• 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. It includes analyses and observations of the author, Arch Ritter, as well as hyper-links, abstracts, summaries, and commentaries relating to other research works from academic, governmental, media, non-governmental organizations and international institutions.
    Commentary, critique and discussion on any of the postings is most welcome.
    This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' original 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:
    "... 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."

CAN CANADA FULLY LEVERAGE ITS UNIQUE TRADE RELATIONSHIP WITH CUBA?

Canadian Sailings: December 3, 2015 @ 8:32 am

Original Source:        http://www.canadiansailings.ca/?p=10739

By Alan M. Field

zzzzzzzzzzStarved for new markets to conquer, American exporters and investors are avidly awaiting the imminent end of the fifty-five year-old U.S. trade embargo of Cuba. Given the current abundance of Cuba-focused business conferences, seminars and traveling delegations to the island-nation, Canadians might well be wondering whether the mania for all things Cuban in the U.S. will also provide a golden opportunity for Canadians to leverage their unique ties with Cuba. Or will it, on the contrary, signal the end to that special relationship at precisely the time when the rest of the world has discovered Cuba?

Trade relations between Canada and Cuba originated during the era when vessels from the Atlantic provinces of Canada traded codfish and beer in Cuba for that country’s rum and sugar. “Canada has been a major trading partner with Cuba dating back to the 1800s,” notes Arch Ritter, an economist at Carleton University, who has written extensively about Cuba’s economic history. “Our ties have been longstanding, and we have never cut trade ties with Cuba.”

Over the past few decades, trade ties between the two countries have grown significantly, but remain modest compared with the volumes that could follow the end of the U.S. trade embargo, and the re-opening of U.S. foreign investment in Cuba. In August 2015, bilateral trade between Canada and Cuba amounted to $100.7 million [Canadian dollars], compared with just $58.4 million in August 2000, and only $33 million in August 1990. From 2000 to 2008, the value of Canadian exports to Canada grew at an annual rate of 11 per cent, while imports from Cuba grew at a rate of 10 per cent. Ontario is the largest provincial exporter to Cuba, followed by Quebec. Manitoba and British Columbia have been the fastest-growing provincial exporters in recent years, according to a report by the Library of Parliament in Ottawa.

Mark Entwistle, a former Canadian ambassador to Cuba (1993-1997) and a founding partner of Acasta Capital, a Toronto-based investment firm, recalls the long decades when Canadian diplomats were the only representatives of any Western democracy at Havana cocktail parties, “Among Western democracies, Canada is the only one that never broke relations with Cuba even once,” Entwistle added.

Canadians imported Cuban sugar, rum and cigars, while exporting a lot of machinery and equipment that “Cuba could no longer get from the United States,” explained Ritter. During the 1990s, when the Soviet Union stopped subsidizing Cuba, the island’s economy “really deteriorated,” added Ritter, “and ties with Canada really intensified. Cuba decided it needed tourism, so it promoted that sector. We became the big tourist country for Cuba, and people said, ‘Cuba’s best friend is the Canadian winter.’” Nowadays, Cuba ranks as the third-most popular overseas destination for Canadians – after only the United States and Mexico – while Canada is Cuba’s largest source of foreign tourists; over one million Canadians visit each year, or more than 40 per cent of all foreign visitors to Cuba.

Burned by Cuba’s ups and downs

During the 1990s, Cuba opened up its economy “a little bit” to foreign enterprises, added Ritter. The mining sector became the focal point of great activity as “a lot of Canadian companies went down there to see if they could prove any commercially viable mineral resources. They all came back empty-handed after a few years, but they were really optimistic because Russia had done the surveying. The Canadian companies thought they just needed to do the work on the ground,” Ritter went on. It turned out that things weren’t so simple.

Other Canadian enterprises went there, but few were successful, noted Ritter. “There were Canadian hotels that pulled out. There was interest in time-share condominiums, and the Cubans changed their mind on that, so that did not go forward. More recently, in the late 2000s, a number of Canadian enterprises made arrangements to invest fairly massive amounts of money in golf courses and related resorts. But those have been put back on the shelf; nothing has happened. I think the Cubans changed their minds [about that],” lamented Ritter. Overall, “The rules have been so fuzzy that every decision is sort of a customized ad hoc decision. The rules of the game come down to case by case decisions by Cubans.”

The only major Canadian firm to enjoy enduring success was Toronto-based Sherritt International, a resource company with interests in nickel and cobalt mining, oil and gas exploration and production, and electricity generation. Ritter said that Sherritt has been “wildly successful for Cuba and for Sherritt.” However, Sherritt’s huge success has not been repeated by other Canadian firms in the Cuban energy sector. In 2009, Pebercan, Inc., a Montreal-based oil producer, was notified by the Cuban government that it would scrap its production-sharing contract with the Canadian firm. That contract, signed by Pebercan and the Cuban government in 1993, had been scheduled to expire in 2018. Neither party to the contract ever announced any reason for the government’s decision to cancel it.

Goodwill is like an isotope that is trickling down

George Petrolekas, a former Marketing Director of a Canadian telecom, who has traveled on business in Cuba, said that former Prime Minister Stephen Harper’s conservative government “has been less receptive to links with Cuba than previous governments, which were Liberal.” During the late 1990s, “The most receptive Canadian governments were probably those of Pierre Elliott Trudeau, and Jean Chretien, to a lesser extent.” Petrolekas said that Harper has been “far harder on Cuba” than other Prime Ministers, such as Brian Mulroney.

Entwistle argues that even under left-leaning Canadian Prime Ministers, Canada has not taken full advantage of existing opportunities to promote Canadian corporate exporters and investors. “Truth be told, no Canadian government of any political stripe has exercised the full weight of instruments available to it for things like trade promotion.” Entwistle believes that Export Development Canada (EDC), which provides Canadian exporters with financing, has “never been overly active in Cuba, in terms of supporting Canadian business. Canadian business has done its own thing in Cuba, regardless of the government.”

Nor have there been a sufficient number of high-level visitors from Ottawa, waving the Canadian flag to drum up new business. Entwistle said, “There have been some political visits; Pierre Trudeau came in 1976; he was the first NATO-member state leader to do so. [Jean] Chretien also went—partly because Trudeau went.” Would it help if the next Canadian Prime Minister paid such a visit? “Hypothetically, if you had a Liberal government, there would be some explosion of activity on the part of the government of Canada in pursuing its relationship; but I think it will probably be business as usual. No government does tremendous damage to the relationship because it does tend to have its own rhythm, and you have this huge number of Canadians who go as tourists; well over a million a year.”

The sluggishness of the relationship defies the rosy expectations of earlier generations of Canadian business leaders. “At least one generation of Canadians in public life always believed that Canada had a special relationship with Cuba,” Entwistle continued. There was an assumption that “this relationship would translate into some sort of privileged access; an ability to leverage the relationship; to acquire things or positions – decisions from the government of Cuba that we want to see. The whole Canadian foreign policy establishment believed that for a long time.”

This presumption of privileged access has turned out to be false, said Entwistle. “While Cubans are very respectful of Canada and they value the relationship very much, we don’t have any special access or privileges in Cuba. We’re in competition with everyone else; you have to earn your keep; earn your way.” Ritter agreed that “Canadians had said for so long that we had built up a lot of goodwill in Cuba – and that it would pay off in the future.” Not true. And yet as early as 2002, when President George W. Bush enabled U.S. exports of pharmaceuticals and foodstuffs to Cuba, Canadians were disappointed with the reaction of their Cuban customers. As soon as lower-priced food became available from the United States, the Cubans switched to it, despite the ongoing U.S. trade embargo in other product sectors. Canada’s business activity in Cuba has been further hampered by the Helms-Burton Act of 1996, which penalizes all foreign companies that do business in Cuba by preventing them from doing business legally in the United States.

Reviving the special relationship

Overall, argued Entwistle, “Canada has an asset that has been created by the 70 years of unbroken ties, but it is being squandered. The goodwill of the relationship on which Canada dined out for a long time is like an isotope with a half-life. It is trickling down and has not been replenished sufficiently. ”

What measures would Entwistle take with respect to Cuba if he were Prime Minister of Canada? First of all, “I would increase the number of political visits at the ministerial level. In a country like Cuba, those kinds of visits, led by [cabinet level] ministers have real value. They signify the importance of the relationship; they provide entrée and access to senior decision makers in the Cuban government. [Canada’s] global competitors have been very active in this. “

In the wake of the normalization of U.S. diplomatic ties with Cuba, senior ministers from several major trading nations have descended on Havana in recent months, accompanied by senior executives from major corporations headquartered in those countries. For example, the President of France brought some 70 French companies; the Spanish prime minister, almost the same number; and likewise from Mexico and elsewhere. Meanwhile, Canadian leadership have undertaken no such large-scale missions in Cuba, of late, perhaps out of a sense that such missions are not necessary, given the decades of mutual goodwill. Despite Canada’s world-famous expertise in telecommunications, Orange S.A., the French telecom company, signed a deal to assist in the development of Cuba’s (government monopoly) telephone network in July 2014. “It’s the kind of deal we could have done, but we just didn’t bother to go there and do it,” Entwistle said.

What role can Canadians play in the Cuba of the future?

The Cuban government has outlined the important role to be played by foreign investment flows in the sustainable development of the country. In 2014, Cuba’s minister for foreign trade and investment said on state TV that the country needs a sufficient volume of foreign capital in order to achieve its economic growth target of 7 per cent a year. Its goal is attract $2 billion to $2.5 billion in foreign direct investments each year, notes Philip Peters, President of the Cuba Research Center. Peters says that target is “pretty ambitious,” given the fact during the entire 1990s, Cuba managed to attract a total of only $4 billion to $5 billion in inward foreign investment.

What will that expansion mean for Canadians? Economist Ritter believes that there are two ways of looking at the ultimate impact of the arrival of so many Americans on Cuban soil. One of those ways is positive; the other is negative. “There will be two kinds of effect. One will be a squeezing out effect in some areas. But there isn’t that much to be squeezed out, so I don’t think we lose so much,” added Ritter, in terms of current Canadian market share in Cuba; given the limited range of Canadian success stories in the world of industry.

When it comes to the tourism sector, there is a divergence of views. Ritter said that “a second squeezing-out effect will take place in the tourism industry, as the tsunami of tourists arrives from the United States. They could squeeze out a lot of Canadians,” given the fact that the typical Canadian tourist in Cuba has a more modest budget than his or her counterpart from the United States. Other analysts, including Entwistle, believe that there will be plenty of room in Cuba – the largest island in the Caribbean – for tourists traveling on all kinds of budgets, from modest cottages suitable for hippies to jet-set plutocrats. The key is to build the infrastructure that supports that expansion for all segments of the market. That’s an area where Canada can fill the gap with additional capital.

A range of enticing new opportunities may open for Canadians to export to Cuba and invest in that country, in partnership with Americans and other newcomers to the island. If the newly pragmatic Cuban government is as transparent as optimists say it will be, Canadians will be making more money in Cuba even if they wind up owning a smaller share of a much larger Cuban pie. Some Canadian companies could play a key role as intermediaries; consultants who advise and partner with U.S. companies that don’t already know Cuba the way a handful of Canadians know it. Apart from their greater familiarity with Cuba, argues Petrolekas, Canadians have this advantage: “There is not a sense that we [Canadians] are there to exploit Cubans. They like us from that standpoint. There are enough companies that operate cross-border between the U.S. and Canada, and we can certainly assist in that.”

How Canadians can improve their chances of success in Cuba

What steps can Canadians take to improve their chances of success? Entwistle notes that “the trick to improving your chances in Cuba is to align [your initiatives] with the Cuban government’s priorities, which have more to do with the real, basic economy than with the bells and whistles of advanced high-technology [economies]. The Cubans are remarkably smart. They have a home-grown leadership that is very serious, very earnest, analytical and methodical.”

Entwistle advises Canadians to study the priorities outlined in the 2014 foreign investment law, which target agricultural development; basic manufacturing, including such substitutes for imports as glass bottles and aluminum cans; and renewable energy, including wind power. In the past, Cuba has benefitted from low-priced, subsidized energy imports from Venezuela, but that country has been suffering economic and political disarray. That makes it riskier than ever for Cuba to depend on Venezuela for low-priced energy imports in the future, industry analysts agree. Another Cuban priority is biotechnology: Close to a dozen biotech institutes have been built in Cuba; meanwhile, Novartis and AstraZeneca – two European pharma companies – have a significant presence in the country.

Tourism remains particularly enticing. Cuba is looking for foreign partners to expand its hotel sector infrastructure quickly, in preparation for the huge flood of American tourists. Canadians may also be able to leverage growing demand for ‘medical tourism,’ which could develop into a huge source of revenue for the island, and for joint-venture partners from capitalist countries. World-famous for its quality, the Cuban medical system is offering medical services for Canadians via Health Services International (Servimed), an agency officially recognized by Cuba’s national medical system. Demand for such services is expected to grow, as well, in the United States, once full trade relations are normalized.

In conclusion, cautions Entwistle, “Cuba is not an economy that is for profiteering in any way; or for get-rich schemes, or getting in and out. This is a long-haul, strategic, patient market that is evolving in front of our eyes; at a very Cuban pace. You need a longer term vision. The companies that have been successful in Cuba have that long term vision, which allows them to ride the fluctuations of the daily ups and downs of doing the actual business. My advice is do less pitching and more listening. And if your business is in areas that are Cuba’s priorities, then you have a real good chance.” If he’s right, Canadians’ cultural aversion to flashy, get-rich-quick salesmanship could work out to their advanta

 

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LA AGROINDUSTRIA CAÑERA CUBANA: TRANSFORMACIONES RECIENTES

Mario González-Corzo, Editor, con la asistencia de Rosalina López

Bildner Center for Western Hemisphere Studies, The Graduate Center, The City University of New York

 This volume presents an analysis of the evolution and recent transformation of the sugar cane industry in Cuba from the fallout of sugar production during the Special Period to the creation of AZCUBA in 2011 to face new challenges; it also covers the potential use of sugar as energy and the behavior of the commodity within the global market economy.

 Complete document here:  La agroindustria cañera cubana

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CONTENIDO

Introducción, Mario González-Corzo

1 Importancia económica y estratég ica de la agroindustria cubana, Armando Nova González

2 La agroindustria bioenergética de la caña azúcar: retos y pers-pectivas, Federico Sulroca Domínguez

3 Las agroindustria cañera cubana: desempeño y tendencias recientes, Mario González-Corzo

4   AZCUBA: un modelo de la agroindustria cubana, Federico Sulroca Domínguez

5 La inserción de la agroindustria en la economía internacional, Lázaro Peña Castellanos

Bibliografía

Sobre los autores

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CUBA’S AGRICULTURAL TRANSFORMATIONS

Journal of Agricultural Studies ISSN 2166-0379 2015, Vol. 3, No. 2

Armando Nova González, Centro de Investigaciones de la Economía Internacional (CIEI), Universidad de La Habana, and Mario A. González Corzo, Lehman College, City University of New York (CUNY)

Complete Essay Here:  Mario Gonzalez-Corzo and Armando Nova, Cuba’s Agricultural Transformations, 2015

 ABSTRACT:

  The Cuban government has implemented a series of agricultural transformations since 2007 to increase the country’s agricultural self-sufficiency and reduce its dependency on food imports. These include the transfer (in usufruct) of State-owned land to non-State producers (e.g. cooperatives and private farmers), moderate price reforms, the decentralization of decision making, and the gradual relaxation of existing forms of agricultural commercialization.

As a result of these measures, the area planted, as well as physical output and agricultural yields (in selected non-sugar crop categories) have shown mixed results, but still remain below desired levels.

There are three (3) fundamental unresolved aspects that have prevented Cuba’s agricultural sector from achieving the desired outcomes: (1) the need to achieve the “realization of property,” (2) the recognition and acceptance of the market as a complementary economic coordination mechanism, and (3) the absence of a systemic focus to achieve the successful completion of the agricultural production cycle.

These unresolved aspects should be addressed through:

(1) the consolidation of input markets, where producers can obtain essential inputs at prices that correspond to the prices they can obtain for their output,

(2) greater autonomy to allow agricultural producers to freely decide when, where, and to whom they could sell their output, after social contracts have been fulfilled,

(3) the diversification of the forms of agricultural commercialization to permit greater participation by non-State economic actors,

(4) allowing agricultural producers to freely hire the labor necessary to sustain and increase production, and (5) providing agricultural producers with the financing and technical assistance necessary.

z3 Mario A. González Corzo and Armando Nova González,

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CUBA STANDARD, ECONOMIC REPORT 2015, First Quarter

Pavel Vidal, Chief Economist and Johannes Werner, Editor

Original here: Economic Report 2015

EXECUTIVE SUMMARY

•The year 2015 has begun with hopes for economic improvement, based on the speeches by Presidents Barack Obama and Raúl Castro on Dec. 17. Given the new tone in bilateral relations and the measures announced by the U.S. government, favorable impacts are expected on tourism, on the private sector, and on the overall functioning of the Cuban economy. We estimate that the way in which Cuba’s GDP growth will be most favored by the new measures is through investment. The new optimism awakened among businesspeople could propel foreign investment on the island.

•In this first quarter of 2015, we are presenting the Cuba Standard Business Confidence Survey, the first poll of this kind used in Cuba. Half of respondents (50.5%) said that their company has increased its intentions to invest in Cuba. Sixty-one percent of respondents believe that economic conditions on the island will improve in the coming 12 months.

•Survey takers were asked to mark the five biggest obstacles to developing and expanding their business in Cuba. The three factors that were selected by most respondents were government bureaucracy (62.2%), excess of regulations (49.5%), and guarantees and legal procedures (43.4%). None of the three factors refers to clear economic problems, but rather to the quality of institutions in the Cuban system.

•Despite the opening of new opportunities in global markets, we foresee slow reaction speed by the Cuban authorities to the new scenarios and institutional weaknesses that will delay Cuba’s international insertion.

•The Cuban authorities have made evident their optimism regarding the macro economy and the main sectors in their perspectives for 2015. The government is planning an acceleration of GDP growth from 1.3% in 2014 to 4% in 2015. Again, the GDP growth plan is based on a “spectacular” acceleration of investments; this year, the government expects an expansion of investments by 27%.

•We also predict an acceleration of GDP growth in 2015, albeit somewhat less optimistic than the government. Our forecast of 3.4% is based mainly on the possible rebound of investments (even if they don’t match the plan), improved access to external financing (thanks to foreign debt renegotiation agreements the government is pursuing), and the benefits of a relaxation of import and fiscal spending controls

•The Cuba Standard Economic Trend Index (CSETI) indicates that the favorable effects of the new international scenario have not impacted yet the Cuban economy. The February 2015 estimate is -0.14, which suggests that balance-of-payment conditions continue to be unfavorable for GDP growth. Even so, they are less negative that those of the first half of 2014.

z1

CONTENTS

Executive Summary

I. Structural and institutional reforms

Entering the eighth year of Raúl Castro’s reforms

Cuba Standard Business Confidence Survey

“Rational optimism” towards the Obama administration’s new policy

New procedures for investments

II. Real sector

Official projections for 2015

Business climate and balance-of-payment conditions in the first quarter of 2015

Uncertainty about future GDP growth

III. Economic policies

Monetary reform continues to be delayed, and new ‘noises’ are heard

Salary expansion and doubts about inflation data

IV. Key macroeconomic indicators

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POLL: CUBAN AMERICANS FAVOR OBAMA’S POLICY OVER RUBIO’S

Original Essay: Cuban Americans: Obama over Rubio and Cruz zzzzzzz CUBA STANDARD

Bad news for Marco Rubio and Ted Cruz: Most Cuban Americans support President Barack Obama’s normalization policy with Cuba, suggests a poll published by Miami-based Bendixen & Amandi International on Dec. 17, the anniversary of the normalization announcement by the presidents of the United States and Cuba.

The survey’s results suggest that presidential candidates Marco Rubio and Ted Cruz, both Cuban American Republicans espousing hardline views of U.S.-Cuba relations, do not represent the majority views of the Cuban community in the United States.

According to the poll, a clear 56% majority support Obama’s normalization policy, 12% more than a year ago, and 53% of Cuban Americans would like to see the embargo lifted, 9% more than last year. The majority is larger among younger Cuban Americans: Sixty-six percent of those age 18-49 favor an end of U.S. sanctions.

Bendixen conducted the survey Dec. 14-16 among 400 Cuban Americans. Florida, a center for histórico exiles who have been driving the U.S. sanctions policy, polls less favorable for Obama’s policy than the rest of the United States. Only 41% of Cuban Americans living in Florida said they had a favorable impression of normalization policies, compared to 56% of Cuban Americans living elsewhere in the United States. Despite broad support for his policy, 52% of Cuban Americans said they would oppose a trip to Cuba by Obama.

The U.S. president announced this month that he would like to visit the island, on condition of progress by the Cuban government on human rights issues.

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CUBAN BASEBALL CRISIS: THE DOWNSIDE OF WARMING RELATIONS WITH AMERICA

The Economist, December 18, 2015

Original Essay: Cuban Baseball Crisis

zzzzThe Havana Sugar Kings of the old International League, circa 1956

LOOK for the Che Guevara mural on a pitch-black street corner in Lawton, a run-down district on the outskirts of Havana. Turn left, walk up the concrete steps and give the password (today it’s “I sell green dwarfs”). Inside, around 20 Cuban men sit silently. Despite the humidity, the ceiling fan is still, allowing puffs of sweet tobacco smoke to hover in the flickering fluorescent light. The newcomers are asked for a “solidarity contribution” of 25 Cuban pesos, or $1. After the customary first drops are spilled to sate the thirst of the saints, a $3 bottle of clear rum makes its way around.

It could easily be a clandestine political gathering. But this group has far more important business: the first game in the Major League Baseball (MLB) semi-final series between the Kansas City Royals and Toronto Blue Jays. For half a century after Cuba’s revolution in 1959, the island’s sports fans knew little of professional leagues beyond their shores. But today, thanks to the internet’s belated arrival and a wave of Cuban players defecting and starring in MLB, in-depth knowledge of American baseball is a badge of honour for baseball-loving Cubans—that is, nearly all the men and plenty of the women, too. “You didn’t know Kansas City won? You’re an embarrassment,” one attendee teased a friend during the ride to Lawton in an exhaust-spewing 1950s taxi, whose shock absorbers were no match for the area’s cavernous potholes.

The easiest way for Cubans to follow MLB in real time is at hotel bars in Vedado, a central Havana district packed with middle-aged American tourists taking advantage of the recent relaxation of travel restrictions. But few Cubans can afford a beer priced in dollars. And if a woman happens to be running a shift at the bar, locals say, there’s always a risk she will put a soap opera on the TV instead. So baseball fans gather in speakeasies like this decrepit flat, whose owner has managed to acquire an illegal satellite broadcast signal and hook it up to his 1980s Japanese television.

The group try to keep quiet, lest the neighbours snitch to the local Committee for the Defence of the Revolution (a network of government informants in every town). But they are rooting for the Royals because of the team’s first baseman, Kendrys Morales, who fled Cuba on a raft in 2004 after serving several stints in jail for his seven previous failed escape attempts. Every time he comes up to bat they allow themselves a muffled cheer. A round of high-fives follows Kansas City’s 5-0 victory.

The next day a big game is scheduled in the domestic baseball league, at Havana’s rickety 55,000-seat Latin American Stadium. It pits the hometown Industriales, Cuba’s answer to the New York Yankees, against a visiting club from nearby Matanzas. A few years ago the stands would have been packed. But today the outfield bleachers are empty, and only the rows of seats closest to the action appear even half-full. Bored-looking police drag on cigarettes. A group of hometown fans tries to rouse the crowd by blaring on hand-held air horns, but it is well short of critical mass.

One reason for the apathetic mood is that the government has banned alcohol sales in stadiums to stop fights. A bigger problem is the poor quality of the play. Last year 11 Industriales players left for the United States; Matanzas lost ten. Only the weaker players remain, and they are demoralised: runners seem content to jog around the basepaths, and fielders let the ball skip past them on difficult plays. In recognition of the depleted rosters, the Cuban league now disbands half of its teams at mid-season and shares their players among the eight clubs that are doing best.

Today’s game is painfully lopsided, as the Matanzas hitters pound the Industriales starting pitcher for seven runs. The biggest attraction is Rey Ordóñez, who defected in 1993, played in MLB for nine years and is catching a game on a visit home. Fans pose with him for pictures. “It’s very hard for the team,” says Lourdes Gourriel junior, the 21-year-old shortstop for the Industriales, following his team’s defeat. “It’s weird seeing someone on TV [in MLB], and just yesterday they were here with you. But that’s everyone’s individual decision. We’re still friends with those who left.”

South American football fans are accustomed to their countries’ brightest sporting stars decamping to richer European leagues. But for Cuban baseball fans the exodus is new. Less than a year after the United States and the government of Raúl Castro, Fidel’s younger brother and successor, announced they would re-establish diplomatic relations, this brawn drain is the most visible consequence of rapprochement with the yanquis, and an indication of what might be lost as the Cuban economy liberalises.

BOTTOM OF THE NINETEENTH CENTURY

Although baseball originated in the United States, the sport arrived in Cuba during its infancy in the 1860s. Within a decade of the first recorded match on the island, Cuba had established the first professional league outside America and put its adopted national game at the service of political aims: the league’s organisers funnelled its profits to guerrilla groups fighting for independence from Spain, and the movement’s spies posed as baseball players when shuttling messages and funds to and from supporters in the United States. “Baseball is more Cuba’s national pastime than it is America’s,” says Roberto González Echevarría, the author of a history of Cuban baseball. “It was considered modern, democratic and American, while the Spaniards had bullfighting, which was retrograde and barbaric. It’s as if the American Founding Fathers had been wielding Louisville Sluggers [an iconic brand of bat].”

After Cuba gained its independence in 1902 baseball became one of its principal means of exercising soft power. It was Cuban athletes, not American soldiers, who spread the sport across the Spanish-speaking Caribbean, helping to form a shared cultural identity with the Dominican Republic, Puerto Rico, Venezuela and eastern Mexico, and earning the Cuban players the nickname the “apostles of baseball”. And it was baseball players who became the best-known Cubans in the United States. Of all the MLB players born in Latin America who started playing before 1959, two-thirds were Cuban, even though most of the island’s stars were black and banned from MLB until the league’s colour barrier was broken in 1947. (In 1912, in response to inquiries about the lineage of two olive-skinned Cuban players, the Cincinnati Reds conducted an “investigation” which declared them “two of the purest bars of Castilian soap [that] ever floated to these shores”.) During the same period Cuba was putting black and white talent on the same fields in its racially integrated winter league, establishing the country as an exemplar of moral leadership in sports.

After Fidel Castro (pictured, swinging) took power and became the island’s baseball-fan-in-chief, the sport’s tacit political role became explicit. He proclaimed athletes to be “standard-bearers of the revolution playing for the love of the people, not money”. He banned professional sports and founded the National Series, a wildly popular amateur league in which each province fielded a team of players from its territory. He also established a formidable player-development system, with scouts identifying talented children and academies to train them once they became teenagers.

American fans, who then, as now, paid attention only to MLB, were unaware of the stars Cuba was producing, since they never played for a team in the United States. But Cuba’s athletic assembly line yielded a national team that dominated the weak competition in international events like the Olympics (in which MLB players do not participate): from 1987 to 1997, the squad won 156 straight games. The elder Mr Castro made such successes central to his propaganda strategy. “The only way Cuba could raise its head in the world was in sports,” says Ismael Sené, who ran the sports department of the Communist Youth in the early 1960s. “There was a campaign against us from the outside, saying that we were all needy, that we didn’t have food. Well, look at our athletes!” The fact that baseball, America’s “national pastime”, was Cuba’s strong suit made each victory extra sweet.

Fidel Castro might be proud of Cuba’s ability to export baseball players, were they not going to America

But setting so much store by its baseball players left the government vulnerable to shifting geopolitics. In 1991 René Arocha, a pitcher in the national team, walked out of his hotel room during a tournament in Miami, made his way to his aunt’s house, and never returned, making him the first team member to defect in history. He had not been planning on playing baseball afterwards, because he had assumed that MLB players were far superior to Cuban ones. But after connecting with a Cuban-born agent, he was given an MLB contract with a six-figure salary, and the next year became the St Louis Cardinals’ second-best pitcher.

After Mr Arocha had proved that Cuban players were of MLB quality, and the fall of the Soviet Union plunged Cuba into a “special period” of unprecedented poverty, more defectors began to leak out. Two half-brothers, Liván and Orlando Hernández, left the island separately in the 1990s, one at a tournament, the other on a rickety boat. Both played starring roles for World Series champions in their first years in MLB, providing Miami’s Castro-hating exiles with a remarkable narrative about the risks Cubans will take for a taste of freedom and the chance to play America’s game. To reduce the risk of further defections, the Cuban team put its players under tight surveillance whenever they travelled abroad, making their national treasures feel like prisoners and encouraging more defections.

SQUEEZE PLAY

The government responded to early defections with stoicism. “When one leaves, another ten better players emerge,” Fidel Castro once said. But in the past few years, the trickle of defections has become a torrent. As recently as 2007 there were just ten Cubans in MLB. Today there are 27. And whereas some of the early defectors had undistinguished careers, the current crop is aking an impact that, were it to occur anywhere but in the reviled United States, Fidel Castro would probably regard as his greatest accomplishment. Yoenis Céspedes, a burly outfielder with a pronounced uppercut swing, single-handedly powered the New York Mets to the World Series this year. His deadly accurate throws to home plate from distances of 300 feet (91 metres) or more have earned him the nickname the Cuban Missile. José Fernández, who fished his mother out of the ocean after a wave swept her overboard during their escape to Mexico when he was 15, is the toast of Miami’s Little Havana for his unhittable array of blazing fastballs and knee-bending curves. Aroldis Chapman holds the record for the fastest pitch in MLB history at 105 miles (169km) per hour. At the “Esquina Caliente” (Hot Corner), a bench in a downtown Havana park where die-hard fans have gathered daily for decades to talk baseball, the regulars today come prepared with the latest statistics on how Cuban players—and even the American-born children of Cuban exiles—are performing in MLB. They use websites like CubanPlay, a new, locally run site, by connecting their phones to public hotspots accessible with $2-an-hour Wi-Fi cards.

Major-league success has been accompanied by major-league riches: the 27 Cuban MLB players earn an aggregate annual salary of $100m. As the rewards have grown, a sophisticated infrastructure to smuggle more players has built up. Almost all recent defectors have escaped with the help of sinister human-trafficking syndicates. These hire boats to bring players to nearby countries, bribe the Cuban coastguard to let them depart, and Dominican or Mexican authorities to grant residency papers, pay tribute to organised-crime groups for the right to operate on their turf, and hold players hostage until they sign an MLB contract and provide a return on the gangsters’ investment, perhaps from their signing bonus. Yasiel Puig, a star right fielder, was held at a motel in Mexico’s Yucatán peninsula for months while his captors, associated with the fearsome Zetas mafia, argued over payment. Leonys Martín, an outfielder, was held at gunpoint in Mexico and forced to sign a contract in which he promised to pay 30% of his earnings to a front company; his smugglers are now in a Florida jail.

Since Raúl Castro became Cuba’s president in 2006, he has cautiously tried to relax state controls. But the defections have forced the pace when it comes to baseball. In 2013 Cuba said it would allow athletes to play professionally in foreign leagues—if they paid a 20% tax and returned for international tournaments and the winter National Series. A handful have gone to the Japanese league in the summer and earned seven-figure salaries.

Both MLB and the Cuban government now say they want a “normalised” system, in which Cuban athletes can travel to America legally and safely, play for MLB teams on a work visa and return home in the off-season. Antonio Castro, one of Fidel’s nine acknowledged children, an international baseball official and the national team’s doctor, has publicly called for such a change.

In an echo of the 1970s “ping-pong diplomacy” in which table tennis helped restore relations between the United States and China, MLB is encouraging a thaw between Havana and Washington. It has applied for an American government licence to do business in Cuba, is sending former players on a pre-Christmas goodwill tour of the island and is trying to organise an exhibition game in Havana featuring one of its teams next March. Meanwhile, Cuban baseball stars are giving Americans a new perspective on a country many perceive as nothing more than a totalitarian dystopia.

Yet the defections continue, for two reasons. The first is that the Cuban baseball authorities’ proclamations that players are now “free to go” ring hollow. It is the government, not athletes, that determines who can leave and for how long, to which country and team, and how much they will be paid. It generally selects older stars who have shown loyalty to the regime.

The second is the continuing influence of ageing “cold warriors” in the United States. Although Barack Obama has streamlined much of the bureaucracy required to authorise contracts with Cuban players, they must still establish residency outside Cuba and sign an affidavit saying that they “do not intend to, nor would [they] be welcome to, return to Cuba”. And America’s trade embargo, which can only be lifted by Congress, bans transactions with the Cuban government. That precludes any arrangement in which athletes would pay a modest tax on their foreign earnings in recognition of the state’s investment in training them, just as the United States taxes its citizens on their worldwide income. Cuba’s requirement that its players working abroad also participate in the National Series and be available to the national team represents another stumbling block, since MLB clubs would never allow their stars to skip out for an international tournament during the season, or risk injury during a long winter campaign in Cuba.

 

Yet for all the Cuban government’s rhetoric about America’s athletic imperialism, it may have an unlikely ally in MLB on the issues that concern it most. Despite MLB’s reputation as a fiercely capitalist industry worth $9 billion a year, the game’s economic model has much in common with Cuban-style socialist principles. To maintain fans’ interest, MLB needs a competitive balance between its rich and poor clubs. It accomplishes this by levying a tax on teams with high payrolls, and via an annual draft that routes the best young players to losing franchises. Cuban players aged over 23 with at least five years in the National Series are exempt from these rules. That enables them to auction their services to the highest bidder, undermining MLB’s carefully calibrated system of economic redistribution and reducing club owners’ profits. As a result, MLB is likely to advocate a tightly controlled system of acquiring Cuban players, rather than a free-for-all.

Moreover, MLB clubs and agents are already warning that after so many defections, the Cuban baseball pipeline is running dry and will need to be replenished. At the Premier 12, an international tournament held last month in Taiwan and Japan, Cuba finished an embarrassing sixth. The unique baseball culture Cuba has developed over 50 years of isolation has proved to be a formidable manufacturer of outstanding players. The Dominican Republic and Venezuela serve as providers of raw athletic material for MLB. Ordinary Cubans, by contrast, have grown accustomed to a remarkable closeness to world-class athletes, who play only for their home provinces and for almost no pay. “I’m just another fan,” says Reinier Reynoso, a 27-year-old pitcher for Industriales who is hanging out with the faithful outside the ballpark before a game. Fans and players “party together”, he says.

Since MLB has a keen interest in producing a new generation of Cuban superstars, it is reluctant to meddle with this potent combination of popular encouragement and state support. “We have no interest in going to Cuba and taking all of their players,” says Dan Halem, MLB’s chief legal officer. “We want Cuban baseball to thrive. We’re perfectly happy for Cuba to develop their own stars and keep them for a period of time. If they lose all their stars, fans will lose interest. There aren’t enough countries where baseball is played for this to just be a feeder for Major League Baseball.”

zzzzzzA recent friendly game

zzzzzWorld champions many times over

CASTRO AT BAT 1977

A Cuban baseball star

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CHINA AND CUBA: 160 YEARS AND LOOKING AHEAD

Mao Xianglin, Adrian H. Hearn and Liu Weiguang

Latin American Perspectives, November 2015

Original Essay: http://lap.sagepub.com/content/42/6/140.full.pdf+html

Abstract

Sino-Cuban relations have deepened rapidly since the beginning of the twenty-first century, propelled by both political ideology and economic interests. A shared commitment to socialism with “local characteristics” has enabled the pursuit of an unusually broad range of cooperative initiatives. These include Chinese investment in the Cuban nickel and oil sectors, educational and medical exchange programs, the development of tourism, and engagement with the Chinese diaspora on the island. Data from Chinese sources on these spheres of engagement reflect an attempt to address contemporary needs with a blend of state and market forces. The intensification of Sino-Cuban relations over the past decade poses no challenge to the United States; on the contrary, it opens new opportunities for trilateral cooperation.

Las relaciones sino-cubanos se han profundizado rápidamente desde comienzos del siglo XXI, impulsadas tanto por ideología política como por intereses económicos. Un compromiso compartido al socialismo con “características locales” ha permitido la consecución de una gama inusualmente amplia de iniciativas cooperativas. Éstas incluyen la inversión china en sectores cubanos de níquel y petróleo, programas de intercambio educacionales y médicos, el fomento de turismo, y la interacción con la diáspora china en la isla. Datos de fuentes chinas sobre estos ámbitos de interacción reflejan un intento de abordar necesidades contemporáneas con una mezcla de fuerzas estatales y del mercado. La profundización de relaciones sino-cubanas en recientes décadas no presenta ningún desafío a los Estados Unidos; al contrario, abre nuevas oportunidades de cooperación trilateral.

zzzChinese President Xi Jinping (L) is awarded Cuba’s Jose Marti Medal by Cuban President Raul Castro in Havana, capital of Cuba, July 22, 2014 [Xinhua]

 

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LET’S MAKE A DEAL: DOING BUSINESS IN CUBA

William M. LeoGrande, Professor at American University in Washington, D.C.

Original article here: Doing Business in Cuba

zzzzBy the first anniversary of President Barack Obama and Cuban President Raúl Castro’s decision to normalize relations last December 17, much had been achieved on the diplomatic front. But progress on the commercial front has been lagging, and unless both sides realize significant economic gains before Obama leaves office, the momentum toward lifting the embargo and fully normalizing relations could be lost.

The initial surge of excitement among U.S. businesses after December 17 was palpable: finally, an opportunity to enter a largely unexploited market, forbidden for half a century. In the past year, a parade of trade delegations has visited Havana. In April 2015, Democratic Governor Andrew Cuomo took a group of 20 New York business leaders. In September, Republican Governor Asa Hutchinson of Arkansas led an agricultural trade mission hoping to expand food sales. In November, Texas Governor Greg Abbott followed suit. Legislators and local officials led other trade delegations from Alabama, California, Kentucky, Illinois, Indiana, Louisiana, Missouri, New Mexico, North Carolina, Ohio, and Tampa, Florida.

In March 2015, the U.S. Agriculture Coalition for Cuba–a broad-based group formed after December 17 to promote agricultural trade–took 95 people to Cuba, including two former secretaries of agriculture. The U.S. Chamber of Commerce launched the U.S.-Cuba Business Council representing over two dozen major corporations, including Caterpillar, Kraft Heinz, Sprint, Boeing, Home Depot, and American Airlines. In October, Commerce Secretary Penny Pritzker went to Cuba, followed in November by Secretary of Agriculture Tom Vilsack.

Cuba needs the trade and investment that U.S. businesses can offer, and Cuban leaders appear eager to expand commercial ties. Yet despite this enthusiasm, few deals have actually been signed. “Up until now it has been going down. looking around, and saying, ‘this is an interesting place, but how do I make money here’?” explained deputy assistant secretary of state Alex Lee at a forum on doing business with Cuba organized by The Economist.

The case of The Home Depot, Inc. illustrates both the opportunities and the obstacles. Some 90 percent of Cubans own their own homes, most of which are in desperate need of repair. Dilapidated structures dot the island, from houses in need of a new coat of paint to apartment buildings literally falling down.

One way Havana has tried to ease the housing problem is by letting people do it themselves. Tens of thousands of families have taken advantage of new government grants and loans to finance home renovations. In 2015, private owners and contractors built more new housing units than the state construction company. That boom translates into a huge demand for tools and building materials–and a huge business opportunity for Home Depot.

The giant home improvement retailer is clearly interested. It is a founding member of the new U.S.-Cuba Business Council, and regional export manager, Heriberto Correa, attended the council’s inaugural meeting held in Cuba during Havana’s International Trade Fair. The Obama administration’s new regulations specifically license the sale of construction materials for private buildings, so Home Depot could legally sell to private Cuban construction cooperatives, contractors, and private home-owners.

It could even rent or build a warehouse in Cuba’s new Special Development Zone at the port of Mariel, where imports are duty-free and new businesses enjoy a ten-year tax holiday. In fact, any U.S. business legally selling goods to Cuba could take advantage of the favorable terms available for establishing facilities in the Mariel zone. And if the Cuban government would allow it, the company could open its own retail outlets and import a fleet of delivery trucks to ship goods from the warehouse to the stores.

Yet when asked if Home Depot planned to enter the Cuban market, the company’s CEO Craig Menear replied cautiously. “Cuba is an area we’re watching carefully,” he said. “We know at some in time when the environment is right, there’s opportunity for The Home Depot to be there. But we believe that before we go in there, it needs to benefit the people of Cuba.”

Caterpillar is another company well-situated to enter the Cuban market. Obama has licensed sales to Cuba’s private farms and cooperative, which are in serious need of better equipment. Moreover, Caterpillar is no late-comer to the island: it first called for an end to the U.S. embargo in 1998, and in 2004 donated generators to Cuban hospitals. “Caterpillar wants to do business in Cuba,” said Bill Lane, senior director of global government and corporate affairs. “Everything Caterpillar makes in the United States is needed in Cuba.” The company hopes to open a dealership on the island, Lane told The Economist‘s Cuba Summit in December, but it has yet to sign any contracts.

So why has progress been so slow?

To be sure, there are difficulties in doing business with Havana. Cuba’s infrastructure– its roads, energy grid, and digital network– lags behind neighboring countries. Foreign companies must still hire labor through the state’s hiring agency. Cuba’s bureaucracy is notoriously slow to make decisions and opaque, making dispute resolution problematic. But, as David Pathe, CEO of Canada’s Sherritt Corp., one of the island’s largest foreign investors, put it, “There is nothing unique about Cuba”– these are the kinds of problems companies face in any new foreign market.

The larger issue making U.S. companies reluctant to enter the Cuban market is uncertainty on the U.S. side. Although the Obama administration wants to see U.S. businesses engage with Cuba to demonstrate the benefits of the president’s new policy, the regulatory changes made thus far still leave too many obstacles in the way. If companies are not absolutely certain that their business plan is legal, they will not take the risk.

Financial regulations are a particular problem. Finance is the life blood of commerce; if funds cannot be easily transferred between Cuba and the United States, business will remain negligible. Although U.S. regulations allow for fund transfers involving licensed activities, companies are terrified of inadvertently violating the rules and being hit with enormous fines.

For example, it took months for the State Department to find a bank willing to handle accounts for Cuba’s diplomatic mission in Washington because the costs of regulatory compliance far outweighed the profit. Stonegate Bank in Florida finally agreed to do it because, as CEO David Seleski put it, they regarded it as a “moral obligation” to help re-establish diplomatic relations. Earlier this month, the Treasury Department had to reassure U.S. banks that they could process fund transfers to Cuba involving authorized travel without themselves having to certify that the travel was, indeed, legal.

The ultimate solution to these problems is to lift the U.S. embargo in its entirety, but that is not likely to happen in an election year when Republicans control Congress. In the meantime, President Obama should issue another round of regulatory changes that clarify what can and cannot be done.

In the financial area, Obama could license U.S. businesses to provide credit to Cuban customers to stimulate nonagricultural trade (agricultural credits are prohibited by law). He could authorize Cuban banks to establish correspondence accounts with U.S. banks to facilitate payments to Cuban customers. Finally, he could issue a general license to U.S. banks to process dollar-denominated transactions conducted by foreign banks (so-called “U-turn” transactions) that must be processed through a U.S. financial institution.

President Obama’s opening to Cuba was historic, but to make it irreversible, the policy needs to produce results–especially in the field of commerce. The interest is clearly there on both sides, but the barriers are still formidable. The exceptions to the embargo that the president has authorized thus far are impressive and lay the groundwork, but they have not yet gone far enough to reassure U.S. businesses that they can safely enter the Cuban market without running afoul of U.S. law.

As Cuba’s economic reforms open the country to foreign trade and investment, U.S. companies risk being left behind as competitors from Canada, China, and Europe jump in ahead of them. Companies that enter the market early and build relationships with their Cuban counterparts stand to benefit the most in the long run. As Caterpillar’s Bill Lane, an aficionado of the seafood in Havana’s private restaurants, put it, “The first movers in Cuba get the lobster.”

 

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HOW CUBA IS, AND ISN’T, CHANGING, ONE YEAR AFTER THE THAW WITH THE U.S.

By Nick Miroff December 15 at 7:00 AM

HAVANA — No event in decades shook up Cuba like the announcement last Dec. 17 by presidents Obama and Raul Castro that their countries would begin normalizing long-broken relations. In the 12 months since, Cubans have witnessed scenes few expected to see in their lifetimes, or at least in the lifetimes of Fidel Castro and his brother, Raul.

A U.S. flag snaps once again in the sea breeze outside a U.S. embassy in Havana. Raul Castro and Obama held talks on the sidelines of a hemispheric summit in April. So many U.S. politicians, corporate executives, foreign leaders, tourists and celebrities have visited, that an island long known for isolation suddenly feels it is at the center of the world.

The psychological impact of these events, however, has far outpaced any physical one. So far, U.S. businesses have only completed a handful of new deals. Cuba remains the only closed, one-party state in the Americas, and if anything, normalization with Washington has left communist authorities increasingly anxious about dissent and more determined to stifle it.

Cuba is still very much the same country it was a year ago. And yet, not quite.

“For a lot of my friends who are university graduates, the news was positive, and we saw it as the beginning of a long and complicated process,” said Lenier Gonzalez, a founder of the group Cuba Posible, which advocates gradual reform. But for more of the population, “it produced an unrealistic expectation

That third group of Cubans heard in Obama’s words last Dec. 17 a cue to flee. They fear normalization will put an end to the immigration rules that essentially bestow residency and welfare benefits on any Cuban who reaches U.S. soil.

As many as 70,000 Cubans have left for the United States in the past year, in what appears to be the largest wave of migration from the island in decades.

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The Legal Emigration Route to the USA: Early Morning Queue outside the American Embassy, April 2015

The changes of the past year have set Cuban authorities on edge too, bringing an escalating crackdown on public protest or opposition activity.

Dozens, even hundreds of activists are detained or arrested each Sunday, when the Ladies in White dissident group attempts to march in Havana and another group, the Patriotic Union of Cuba, stages a weekly mobilization in Santiago, the island’s second- largest city.

Though the government generally no longer locks up dissidents for long prison terms, it increasingly relies on short-term arrests to block protests by activists it considers “mercenaries” at the service of foreign interests.

The illegal but tolerated Cuban Commission of Human Rights and Reconciliation tallied 1,447 political arrests or arbitrary detentions in November, the highest monthly total in years.

In an interview published Monday, Obama said that the United States would continue to support Cuban rights activists and that he was considering a trip to the island — but on the condition that he can meet with dissidents. “If I go on a visit, then part of the deal is that I get to talk to everybody,” he said, in an interview with Yahoo News.

“Our original theory on this was not that we were going to see immediate changes or loosening of the control of the Castro regime, but rather that over time you’d lay the predicates for substantial transformation,” said Obama, whom surveys show is a widely popular figure on the island.

Cuban officials this year have tried to push back at public perceptions that Obama is a friend and the United States is no longer a threat or a foe. Relations will not be truly normal, they insist, until Washington lifts its trade embargo, closes the U.S. Navy base at Guantanamo Bay and makes reparations for a half-century of economic sanctions and other grievances.

Yet the rivalry has morphed from hostile confrontation into something more sportsmanlike: a low-intensity contest to set the pace of change, with Washington trying to move faster and Cuba preferring slow, cautious steps.

As Rafael Hernandez, editor of the Cuban journal Temas, put it: “We’ve traded a boxing ring for a chess board.”

For all its revolutionary slogans and lore, Cuba can be a profoundly conservative place, in the strict definition of the term. It is a country where the television programming, food rations and newspaper editorials seem to remain the same, year in, year out. This drives young Cubans crazy. But the continuity is a comfort to some, not least the communist party elders who have ruled for 57 years.

Raul Castro, 84, has pledged to step down in February 2018. Obama has 13 months left in office. That leaves a narrow window for the two men who charted the normalization course to see it through.

Rarely does a week go by without some new chess move. The Obama administration in May took Cuba off the list of state sponsors of terrorism, paving the way for the countries to formally reestablish diplomatic ties in July.

The two countries have signed new agreements on environmental cooperation. They’ve enhanced anti-narcotics enforcement. Direct mail service is set to resume on a trial basis. U.S. and Cuban officials have even started discussing their oldest grievances, opening negotiations to settle billions in U.S. property claims and Cuban counter-claims.

The U.S. secretaries of agriculture, commerce and state have all visited Havana in the past year, along with dozens of U.S. lawmakers, adding up to the highest-level government contacts in decades.

A U.S. tourism tsunami still seems to be building. U.S. travel to Cuba increased by 40 percent since last December, according to industry estimates. Overall tourism to Cuba increased nearly 20 percent, bringing billions in additional revenue for the government.

“Our booking activity has been off the charts,” said Tom Popper, president of Insight Cuba, the largest U.S.-based provider of the licensed “people-to-people” travel permitted under U.S. law.

Most of the U.S. travelers have come to Havana, where a shortage of hotel beds has kicked off a scramble among Cubans and their foreign business partners to buy, renovate and rent properties. Each city block seems to have at least one crew of contractors patching cracks and applying paint.

A deal to reestablish regular commercial flights between the two countries is said to be imminent, with United, JetBlue, American Airlines and other U.S. carriers pledging to begin service as soon as they’re cleared by the two governments.

Cuba established a direct phone link with a U.S. company, IDT, and a roaming agreement with Sprint. It has set up nearly 50 outdoor WiFi hotspots at parks and boulevards across the island, where Cubans gather round-the-clock to chat with friends and relatives overseas.

But the initial Cuba excitement among U.S. companies has been replaced by something more “sober” a year later, said James Williams, president of Engage Cuba, a group lobbying to lift the embargo.

Williams said he knew of at least two-dozen U.S. companies that had submitted formal business proposals to the Castro government, aimed at taking advantage of more flexible rules. “I would imagine it’s probably in the hundreds,” he said.

The companies want to lease office space, build warehouses, dock cruise ships and ferries. Not one has gotten a green light so far, he said.

“Frankly I think the Cubans have been overwhelmed with a surge in interest and the decentralized nature of how that interest is coming to them, with companies calling them up, consultants coming to them, and not a lot of clarity about how to make a deal,” said Williams. “The non-responsiveness has slowed things down.”

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THE BUENA VISTA ECONOMIC EFFECT

A genre of music once sidelined as “A decadent relic of the past” that came back to “Rescue” *   the Revolution.

 By Anthony Smith, December 14, 2015

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Buena Vista Social Club, the musical phenomenon that initially captured the world’s attention around 1997, is in the midst of its final world tour. Although several of the stalwarts of the group have since passed away, the remaining members, along with an injection of new blood are giving fans a good show. The unlikely rise of these musicians came at the height of the special period, giving Cuban cultural tourism an unexpected boost when it was limping along following the collapse of the Soviet Union. Although Cuba has always punched above its weight in the area of music, this was the most improbable of scenarios at a time of utter desperation.

The success of Buena Vista on multiple fronts (CD, concerts and a documentary), led a lot of individuals across the world to visit Cuba. On the island, Cubans themselves knew little about Buena Vista, and the younger generations were largely indifferent to the music. Cuban musicians were initially surprised by foreign tourists requesting songs that they did not know, but they quickly caught on, learning songs like “Chan Chan.” There was also a boom in new groups forming to play exclusively for tourists, though it soon became obvious that they had a repertoire that was largely limited to the ones made popular by Buena Vista Social Club. They could play hits from the past like “Quizas, quizas,” but not “Me voy pa’l pueblo” or “La runidera” because they were not among those that the members of Buena Vista had included in their various albums.

Now largely unknown by many and overlooked by a few, is the reasoning that led these musicians into obscurity. Throughout history, revolutions have upended societies and sought to reshape them, and Cuba was no different. There is little doubt that Cuba needed a revolution in 1959. The existence of a mafia state, gambling, rampant corruption, abject poverty, drugs and prostitution created conditions ripe for sweeping change. As relations with the US deteriorated, Cuba entered a degree of isolation, defections and a looming cold war that changed everything internally. Music, art and culture were soon expected to toe the party line. The worst times were in the so called “El quinquenio gris,” a five year gray period (1968-73) where there was severe repression in the arts and culture. The air of uncertainty led writers, poets, artists and musicians to play it safe in their work, for fear of running afoul of rules and regulations that were deliberately ill-defined to create an atmosphere of indecision and self- censorship.

Looking back, there is little doubt that the arts were unfair victims of this purge. State resources were directed towards other, newer forms of music. The individuals that had burgeoning careers in pre- Castro Cuban and remained in Cuba were sidelined as the revolution sought to create new sounds. Ruben Gonzalez said that he had not played a piano in well over a decade at the time he was invited to play for Buena Vista Social Club. Ibrahim Ferrer was for all intents and purposes retired, shining shoes to make some extra money. Compay Segundo had composed the song “Chan Chan” as early as 1987, but did not get the chance to record it in studio until 1995. This is not to say that Cubans were devoid of musical choices. A lot of new artists like Silvio Rodriguez and Pablo Milanes did emerge, as did forms of music like Nueva Trova and Timba, but their emergence came at the expense of the older musicians that had established careers in 1959.

A lot of criticism has been directed at the lack of authenticity of Buena Vista Social Club, and it’s over reliance on marketing and neo-colonial nostalgia for the past. However valid that criticism may be, when it comes down to the dollars and cents, Buena Vista beat Timba, Nueva Trova, Latin Jazz, Reggaeton and all others as a selling point. If anything, Cuba failed to fully capitalize on the Buena Vista craze at its peak over a decade ago. Commemorative and limited edition T-shirts, cups, rum, coffee and even cigars would have brought in additional millions in revenue from foreign tourists.

Finally, it should not be forgotten that Buena Vista Social Club happened in spite of, and not because of the Cuban revolution.

*The word “Rescue” is frequently used to describe attempts to resuscitate and rebuild various parts of Cuban society in the economic decline that followed the collapse of the Soviet Union.

Anthony Smith is an amateur Cuban historian and lover of all things Cuba. He has made his living as a consumer rights advocate, a professional fundraiser, a political activist and in the food service industry

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