Chronicle on Cuba - August 2007

Economy

August 1: The Venezuelan Petroleum Corporation (CVP) and Cuban CUPET started the first project for offshore exploration in Cuba. According to a press release from state-run oil holding Petróleos de Venezuela (Pdvsa), subsidiary CVP and CUPET will start exploration in six blocs of approximately 10,000 square kilometers. "Ascertaining the presence of deposits of light crude oil in volumes able to keep a high production potential is expected," said Pdvsa. The company claimed that the exploration to be made in the Cuban coasts will be "the first experience of Pdvsa in such an environment." (El Universal, 1/8/07)

August 1: Deputy Minister of Commerce, Mehdi Ghazanfari, said in Tehran that Iran signed two protocols for trade with Cuba and Venezuela during recent visits of the Minister of Commerce, Masood Mir-Kazemi, and his accompanying delegation to the two countries. Ghazanfari told reporters that based on one of the contracts, Iran and Cuba would levy 15 to 30 percent preferential tariff on their capital, intermediary and consumption goods. He said Cuba would hence levy the tariff on 44 and Iran on 88 items.  The official said Venezuela wants Iran to host the ALBA exhibition wherein to showcase products of Ecuador, Venezuela, Nicaragua, Haiti and Cuba. Furthermore, Iran and Venezuela study a proposal raised during the Iranian delegation's visit to Venezuela for formation of a joint shipping and insurance company. Ghazanfari said Iran's exports, including re-exports to Venezuela last year were worth 60 million dollars. (Tehran Times, 1/8/07)

August 1: Sherritt International Corporation posted a record profit of $132.4 million in the second quarter, more than doubling its $57.2-million year-earlier earnings on strong sales and "robust" metal prices. The diversified mining company's diluted earnings per share were 72 cents, versus 33 cents in the year-earlier period. "Sherritt anticipates that nickel prices will continue to be above historical averages, despite having declined from the record levels experienced in the second quarter", the company said in a release. Sherritt operates in Canada, Cuba and elsewhere abroad but not in the United States, where the government objects to the Toronto-based company's involvement with the Cuban government led by Fidel Castro. (Toronto Star, 1/8/07)

August 2: The value of Venezuelan oil subsidies to Cuba climbed past $3 billion in 2006 and could swell to $4 billion this year -- almost double current estimates, according to a University of Miami report to be released. Venezuela is propping up Cuba 's troubled economy with shipments of 94,103 barrels of oil a day, experts at UM's Institute for Cuban and Cuban American Studies (ICCAS) calculated, based on official Havana figures issued on July 27. That means Cuba last year got some $3.3 billion in oil products from Venezuela, up from $2.7 billion in 2005. Caracas has declined to explain the payment system, but experts believe Havana gets the energy assistance free of charge. Experts say the high subsidies are reminiscent of Cuba 's dependency on the Soviet Union, which provided an estimated $4-$6 billion a year in subsidies until it collapsed in 1992. Cuba 's economy fell apart, and widespread shortages plagued the nation for years. '' Cuba is repeating chapter and verse what it did in the 70s and 80s with Russia,'' said ICCAS energy expert Jorge Piñón, who prepared the study. 'If Chávez gets hit by a truck crossing the street tomorrow, the [Venezuelan oil officials] (…) are going to say to Cuba: ‘Pay for it, and pay market price.' '' (The Miami Herald, Bloomberg, 2/8/07)

August 2: Spanish company Girbau, for 30 years established in Cuba, will sell industrial laundry and dry cleaning equipment for 8 million euros in 2007 to the island. The report published in Havana by business monthly “Negocios en Cuba” includes statements by Vice President for Exports and representative in Cuba, Santiago Carol, who says Girbau constructs washers from 7 up to 110 kilogram-capacity and the washing tunnel type in continuous processes. Asked about plans for this year, the company’s executive said sales would be in the order of 8 million euros, 2 million over last year’s exports to Cuba. Girbau estimates business with Cuba can grow up to 20 percent per year. (Prensa Latina, 2/8/07)

August 4: Cuba is not only receiving the benefits of the UN Food and Agriculture organization (FAO) but also has become a close collaborator of that international agency in aid to other nations. Francisco Arias Milla, the FAO representative in Havana, informed Granma International that, as one example of that cooperation, there is an agreement with the Cuban authorities giving the agency up to 200 technical personnel from the island for its diverse projects, principally in Africa, South America and the Caribbean, and that there is an interest in increasing that figure to 300. Currently, some 40 Cuban specialists are on FAO missions. "They are not only taking their technological knowledge, but also their discipline and work ethics," Arias Milla added. (Granma International, 4/8/07)

August 4: Cuba's Ministry of Tourism issued a report saying that over the past few years, Cuba has become one of the most appealing venues in Latin America for holding international conferences, congresses and conventions. According to statistics from the International Congress and Conventions Association (ICCA), Cuba ranks sixth in Latin America and eighth in the Western Hemisphere. However, its capital Havana ranks fourth in Latin America and fifth in the Americas. (Radio Habana Cuba, 4/8/07)

August 5: In Munich, Cuban vice-minister of Foreign Trade, Eduardo Escandell, said that business activities between Bavaria and Cuba are increasing. “It is a business matter, and business is business,” he said. According to the Bavarian Ministry of Economy, exports (37.5 million Euros) and imports (9 million) totalled 46.5 million Euros in 2006. As a whole, German exports to Cuba grew from 101 million Euros in 2003 to 113 in 2004, to 259 (an increase of 259 %) in 2005, and 412 last year. (El País, 6/8/07)

August 6: Russia delivered the first of three Tupolev medium-haul jet planes to Cuba , expanding one of its main export markets for commercial aircraft, the Cuban Communist Party newspaper Granma reported. The cargo version of the TU-204 arrived in Havana the day before, and two passenger jets will be delivered before the end of the year as Cuba upgrades its aging Soviet-era fleet, the paper said. In 2006, Cuba received three Ilyushin IL-96-300s long-haul passenger jets used on routes to Europe and Latin America by Cuban carrier Cubana de Aviacion. A Russian diplomat said the sales to Cuba are one of the most important export contracts for Russia's commercial aircraft industry since the collapse of the Soviet Union in 1991. The deal was financed by Ilyushin Finance Co. Cuba last year agreed to buy $100 million a year in civilian aircraft from Russia over the next seven years, including short-haul regional Antonov AN-148 planes. (Reuters, 7/8/07)

August 10: Cuba has planned to plant more than 135 millions trees in the last half of 2007 as a response to the United Nations-promoted international campaign entitled "Lets Plant the Planet," to encourage world reforestation. National Forestry Director Elias Linares noted that Cuba is hoping to cover 12.6 percent of the world's overall goal through a countrywide campaign that will run until December, according to a report by daily Granma Internacional. He explained that in the island, some 60,000 to 64,000 hectares are planted every year as part of the national program called "Plant your Tree." The action has led to a steady growth of forested areas on the island, covering nearly 25 percent of the national territory, said Linares. "Cuba, Uruguay, Chile and Costa Rica are among the only countries in Latin America and the Caribbean witnessing the growing of their forest," stated Linares. (ACN, 10/8/07)

August 11: The 3rd Summit of PETROCARIBE began sessions at the level of heads of State in Caracas, with an agenda focused on cooperation among country members. Participants are expected to review and assess the running of the initiative, including 11 bilateral agreements and five joint ventures and important infrastructure projects aimed to broaden the influence of PETROCARIBE in the area. Regarding financing of the oil bill, experts said countries involved in the accord have saved $437 million in their purchase of oil. PETROCARIBE members are also expected to inform about the impact of the project on their social and economic development programs. Delegations attending the summit will also discuss steps to be taken by this cooperation mechanism promoted by Venezuela. Vice President Carlos Lage heads a Cuban delegation that includes Marta Lomas, minister of Foreign Investment and Economic Cooperation; German Sanchez, Cuba’s ambassador to Venezuela, and other officials of the Basic Industry and Foreign Ministries. [Speech by Carlos Lage] (Granma, Prensa Latina, 11/8/07)

August 11: Venezuelan President Hugo Chavez supports constructing a natural gas pipeline beneath the Caribbean to supply neighboring islands and Cuba, and possibly extending to Mexico's Yucatan Peninsula. Chavez called for the Venezuela-to-Caribbean pipeline in a speech to the PetroCaribe summit, a gathering in Caracas of energy ministers and heads of state from the region. The speech was broadcast on Venezuelan state television. The proposal for what he called a ``Great Trans-Caribbean Gas Pipeline'' comes just two weeks after Chavez said his plan for a ``Great Gas Pipeline of the South'' was on hold. That $20 billion pipeline to Argentina through the Amazon rain forest had been ``frozen'' by opposition in Brazil, he said July 27. At the summit, Chavez also proposed building an oil refinery in Guyana and urged the government of Dominica to accept his offer of a 10,000 barrel-a-day refinery, a project currently awaiting environmental analysis. He said Venezuela's restoration of the Cienfuegos refinery in Cuba will be completed in November. (Bloomberg, 11/8/07)

August 11: Venezuelan President Hugo Chavez said the upgraded and enhanced Cienfuegos refinery, near the city of the same name in Cuba, will begin operations by December 2008. Chavez and Cuban Deputy President Carlos Lage announced the start-up, during the last day of the third heads of state summit of Petrocaribe, the energy cooperation scheme Venezuela is implementing with 13 Central American and Caribbean countries, where the former supplies the latter with crude and refinery products under special financial conditions. "So, Cienfuegos will be in operations by December, right?" Chavez asked Lage during a closed-circuit broadcast of the summit. "Yes, in December," Lage confirmed. The plans for Cienfuegos were first announced in late 2005. Cienfuegos was built during the Cold War by the Soviet Union in order to process Cuban crude, but the facility only saw limited operations before being completely shut down after the fall of Communism in Europe. Now, Venezuela's state oil firm PDVSA is restarting it together with Canadian construction firm SNC-Lavalin and, according to PDVSA, and its capacity is being expanded to 110,000 b/d a day from 70,000 b/d. (Platts Commodity News, 12/8/07)  

August 11: Trade already underway between Venezuela and Cuba has reached more than $1.8 billion, although accords signed and waiting to be activated boost the amount to some $3 billion. Providing those figures was Venezuela's ambassador to the Caribbean island, Ali Rodriguez Araque, who said that Caracas and Havana signed "five agreements for the integration of mixed companies to produce food products" recently, without specifying the date. "In the agricultural category (…) five agreements have just been signed for the integration of mixed companies to produce food products both in Cuba and in Venezuela, while Venezuela will receive the benefits of important scientific and technological advances that characterize the educational and training processes of the Cuban people," Rodriguez said on state channel Venezolana de Television (VTV).     (AFP, 13/8/07)

August 13: Drilling in Cuban waters in the Gulf of Mexico by a consortium of foreign oil companies will begin at the end of 2008, and not at the beginning of the year, as previously announced, according to the official financial weekly “Opciones”. “Repsol-YPF (...) is getting ready for a second drilling at the end of next year,” said “Opciones” quoting Rafael Tenreyro, manager of exploration for the state company Cuba Petróleo (CUPET). (Reuters, 14/8/07)

August 14: The installation of generators in 116 of Cuba's 169 municipalities allowed to eliminate blackouts in the island, according to an official source. Vicente de la O, general director of the Electricity Company at the Basic Industry Ministry, said that the capacity installed in the country, as part of the energy revolution, is higher to the maximum demand of consumption. The executive stated to the national television that if the country reported in 2005 about 248 days of blackouts more than one hour and 100 megawatts, that stage has been overcome at present. De la O noted that diesel generators have already been installed and others of fuel oil are being currently placed to work around the clock, and guarantee the stability of the National Electric Power System. (Prensa Latina, 15/8/07)

August 15: Iran's ambassador to Cuba said that, Arak Pars Wagon Company, with its major contracts in railroad industry, has a big share of trade exchanges between Iran and Cuba. "Right now, Iran-Cuba trade exchange leveled at 200 million euros, a big part of this amount belongs to the production of 750 wagons to carry passengers, cement and cargo”, Mostafa Alaei said to the press in Tehran. Cuba has signed an agreement in the field of pharmaceutics technology transfer with Iran, especially Hepatitis medicine, the envoy added. "Cuba, in the fields of construction of residential buildings, transport and oil industry, needs Iran's cooperation and Markazi province by its strong industrial infrastructure can play an effective role in this concern”, he explained. “Iran is executing 60 projects in Cuba right now, which include power plants and dam construction, exporting bicycle, fisheries, agriculture and construction of a 70 kilometers freeway." (IRNA, 15/8/07)

August 16: Cuba presents a favourable result in water availability, whose dams store 80 percent of their capacities, according to a report from the National Hydraulic Resources Institute (INRH) published in Havana. According to experts, such result is satisfactory, because it has a much higher average with over 671 million cubic meters of water dammed, compared with the same date of the last year. The situation is due to spring rainfalls that occurred in the country, above all in July, which increased water stored in reservoirs in over 78 million cubic meters compared with June. (Prensa Latina, 16/8/07)

August 16: The Brazilian state company of geological services (CPRM) and the Government of Cuba launched a mining cooperation plan which aims toward the transference of technology from Brazil to Cuba. “Environmental preservation, an area in which the Cuban mining industry has experienced some problems, is included in the agenda,” said a CPRM official. (Reuters, 16/8/07)

August 18: The 11 dams in the Eastern Santiago de Cuba province are at 91 percent of their capacity. Given the proximity of Hurricane Dean, authorities in that province began implementing measures to deal with the likelihood of a natural disaster. Santiago de Cuba has 628, 600, 000 cubic meters of water stored. Some dams have already begun releasing water. (Radio Habana Cuba, 18/8/07)

August 19: Native Cuban species are nowadays the favorite targets for poachers, as well as clandestine fishermen, who flout the laws and regulations - although 1,380 fines were imposed for such activities in 2006 - the official Juventud Rebelde newspaper reported. Crocodiles, tortoises, turtles, coral, mollusks and other sea life, as well as parrots, hummingbirds and other birds, butterflies and assorted other insects - all part of the Caribbean island's rich native fauna - are being captured illegally for sale, the paper complained. It also said that the factors leading to furtive hunting and fishing range "from the economic conditions of the villagers to the lack of regulations, of control and even ignorance and lack of environmental education." Inspectors from the Fishing Ministry last year noted 2,219 infractions of the hunting and fishing regulations and the Forest Ranger Corps imposed 840 fines for illegal hunting and 540 for clandestine fishing, while so far in 2007 the Customs Office has tallied 80 cases of people who tried to take protected species out of the country, according to the article. (EFE, Juventud Rebelde, 19/8/07)

August 20: Strong swells provoked by the powerful Hurricane Dean passing near the southern Jamaican coast caused heavy rains and floods in eastern Cuba. The National Civil Defense called a hurricane alarm for provinces of Guantanamo, Santiago de Cuba and Granma, while Holguin, Las Tunas, Camaguey, Pinar del Rio and the Isle of Youth were on a tropical storm warning, and the rest on an informational phase. (Prensa Latina, 20/8/07)

August 20: Sydney got the short straw in Sunwing Vacations choice of cities with direct flights to vacation spots this winter. Sydney, in Canada’s Nova Scotia, provided the least amount of revenue and proved to be the toughest sell for Sunwing Airlines and will be dropped after only one season of offering direct flights from Sydney airport to Holguin, Cuba, said Bob Sime, the Atlantic Canada director of Sunwing Airlines. The airline will continue to offer its popular domestic charters to Toronto twice weekly until mid-October. “They’ve done very well, we’ve had good demand on them so we are very encouraged on that series,” Sime said. “We will be definitely looking to try to (bring) that back again next summer.” But he admitted their flights out of Sydney to Holguin was a battle. “It was not enough to discourage us, but in terms to how it compared to other gateways throughout Atlantic Canada, we found the market to be less than what we expected.” Sunwing Vacations was looking for 189 people, give or take, every week for six weeks in a row to go to Holguin. They weren’t there, Sime said. “We were getting half that.” (The Cape Breton Post, 20/8/07)

August 21: As the powerful Hurricane Dean plows in to the Yucatan Peninsula, reports from eastern Cuba came in on the damage caused by the sea that left some communities cut off by land. Sea penetration caused by four meter waves left damage at the Baconao park aquarium. Major Modesto Gutierrez, head of the Civil Defense for the municipality of Guama, said alternatives are being weighed to reestablish communication with the three communities where the road was washed out. According to government reports, the waves reached the coast with heights of three to six meters and destroyed a 500-meter stretch of the coastal road in the zone of Babujal, near Ocujal del Turquino. Similar damage occurred near Palma Mocha, blocking access to La Plata and La Magdalena and other portions of the road to Granma, such as in Cojimar, where the sea penetrated 100 meters from the coastline. A total of 40 homes were affected by coastal flooding. In the coastal town of Siboney, the sea penetrated more than 11 meters with waves between 5 and 7 meters high; damage was minimal. The rest of Santiago de Cuba province returned to normal and the approximately 150,000 persons who had been evacuated as a preventive measure began returning to their homes. (Periódico 26, EFE, 21/8/07)  

August 21: Venezuelan state aluminum reducer Alcasa is looking at providing Cuba with technical assistance for downstream aluminum fabrication, an Alcasa executive told the press. "We're performing a study right now to help us determine the potential of Cuba's processing industry and to see if a downstream industry can develop," the official said.  Since Cuba does not have enough power to install aluminum reduction plants, it is more likely that development will occur in metal transformation, the executive said. The Venezuelan smelter plans to support the island's aluminum industry for six months, said the executive. (Bnamericas, 21/8/07)

August 22: Russia's Ilyushin Finance leasing company concluded a memorandum of mutual understanding with Cuba, which envisions the continuation of supplies of Russian-made aviation equipment to Cuba. The document was signed within the framework of the MAKS-2007 international air show, by Ilyushin Finance director general Alexander Rubtsov and chief representative of Aviaimport, a company which engages in purchasing planes for Cuban airlines. Aviaimport plans to buy two Tu-204 planes and three An-148 aircraft in the period 2006-2011. Their aggregate cost is 150 million dollars. A number of important contracts were concluded at MAKS-2007, including a contract with Iran, which will purchase five Tu-204-120C planes in a deal worth 200 million dollars. (ITAR-TASS, 22/8/07)

August 22: A new high-density polyethylene pipe factory, now in the test phase, is part of Cuba’s concerted effort to replace imports, said Jose Ramon Machado Ventura, a Communist Party Politburo member, during his visit to Holguin province. At the HolgPlast factory Machado received detailed information about the characteristics of the installation —the third of its type in Cuba— conceived primarily to supply the water pipes required by the investment program in the eastern part of the nation. Part of its production (the 900 millimeters or almost 36-inch diameter pipes) will be used in the construction of the water pipeline between Nipe and Gibara, an important in-progress investment, Water Resources provincial officials noted. (Granma, 22/8/07)

August 23: The Cuban Chamber of Commerce expanded its institutional functions and services to its associates in order to achieve higher efficiency, Raul Becerra, president of the Cuban Chamber, said. Among the new services, Becerra mentioned the organization of conferences where international experts will pass on their skills to Cuban entrepreneurs. We take advantage of the institution´s links with other chambers over the world, to invite their specialists to visit Cuba and give their experience in certain topics, the Cuban Chamber official affirmed. Plans for the second semester include the organization of the Second Forum of Businesspeople of Non Aligned Countries in November, and the 25th Havana International Trade Fair. The entity also works in preparing the Cuba-Spain Bilateral Committee meeting and the upcoming China-Latin America Business Summit in which Cuba will take part in Santiago de Chile on November 28-29. (Prensa Latina,23/8/07)

August 24: Cuban Foreign Minister Felipe Perez Roque requested from the Brazil government an extension of a line of credit to 200 million dollars. According to his Brazilian counterpart, Celso Amorim, Perez Roque also was interested in increasing Brazil’s investments in the island. The request was made during a meeting between the two Foreign Ministers in Brasilia. “Havana is interested in obtaining financing in order to buy agricultural products”, Amorim said to journalists. He also said that Cubans have paid “in time”. Amorim explained that a previous line of credit extended by Brazil to the island two years ago reached a total of 90 million dollars, of which only 20 have been used. The Cuban government is asking now for a line of credit of 200 million. Amorim seemed to be in favour of extending the credit. “It is a matter of finding a good formula”, he said. According to Amorim, Perez Roque expressed the interest of the Cuban government in increasing Brazilian investments in areas such as transportation, oil, nickel and tourism in Cuba. Pérez Roque thinks “it is absurd to have so many investments from Spain, France, or Europe and relatively so little or almost none from Brazil”, Amorim said. (AP, 24/8/07)

August 25: Cuba has applied anti-erosive measures in over one million hectares of land and a half to stop and counteract the deterioration of soils and revitalize agricultural production. The use of green fertilizers, drainage and fitting-out lands are among tasks of the National Program for Soils Improvement and Conservation, in the nation's 14 provinces. (Prensa Latina, 25/8/07)

August 27: Cuba's program of Urban Agriculture has generated nearly 50,000 jobs across the island over the last few years. This number is expected to increase with the progressive incorporation of more land into this activity of production. According to reports by the Cuban Ministry of Agriculture, some 35,000 hectares are currently devoted to urban agriculture in the 169 municipalities across the country. Farmers are paid according to their efficiency, which encourages hard work and contributes to the increase of productivity. The greatest challenges to the Urban Agriculture program are found in the Cuban eastern provinces where the soil has been affected by salinity and erosion. (Radio Cadena Agramonte, 27/8/07)

August 28: Cuba began the 2007-2008 coffee harvest hoping to overcome last year’s 8,200 tons of semi-processed beans. According to a local radio station in Santiago de Cuba, agriculture officials in Santiago de Cuba province, which produced a third of last year’s harvest, said that this season they are expecting a production growth of a 10%. Other eastern provinces, accountable for 85 % of the total Cuban coffee production, forecasted similar increases. Rubén Martínez, an official in charge of coffee production at the Ministry of Agriculture said that this year the 2006-2007 harvest produced almost 8,200 tons, some 3,200 tons more than the previous one. (Reuters, 28/8/07)

August 29: The protection and recuperation of species endangered either by overexploitation or with demographic problems is occupying Cuban specialists in several provinces. One such project, undertaken by the Flora and Fauna enterprise in Pinar del Rio is the protection of the "Palma Petate" with habitat only in the western region of Cuba. Specialist Lidia Luifriu told the press this project aims to protect over 300 species of Coccothrinax crinita, distributed between Las Pozas and Rio Viejo, Bahia Honda, a species reduced by overexploitation. (Prensa Latina, 29/8/07)