranian-made transportation facilities are of high quality and can have customers in Cuba." Manuel also said that there is a good market in Cuba for various types of vehicles, including passenger cars, manufactured in Iran, and the Iranian firms' presence at the fair would meanwhile pave he path for further cooperation, as well as a step toward the entry of Iranian cars to Latin American markets. (FARS, 21/7/06)

July 21: The Common Market of the South (Mercosur) and Cuba signed an agreement on eliminating tariffs and boosting complementary trade, on the sidelines of the 30th Mercosur Summit held in Cordoba, Argentina. The group deal, known as the Economic Complementation Accord, is an integration of the four agreements that the Mercosur members already had with Cuba, and was signed by presidents of Argentina, Brazil, Paraguay and Uruguay on behalf of Mercosur, and Fidel Castro. Cuba-Mercosur trade reached 405 million US dollars in 2005, but still it’s 0.17 percent of Mercosur’s global transactions. (Xinhua, EFE, 21/7/06)

July 26: After an intensive restructuring of its sugar industry, Cuba is planning to make new investments in the sector to produce ethanol, Sugar Minister Ulises Rosales del Toro said. During a visit to the eastern province of Granma, the minister told journalists that the Cuban sugar industry had arrived at the "door of development" after the restructuring process it began in 2002. The Communist island dismantled part of its sugar industry after the drop in prices for the sweetener several years ago, but it began to increase production again when prices on the international market began rising. In the new phase, Cuba is focusing its attention on the production of ethanol, which, the minister said, offers a "magnificent outlook for the next harvest." He also said that the government was studying joint investment proposals it had received in the sector, but he added that so far "there is nothing concrete." If these joint investments are agreed, it would be the first time Cuba allows investments of foreign capital in the sugar industry. (EFE, Reuters, 26/7/06)

July 26: Fidel Castro, who attended as a special guest a Mercosur Summit in Argentina, said that his country will join the South Common Market bloc when it is suitable to the island, because Cuba “doesn’t take decisions following blind rules”. “I said in that meeting that we do not act following blind rules”, Castro said in a speech delivered during the celebrations for the 26th of July anniversary. “What is a blind rule? I lower the tariffs in order to sell. Those are indirect measures. We apply direct measures. That is what should be done”, he said. “We act according to rationality”, Castro added. (AFP, 26/7/06)

July 26: Fidel Castro inaugurated the country’s largest new power-generator system in the eastern province of Holguin. The initiative --connected to the national grid-- is part of the ongoing National Energy Program aimed at boosting the efficient use of fuels. The power generation facility will contribute over 200,000 kilowatts, nearly the same output as one of the units of the thermoelectric plant operating in that Cuban territory. The mounting and testing of the project took only five months. (ACN, 27/7/06)

July 27: Using its own resources, Cuba will soon start building its first eolian park in a northeastern coastal area, which is ideal to develop that alternative energy source from wind activity. Vladimir Alvarez, a specialist of the Integral Directive Board of the Eolian Project in Holguin, told the press ground movement will start in August on the Gibara coast, where six generators will be placed. That equipment will generate 5.1 megawatts, although the eolian-electrical potential in Holguin is over 500 megawatts, equivalent to the production of the generating units of Lidio Ramon Perez thermoelectric station in Felton area in the same province. Park operations will begin in early 2007, with a design to take advantage of the trade winds from the Atlantic Ocean, which reach this area perpendicularly. (Prensa Latina, 27/7/06)

July 30: Cuban authorities are cracking down on people who fail to pay for electric service and break other utility rules in Havana, where more than 800 violations have been registered so far this year, the press reported. Cuba's state-owned power company has deployed 192 inspectors across the capital to uncover fraud by electric customers, the weekly Tribuna de La Habana said. Among the violations being targeted are the unauthorized resetting of electric meters and other tactics to avoid paying electricity bills. Violators face penalties ranging from service cutoffs to fines and even jail time if convicted of a repeat offence. State-owned power company OBE said payments for service in Havana have not been matching consumption, drawing the attention of company personnel. Company officials estimated that fraud in 2006 was running at three times the rate last year. (EFE, 30/7/06)