Carbonera Club - Press Clipping 2011 by JOHN considine

Client: Esencia Hotels & Resorts Source: Irish Times Date: 18th June 2009

A glimpse of Cuba's future in resort north of Havana. CUBA: FROM €93,000:A British resort company and the Cuban government are proposing to build a major holiday home development on the oceanfront in the country’s principal tourist resort YOU LEARN a lot about modern Cuba by driving the scenic Via Blanca highway between Havana and the north coast resort of Varadero. My trip one late May afternoon starts on the wave-lashed Malecón, a 7km boulevard separating the capital – both its restored colonial quarter and its communist-designed tower blocks – from the Florida Straits. Moving on from the sometimes dilapidated nearby suburbs into the outer ones, each junction is lined with workers and schoolchildren sweating in the 35ºC heat, trying to hitch-hike home to their villages. Soon, the coast road changes from motorway to pot-holed track and back again, ensuring the 140km trip takes a full two hours. But it’s worth it: an occasional industrial plant, village or roadside bar, a few small oil wells, then mostly blue water on one side, lush green countryside and distant mountains on the other, and many fine, empty sandy beaches. Entering Varadero, modernity immediately takes over. The beach is still beautiful though packed, and bougainvilleas line neatly manicured lawns; clear views give way to the clutter of hotels, restaurants, shopping malls and even a discotheque or two. This is Cuba’s principal tourist resort and, perhaps more importantly, the place where developers expect to gain permission to build the first holiday homes in the country to be sold to foreigners for more than half a century. If Havana is Cuba’s past, Varadero is a glimpse of its future and, with some observers anticipating a more open foreign policy from the Raul Castro government, it could serve as a template for other, similar areas to be built out in the next decade. Under communist control since its 1959 revolution – when almost all private homes were seized and nationalised – Cuba has not kept pace with the rest of the world. The streets are full of old European cars of different vintages and dubious reliability with a few American classics here and there. Finding a good restaurant is still a hit-and-miss exercise and shops are surprisingly hard to spot, even in many residential suburbs. But large numbers of children playing in the street and an absence of obesity are reminders that falling behind the times is not always a bad thing. In real estate terms, Havana’s tourist-filled old town has been meticulously restored but that is juxtaposed with its bland tower blocks and, in the tree-lined suburbs of Vedado and Miramar, crumbling 19th and 20th-century architecture.

But change seems to be in the air. Some two million tourists, mostly Canadians, Britons and Spaniards, now visit Cuba each year, frequenting not only Varadero but also Trinidad, a Unesco World Heritage Site, and Sancti Spiritus, deep in the countryside. Thanks to relaxed rules on imports, young locals now carry mobile telephones and watch plasma-screen televisions; hotels advertise with “Wi-fi here” signs; there are Benetton and Zara shops in Havana; and the occasional modern black Mercedes can be seen among the city’s Lada taxis. Relations with the US are also improving, with recently relaxed travel restrictions for Cuban-Americans, early speculation that the trade embargo imposed back in 1961 will eventually be lifted and smaller signs of thaw, including news that the state television service will screen The Sopranos and Grey’s Anatomy this summer. (The US army also still has its much-publicised base at Guantánamo.) Then there is the Carbonera Club, a 15-minute drive from central Varadero. A proposed collaboration between UK-based Esencia Hotels and Resorts and the Cuban government, the oceanfront resort is expected to include 800 villas and apartments, an 18-hole golf course, private and communal pools, a yacht club and restaurants, with residential sales kicking off as soon as the joint venture contract is signed. Savills, sole marketer of the development, says the agreement is in place and the announcement “imminent” although there have been unexplained delays. “Carbonera will be an opportunity to buy not only a Caribbean holiday home but a slice of history,” says the company’s David Vaughan. Prices will start at $129,000 (€93,000) for apartments near the back of the site and rise to $1.8m (€1.29m) for seafront villas – comparable to “middle market” prices on other Caribbean islands such as the Dominican Republic and well below those in prime destinations such as Barbados. The properties will only be available for sale on a 75-year leasehold basis, however, and it’s unclear whether the authorities will allow them to become freehold. Questions also remain about whether deposits will be lodged in Cuba or the buyers’ own countries. And club membership, with a likely fee of $1,000 (€721), is mandatory, with the developer reserving the right to reject applicants who cannot prove their bona fides. In spite of the uncertainty, Esencia insists Cuba is a compelling market. “Buyers will have so much more than elsewhere,” says Christopher Lawton, director of sales for the company, which is also working with the government on refurbishing some hotels in central Havana. “The island is the size of England and has more culture than most other holidayhome destinations. There’s the beautiful coastline and countryside that you expect but also an existing infrastructure.” The road network, though patchy, does criss-cross the island; the national rail network is one of few in the region; and there are 30 airports, nine of them entry points, along with a cruise-ship port at Varadero. The local population is skilled and educated, with a 99.8 per cent adult literacy rate, and surprisingly welcoming to newcomers, even those from the US.

“America may have a problem with us but we have no problems with Americans; the more who visit us, the better,” says Jose Tovar Pineda, director-general of Varadero’s golf course. Many think his facility is a model that should be replicated in other parts of the country and Pineda says he wouldn’t be surprised if Cuba has 12 or more international-standard courses by 2018, each with hotels and possibly private residences, as called for in the Carbonera Club’s plans. “What we don’t want is people to come to Cuba, sit on the beach, then go home after a week without having seen the country,” he says. “So our resorts will be at historic centres across the country. That way people get their suntan, enjoy our country and learn about the culture.” Such ambitions would have seemed laughable five years ago and sceptics still argue that the Cuban government could turn inward once more and kill the Carbonera Club development at any time. But optimists think it will be the first of many similar schemes – with Qatari and Canadian developers already waiting in the wings – at last breaching one of the final frontiers for private property.

Client: Esencia Hotels & Resorts Source: Daily Express Date: 21st January 2009

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US push to allow all Cuba travel By Daniel Dombey in Washington Published: March 31 2009 19:30 | Last updated: March 31 2009 19:30

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Leading US business groups and lawmakers from both parties rallied on Tuesday behind an effort to scrap all restrictions on travel to Cuba, as momentum grows to alter Washington’s relationship with Havana. The Senate bill, proposed by Byron Dorgan, a North Dakota Democrat, and backed by 20 other senators, including Republicans, as well as groups such as the US Chamber of Commerce, the American Farm Bureau and Human Rights Watch, would allow all US citizens to visit the island. EDITOR’S CHOICE Castro praises ‘noble intentions’ - Jan-22 Concern over Castro’s health resurfaces - Jan-16 In depth: Cuba under Raúl Dec-18

Slideshow: The Cuban revolution at 50 - Jan-02 Workers gain as Cuba shifts gears - Jan-08 Havana more transparent with economic data - Jan-05

“We have been trying the same thing for over 40 years, and our strategy has not worked,” said Mike Enzi, Republican senator from Wyoming. “It is time for a different policy – one that goes further than embargoes and restrictive and confusing travel policies.”

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The bill would go much further than legislation approved by Congress last month. That measure in effect loosened restrictions on Cuban Americans’ visits to relatives on the island by denying funding to enforce the current tough rules on such trips.

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The legislation also outstrips the promises made by President Barack Obama, who has pledged to remove only those restrictions limiting family visits, rather than the ban on trips by other US citizens, and who says he would keep the embargo on trade with the island.

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“Our existing policy has isolated ourselves; we just don’t believe the Castro dictatorship would be in existence today if there were free trade, free movement of people and free markets,” said Myron Brilliant, vice-president for international affairs at the US Chamber. Arguing that the Obama administration and the congressional push offered the most likely chance of change for years, he added: “If we move we can also create openings in policy towards Latin America [a region in which many countries have often been at odds with the US stance on Havana].” Although limited Cuban-US trade in agricultural and pharmaceutical products has grown in recent years, Mr Brilliant called for restrictions on such commerce to be abolished, and for US investment in the Cuban oil, mining and tourism sectors to be permitted. He also quoted a 2001 US International Trade Commission study that estimated that the Cuban embargo costs US businesses up to $1.2bn (€900m, £840m) a year in lost sales.

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The legislation now before Congress would leave the embargo intact and is far from certain of passage. Robert Menendez, a Democratic senator from New Jersey, has repeatedly outlined his opposition, although his office declined to comment on whether he would seek to stop it through a filibuster. Mr Menendez argues that allowing US tourists to visit Cuba would be an economic boon to the country’s government and would remove an important source of US leverage. Congressional Republicans say there would be much more resistance to lifting the generalised ban on travel than to relaxing the restrictions on family visits. Copyright The Financial Times Limited 2009 Print article

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Cuba Commits to Private Enterprise and Foreign Developers Want In E-MAIL PRINT

By Jonathan Kandell December 2010 Keywords: Cuba, private enterprise, Raúl Castro, foreign developers

Page 1 of 6 For a country that claims to want to open its economy after five decades of communism, Cuba has chosen an unlikely poster child for its efforts to attract foreign tourists: Che Guevara. A photograph of the revolutionary leader dressed in combat fatigues and swinging a golf club adorns walls at the Ministry of Tourism and at the Havana offices of some of the foreign companies that are teaming up with the government to develop golf courses, luxury hotels, vacation villas and condominiums. Never mind that Che posed for that photo op to thumb his nose at Yankee capitalists during the 1962 Cuban Missile Crisis. The picture’s message today is that there is nothing counterrevolutionary about golf — or about seeking to lure the game’s well-heeled practitioners from abroad. ―The Cubans have been astute in gauging the competitive climate in tourism and coming up with new product offerings to meet foreign consumer demand,‖ says Robin Conners, president and CEO of Vancouver-based Leisure Canada, a leader among private developers planning high-end resorts in partnership with the Cuban government. Foreign companies like Leisure Canada have dreamed about the potential of the Cuban market for years. Now they hope the political conditions are finally right for turning their plans into reality. In August, President Raúl Castro announced that the government would lay off half a million workers — roughly 10 percent of the labor force — by March and open up new sectors of the economy to private enterprise. Also that month, the government declared it would allow foreigners to take out 99-year leases on state property; industry executives regard this measure as crucial for developing high-end tourist resorts in the country. The layoff decision, if implemented, would signal a historic policy shift by this Caribbean nation. Since Castro’s ailing brother, Fidel, led a Communist revolution here in 1959, the government has maintained an iron grip on the economy and remains virtually the sole employer in the country. Now, decades after China and

Russia abandoned central planning for their own forms of capitalism, Havana appears to have decided that it too needs to unleash market forces to revive the island’s stagnant economy. ―We have to erase forever the notion that Cuba is the only country in the world where one can live without working,‖ Raúl Castro, 79, said in announcing the layoff plans in a speech to the National Assembly. Is Cuba serious about opening its economy or just making a feint toward capitalism? Observers have their doubts. Consider the regime’s heavy bureaucratic hand. Supposedly to free up the economy, the government has designated 178 specific businesses — including family-run boardinghouses, small restaurants, tourist boat rentals, taxi owners and even party clowns — that will be eligible to operate privately under state licenses beginning next year. ―This enumeration of private work seems more in tune with a feudal village than a 21st-century country,‖ wrote Yoani Sánchez, Cuba’s most famous dissident blogger, in September. Private businesses, ranging from small farms to market stalls to barbershops and beauty salons, currently employ just 144,000 workers, and they have no access to credit from the state-owned banking system or to microfinance. It’s hard to see how this tiny private sector can absorb the looming army of unemployed, few if any of whom have entrepreneurial experience. ―It is challenging to suggest that the least productive 10 percent of the labor force will become a juggernaut of commercial enterprise,‖ says John Kavulich II, a senior adviser to the U.S.-Cuba Trade and Economic Council, a New York–based organization that advises U.S. businesses on Cuban affairs. 1|2|3|4|5|6

For a country that claims to want to open its economy after five decades of communism, Cuba has chosen an unlikely poster child for its efforts to attract foreign tourists: Che Guevara. A photograph of the revolutionary leader dressed in combat fatigues and swinging a golf club adorns walls at the Ministry of Tourism and at the Havana offices of some of the foreign companies that are teaming up with the government to develop golf courses, luxury hotels, vacation villas and condominiums. Never mind that Che posed for that photo op to thumb his nose at Yankee capitalists during the 1962 Cuban Missile Crisis. The picture’s message today is that there is nothing counterrevolutionary about golf — or about seeking to lure the game’s well-heeled practitioners from abroad.

―The Cubans have been astute in gauging the competitive climate in tourism and coming up with new product offerings to meet foreign consumer demand,‖ says Robin Conners, president and CEO of Vancouver-based Leisure Canada, a leader among private developers planning high-end resorts in partnership with the Cuban government. Foreign companies like Leisure Canada have dreamed about the potential of the Cuban market for years. Now they hope the political conditions are finally right for turning their plans into reality. In August, President Raúl Castro announced that the government would lay off half a million workers — roughly 10 percent of the labor force — by March and open up new sectors of the economy to private enterprise. Also that month, the government declared it would allow foreigners to take out 99-year leases on state property; industry executives regard this measure as crucial for developing high-end tourist resorts in the country. The layoff decision, if implemented, would signal a historic policy shift by this Caribbean nation. Since Castro’s ailing brother, Fidel, led a Communist revolution here in 1959, the government has maintained an iron grip on the economy and remains virtually the sole employer in the country. Now, decades after China and Russia abandoned central planning for their own forms of capitalism, Havana appears to have decided that it too needs to unleash market forces to revive the island’s stagnant economy. ―We have to erase forever the notion that Cuba is the only country in the world where one can live without working,‖ Raúl Castro, 79, said in announcing the layoff plans in a speech to the National Assembly. Is Cuba serious about opening its economy or just making a feint toward capitalism? Observers have their doubts. Consider the regime’s heavy bureaucratic hand. Supposedly to free up the economy, the government has designated 178 specific businesses — including family-run boardinghouses, small restaurants, tourist boat rentals, taxi owners and even party clowns — that will be eligible to operate privately under state licenses beginning next year. ―This enumeration of private work seems more in tune with a feudal village than a 21st-century country,‖ wrote Yoani Sánchez, Cuba’s most famous dissident blogger, in September. Private businesses, ranging from small farms to market stalls to barbershops and beauty salons, currently employ just 144,000 workers, and they have no access to credit

from the state-owned banking system or to microfinance. It’s hard to see how this tiny private sector can absorb the looming army of unemployed, few if any of whom have entrepreneurial experience. ―It is challenging to suggest that the least productive 10 percent of the labor force will become a juggernaut of commercial enterprise,‖ says John Kavulich II, a senior adviser to the U.S.-Cuba Trade and Economic Council, a New York–based organization that advises U.S. businesses on Cuban affairs.

In short, the new era does not yet appear to be a Cuban version of 1978, the year Deng Xiaoping unleashed market forces in China by allowing peasants to cultivate private plots. Yet Castro’s gesture marks a welcome change after five decades of suffocating state control. ―This is no opening of the floodgates, but it may mean the beginning of a new socialist era,‖ says Ted Henken, an expert on the Cuban private sector who teaches at New York’s Baruch College. If private sector employment is to take off, tourism is bound to play a leading role. The island — the largest in the region — boasts white-sand beaches and expanses of unspoiled nature. Havana itself is a virtual museum of architecture. The old town center, Habana Vieja, features scores of Spanish colonial buildings dating to the 16th century, while Centro, the downtown district, has hundreds of neoclassical, art nouveau and art deco structures. Along with oil exploration and nickel mining, tourism is one of the few areas of the economy open to foreign investment, and it has grown rapidly over the past two decades to overtake sugar as Cuba’s largest source of hard-currency revenues. The sector pulled in $2.1 billion in 2009, compared with $2.88 billion for all the country’s exports of goods and services. ―I believe the economic reforms are cause for optimism,‖ says Andrew Macdonald, chief executive of Esencia Hotels & Resorts, a privately held company based in London that is seeking government approval to develop a $200 million luxury resort east of Havana complete with a golf course, 800 luxury apartments and 100 villas. ―Anything that increases the private sector and reduces the role of the state in the economy is a favorable development.‖ Cuba began developing its tourism industry nearly two decades ago. The country was hit hard by the 1991 collapse of the Soviet Union, which had propped up the Castro regime with subsidies. Cuba’s economic output contracted by a third in the three years after 1991. In a bid to cover the shortfall, the government ordered ministries to devise commercial strategies to help fund their budgets. The Ministry of Education sent teachers to Nicaragua and Venezuela, and the Ministry of Health dispatched an army of doctors overseas to earn hard currency. The armed forces, then under the command of Raúl Castro, plunged into tourism.

In 1991 the new Russian government abandoned plans to build a naval base on the coast east of Havana, forfeiting tens of millions of dollars that the old Soviet regime had placed in escrow for the project. Castro’s Ministry of the Revolutionary Armed Forces used those funds to expand its fledgling tourism arm, Gaviota, into luxury hotels, travel agencies, car rentals, marinas and restaurants. The company currently operates 38 hotels. Gaviota’s success has spawned several imitators. The Ministry of Tourism is considering proposals from several joint ventures to develop a dozen golf resorts — this in a country with only one 18-hole course, at Varadero, a beach resort town 86 miles east of Havana. Foreign investors know the wait can be painfully long. ―In normal countries joint ventures are quickly created and assume high risks for potentially high profits,‖ says a Cuban working with a foreign developer. ―In Cuba decisions are so centralized and slow that it can take years to form a joint stateprivate venture. On the other hand, once it is created, the business risks are very low and high profits are almost guaranteed.‖

Leisure Canada hopes to prove that hypothesis correct. The small company (market cap $31 million) focuses exclusively on the Cuban market and has been lobbying the government for more than a decade for the right to develop tourism projects. The company has a ready market: Canadians are avid snowbirds, accounting for 933,000 of the 2.4 million foreign tourists who visited Cuba last year. The U.K. ranked a distant second with 171,800 visitors. The half-century-old U.S. trade embargo continues to keep American companies and tourists out of Cuba, although an estimated 200,000 Cuban-Americans (who are not counted as tourists by either Havana or Washington) visit relatives in Cuba each year. Last year, Leisure Canada finally won approval to set up a 50-50 joint venture with Grupo Hotelero Gran Caribe, a fully owned entity of the Ministry of Tourism. The company plans to break ground in early 2011 on a $200 million, 716-room hotel in Miramar, a Havana district popular with wealthy Cubans and Americans before the revolution that today houses a number of government agencies and foreign multinationals. ―Now they are reacting pretty quickly to feedback from us,‖ CEO Conners says of the authorities. In August, for example, the government announced it would allow foreigners to take out 99-year leases on state property, up from a previous maximum of 50 years. The move followed lobbying by Leisure Canada and Esencia, which regard longterm leases as essential to developing resort properties for upscale foreign tourists. ―We explained to our Cuban partners just how important a 99-year lease is for this sort of client and to obtain better financing terms for the project,‖ says Conners. ―Banks view it as virtually full ownership.‖ The new long-term leases are crucial for Leisure Canada’s other two projects, which are pending approval. The company wants to develop a $130 million luxury resort

with 425 hotel suites, condo apartments and villas at Cayo Largo, an islet 50 miles south of Cuba’s main island that has an air force base with a runway large enough for transatlantic aircraft. Even more ambitious, Leisure Canada hopes to build a $900 million resort with a golf course, marina, hotels, condos and villas at Jibacoa, some 40 miles east of Havana. Both of those projects could take years to get started. The site currently houses a state-run campground and cabins for the Cuban proletariat. Conners is optimistic that economic necessity will ultimately prevail. ―Cuba has a large pool of workers available for the hotel construction and service industry,‖ he says. Groups of people hanging around the Jibacoa village square attest to that fact. Nearby, a bare-chested watchman stands guard at the entrance to the planned development site. After letting a company executive enter the area, he pleads, ―Hurry up with the project — and sign me up for the first job.‖ At the other end of the tourist industry spectrum, family-run bed-and-breakfasts and restaurants are also expected to expand in number as a result of the economic reforms, but that will require new sources of financing. Thus far the state banks that monopolize credit do not lend to the private sector. The most obvious source of foreign capital is the Cuban-American community. ―But will the Cuban government allow somebody in Miami to send a relative in Havana $50,000 to start a business?‖ asks U.S.-Cuba Trade and Economic Council adviser Kavulich. ―And will the U.S. government allow it?‖ To survive and succeed as a private innkeeper in socialist Cuba demands the sort of entrepreneurial spirit, ingenuity and persistence that Carlos Repilado has displayed over a quarter century. Repilado rents out three rooms to foreign tourists for about $30 a night in a bed-and-breakfast called Carlos&Nelson that he has created in his second- and third-floor apartment in a 1920s Havana townhouse. Repilado, a broad-shouldered 72-year-old who looks two decades younger, began his adult life as a computer programmer for IBM Corp. in the mid-1950s. When the Castros and Che entered Havana triumphantly in 1959, Repilado was among the revolutionaries’ excited sympathizers. IBM pulled out of Cuba in the early 1960s, leaving him without a job, but Repilado took advantage of the new regime’s large cultural affairs budget and found work in the theater, eventually gaining a reputation as a lighting designer. He has worked in Havana and abroad on Cuban theatrical and musical productions, from highbrow European plays to the highkicking Tropicana Cabaret. But even with his renown, Repilado earns barely double the average monthly wage of $20 in his profession; the B&B provides the bulk of his income. Becoming a jack-of-all-trades during a half century of theater assignments has made him an expert at the home repairs necessary to running a thriving guesthouse. Finding specialized labor and ready-made products is nearly impossible in Cuba. ―Here you have to learn to do many things on your own,‖ says Repilado as he goes about reupholstering an ancient sofa on a hot, humid

afternoon. Later in the week he and a friend will stanch a leak in the 20-foot-high ceilings and repair the wooden window shutters that have been lashed by tropical storms. Repilado became an innkeeper through luck, skillful bargaining and a Rolodex of foreign contacts. With aging parents and aunts to care for, he traded his own small apartment and theirs for the large duplex apartment, which had been occupied by a friend whose growing family required more than one residence. This is the usual horse-trading that goes on in Cuba, where there is no legal right to sell one’s dwelling and where there has been almost no urban residential construction for 50 years. Repilado’s relatives moved in with a bounty of heirlooms that later turned his B&B into a comfortable living museum of armoires and tables with matching carved wood chairs, European paintings and sepia photographs, porcelain statuettes and alabaster chandeliers. After his parents and aunts died, Repilado began to offer free lodging to foreign theater colleagues. When a 1985 government decree authorized a limited number of B&Bs in private homes, he opened his residence to paying guests recruited through the grapevine of his acquaintances abroad. Now there are 138 B&Bs — known as casas particulares — in Havana and more than 200 nationwide, according to the Casa Particular Association. But few have lasted as long as Repilado’s. In a country where hardly any innkeepers speak foreign languages, his serviceable English has allowed him to expand his guest list to Canadian, British and even U.S. travelers. Only a robust occupancy rate enables Repilado to survive the onerous taxes and fees that scuttle dozens of casas particulares every year. Like other guesthouse keepers, he hopes the government’s reforms will include lower fees and taxes. ―But until now we have heard nothing,‖ he says. He must pay the government about $300 a month in guesthouse fees regardless of how many clients arrive. And taxes rise steeply depending on his occupancy rate. Other casas particulares are known to underreport income or secretly rent unauthorized rooms. ―But I’m not going to do anything that is against the law — it’s just not worth it,‖ says Repilado. Determination and serendipity in the face of a hostile state bureaucracy have also been keys to success for restaurateur Omar González Rodríguez. Lean, angular and white-haired, the 64-year-old González bears an uncanny resemblance to the late Gregory Peck in the lead role of Old Gringo, which is why he named his Havana restaurant after the 1989 film based on the Carlos Fuentes novel. ―We met when Mr. Peck came to Cuba for a film festival, and he did say we looked like each other, except he was a head taller,‖ recalls González. González opened Gringo Viejo 15 years ago in a basement in Havana’s Vedado neighborhood, right after a 1995 decree allowing entrepreneurs to go into the restaurant business. These private restaurants, known as paladares (from the Spanish word for ―palate‖), were permitted only 12 seats each and had to be located in the owner’s home and staffed only with family members. They were prohibited from serving lobster and beef, which were available only in state restaurants

catering to foreigners. Taxes were steep and have continued upward, ensuring that the government takes well over half of reported profits. Little wonder that after reaching a peak of more than 200 paladares a decade ago, the number has dropped to fewer than 100 today. González has made the most of his cramped, windowless dining space. The room is unexpectedly splendid, lined with photographs of prominent diners and a poster of Peck in Old Gringo. There are exposed racks of imported wines against the walls. A flat-panel television above the bar plays a video of Aretha Franklin belting out ―Respect.‖ The menu offers dozens of main courses, mostly pork and chicken dishes. All the clients are foreigners, including a Chinese family, an Italian couple and two German friends. At the equivalent of $15 to $30 a meal, Gringo Viejo is far beyond the reach of ordinary Cubans. González was a graphic designer by training and made a living by producing handmade sandals and wallets as well as metal sculptures, one of which hangs in his paladar. The dining area used to be his workshop, in the basement of his home. ―At night friends would come by because they knew there was always a bottle of rum,‖ says González.

When the decree permitting private restaurants was announced, González opened his paladar with encouragement from his friends. He hired his son as bartender, his daughter as chief waitress and other relatives as cooks and assistant servers. González himself enrolled in cooking and wine-tasting classes. His idea was to infuse traditional Cuban dishes with European and Asian ingredients. Today one of Gringo Viejo’s most popular entrées is a typically Cuban pork cutlet topped with fried quail eggs and a soy-based sauce, with flash-fried bok choy and bean sprouts on the side. ―I’m always experimenting with recipes, and then I turn them over to the cooks,‖ says González. A government decree issued in October allows paladares to expand to 20 seats, hire employees who aren’t related to the owner and, finally, serve lobster and beef. But the measures don’t evoke much enthusiasm among private sector advocates. ―They are just enough to survive,‖ says Baruch College’s Henken. ―Obviously, the government doesn’t want paladares to become full-scale restaurants and compete against the state.‖ Becoming too well known and successful can incite a government backlash. Only last year the authorities shut down one of the top paladares, El Hurón Azul, because the owner had purchased forbidden luxury imports, including a refrigerator and a stove. González is savvy enough to navigate these political shoals. But he does complain that it is hard to compete with government-owned restaurants that have no capacity restrictions and lower costs.

He is optimistic, however, that the government will expand its tepid reforms. ―Joblessness will push the growth of paladares,‖ he predicts. His son, the bartender, is already planning to start his own tapas bar. For now, González would be content if he was permitted to expand his paladar to the cramped terrace, located between the street and the basement entrance, to accommodate a barbecue grill and a smoking area. ―After a meal, people should be allowed to enjoy a good Cuban cigar,‖ he says.

Revolutionary Cuba Now Lays Sand Traps for the Bourgeoisie By RANDAL C. ARCHIBOLD

MEXICO CITY — One of Fidel Castro’s first acts upon taking power was to get rid of Cuba’s golf courses, seeking to stamp out a sport he and other socialist revolutionaries saw as the epitome of bourgeois excess.

Rolls Press/Popperfoto, via Getty Images

Fidel Castro playing in his customary military fatigues in the early 1960s, in what some say was an effort to mock the sport.

Now, 50 years later, foreign developers say the Cuban government has swung in nearly the opposite direction, giving preliminary approval in recent weeks for four large luxury golf resorts on the island, the first in an expected wave of more than a dozen that the government anticipates will lure free-spending tourists to a nation hungry for cash. The four initial projects total more than $1.5 billion, with the government’s cut of the profits about half. Plans for the developments include residences that foreigners will be permitted to buy — a rare opportunity from a government that all but banned private property in its push for social equality. Mr. Castro and his comrade in arms Che Guevara, who worked as a caddie in his youth in Argentina, were photographed in fatigues hitting the links decades ago, in

what some have interpreted as an effort to mock either the sport or the golf-loving president at the time of the revolution, Dwight D. Eisenhower — or both. President Hugo Chávez of Venezuela, who maintains close ties with Cuba, has taken aim at the pastime in recent years as well, questioning why, in the face of slums and housing shortages, courses should spread over valuable land “just so some little group of the bourgeois and the petit bourgeois can go and play golf.” But Cuba’s deteriorating economy and the rise in the sport’s popularity, particularly among big-spending travelers who expect to bring their clubs wherever they go, have softened the government’s view, investors said. Cuban officials did not respond to requests for comment, but Manuel Marrero, the tourism minister, told a conference in Europe this month that the government anticipates going forward with joint ventures to build 16 golf resorts in the near future. For the past three years, Cuba’s only 18-hole course, a government-owned spread at the Varadero Beach resort area, has even hosted a tournament. It has long ceased to be, its promoters argued, a rich man’s game. “We were told this foray is the top priority in foreign investment,” said Graham Cooke, a Canadian golf course architect designing a $410 million project at Guardalavaca Beach, along the island’s north coast about 500 miles from Havana, for a consortium of Indians from Canada. The company, Standing Feather International, says it signed a memorandum of agreement with the Cuban government in late April and will be the first to break ground, in September. Andrew Macdonald, the chief executive of London-based Esencia Group, which helps sponsor the golf tournament in Cuba and is planning a $300 million country club in Varadero, said, “This is a fundamental development in having a more eclectic tourist sector.” The other developments are expected to include at least one of the three proposed by Leisure Canada, a Vancouver-based firm that recently announced a licensing agreement with the Professional Golfers Association for its planned resorts in Cuba, and a resort being designed by Foster & Partners of London. The projects are primarily aimed at Canadian, European and Asian tourists; Americans are not permitted to spend money on the island, under the cold-war-era trade embargo, unless they have a license from the Treasury Department. Developers working on the new projects said they believed Cuba had a dozen or so courses before the revolution, some of which were turned into military bases. Cuba

and foreign investors for years have talked about building new golf resorts, but the proposals often butted against revolutionary ideals and red tape. Several policy changes adopted at a Communist Party congress in April, however, appear to have helped clear the way, including one resolution specifically naming golf and marinas as important assets in developing tourism and rescuing the sagging economy. “Cuba saw the normal sun and salsa beach offerings and knew it was not going to be sustainable,” said Chris Nicholas, managing director of Standing Feather, which negotiated for eight years with Cuba’s state-run tourism company. “They needed more facets of tourism to offer and decided golf was an excellent way to go.” The developers said putting housing in the complexes was important to make them more attractive to tourists and investors, and to increase profits. Still, John Kavulich, a senior adviser for the U.S.-Cuba Trade and Economic Council, said Cuba had a history of pulling back on perceived big steps toward freer enterprise and might wrestle to explain how such high-dollar compounds could coexist with often dilapidated housing for everyone else. “Will Cuba allow Cuban citizens to be members, to play?” he said. “How will that work out? Allowing someone to work there and allowing someone to prosper there is an immense deep ravine for the government.” But Mr. Macdonald said political issues were moot, given that Cuba already had come to terms with several beach resorts near Havana that generally attracted middle-class foreign travelers. “It’s not an issue for them,” he said. “It’s tourism. It’s people coming to visit the country.” If the projects are built as envisioned, the tourists will enjoy not just new, state-ofthe-art courses and the opportunity for a second home in Cuba, but shopping malls, spas and other luxury perks. Standing Feather, which calls its complex Estancias de Golf Loma Linda (Loma Linda Golf Estates), promises 1,200 villas, bungalows, duplexes and apartments set on 520 acres framed by mountains and beach. The residences are expected to average $600,000, and rooms at the 170-room hotel the complex will include may go for about $200 a night, a stark contrast in a nation where salaries average $20 a month.

Standing Feather said that to build a sense of community and provide the creature comforts of home among its clientele, the complex will include its own shopping center, selling North American products under relaxed customs regulations. â&#x20AC;&#x153;It is in the area that Castro is from, in Holguin Province,â&#x20AC;? added Mr. Cooke, the golf course architect

The Independent, Cuba Feature – 1 July 2009

1. Why was Esencia interested in investing in Cuba in the first place? 

Cuba is one of the most popular tourist destinations in the Caribbean offering a varied landscape with white sandy beaches, lush vegetation and of course exciting and historical cities. It is a place full of passion, spirit, culture and a vibrant nightlife.



The IMF has predicted that Cuba will enjoy an increase of at least 3.5 million tourists over the next few years. In response to this tourism boom Esencia Hotels & Resorts and the Cuban Government are developing the Carbonera Club, Cuba’s first five star residential resort.



Esencia Hotels & Resorts and the Cuban Government have signed a historic agreement to sell property on the island for the first time in 50 years. Esencia has agreed to form the first joint venture with Palmares SA, part of Cuba’s Ministry of Tourism to develop and operate The Carbonera Club, a world class five star luxury golf resort.



This is an amazing opportunity to be part of history and become one of the first non-residents to buy in Cuba and invest in a unique and luxurious development in one of the world’s most beautiful locations.



This partnership, the first significant direct investment into Cuba Tourism by a British company, comes as a result of the Cuban Government’s desire to attract high quality tourism.



In order to create high standard developments Esencia has brought together a world-class team to deliver the luxuriously appointed Carbonera Club. These experts include PGA Design who will be developing a championship 18-hole golf course, Savills UK Real Estate; Rafael de la Hoz, a leading Spanish architectural firm, famous UK architectural studio Conrad & Partners, and Onework, a leading Italian landscaping studio Galeon, the Spanish property management company;



Cuba’s Ministry of Tourism would like to focus on golf tourism as it forms an integral part of an up market tourism product, and is therefore working on a development strategy for golf courses. Golf tourism is a tremendous revenue generator. The Cuban Government’s forecast for the next three years is to build ten golf courses.



Esencia Hotels & Resorts (www.esenciahotelsandresorts.com) was incorporated to embrace the Cuban in-country business opportunities, contracts have already been signed for a chain of boutique hotels throughout Cuba with the leading hotel group Gran Caribe. The first hotel in Havana, Hotel Victoria will open in early

…/2 2010, and this will be followed by another Hotel & Spa in Vinales, the UNESCO world heritage site. 2. What do you foresee for Cuba's future particularly in the light of Barack Obama's overtures towards dropping restrictions to Cuba? 

This is an exciting time for Cuba and for investment in Cuba. Esencia is well aware of the tremendous potential that Cuba has to offer to international investors. The Ministry of Tourism has expressed the desire to enhance its tourism product by embracing the concept of working with international partners such as Esencia Hotels & Resorts to deliver high end cutting edge integrated resorts, like the Carbonera Club. This type of strategic vision and commitment to up market tourism will help truly differentiate Cuba from other destinations.

3. In what way can buyers benefit from investing in The Carbonera Club? 

This is an amazing opportunity to be one of the first non-residents in 50 years to buy in Cuba and invest in a unique and luxurious development in one of the world’s most beautiful locations.



Cuba offers an exceptional infrastructure of medical facilities – rated amongst the best in the world. It has also the lowest crime rate in the Caribbean. It has a highly educated and cultured population and workforce with literacy at 99.8% of the total population of 11,423,952 (July 2008).



Cuba has a well established transport and communications infrastructure and services



As a country it has a well-established business culture infrastructure.



The Carbonera Country Club Resort will be the first truly integrated golf resort in Cuba



…/3 

The spectacular Carbonera Club is located just minutes from the islands premier beach resort Varadero and one hour’s drive from Havana. This exclusive resort will offer a 120 bed 5* hotel, world-class sports facilities including a PGA championship 18-hole golf course, Beach Club, Yacht Club with marina facilities nearby, gym, tennis centre, aquatic activities and superb leisure services such as a SPA, shops, bars, cafés, nightclub, cinema and restaurants. All these services are located around a magnificent Country Club designed by famous Italian landscape studio One Works. Our clients can chose from a range of superior designer properties from: “Conran Residences” with a stunning contemporary and luxury design, created by famous UK architectural and design studio Conran & Partners, “Colonial Village Apartments” with a traditional and Mediterranean elegance as well as “De La Hoz Villas” with chic colonial architecture designed by renowned architect studio Rafael de La-Hoz. These superb apartments and villas offer ocean, golf or garden views. Set to open in 2011.



No sales or capital gains tax



Access to Cuba is significant – the country has over 30 airports. There are 20+ flights per day between UK and Cuba

4. In what way can buyers benefit from investing in The Carbonera Club should the country open up to the US? 

The rental market will become more buoyant with an increasing demand of US visitors in the future



The increasing demand will create more up market products in Cuba which will therefore attract more high-end clients. It will result in a higher number of incoming scheduled flights.

5. Are there enough people interested in visiting and owning in Cuba from other destinations? 



Esencia Hotels & Resorts has already received significant interest in its membership of The Carbonera Club.from a variety of nationalities such as the UK, Canada, Spain, Italy, Middle East, US and Mexico.

…/4

6. Who do you see as your target buyer? The Carbonera Club is aimed at up-market target seeking: (1) (2) (3) (4)

A unique destination A first time opportunity to buy in Cuba after 50 years A high quality lifestyle A rich and vibrant culture and heritage

This development is suitable for anyone interested in overseas property e.g. investors, holiday-makers, golf enthusiasts and retirees. From a corporate perspective, it will also be of interest to businesses with locations in or near to Cuba.

7. How interested is the Cuban government in encouraging inward investment from overseas sources? 

In past 18 months, legislation in Cuba has changed in terms of real estate models. The Ministry of Tourism has also undertaken activity to improve the quality and diversity of the country’s tourism product, and understands that working with international up-market investors such as Esencia Hotels & Resorts will help them reach their objectives.



This is an exciting time for Cuba and for investment in Cuba. Esencia is well aware of the tremendous potential that Cuba has to offer to international investors. The Ministry of Tourism has expressed the desire to enhance its tourism product by embracing the concept of working with international upmarket partners such as Esencia to deliver high end cutting edge integrated resorts, like the Carbonera. This type of strategic vision and commitment to tourism will help truly differentiate Cuba from other destinations.



The Carbonera Club will be one of the largest investments in the Cuban Tourism sector during the last few decades and the most significant for a UK company. The UK remains the second largest tourism market to Cuba. It is hoped that this will herald a new era for British business. Esencia is a member of the steering committee of the Cuba Initiative, a bilateral organization set up in 1995 to encourage trade and investment and a closer exchange on other matters of interest. The current chairman of the UK side of the Cuba Initiative, Ian Taylor, MP (former Foreign Minister) commented in January 2009 following a recent visit to Cuba: “I am delighted that Esencia, which has been working on this project for several years has been able to make progress and that this important project is now becoming a reality. It was one of the projects I discussed with Cuban Ministers. To have a British company that is able to bring so many well known names together in relation to an investment in Cuba herald a new era for British Business in Cuba and augurs well for closer UK relations.”

…/5

8. What are the conditions of ownership of The Carbonera Club at the moment? 

The properties will be sold on a 75-year lease. The title of freehold is under consideration by the Government of Cuba, and if agreed, will be offered to the property owners.

9. Tell me a bit about the location of your residential and golf resort, why was it chosen to be in that particular area and what kind of lifestyle/holidays can buyers expect to have? 

The Carbonera Club is situated in glorious surroundings, overlooking the sparkling Caribbean Sea, just minutes from the famous beach of Varadero and one hour by car to the historic capital of Havana. This breathtaking resort includes 800 stylish apartments and 100 luxury villas, designed by such renowned designers as Sir Terence Conran and Spanish architectural firm Rafaiel de La-Hoz. The Carbonera Club will delight even the most demanding traveller with its beautiful location, stunning design, luxury finish and fantastic onsite facilities.



Esencia’s clients can chose from a range of superior designer properties at the Carbonera Club from: “Conran Residences” with a stunning contemporary and luxury design, created by famous UK architectural and design studio Conran & Partners, “Colonial Village Apartments” with a traditional and Mediterranean elegance as well as “De La Hoz Villas” with chic colonial architecture designed by renowned architect studio Rafael de La-Hoz. These superb apartments and villas offer ocean, golf or garden views. The Carbonera Club is set to open in 2012.



Clients will enjoy first-class sporting facilities including an 18 hole PGADC golf course, beach club and sailing club as well as shops, bars, cafes, clubs and restaurants.



The spectacular Carbonera Club is located in close proximity to the airport, with over 20 flights a day from the UK.



Nearby the Carbonera Club is located a marina which will be extended to include 75 berths



Quite simply Cuba is one of the most popular tourist destinations in the Caribbean offering a varied landscape with white sandy beaches, lush vegetation and of course exciting and historical cities. It is a place full of passion, spirit, culture and a vibrant nightlife. And the Carbonera Club ticks all the boxes of those seeking the perfect destination with world-class standards and offering a cosmopolitan lifestyle.

…/6

10. Is the Carbonera Club development underway? 

Negotiations between Esencia and the Cuban government are in the final stages and the agreement will be signed imminently.



Development of the Carbonera Club is scheduled for completion in 2011.

11. Fact Box information: 

Prices at the Carbonera Club will start at £77,500 for a 1-bed room apartment rising to £1.1million for seafront villas.



Esencia Hotels & Resorts - www.esenciahotelsandresorts.com



For more information about The Carbonera Club please contact: sales@esenciahotelsandresorts.com

Evening Standard Wednesday 25th February 2009

Investment property at golf resort in Egypt - Times Online

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Investment property at golf resort in Egypt - Times Online

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La Jornada: Construirán campos de golf en desarrollos turísticos

http://www.jornada.unam.mx/2009/04/01/index.php?section...

Prepara la isla plan para expandir el sector y captar visitantes de Estados Unidos

Construirán campos de golf en desarrollos turísticos GERARDO ARREOLA Corresponsal

Cuba confirmó hoy que negocia con inversionistas extranjeros la construcción de campos de golf en desarrollos turísticos de lujo, como parte de su plan de expandir el sector para un mercado que puede incluir pronto a visitantes estadunidenses. La Habana, 31 de marzo.

“Son varias las empresas de diferentes países que trabajan en estos proyectos”, dijo a periodistas la viceministra de Turismo, María Elena López, sobre los campos de golf que anunció el gobierno hace dos años. “Es una política de crecimiento que tenemos claramente planteada”. López declinó precisar el impacto que tendrán las facilidades que otorgó este mes el Congreso de Estados Unidos a los cubanos que viven en ese país para que viajen a la isla, así como los alcances de una posible liberación de los viajes de los estadunidenses a Cuba, como la prevista en una legislación anunciada este martes en Washington. El turismo cubano “se prepara para poder dar respuesta al mercado”, dijo la viceministra, y subrayó que considera el potencial estadunidense como el de un país más. “Para todos nos preparamos”. En febrero pasado las autoridades anunciaron la ampliación de la terminal del aeropuerto internacional de La Habana, por la que llegan los vuelos de Miami. La viceministra apuntó que por ahora trabaja con las proyecciones de emisores tradicionales (Canadá, Europa occidental, México) y nuevos mercados (Europa del este, Rusia y Sudamérica). Desde que Cuba anunció su plan de abrir campos de golf, expertos estimaron que una porción de la demanda vendría de Estados Unidos, si se levanta la actual prohibición para que los ciudadanos de ese país viajen a la isla. Cuba sólo tiene un campo de 18 hoyos según normas internacionales, en el balneario de Varadero. De fuentes oficiales sólo se conoce que hay tres proyectos de nuevos campos en esa misma playa de la costa noroccidental, en Cayo Coco y en Holguín.

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La Jornada: Construirán campos de golf en desarrollos turísticos

http://www.jornada.unam.mx/2009/04/01/index.php?section...

Pero el proyecto de Varadero, The Carbonera Club, ya se anuncia en Europa como una sociedad de una compañía británica y la corporación local Palmares. Una fuente cercana a la comercialización del enclave turístico dijo a La Jornada que se prevé su lanzamiento internacional en mayo próximo. Según la promoción preliminar, el complejo será exclusivo para socios y tendrá un campo de golf, canchas de tenis, servicios hoteleros, cabaret, centro de convenciones, escuela de idiomas y 720 villas privadas, departamentos y residencias en venta, con precios desde 150 mil dólares hasta un millón 300 mil dólares, según el tamaño. Consultada para que confirmara la venta de inmuebles, la viceministra López respondió: “Hasta ahora, lo que establece la ley de la inversión extranjera”. Esa ley permite a los extranjeros que residen permanentemente fuera de Cuba la compra de bienes inmuebles para vivienda o vacaciones personales. También autoriza la adquisición de viviendas u oficinas a empresas foráneas y la compra de desarrollos inmobiliarios para su explotación turística. Los anuncios conocidos indican que The Carbonera Club será desarrollado por Cuban Golf Resort, una sociedad entre Palmares y la británica Esencia Hotels and Resorts, a su vez parte de Havana Holdings, titular de franquicias del afamado bar cubano Floridita. Después de dos años de retroceso, el turismo cubano repuntó en 2008, con 2 millones 350 mil visitantes, que dejaron ingresos de 2 mil millones 700 mil dólares. El sector es la segunda fuente de divisas del país, después de los servicios médicos. La viceministra López dijo que Cuba no rebajará precios, aunque otros destinos lo hagan para sortear la crisis mundial.

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La Jornada: Construirán campos de golf en desarrollos turísticos

http://www.jornada.unam.mx/2009/04/01/index.php?section...

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Caribbean paradise with a twist Sunday, June 14, 2009 Playing golf on the Varadero course in the Caribbean is a bracing experience - and a historic one, too. It is a neatly manicured course. Many of its fairways run along a beautiful coastline as winds blow in from the Florida Straits to offset the strong sunshine that beats down daily - in winter and summer.

It may sound like just another Caribbean idyll, but it’s not that simple; this is Cuba and, therefore, as with so much else on this island, it has a political significance. Because the Varadero resort - a tourist haven on the north-west coast, just 160 kilometres from Florida - is to be home to the island’s first private holiday home development on sale to foreigners for over half a century.

Two hours’ drive away, Cuban capital Havana is a picturesque but faded collection of fine Spanish colonial architecture and communist-era tower blocks.

Varadero, by contrast, is completely different. It covers the 20-kilometre long Peninsula de Hicacos and consists not just of the existing golf course - the only one in Cuba - but also a string of four and five-star hotels, restaurants, shopping malls and even a disco or two.

A few minutes’ drive away, close to the dramatic Via Blanca highway which leads to Havana, is the 420acre site that will soon become the private holiday home scheme to be called The Carbonera Club. Marketing begins in July, and early buyers will not only be purchasing a slice of history, but also a sophisticated lifestyle.

Carbonera will include its own new golf course, beach club, marina, gym, tennis centre and aquatic facilities, plus a spa, cinema, bars and restaurants, as well as a five-star hotel.

Many of the 800 holiday homes to be built there - most of them apartments, but also some ocean-front villas - have been designed by British style guru Sir Terence Conran, and have private pools.

The interiors of the Conran properties will have whitewashed walls, limestone floors, dark timber framed windows, louvred shutters and ceiling fans. They combine to provide a contemporary twist on the classic Hemingway-era colonial look.

‘‘There are cities and industries, long-standing transport and social infrastructures, extraordinarily high levels of education and health and a degree of European-influenced culture that you just don’t find anywhere else in the Caribbean. We haven’t realised it because the island has effectively been closed. Now that’s changing and our buyers will be able to enjoy it all,” said Christopher Lawton, sales director of Esencia, a hotel and resort construction firm which is building Carbonera as a joint venture with the Cuban authorities.

Esencia, British-owned but Madrid-based, is also renovating one of Havana’s leading hotels, The Victoria, as a joint venture with the government.

The hotel will open in late 2009, two years before buyers are expected to move into homes in The Carbonera Club.

A visit to the island shows that Lawton’s glowing review of its potential is not merely developer’s hype. Fifty years of communism may have denied Cuba the gloss of ‘westernised’ Caribbean hotspots, but there are plenty of other advantages. There are 30 airports, nine of them capable of hosting international flights, as well as a cruise ship port and extensive national road and rail networks.

Predictably, many of these networks need refurbishment, but that just enhances the investment appeal of buying a home on the island. When Cuba takes its place in a post recessionary world, the existing infrastructure will have to be developed as private investment arrives. This, in turn, will add value to properties purchased by early buyers.

Cuba’s greatest asset, however, is its natural beauty. Clear blue waters surround vast, open countryside which is lush and green from the occasional cloudburst. Much of the interior is mountainous, and surprisingly little of the inland has been scarred by industry.

Villages dot the hills while the roads - some of them wide carriageways, but many just tarmac tracks - link towns boasting typical Cuban architecture. Savills is handling Carbonera’s sales worldwide, and prices for the apartments and villas range from between €1,100 and €1,400 per square metre, which is roughly midrange for the Caribbean. Unit prices, therefore, range from about €90,000 for an apartment at the back of the scheme to €1.3 million for the largest oceanfront villa.

So far the properties are on sale with 75-year leases, but Esencia believes that freehold status will be granted shortly.

‘‘There are two million tourists in Cuba each year. Most are Canadians, Spaniards, Irish and British, and that’s where we expect buyers to come from,” said Mario Dorta, of Havana Holdings, the parent company of Esencia.

But while Esencia and Savills are happy to deal with any buyer, their real goal is to attract US investment. There is evidence that, if (some would say when) the 48-year-old trade embargo between the two countries ends, Americans will flock in.

The US senate recently relaxed travel and financial repatriation controls - senior Washington politicians visited Havana in April - and US president Barack Obama and secretary of state Hillary Clinton have admitted that the embargo had not brought democracy to Cuba. Just as importantly, there are signs that Cuba is voluntarily embracing at least some of the material freedom which it has hitherto spurned.

Mobile telephones and plasma television sets are now on sale, while Benetton has a store in central Havana. US cable company HBO has sold The Sopranos to Cuban state TV, wi-fi and the internet are available, and some locals wear the best clothing brands.

So what, you may ask? But just two years ago, before Fidel Castro’s illness saw power pass to his brother, Raul, such sights were unthinkable. Now, bricks and mortar are helping open up Cuba.

Esencia has said that up to 12 additional resorts - each possibly with its own private homes may be created in the next decade. The island’s annual tourist target has risen to four million

by 2018 and more hotel joint ventures are expected; developers from Qatar and Canada are rumoured to be announcing private-public joint venture schemes soon.

Many of the future holiday homes are likely to be built around new golf courses. Buoyed by the international popularity of Varadero, the Cuban government wants up to another 12 courses sited at historic and cultural centres across the country.

If anyone doubts how golf and Cubaâ&#x20AC;&#x2122;s revolutionary, socialist zeal have been reconciled, one needs to just walk into the Melia hotel at Varadero.

On the wall are photographs of Che Guevara, wearing a combination of fatigues and plusfours, playing in the 1960s.

What is not explained is how he would regard the construction of foreign-owned holiday homes. Perhaps, even 50 years ago, Che knew that, when it came to Cuba, anything was possible.

More details about the Carbonera Club are available from selling agent Savills at www.savills.com and 00442070163740

Client: Esencia Hotels & Resorts Source: The Telegraph Date: 2nd June 2008

Vol. XI, No. 1

www.cubatradenews.com

January 2009

Forecast: 4% growth in ‘09 — amid cash crunch

In 2008, Cuba suffered one of the financially most difficult grew 4.3 percent in 2008. years since the collapse of the Soviet Union, Economy Minister However, lower nickel and sugar prices derailed the original José Luis Rodríguez told deputies at the parliament’s plan of 8-percent growth. Due to the price drop, export year-end session. revenues from nickel were $250 million lower than Even so, Cuba’s gross domestic product should in 2007. rise more than 4 percent in 2009, Rodríguez said. At the same If this comes true, Cuba would be among the Fewer benefits, time, imports fastest-growing economies in the recession-stricken went through the harder work, hemisphere. roof. Hurricanes and maybe a raise Cuba is calculating its GDP in a different way than that caused $10 billion Page 2 other nations, by including state spending on in damage — 20 free healthcare, education, transportation and percent of GDP subsidized food. — forced the Thanks to a 2.1-percent rise in goods exports, a country to increase expensive food imports and 6.2-percent rise in services exports, and 6.6-percent The Look Ahead buy building materials abroad. Hurricane recovery growth in infrastructure investment, Cuba’s GDP needs and high food and fuel prices pushed up Continued on next page

2009

SINGER RAISES VOICE

In what could be the prelude to lively reform discussions before the upcoming 6th Communist Party congress, Pablo Milanés, the revolutionary bard and long-time supporter of the Cuban state, had frank and harsh words for his government in a recent interview. For the first time in 11 years, and seven years behind schedule, the rank-and-file members of the state party are expected to meet late this year to set the stage for reforms. “Cuban Socialism is stagnating,” the 65-year old singersongwriter said in a conversation published by Spain’s Público. “This Socialism has given all it promised to give. We’re paralyzed and we have to make reforms,” he said in what Continued on page 10

Milanés: “I don’t trust anymore in any Cuban leader older than 75.”

Leadership keeps 50-year bash low-profile

In a low-profile celebration amid the global economic crisis and cash crunch on the island, Cuba marked Year 50 of its revolution. Plans to stage a ”big extravaganza complete with a military parade” were scrapped after the hurricanes, in favor of “a more austere celebration in tune with the times,” an official told Reuters. During a Revolution Day speech Jan. 1, President Raúl Castro did not dwell on the topic of Socialism. Instead, he described the revolution as the culmination of Cuba’s drive for autonomy and independence from Spain and the United States. He emphasized challenges ahead and the need to be grounded in reality. Castro held the speech on the same balcony from which his older brother Fidel declared victory in 1959. The building in the center of Santiago de Cuba is facing a square that fits only a few thousand people. “Observing the current turbulences of the world, we can’t think that [the next 50 years] will be easier,” Castro said. ”I don’t say this to scare anyone, it’s just the Continued on page 8

‘4% growth,’ from previous page income grew only 5.6 percent. Cuba’s cash crunch is likely to continue throughout 2009, although the government is trying to cut back the rise of expenses by more than half from last year. Public spending will increase 3.9 percent in 2009, Barreiro said. Cuba, according to its economy and planning minister, will try to “maintain its external financial balance and create reserves for indispensable contingencies” this year.

imports 43.8 percent, more than $8 billion. As a result, the trade deficit soared by 70 percent, or $5 billion, to $11.7 billion in 2008, according to estimates by Reuters. The budget deficit in 2008 — a whopping 6.7 percent of GDP — was twice as big as in 2007, and it’s proportionally the highest in 13 years. Public spending grew 9 percent in 2008, according to finance Minister Georgina Barreiro, while

Raúl Castro prepares Cubans for more work, fewer benefits, maybe higher wages Instead, salaries should rise according to employees’ productivity, forcing people to get to work, Castro said. “Let’s not deceive ourselves anymore. If there’s no pressure, if there isn’t a necessity to work to satisfy my necessities, and if they’re giving me free stuff here and there, we’ll lose our voice, calling people to work. That’s my way of thinking, and that’s why everything I’m proposing is going towards that goal. Let’s not deceive ourselves.” “The next year is marked by much uncertainty in the world economy, and we must be prepared to confront this serious challenge, which is already affecting us in significant ways,” Castro said.

In his closing speech of the year-end session of the parliament Dec. 27, President Raúl Castro prepared the country for an austere year. “Two plus two is always four, never five,” Castro told the parliament. “We must act with realism and adjust our dreams to the true possibilities.” He announced that foreign travel budgets for state officials and state company executives were cut in half and that highly subsidized employee bonus programs such as vacation plans and free meals would be eliminated. Free government services will be strictly limited to education, healthcare and culture.

VENEZUELA: $2 BLN STIMULUS

In their own version of an anti-recession package, Venezuela and Cuba during Raúl Castro’s first official visit abroad signed agreements for 36 new joint projects in 2009 worth some $2 billion. The cooperation plans for this year considerably exceed last year’s volume of 76 projects worth $1.35 billion. However, joint projects have suffered delays in the past, and 2009 might not be different. The two most important new projects signed in Caracas are for oil refining and information technology. In a memorandum of understanding, the partners agreed on creating a new joint venture company. Cuvenpetrol S.A. — 51-percent owned by PdVSA and 49 percent by CubaPetróleo — will be in charge of building a new 150,000 barrel-per-day refinery in Matanzas that will process Cuban heavy oil. The holding will also expand the Cienfuegos and Santiago de Cuba refineries. Cienfuegos will add 85,000 bpd capacity for a total of 150,000 bpd. Santiago will expand by 22,000 bpd to 50,000 bpd. Cuvenpetrol will also design and build a regasification plant for cont’d on page 5

Bolívarian crisis plan: Venezuela invests $2 bln more in its partnership with Cuba Relaciones Exteriores Venezuela

Cuba Trade & Investment News is a monthly publication of North American Partners (NAP), Tampa, FL, USA. CTIN is distributed to subscribers via mail or e-mail. Publisher Andrew Goddard P.O. Box 13752 Tampa, FL 33681-3752 USA Tel: 813 839 6988 Fax: 813 831 3811 AGoddard@cubatradenews.com www.cubatradenews.com Editor Johannes Werner Tel: 941 330 0303 JWerner@cubatradenews.com Editorial Advisors Chris Aberle, FCStone, Des Moines Kirby Jones, US-Cuba Trade Assn., Wash. DC David Lyons, Daily Bus. Review, Miami John McAuliff, FFRD, New York Phil Peters, Lexington Institute, Washington SUBSCRIPTIONS Call 813 839 6988. One year $350. In Canada and Mexico, add $15 postage. COPYRIGHT NOTICE No part of this publication may be copied, photographed or duplicated without NAP’s consent.

Focus on Cuba By Sarah Stephens

Nine Ways to Talk How can we break the fifty yearold diplomatic deadlock between the United States and Cuba? U.S. policy — imposing economic sanctions to provoke the overthrow of Cuba’s government — has never worked and never will. The two nations simply won’t agree on each other’s most basic demands. Cuba asks for an unconditional end to the U.S. embargo; the U.S. demands that Cuba unilaterally dismantle its political system. With both sides so hopelessly divided, how can we even begin a conversation to end this stalemate? There are numerous topics of global and mutual interest to talk about. The Center for Democracy in the Americas has identified nine critical areas where Washington and Havana can communicate, work together and build relationships of confidence and trust. CDA recruited a team of scholars and experts to offer their ideas for cooperation in military affairs, migration, energy, trade, academic exchange and other fields, which could then produce the progress that has eluded our diplomats for five decades. In their essays, the experts address: Military cooperation: Shared techniques and training exercises on search and rescue and drug interdiction between the Cuban military and the U.S. Defense Department could lead to a dialogue involving Cuba in international humanitarian programs or defense of the Panama Canal. Security cooperation: By working together to stop drug smuggling, criminal financial activities, and other law enforcement matters, and Continued on next page

Preview 2009

Resources scarce, reforms aplenty

If you are a businessperson exporting to or doing business in Cuba, here are some of the important things to watch in 2009 “We still have enormous problems Fidel Castro had postponed it without with Alimport re letters of credit being explanation. •Continued slow raises for Cuban opened months after we deliver to the docks,” a U.S. exporter complained workers, and a flexibilization of the to Cuba Trade about the state food wage system, giving state companies and import company. “It is becoming foreign joint ventures more control over the hiring and compensation very frustrating.” Don’t process. expect this situation •Continued to improve anytime restructuring of the soon. Continued Cuban government slow payment under Raúl Castro from Cuban and introduction b u yers w ill of more market likely be elements. The the norm for new president is 2009. Although making his mark tourism and with pragmatic service exports efforts aimed at are still growing, increasing efficiency and the nickel mining and productivity. He announced oil sectors have slowed “structural and conceptual down as a consequence changes.” of plunging prices. •As the cash That will keep crunch continues, Cuban coffers expect cutbacks empty. in government programs •The biggest immediate that had been taken for granted economic jolt could come in the form of a lifting The Look Ahead by many Cubans. •More centralized control of the U.S. travel ban. on state company spending, President Barack Obama has announced limited embargo relief as Raúl Castro continues to push his and a willingness to talk with Cuban project of creating a central fiscal control leaders. But progress in U.S.-Cuban institution placed above government relations will to a large degree depend ministries. •Continued investments by Venezuela, on how much energy and resources Obama can afford to spend on Cuba. particularly in oil and gas exploration, What’s more, the president has a lot of refining, petrochemical industry, and leeway on many smaller issues, but it’s agriculture. The South American up to Congress to make big changes to country’s revenues are expected to drop significantly this year, due to falling the embargo. •Many Cubans hope that the sixth oil prices. President Hugo Chávez is congress of the Communist Party committed to continue Venezuela’s of Cuba, scheduled for late this year, forging of close economic ties within will instill life into the ossified state Latin America, and he says his country’s apparatus. Lively discussion has already hard-currency reserves are big enough begun as to the extent of reforms. to continue as planned. Major projects The gathering of the rank-and-file in Cuba’s petrochemical industry are membership should have occurred in already underway. But it remains to 2002, but the Cuban leadership under Continued on next page

2009

Preview 2009

‘‘Scarce resources,’ from previous page

•Increasing interaction with Latin American economies — particularly Brazil and Mexico. Brazil signed a series of be seen whether the financial situation allows Venezuela to substantial economic agreements and is providing generous maintain this pace of investment. loans. Mexico expects to quintuple trade with Cuba over the •More integration with ALBA member countries and next few years. close associates (Venezuela, Bolivia, Nicaragua, Honduras, •Increasing trade and investment with China, Russia Ecuador). First steps towards the Sucre, the common currency and India, thanks to generous loans from these rising of ALBA members. Thanks to initial capitalization powers. committed by Venezuela and Cuba in December, •Limited financial relief, thanks to debt the ALBA Bank may begin granting loans to renegotiation with Cuba’s long-standing partners ALBA projects this year. Further agreements with in Canada, Europe, Japan and South Korea. ALBA member countries should boost medical and •There are no indications of rapid change. The educational service exports by Cuba. Raúl Castro administration is taking its own pace •Foreign companies taking advantage of at reforming the most dysfunctional sectors of Cuba’s the Cuban market as a platform to other ALBA economy. markets. •Although the U.S. media is fixated on Fidel Castro’s health and Cubans are emotional about “We still have enormous probhis persona, his eventual passing is of relatively lems with Alimport re letters of The Look Ahead little concern to the subsistence of the system. As one observer said, asked about what he thought will credit being opened months after happen when Fidel dies — “There’ll be a big funeral we deliver to the docks. It is bein Havana.” More than in Havana, Fidel’s death may have a psychological impact on Cuban Americans. Many hardliners coming very frustrating.” may capture this moment as an opportunity to soften their stance on Cuba. It would also give U.S. politicians an opportunity to U.S. exporter to Cuba Trade save face.

2009

‘Nine ways to talk,’ from previous page

Hurricane cooperation: Cuba’s peerless civil defense program and mass mobilization in natural disasters dramatically reduces the number of casualties from serious tropical storms. With storm activity in the Caribbean rising, shared information to improve hurricane forecasting and response would benefit both countries. Academic cooperation: Broad academic cooperation between the U.S. and Cuba in public health, biotechnology, arts education and environmental issues is impermissible under current sanctions. A democratic society cherishes the free flow and exchange of ideas; the U.S. should act in accordance with its values and resume academic exchange. The role of Cuban-Americans: The passage of time and a changing political climate in Florida has released the grip of hardliners in the Cuban-American community on U.S.Cuba policy. This means that travel restrictions on Cuban Americans can be removed, programs like Radio and TV Marti can be reexamined or defunded, and the belligerent tone of our diplomacy can be replaced. The moderate CubanAmerican community can now become a vital element of an improved, more creative policy that actually helps to facilitate a peaceful economic and political opening on the island.

jointly managing environmental and major security crises, the governments could create functional relationships on which to build trust. Migration cooperation: Cooperation on migration has historically followed migration crises rather than preceding them. Here is a new migration agenda that starts with specific policy reforms, such as more family visits and joint anti-smuggling operations, but leads to a new “normal” regime that promotes economic cooperation, educational partnerships, and exchanges. Medical cooperation: U.S. sanctions against Cuba’s health care system have had the paradoxical effect of fostering breakthroughs in Cuban research on cancer drugs and immunizations that are unavailable to U.S. citizens. Both countries could benefit from developments in health education and research if medical sanctions were repealed. Commercial cooperation: Opportunities for trade and commerce with Cuba would help U.S. firms compete against foreign firms, which operate in Cuba without restrictions, while improving Cuban living standards and working conditions. Energy cooperation: The expertise of the U.S. energy industry could speed Cuba’s development of abundant untapped oil resources, increase Cuba’s ability to produce ethanol, boost energy supplies to the U.S., and help Cuba’s economy.

Sarah Stephens is executive director of the Center for Democracy in the Americas, an independent non-government organization based in Washington. The full text of the report can be found at www.democracyinamericas.org. 4

Economy $2 billion stimulus,’ from page 2 liquid natural gas imported from Venezuela, as well as gas pipelines and other gas distribution facilities in Cuba. The agreement didn’t specify where the regasification plant will be located. The two presidents also signed a memorandum of understanding to create Guardián del ALBA S.A. The Venezuela-based joint venture, whose 51-percent owner will be PdVSA Industrial S.A. (with Cuba’s ALBET S.A. holding 49 percent), will set up “socialist software plants” to produce integrated solutions for automatization, information technology and telecommunications. The partners hope their software will help Cuba and Venezuela save more than $500 million in licensing fees. All Cuban-Venezuelan projects are under the umbrella of the

ALBA trade and integration agreement, which also includes Bolivia, Nicaragua, Dominica and Honduras. Castro’s visit coincided with the 9th meeting of the CubaVenezuela bilateral commission at the PdVSA headquarters Caracas Dec. 12-13. Of 311 proposed projects, the commission’s 24 committees agreed on continuing 137 development projects already underway, and to start 36 new ones. During a ceremony in Caracas, President Hugo Chávez presented Castro with the Order of the Liberator and a replica of Simón Bolívar’s sword. Castro was accompanied by Ricardo Cabrisas, the recently appointed vice president in charge of international economic relations. The Cuban delegation also included Rodrigo Malmierca, the new minister of foreign investment, and Foreign Minister Felipe Pérez Roque. Raúl Castro, 77, last visited Venezuela 55 years ago.

EXPERTS TALK COMMON CURRENCY

Six expert commissions and the finance ministers of the ALBA trade and integration agreement met Jan. 8 at the headquarters of Banco del ALBA in Caracas to analyze details of the proposal to create a common currency, Venezuelan Finance Minister Alí Rodríguez announced in December. The results of the expert meeting will be presented at the next ALBA-Petrocaribe summit at a yet to be determined date in the first quarter of this year. The currency, dubbed Sistema Único de Compensación Regional (Sucre), is part of an effort to facilitate commercial exchange within Latin America and break free of the dependence on the U.S. dollar and U.S. financial markets. “When there’s a crisis that has among its causes the weakness of the dollar, which has been profoundly affected by high levels of speculation, this obliges — as it’s happening — the different regions to go look for their own solutions,” Rodríguez said. At a December meeting in Caracas, the presidents of Venezuela, Cuba, Bolivia and Nicaragua gave green light to study the creation of a common currency. Ecuador and Dominica participate as observers.

Confirming Venezuela’s role as No. 1 partner for Cuba: Raúl Castro visiting Caracas. Relaciones Exteriores Venezuela

ALBA Bank gets capital infusion

Bolstering the long-ailing Banco del ALBA project, Venezuelan Finance Minister Alí Rodríguez announced Dec. 9 that Venezuela would provide $850 million of the bank’s $1 billion starting capital. ALBA members Venezuela, Cuba, Bolivia and Nicaragua officially opened the bank’s headquarters early last year, but the infrastructure bank has not begun to operate yet. Since then, Dominica and Honduras have joined as members, and Ecuador as an observer. However, only Venezuela and Cuba have committed funds to the project. The board of directors met for the first time Dec. 10 at the headquarters of the bank in Caracas.

Economy

Cuba ‘returns’ to hemisphere

The two main regional powers, Brazil and Mexico, had promoted Cuba’s entry to the Rio Group, an informal consultation group formed at the tail end of the Cold War to the Washingtonbased Organization of American States (OAS). The summit issued a joint statement calling on the United States to lift the embargo. “In particular,” the group asked Washington to end the embargo-tightening measures introduced by the Bush Administration in 2004. Bolivian President Evo Morales took the issue one step further, suggesting Latin American nations should expel their U.S. ambassadors until the United States lift the embargo. Meanwhile, Brazil offered to mediate between the United States and Cuba, Venezuela and Bolivia, respectively. Ecuadorean President Rafael Correa suggested the Rio Group morph into a more coherent organization that would replace the Washington-dominated OAS. However, on the margins of the summit, Raúl Castro met with OAS Secretary General Miguel de Insulza. Brazilian President Luiz Inácio Lula da Silva urged the United States to accept Cuba as a member of the OAS. At the margins of the summit, Castro for the first time met with Mexican President Felipe Calderón, overcoming half a decade of diplomatic conflicts between the neighbors. Castro and Calderón agreed to mutual visits this year.

Taking Cuba to the next level of integration with Latin America, the long-isolated country was welcomed as a full member of the Rio Group at a summit in Costa do Sauípe, Brazil. The summit was a four-way event by Mercosur, the Rio Group, Unasur, and the Latin American and Caribbean Summit (CALC). The Rio Group accession prompted President Raúl Castro to declare Cuba’s victory over isolation efforts by the United States. “We’re living a radically different historical moment,” Raúl Castro told the Cuban parliament in its year-end session. “The nations in our continent have gone from petitions to demands when it comes to ending U.S. aggression against Cuba, at multilateral events as well as in individual form by a growing number of governments and parliaments.”

Group shot at Costa do Sauípe, still sans Raúl Castro photo: Grupo de Rio

Hurricane recovery advancing at acceptable pace

Hurricane recovery is proceeding “satisfactorily,” President Raúl Castro told the parliament during the National Assembly’s year-end meeting. Agricultural production is coming back, and thanks to “important investments,” residential construction is picking up, he said. Four Venezuelan construction brigades have begun earthmoving on new residential projects. However, he warned that the “magnitude of the task” of reconstruction might require three to six years. According to Castro, of 500,000 damaged homes in 35 municipalities 77 percent have yet to be fixed, in addition to 70,000 still damaged from hurricanes in previous years. A major drag on reconstruction efforts is a worker shortage. “As far as construction workers go, I must say that the response [of job seekers to a government call] is very, very insufficient,” Castro said. “We’ll see what we can do.” Meanwhile, a Venezuelan modular-home plant under construction at Cienfuegos is expected to crank out 4,430 modular “Petrocasa” homes this year made of PVC wall components. The $80 million factory will produce profiles, plumbing components, artificial wood and carpentry elements with machines imported from Germany and Austria, using some Brazilian-made components. The plant is expected to make 11,000 two- and three-bedroom homes in 2010.

One 100-home Petrocasa pilot subdivision has been built in Cienfuegos, and a similar one in Santiago de Cuba is almost finished. Some 50 Petrocasa homes are under construction in hurricane-affected areas of Pinar del Río province, and another 48 at Gibara, a port city in Holguín province devastated by Hurricane Ike this fall.

Housing to get private-fund boost

In a response to the desolate state of housing in the country, Cubans will be allowed to build their own homes using private money, Raúl Castro announced Jan. 11, according to Granma, while visiting the construction site of a Venezuelan-made Petrocasa neighborhood. Castro said the measure would trigger the construction of hundreds of thousands of homes. The privately built homes will be subject to strict limitations and guidelines, Castro said. Nevertheless, this is a step towards bringing market mechanisms to the housing sector. Petrocasa construction at Cienfuegos Photo: Pequiven

Economy

Cuba to Obama: The world is with us

Havana Jan. 7-10, accompanied by a large delegation intent on strengthening economic ties. The delegation included the ministers of agriculture, cattle, aquaculture and fishing, electricity, health, education, labor and sports. Correa signed cooperation agreements on economic complementation, energy savings, irrigation, disaster management, culture, healthcare and education during his visit. Ecuadorean media reported that the agreements also include the creation of two joint ventures for biotech products and generic drugs. Correa followed Panamanian President Martín Torrijos who was in Havana Jan. 5. Argentinean President Cristina Fernández de Kirchner is scheduled to be in Cuba Jan. 18, after postponing her visit for a week, due to illness. Chilean President Michelle Bachelet will attend the opening of the Havana Book Fair in February, which features Chile as the honored country this year. Honduran President Manuel Zelaya is scheduled to travel to Havana in March to sign a trade agreement. Mexican President Felipe Calderón will visit later this year. Finally, Guatemalan President Álvaro Colom said he would visit Cuba during the first quarter. Late last year, President Raúl Castro hosted Brazilian President Inácio “Lula” da Silva, Chinese President Hu Jintao and Russian President Dmitry Medvedev.

In rapid sequence, the heads of state of six fellow Latin American countries are visiting Cuba, on invitation by President Raúl Castro. The President of Ecuador, Rafael Correa, spent four days in

Mexico: We want 10 percent of Cuba trade

Now that a political conflict is set aside, Mexico hopes to recover the 10-percent market share of Cuban imports it held in 1994, Undersecretary of State Gerónimo Gutiérrez said in a press conference. Ten percent of Cuba’s imports today would amount to $1 billion. Mexico-Cuba trade dropped from a high of $435 million in the 1990s to $200 million in 2007, Felipe Calderón after a series of conflicts. Mexican exports to Cuba rose 67.4 percent during the first three quarters of 2008. Mexican President Felipe Calderón plans to travel to Cuba early this year. ‘Low-profile 50-year bash,’ from page 1 reality.” Castro reminded the audience of the warning of Cuba’s possible “self-destruction” his older brother gave in November 2005. “Our people know each imperfection of [the revolution] that the people itself raised with their arms and defended by risking their lives. We revolutionaries are our main critics. We haven’t hesitated to elucidate deficiencies and errors publicly.” Although they didn’t visit Cuba for the celebrations, Cuba’s closest friends in the hemisphere, Presidents Hugo Chávez, Evo Morales and Daniel Ortega, all issued congratulatory public statements to the Cuban government. A children’s day Jan. 3 kicked off the public celebrations, followed by 10 street dance events in public places throughout Havana. The “José Martí Anti Imperialist Tribune” on Havana’s Malecón, facing the U.S. Interests Section, will host concerts by Los Van Van, Paulo FG, and the ensemble of the Tropicana cabaret. A gala show Jan. 21 in the Teatro América in Havana will top out the festivities.

RAUL SUGGESTS PRISONER EXCHANGE

Days before the inauguration of President Barack Obama, the Cuban government continues to signal its willingness for dialogue to Washington. During a joint press conference with President Lula da Silva in Brasilia in December, Raúl Castro said Cuba would be willing to exchange political prisoners in Cuba for five spies imprisoned in the United States since 1998, known as “Cinco Heroes” on the island. Responding to a reporter’s question, Castro said a “former president” had urged him in a letter to seek better relations with the Obama Administration. “I told him the time of gestures is over in Cuba, that they have to be bilateral gestures, no more unilateral gestures,” Castro said. But under “absolute equality of conditions,” Cuba would be inclined to begin talks. “We’re going to do gesture for gesture,” Castro answered another reporter’s question on imprisoned political opponents in Cuba. “These prisoners you are talking about, they want us to release them? They should tell us tomorrow — we’ll send them there with their families and everything. Or they return our Five Heroes to us. That is a gesture by both sides.” Communist Party daily Granma published a transcript of Castro’s answers.

1960s comic book about the revolution, made in Cuba 8

Embargo

Anti-embargo groups keep up pressure on Obama

In anticipation of Barack Obama’s inauguration Jan. 20, many groups — including some that have advocated Cuba’s isolation before — are urging the new president to ease the embargo. The Miami-based Cuba Study Group, which had declined in to seek relations with Cuba in the past, joined with the Emergency Coalition to Defend Educational Travel, to ask Obama to lift travel and remittance restrictions not just for Cuban Americans, but for all Americans. “The consensus on democratic movement in Cuba is that the isolation must be broken,” said Cuba Study Group Executive Director Tomás Bilbao. “We have to listen to the people who we’re intending to help.” Washington-based human rights group Freedom House, which has been critical of Cuba’s human rights record, asked Obama to immediately lift the travel ban and re-examine the embargo. Ending the travel ban would expose Cubans to ideas from abroad, a spokeswoman of the group argued. Also, a coalition of academic, business and humanitarian organizations sent an open letter to Obama to allow peopleto-people exchanges, family travel and remittances. They include the Association of International Educators, American Association of State Colleges and Universities, American Friends Service Committee, Church World Service, Fund for Reconciliation and Development, Latin America Working Group, Latin American Studies Association, National Foreign Trade Council, Operation USA, Social Science Research Council, Unitarian Universalist Service Committee, USA*Engage, and Washington Office on Latin America. Finally, the leaders of the National Council of Churches, Church World Service and more than a dozen other U.S. Christian leaders asked Obama in an open letter to lift the travel ban, restore full diplomatic relations, and end the embargo altogether.

“We are convinced that it is time to change the ineffective and counter-productive U.S. policy toward Cuba,” the letter said. “We urgently request you to change the Cuba policy of the United States in ways that will assist the churches in their work and benefit all Americans.”

FLORIDA REP TAKES PUBLIC STAND

As the first acting congressperson in Florida, Rep. Kathy Castor (D-Tampa) asked publicly for an easing of the Cuba embargo. In an open letter to Presidentelect Barack Obama, she asked for a lifting of certain travel and remittance restrictions. “The restrictions have proven ineffective in altering the political situation and interfere with Rep. Kathy Castor fundamental family relations and human rights,” Castor wrote. “By lifting the burdensome restrictions we can provide relief to families while maintaining the pressure for human rights and change the island needs.” Tampa is the city with the second-largest Cuban population in the United States, after Miami. Meanwhile, Rep. Rosa DeLaura (D-Ct.), chairwoman of the House Appropriations subcommittee on agriculture, took the lead in calling for an immediate end to all travel and agricultural trade restrictions. “I believe that lifting all of the agriculture trade restrictions would help American agriculture, farm equipment businesses, and help with public health in Cuba,” DeLauro said. “I think it’s smart. It’s important.” DeLauro traveled to Cuba last year to attend the International Havana Fair.

FORMER BUSH AIDE PLEADS GUILTY

Felipe Sixto, a former White House aide and director of an anti-Castro group in Washington, pleaded guilty to stealing from USAID funds managed by the Center for a Free Cuba. He overcharged the Washington-based Center by $579,000 for radios and flashlights. Sixto resigned March 28 last year from his White House job.

DIAZ-BALART REALIGNS DEFENSE

Rep. Lincoln Diaz-Balart, the scion of the hard-line Cuba fraction in the U.S. Congress, is realigning the embargo defenses, facing Obama’s stated intent to lift some travel and remittance restrictions. He wants to maintain the embargo intact, but this does not mean that the “usefulness of certain” embargo-tightening measures passed by President George W. Bush in 2004 “cannot be talked about,” Diaz-Balart said, according to Nuevo Herald columnist Emilio Ichikawa. Diaz-Balart, who was re-elected to another two-year term in November, was a driving force behind all of the Bush Administration’s travel and remittance restrictions. “We’ll see intents to grant concessions to the regime,” DiazBalart said, according to the Miami Herald. “I expect them, but we’ll fight to maintain the embargo until there’s a genuine democracy underway [in Cuba].”

PEREZ, FANJUL WANT TO BUY HERALD

Jorge Pérez and Alfonso Fanjul, two prominent Cuban American businessmen associated with a political hard line, have been negotiating with executives of the McClatchy Co. about buying the Miami Herald. No agreement has materialized. The Miami Herald Media Co., owned by McClatchy, publishes the Miami Herald and El Nuevo Herald. Coping with drops in advertising and circulation, McClatchy’s stock has slid more than 80 percent since summer last year. The heavily indebted chain owns 30 newspapers. 9

Economy

British investors end real estate drought

Promising an end of a decade-long drought during which foreigners could not buy residential property in Cuba, London-based Esencia Hotels & Resorts said it signed a “pre-joint venture agreement” with state company Grupo Palmares SA to build a golf course resort. Esencia is set to begin to market Carbonera Club condos this spring. The joint venture, Cuban Golf Resorts (CGR), plans to begin construction this year of a 170-hectare beachfront resort near

Cuba’s only 18hole golf course in Varadero

Varadero. The project includes 105 apartments designed by Conran & Partners, 468 apartments in low-density, three- to four-story buildings, and 156 private villas designed by Rafael de la Hoz. The club’s plans include an 18-hole golf course, a marina with yacht club, and a hotel with a spa. Buyers, according to CGR, will be granted a visa allowing a stay of up to six months at a time. GCR asks for a $1,000 membership payment in the Carbonera Club. Each member is entitled to a reservation for an apartment or villa, for a 10 percent down payment. Property sales at Carbonera are tax-free. “I am delighted that Esencia, which has been working on this project for several years, has been able to make progress, and that this important project is now becoming a reality,” said Ian Taylor MP, a former British trade minister and chairman of the British parliament’s Cuba Initiative. Taylor said he had discussed the project with Cuban minister Esencia also operates the Victoria, a historical boutique hotel in the Vedado district of Havana, says it will open a spa hotel in western Viñales this fall, and plans more projects in Cienfuegos and Santiago de Cuba.

‘Singer raises voice,’ from page 1

some of his critics described as “rude” and party-spoiling behavior, just as Cuba is celebrating the 50th anniversary of the revolution. Asked about how Cuba is doing, Milanés said “quite bad — after three hurricanes, a crisis that doesn’t end, and [with] leaders who don’t do anything to push ahead the country again in the middle of this paralysis. If you add to this the global crisis, we’re all set.” “I don’t trust anymore in any Cuban leader older than 75 years because all of them, in my mind, are past their glory days. There were many, but they’re ready to be retired. We must pass the baton to the new generation so they make a different Socialism, because this one is stalled. It has already given all it could, moments of glory, immortal things that persist in the memory and in everyday Pablo Milanés: Cuba can’t facts of Cubans. But we have live off promises anymore to make reforms on a lot of fronts of the Revolution, because our leaders aren’t able anymore. “The situation that Cubans are living is such that they can’t live off promises anymore.” “Many people fear to talk, because there’s a system of censorship, of quiet and hidden repression that won’t allow you to talk freely. We have to destroy this, question it radically. These are things that have been exposed before, including by the Cuban leadership, but they haven’t been carried out.” “I am convinced Pablo’s true opinions and true sentiments are not in this interview,” wrote Nisia Agüero, a friend of Milanés and high-ranking official of the state culture organization UNEAC, describing his words as “rude.” “Pablo is ours: He’s of Cuba. He’s of the revolutionary people that loves him so dearly,” she wrote in Jiribilla magazine. “Those who try to use him to damage the image of the Revolution on its 50th anniversary know that too.”

COMPTROLLERS OFFICE COMING IN ‘09

Continuing his drive for efficiency and cost controls amid a cash crunch, Raúl Castro announced further government changes in the course of 2009. Studies to create a centralized comptroller’s office are “very advanced,” he told the National Assembly. The powerful office would take over the functions of the Ministry of Audits and Control, but would be reporting directly to the Council of State and be positioned above government ministries. Complaining about the “total absence of norms and regulations,” he said he would present the plan for a Contraloría General de la República at the parliament’s summer session. “During many years I have meditated about these questions, most of all critically analyzing my own work, and also that of others,” Castro said. “I have arrived at the conclusion that one of our fundamental problems is the lack of systematic demands at all levels.” advertisement

www.progreso-weekly.com 10

News from the Sales Department

CONFERENCES & EVENTS •”U.S. Policy Towards Cuba: A Conversation with American Diplomats” (podium discussion), University of Miami, Jan. 23 •Informática 2009 (information technology fair), Havana, Feb. 9-13 •International Book Fair, Havana, Feb. 12-March 8. •Cuba Consultation 2009 (annual meeting of anti-embargo activists), Washington, March 5-6 •International Tourism Fair, FITCUBA 2009, Havana, May 4-8 •Cubadisco 2009 (music industry fair), Havana, May 16-24 •7th Int’l Meeting on Nature Tourism, TURNAT 2009, Zapata Swamp National Park, Sept. •18th Latin American Congress of Ethno-Medicine (natural medicine), Havana, Sept. 14-18

++An Oklahoma agricultural trade delegation led by Secretary of Agriculture Terry Peach visited Havana in mid-December. Peach said that negotiations have begun with Alimport over the sale of wheat, forest products and dairy cattle. He said he was confident over a 1 million bushels wheat delivery “sometime in the coming months.” A first Oklahoma delegation visited Cuba in 2006.++ ++Alimport S.A. bought 600 container loads of utility poles from a Chilean company. The purchase was made on credit.++ ++Argentinean businesspeople met for two days with representatives of Cuban state companies and ministries at the Hotel Nacional in Havana to negotiate contracts.++ ++A Pakistani delegation made up of representatives of the textile and biomedical industries is planning to visit Cuba this year to explore investment opportunities, as Pakistan and Cuba are readying an economic cooperation agreement. The Cuban ambassador in Islamabad told State Investment Minister Saleem Mandviwala that the two countries should cooperate in textile, medical equipment and biotechnology. Cuba sent a medical brigade to Pakistan three years ago after an earthquake.++

Call (941) 330-0303 or send an e-mail to JWerner@ cubatradenews.com for more information on events

Economy ‘OFFER AND DEMAND’ FOR TAXIS

In another small reform, the Cuban government published new regulations Dec. 22 for private taxi owners that allow urban service to be “freely agreed on” between client and owner, according to offer and demand. According to Resolution 263/2008, rural taxi owners must follow a set route, schedule and pricing.

2008 BREAKS TOURISM RECORD

Cuba broke a tourism record in 2008, thanks to 2.35 million foreign visitors, 9 percent more than the year before, according to Tourism Ministry officials. The previous peak dates from 2005, with 2.31 million visitors. Tourism also generated a record $2.7 billion in revenues, up 13.5 percent from 2007, the National Statistics Office (ONE) said in a preliminary report for 2008. Despite the unpredictability of the global economy, tourism officials are optimistic about 2009. The ministry expects Cuban tourism to break another record this year, banking on the arrival of 2.5 million foreigners in 2009. Tourism revenues in 2008 rose 13.5 percent over 2007, net profits rose 16.7 percent. The boost in 2008 came mainly thanks to Canadian tourism, which was 25 percent up in 2008. Canada hasn’t been affected by the global financial crisis as much as other countries, and a cold spell this winter contributed to driving Canadians South. “Cuba really took off this year,” Cynthia Wong, manager of CAA Travel in Saskatoon told News Talk 980. “A lot of people are getting adventurous and want to see a little bit of history in Havana.” In a warning signal, though, the number of British, Italian, Spanish and German tourists declined between 3 and 5 percent in 2008. A big part of the increase went to the No. 1 beach resort. Varadero for the first time broke the 1-million tourist barrier in 2008. The Jardines del Rey area also saw considerable growth in 2008, up 6 percent. In December, the visitor number was up 28 percent, with 90 percent occupancy.

Tight and noisy, but better than the bus — pivate Polski Fiat taxi

Top “exports”: Doctors, teachers and beaches

Nickel, sugar and other commodity exports suffered last year — while food and other imports went through the roof — but Cuba was able to compensate s by sending doctors, teachers, engineers, technicians and sports coaches abroad, and by attracting a rising number of tourists. Service exports rose 6.2 percent in 2008 to $9.2 billion, according to preliminary figures released by the National Statistics Office (ONE). Neither ONE nor the Central Bank do specify what’s included in the services export category. According to Reuters, officials say it includes services provided by Cubans abroad, tourism, and donations. The rise consolidates service exports as the most important source of foreign currency. Service exports have exceeded tourism revenues since 2005. The bulk consist of medical, education and other services provided to Venezuela. Tourism generated $2.5 billion in revenues in 2008. 11

Companies After being taken over by Wal-Mart Stores Inc., Santiago de Chile-based D&S S.A. stopped selling not only Cuban and Iranian, but also Venezuelan products, according to Chilean media. Iran and Cuba are subject to U.S. trade D&S Líder supermarket sanctions, but Venezuela isn’t. The national economic prosecutor’s office in Santiago de Chile is investigating whether Wal-Mart’s restrictions violate Chilean competition law. D&S reportdely sold remaining Cuban and Venezuelan rum at its Líder, SuperBodega and Ekono stores at half price to liquidate its stock. In response, Chilean competitor Cencosud started a publicity campaign saying that in its Jumbo stores customers could “find products from all over e world, without restrictions.” *** Telecom Italia SpA, the joint venture partner of Cuban state telecom ETECSA, had informal talks with Spain’s Telefónica SA over the sale of its 27-percent stake in the Cuban company, Corriere de la Sera reported Dec. 10. The Italian newspaper said that Telefónica was willing to offer as much as $500 million, but that Telecom Italia was seeking $779 million. The Corriere didn’t attribute the information. Telecom Italia could also auction off its stake in a process supervised by the Cuban government, according to the newspaper.

Havana Journal Inc., a Massachusetts-based company that focuses on Cuban Web business, published data about some of the top Cuba-related Web sites. Using various traffic measurement tools, the survey shows that the top sites are news, opinion and travel related. They include CubaWeb. cu, BabaluBlog.com, TasteOfCuba.com, Cubanet.org, TheRealCuba.com, AfroCubaWeb.com, HavanaJournal. com, MyCubanStore.com, CubanFoodMarket.com, and CubaGenWeb.org. More information at http://havanajournal. com/images/cuba-select-2009.htm *** Rotterdam-based Nirint Shipping BV, the main shipper of Cuban nickel to Canada and Europe, has recently increased shipments of goods to Cuba. Nirint has been shipping industrial goods to Cuba on the five multi-purpose freighters it dedicates to regular Caribbean runs, including machinery for an expansion project at a Sherritt International Corp. nickel plant in Moa. Other shipments included liquid cargo, containers, construction equipment and buses. The shipper offers regular Europe-CubaCanada-Europe, Asia-Cuba-Asia, and Canada-Cuba-Canada runs. Nirint is owned by the Fondel Group, the Dutch commodity trader that handles the bulk of Cuban nickel sales. Nirint Commander, docked at Havana

LOVE, LOSS AND LONGING — THE BOOK The Latin America Working Group Education Fund (LAWGEF) and the Washington Office on Latin America (WOLA) are pleased to announce the publication of Love, Loss and Longing: The Impact of U.S. Policy on Cuban-American Families, a stunning photo and text book. The photos and testimonies in the book movingly capture how CubanAmerican families feel at being separated from their family members on the island. This new book is based on the photographs and stories exhibit that toured across the country for the past year and a half. With venues in over 20 cities throughout the United States, the photo exhibit reached thousands of Americans and is aimed at moving policymakers towards a policy of engagement with Cuba. The book includes expanded text on the background and implications of current restrictions. To order your copy today, go to: www.lawg.org/misc/Sign_up_pubs.htm. Proceeds will contribute to LAWGEF’s work to educate the American public and policymakers about the impact of the Cuba travel ban. To preview a free version of the book go to: www.lawg.org/misc/Publications.htm