Chronicle on Cuba - January 2008

Economy

January 2: According to an official report, Cuba, whose yearly food imports regularly average 1.5 billion USD, had to spend an additional 286 million USD in 2007 to meet rising international market prices. “The increase in the price of approximately the same volume of imports implied the additional expenditure of 286 million USD in the current year. Prices will continue to rise in 2008,” warned in a televised speech Osvaldo Martínez, president of the Cuban Parliament’s Economic Commission. [Discurso de Osvaldo Martínez] (AFP, 2/1/08)

January 2: Cuba ended 2007 with 18 of the 52 sugar mills that will operate during the 2007-2008 harvest running at 70 percent capacity, Communist Party daily Granma reported. The newspaper said, however, that the success of the harvest "will depend on the output of the 20 mills from (the eastern provinces of) Las Tunas to Guantanamo that will operate this harvest." The roads in that area were badly affected by rains associated with Tropical Storm Noel in November. "If they can repair the roads to ensure the supply of sugarcane and (the cane that) arrives is high quality, the industry will have the backing it needs and will have overcome the challenge," it said. Cuban authorities estimate that 52 mills will be involved in the 2007-2008 harvest, which began on December 10 in the eastern province of Granma; authorities said at that time they were expecting a "difficult milling season" because of October and November rains. (EFE, 2/1/08)  

January 3: Cuba will begin building a new eolian park in the central region, with capacity to generate ten megabytes, local press informed. After intense wind studies by the ministry of science, technology, and environment, and Cuba’s Electrical Union, it was decided to build the park in the municipality of Corralillo, in Villa Clara province. This new work will add to another two already built on Turiguano Island, in the central province of Ciego Avila, and in the special municipality of Isla de la Juventud, as well as another under construction in Gibara, eastern province of Holguin. (Prensa Latina, 3/1/08)

January 3: Suchel Camacho S.A., Cuba's major perfumes and cosmetic company, contributed with 60 million pesos to the domestic economy in 2007, by producing twice their target for the period. The company manager, Sonia Gomez, told the press that a new line of toiletries will be produced in 2008 under the name "Las cosas de mi botica" (My Pharmacy Stuff). The new products will focus on the traditional pharmacopoeia and will be made up only from natural raw materials. (ACN, 3/1/08)

January 4: Private farmers will be paid more as part of a plan to reduce imports of powdered milk, meat, beans and other staple foods, said the president of the National Association of Small Farmers (ANAP), Orlando Lugo Fonte. “The government will import 20,000 tons of milk less, so that balance will have to be produced domestically. To that effect, they have approved the payment of 0.02 USD per liter of milk to dairy farmers," Lugo Fonte told farmers in Santiago de Cuba. (EER, 7/1/08)

January 5: Almost half a thousand Venezuelan experts in agriculture graduated from the Cuban Institute of Animal Science as part of agreements signed by Cuba and Venezuela within the framework of the Bolivarian Alternative for Latin America and the Caribbean (ALBA). The participants became qualified on integrated handling of plagues in agricultural cultivations, technologies for milk production, photo sanitary labs and agro productive projects, the director of the scientific institution Omelio Borroto said. (Prensa Latina, 6/1/08)

January 5: Cuba will produce more than 1,000 megawatts in 2008 using fuel oil, Vice President Carlos Lage said. As this process is taking place, the same amount will be replaced in inefficient power plants, Lage said during a visit to the construction site where fuel oil generators will be installed at Mariel's power plant, in the province of Havana. Lage, who is also the secretary of the Executive Committee of the Council of Ministers, pointed out that it was the biggest, most important and most complex work of the country's new power generation system using gas and fuel oil, according to the newspaper Juventud Rebelde. So far, 77 million, of a 91-million-peso budget, have been invested in the project, whose magnitude can be measured by its generation capacity of 142.2 megawatts. As part of Cuba's Energy Revolution, aimed at saving fuel, the second group of fuel oil generators was inaugurated in the Havana municipality of Güira de Melena. (Prensa Latina, 6/108)

January 6: Cuban tourism authorities want to increase the number of hotel rooms in Havana, which annually hosts half of the more than 2 million tourists who visit the island, local media reported. The representative of the Tourism Ministry in the Cuban capital, Ramon Zamora, said that the proposal is to be able to receive more tourists in the capital, which has very specific attractions that draw people from all over the world. Havana brings in 33 percent of the country's tourism income by hosting 50 percent of Cuba's foreign visitors, and it has 12,325 rooms spread among 62 hotels, that is to say 27 percent of the country's hotel rooms, according to official data. Zamora said that in 2007, 1.3 million visitors from Spain, Mexico, Italy, France, the United Kingdom, Canada and Germany, the main tourist-sending nations to Cuba, visited Havana, as per a report by the state-run Prensa Latina news agency. (EFE, 6/1/08)  

January 7: Cuban farmers have a suggestion for how the government can put millions of acres of fallow land to work and put more food on everyone's table. Give state-owned lands to them, and allow a bit of capitalism. ''We are all hoping for some change -- a new system that allows you to have a better life and do some business,'' said Elena, a small farmer from the Santiago de Cuba area. "Here, you are not even the boss of what's yours.'' Interim president Raúl Castro has made it clear as he grapples with the illness of his brother Fidel that one of the chief troubles the country faces is how to put more food on the dinner table without compromising the 49-year-old revolution's socialist doctrine. Cuba's government owns 85 percent of the arable land and controls all supplies like seeds, herbicides, feed and fuel. Private farmers who own the other 15 percent produce 60 percent of the island's food, the government has acknowledged. Experts estimate there are up to 225,000 private farmers in Cuba, as well as another 350,000 farmers working on cooperatives that own their own land, within a system that has long been dominated by Soviet-style, state-owned collective farms. Orlando Lugo, head of the National Small Growers Association, told Bohemia magazine there were places last year that didn't plant potatoes, because farmers did not have the materials needed to prepare the soil. With the proper resources, growers in Havana could double or triple output, he added. ''We need more resources,'' Lugo said. "We lack tractors, and there's barely enough machinery and a shortage of fuel.'' (The Miami Herald, 7/1/08)

January 7: Cubans who work for foreign companies and receive bonuses will have to declare them as income and pay taxes on them, according to an official ruling by the Finance and Prices Ministry. The ruling affects workers hired through state agencies to work for foreign companies or institutions, embassies, consulates, local offices of international organizations and the foreign press, among others. The hiring agency collects the workers' wages from the companies and in turn pays the employees, after taking out applicable deductions. With the official monthly salary at around $15, foreign employers have long paid their locally hired workers bonuses in hard currency or in the Cuban convertible peso, or CUC, which is worth $1.08, compared with 4 cents for the ordinary peso. According to the new ruling, Cuban workers who receive such bonuses must file with the tax office in the first sixty days of the year and declare their income in CUC or foreign currencies. Foreign companies must also record the payment of any bonuses "separately in their accounting records," which will be compared to the sworn declarations filed by their employees with the tax office. (EFE, 7/1/08)  

January 8: Cuba plans to build 30 new hotels starting this year in order to add more than 10,000 additional hotel rooms to the island's tourism infrastructure, the state-controlled financial weekly Opciones reported. The Tourism Ministry delegate in Havana, Ramon Zamora, told the publication that almost 1,000 of the new rooms would be in the capital, which together with the seaside resort of Varadero accounts for 70 percent of revenues from the sector. According to Zamora, plans for developing tourism up to the year 2010 call for boosting expansion through the building of new facilities, the promotion of the new Hoteles E chain, and investment in renovating existing facilities. (EFE, 8/1/08) 

January 9: The first of seven direct Santiago-Havana flights of a Cubana IL-96 will take 230 Chilean tourists in January and February to Havana, Chile Havanatur director Rafael Alcala announced. Alcala told Prensa Latina that these direct flights are destined to increase tourism from Chile and to reposition Cubana de Aviacion Airline in Chile. (Prensa Latina, 9/1/08)

January 10: Brazilian President Luiz Inacio Lula da Silva will visit Cuba offering investments, Marcelo Baumbach, presidential spokesman, told a news conference. The Brazilian government wants to increase credit lines to Cuba for food imports as well as investments in industrial, agriculture and infrastructure projects, including the modernization of its hotel industry. Also on the agenda is a framework agreement for cooperation with Brazil's state-controlled oil company Petrobras, including the construction of a lubricants plant and oil drilling in the Gulf of Mexico, Baumbach said. Petrobras is expected to train Cuban personnel and offer aid in refining and research. Lula, who will be accompanied by several ministers as well as the head of Petrobras, is due to arrive on January 14 and spend 24 hours on the Caribbean island. (Reuters, 10/1/08)

January 10: Cuban service exports increased dramatically for the third consecutive year in 2007 to $8.36 billion, more than twice the level reported in 2004, the government said. The mounting service income, mainly from leftist ally Venezuela, has enabled Cuba to more or less balance its external finances despite a huge trade deficit, pay debts contracted since 1991 and register strong growth after years of crisis that followed the demise of the Soviet Union. The National Statistics Office, in preliminary figures posted on its Web site (www.one.cu ), reported the 21.5 percent, or $1.5 billion, jump in service exports was not related to tourism revenues, which stagnated at $2.2 billion. Cuba does not specify what it includes within the service export category, though on various occasions officials have said tourism and related revenues, the export of medical and other technical services and donations fall within it. (Reuters, 10/1/08)  

January 10: Cuba’s National Statistics Office (ONE) informed that, in 2007, rice production was 208,000 tons, slightly lower than the previous year. Cuba consumes a minimum of 700,000 tons of rice every year. (Reuters, 10/1/08)

January 10: India will soon cancel a debt for 64 million USD incurred by Cuba, and will seek to strengthen cooperation with the island in the areas of energy production, civil aviation and tourism, declared in Havana, Somnath Chatterjee, president of the Indian Parliament’s Lower House. The Hindu parliamentarian concluded a four-day official visit to the island. (AFP, 11/1/08)

January 15: The Cuban nickel industry surpassed tourism as the country's top foreign exchange earner for the first time in 2007, an economic commentator said on state-run television. "Cuba's production of between 75,000 and 76,000 tonnes meant revenues of around $2.7 billion, while tourism earned around $2.1 to $2.2 billion," Ariel Terrero, considered the best-informed economic commentator on state-run television, said. Cuban officials have said nickel output was up 2.2 percent last year over a 2006 output of around 74,000 tonnes. Terrero confirmed unrefined nickel plus cobalt production should reach a record 80,000 tonnes this year. "There are plans to increase production at the Pedro Soto Alba plant, a joint venture with Canada, by 4,000 tonnes, an investment that began some time ago and which should come on line beginning this year," he said. Joint venture partner Sherritt International has announced plans to add 16,000 tonnes to the plant's capacity, 4,000 tonnes in 2008, another 9,000 tonnes in 2009 and a final 3,000 tonnes in 2011. Sherritt partner, state-run Cubaniquel, operates two older plants in eastern Holguin province where the joint venture is located, exporting the product mainly to Europe and China. The three plants have operated at capacity for a number of years. (Reuters, 15/1/08)

January 15: Brazil and Cuba signed 10 agreements covering oil exploration, biotechnology, pharmaceuticals, and agriculture during Brazilian President Luiz Inacio da Silva's official visit to Cuba. At a ceremony at the Palace of the Revolution in Havana, Lula signed for his nation while Raul Castro, who has been acting president since July 2006, signed for Cuba. Other important agreements include a memorandum of understanding allowing Brazilian state-owned energy company Petrobras to explore and produce oil and gas in Cuban-owned Gulf of Mexico waters. Petrobras joins companies from Spain, Canada, India and Malaysia in exploring this area. A second memorandum agreed to set up a feasibility study on a possible joint venture to produce and sell lubricants in Cuba. In another document, Brazil's Financing and Export Guarantee Committee (Copfig) approves a credit for food purchases, the expansion of Cuba's Ernesto Guevara Nickel Plant, and the purchase of fish farming equipment. Cofig also agreed to look at a series of projects, from hotels to pharmaceuticals. Brazilian Foreign Ministry said food credits might be worth as much as 100 million US dollars. [Acuerdos suscritos entre Cuba y Brasil] (Xinhua, Sun Sentinel, 16/1/08)

January 17: The Camilo Cienfuegos refinery, in the Cuban central province of Cienfuegos, began processing crude oil in accordance with its implementation plan after its recent re-inauguration. Executives of this industry told reporters that the plant is refining its first 65,000 barrels of crude oil to obtain fuel oil, diesel, naphta, gasoline and turbo fuel. The technical staff of the refinery has also worked in the enlargement of storage tanks and they concluded the assembly of a geodesic dome in the third tank, with a capacity of 50,000 cubic meters. (Prensa Latina, 18/1/08)

January 17: The Venezuela-Cuba relationship has been the driving force for Latin American integration, said Martha Lomas, minister of foreign investment and economic cooperation, speaking in Caracas at the signing ceremony for the 8th Joint Commission of the Integrated Cooperation Agreement between the two countries. In a statement to the press, Minister Lomas reported that, as part of the growing exchange, 26 joint enterprises have been created and another 10 are in the final stages of negotiation. On this occasion, 76 projects were presented, mostly related to the sugar agribusiness and its derivatives, representing an amount of over $1.355 billion, to be administered by 18 Venezuelan and 21 Cuban ministries, with the participation of more than 60 institutions in the two countries. (Granma International, 17/1/08)

January 18: Chinese and Cuban companies signed a contract to sell the Caribbean island six air-generators of 750 kilowatts each destined to the second Gibara eolian wind energy park. Located in north Holguin, this site will have a 1,500-kilowatt power. The document was inked during a ceremony at the Cuban embassy in Beijing, by Wu Gang, president of the Chinese Company GoldWind, and Lazaro Hernandez, trade director of the Cuban Company EnergoImport. GoldWind Science and Technology Corporation, manufacturer of the top-technology equipment, is the leading company in China in this renewable energies sector, and controls about 34 percent of the domestic market. (Prensa Latina, 18/1/08)

January 18: Cuba has a new "special corps" of government inspectors to prevent pilfering of fuels and ensure that electricity is not wasted, state-run media reported. The press cited Vice President Carlos Lage as saying the inspectors have "all the authority to continuously monitor how electricity, fuels and lubricants are being used" on the communist-ruled island. Lage commented at the swearing-in of the first 65 members of the new corps, whose ranks are set to swell by 200 during the course of this month. Reports from the inspectors "should suggest control measures, sanctions for those who irresponsibly fail to comply and technical solutions to promote efficiency," the official said. (EFE, 18/1/08)  

January 21: Cuban sugar mills have opened more or less on time so far this year, with 52 state-run mills scheduled to be grinding by early February when yields rise, official media reports indicated. The government said there was 12 percent more cane than last year when plans to produce 1.5 million to 1.6 million tonnes of raw sugar fell short and output was 1.2 million tonnes. According to sources close to the industry and provincial plans reported by local media, Reuters estimates that Cuba plans to produce a minimum 1.6 million tonnes this harvest. Some 40 mills were open, according to various media reports, compared with just 20 a year ago when late start-ups contributed to a dismal performance. Mill openings averaged more than one per day in January and 13 mills ground in December, compared to just one mill in December 2006. Weather conditions have also proven favorable, with milling and cane yields more or less what would be expected. But chronic organizational and management problems still exist and could still threaten this year's output. (Reuters, 21/1/08)

January 21: The alcohol distillery functioning within the Antonio Guiteras sugar factory, in eastern Las Tunas province, has increased its production capacity. After a 23-year period of no renovations, repair works began in the second semester of 2007. Once repairs are completed, production should increase from 850 to 1,000 hectolitres of alcohol every day. The greater part of the alcohol obtained is devoted to produce rum and other beverages, plus the elaboration of drugs in the pharmaceutical industry, and its use in other economic branches. (ACN, 21/1/08)

January 22: Cuba has banned the hunting of marine turtles endangered in the Caribbean by the illegal trade in shells used to make combs, an official said. The decision was applauded by the World Wildlife Fund (WWF) as a lifeline to all turtle species hatching on beaches throughout the Caribbean, but above all the critically endangered hawksbill turtle. The ban already took effect, said the Cuban Fisheries Ministry's director of regulations, Elisa Garcia. She said it would remain in effect "until it is scientifically proven that the species is recovering." "This far-sighted decision represents an outstanding outcome for Cuba, for the wider Caribbean and for conservation," said the WWF species program director, Dr. Susan Lieberman. Two fishing communities that still hunt turtles, Nuevitas, in Camaguey province, and Cocodrilo, in the Isle of Youth, will get funding from the Canadian International Development Agency (CIDA) to find alternative sources of income and modernize their fishing fleets. (Reuters, 22/1/08)

January 23: Seizing on its proximity to Canada, Cuba has partnered with Choice Medical Services to attract medical tourists. Cuba has also partnered with similar firms in Germany and Spain, cracking into the Western market by highlighting its excellent health-care system and low cost of care. According to Choice Medical Services, a hip replacement in Cuba costs about $10,000, compared with $39,000 in the US. In 2007, the Caribbean nation hosted nearly 20,000 medical tourists, according to Cubanacan Tourism and Health, the umbrella organization that promotes Cuba's health tourism facilities. (The Globe & Mail, 23/1/08)

January 23: Feasibility studies are underway with a view to opening gold and zinc-copper mines in the Cuban province of Villa Clara in 2009. The study is part of a cooperation program between Cuba and Venezuela. "Our aim is to extend existing reserves and to start mining underground deposits by next year", said company director Argelio Abad. The studies, being carried out by the Central Geo Mining Company, have an increased importance because of the rise in the price of gold and the demand for copper and zinc in the international market. The Central Geo Mining Company had a commercial production of more than 14 million pesos in 2007. (RHC, AIN, 24/1/08)

January 24: Amid the turbulent state of international finances, the ALBA Bank will provide stability and sustainability, said Francisco Soberon Valdes, minister-president of the Central Bank of Cuba at a work session preceding the official founding of the new bank set for January 26. Soberon told the press covering the Sixth Bolivarian Alternative for the Americas (ALBA) Summit in the Venezuelan capital that the new banking institution comes at a time when capitalism is more than ever showing its weaknesses. Soberon led Cuba’s delegation at the minister level commission that met to review the ALBA Bank founding documents. In praising the idea, he called it “very well designed” and highlighted its importance to finance projects of social impact generally not assumed by commercial banks because of their long payback period. “The ALBA Bank can fill that void,” he added. (Prensa Latina, 24/1/08)

January 26: Venezuelan President Hugo Chavez and three of his closest allies teamed up to create a regional development bank intended to strengthen their alliance and promote independence from US-backed lenders like the World Bank. The bank was launched as Chavez hosts a summit with leaders from Nicaragua, Bolivia and Cuba -- members of the Bolivarian Alternative for the Americas, or ALBA. The ALBA Bank will be started with $1 billion to $1.5 billion of capital, Venezuelan Finance Minister Rafael Isea said, according to the state-run Bolivarian News Agency. (AP, 26/1/08)

January 28: Insufficient production and the high prices of agricultural goods are forcing Cubans to “work wonders” in order to be able to feed themselves, according to a report published in the official newspaper Juventud Rebelde. Commercialization issues are barely “the tip of the iceberg” of “an agricultural model beset by many shortcomings that prevent the improvement of productive levels,” indicates the article. (El Nuevo Herald, 28/1/08)

January 28: Virtually every square foot of Havana is owned by the socialist state, which would seem sure to put a damper on the buying and selling of property. But the people of Havana, it turns out, are obsessed with real estate and have dreams of more elbow room, not to mention the desire for hot water, their own toilets and roofs that do not let the rain seep indoors. There is a bustling underground market in homes and apartments, which has given rise to agents (illegal ones), speculators (they are illegal, too) and scams (which range from praising a dive as a dream house to backing out of a deal at the closing and pocketing the cash). The whole enterprise is quintessentially Cuban, socialist on its face but really a black market involving equal parts drama and dinero, sometimes as much as $50,000 or more. These days, insiders say, prices are on the rise as people try to get their hands on historic homes in anticipation of a time when private property may return to Cuba. (The New York Times, 28/1/08)

January 29: Cuba has purchased 550 cargo wagons and 200 railway passenger cars from Iran, Transport Minister Jorge Luis Sierra said. The equipment will arrive in Cuba gradually and will allow the country to re-establish daily train service between Havana and the island's other provinces, the minister said in a statement released by state agency Prensa Latina. Sierra did not indicate the cost of the transaction, which furthers the nations' cooperation in that sector. Iran in November 2007 granted Cuba a 200-million-euro ($295 million) loan to finance imports from the South Asian nation, while the Cuban government has signed contracts worth more than $2 billion in the transport sector. (EFE, 29/1/08)

January 29: With 39 mills up and working, and good weather to boot, Cuba is achieving higher sugar output than at the same stage of the previous harvest, Sugar Minister Ulises Rosales del Toro said. "The harvest is going well," Rosales del Toro told the state news agency Prensa Latina. The minister said another 13 mills will start grinding sugar cane by next month and the raw sugar output will be on target when the harvest ends in April. He gave no figures. According to sources close to the industry and provincial plans reported by local media, Reuters estimates that Cuba plans to produce a minimum 1.6 million tonnes this harvest. Officials said there is 12 percent more cane than last year when plans to produce between 1.5 and 1.6 million tonnes of raw sugar fell short and output was 1.2 million tonnes. That dismal performance, among the lowest output levels in a century, was caused by late start-ups and other equipment problems. (Reuters, 29/1/08)

January 29: More than 2,200 new jobs will be created in the central Cuban province of Ciego de Avila as a result of a cooperation agreement between Cuba and Venezuela. The program, called Center for Endogenous Development, is one of the more than 300 projects that are underway on the island as part of the Bolivarian Alternative for the Americas (ALBA). For this project, which will conclude in 2010, Venezuela will contribute $14 million while Cuba will give 44 million Cuban pesos. According to Elio Castillo, an official at the Cuban Ministry for Foreign Investment and Economic Cooperation (MINVEC), the new jobs will be created in the fields of agriculture, cattle raising, fishing and construction, among others. Part of the investment will be earmarked to the repair and maintenance of roads and the construction of new houses in the area. (Prensa Latina, 29/1/08)

January 30: Cuba First Vice President Raul Castro has recently urged on the need to consolidate the programs set for the development of urban agriculture (AU) in the island in order to increase the production of foodstuffs. The also second secretary of the Cuban Communist Party sent a letter to the attendees to a meeting held in the island’s central province of Sancti Spiritus in which he praised the great efforts of the over 300,000 producers engaged in urban agriculture who managed to get over one million tons of products last year. (Escambray, 30/1/08)

January 30: Brazil's state-owned Petroleo Brasileiro SA (Petrobras) signed agreements with Cuba's Compania Cubana de Petroleo (Cupet) for cooperation in oil and gas exploration and production, research and development, and human resource cooperation. Studies also will be undertaken for agreements concerning facilities maintenance. The agreements give Brazil a foot in Cuba's energy door that Venezuela has, until recently, partially blocked. Petrobras, which has expertise in deepwater exploration and production, said the agreement "foresees the assessment of the offshore blocks in the Cuban sector of the Gulf of Mexico, as well as technical and economic analyses for the construction of a lubricant factory in Havana." Cuba hopes its exploration in the deepwater Gulf of Mexico will result in discoveries enabling the country to become self-sufficient in oil production. (Penn Energy, 30/1/08)

January 31: Cuba and Algeria agreed to strengthen cooperation in health, agriculture, fishing, education and other matters at the signing of an agreement in the recently concluded 15th Session of the Mixed Inter-governmental Commission. For the Cuban part the documents were signed by Foreign Trade Minister Raul de la Nuez and for Algeria they were signed by the Minister of Health, Population and Hospital Reform, Amar Tou. The meeting ended with important agreements on bilateral cooperation in the maternal-infant program and technology transfer, for which Cuba will supply vaccines, blood derivatives and other products of the pharmaceutical-medical industry. Another topic of cooperation was the development of higher education, sports and, for the first time, physical planning. (Prensa Latina, 31/1/08)

January 31: The Vice President of the Republic of Guatemala, Rafael Espada, is to officially visit Cuba, invited by the island's government. Espada will arrive accompanied by Energy and Mining Minister Carlos Meanny Valerio, Culture and Sports Minister Jeronimo Lancerio, and Juan Aguilar, chief of the Presidential Secretariat on Food Security. Also on the list are the Rector of San Carlos University, Estuardo Galvez, and the Dean of the Medicine Faculty, Jesus Oliva. This visit is an expression of Cuba   and Guatemala's will to develop and deepen current bilateral relations, Granma newspaper reported. (Prensa Latina, 31/1/08)