• 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.

U.S. POLICY IS HURTING CUBA’S ENTREPRENEURS

BY NIURIS HIGUERAS, YAMINA VICENTE, JULIA DE LA ROSA QUESADA AND MARLA RECIO

Miami Herald, DECEMBER 11, 2017

Original Article: HURTING CUBA’S ENTREPRENEURS

NIURIS HIGUERAS IS THE OWNER OF ATELIER RESTAURANT; YAMINA VICENTE IS THE OWNER OF DECORAZON, A DECORATING COMPANY; JULIA DE LA ROSA QUESADA IS CO-OWNER OF LA ROSA DE ORTEGA B&B; AND MARLA RECIO IS THE OWNER OF HAVANA REVERIE, AN EVENT PLANNING COMPANY.

It is a tough moment in Cuba for hundreds of thousands of entrepreneurs and millions of families with relatives in the United States. President Trump’s new Cuba policy, announced in June and recently written into law, and the partial draw-down of the U.S. Embassy, are hurting the private sector and taking a terrible toll on Cuban families.

As business owners and the heads of our households, we’re saddened by the turn of events that are causing so many of our friends, family and colleagues to suffer. We’re tired of hearing about “support for the Cuban people,” while those very policies take money out of our pockets and food off our tables, and separate us from our families.

The new restrictions on travel are crushing the private sector. Limits on individual travel and calls for stricter enforcement have confused and scared U.S. visitors, many of whom are choosing to go elsewhere or canceling their Cuba travel plans. As a way of kicking us while we’re down, an unjust State Department travel warning and the partial closure of the U.S. Embassy in Havana have further affected U.S. travel and hurt our businesses.

The closure of consular services is dividing families, making reunification and family visits nearly impossible. Hundreds of thousands of Cuban families are suffering, not knowing when they will be reunited with loved ones. It also makes it impossible for entrepreneurs to take part in workshops and training programs, cultural groups to tour the U.S. and Cuban students to get visas to study in the States. The accompanying travel warning, which is completely unjustified, is scaring off American visitors.

Together, the travel warning and new restrictions have had a clear impact: Restaurants are empty, occupancy rates are down, events are canceled and freelance guides and taxi drivers and others roam the streets looking for work. Many of us now must decide which of our workers to lay off.

Unfortunately, despite the rhetoric in U.S. policy about support for the Cuban people and support for the private sector, our reality is not taken into account and our wants and hopes fall on deaf ears. Last year, we went to Washington, D.C., to have lawmakers hear our voices and discuss how a more open policy of trade and travel helps Cuba’s private businesses. The country’s top 100 private businesses sent a letter to President Trump making that case, believing as a business person he would understand.

A group of us, Cuban women entrepreneurs, reached out to Ivanka Trump, assistant to the president, hopeful she would understand the importance of empowering women who are business leaders on the island. Our letters and meeting requests to the administration went unanswered, time and time again.

Sen. Marco Rubio claims to be the leading architect of the administration’s policy toward our country. Facing criticism of how the new travel policy would affect Cuban entrepreneurs, Rubio tweeted: “If Cuban people are hurt it will be because the Castro govt doesn’t allow them to own their own business, not because of the new policy.”

We would like Rubio to know that we do in fact own our own businesses, and we are hurt by the new policy.

We have repeatedly requested meetings with Rubio and his staff to share our knowledge and firsthand experiences as entrepreneurs and community leaders in Cuba. Unfortunately, like administration officials, he has ignored our requests to meet.

Policymakers refusal to meet with us and, more important, take our aspirations and livelihoods into account, is symbolic of decades of U.S. policies that aim to punish the Cuban people because of disapproval of the Cuban government. Not only is this way of thinking and acting ineffective and counterproductive, it is cruel and causes real suffering for the people they’re supposedly trying to help.

We call on Rubio to stop trying to divide and separate our two countries. Stop pushing forward measures that harm families, entrepreneurs and average Cubans. We also call on the State Department to immediately lift the unwarranted and politicized travel warning, fully reopen embassies and make clear that the confusing and convoluted new regulations permit individual travel.

Rhetoric, finger pointing, and restrictions are not the type of “support” the Cuban people want and need. What we want are fully functioning embassies and the freedom of travel for Americans and Cubans alike. We can take care of the rest.

NIURIS HIGUERAS

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CUBA’S LEADERS ARE TRAPPED BETWEEN THE NEED FOR CHANGE AND THE FEAR OF IT

A new study shows just how weak the Castros’ economy is

 The Economist. Print edition | The Americas; Dec 7th 2017

Original Article: The Need for Change and the Fear of It

Raúl Castro and Miguel Díaz-Canel

FOR decades Cuban exiles in Miami dreamed of the day that Fidel Castro would die. They imagined that Cubans would then rise up against the communist dictatorship that he imposed. Yet when, a year ago this week, Castro’s ashes were interred in his mausoleum, it was an anticlimax. His brother, Raúl, who is now 86, has been in charge since 2006. For a while, he seemed to offer the prospect of far-reaching economic reform. Now, as he prepares to step down as Cuba’s president in February, he is bequeathing merely stability and quiescence.

Raúl’s planned retirement is not total—he will stay on as first secretary of the ruling Communist Party for a further three years. He is due to leave the presidency as Cuba is grappling with two new problems. The first is the partial reversal by Donald Trump of Barack Obama’s historic diplomatic and commercial opening to the island, which will cut tourist revenues. The second is the aftermath of Hurricane Irma, which in September devastated much of the north coast and several tourist resorts. That has prompted speculation in Miami that Raúl may stay on.

That is to misread the man. In his decade in power Raúl has striven above all to institutionalise the Cuban communist regime, replacing the wayward charisma of Fidel with orderly administration and a collective leadership. He has groomed as his successor Miguel Díaz-Canel, a 57-year-old engineer who has already assumed many public duties. Yet, as president, Mr Díaz-Canel’s autonomy will be limited. He is just one of a group of party bureaucrats and generals who are the real power in Cuba, steadily replacing the generación histórica (those who fought in the 1959 revolution), who are dying off.

The new generation faces an acute dilemma. Despite aid from Venezuela, which has now fallen to half its peak level, Cuba remains unable to produce much of the food it consumes or pay its people more than miserable wages. That is why Raúl embraced market reforms, albeit far more timid ones than those in China or Vietnam. More than 500,000 Cubans now work in an incipient private sector of small and micro businesses or co-operatives.

But these reforms bring inequality and a loss of state control. When Mr Obama visited Cuba in 2016, offering support for entrepreneurs and calling on live television for free elections, the regime appeared to panic. Since then, the government has placed some curbs on small business to stop what Raúl called “illegalities and other transgressions”. In other words, the government wants a market economy without capitalists or businesses that thrive and grow. It seems nowhere near tackling the multiple exchange rates (ranging from one peso to the dollar for official imports to 25 for most wages and prices) that ludicrously distort the economy.

Stalling may leave intact the regime’s political control—its overriding priority. But this ignores a fundamental problem. Since the 1980s the Cuban economy has steadily lost ground in relation to those of other Latin American countries, as a study published last month by the Inter-American Development Bank shows. Its author, Pavel Vidal, was one of Raúl’s team of reformist economic advisers and is now at the Javeriana University in Cali, Colombia. He has devised hitherto unavailable internationally comparable estimates for Cuba’s GDP since 1970 by calculating an average exchange rate which takes into account the weight of the various rates in the economy.

Mr Vidal finds that GDP per person in Cuba in 2014 was just $3,016 at the average exchange rate, barely half the officially reported figure and only a third of the Latin American average. This includes the value of free social services (such as health, education and housing) that Cubans receive. Taking into account purchasing power, GDP per person was $6,205 in 2014, or 35% below its level of 1985. Mr Vidal goes on to compare Cuba with ten other Latin American countries whose populations are similar in size. Whereas in 1970 Cuba was the second-richest, behind only Uruguay, in 2011 (the latest year for which data are available) it was in sixth place in income per person, having been overtaken by Panama, Costa Rica, the Dominican Republic and Ecuador.

Cuba’s decline is above all because of lack of investment, says Mr Vidal. But a shrinking and ageing population plays a part, too. He finds that the reforms have brought about a modest increase in income and even in productivity. They “go in the right direction but have fallen short”, he concludes.

For Mr Díaz-Canel and his reformist colleagues the message is clear: speeding up change carries political risks, but not doing so involves economic ones.

 

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ORDER FROM CHAOS: WHAT WILL BE RAUL CASTRO’S LEGACY?

Richard E. Feinberg, Nonresident Senior Fellow – Foreign PolicyLatin America Initiative

Brookings, December 4, 2017

Original Article: Order from Chaos
In many ways, Raúl Castro’s 10-year presidential rule, ending in February 2018, has been utterly disappointing. Cuba’s economy is stagnant and economic reform has stalled. Political power remains highly centralized and secluded. The island’s educated youth are fleeing in droves for better opportunities abroad. And the Trump administration is renewing U.S. hostility.

Nevertheless, during his decade in power Raúl Castro oversaw historic shifts in Cuban foreign and domestic policies. Raúl initiated some policy innovations, deepened and consolidated others, and merely watched while forces beyond his control drove other changes. Regardless, these changes have paved the way for the successor generation of leaders—if they dare—to push Cuba forward into the 21st century.

MORE FRIENDS

Fidel’s younger brother, now 86, can be especially pleased with his achievements in foreign affairs. Cuba had been a colony of Spain, a dominion of U.S. capital, a cog within the Soviet-dominated Council for Mutual Economic Assistance (COMECON) system. Now, for the first time in its 500-year history, Cuba has escaped the grip of a single world power.

Today, Cuban traders circumnavigate the globe, engaging both state-directed and free-market economies. The top trading 10 partners in goods in 2016 were (in rank order): China, Venezuela, Spain, Canada, Brazil, Mexico, Italy, Argentina, Germany, and Vietnam. The next tier of merchandise trading partners (between $275 million and $100 million) includes the United States, France, Algeria, the Netherlands, Russia, and Trinidad and Tobago. No single country accounts for more than 20 percent of total merchandise trade.

This trade diversification began in the 1990s following the collapse of the Soviet Union, but Raúl’s economic team extended and consolidated it. Under Raúl, Cuba also expanded the number of countries that purchase its main service export—the labor of educated professionals, especially in the medical field. While Fidel initiated large-scale service exports to Venezuela, Raúl followed suit with Brazil and dozens of other developing countries.

In the last 10 years, Cuba has also diversified the sources of foreign investment. For example, in the economy’s bright spot, international tourism, investors hail from Spain, France, Canada, Germany, Switzerland, Canada, China, and Malaysia, among other locations.

A small island economy cannot hope to be fully autonomous; it must adapt to global constraints. But by diversifying its economic partners, Cuba has minimized its vulnerability to external dictates, and maximized its own margin for maneuver. This diversification of economic partnerships has paid handsome diplomatic dividends. Cuba has become an accepted participant in various Latin American forums and diplomatic initiatives; overcame its exclusion from the Summit of the Americas leaders’ meetings; gained membership in the Central American Bank for Economic Integration (CABEI); and gained access to resources at the multilateral Andean Development Corporation (CAF). President Donald Trump is alone in his efforts to damage the Cuban economy through comprehensive economic sanctions.

BREAKING IDEOLOGICAL BARRIERS

The slow, halting pace of economic reform has discouraged many Cubans, especially recent university graduates. Conservative forces resisting change remain strong within the Cuban Communist Party. Nevertheless, Raúl leaves a legacy that could greatly facilitate the work of reformers in the future. (I will further evaluate the economic reforms and pathways forward in a February 2018 Brookings policy brief.)

Raúl’s legacy lies not in standard measures of economic performance, such as per capita GDP growth, labor productivity, or investment rates, where results have varied from disappointing to disastrous. Rather, Raúl’s legacy in economic policy lies in breaking once forbidding ideological barriers. True, Raúl’s public statements often have been contradictory and shifting, as he apparently sought to balance conflicting tendencies within the Cuban Communist Party. But in key areas, Raúl demolished or at least cracked these obstacles to change: rejection of globalization (a favorite Fidel bugaboo), fear of foreign investment, and hostility to private business and markets. He also transformed relations with the United States.

In daily life, Cubans have left behind the comfort of social uniformity and relative economic equality for the more tumultuous worlds of greater social heterogeneity and income inequalities.

Raúl is no cheerleader for globalization. But he set aside his brother’s heated denunciations of multinational corporations and “exploitative” markets. Instead, he went about the practical business of building economic relations with a multitude of governments and foreign corporations. Without much pomp and circumstance (although there was the occasional ribbon-cutting), Raúl advanced the process of normalizing Cuba’s integration into global markets.

Raúl’s decision to normalize diplomatic relations with “the historic enemy,” the United States, dramatically revised his regime’s foreign policy doctrine. The hegemon just across the Florida Straits was no longer an imminent, existential threat, readily justifying economic deprivations and tight political restrictions. Notwithstanding the altered attitude in Washington today, so far a number of the concrete gains from the Obama era détente remain in place, notably the facilitation of travel (commercial airline flights and cruise ships) and the generous flows of remittances to many Cuban families, whether for household consumption or business start-ups.

Of the reforms most directly attributable to Raúl, the suppression of the special (and expensive) permit to travel abroad was among the most important to many Cubans. As a result, most Cubans can freely leave the island (provided they can acquire an entry visa elsewhere), to be enriched by their contact with foreign lands and ideas. Greater access to mobile technology and rapidly expanding social media, permission to sell homes and cars, and more freedom to stay in once-forbidden tourist hotels have also improved life for many Cubans during his tenure.

De facto, by building commercial partnerships worldwide, and by accepting the freedom to travel, Cuba has now embraced core components of globalization.

OPENING TO FOREIGN INVESTMENT

To stave off complete economic collapse in the early 1990s, Fidel had invited in limited foreign investment. El Comandante en Jefe made these concessions holding his sensitive ideological nose and again closed Cuba’s borders once he felt politically secure. In sharp contrast, Raúl has publicly chastised his ministers for not accelerating foreign capital inflows (although he hesitated to fire them).

Periodically, the government releases a “Portfolio of Opportunities for Foreign Investment.” Each edition is fatter and glossier; the 300-page 2017-2018 version features 456 projects with a cumulative price tag of $11 billion. Yes, most projects have remained on paper, victims of bureaucratic foot-dragging and red tape; but these documents are products of an inter-agency process whereby many ministries and state enterprises join in a collective waving of hands to the international commercial community.

In a 2011 official document outlining proposed reforms, foreign investment was derided as “complementary,” a secondary afterthought. In contrast, when addressing Havana’s annual international trade fair in 2017, Raúl’s minister for foreign trade and investment sang a very different tune: “Today foreign investment ceases to be a complement and has become an essential issue for the country.”

Mariel, the new economic development zone facing the Straits of Florida, has gotten off to a slow start, having approved over three years only 26 projects worth about $1 billion. However, 15 of these projects have broken through another ideological barrier: allowing 100 percent foreign ownership.

LEGITIMIZING PRIVATE PROPERTY

Fidel disliked and distrusted private property. In 1968, for example, he nationalized remaining mom-and-pop businesses. In contrast, over the last decade the government has issued hundreds of thousands of licenses to small-scale private businesses. Raúl has also encouraged some 200,000 Cuban families to farm as homesteaders (although not all survived). In addition to these authorized private businesses, many Cubans augment their income in more-or-less tolerated gray-market activities. Altogether, as much as 40 percent of the Cuban workforce have at least one foot in the private sector.

Recently, Raúl criticized private business for illicit activities, and the government halted the granting of new business licenses. Nevertheless, these concessions to anxious Communist Party stalwarts appear to be a temporary pause. The ideological foundations, and public constituency, for the acceptance and eventual expansion of a market-driven private sector have most likely been set too deep for a full-blown counter-revolution to succeed.

SOCIAL RELAXATION

This increase in economic pluralism has unleashed public debates on economic policy. Criticism of government performance is widely voiced with less fear, even if journalists and academics are still careful not to directly confront senior authority.

Another major shift that accelerated during the last decade: the evolution of Cuban society from socialist uniformity toward a more heterogeneous mix of property relations, income levels, and social styles. While legal statutes remain to be written, property can now be private (often in partnership with diaspora capital), cooperative (in numerous variations) and foreign-owned, as well as state controlled.

Income inequalities have become more visible, even if less jarring than in other Latin American and Caribbean nations. Many Cubans still honor social solidarity. But the transition toward a more normal, relaxed, and individualistic society is unmistakable. On Havana’s streets, Cuban youth—increasingly exposed to international tourists, travel opportunities and the worldwide web—sport the variety of hairstyles, tattoos, music, and other signatures of global youth.

These ideological adaptations do not guarantee speedy policy changes, much less their faithful implementation. The Cuban government is grappling with a severe foreign exchange crisis, and the sudden, unanticipated chill in bilateral relations imposed by the United States. All the more reasons for the next generation of Cuban leaders to build upon the diversity of international economic associations and the new ideological currents unleashed during the reign of the second and last Castro brother—and to launch their island state into deeper phases of global integration and economic transformation.

Richard Feinberg

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NESTLE, CUBA LAY FIRST STONE FOR $55 MILLION COFFEE AND BISCUIT FACTORY

Reuters, November 28, 2017.

Original Article: Cuba Nestle

By Sarah Marsh

HAVANA (Reuters) – Cuba and Swiss firm Nestle on Tuesday laid the first stone of a $55 million coffee and biscuits factory joint venture in the Mariel special development zone, the latest major foreign investment in the Communist-run island.

Nescor is Cuba’s third joint venture with Nestle and reflects President Raul Castro’s drive to attract international capital to help update the Soviet-style command economy and stimulate growth.

Cuba created the zone around the Mariel port just west of Havana four years ago, offering companies significant tax and customs breaks. Its aim to replace imports with Made in Cuba goods has become all the more pressing because aid from socialist ally Venezuela is falling, resulting in a cash crunch.

Nestle Vice President Laurent Freixe said in an interview after the symbolic stone-laying ceremony that negotiations with Cuban partner Coralsa and Mariel authorities had taken just 18 months, a “record speed”.

The factory would be operating at the end of 2019 manufacturing coffee products, said Freixe, head of Nestle’s Americas division. Biscuits and other culinary products would come later. The company exports goods to Cuba and the other two joint ventures are one producing ice cream and the other bottled water and other beverages.Nescor goods would be destined both for the Cuban market and tourists visiting Cuba, while it could eventually also export Cuban coffee, Freixe said.

Nestle last year already exported Cuban coffee as a limited “Cafecito de Cuba” edition of Nespresso single-use brewer pods, including to the United States.

“It sold at an impressive speed,” said Freixe. “Within a few days that line was sold out, which shows the potential.”

Before being able to export Cuban coffee, Nestle would first need to help Cuba increase its harvest, Freixe said, which has steadily declined since the 1959 revolution.

The new factory could double Nestle’s turnover in the country over the medium term from $135 million currently, he said.

So far, Cuba has approved 31 projects for the Mariel zone including nine with multinationals, Director Ana Teresa Igarza said at the ceremony. There was no longer the same flurry of business interest in the zone as when it was created but the interest that remained was more serious, she said. Mariel was on the list of Cuban entities that the administration of U.S. President Donald Trump banned U.S. firms from doing business with.Just one U.S. company, Rimco, the Puerto Rican dealer for heavy machine maker Caterpillar , has signed a deal with Mariel to open up shop there, getting approval just on time before the new U.S. regulations were issued earlier this month.Igarza declined comment on whether Mariel continued to negotiate with other U.S. companies but said it would be open to doing so.

Mariel, April 2015. (Photo by Arch Ritter)

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YOUR MIND IS IN PRISON: CUBA’S WEB OF CONTROL OVER FREE EXPRESSION AND ITS CHILLING EXPRESSION ON EVERYDAY LIFE

Original Document: Amnesty International

Amnesty International, November 27, 2017

TABLE OF CONTENTS

1. INTRODUCTION

2. THE TIP OF THE ICEBERG  

[From Amnesty International’s archives: Cuba’s 50-year campaign against freedom of expression and peaceful assembly]

2.1 THE RIGHTS TO FREEDOM OF EXPRESSION AND ASSOCIATION

2.2 “EVERYTHING IS ILLEGAL”

2.3 HUMAN RIGHTS STANDARDS AND THE APPLICATION OF THE CRIMINAL LAW

3. SILENCE–A CONDITION OF EMPLOYMENT

3.1 HARASSMENT AND WRONGFUL DISMISSALS IN THE STATE SECTOR

3.2 A VICIOUS CYCLE: HARASSMENT IN THE SELF-EMPLOYED SECTOR

3.3 IMPRISONED AND DISCRIMINATED FOR TRYING TO LEAVE THEIR OWN COUNTRY

3.4 LIMITS ON INDEPENDENT TRADE UNION

3.5 THE APPARENT LACK OF EFFECTIVE RECOURSE FOR DISCRIMINATORY DISMISSAL

3.6 DISCRIMINATION IN ACCESS TO AND AT WORK

3.7 FEAR OF RETURNING TO THEIR OWN COUNTRY

4. BELOW THE SURFACE OF THE ICEBERG

4.1 SELF-CENSORSHIP

4.2 THE CHILLING EFFECT

5. RECOMMENDATIONS

TO THE CUBAN GOVERNMENT

TO THE US CONGRESS

INTRODUCTION

The past few years have been a bitter-sweet period for those hoping for the Cuban authorities to relax their iron grip on people’s right to freedom of expression and assembly.

High-profile visits by the International Committee of the Red Cross and Pope Francis in 2015, as well as by the UN Special Rapporteur on trafficking in persons, especially women and children and the UN Independent Expert on human rights and international solidarity in 2017, appeared to herald greater political openness and to offer some hope that Cuba might begin to open itself up to increased international scrutiny by independent human rights monitors. A tourism boom, the expansion of Wi-Fi-internet hotspots, even a first ttime performance by the rock band the Rolling Stones (foreign rock music was deemed subversive in Cuba for decades) were other small signs that Cuba might be releasing its tight control on freedom of expression. The re-establishment of diplomatic relations between Cuba and the USA starting in December 2014, followed by then President Obama’s state visit to Cuba in 2016 also seemed to promise the beginning of an end to the economic embargo which for decades has perpetuated the Cold War rhetoric of “us” and “them” and undermined ordinary Cubans’ enjoyment of economic and social rights.

This optimism makes the jarring reality all the more marked. Hours before President Obama landed in Cuba, dozens of activists and independent journalists were detained. In a joint press conference with the US President, President Raúl Castro continued to flatly deny that there were any “political prisoners” in Cuba.

In contrast, in the past three years, Amnesty International has named 11 prisoners of conscience in Cuba, and there are likely many more. Further, a national human rights organization, not recognized by the Cuban authorities, reported an average of 762 politically motivated and arbitrary detentions a month between 2014 and 2016.

Human rights lawyers from the organization Cubalex were harassed and intimidated, despite having been granted precautionary measures by the Inter-American Commission on Human Rights (IACHR) to protect their lives, personal integrity and activities as human right defenders. In May 2017, at least 12 of its members were granted asylum in the USA after the Cuban authorities threatened to bring criminal charges against them related to a tax investigation. The Committee to Protect Journalists (CPJ) ranked Cuba 10th on its 2015 list of the world’s most censored countries and classified its laws on free speech and press freedom as the most restrictive in the Americas. Amnesty International media remains heavily censored and limited. While an increasing range of autonomous digital media projects has emerged, alternative online news sources operate within a legal limbo that exposes journalists and media workers to the risk of harassment and arbitrary detention. Moreover, their web pages are often blocked by the authorities in Cuba. In early 2017, the expulsion of a journalism student reportedly pushed out of university for being a member of the group Somos, considered a dissident organization by the authorities, received widespread international and independent national media coverage. According to press reports, one of Cuba’s most famous singers, Silvio Rodríguez, called the expulsion an “injustice” and “clumsy and obtuse.”

In June 2017, President Trump’s administration took an almost complete U-turn on US political rhetoric towards Cuba reducing the likelihood that the US Congress will pass legislation to lift the economic embargo on Cuba. Despite the easing of some restrictions by the former Obama administration, which has allowed for increased travel and remittances between the two countries, and annual votes by a majority of UN member states to lift it, the embargo remains in place. Amnesty International has consistently recommended that the US embargo be lifted, based on its negative impact on the economic and social rights of the Cuban population. Meanwhile, a recent poll by the University of Chicago found that many Cubans “feel stuck in the current economic climate.”

Few expect the economy will improve anytime soon and 46% described it as poor or very poor. Cuba’s fragile economy has inevitably been impacted by the ongoing economic and human rights crisis in Venezuela – a provider of significant economic aid to Cuba in recent years. Exceptionally low salaries – the average monthly salary is approximately USD27 a month – are insufficient to cover basic needs. Ordinary Cubans continue to struggle, despite the government’s food ration system, taking additional jobs in the informal sector and receiving remittances from family members living overseas.16 In July 2017, the Secretary General of the Central Union of Cuban Workers (Central de Trabajadores de Cuba, CTC), the country’s only officially recognized trade union, stated in an interview that average salaries are unable to meet workers’ basic needs and create “apathy in work, lack of interest and significant labour migration”, an issue that he said is being evaluated by decision-making bodies.

While many Cubans interviewed for this briefing told Amnesty International that they felt Cuba has made important human rights advances in the provision of free health care and access to education and valued the fact that there is little organized crime in the country, many also described the day-to-day struggle of having to make difficult choices between feeding and clothing their families. People interviewed by Amnesty International said that food rations – which have been progressively reduced – are insufficient to last the month. And while education is free, many Cubans find it difficult to buy the things their children need to attend school, such as uniforms, backpacks and other basic supplies. For example, an administrator in a state food factory told Amnesty International she earned USD20 a month at a time when shoes for her child could easily cost USD30. Many people interviewed said they had to break the law to make ends meet. The same administrator also described how one of her job responsibilities was to ensure that workers did not steal bread or other essentials they need to survive.

Former President Fidel Castro’s death in November 2016, and President Raúl Castro’s announcement that he would step down in 2018 continue to fill opinion columns with speculation about Cuba’s future. But while in political quarters and international news rooms Cuba remains a hot topic, tens of thousands of Cubans continue to leave the country. Their individual reasons may vary, but common threads are disillusion with Cuba’s changing international diplomacy, a lack of confidence that salaries will improve18 and scepticism at the idea that a post-Castro administration will do anything to untangle the tight web of control on freedom of expression. Amnesty International’s interviews with Cuban migrants highlight this widespread and profound lack of belief in the prospect of structural change. This briefing examines limitations on freedom of expression that persist in Cuba despite the context of purported political openness, a tourism boom and a changing economic context. It is based on research carried out between December 2016 and September 2017, although Amnesty International´s lack of access to Cuba has posed a significant limitation on providing an analysis of human rights issues in the country. The interviews the organization conducted with Cubans for this briefing have made it possible to identify the impact on a wide range of people of 50 years of serious restrictions on the rights to freedom of expression and peaceful assembly.

The failure of the authorities to respect and ensure these rights has had an impact far beyond the ranks of those directly targeted for their activism or views and seeped into the everyday experiences and hopes of people from all walks of life.

This briefing focuses on those wider influences and on the human rights advances that those affected would want to see. As Cuba prepares for elections in 2018, the diverse Cuban voices at the centre of this research highlight the need for authorities to promote reforms that ensure the respect and protection of human rights, including a review of criminal laws and practices which are inconsistent with international human rights law and standards and that unduly limit freedom of expression. They also underscore the need for the authorities to adhere to international labour standards which Cuba has undertaken to uphold by ratifying International Labour Conventions. The briefing ends with a set of recommendations calling on the authorities to end unjust restrictions not only on those unfairly deprived of their physical freedom, but also on those who feel their minds are imprisoned and their lives stunted because they are deprived of their right to freedom of expression.

CONTINUE READING

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CUBA’S CRITICAL JUNCTURE: MAIN CHALLENGES

Vegard Bye. Senior Research Fellow Centre for Development and the Environment, University of Oslo. vegard.bye@sum.uio.no

Complete Article: CUBA’S CRITICAL JUNCTURE

Abstract

Cuba is rapidly approaching a critical juncture, where a complete and generational change of leadership is unavoidable (between 2018 and 2021). The country and its Revolution is up against some unavoidable and complicated choices in the coming four years. With the rapidly approaching end of the Castro era, without any clear new leadership structure in sight, and with an apparently unsolvable economic crisis and rapidly shrinking confidence in the political power bloc particularly among the younger generations, a deep legitimacy crisis is looming. What are the principal challenges ahead, and how can and will they be solved?

  1. Introduction

Cuba is rapidly approaching a critical juncture, as a complete and generational change of leadership seems inevitable between now and 2021. The country and its revolution will be facing a series of complex, unavoidable choices in the next four years. With the end of the ‘Castro era’ and no clear new leadership structure in sight, combined with an apparently unsolvable economic crisis and rapidly shrinking confidence in the political power bloc, particularly among the younger generations,1 a deep legitimacy crisis is looming.

This study analyses some of the main challenges represented by the new international setting particularly concerning relations with the USA and the change from Barack Obama (2008–2016 to Donald J. Trump (2016) in the White House. These issues include how the economic crisis is undermining the welfare state that was once the pride of the Cuban Revolution, and the political challenges that may ensue; and how the monolithic character of the Cuban power structure is being put to the test by the increasing differentiation of interests between the early winners and the early losers of the economic reforms. The study also indicates some of the dilemmas of post-totalitarian political transformation identified in the theoretical literature, and relates these to other similar processes. Finally, we present some paradigm choices facing the next generation of leaders, and then discuss how a game of power, hegemony and legitimacy may unfold in post-Castro Cuba. While the most likely outcome still seems to be the continuation of some type of authoritarian and neo-patrimonial system, it is also possible to imagine some key post-Castro decisions that could take the country in a more pluralistic and participatory direction – although President Trump’s return to confrontationalism is making that even less likely. The harsh choice may be between re-building legitimacy and reverting to a much more repressive system.

Discussing political structures and their possible transformation is highly complicated regarding a system as opaque as that of Cuba, where there is no academic or media tradition of open analysis of power structures or ready access to reliable data. Such discussion may become quite speculative, as it is virtually impossible to underpin crucial observations about power relations with firm quantitative data – turning the choice of methodology towards qualitative analysis. Still, we believe it is worth putting together the available theoretical and empirical elements that may give indications about the future direction of a country that has played such a significant role in world politics and political/ideological discussions – a role quite out of proportion to its small size. Cuba offers a laboratory for the analysis of transformative politics.

……………………………….

  1. Conclusions

As yet, fairly authoritarian scenarios appear to be the likely outcomes of the transformation process. However, there remains the question of how absolute is the power that Cuba’s formal power bloc continues to exercise – and whether other options may emerge, against the odds, as the post-Castro generation prepares to take over the reins. Recently revealed remarks by First Vice President Miguel Díaz-Canel, the most likely presidential candidate in February 2018, leave few expectations for a prompt break with the past.15

The information monopoly has been definitely broken in Cuba – although the information hegemony may still be in place (Hoffmann 2016). Young people, also party loyalists, encounter no problems in seeking alternative information and views about the outside world as well their own country, including about the root causes of the economic failure. This will have consequences for how the next generation of leaders will need to communicate with the populace, and take public opinion into account, if they want to build a new capital of legitimacy. Moreover, the Party’s social hegemony appears to be slipping away, particularly among younger Cubans who hardly care about what happens at a Party Congress or in other formal decision-making bodies. This may even mean an actual loss of absolute political power – how relevant, then, will the three documents of principle discussed at the 7th Party Congress and ‘supported’ by the mid-2017 session of the National Assembly will be for the future of Cuba?

On the other hand, there seem to be no indications of counter-hegemonic forces developing, within or outside of party and state structures. Still, we should remain aware to the possibility that the looming ‘crisis of legitimacy’ in Cuba might become a ‘crisis of hegemony’ or of ‘authority’ (see Gramsci 1999Anderson 1976). It is no simple matter to apply such concepts, originally developed for analysing social and class forces in early industrial Europe, to the transformation process of a post-totalitarian system or an authoritarian socialist system searching for alternatives. However, the alternative Gramscian concepts of a passive revolution vs. the creation of a counter-hegemonic bloc may still be relevant. In the former, the bourgeoisie (or nomenclature in the Cuban case) would allow certain demands by looking beyond its economic-political interests and allowing the forms of hegemony to change (typically in the way the Nordic model was conceived in the 1930s). This would imply that the Cuban power elite might have to look for a similar adaptation of its hegemonic bloc in order to meet the emerging legitimacy crisis, particularly after 2018. The alternative might well be a deep organic crisis, tempting new social forces to set about building a counter-hegemonic historical bloc, leading to what Gramsci called ‘creating the new’ (which in Cuba would be some kind of post-socialism), rather than ‘restoring the old’ through a passive revolution.

One possible source of challenge to the existing hegemony of the Cuban political system would come from civil society, perhaps feeding on the growing self-confidence felt by private entrepreneurs as their critical economic role becomes more visible and recognised by the regime. ‘What is threatening to authoritarian regimes’, noted Przeworksi (1991: 54–55), ‘is not the breakdown of legitimacy but the organisation of counter-hegemony: collective projects for an alternative future. Only when collective alternatives are available does political choice become available to isolated citizens.’ Thus, according to Przeworski and building on the Gramsci concept of hegemony, the emergence of civil society organisations in itself becomes a relevant force for regime transformation only in a situation of falling legitimacy, if civil society organisations manage to organise a ‘counter-hegemonic bloc’. This has not yet happened in Cuba, nor is there any sign that it is about to happen. That being said, however, serious problems of legitimacy at a critical juncture may result in a new situation.

Moreover, no negotiation scenario is yet on the table in Cuba. Linz and Stepan (1996), Przeworski (1991) and Saxonberg (2013) all introduce the issue of negotiations at specific points during post-totalitarian transformation. Przeworski sees the issue of alliance building between groups willing to negotiate on the part of the regime and civil society as decisive for the outcome of any negotiation: ‘visible splits in the power bloc indicate to the civil society that political space may have been opened for autonomous organization. Hence, popular mobilization and splits in the regime may feed on each other’ (1991: 57).

Cuba has not yet arrived there: power-bloc splits are not evident, nor is there anything like a counterpart with which to negotiate. For that to happen, the combination of regime crisis –perhaps with the prospects of serious repression – and the emergence of a counter-hegemonic alternative would be required. It can only be speculated whether and under what circumstances such a situation might emerge.

Scenario forecasting in Cuba is a highly risky business. Here we make an attempt, identifying three basic scenarios that will gradually emerge with greater clarity as decisions and circumstances unfold in the time ahead:

  1. A neo-patrimonial system, whether ‘socialist’ as in China and Vietnam, or an ‘oligarchic’ variety as in Russia or Angola;16
  2. A transnational neo-authoritarian system: neoliberal capitalism based on massive US and other foreign direct investments, with the full dismantling of the current state and power structure (Cuba as a mini-Florida);
  3. Transformation to a mixed economy with a more pluralist and participatory polity, and the reconstruction of a welfare state: a negotiated process towards some kind of social democratic system.

As shown in Figure 1, we hold that a series of strategic decisions by the post-Castro generation of leaders in favour of more market-oriented economy is what might take Cuba in a less authoritarian direction, while simultaneously helping to rebuild the welfare state.

Vegard Bye

 

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DISIDENCIA CUBANA NO LOGRA NOMINAR CANDIDATOS A ELECCIONES MUNICIPALES

Agence France Presse, 13 de noviembre de 2017 8:49 PM

Original Article: Disidencia No Logra Candidatos

La Habana

Tres organizaciones opositoras cubanas que se habían propuesto nominar cerca de 550 candidatos independientes a delegados en las elecciones municipales del 26 de noviembre fracasaron en su propósito, admitieron este lunes sus directivos.

“Ninguno ganó la nominación por la intervención de la policía política fundamentalmente, no solamente por la detención de las personas que se iban a postular, sino por su presencia proactiva en las asambleas”, dijo a Julio Antonio Aleaga, de la agrupación Candidatos por el Cambio.

El proceso de postulación que terminó el 2 de noviembre se hace en asambleas de barrio, donde se proponen y aprueban a mano alzada los candidatos a delegado. Según la Comisión Electoral, se realizaron 60,870 propuestas para nominar 27,221 candidatos, entre los que se escogerán los 12,515 delegados en voto directo y secreto el día 26.

La plataforma Otro 18 buscaba postular a 182 opositores, la agrupación Candidatos por el Cambio promovió a 306 y el Partido Autónomo Pjnero 60.

Este es el inicio de un proceso electoral, primero municipal y luego general, que debe concluir con febrero de 2018 con la elección de un nuevo Parlamento y un presidente, que sustituirá a Raúl Castro.

“Ahora mismo, en la situación que está el país, un posible cambio de gobierno, era muy difícil, porque además se vive en una dictadura, era muy difícil que pudieran ganar los candidatos independientes”, opinó Aleaga.

Según Manuel Cuesta Morúa, de Otro 18, “no pudieron nominarse porque las autoridades desplegaron una batería de actos violatorios en todos los casos de la Ley Electoral y de la Constitución, que impidieron que estas personas pudieran ser nominadas”. Citó detenciones temporales, procesamientos jurídicos por diferentes causas, intimidaciones, cambios de fecha y hora de las asambleas y otras “artimañas”.

El intento de cambiar la situación política cubana participando en el juego electoral oficial es rechazada por parte de la disidencia.

“La oposición se divide ahora muy claramente en los que no creen en el proceso electoral y los que creen que se debe participar en los procesos electorales como forma de modernizar el país”, dijo Aleaga.

Pero ambos dirigentes sostienen que a pesar del fracaso en nominar, el hecho de participar significa avances.

“No es necesariamente una derrota de la estrategia, porque para nosotros la estrategia tenía tres puntos fundamentales: primero legitimarnos frente a la ley, luego frente a la sociedad y tres, obviamente, tratar de lograr que algún candidato pudiera competir”, dijo Cuesta.

Nomination meeting for candidates for Municipal Assembly, Havana.

Perfect and enthusiastic accord.

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CUBA: CARTERA DE OPORTUNIDADES DE INVERSION EXTRANJERA, 2017-2018

MINCEX, November 2017

Original Document: MINCEX:  CARTERA DE OPORTUNIDADES DE INVERSION EXTRANJERA 2017-2018

Great opportunities for foreign investors in Cuba!

After nationalizing all foreign investment as well as domestic private enterprise – right down to the street vendors and shoe shine boys in the 1960 to 1968 period –  Cuba is now  courting foreign investors.

Here is the current document from MINCEX listing the possiblde investment opportunities for foreign enterprises,. It was sent courtesy of Jose Luis Rodriguez, (former Minister of Economics and Planning, former Director and currently with the CENTRO DE ESTUDIOS SOBRE LA ECONOMIA MUNDIA).

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CUBA STUDY GROUP Press Release: STATEMENT ON THE NEW CUBA REGULATIONS

Original Here: THE NEW CUBA REGULATIONS

November 9, 2017

The regulations announced on November 8 2017 are highly counterproductive.

Instead of supporting the Cuban private sector, as the administration has stated, new travel rules harm Cuban entrepreneurs and their employees by making it more difficult for individual Americans to visit the island and patronize their businesses. Rather than deal a lasting blow to the Cuban military, the ban on U.S. interaction with 180 Cuban state enterprises imposes unwieldly, and arguably unenforceable, regulatory burdens on U.S. citizens. More generally, these measures represent a setback to the broader process of normalization, which continues to be overwhelmingly popular with both the U.S. and Cuban people.

The Cuba Study Group disagrees, in particular, with the Trump administration’s decision to ban non-academic educational and individual people-to-people travel. The free flow of people, ideas, information, and goods helps, rather than hinders, the cause of meaningful reform on the island. Moreover, U.S. travelers frequent privately-owned rooms and other small businesses at a higher rate than visitors from any other country. President Trump’s measures will therefore hit the island’s private sector hardest, not the government, as tourists from other countries will continue to patronize state-owned companies and hotels.

Raúl Castro is slated to step down from the presidency in early 2018. At the same time, the country’s internal economic agenda has stagnated, and Hurricane Irma just devastated wide swaths of the island’s northern coast.

At this juncture of uncertainty and transition, it is in the best interest of the United States to remain engaged as the island confronts multiple challenges. By providing the Cuban government an excuse to revive a siege mentality, the Trump administration’s policies ultimately favor those in Cuba in a position to benefit most from the status quo where essential economic and political reforms continue to be neglected. As in the pre-normalization era, the Cuban people, and not the Cuban government, will most keenly feel the results.

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TRUMP’S NEW CUBA SANCTIONS MISS THEIR MARK

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BY WILLIAM M. LEOGRANDE | NOVEMBER 9, 2017

Original Article: SANCTIONS MISS THEIR MARK

REGULATIONS ON TRAVEL AND TRADE WILL LIKELY HAVE LITTLE IMPACT ON CUBA’S GOVERNMENT, HURTING ORDINARY CUBANS INSTEAD.

After two years of restored diplomatic ties, new U.S. regulations on Cuba are bringing back a thicket of travel, financial and trade restrictions – and a tougher stance toward the island. The goal of these restrictions, according to U.S. President Donald Trump, is to starve the Cuban government of money from travel, remittances and commercial ties. But the real victims of the new sanctions will be U.S. residents whose right to travel is curtailed, Cuban families who depend on remittances to survive, the struggling Cuban private sector, and U.S. businesses that will face an even greater disadvantage competing with Asian and European firms.

The regulations issued by the Treasury and Commerce Departments on Nov. 8 re-impose significant limits on educational travel to Cuba that former President Barack Obama relaxed. They also redefine “prohibited officials of the Government of Cuba” expansively, potentially cutting off remittances to hundreds of thousands of Cuban families. Finally, they prohibit anyone subject to U.S. jurisdiction from engaging in any “direct financial transactions” with entities controlled by the Cuban military or security forces that “disproportionately benefits” those entities.

All this marks the implementation of new sanctions Trump announced on June 16, 2017, at a Cuban American rally in Miami. The sanctions were mandated by the National Security Presidential Memorandum the president signed onstage, and included several major changes to the Cuban Assets Control Regulations (CACR), which spell out the operational details of the U.S. embargo.

Educational travel

In January 2011, Obama relaxed restrictions that former President George W. Bush had imposed on educational exchanges with Cuba – restrictions so onerous they eliminated most U.S. study abroad programs. Trump’s new regulations re-impose the Bush era restrictions, albeit with some exceptions for students accompanied by a representative of their U.S. academic institution. When combined with the State Department’s Sept. 29 travel warning advising people not to visit Cuba at all because of the injuries suffered by two dozen personnel at the U.S. embassy, the new restrictions on educational travel could drastically reduce U.S. study abroad in Cuba, which had been on the upswing since 2014.

U.S. visitors traveling under the “people-to-people” educational license (for educational travel not leading to an academic degree) can no longer travel on their own. They must now travel with organized groups under the auspices of a U.S.-based, licensed travel provider. Obama had lifted the group travel requirement in March 2016, providing an immediate boon to Cuba’s emerging private sector because individual travelers are much more likely to stay at private B&Bs (casas particulares), eat in private restaurants (paladares), take private taxis, and hire private guides. Most organized groups are too large for private rentals and thus have to be booked into government-owned hotels. Consequently, although Trump’s policy purports to boost Cuba’s private sector, the prohibition on individualized people-to-people travel hits the private sector hardest.

Although Cuban private businesses may suffer, the new travel regulations are not likely to put a huge dent in the number of U.S. visitors. The volume of travelers from the United States jumped dramatically in 2015, up 77 percent over 2014, after Obama and Cuba’s President Raúl Castro announced their intention to normalize relations in December 2014. This surge occurred before Obama ended the prohibition on individualized “people-to-people” travel. U.S. visitors are far more likely to be deterred by the State Department’s travel warning. Even then, a significant decline in U.S. visitors will not do serious damage to the Cuban tourist industry, which hosted four million foreign visitors in 2016 and is on track to host 4.7 million this year, of which only seven percent were non-Cuban American U.S. visitors.

Remittances

The new regulations redefine “prohibited officials of the Government of Cuba” to include all employees of the Ministry of the Revolutionary Armed Forces and Ministry of the Interior, thousands of ordinary Cubans who volunteer as leaders of their local Committees for the Defense of the Revolution, as well as senior government and party officials. The previous regulatory definition of prohibited officials, put into place by Obama in October 2016, was limited to members of the Council of Ministers and flag officers of the Revolutionary Armed Forces. The new definition encompasses hundreds of thousands of people, since the armed forces manage a significant number of commercial enterprises such as the Gaviota hotel chain and TRD Caribe retail stores, especially in the fast-growing tourism sector.

Cubans who are “prohibited” are not allowed to receive payments from U.S. nationals. That includes remittances and gift packages (Cuban Assets Control Regulations,  §515.570), so the new regulations could potentially deprive hundreds of thousands of Cuban families of support from their relatives abroad. However, the actual impact is harder to predict. There is no way to enforce this prohibition since the U.S. government does not have a list of all the people covered in the expanded definition. Moreover, Cuban Americans can carry funds and gift packages to family when they travel or can wire funds through third countries, just as they did in 1994 when former U.S. President Bill Clinton tried, unsuccessfully, to cut off remittances to punish Cuba for the balsero (rafters) migration crisis.

Apart from whether the new prohibition proves effective, it would seem to run counter to the purported aim of Trump’s policy to empower the Cuban people by directing U.S. funds to them, rather than to the Cuban government. Remittances are by far best way to do that because the dollars go directly to family on the island.

Transactions with military-linked enterprises

The most complex regulatory change is the prohibition on engaging in any “direct financial transactions” with businesses controlled by the Cuban military or security forces if they “disproportionately benefit” those forces. This is a potentially significant prohibition because the Cuban armed forces ministry administers commercial holding companies involved in everything from banking and port management to hotels and retail sales. The presence of military enterprises is greatest in the tourist sector, where both U.S. visitors and U.S. companies are most likely to encounter them.

The U.S. Department of State was tasked with creating a list of prohibited enterprises, which it released along with the new regulations. The list includes 180 entities, 58 percent of which are in the tourist sector, including 84 hotels – by far the largest category of businesses included. Some of the entities listed are holding companies for hundreds of retail outlets, but U.S. travelers and companies can still do business with subsidiaries of prohibited entities so long as the subsidiaries themselves are not specifically listed. Quite reasonably, the State Department took the view that it could not expect travelers to know which retail outlets might be subsidiaries of prohibited entities unless they were specifically named.

Senator Marco Rubio (R-Fla.) and Representative Mario Díaz-Balart (R-Fla.), who were the intellectual authors of the ban on transactions with military-linked enterprises, complained that the State Department’s list was not inclusive enough because “bureaucrats” were “refusing” to carry out Trump’s policy. Rubio wanted to see the entire Cuban tourist sector put off-limits because the Minister of Tourism, Manuel Marrero Cruz, is a former military officer. According to Rubio, that means the entire sector is controlled by the armed forces.

The Cuban government was not happy with the sanctions either. Josefina Vidal, Director General for U.S. Affairs in the Foreign Ministry, said the new measures “confirm the serious regress of bilateral relations as a result of the decisions adopted by the government of the President Donald Trump,” and called some of them “subversive.”

In truth, the impact of these sanctions on commercial relations with Cuba is likely to be limited. The Cuban government, adept at coping with U.S. hostility for the past half century, may feel the pinch, but it can look elsewhere for trade partners and tourists. Also, in order to avoid disrupting ongoing business relationships, the new regulations exempt existing contracts from the prohibition on doing business with military-linked enterprises. So, for example, Marriott-Starwood Hotels’ contract to manage hotels owned by holding companies administered by the armed forces ministry is not affected by the new regulations. Moreover, even future contracts will be allowed with military-linked businesses involving ports, airports, and telecommunications, which are the three sectors in which most U.S. businesses (cruise ship lines, airlines, and cell phone companies) now operate.

On balance, the regulatory burden falls most heavily on U.S. academic institutions, whose study abroad programs in Cuba will be curtailed; on U.S. travelers who can no longer travel by themselves on a people-to-people educational license; on Cuban-Americans whose families on the island who will no longer be eligible to receive remittances and gift packages; and on U.S. businesses that may want to sell goods to Cuba in sectors where their counterparts are commercial enterprises managed by the armed forces ministry.

The Cubans who will suffer most are small business owners, suppliers, and employees who cater to individual U.S. travelers; employees of state firms managed by the armed forces ministry and their families, who may lose remittances and gifts; and Cubans who might have found employment with U.S. companies whose potential business deals are now blocked.

The Cuban state will suffer only marginally from Trump’s new sanctions – certainly not enough to force it into the sorts of concessions Washington demands.

 

 

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