• 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."

An Up-Date on Cuba’s Small Enterprise Reforms: “Ups and Downs of Self-Employment”

August 14, 2012 . Fernando Ravsberg. HAVANA TIMES

Original: Avances y vicisitudes de los trabajadores autónomos en Cuba

he Deputy Minister of Labor and Social Security, Jose Barreiro, explained to us that self-employment in Cuba is a “measure adopted while thinking of people coming from the overly staffed government sector as well as others who are not occupationally engaged.”

He was referring to those people who are laid off or are currently unemployed, though government officials always avoid using those terms. Nor do they like to deal with the issue of low wages, even though most people and President Raul Castro consider this a crucial issue.

Barreiro talked about greater flexibility in permitting activities that were previously banned and new approaches, such as urban cooperatives, but he confirmed that self-employment by university graduates will continue to be prohibited.

The deputy minister recognizes that the lack of products and supplies for the self-employed leads to black marketing and theft from the state. This is why he assures that supplies will continue to grow in stores, though they still haven’t opened wholesale markets – which he believes “would be ideal.”

According to Barreiro, the labor market structure will change over the coming years to an economy with “fewer government employees as they feed into the ranks of the non-state sector (as members of cooperatives, independent tenant farmers and self-employed workers).”

Slow growth

Deputy Minister Barreiro explains that “the main object (of self-employment) is that this becomes an employment alternative,” adding that “since October 2010 this sector has grown by 240,000 workers, bringing the total to 390,000.”

According to Barreiro, the growth in the number of autonomous workers is due mainly to “new permits being issued and the hiring of employees; currently there are 62,747 such employees,” a figure that indicates the success of some “self-employed workers.”

Among the independent workers, “Sixty-nine percent had no employment relationship at the time of applying for a license,” with that figure including the unemployed, pensioners and self-employed workers who exercised their trades illegally when those activities were prohibited.

The deputy minister said that though they lack reliable statistics, the fact is that only 31 percent of the self-employed come from government businesses or institutions. This situation is slowing the rate of layoffs, which needs to eventually lay off one million workers.

Barreiro asks for caution when people look at “the number of reduced personnel (layoffs), because in the ministry we believe that it is a sustained, attentive and organized process. Sometimes downsizing is associated only with the availability of workers (the number of laid off/unemployed workers) but this can also happen through increasing production without increasing personnel.”

More reforms

Barreiro agrees that the absolute number of self-employed workers “has not stopped growing, but the rate of growth is less” than in the beginning. He added that because of this, “self-employment will continue to become more flexible, within the country’s legal, zoning and health standards.”

“Now we’re working on designing structures for urban cooperatives, a form of organization that is different from that of the one for self-employed individuals (…) it will have much more flexibility (…) adopting a similar approach to that of the beauty parlors and barbershops that were transferred over to workers management.”

“There are many services that are currently provided by the state but that could be much more profitable if they were run by cooperatives, they would have much more room for success. We see a place for them in the economy,” explained Barreiro. But then he cautioned that this could not happen right away because “first you have to experiment so that when you advance you’re doing things right.”

He assured us that soon new models of independent work would also be initiated, ones that were previously prohibited. Among those authorized will be “sheet metal workers, iron workers, floor polishers, vendors of aluminum articles, flame-cutters, founders and marble masons.”

Scarcity and crime

The issue of the materials and supplies is the most serious one for self-employment. Authorization was given for independent carpenters, but wood isn’t sold to them. Sheet metal workers work without permission in front of everyone, despite it being known that they use oxygen and acetylene stolen from the government.

Barreiro maintains that “we must end this situation of illegal operations by creating legal mechanisms for purchasing products – for example, the types of gas used by sheet metal workers. Still, he insists that there will be no wholesale markets, though he recognizes that this would be ideal.

He claims that, “We’re clear that the solution is to increase supply,” adding that “now there are materials and inputs in stores; though these are not everything that people need, the supply is increasing. This will continue until the conditions exist for the transition to wholesale markets.”

The other major obstacle that’s confronted is the lack of start-up capital, since banks hardly ever make loans to stimulate business development. According to Barreiro, the main problem is that they still haven’t found ways to ensure that people will pay back their loans.

(*) An authorized translation by Havana Times from the Spanish original published by Cartas Desde Cuba


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Foreign Business in Cuba: Beware the Dangerous Embrace: Havana is at the same time attracting and terrifying entrepreneurs

by Nancy Macdonald and Gabriela Perdomo

Original Article is located here: Maclean’s Magazine, August 8, 2012

Until this spring, Stephen Purvis had it all. The British architect, who’d helped launch the Saratoga, Cuba’s poshest hotel, was one of the more prominent figures in Havana’s business community. As chief operating officer of Coral Capital, one of Cuba’s biggest private investors, he was overseeing a planned $500-million resort in the sleepy fishing village of Guanabo. The Bellomonte resort, which would allow foreigners to buy Cuban property for the first time, was part of Havana’s ambitious, multi-billion-dollar plan to attract high-end tourists and badly needed foreign exchange. Everything he touched seemed to turn to gold. The musical Purvis produced in his spare time, Havana Rakatan, had a run at the Sydney Opera House last year before moving on to London’s West End. But in April, the 51-year-old was arrested on suspicion of corruption as he prepared to walk his kids to school in Havana.

Purvis’s arrest could have been anticipated. Coral Capital’s British-born CEO, Amado Fakhre, has been held without charges ever since his arrest in a dawn raid last fall. The investment firm is being liquidated, and both men have faced questioning at Villa Marista, Cuba’s notorious counter-intelligence headquarters. They are not alone. Since last summer, dozens of senior Cuban managers and foreign executives, including two Canadians, have been jailed in an investigation that has shocked and terrified foreigners who do business in the country.

Since replacing his brother Fidel as president in 2008, Raúl Castro has painted himself as a reformer, and Cuba as a place where foreign businesses can thrive. Over the last year, he has relaxed property rights, expanded land leases and licensed a broad, if random, list of businesses—everything from pizza joints to private gyms. And he’s endorsed joint venture golf courses, marinas and new manufacturing projects. Canadians are chief among those heeding Raúl’s call to do business with Havana. Hundreds have expressed interest in the Cuban market in the last year alone, according to Canada’s Trade Commissioner Service. Flattering reports in Canadian media have praised Raúl’s efforts. Yet they seem to overlook troubling signs that Cuba appears to be moving backwards.

Raúl’s sweeping changes were meant to pave the way for massive foreign investment in Cuba. The country, which was forced to lay off 20 per cent of its public workforce last year, is barely as developed as Haiti, and will need an influx of foreign cash to stay afloat. There is urgency to the project. Time is running out for Venezuelan President Hugo Chávez, Cuba’s benefactor, who funds the country to the tune of $10 billion a year, says José Azel, a University of Miami research associate. At home, Chávez, who is sick with cancer, is also fighting off a tough challenge from Henrique Capriles in presidential elections slated for October. His successor will almost certainly cut Cuba’s generous aid package to deal with Venezuela’s own needs.

So a strange incongruity exists in Cuba today: Havana is bending over backwards to attract foreign currency at the same time it is imprisoning some of its biggest Western investors. For all Cuba’s reforms, this Castro appears to be as intent on maintaining an iron grip on the country as the last one.

Few are more keenly aware of the pitfalls of doing business in the new Cuba as a pair of Canadians sitting in jail in Havana. It has been more than a year since Sarkis Yacoubian, the president of Tri-Star Caribbean, a trading firm with headquarters in Nova Scotia, was detained in the Cuban capital. And September will be the one-year anniversary of the arrest of Cy Tokmakjian, the president of a trading company based in Concord, Ont. He and Yacoubian have both been imprisoned without charges. Their assets now belong to Cuba. No trial date has been announced.

Both Yacoubian and Tokmakjian ran well-established businesses in Cuba, had years of experience in the country, and multi-million-dollar contracts with several government ministries. Yacoubian imported the presidential fleet of BMWs. Tokmakjian, who’d been in Cuba for more than 20 years and did $80 million in annual business there, had the rights to Hyundai and Suzuki, which are used by the country’s police.

So far, Raúl has scared off more joint ventures than he has attracted, jeopardizing the investment Cuba needs to succeed. Spanish oil giant Repsol quit the country in May. Canada’s Pizza Nova, which had six Cuban locations, packed its bags, as did Telecom Italia. The country’s biggest citrus exporter, BM Group, backed by Israeli investors, is gone. A Chilean who set up one of Cuba’s first joint enterprises, a fruit juice company, fled after being charged with corruption last year. He was convicted in absentia. Shipping investors are pulling out, even as Cuba prepares to open a new terminal on the island’s north coast.

Experts say Raúl’s crackdown is an attempt to reassert control. By targeting the biggest names in the business community, he’s sending a message, says Azel. “Raúl doesn’t want to be Gorbachev,” the Soviet statesman who brought down Communism in the former Soviet Union. “He wants to be the guy who makes socialism work.”

Yet as detentions pile up it remains unclear what exactly the jailed Canadians and Britons have done, or what the regime means by clamping down on corruption. “Cuba’s version of what is legal and proper is different from the rest of the world,” says Ted Henken, president of the Washington-based Association for the Study of the Cuban Economy. Even sales commissions are viewed as corrupt, says Yoani Sánchez, a Havana-based journalist. Foreign companies can’t pay their Cuban employees any more than the standard wage, about $20 a month, says Sánchez—barely enough for two weeks’ living in poor conditions with a poor diet. Many foreign bosses routinely top up pay with bonuses and commissions, which Havana considers bribery. For years, says Henken, corruption was the grease that made wheels turns. “You got what you needed to live from what was thrown off the back of the truck.”

It is not clear whether the detained Canadians are facing charges for salary top-ups, for example, or for legitimate corruption allegations. Canada’s Foreign Affairs department would only confirm that “consular services are being provided to two Canadian citizens detained in Cuba.” Executives at Tri-Star Caribbean and members of the Tokmakjian family declined comment, citing the “extremely sensitive” nature of the situation.

Azel’s advice to potential Canadian investors? Stay away. “You’re defenceless. There’s no independent judiciary to adjudicate any kind of claim,” he says. “Doing business with Cuba is a very risky proposition.”

So then why all the new resorts and planned golf courses? Why do so many Brits and Canadians take the personal and business risk? Because it’s widely believed that the days are numbered for the U.S. travel ban on Cuba, which has barred Americans from visiting the island for almost three decades. Predictions for tourism growth are off the charts—up to six million annual visitors, from two million today, says Gregory Biniowsky, a Canadian consultant who’s lived in Cuba for two decades. Cuba’s boosters believe the country, with its vast, undeveloped white sand beaches, just 45 minutes by plane from Florida, could come to rival Jamaica or the Dominican Republic as a tourist draw. “It’s just a matter of time before things boom here,” says Biniowsky. Five billion barrels of oil lie under Cuba’s waters, according to the U.S. Geological Survey. To some, getting in on the ground floor is worth the risk. But foreign investors who lose sight of the dangers could find themselves in serious trouble.

The old Royal Bank of Canada Building in Havana. The interior of the building is below.

Photos by Arch Ritter, April 2012

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Pavel Vidal Alejandro: “Microfinance in Cuba”

Below is a Power Point Presentation on Cuba’s rapidly evolving microfinance system prepared for the “Seminar on Prospects for Cuba’s Economy” at the Bildner Center, City University of New York, on May 21, 2012 by Pavel Vidal Alejandro. To my knowledge this is the first such analysis to appear for the Cuban case.

Unfortunately for the Centro de Estudios de la Economía Cubana (CEEC) de la Universidad de La Habana, Dr. Vidal has just left for Pontificia Universidad Javeriana of Cali, Colombia, where he will be a professor of macroeconomics. He apparently left on good terms with CEEC and, fortunately,  will continue his work on the Cuban economy. \

The full presentation can be found here:   Pavel Vidal: Microfinance in Cuba


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Cuba: When Bureaucrats Attack

Cuba: When bureaucrats attack

The abrupt closing of a popular Havana business tests Raul Castro reforms.

Ulises Aquino

Original here:  Cuba: When Bureaucrats Attack

Nick Miroff, July 31, 2012 08:44

HAVANA, Cuba— In the new Cuba, the one President Raul Castro and his team of reformers say they’re building, the hard-working entrepreneur is a patriotic figure, a job-creator who’s helping to lift up the island’s feeble economy.

That’s the Cuba where Ulises Aquino thought it would be a good idea to start a business.

With funds earned abroad as an award-winning opera singer, Aquino opened a restaurant and cabaret last year where the company he founded, Opera de la Calle (Opera of the Street) could perform.

He called it “El Cabildo” (roughly, the “meeting place”), transforming a trash-strewn lot into a lively entertainment venue, with an open-air stage, restaurant and bar. Aquino offered free children’s theater and other community activities on weekend mornings, and kept his prices low, charging $2 admission to Opera of the Street shows that feature as many as 80 singing-and-dancing performers.

Aquino was a good socialist businessman too, sharing profits with his 130 employees and paying wages that were three or four times the $20 average monthly Cuban government salary.

More from GlobalPost: Cuba mute in the time of cholera

El Cabildo was so innovative that Aquino and his new model of socialist enterprise were featured in a July 12 Reuters article titled “In Cuba, an opera singer builds an empire.”

And that’s when the bureaucrats attacked.

“It may have been the last straw,” said Aquino, of the article. “But they had their eye on me for a while.”

The following Saturday night, on July 21, a team of city government inspectors arrived at El Cabildo and interrupted the show, “like a team of commandos,” said Aquino, a barrel-chested bulldog of a man, who trembled with anger as he re-told the story.


The inspectors ordered Aquino off the stage as the audience looked on in shock. Then they shut down the kitchen and froze the cash register for a four-hour inspection.

By the following Monday El Cabildo was closed and Aquino had an order from local Havana officials stripping him of his business license for two years.

The inspectors had determined El Cabildo to be in possession of “more chairs than the permitted number,” and “products whose origin could not be determined” – ie lacking receipts. Two prep cooks who Aquino says were there on a trial basis were found to be “illegal workers.”

Worst of all, Aquino was accused of “enrichment” because he was charging a $2 cover “for personal benefit,” something he was not specifically authorized to do—even though entertainment venues all over Havana routinely charge $5 to $10 at the door.

There was no fine, no appeals process, no legal recourse. It didn’t seem to matter that Aquino had more than $100,000 of his savings invested in the business, or that 130 families would lose their income.

This was the old way in Cuba, where bureaucrats rule.

More from GlobalPost: Cuba’s gay rights revolution

Aquino, for one, doesn’t blame Raul Castro. “This goes completely against everything that the government has been telling us,” he said.

“The people who are behind this are the mid-level bureaucrats who know the status quo is endangered by all these new opportunities that offer a change from all the old taboos and prohibitions,” said Aquino.

On Monday, officials from Cuba’s Ministry of Culture issued a statement offering their support for Aquino’s Opera company and its ability to continuing performing at El Cabildo. But they said nothing about his dispute with city authorities and the fate of the businesses that make Opera of the Street possible.

“This place is dead right now,” said Ruben Rodriguez, the opera company’s choreographer, covering up the sound board and lighting controls opposite an empty stage. “Everything’s paralyzed.”

The fate of El Cabildo will be closely watched in Cuba, where Raul Castro’s economic reform process has lost momentum in recent months and Cubans’ initial enthusiasm for starting small businesses has faded.

Officials announced a new pilot program last week that will convert state-run companies into employee-run cooperatives, but the experiment will be limited to just 222 firms.

Meanwhile, a vast state apparatus of government officials who produce nothing of value remain ready to prey upon those who do.

Castro and other Cuban officials have repeatedly said that recalcitrant bureaucrats will not be allowed to stand in the way of economic change. If they intervene to help re-open El Cabildo, they will send a clear signal that Cuba’s new small businesses deserve encouragement, not strangulation.

But if El Cabildo stays closed, it can send a different message about Cuba’s incipient capitalism in Cuba: that new entrepreneurs here should not be too ambitious with their plans or too proud of their success. And any business, no matter how big, can be shut down on a whim, if a local official orders it so.

In that case, Aquino said, “the loser here won’t be me. It’ll be our country.”

Opera de la Calle

See also Havana Times July 27, 2012,  Cuba Closes ‘Street Opera’ Project

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Yoani Sanchez on Raúl Castro’s 26th of July Speech: “The Table Is Set for the United States”

Original article from Huffington Post  here: Raul Castro’s 26th of July Speech, 2012

On Thursday morning, the 26th of July was celebrated in Gunatanamo province. The 59th anniversary of the assault on the Moncada and Carlos Manuel de Cespedes barracks went according to script with no great surprises. In Mariana Grajales Plaza in this eastern city, members of the government, local authorities and thousands of local people gathered. The main speech was delivered by José Ramón Ventura, first vice president of the Councils of State and Ministers. His words were marked by calls for anti-imperialism and calls for efficiency.

He delivered them like a man of the old guard, an octogenarian leader emphasizing the need to meet production plans and insisting on the Guidelines of the Sixth Communist Party Congress. His allocution was free of announcements, although popular rumor suggested — weeks in advance — the possibility of a decree regarding travel and emigration reform. A change longed for by Cubans who could travel outside the island without needing a permit to leave, what we call the “white card.”

Instead, the statements made at the ceremony focused more on the continuation of the current process. Only in the final minutes did Raúl Castro take the microphone and improvise a speech. From experience, Cubans know that unscripted words are often the most momentous. The general boasted that the ceremony had lasted only “55 minutes,” a clear contrast to the long events organized in the past by his brother, Fidel Castro.

He also stressed the need to raise productivity, without which it will not be possible to improve the current wage scales. Historical references also salted his time in front of the microphone. Meanwhile, the sun rose in the sky over one of the hottest areas of the country and the people remained standing before the words of the current president. This was the first 26th of July that was commemorated under the new rules of the Raúl regime, with the site chosen not in a contest between provinces but in their geographical order. The 60th anniversary, next year, will take place in Santiago de Cuba, where the Moncada Barracks is located.

The most controversial statement in Raúl’s speech was that if the United States wants “to talk, the table is set… If they want to talk about the problems of democracy, of freedom of the press, of human rights… we will discuss it… but under conditions of equality,” affirmed the man who for almost 50 years was minister of the Armed Forces.

This assertion comes at a time when the opposition has lost, physically, one of its main leaders, the layman Oswaldo Payá. Many of the dissidents surveyed by this writer for El Pais newspaper, expressed their displeasure with the fact that the Cuban authorities are disposed to talk about internal matters with a foreign government and not with the nonconformists in their own backyard.

But this is not the first time the current Cuban president has spoken of a possible dialog with his neighbor to the north. In reality, however, the official discourse continues to feed off confrontation with the White House.

This was, without a doubt, a 26th of July that will pass with neither pain nor glory.

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Mark Frank: “Cuba broadens economic reforms, plans new measures”

By Marc Frank

HAVANA | Thu Jul 26, 2012 8:07pm EDT

(Reuters) – Cuba adopted a new tax code this week and said it would loosen regulations on some state companies while turning others into cooperatives, as one of the world’s last Soviet-style economies moves in a more market-friendly direction.

The plans were announced at a session of the National Assembly, which passed the country’s first comprehensive tax code since the 1959 revolution on the communist-ruled island. Foreign journalists were barred from Monday’s meeting, only portions of which were later broadcast by the official media.

President Raul Castro, 81, has liberalized regulations for small businesses and farming, and begun leasing small state retail outlets to employees since taking over for his ailing older brother Fidel in 2008. But he now appears ready, says Cuba expert Phil Peters, “to put some meat on the bone.”

Marino Murillo, head of the Communist Party commission responsible for implementing reforms approved at a party Congress last year, characterized the tax law as providing the basis for ““bringing up to date the economic model,” while releasing few details of the code.

The new law takes effect next year and is scheduled for publication next month.

Castro’s point man for reform said it would gradually replace an old Soviet-style system and eventually require everyone to pay income and property taxes for the first time since the 1960s.

Murillo, in a two-hour presentation to the National Assembly, announced that an unspecified number of state companies would be partially deregulated by the end of the year. He said the companies, previously part of various ministries, would be able to make day-to-day business decisions without waiting for government approval, manage their labor relations and set prices. After meeting state contracts, they will also be able to sell excess production on the open market. The companies will be self-financed, including through bank credits, and expected to cover their losses, versus handing over all profit to the state and receiving financing and subsidies from the treasury. Instead of being micro-managed by the ministries, Murillo said the companies would be evaluated by “four or five indicators” such as earnings, the relation of productivity to salaries and their ability to meet the terms of state contracts.

Murillo also announced that 222 small to medium-sized state businesses were preparing to become cooperatives, ranging from restaurants and produce markets to shrimp breeding and transportation. The cooperatives will lease state property and equipment at 10-year renewable intervals, operate on a market basis, pay taxes like other companies and divide profits among members as they see fit, Murillo said.


“They have been rolling things out one by one on a slow but steady timetable and my guess is they will continue to do so. It’s a timeline that goes to 2015,” Peters, a vice president of the Virginia-based Lexington Institute, said. “Now they are getting to the things that really have the ability to increase the size of the private sector and create the savings in the state sector that they say are their targets,” he said.

Cuba, with a foreign debt of more than $22 billion according to Reuters’ estimates and still mired in a post-Soviet crisis after 20 years, has no choice but to change its inefficient ways, government insiders say.

Marino said as much during the National Assembly meeting. “We are not calling for turmoil … but the reality of life shows we cannot maintain (a command economy),” he said.

The five-year reform plan calls for moving from government administration of just about the entire economy to managing it through “”indirect” means such as taxes and bank credits.

Most retail services and minor production and farming are scheduled to go over to a “”non-state” sector that will account for more than 40 percent of the labor force, compared with the current 15 percent.

At the same time, the Communist Party plans to move away from a paternalistic state system of collective work and consumption to one where individual effort is better rewarded. Across the board subsidized goods and services are to be replaced by targeted welfare.

Castro, who closed the National Assembly meeting, said the new measures would “”permit the state to forget about the administration of a set of secondary services and productions and concentrate on improving the management of the basic means of production which will remain as socialist state companies.”

Murillo also announced that the government would lease to its employees more than 1,000 small cafeterias, following in the footsteps of barbershops, hairdressers and a host of other minor services let go over the last few years. The former state establishments now must compete head to head with a burgeoning small business sector of more than 300,000 mom-and-pop operations, including restaurants and other small companies.

Murillo said the new tax code would cut small business taxes on average by between 3 and 7 percent and provide other benefits for start-ups, such as eliminating the labor tax for those with five employees or less. The new law will also benefit small farmers, he said.


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Dissidents arrested at Paya funeral in Cuba

Radio Netherlands Worldwide, July 24, 2012

Cuban police arrested dozens of dissidents Tuesday after the funeral of Oswaldo Paya, a political activist whose sudden death in a road accident triggered grief and suspicion, AFP reporters said. Those arrested included Guillermo Farinas, a leading rights activist, who was held for questioning by plainclothes police deployed outside the Havana church where Paya’s funeral was held.

At the Funeral of Oswaldo Paya

Farinas, known for hunger strikes that drew attention to the plight of political prisoners in Cuba, and about 50 others were stopped by police after emerging from the funeral mass shouting slogans against the government.

They were forced onto two buses that the church had provided to take people to the cemetery where Paya was to be buried.

Two of Paya’s children have questioned the official account of how their father was killed.

Authorities said Paya, 60, died along with another dissident, Harold Cepero Escalante, on Sunday when their rental car went off the road and struck a tree in southeastern Cuba.

Separately, a Spanish national who was driving the car in which Paya was killed was taken into custody by Cuban police for questioning after being released from a Havana hospital on Monday, a Spanish embassy source said.

The source said Angel Carromero Barrios, a 27-year-old activist with the youth wing of Spain’s ruling Popular Party, was being held in Bayamo, 744 kilometers (462 miles) southeast of Havana.

“He is still in Bayamo, in a detention center,” the source said.

A Swede, 27-year-old Jens Aron Modig, also was in the car at the time of the crash. He was treated at a local hospital and released. The Swedish embassy would not comment on his situation.

Paya, winner of the European Union’s Sakharov prize for human rights in 2002, is best known for confronting the Cuban parliament that year with a petition signed by 11,000 people demanding political change in Cuba.

Known as the “Varela Project,” the initiative was instrumental in opening debate in Cuba on the direction of a communist regime dominated for more than half a century by Fidel Castro and his brother Raul.

Paya was eulogized Tuesday by Cardinal Jaime Ortega, the archbishop of Havana and a key intermediary with Cuba’s ageing leadership, as a man whose political activism was rooted in his Christian faith.

“Oswaldo had a clear political vocation and, as a good Christian, this did not distance him from his faith or religious practice,” Ortega said.

“On the contrary, he always looked to his Christian faith as inspiration for his political options.”

His death brought a flood of reaction praising his courage and dedication to human rights.

Pope Benedict XVI extended condolences to Paya’s family in a statement that Ortega read at the funeral service.

In Chile, two lawmakers complained that they had been denied visas to attend Paya’s funeral. Senator Patricio Walker and congressman Juan Carlos Latorre, both members of Chile’s Christian Democratic party, had applied for the visas Monday at the Cuban consulate in Santiago.

“They had given me the visa, the truth is I was bit surprised,” Walker told reporters. “The consul called me and said that it was a mistake, that tourist visas could not be given to holders of diplomatic passports.”


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Cuba economy czar says cooperatives by year-end

By PETER ORSI Associated Press; July 23, 2012

HAVANA (AP) — Cuba’s economy czar said Monday that plans are in place to begin an experimental phase of non-state cooperatives in sectors ranging from food services to transportation by the end of the year.

While cooperative farming has already begun, Cubans have been waiting for regulations allowing them to form worker-owned co-ops in other sectors. The pilot program announced by Marino Murillo in a session of Cuba’s parliament will include 222 cooperatives.

The creation of midsize cooperatives is a long-promised lynchpin of President Raul Castro’s economic reforms, and Cuba’s economy czar promised state support to jump-start the pilot program. Murillo said some will be converted state-run enterprises, and co-ops will be given preference over private single-owner businesses.

“For these cooperatives and the non-state entities, in the coming year $100 million is being budgeted which is the financing necessary so they can be assured production, because if we create them and there is no financing, they won’t work,” Murillo told lawmakers in one of the parliament’s twice-a-year sessions.

He also reiterated that Cuba must also make its state-run enterprises more efficient and productive, since they will continue to dominate.

“The most important part of our economy will be the socialist state enterprise,” Murillo said. “Don’t think that all of a sudden the private-sector workers will generate $40 billion, $50 billion in GDP.”

Castro’s five-year plan to overhaul the economy has already legalized the sale of homes and cars and swelled the ranks of private-sector entrepreneurs by a quarter-million since 2010. Nearly all are small mom-and-pop shops, however, the likes of restaurants, cell-phone repair shops and jewelers.

Cuba insists that the reforms are not are not a wholesale embrace of capitalism but rather an “updating” of the nation’s socialist model, and most key sectors will remain under government control.

Other than a statute on taxation, no new laws were announced Monday. Foreign journalists were not allowed access to the session of the National Assembly, but state television aired Murillo’s speech in the evening. For islanders wondering whether the assembly would take action on long-promised reform of travel restrictions, it was another disappointment.

Early this year, Parliament President Ricardo Alarcon said in an interview that a “radical and profound” change to the rules, which keep most Cubans from leaving the country, was imminent.

There has been no word since then about scrapping the much-loathed “tarjeta blanca,” or “white card,” which islanders must apply for to travel abroad. Speaking to parliament, Castro repeated that the government still intends to reform the migratory rules, but did not say when it might happen. “It has not been relegated. On the contrary,” Castro said. “We have continued working toward its gradual relaxation, taking into account the associated side-effects.”

The pace of Castro’s reforms has slowed this year with no blockbuster changes announced since December, leading many economists to question whether Cuba can meet its own targets for reducing bloated state payrolls by 1 million workers, and shifting 40 percent of the economy into non-state control.

Last week, the island’s burgeoning small business class was dealt a blow with the low-key announcement of new, stiff tariffs on imported goods. The entrepreneurs say that without access to wholesale markets, the only way they can supply their businesses is through “mules” who transit between Cuba and places such as Miami, Ecuador and Panama with their bags stuffed with food, spices, clothing, electronics, diapers and other items tough to come by on the island.

On Monday, Cuban state media published an article seeking to quiet what it called the “numerous comments and anxieties” about the new customs duties. It made no mention of the small businesses, however, and insisted that the measures were necessary because excess baggage is slowing down service at the airport, making it resemble a cargo terminal.

Murillo said Monday that Cuba is studying how to establish wholesale markets, but did not announce specific plans.

Economists say it’s clear that Castro’s changes are here to stay, but change is happening slowly and measures to stimulate the private sector come with other decisions throwing up obstacles in entrepreneurs’ paths. “It’s very confusing because they are really sending mixed signals,” said Sergio Diaz-Briquets, a Cuba analyst based in the Washington area.

Castro also reiterated that the government will not be pressured into hurrying. “On a national level and above all in the exterior, there has been no lack of appeals, not always well-intentioned, to accelerate the pace of transformation,” Castro said. “It is a matter of such scope upon which the country’s socialist and independent future depends, that there will never be space for the siren calls that call us to immediately dismantle socialism and impose so-called shock therapies on the people.”

Cuba celebrates Revolution Day on Thursday. The date is sometimes used to make major announcements, though less so in recent years since Castro replaced his older brother Fidel as president.

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Canada Offers Condolences on Death of Cuban Activist


July 24, 2012 – The Honourable Diane Ablonczy, Minister of State of Foreign Affairs (Americas and Consular Affairs), today issued the following statement on the death of Oswaldo Payá Sardiñas:

“I was saddened to learn of the tragic death of Oswaldo Payá Sardiñas.

“Mr. Payá dedicated his life to defending civil liberties and human rights, and he was one of Cuba’s most prominent voices for democratic change. He received the Sakharov Prize in 2002. In 2005, and again in 2011, he was nominated for the Nobel Peace Prize.

“His commitment to dialogue and non-violence and his support for a vibrant civil society in which religious organizations play an important role stand out as a positive example for the continued development of democracy in Cuba. My thoughts and prayers are with the family and friends of this tireless champion of freedom and democracy.”

– 30 –

For further information, media representatives may contact:

Gemma Collins
Director of Communications
Office of the Minister of State of Foreign Affairs (Americas and Consular Affairs)

Foreign Affairs Media Relations Office
Foreign Affairs and International Trade Canada


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Omar Everleny Pérez and Pavel Vidal, “Relanzamiento del cuentapropismo en medio del ajuste estructural”

Below is a Power Point Presentation prepared for the “Seminar on Prospects for Cuba’s Economy” at the Bildner Center, City University of New York, on May 21, 2012 by Pavel Vidal Alejandro and Omar Everleny Pérez Villanueva. Unfortunately Omar was unable to make the CUNY session himself due to visa and flight delays and complications.

The full presentation can be found here: Pavel y Omar Relanzamiento del Cuentapropismo en medio del ajuste estructural

Pavel Vidal Alejandro and Omar Everleny Pérez


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