Chronicle on Cuba - September 2006

Economy

September 1: Esteban Lazo, member of the Political Bureau of the Communist Party of Cuba met with the Chinese Minister of Radio, Film and Television. The two officials held talks about topics related to audiovisual matters and expressed their satisfaction with the exchange, which began with a visit by Lazo to China in July, followed by a trip by the president of the Cuban Institute of Radio and Television, Ernesto Lopez. Cooperation between the two nations in this area is expected to produce several bilateral agreements. The first step has already been implemented with the broadcasting of Chinese Television in Cuba and the Cubavision Internacional channel in China. In both cases, transmissions are aimed at tourist resorts. Wang Taihua attended the inauguration of a TV broadcasting center at a beach resort in Cayo Coco, on the Cuban northern coast. The tourist resort now offers three channels broadcasting Chinese Television in Chinese, English and French. (Granma, AFP, 1/9/06) 

September 2: Cuban Minister of Transportation Carlos Manuel Pazo Torrado in Havana called for expansion of technical cooperation with Iran. In a meeting with Iran's Ambassador to Cuba Ahmad Edrissian, Torrado said Iran was an advanced country in various fields of transportation and expressed his country's willingness to boost cooperation with Iran in this respect. He said the upcoming visit to Cuba of the Iranian President Mahmud Ahmadinejad would be an appropriate opportunity for the two countries to sign new agreements. Meanwhile, Cuban Minister of Basic Industries Yadira Garcia Vera, in a meeting with Edrissian, expressed her country's readiness to sign industrial agreements with Iran. The minister said the two countries enjoy great potentials for expansion of industrial cooperation, adding Cuba is determined to boost ties with Iran in different fields. The two sides discussed avenues for bolstering bilateral economic ties particularly in the fields of electricity, oil and cement. (Tehran Times, 2/9/06)

September 5: Several years after downsizing what was once Cuba's most important business, authorities have reversed course and are expanding the sugar industry to take advantage of the high global price of sugar and growing demand for ethanol. Ulises Rosales del Toro, Cuba's sugar minister, said that he expects sugar production to increase at least 25 percent this year and has vowed to triple production to 3 million tons in the next few years, according to Cuba's state-run media. Cuban authorities also plan a fivefold increase in the production of ethanol, a sugar-based fuel for automobiles that is increasingly attractive as gasoline prices soar. Analysts say the ambitious effort is full of pitfalls and doubt that Cuba has the capital needed to quickly boost sugar cane yields, modernize two dozen or more refineries to increase processing capacity, and build new ethanol distillery plants and other infrastructure to develop a viable export business. (Chicago Tribune, 5/9/06)

September 8: The first coffee beans of the 2006-2007 harvest in Cuba’s Holguin Province have already been gathered in the municipality of Sagua de Tanamo, one of the largest producers in Cuba. The recently initiated season will have a workforce of about 7,000 harvesters, who will collect nearly 70 percent of the total crop in the territory, forth among all coffee growers on the island. The current estimate of production in the province is for 360,000 buckets, most of this to be harvested in the municipalities of Sagua de Tanamo and Mayari. The greatest production of coffee in Holguin comes from independent small farmers, who hold around 60 percent of the estates. (Ahora, 8/9/06)

September 8: Cuba’s Assistant Foreign Trade Minister Pedro Luis Padron heads a delegation arriving in Brazil, to participate in the meeting of ministers and high-ranking officials of the G-20. The September 9-10 forum in the Copacabana Palace in Rio de Janeiro is intended to call world attention to the stagnation of negotiations of the Doha Round due to the position of the US and the European Union to preserve their protectionist agriculture policies. Brazilian Foreign Minister Celso Amorim will be the host of the meeting, where the G-20 is expected to increase its membership to 23 with the return of Ecuador and Peru. So far the members are Argentina, Bolivia, Brazil, Chile, China, Cuba, Egypt, Phillippines, Guatemala, India, Indonesia, Mexico, Nigeria, Pakistan, Paraguay, South Africa, Thailand, Tanzania, Uruguay, Venezuela and Zimbabwe. (Prensa Latina, 8/9/06)

September 10: India's state-run oil company signed an agreement to explore Cuba's Gulf of Mexico waters for oil at a time when US companies and politicians are increasingly concerned over exploration in the area. Cuba Petroleum Director Fidel Rivero Prieto said upon signing the agreement that six foreign companies had signed for 16 of 59 blocks in Cuba's Gulf waters, two companies more than previously announced. Prieto refused to name the two other companies or which blocks they had taken due to possible US objections. "It is up to the companies to announce if they want," he said. India's Oil and Natural Gas Corp's (ONGC) overseas arm ONGC Videsh signed joint production agreements for blocks 34 and 35 covering 4,300 square kilometers (1,660 square miles). (Reuters, Bloomberg News, The Globe and Mail, 10/9/06)

September 10: The Chamber of Commerce of the Republic of Cuba and the Federation of Syrian Chambers of Commerce have agreed to promote bilateral trade. The negotiations were held in the National Hotel of Havana, and led by Frank Abel Portela Chacón, secretary general of the Cuban Chamber of Commerce, and Bashar Nouri, secretary general of the Syrian federation. (WDS, 12/9/06)

September 12: Fidel Castro's health problems will not lead to any changes in Cuba's economic system, nor is there any interest in adopting a Chinese economic model here, the island's economics minister said. Jose Luis Rodriguez's comments appeared aimed at dispelling speculation that Raul Castro, the communist-run island's acting president while his elder brother recovers from stomach surgery, would open up the Cuban economy and take pointers from China if given full power. "If people are thinking that there could be a change in Cuba's policies toward an opening of the economy in the hypothetical case of the Comandante (Fidel Castro) remaining ill, I can firmly say no,'' Rodriguez told a news conference. "It's not planned, nor is it the desire of the people,'' he said. As for communist China, its explosive shift toward a market economy in recent years is due to its own "very particular characteristics,'' and is not a relevant model for Cuba, Rodriguez said. The official said there is one Chinese example, however, that Cuba will likely follow: putting an end to its dual currency system. The plan, Rodriguez said, is to eventually merge the Cuban peso with the island's convertible Cuban peso.  Cuba's economy grew a faster-than- expected 12.5 percent in the first half of 2006, boosted by a surge in the construction, transport and services industries, Rodriguez said. (AP, Bloomberg, 13/9/06)

September 19: Over 40 countries will be represented at the International Transportation Fair FIT 2006. This commercial exhibition will begin on September 26 in Expocuba, the biggest exhibition site on the island. In a press conference, Transportation minister Carlos Manuel Pasos assured that the 10th FIT exhibition includes the signing of a contract with Byelorussia for 100 new articulated urban transport buses, adapted to the Cuban climate, and part of them will be in the country by the end of this year. The Minister also said that the situation of public transportation is still “critical”. He added that 8,000 buses were bought in China, 1,000 of which are already on the island. Cuba has invested one billion dollars in public transportation, not including locomotives and train wagons. (Prensa Latina, EFE, 19/9/06)

September 20: Export Assistance Canada accepted applications for Canadian companies that want to join its October 29 trade mission to Havana. The visit will coincide with Havana’s International Trade Fair. Participating Canadian companies will have an opportunity to meet Cuban buyers and importers of industrial machinery, as well as purchasers of equipment and materials for the oil, gas and mining industries. Cuban government officials also will be on hand. "With the increasing prices of oil, gas and minerals such as nickel and copper, Cuba is implementing numerous projects of exploration and modernization of their production facilities," Export Assistance Canada said. "These industries are soaring and the demand for new or used machinery, as well as automation processes, is stronger than ever. Construction machinery is also in demand. Banking institutions, some of them doing business in Canada, are very active in Cuba to finance their orders (…) Given especially the absence of American competition, the opportunities for Canadian suppliers in Cuba in the oil, gas and mining industries are numerous." Products in demand in Cuba include industrial and construction machinery, machinery and equipment for exploration, refining and transportation of oil and gas, and machinery and equipment for exploration and production of nickel and copper. (Metal Bulletin News Alert Service, 20/9/06)

September 21: Colombia and Cuba have concluded with positive results the first round of negotiations aimed at strengthening and increasing the Economic Complementation Agreement between the two countries. Colombian vice Minister of Trade Eduardo Muñoz said that the three days of talks were successful. Muñoz noted that the groups of Health and Phytosanitary measures, Technical Obstacles to Trade, and Controversy Solution met during the first round of talks. The minister of Trade stated that the Controversy Solution group has already concluded its work, Health and Phytosanitary measures has still two points pending, while Technical Obstacles to Trade is the most delayed, but is committed to solve differences as soon as possible. Another Cuban technical delegation will arrive in Colombia on October 2-5 to focus on issues like Access and Origin Norms to markets and will solve aspects that were pending in the first round of talks. (Prensa Latina, 21/9/06)

September 22: A two-days meeting of the presidents of provincial committees of Cuban People’s Power resumed in Havana. Presided over by First Vice President Raul Castro and other top Communist Party and government officials, the meeting took a look at the nation’s priority housing program. It was reported that as of August, some 68,600 houses had been completed and that there is a firm commitment to reach the stated goal of 100,000 by the end of the year. Participants also evaluated the progress of the nation’s energy revolution that involves both saving and new generation strategies. Reports were made on the replacement of old energy inefficient refrigerators and air conditioners in residential homes with new energy-saving ones. Current electricity consumption and demand was reviewed, as was progress in the installing of clusters of diesel generators and their synchronization to the national power grid, expected to be completed in October. Another issue discussed at the meeting was assistance to 107,272 Social Security recipients including low income people, retirees, the physically disabled and pregnant women with health risks. The distribution of basic food items at the neighborhood stores and audits of the wholesaler’s warehouses were also reviewed. (Granma, 22/9/06)

September 25: Cuba fired the heads of two of the country's most influential companies in a bid to bring the computing and telecommunications enterprises back under firm state control amid a national anti-corruption drive, industry sources said. Information Technology and Communications Minister Ramiro Valdes, 74, a former revolutionary hero, took over the sensitive sector that controls communist Cuba's communications, computing, Internet and software development late in August 2006. Valdes fired the president of Empresa de Telecomunicaciones de Cuba SA (Etecsa), Jose Antonio Fernandez, and the vice minister for information, Nelson Ferrer, for failing to control the fixed-line and mobile services monopoly, the sources said. Valdez also fired the president of the powerful state-run Copextel corporation which imports, assembles and distributes advanced communications, computing and other technology, the sources said. Copextel, with annual revenues of more than $200 million, has been caught up in recent corruption scandals involving kickbacks from foreign companies. Etecsa's new president, Maimir Mesa Ramos, and Copextel's new boss, Antonio Orta Rodriguez, were both promoted from within the ranks. International studies have found that Cuba occupies last place in Latin America for both mobile phone and Internet penetration, and is fifth from last in terms of its number of fixed telephone lines. Cuba's 11 million people cannot buy a computer or subscribe to the Internet without a government permit, satellite television is prohibited, and mobile phones are available only for hard currency. (Reuters, 26/9/06)

September 26: The 7th Cuba-Russia Inter-Government Commission began in Havana, aimed at fostering economic, trade and scientific-technical cooperation. Government Minister Ricardo Cabrisas presided over the Cuban delegation to this meeting, while Grigori I. Elkin, president of the Federal Agency for Technical Normalization and Metrology, led the Russian representation. This session takes place during the visit to Havana of Mijail E. Fradkov, president of the Russian Federation Government. The Russian delegation’s agenda includes meetings with Cuban authorities from several ministries and officials from the Institutes of Civil Aeronautics and Hydraulic Resources. (Prensa Latina, 26/9/06)

September 27: A huge blaze broke out in the pumping section of the state-owned Ñico Lopez refinery, located on Havana Bay 10 kilometers from the city center. The blaze at Cuba's biggest oil refinery in Havana left one worker dead and another injured, television reports said. It took firefighters five hours to put it out, as two workers injured in the blaze were taken to a nearby military hospital, where one of them later died. "We've got it under control," a fire department spokesman told the press. "The fire broke out in an area of the refinery where there's plenty of gasoline, when a van engine was turned on," he added.  Another fire broke out 10 years ago at the same refinery, but it was extinguished in two hours without any injuries or major damage. The refinery, formerly owned by Esso and Shell, predates the 1959 Cuban revolution. Flames from the refinery, located on the fringes of Havana's port quarter, were visible all over the Cuban capital "for at least six or seven hours," a source said. (AFP, Platts Commodity News, 29/9/06)  

September 27: Cuba's International Transport Fair opened with the goal of improving the island's ailing transport sector with the purchase of buses from Belarus and China and a new railroad deal with Venezuela, state-run media reported. Representatives from 40 countries have exhibitions at the event, which runs through Saturday. Venezuela, China and Russia rented out entire pavilions, and Iran is attending for the first time, according to Transportation Minister Carlos Manuel Pazo. Pazo told the government's business weekly Opciones that the event will try to ease transportation woes on the island but warned Cubans not to have “false hopes”. Cuba's internal transport system steadily deteriorated after the crushing economic crisis of the early to mid-1990s caused by the collapse of the Soviet Union, Cuba's longtime backer. Cubans often spend hours waiting for buses that never come, or are already full when they arrive. The government stepped up recovery efforts early last year, importing 80 buses from China. It also repaired some 60 locomotives and 1,800 railway cars for transport across the island. The transportation minister said Cuba will sign an agreement with Venezuela this week to form a joint-enterprise company to deal with railway development. A plan to purchase 100 buses from Belarus will also be announced, he said. (AFP, 27/9/06) 

September 27: Negotiators from Cuba and the 15-nation Caribbean Community were in discussions to add hundreds of goods to those already exempted from import taxes under a free trade agreement. A deal signed in 2000 by the communist-led country and the regional bloc, also known as Caricom, slashed or eliminated duty on items including electrical products, construction materials and pharmaceuticals. Ken Valley, Trinidad's trade minister, said Caricom officials wanted to include more manufactured products such as furniture and agricultural goods, as well as tourism services. Caricom officials said Cuba wants to add some 200 products to the treaty. Cuban officials could not be reached for comment. (AP, 27/9/06)

September 28: President of the Russian government Mijail Fradkov started a visit to Cuba accompanied by a large governmental and business representation to fulfill a tight work agenda. Fradkov arrived at the Cuban capital accompanied by Deputy Ministers of Finance, Anton Siluanov and Economic Development and Foreign Commerce, Vitali Savelev. The Head of the Federal Service for the Technical-Military Collaboration, Mijail Dimitriev, and the Head of the Russia-Cuba Mixed Commission, Grigori Elkin, and other high-ranking officials are also part of the delegation. The Russian dignitary will hold official talks with Cuban First Vice President Raul Castro and sign various bilateral agreements in the headquarters of the island's Council of State. (Prensa Latina, 28/9/06)

September 28: Azerbaidzhan s Foreign Minister Elmar Maguerramm Mamediarov began his first official visit to Cuba. On arriving in Havana, Mamediarov and his delegation said they will explore potential agreements on the energetic sector. They will also sign on the creation of a joint commission for bilateral cooperation. The Baku foreign minister met with Ricardo Alarcon, president of Cuba’s National Assembly, and is expected to meet with Juan Almeida, vice president of Cuba s Council of State, and Basic Industry Minister Yadira Garcia. (Granma, Prensa Latina, 29/9/06)

September 28: Russia agreed to grant Cuba credit worth $350 million and restructure some of its recent debt during a visit by Russia's prime minister, officials said. Cuban Defense Minister Raul Castro, who is acting president while his elder brother Fidel recovers from intestinal surgery, gave red-carpet treatment to Mikhail Fradkov, the highest-ranking Russian official to come to Cuba since a visit by President Vladimir Putin in 2000. Alexander Bochanov, the press liaison at the Russian Embassy in Havana, said that Russia had agreed to restructure some $166 million of debt acquired in recent years. The $350 million line of credit will be used to buy Russian goods and services. It is a 10-year loan with annual 4-percent interest, according to Russia's RIA Novosti news agency, which reported that Fradkov said the credit would be used to help modernize Cuba's energy sector and transportation system, reconstruct water conservation facilities and railroads, and design and deliver air navigation systems. But the question of Cuba’s debt from Soviet times - the fantastic sum of 22bn dollars—remains unsolved. Havana does not want to recognize this at all. Russian officials insist that it must be paid, but during this visit they preferred not to broach the subject. (AP, BBC, 29/9/06)

September 28: Venezuela is planning to double its presence at the 24th Havana International Fair to take place in October, Havana, as the two countries continue to expand bilateral trade. Gustavo Marquez, the Venezuelan minister for Foreign Trade and Integration, made the statement during the official announcement of the fair. In 2005, Venezuela was represented by 57 private and public businesses and several ministers and financial institutions at the Expocuba fairgrounds. (Prensa Latina, 29/9/06)