• This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' blog "Generation Y" this is not dedicated to those with names starting with the letter "A". Instead, it draws from Douglas Coupland's novel Generation A which begins with a quotation from Kurt Vonnegut at a University Commencement that was brought to my attention by Andrew Johnston of Ottawa: ".. ... I hereby declare you Generation A, as much as the beginning of a series of astounding triumphs and failures as Adam and Eve were so long ago."

    The objective of this Blog is to facilitate access to research resources and analyses from all relevant and useful sources, mainly on the economy of Cuba.

Cuban Blogger, ​Elaine Díaz, Reveres Fidel but Pushes for Reform

The New York Times By NATALIE KITROEFF June 11, 2013, 2:42 pm

Elaine Díaz

Elaine Díaz may be the most important Cuban dissident you’ve never heard of. But that is perhaps because she doesn’t even call herself a dissident.

 

Ms. Díaz is a leader of a group of Cubans who are opening a new avenue for criticism in a country that, for the last 50 years, has offered its citizens only two options: with us or against us. Ms. Díaz insists that there is a third way. “Cuba has a lot to change,” Ms. Díaz said during a visit to New York last week, “but I don’t think you need to destroy the system to create something new.”

 

That’s a convenient view, because that system is paying her salary.

 

A professor of journalism at the University of Havana, a public institution, Ms. Díaz is an employee of the state. That has not stopped her from writing publicly and with disarming directness about the challenges of daily life in Cuba on her blog, La Polémica Digital, for the last five years. She is young, progressive and fiercely loyal to the Cuban government. But she says she is also determined to reform a socialist system that no longer works as well as it used to for the common man.

 

The delicacy of that relationship is not lost on Ms. Díaz. “I’ve been scared that maybe I’d write something that would be interpreted the wrong way,” she said, “and that I would be punished, or lose my job.”

 

She has managed to set herself apart in an increasingly cluttered Cuban blogosphere, earning respect for her thorough reporting and simple, moving prose. Last year she traveled abroad for a meeting of global bloggers in Nairobi, and last month she arrived in the United States for the annual Latin American Studies Association conference in Washington.

 

So far, Ms. Díaz said, she hasn’t heard a peep from the authorities about her writing. Indeed, the government has been surprisingly tolerant of Ms. Díaz and her colleagues – loosely affiliated under the moniker Bloggers Cuba – a fact that some experts attribute to the group’s willingness to self-censor.

 

Ted Henken, an expert on social media in Cuba, called these younger bloggers “silent dissidents,” adding, “Their big problem is that they’re constantly biting their tongue.”

 

Cuba’s more famous and far more radical critic, Yoani Sánchez, shares that view. When Ms. Díaz abruptly took a leave from her blog last August, Ms. Sánchez speculated that she had been forced off the keyboard by a government that had lost patience with her.

 

Ms. Sánchez, taking a jab at Ms. Díaz’s ties to the government, called her the “official Cuban blogger” and wrote that “Elaine Díaz has transgressed the limits of criticism permissible” for an employee of the state. Ms. Díaz insists that she stopped writing only to focus more intently on her teaching, and she has since resumed the blog.

 

But Ms. Díaz does acknowledge that there are taboo subjects, like the state of education or health care, that she is hesitant to discuss casually. “If I go to a dirty hospital, I’m not going to write about it,” she said, “because I have a commitment to the system.” Universal health care and free education are seen as the revolution’s most significant success stories, which makes it imperative to keep them intact, even as they quickly become well-worn myths.

 

In fact, for government loyalists like Ms. Díaz, it seems that, as you get closer to the core of the communist narrative holding Cuba together, the space for genuine debate shrinks. Rattling off a series of topics that she would be careful about touching, Ms. Díaz paused before the kicker: “Fidel Castro, for example, is sacred to us,” she said in an almost reverent tone. “At least in the world that I move around in, there’s a respect and historical gratitude” toward him.

 

“He’s a figure that, when you launch into criticism, it’s very difficult,” she added.

 

That approach may be more cautious than the tack taken by Ms. Sánchez and more extreme elements of the opposition, but that doesn’t mean it should be discounted. “It’s as important or more important when people who consider themselves believers express criticism because they can’t be as easily disqualified as people on the out and out, in the opposition,” said Mr. Henken, the expert on Cuba’s Internet. “Yoani is the acerbic agnostic, whereas Elaine is the critical believer,” he added.

 

Even the United States government is taking notice. Last month, Conrad Tribble, the deputy chief of the United States Interests Section in Havana, Washington’s diplomatic outpost in Cuba, made an unannounced visit to a public meeting of what The Associated Press called “Cuba’s pro-government Twitteratti.”

 

A brief video clip of the encounter posted on Crónicas de Cuba, the journalist Jorge Legañoa Alonso’s blog, showed Mr. Tribble, sporting a fuchsia Hawaiian shirt, saying he had come to talk with the group about things that the United States and Cuba share — “baseball, music, et cetera” — and on issues in dispute.

 

Video of an American diplomat interacting with Cuba’s “Twitteratti” in Havana last month, posted on YouTube by Jorge Legañoa Alonso, a journalist and blogger.

 

His presence was an olive branch in a diplomatic relationship where engagement on both sides has consisted mainly of covert operations and official bluster. It was also a sign of the growing influence of this corps of young bloggers, whom the State Department wants to cultivate a relationship with, despite their pro-Castro bent.

 

Ms. Díaz, who could not make the meeting but has interacted with Mr. Tribble on Twitter this year, said she appreciated the gesture.

 

@conradtribble Espero tengan la oportunidad de rectificar estos casos que limitan la libertad de intercambio académico entre ambas naciones

 

— Elaine Díaz (@elainediaz2003) 8 Apr 13

 

“He didn’t go there to make a speech or convince anyone, or try to impose anything,” she said. “He’s welcome. Any steps toward a closer engagement between the United States and Cuba, even if they’re small, are good.”

 

Ms. Díaz would know. In the two weeks she has spent in the United States, she said, “there have been moments that have changed my life, and have nearly made me cry.”

 

She recalled arriving at the Miami airport and being handed a cellphone by a stranger who saw that she was lost. Or a man in New York City who walked her to her host’s house when she was lost in a sea of apartment buildings in Washington Heights.

 

“I had the impression that in the United States, no one cares what you have to say, no one will talk to you, everyone is absorbed in their own world,” she said, adding that the image of “a very individualistic culture, it’s not what I’ve found.”

When she returns to Cuba in a week, Ms. Díaz said she would write about the experience on her blog. For now, she’s enjoying her stay in enemy territory.

 

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Remittances Drive the Cuban Economy

By Emilio Morales and Joseph L. Scarpaci, Miami (The Havana Consulting Group).— Fidel Castro’s government reluctantly accepted remittances from abroad in 1993 when it realized it needed access to hard currency to survive.

It was a devastating ideological blow at the beginning of the so-called ‘Special Period in a Time of Peace’ because it revealed that the Cuban exile community had become a lifeline for the island. Suddenly, U.S. dollars started inundating the island and would never leave. Both the Cuban society and the exile community were startled by this bold move.

The former Cuban leader probably never imagined that the forced opening up to dollars was going to become the most efficient driver in the economy over the last 20 years. Not a single Cuban economist foresaw that outcome. Today, remittances reach 62% of Cuban households, sustain about 90% of the retail market, and provide tens of thousands of jobs.

Money sent from overseas far exceeds the value of the once powerful sugar industry which, in 1993, began a huge decline from which it has not recovered. Remittances in 2013 surpass net profits from tourism, nickel, and medical products manufactured by the Cuban biotech industry.

Table 1. Remittances versus Other Sources of Hard Currency in Cuba, 2012 (in millions of US dollars)

No.

Source

2012

1

Remittances received in cash

$2,605.12

2

In-kind remittances

$2,500.00

3

Total remittances

$5,105.12

4

Tourism revenues

$2,613.30

5

Nickel exports

$1,413.00

6

Pharmaceutical exports

$500.00

7

Sugar exports

$391.30

Data sources: Calculated by The Havana Consulting Group, based on their data and open-source statistics published by the Oficina Nacional de Estadísticas e Información (ONEI), Havana.

The table above shows that remittances ($5.1 billion) outstrip the leading four sectors of the Cuban economy combined ($4.9 billion). Moreover, the figures for items 4 through 7 do not take into account expenses incurred in generating those gross revenues (i.e., costs of processing sugar, manufacturing drugs, food imports, etc.). Sending remittances does not cost the Cuban government money, but it circulates throughout he economy and supports most Cubans in some way.

White House Policies Trigger Growth in Remittances

Barack Obama’s arrival in the White House has directly influenced the increase in money being sent to Cuba. In the past four years, $1 billion USD of remittances have infused the Cuban economy.

Cash remittances in 2012 reached a record $2.61 billion USD; a 13.5% increase over 2011.

In other words, cash remittances outweigh government salaries by 3 to 1. The current monthly mean salary according to ONEI (the official government statistics agency) is 445 Cuban pesos, or the equivalent of just under $19 USD. Today, the economically active work force is 5.01 million workers, of which about 80% (4.08 million) draw state paychecks, whereas the balance is self-employed, agricultural, or cooperative workers.

If we use the official exchange rates that one Cuban convertible peso (CUC) equals 24 pesos (CUP) or one US dollar, the annual payout for state workers is three times less than the volume of money that Cuban émigrés send to family back home. Include in-kind remittance contributions (gifts, appliances, clothing, etc., brought to Cuba during visits), and the ratio leaps to 5.5 to 1.

Behind this growth in sending money to Cuba is the opening up of travel to Cuba as well as eliminating restrictions on sending money there. In 2012, just over a half a million Cubans residing abroad visited Cuba, making them the second largest tourist group in the island’s market; only Canadians (1.1 million visits) surpass them.

Out-migration from Cuba –about 47,000 annually on average over the past decade or nearly a half million émigrés—is also a contributing factor because those who have most recently left the island are the ones most inclined to send money back home. That was not the pattern with the original exile community in the 1960s; sending dollars to the island was forbidden back then.

We also need to acknowledge that several reforms introduced by the Cuban government in the past three years have encouraged remittances. This cash infusion helps to start home restaurants (paladares), B&Bs, car rentals, and more recently the buying and selling of private cars and real-estate. These businesses are aided by the 1.6 million cell phones in use today –available to the general public only since 2007—of which 70% are paid for by Cubans living off the island.

Never at a loss to encourage remittances, the Cuban government announced just last month the opening of 118 Internet stations that charge very high hourly rates. The new cyber cafés will initially cluster in the tourist poles across the island and the provincial-capital cities.

At the present, then, the role the Cuban diaspora plays in developing the island’s economy has never been greater, despite the restrictions on how and where money can be invested. However, the short term is unlikely to witness a greater influx of capital beyond the diaspora’s giving. Witness the failures in recent offshore gas and oil oil drillings that have come up ‘dry’ and the political and economic crisis in post-Chávez Venezuela is mired. This may create a broader space for the exiles to have a more direct hand in rebuilding the country.

Like it or not, Cuban exiles carry economic clout on the island. They have a lot of skin in the game; some of it is economic, and a lot of it is love of family. Their role in shaping the lives of many will be transformative in years to come, and on both shorelines that straddle the Florida Straits.

Last Updated (Tuesday, 11 June 2013 04:20)

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The Economist: “A tale of politics, corruption and golf”

 

May 25th 2013 | HAVANA |THE ECONOMIST

AFTER the 1959 revolution Fidel Castro declared that golf was a “bourgeois” hobby, unsuitable for communists. Most of the island’s courses were built on, and no new ones have been developed since. But the government has just given the go-ahead to a new golf resort, in what it claims is “the start of a whole new policy to increase the presence of golf in Cuba”. In the same week it pressed ahead with the prosecutions of several foreign businessmen for corruption. The developments, which seem to be linked, show how Cuba is changing its attitude to business.

The $350m Carbonera Club, near the beach resort of Varadero, is to be developed by Esencia, a British company. A few days before the project was approved, Esencia had staged a golf tournament which was won by Mr Castro’s son Antonio. The development will include residential properties available for purchase by foreigners. Other big tourism projects are under way. The government has given the go-ahead to the construction of a 1,300 berth marina, also in Varadero, which would be the largest in the Caribbean. The island’s airports are to be upgraded too, with help from Brazil’s development bank.

Raúl Castro, Fidel’s brother, has slowly begun to open Cuba’s economy since becoming president in 2008. Cubans may now buy homes and cars, and small businesses such as restaurants and bars have proliferated. But Raúl has been at pains to stress that his intention is to “update” Cuba’s socialist model, rather than reintroduce full-blown capitalism. Perhaps to make that clear, foreign businessmen on the island have had a particularly hard time under his watch. Several have been held without charge for almost two years, ostensibly for corrupt practices. Now, in a move which could be a precursor to their release, they are about to go on trial.

Sarkis Yacoubian, a Canadian of Armenian origin who ran a transport and trading company, will probably be first in court. In July 2011 state security officers raided his office and took him to Havana’s notorious detention centre, Villa Marista, where he apparently admitted paying bribes to state employees (all of whom, from labourers to managers, earn about $20 a month). Some officials were slipped a few ten-dollar notes, or a dinner. At least one was given $50,000.

Mr Yacoubian’s confession soon triggered further arrests. In September 2011 authorities detained his business partner turned rival, Cy Tokmakjian, a fellow Canadian-Armenian. His company, Tokmakjian, had the lucrative sole concession to import Hyundai vehicles to Cuba, and also supplied heavy machinery to the nickel industry.

A month later Amado Fahkre, a managing partner of Coral Capital, a British fund with property and art investments on the island, was arrested. The following year Coral’s chief operating officer, Stephen Purvis, was taken into custody, too. Many other foreign investors fled following the crackdown. Those who stayed complained that it had become much harder to meet Cuban officials.

By announcing the new golf investments at the same time as ending the legal limbo of the jailed foreigners, Raúl may be signalling that once again the island is open for business. The trials and the more relaxed attitude to investment are part of the same process, says one Western diplomat: “After two years of indecision, something is happening.”

Something has to. Cuba’s economy has long been propped up by Venezuela, which provides most of Cuba’s oil in return for tens of thousands of Cuban doctors and security advisers. Nicolás Maduro, Venezuela’s new president, has pledged loyalty to Cuba. But his narrow, disputed election victory last month, and Venezuela’s nosediving economy, mean that Cuba needs other options. Much as Fidel may disapprove, it seems that the sport of stockbrokers is part of the plan.

A Game for Revolutionaries?

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Cuban oil hopes sputter as Russians give up for now on well

By Jeff Franks

Original Here: Cuban Oil Hopes Sputter…

HAVANA, May 29 (Reuters) – Russian state-owned oil company Zarubezhneft said this week it was giving up for now on a problem-plagued exploration well off Cuba’s north-central coast, which brings to an end the communist-led island’s only active project in its search for offshore oil fields.

The news was not all bad because the company said it would return to the same spot next year. But it was another blow to Cuba’s hopes for energy independence, which have acquired new urgency with the March death of Venezuelan President Hugo Chavez, the communist-led island’s top ally and benefactor.

The Russians’ plan to drill 6,500 meters (21,325 feet) below the sea floor and hopefully find oil appears to have been derailed by the same issue that others have encountered in Cuban waters – difficult geology – as well as problems with its rig, the Songa Mercur, which at one point lost its blowout preventer.

The Songa Mercur Drilling Platform

“Taking into consideration geological complications, Zarubezhneft and (Cuban state oil company) Cubapetroleo have jointly decided to make changes in the initial drilling program by dividing it into two stages,” the company told Reuters this week.

“The second stage of exploration work on Block L is due to be launched in 2014,” it said, declining to comment further. The well, begun five months ago, was in shallow water about 200 miles (320 km) east of Havana, near the popular tourist destination Cayo Santa Maria.

The premature end of the Zarubezhneft well was not totally unexpected because Songa Offshore, owner of the Songa Mercur, earlier said the rig would leave by June 1 for a project in Southeast Asia. It had originally been scheduled to stay in Cuba until July 1.

There was a Russian press report that the rig would come back for another attempt by Zarubezhneft, but Songa Offshore Chairman Jens Wilhelmsen told Reuters the report was “completely without foundation.”

“We have not any agreement that Mercur will return and we have not received any inquiries from Zarubezhneft that they want it back,” he said. “So I can just deny that Mercur will return.”

BACK TO SQUARE ONE

All of which means that Cuba is back to square one in its quest to tap into fields off its northern coast that it says may hold 20 billion barrels of oil. The U.S. Geological Survey has estimated a more modest 4.6 billion barrels.

In the last year, Spain’s Repsol SA, Malaysia’s Petronas and Venezuela’s PDVSA sank wells in waters more than a mile deep off Cuba’s northern and western coasts. They all came up dry, and encountered a thick layer of dense rock difficult to drill through.

The Caribbean island’s hopes now lie with projects under consideration that may or may not come to fruition and are likely at least a year or more away if they do. Should oil be found, it would take another three to five years to put it into production, experts say.

Time is of the essence for Cuba because, under a generous deal made with Chavez, it gets 110,000 barrels per day, or two-thirds of its oil, from Venezuela in exchange for the services of more than 40,000 Cubans, most of them doctors and other medical personnel.

Chavez’s successor, President Nicolas Maduro, vowed during a recent visit to Havana to keep the oil flowing, but he faces mounting economic problems and political pressure from opponents to stop shipping oil to Cuba.

Repsol, which also drilled an unsuccessful well in deep water near Havana in 2004, pulled out of Cuba, but some of the other oil partners are still around.

Petronas is continuing to conduct seismic studies in the four blocks it leases with Russian partner Gazprom and is considering another well, as is Venezuela’s PDVSA, which has four blocks at Cuba’s western tip, industry and diplomatic sources said.

A unit of India’s Oil and Natural Gas Corp, which had a share of the Repsol wells, has two offshore blocks of its own and has been looking for a partner to drill a well.

GARDENS OF THE QUEEN

In a development that is potentially both interesting and controversial, Norway’s Statoil ASA, which also partnered with Repsol, appears to be looking at possibilities on Cuba’s mostly unexplored Caribbean side.

A Cubapetroleo map on display at a recent geosciences conference in Havana indicated that as of last November, Cuba was in negotiations with the Norwegian oil giant to lease three large blocks along the central and southeastern coast, between the archipelago of the Gardens of the Queen and the coast in the Gulf of Ana Maria and the Gulf of Guacanayabo.

Statoil does not comment on pending projects, but industry sources said it may just be sniffing around as it does all over the world looking for oil prospects and that its level of interest remains to be seen. The company has not mentioned Cuba in its drilling plans for the next two years.

It is likely also mindful of the sensitivity and potential dangers of drilling near the Garden of the Queens, which is regarded as one of the world’s most pristine coral reefs and whose preservation as such has become a cause for international environmental groups.

The same Cubapetroleo map showed that a Brazilian firm, Synergy Corp, was in negotiations for a near-shore block on Cuba’s north coast that state-owned Petrobras abandoned two years ago, citing poor prospects.

Attempts to reach Synergy for comment were unsuccessful.

A number of factors are working against Cuba’s oil hopes, among them the political and logistical difficulties imposed by the long-standing U.S. trade embargo against the island.

The embargo makes it difficult to find rigs that do not violate its limitations on the use of U.S. technology in Cuba and, according to experts, adds an estimated 20 percent to costs because everything in the project has to be shipped in from distant, non-U.S. sources.

There is also Cuba’s history of failed wells, which makes it hard to compete for the oil industry’s interest in a world where there are many other areas with proven oil reserves.

“It is very difficult today with other opportunities out there for a major oil company to justify going to Cuba and spending what will certainly be over $100 million in areas where it is yet to be proven they have recoverable reserves,” said Jorge Pinon, an expert on Cuban oil at the Center for Energy and Environmental Policy at the University of Texas in Austin.

“It is going to be extremely challenging (for Cuba),” he said.

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Policy Options for Cuba’s Development: Preparing for the Post-Embargo Era

Below are hyperlinks to presentations at a conference in Havana in April 25-26 on policy possibilities for the Cuban economy and potential insights from the experiences of other countries including Sweden, Brazil, Vietnam and China. The original links are at the web site of NUPI, the , here: Policy Options for Cuba.

Policy Options for Cuba’s Development: Preparing for the Post-Embargo Era

This project aims at supporting the work of Cuban economists and social scientists – those living in Cuba and abroad – who have argued for substantial economic reform and new socio-development strategies.


Deltakere

Fulvio Castellacci1
Morten Skumsrud Andersen2
Vegard Bye3
4

Claes Brundenius, Professor, Lund University


The final conference of phase 2 of this project took place in Havana on April 25th and 26th 2013. All presentations from this conference can be downloaded below.

Presentations:

Conference programme5

1. Welcome Remarks (eng) – Castellacci6

2. The updating of the Cuban Economic Model (spa) – Pérez Villanueva7

3. Economic Development in Cuba (eng) – Torres Pérez8

4. Reforms in Cuba in light of experiences from China and Vietnam (spa) – De Miranda Parrondo9

5. Entrepreneurship, Innovation and SMEs: Can the Cuban Reform Process Learn from Vietnam? (eng) – Brundenius10

6. Innovation and Entrepreneurship: The Case of University Start Up Companies in China (eng) – Li11

7. Innovation, Absorptive Capacity and Growth Heterogeneity: Cuba in a Latin American Perspective (1970–2010) (eng) – Castellacci and Natera12

8. Institutions and innovation in the process of economic change (eng) – Alonso13

9. Challenges for an Efficient Cuban Economy in Times of Increasing Heterogeneity and Uncertainties (eng) – Fernández Estrada14

10. Towards a new taxation in Cuba (spa) – Pons Pérez15

11. The key to inclusive economic groth in Cuba (spa) – Sagebien16

12. The politics of Science, Technology and Innovation in Cuba (spa) – Núñez Jover17

13. Main problems for innovation in Cuban enterprises18

14. Innovation and Entrepreneurship: Challenges for Local Development in the university centers of Santiago de Cuba (eng) – Sayous and Soler19

15. Structural change in Brazil – A Latin American Experience (spa) – Vasconcelos20

16. The Swedish Innovation System: The Role of Government and its Support to SMEs (eng) – Schwaag Serger21

21

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Amnesty International, The State of the World’s Human Rights: CUBA

Amnesty International Annual Report 2013, May 22, 2013

Repression of independent journalists, opposition leaders and human rights activists increased. There were reports of an average of 400 short-term arrests each month and activists travelling from the provinces to Havana were frequently detained. Prisoners of conscience continued to be sentenced on trumped-up charges or held in pre-trial detention.

Rights to freedom of expression, association, movement and assembly

Peaceful demonstrators, independent journalists and human rights activists were routinely detained for exercising their rights to freedom of expression, association and assembly. Many were detained and others were subjected to acts of repudiation by government supporters.

  • In March, local human rights activists faced a wave of arrests and local organizations reported 1,137 arbitrary detentions before and after the visit of Pope Benedict XVI.

The authorities adopted a range of measures to prevent activists reporting on human rights including surrounding the homes of activists and disconnecting phones. Organizations whose activities had been tolerated by the authorities in the past, such as the Cuban Commission on Human Rights and National Reconciliation, were targeted. Independent journalists reporting on dissidents’ activities were detained.

The government continued to exert control over all media, while access to information on the internet remained challenging due to technical limitations and restrictions on content.

  • In July, Oswaldo Payá Sardiñas, one of Cuba’s most respected human rights and pro-democracy campaigners, died in a car accident in Granma Province. Several journalists and bloggers covering the hearing into the accident were detained for several hours.
  • Roberto de Jesús Guerra Pérez, founder of the independent news agency Let’s Talk Press (Hablemos Press), was forced into a car in September, and reportedly beaten as he was driven to a police station. Before being released, he was told that he had become the “number one dissident journalist” and would be imprisoned if he continued his activities.

A number of measures were used to stop or penalize activities by political opponents. Many attempting to attend meetings or demonstrations were detained or prevented from leaving their homes. Political opponents, independent journalists and human rights activists were routinely denied visas to travel abroad.

  • For the 19th time since May 2008, Yoani Sánchez, an opposition blogger, was denied an exit visa. She had planned to attend the screening in Brazil of a documentary on blogging and censorship in which she featured.
  • In September, around 50 members of the Ladies in White organization were detained on their way to Havana to attend a public demonstration. Most were immediately sent back to their home provinces and then released; 19 were held incommunicado for several days.

In October, the government announced changes to the Migration Law that facilitate travel abroad, including the removal of mandatory exit visas. However, a series of requirements – over which the government would exercise discretion – could continue to restrict freedom to leave the country. The amendments were due to become effective in January 2013.

Prisoners of Conscience

Seven new prisoners of conscience were adopted by Amnesty International during the year; three were released without charge.

  • Antonio Michel Lima Cruz was released in October after completing his two-year sentence. He had been convicted of “insulting symbols of the homeland” and “public disorder” for singing anti-government songs. His brother, Marcos Máiquel, who received a longer sentence for the same offences, remained in prison at the end of the year.
  • Ivonne Malleza Galano and Ignacio Martínez Montejo were released in January, along with Isabel Haydee Álvarez, who was detained after calling for their release. They were held for 52 days without charge after taking part in a demonstration in November 2011. On their release, officials threatened them with “harsh sentences” if they continued dissident activities.
  • Yasmín Conyedo Riverón, a journalist and representative of Ladies in White in Santa Clara province, and her husband, Yusmani Rafael Álvarez Esmori, were released on bail in April after nearly three months in prison. They faced charges of using violence or intimidation against a state official, who later withdrew the accusation.

Arbitrary Detention

Short-term arbitrary detention continued and reports of short-term incommunicado detentions were frequent.

  • In February, former prisoner of conscience José Daniel Ferrer García was detained and held incommunicado for three days. While detained, he was threatened with imprisonment if he continued dissident activities through the Patriotic Union of Cuba. In April, he was detained again on charges of “public disorder” and released 27 days later on condition that he give up political activism.
  • Ladies in White Niurka Luque Álvarez and Sonia Garro Alfonso, and Sonia’s husband Ramón Alejandro Muñoz González, were detained without charge in March. Niurka Luque Álvarez was released in October. Sonia Garro Alfonso and her husband remained in detention at the end of the year, but had not been formally charged.
  • Andrés Carrión Álvarez was arrested for shouting “freedom” and “down with communism” at a mass celebrated by Pope Benedict XVI. He was released after 16 days in prison. He was detained for five hours three days later and charged with another count of “public disorder”. He was released on condition that he report to the police once a week, and that he did not leave his home municipality without prior authorization or associate with government critics.

The U.S. Embargo against Cuba

In September, the USA renewed the Trading with the Enemy Act, which imposes financial and economic sanctions on Cuba and prohibits US citizens from travelling to and engaging in economic activities with the island. In November, the UN General Assembly adopted, for the 21st consecutive year, a resolution calling on the USA to lift the unilateral embargo.

The WHO, UNICEF and UNFPA and other UN agencies reported on the negative impact of the embargo on the health and wellbeing of Cubans and in particular on marginalized groups. In 2012, Cuba’s health care authority and UN agencies did not have access to medical equipment, medicines and laboratory materials produced under US patents.

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Cuba’s sugar mills get new lease of life

BBC, 22 May 2013 Last updated at 00:15 ET

The chimneys are back at work in the Cuban sugar town of Mejico   It is a sight the people of Mejico thought they would never see again – sugar cane pouring onto a conveyer belt, beneath chimneys pouring smoke into a bright blue sky.  Silent for seven years, the town’s sugar mill has been given a new lease of life.

Sugar was Cuba’s biggest export until the 1990s, providing half a million jobs. But when the Soviet market disappeared and the world sugar price sank, almost two-thirds of the island’s mills had to close.  At those that remained, production plummeted. Weeds overran the cane fields, and abandoned sugar plants – once the heart of many communities – fell into ruin.

 ‘Tough blow’

But Mejico is one of more than a dozen mills gradually being salvaged as Cuba looks to capitalise on a recent rise in sugar prices and improved yields in its cane-fields.

The mill in Mejico dates back to 1832, when the canefields were worked by slaves housed in nearby barracks  “When they said the mill would stop working, it was a tough blow,” says Ariel Diaz, who used to work as an engineer at the old mill before it shut down in 2006.  “It really traumatised us,” he says of its closure, which happened almost overnight.

There had been a mill in Mejico since 1832. The original stone slave barracks are still standing – converted into workers’ housing. “We were nothing without the mill. It was our life,” Mr Diaz says, now happy to be back in the noisy, steamy sheds shouting orders to his team as huge metal cogs turn down below..

Repairs, Australia Sugar Mill, 1994,  (now converted to a museum). Photo by Arch Ritter

 Centuries-old tradition

The re-opening has created some 400 new jobs in the mill itself. Sixteen farmers’ co-operatives are supplying it with cane. The country needs to produce sugar, and we can help”

Across Cuba, as mills closed, many people were redeployed to collective farms; others were paid to study and re-qualify.  “Clearly people were affected, especially psychologically,” a spokesman for state sugar company Azcuba, Liobel Perez, accepts.  “The mills represent years, centuries, of tradition so it was very hard. But steps were taken to help.”

Just a short drive from Mejico, the chimneys of the Sergio Gonzalez mill are still cold some 15 years after the last sugar rolled off the conveyer belts.  Weeds poke out of holes in the concrete. The old sheds have been partially dismantled and are rusting.A sorry-looking stage has a faded pro-revolution slogan painted across it: “Revolucion, Si!”

“All the families here lived off the mill, and life was much easier,” recalls Argelio Espinosa, a mill mechanic for many years. He now sells slush-ice drinks from a street cart, one of the small, private businesses that communist Cuba now allows.  But sales in such a poor town are slow and Mr Espinosa echoes many who say the mill closure brought other difficulties.

“When the mill was open there was always transport for the workers and everyone used it. Now there’s just two buses a day,” he points out. “It’s the same with the water. When the mill was grinding, it needed water and we were never short. Now we have problems,” he adds.

The locals talk of how new businesses, like a spaghetti factory, were brought to other former sugar towns.   In Sergio Gonzalez, the luckiest now hitch a ride 80km north for jobs in the tourist resort of Varadero.

Challenges ahead

By contrast, there is a fresh buzz of activity in Mejico. In the nearby fields, workers have been rushing to cut the cane before the weather turns. A shiny new Brazilian harvester charges forward, swallowing up the cane as it goes.  Cuba has invested in some new equipment to kick-start its revamped sugar business. It is one of four machines Cuba invested in for the mill re-opening, far more efficient than the aging, Soviet alternative.

There have been teething troubles with the re-opening. New machine parts arrived late, the workforce is young and inexperienced, and production is below target. Senior staff have slept little, under pressure to perform.

But the whole community is willing this to succeed. Some pensioners are helping out at the mill for free, passing their expertise to a new, young generation. And many sugar workers who took up farming when the mill closed have hung up their spades and returned.

“They like the mill. It’s a tradition here, more than anything. And it’s more secure work, right next to their homes,” explains mill director Jesus Perez Collazo. “There are a lot of challenges. The harvest is not as good as we wanted but the country needs to produce sugar, and we can help,” he says.

China buys 400,000 tonnes of sugar from Cuba a year; now production is increasing, Azcuba says international brokers are also knocking at the door.

 New life

With the revamped mills back online, the eventual target is three million tonnes per year, though persistent inefficiencies mean this year’s harvest will fall well below that.

Some old-time sugar workers are passing on their knowledge to a new generation of workers. “Sugar is once more becoming one of our principal export goods and that will be reinforced in the years to come,” argues spokesman Liobel Perez.. Despite the difficulties, those are welcome words in Mejico.

As the day cools, men gather in the main square watching the mill smoke rise and discussing the harvest.  For some, like 68-year old Joel, the re-opening has meant coming out of retirement.  “I need the money,” he says bluntly. At $35 a month, his mill salary is more than three times his pension. Others take a broader view. “There was no life, no movement here without the mill,” one man comments. “This place was like a cemetery.”

Now Mejico is shuddering back to life.

Australia Sugar Mill, 1994

Steam Locomotives, vintage  +/- 1910, at the Australia Sugar Mill, 1994, Photo by Arch Ritter

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Canadian jailed in Havana corruption scandal speaks out

By Julian Sher of The Toronto Star And Juan O. Tamayo; Posted on Wednesday, 05.15.13

Speaking over a scratchy telephone line from inside a Cuban prison, Sarkis Yacoubian’s voice goes suddenly silent. He’s crying.

“I was so depressed at times, I wanted to commit suicide,” says the 53-year-old entrepreneur.

In exclusive interviews from the La Condesa prison, Yacoubian provides an insider’s view of a sweeping anti-corruption campaign by the government of Raúl Castro that has seen several foreign businessmen — including himself and another Toronto-area businessman — jailed.

A joint investigation by The Toronto Star and El Nuevo Herald has found that in a corruption-plagued country described in secret U.S. government cables as “a state on the take,” the two jailed Canadians are embroiled in a high-stakes diplomatic and legal stand-off between Havana and Ottawa, potentially jeopardizing millions in taxpayer dollars that underwrite Canada’s trade with Cuba.

Arrested in July 2011 and detained for nearly two years without charges, Yacoubian, who ran a transport and trading company, was finally handed a 63-page indictment last month accusing him of bribery, tax evasion and “activities damaging to the economy.”

Sarkis Yacoubian  from Toronto, is in prison near Havana awaiting trial on corruption-related charges.

A suspect who says he quickly pointed the finger at widespread wrongdoing by other Canadian and foreign businesses, Yacoubian now faces up to 12 years in prison after he pleads guilty at his trial set to begin next Thursday. The charges were filed in a special Havana court for Crimes against the Security of the State, which can effectively hold trials in secret.

“They found out this was an epidemic going all over the place and I was the fall guy,” says Yacoubian. “They want to give an example to the rest of the businessmen. They want to scare them to death.”

The second Canadian — 73-year-old Cy Tokmakjian who runs a global transportation firm called the Tokmakjian Group — was picked up by Cuban authorities in September 2011 and remains in jail with no specific charges filed against him.

“We’re as worried as anyone would be if their father is in a place where they shouldn’t be,” said his son and company president Raffi Tokmakjian in an interview at their corporate headquarters in Concord, Ontario.

Raffi and his two sisters say they are in daily phone contact with their father. “He worries more about us. He says: ‘You guys stay strong, I’m okay,’” said Anni Tokmakjian, the company’s director of sales. “We’re just focusing on getting him home, that’s all we really care about.”

But that might not be easy. The two entrepreneurs of Armenian origin, one-time business associates turned bitter rivals, ran multi-million dollar trading companies that sold heavy equipment, vehicles and supplies to Cuban state companies in the transport, construction, nickel and other industries.

Today, their Havana offices are shuttered, their fortunes frozen and their future in limbo.

Cuban authorities in Havana and at the country’s embassy in Ottawa declined to be interviewed for this story.

Complicating matters is that millions in Canadian taxpayer dollars funded by the Canadian Commercial Corporation (CCC) — a kind of broker that underwrites contracts between the Cuban government and select Canadian firms — may be at stake.

In 2011 and 2012, the CCC signed 38 contracts in Cuba worth more than $68.4 million, the latest in its $650-million business with Cuba since 1991. Much of that financial support — for privacy reasons, the agency won’t disclose its client list — went to back deals made with the Tokmakjian Group.

Now that Tokmakjian is in prison and the Cuban government has officially revoked his company’s license to operate, there are questions about what the Cubans will do if their courts rule that Tokmakjian contracts backed by the CCC were tainted by corruption.

The Tokmakjian Group is reported to be the second largest Canadian operation in Cuba, with at least $80 million in annual sales in the country.

Raffi Tokmakjian says his father “fell in love with the place” when he began investing in Cuba in the 1960s.

Yacoubian, too, had big dreams when he first came to Cuba in 1993. He quickly became fluent in Spanish and, after working briefly for Tokmakjian, he built his company, Tri-Star Caribbean, into a flourishing $30-million-a-year enterprise.

It all came crashing down when plainclothes security officers swept into his offices in Havana in July 2011.

Whisked away to a “safe house” for questioning and allowed outside for only one hour a day, Yacoubian says he slipped into desperation and depression. “I had lost my mind,” he says. “I was talking to myself, banging my head.”

Then Yacoubian made a fateful choice: He blew the whistle. “Maybe in my conscience I wanted my company to be brought down so that I could tell once for all things that are going on,” he says. “It was just eating me alive.”

He told his interrogators that he had little choice but to hand over money to bureaucrats or officials to secure contracts or even to ensure they were honored after winning a bid.

“If I didn’t pay, at the end of the day they would just create problems for me,” he says. Prosecutors allege in their court filing that Yacoubian or his employees bribed at least a dozen state officials with everything from nice dinners and prepaid phone cards to cash — $300 for a tip on a deal, $50,000 for a 2008 contract on earth movers.

Yacoubian disputes many of the details in the charges. But he says what bothered him was that some of the foreign businessmen were “bigger crooks” than the Cubans, profiting unduly from shady business dealings — often, he says, with support or subsidies from Western governments.

Yacoubian says he spent the next few months turning what could have been a police grilling of him into a kind of Corruption 101 class for his interrogators.

“I tried to explain to them systematically how things could be done,” he says. “I gave them drawings, designs. I gave them names, people, how they do it, why, when, where, what.”

Yacoubian did not know that his tell-all tale would become fodder for a campaign against corruption led by Raul Castro.

The Reuters news agency reported in February 2012 that Yacoubian’s videotaped confession was the centerpiece in a video titled “Metastasis” that describes payoffs and bribes “spreading like cancer” into high levels of the Cuban government.

In the video, shown only to top government and Communist Party officials, “Yacoubian confesses he passed packets of money to Cuban officials,” Reuters reported.

Tokmakjian is also featured and accused of corruption. His children say he firmly denies any wrongdoing, insisting there have been yearly audits of their business partnerships with the Cubans with “no issues.”

Tokmakjian and Yacoubian were eventually transferred to La Condesa, a prison reserved for foreigners and disgraced government officials — although the Canadians are kept apart in separate barracks.

The families of both men say they have received support from the Canadian embassy in Havana and assurances that Foreign Minister John Baird and Minister of State of Foreign Affairs Diane Ablonzy have pushed the Cubans “at the highest levels” to provide justice for the jailed Canadians “in a more timely matter.”

Close observers of Canadian business and political affairs in Havana say Ottawa and the CCC have to be concerned when a major player like Tokmakjian, backed by federal money, runs afoul of the Castro regime. Canada is one of Cuba’s largest trading partners and its single largest source of tourism revenue

One long-time Canadian investor with many years of experience in Havana, who asked to remain anonymous because of the uncertain political climate there, said “a lot of people” were frustrated that CCC was an exclusive club, most of its money being “eaten up by a handful of companies,” including the Tokmakjian Group.

For now, the CCC says it is not worried.

“The Corporation has consistently been paid by the Government of Cuba on time regardless of the external environment,” said Joanne Lostracco, the CCC’s manager of Government Relations.

Asked about the perils of a Canadian corporation operating in a Cuban economy tainted by corruption, Lostracco said the CCC has a “strong due diligence process” that imposes “full financial disclosure” on Canadian companies and allows the CCC to withdraw from any contract “obtained through illicit means.”

The Tokmakjian children remain optimistic their father will be home soon, taking heart from the fact that 10 other foreign employees of their company who were detained by Cuban authorities have been released in the past four months.

For his part, Yacoubian says he hopes to get a reduced sentence after he pleads guilty at his trial next week “because I collaborated closely” — a collaboration acknowledged by Cuban authorities in his indictment.

Yacoubian takes anti-depressants during the day and sleeping pills at night, but he says the poor ventilation in the stifling heat and the lack of chairs for his bad back are taking a toll.

Reflecting on the role he has played in unraveling Cuba’s corruption scandals, he has mixed emotions.

“It’s a victory because now, how things were done (in the past) has been unwrapped,” he says. But he also recalls the lyrics from a rock song that was popular when he and his family lived through the difficult years of civil war in Lebanon:

“Don’t be a hero,” Yacoubian says. “Heroes are so sad.”

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Cuba: The Persistence of Institutional Racism

Esteban Morales, HAVANA TIMES, May 16, 2013

 

Who is responsible for the fact that  our national statistics do not offer the information needed to conduct a thorough study of the racial issue in Cuba?

— While it is true that racism, as a conscious, institutional policy does not exist in Cuba, this does not mean we have done away with institutional racism as such.

Who is responsible for the fact that the issue of color isn’t mentioned in Cuban schools, that race isn’t a subject of study or research in any University syllabus, or that these questions aren’t sufficiently addressed by the media? Without a doubt, the Ministry of Education, Cuban television and the official press are responsible.

 

Who is responsible for the fact our national statistics do not offer the information needed to conduct a thorough study of the racial issue in Cuba, or for the fact our socio-economic statistics make no mention of skin color? Without a doubt, the National Statistics Bureau (ONE) is responsible.

 

So, has institutional racism truly disappeared? Apparently not, or, at the very least, it has disappeared only relatively, for our State institutions still do not offer us the results we would expect from them were they actually designed to combat racism, showing many deficiencies in terms of the mechanisms that could help us eradicate this phenomenon.

 

If these mechanisms were improved, we would be in a much better position to combat racism andracial discrimination, which still exist in our society. These phenomena aren’t entirely inherited from the past; they are also the result of flawed social systems that contribute to their reproduction.

 

These flaws we continue to perpetuate stem, to a considerable extent, from the flawed mechanisms of different State institutions.

 

We could say, thus, we have not totally eliminated so-called institutional racism in Cuba, and that this form of racism often finds refuge in the lack of political will shown by some State institutions that, far from helping eradicate the phenomenon, contribute to its survival.

 

It will be impossible to win the battle against stereotypes, racism and racial discrimination if our educational institutions, our media, our scientific and statistics organizations do not join forces. Without these four institutional pillars, we will not come out victorious of this great struggle we have undertaken.

Prof. Esteban Morales

 

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Canadian, British executives face corruption charges in Cuba

By Mark Frank, Havana — Reuters, Globe and Mail, May 15, 2013

Canadian and British executives of three foreign businesses shut in 2011 by Cuban authorities, ostensibly for corrupt practices, have been charged after more than a year in custody and are expected to go on trial soon, sources close to the cases told Reuters.

The arrests, part of a broad government campaign to stamp out corruption, sent shock-waves through Cuba’s small foreign business community where the companies were among the most visible players.

Until then, expulsions rather than imprisonment had been the norm for those accused of corrupt practices.

The charges against the executives involve various economic crimes and operating beyond the limits of their business licenses on the communist-run island, according to the sources, who asked to remain anonymous and who include a close relative of one of the defendants. Some of the foreigners are alleged to have paid bribes to officials in exchange for business opportunities.

Dozens of Cuban state purchasers and officials, including deputy ministers, already have been arrested and convicted in the investigation into the Cuban imports business that ensued.

Cuba has mounted a crackdown on corruption in recent years as part of a gradual reform process to open up the state-run economy to greater private sector activity. Under Cuban law, trials must begin within a month of charges being filed, though small delays are common and postponement can be sought by the defendants’ lawyers.

“There is definitely movement and the trials could begin soon,” a Western diplomat said.

The crackdown began in July 2011 with the closure of Canadian trading firm Tri-Star Caribbean and the arrest of its chief executive, Sarkis Yacoubian.

In September 2011, one of the most important Western trading firms in Cuba, Canada-based Tokmakjian Group, was also shut and its head, Cy Tokmakjian, taken into custody.

In October 2011, police closed the Havana offices of the British investment and trading firm Coral Capital Group Ltd and arrested chief executive Amado Fakhre, a Lebanese-born British citizen. Coral Capital’s chief operating officer, British citizen Stephen Purvis, was arrested in April 2012.

All four men are being held in La Condesa, a prison for foreigners just outside Havana, after being questioned for months in other locations.

A number of other foreigners and Cubans who worked for the companies remain free but cannot leave the island because they are considered witnesses in the cases.

Cuban officials and lawyers for the defendants could not be reached for comment.

The legal limbo of the foreign executives has put a strain on Cuba’s relations with their home countries, where the legal process protects suspects from lengthy incarceration without charges, diplomats told Reuters.

Cuba says the cases are being handled within the letter of Cuban law. Attorney General Dario Delgado told Reuters late last year that the investigation had proved complex and lengthy.

“These cases, which involve economic crimes, are very complicated. They do not involve, for example, traffic violations or a murder,” he said.

Comptroller General Gladys Bejerano has said the length of investigations depended on the behavior of those involved.

“When there is fraud, tricks and violations … false documents, false accounting … there is no transparency and the process becomes more complicated because a case must be documented with evidence before going to trial,” she said.

Transparency International, considered the world’s leading anti-graft watchdog, last rated Cuba 58 out of 178 countries in terms of tackling corruption, ahead of all but eight of 33 nations in Latin America and the Caribbean.

Soon after taking over for his ailing brother Fidel in 2008, President Raul Castro established the comptroller general’s office with a seat on the ruling Council of State, even as he began implementing market-oriented economic reforms.

The measure marked the start of the anti-corruption campaign. Since then, high-level graft has been uncovered in several key areas, from the cigar, nickel and communications industries, to food processing and civil aviation.

Rodrigo Malmierca, the minister of foreign commerce, last week delivered a report to the cabinet highlighting “irregularities” in foreign joint venture companies, according to state-run media.

Malmierca blamed “the lack of rigor, control and exigency” of the deals “as well as the conduct and attitudes of the officials implicated,” the reports said.

Castro has been less successful, however, in tackling low salaries and lack of transparency, which contribute to the problem, according to foreign diplomats and businessmen.

There is no open bidding in Cuba’s import-export sector and state purchasers who handle multimillion-dollar contracts earn anywhere from $50 to $100 per month.

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