Tag Archives: Trump

CHINA PILES INTO CUBA AS VENEZUELA FADES AND TRUMP LOOMS

Reuters, Tue Feb 14, 2017 | 8:17 PM EST

Original Article: China piles into Cuba

CUBA ISN’T WAITING AROUND FOR U.S. WHEN IT’S GOT CHINA

By Marc Frank | HAVANA

From buses and trucks to a $500 million golf resort, China is deepening its business footprint in Cuba, helping the fellow Communist-run state survive a crisis in oil-benefactor Venezuela and insulate against a possible rollback of U.S. detente.

Cuban imports from China reached a record $1.9 billion in 2015, nearly 60 percent above the annual average of the previous decade, and were at $1.8 billion in 2016 as the flow of oil and cash slowed from Venezuela due to economic and political turmoil in the South American country.

China’s growing presence gives its companies a head start over U.S. competitors in Cuba’s opening market. It could leave the island less exposed to the chance U.S. President Donald Trump will clamp down on travel to Cuba and tighten trade restrictions loosened by his predecessor Barack Obama.  A deterioration in U.S.-China relations under Trump could also lead Beijing to dig in deeper in Cuba, some analysts say.

“If and when the Trump administration increases pressure on China … China may decide to double down on its expanding footprint in the United States’ neighborhood,” said Ted Piccone, a Latin America analyst at the Brookings Institution think tank.

China, the world’s second largest economy, sells goods to Cuba on soft credit terms. It is Cuba’s largest creditor and debt is regularly restructured, though amounts and terms are considered state secrets.  While Cuba does not publish investment data, the state press has been abuzz with news of Chinese projects lately, covering infrastructure, telecoms, tourism and electronics.

Yutong (600066.SS) buses, Sinotruk (3808.HK) trucks, YTO (600233.SS) tractors, Geely (0175.HK) cars, Haier (1169.HK) domestic appliances and other products are prominent in Cuba, where the main U.S. products on display are cars dating back to the 1950s, thanks to the ongoing economic embargo.

Cubans flock every day to hundreds of Huawei supplied Wi-Fi hot spots and the firm is now helping to wire the first homes.

“Business is really booming, more than we could have ever imagined,” said the manager of a shipping company which brings in Chinese machinery and transport equipment and who asked not to be identified.

The foreign ministry in Beijing described China and Cuba as “good comrades, brothers, and partners,” and said the relations “were not influenced by any third party,” when asked whether U.S. policy was encouraging China to deepen its presence.  “We are happy to see that recently countries around the world are all expanding cooperation with Cuba. I think this shows that all countries have consistent expectations about Cuba’s vast potential for development,” Chinese Foreign Ministry spokesman Geng Shuang told reporters.

The U.S. State Department and White House did not immediately respond to requests for comment.

INCREASED INVESTMENT

Over the past two decades, China has become a major player in Latin America and the Caribbean, second only to the United States in investment flows and diplomatic clout.  But the Asian giant was reluctant to invest in Cuba because of the poor business climate and fear of losing opportunities in the United States, according to Asian diplomats in Havana.

That began to change after Obama moved to normalize relations two years ago and Cuba sweetened investment rules, sparking new interest among U.S. businesses and competitors around the world.  China was well placed because the local government preferred doing business with long-term friends offering ample credit to work with state-run firms.

In return, Cuba has shared contacts and knowledge about the region, and taught hundreds of Chinese translators Spanish.

A report on the government’s official Cubadebate media web site last month said the two countries agreed to strengthen cooperation in renewable energy and industry, with 18 Chinese firms taking part in a three-day meeting in Havana.

Plans for several projects were signed, including a joint venture with Haier to establish a renewable energy research and development facility, the report said.  A few weeks earlier, Cuba opened its first computer assembly plant with Haier with an annual capacity of 120,000 laptops and tablets, state media reported.

Other projects include pharmaceuticals, vehicle production, a container terminal in eastern Santiago de Cuba, backed by a $120 million Chinese development loan, and Beijing Enterprises Holdings Ltd. (0392.HK) venture for a $460 million golf resort just east of Havana.  Shanghai Electric (601727.SS) is providing funds and equipment for a series of bioelectricity plants attached to sugar mills.

Barrio Chino, La Habana

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CAN DONALD TRUMP AND RAÚL CASTRO MAKE A GOOD DEAL

By JORGE I. DOMÍNGUEZ, New York Times JAN., 10, 2017

Original Article: Trump-Castro Deal?

CAMBRIDGE, Mass. — Cuba operates as if it had two parties, President Raúl Castro joked in his main report to the Seventh Congress of the Cuban Communist Party last April: “Fidel leads one and I, the other.”

This was more than just a joke: Fidel Castro, Raúl Castro’s brother and the former president, had criticized President Obama’s visit to Havana a month earlier in official publications. It was the first public split between the brothers on an issue of such importance. President Obama’s Cuba policy change, announced in December 2014, drove a wedge through the Cuban leadership, making manifest the differences between government hard-liners and soft-liners. For the balance of 2016, the hard-liners dominated official communications, republishing tales of American perfidy over the previous two centuries. During the same period, however, Raúl Castro’s senior team negotiated and signed many practical agreements to alter American-Cuban relations.

Fidel Castro is now dead; the ossified government he nurtured is vanishing as well. Since taking power in 2008, Raúl Castro has made many domestic and foreign policy changes that happen to be in line with key foreign policy priorities of the American president-elect, Donald J. Trump, and at the same time open up Cuba’s economy, and society. A deal-making Trump presidency will find a deal-honoring Raúl Castro presidency. The agreements that the Trump administration will inherit, reached under Mr. Trump’s three predecessors, serve both the interests of the United States and Cuba as well as the presumed Trump presidential agenda. Reversing or scaling back such agreements, as Mr. Trump has threatened to do, will make it more difficult for him to fulfill that agenda.

Last year, more than half a million visitors from the United States had set foot in Cuba and American commercial airlines now fly regularly between the United States and Cuban cities. Earlier in the Obama presidency, the United States government liberalized rules on sending money transfers to Cuba, and much of it informally financed the re-emergence of a Cuban private business sector. The number of small- business licenses now exceeds a half-million in a country of 11.2 million people. Money transfers from the United States fund a Cuban civil society independent of the state for the first time in a half-century.

Recent agreements between the two countries make it easier for them to cooperate on hurricane tracking and biodiversity protection, share information on pollution and undertake joint maritime geological exploration. Other agreements protect migratory birds and fish. Cuba and the United States now also work together on cancer research, in which Cuban scientists have registered significant advances, and on the prevention and cure of infectious diseases, including combating the Zika epidemic, in which Cuba is a worldwide example of effectiveness.

Cuba and the United States have long cooperated on security matters, coordinating on security around the United States Navy base at Guantánamo Bay. Since the mid-1990s, the two countries have worked together to prevent undocumented migration. Cuba patrols its ports to prevent anyone from stealing boats and rafts; at its airports, it checks for valid visas among those about to board. United States Coast Guard cutters intercept undocumented migrants in the Straits of Florida and return them to Cuba.

The two countries have informally combined efforts on drug traffic interdiction since the 1990s, and this was formalized last July; Cuba provides an effective barrier against drug traffic into the United States.

And Cuba long ago adopted the Trump-preferred migration policy: seek to stop the departure and accept the return of undocumented migrants.

Suppose you are the United States president-elect. What is not to like?

Still, while economic agreements emphasize the two countries’ equality, some of the deals couldn’t be more lopsided. Only American airlines fly between the two countries; Cubana de Aviación does not. And since late 2002, Cuba has purchased about $5.3 billion worth of United States agricultural products, paying cash, while exporting almost no goods to the United States.

What’s wrong with agreements already in place that benefit both countries? The United States wants to warn Florida and the Carolinas about hurricane trajectories, its fowl and fish to winter in Cuba’s Caribbean waters and come back, and to benefit from Cuba’s scientific expertise. Cuba and the United States are interested in exploring for oil in the Gulf of Mexico and have agreed to track seismic threats beneath the gulf’s waters to prevent oil spills.

On delicate issues, President George W. Bush and Fidel Castro, and later President Obama and Raúl Castro, developed ways of agreeing substantively while publicly denying any negotiation had taken place. That diplomatic ruse worked. In 2002, the Cubans induced the Bush administration to begin exporting American agricultural products; each side made it known that these were unilateral, independent and sovereign decisions. In December 2012, the United States and Cuba did not trade spies; rather, each made unilateral, independent and sovereign decisions to release some of the other’s prisoners.

Slowly, United States-Cuba relations got better. That serves Cubans who may travel more easily, receive friends, rent space through Airbnb, and get working capital through money transfers to establish private businesses and fund an independent civil society. That serves Americans who benefit from freer travel and cooperation on issues such as migration, crime and drug trafficking. What next? Rely on unilateral, independent and sovereign Cuban decisions to foster change.

Here’s how Raúl Castro’s joke ended at the April party congress: “Fidel will certainly say, ‘I want to lead the Communist Party,’ and I will say, ‘O.K., I’ll lead the other one, the name does not matter.’ ” If you are a Cuban hard-liner, that joke is terrifying. President Raúl Castro is prepared to open the gateway to something different, less dogmatic, whose name neither he nor we know. But we know what it is not. It is not called “Communist.”

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“CUBA 2017: SLOW MOTION ECONOMIC REFORMS PLUS POLITICAL STASIS”

Attached here is a Power Point Presentation on Cuba’s current economic and political situation.  The complete presentation is attached here:  Cuba 2017: Slow Motion Reforms. January 4, 2017

By Arch Ritter

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WHICH TRUMP WILL CUBA HAVE TO CONTEND WITH, THE HARD-LINER OR THE DEAL-MAKER?

WILLIAM M. LEOGRANDE, Professor of Government, American University, Washington, DC 20016

World Politics Review, November 16, 2016

Original Article: Which Trump Will Cuba Have to Contend? 

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DONALD TRUMP HAS A CHOICE TO MAKE ON CUBA

CNBC.com

Ted Henken,  November 14, 2016

zzazaOne example of freer markets in Cuba isthe Paladar La Cocina de Lilliam (Lilliam’s Kitchen), a home-based restaurant garden where President Jimmy Carter ate on his first visit to Cuba in 2002. Photo: Ted Henken

While Americans have been reeling over the shocking outcome of our presidential election, Cubans are experiencing perhaps even greater vertigo as a result of the surprise victory of Donald Trump.

As the saying goes, “When the U.S. sneezes, the rest of the world gets a cold.” Or perhaps the old Mexican adage is more appropriate to the situation Cubans find themselves in: “Poor Mexico! So far from God, but so close to the United States!”

Cubans went from a largely acrimonious relationship with the U.S. prior to December 2014, to one of unprecedented “hope and change” during the past 22 months under bilateral efforts to achieve diplomatic normalization between the erstwhile adversaries, to one of great trepidation and uncertainty over the past week given the president-elect’s campaign promise to “cancel Obama’s one-sided Cuban deal.” President Raúl Castro perfectly captured the moment’s ambivalence for Cuba by quickly sending the president-elect a brief note of congratulations while simultaneously ordering a five-day military mobilization.

In my more than half-dozen trips to the island over the past year, I have noted a palpable, ebullient expectation among Cubans for a better, more prosperous future under Obama’s “new rules” of engagement. This was especially pronounced among Cuba’s emergent entrepreneurial class, which includes old school cabbies in their even older school American cars, hip app designers in Cuba’s surprising tech start-up scene, and some of the many restaurateurs behind the island’s surging circle of “paladares” (private, home-based restaurants) which now number more than 1,800.

This hard-won hope was also born of Cuba’s own “new rules” introduced in late 2010 under President Raúl Castro aimed at expanding the island’s long-suppressed private sector. However, I also found that most entrepreneurs were under no illusions that the Cuban government would be fully lifting its own counter-productive “auto-bloqueo” or internal embargo against grass-roots entrepreneurial innovation and inventiveness any time soon.

This sense of rising hope inside Cuba reached its climax in Obama’s brilliant deployment of soft power during his historic state visit to the island in March 2016. Many Cubans identified with this youthful, optimistic, and eloquent African-American family man endowed with both a sense of history and of humor much more than with their own waxworks of old white ideologues.

However, Cuba’s old guard realized that Obama’s charm offensive had begun to fatally undermine their own authority and undercut their long-effective use of the U.S. boogeyman as a scapegoat for their own economic failures and as a justification for their continued political authoritarianism. In response, the Cuban leadership has spent the past eight months constantly reminding Cuban citizens of the continued U.S. existential threat to Cuban sovereignty under the Revolution and simultaneously dashing their hopes for a better, more open and prosperous future by stepping up detentions of peaceful political opponents and independent journalists and slowing economic reforms to a manageable trickle.

The clearest example of the Cuban government’s efforts to lower expectations has come on the economic front. First, April’s Seventh Party Congress included no new resolutions about deepening or expanding much needed market-oriented reforms apart from a vague reference to studying the possibility of granting status as legal businesses to a portion of the half-a-million strong micro-enterprise sector. Nothing has come of this idea in the intervening seven months.

Second, price controls have been reimposed in the private agriculture and transportation sectors, reducing incentives for greater production. Third, this past summer saw the government scale back economic growth estimates for 2016 to under 1 percent and impose severe energy saving and cost-cutting measures across the state sector due to a liquidity crisis and the Venezuelan debacle.

Finally, the issuing of new licenses for Havana’s surging private, home-based restaurant sector were suspended for six weeks in the fall in order to root out legal violations such as providing bar services and live entertainment without permission, obtaining supplies from black-market sources, staying open past the state-imposed 3 a.m. closing time, and tax evasion. Some have even been accused of doubling as sites of prostitution and drug trafficking and shut down.
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However, the government has so far not delivered on its promise to provide affordable access to wholesale markets for these restaurateurs nor has it allowed them to legally import supplies from abroad or expand beyond the arbitrary limit of 50 place settings. Moreover, the tax system for the private sector provokes “creative bookkeeping” by imposing a rigid 40-percent deduction limit for business often burdened by much higher supply costs due to Cuba’s environment of chronic scarcity. It also imposes a labor tax on any more than five employees disincentivizing legal hiring.

To add insult to this injury, the moribund network of their state-run competitor restaurants do enjoy access to wholesale markets and suffer no seating or size restrictions or employment taxes. Especially frustrating for Cuban entrepreneurs is the fact that this emphasis on law and order comes in the context of shrinking output in the state enterprise sector, a looming emigration crisis with record numbers of new Cuban arrivals in the U.S., and in the midst of a tourism boom that the state hospitality sector has proven unable to absorb.

As Cubans like to say: “¡No es fácil!” (It ain’t easy!)

President-elect Donald Trump could follow the recommendation of some Congressional Republicans by adding his own isolationist wind to the already full sails of the Cuban government’s rigid control that attempts to keep Cuban entrepreneurs in their frustrated and impoverished places. Or he could send Cuba’s business pioneers a message of support and solidarity as they attempt to build a more prosperous future by continuing America’s historic opening to Cuba that aims to empower the island’s mergent capitalists through engagement, investment, and trade.

For someone who campaigned as a anti-politician who would bring a hard-nosed business sense to Washington, Cuba presents Trump with a golden opportunity to place economic pragmatism and the tangible benefits it would bring to citizens of both countries over the out-dated and counterproductive Cold War ideology that undergirds the embargo.

Commentary by Ted A. Henken, an associate professor of Sociology and Latin American Studies at Baruch College, City University of New York and co-author with Arch Ritter of the book “Entrepreneurial Cuba: The Changing Policy Landscape.” He is a past president of the Association for the Study of the Cuban Economy (2012-2014). Read his blog and follow him on Twitter @ElYuma.

 

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