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Vol. 20, No. 3

In the News Vatican and Cuba On eve of Pope Benedict XVI’s visit, ‘constructive engagement’ at work .....Page 2

OFAC nixes ferry Agency says ‘no’ to proposals for Fla.-Cuba passenger ferry service ................Page 3

P2P takes off Since relaxation of OFAC rules, ‘people-topeople’ travel skyrockets ...............Page 4

Special report: Cement Cuba attempts to revive its troubled cement manufacturing sector ..............Page 6

Newsmakers Bill Hauf, known for building playgrounds in Cuba, hopes to inaugurate BWI-Havana flights as early as this fall ............Page 10

Weak demand U.S. charter firms struggle with limited demand for Cuba flights ..............Page 11

MINTUR: We play fair Agency denies charges of discriminatory pricing against U.S. tourists ........Page 12

Retiring to Cuba How does Cuba stack up against other potential retirement havens? ......Page 13

Business briefs Sherritt sees drop in nickel, oil production; Cuban coffee harvest up 24% ......Page 15 CubaNews (ISSN 1073-7715) is published monthly by CUBANEWS LLC. © 2012. All rights reserved. Annual subscription: $398. Nonprofit organizations: $198. Printed edition is $100 extra. For editorial inquires, please call (305) 393-8760, fax your request to (305) 670-2229 or email info@cubanews.com.

March 2012

‘Mules’ handle growing volume of cargo as MIA dominates Cuba-bound air traffic BY DOREEN HEMLOCK

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he business of sending U.S. goods to Cuba is changing: More gift packages are going to individuals, and less commercial freight to Cuba’s cash-strapped government. The shift comes from policy changes in both Washington and Havana. In 2009, the Obama administration eased rules on sending gifts to individuals on the island. And now that Cuban authorities encourage private business, many locals have begun to rely on their relatives in the States to send down supplies and other basics. Likewise, Cuban state entity Alimport is buying less food and medicine from U.S. companies — no longer hopeful that its purchases from various states will speed an end to Washington’s 50-year-old embargo against the island. However, the shift has hurt some traditional freight companies serving Cuba. Miami-based Caribbean Direct International saw volumes on its all-cargo flights to Cuba drop

more than 80% since 2009, when newly inaugurated President Barack Obama issued a decree letting Cuban-Americans travel to the island whenever they want and send more gifts. The company’s president, Mercedes Costa, says much of her former business now moves through “mules” — Cuban-Americans who travel to the island hauling everything from food to clothes to flat-screen TVs. In return, the mules receive a free round-trip ticket, valued up to $500, and sometimes a small stipend too. Caribbean Direct’s volumes plunged from roughly 40,000 lbs a month in 2008 to 4,500 lb/month in 2011, she said, as mules took over the growing gift-parcel business. “Mules are stocking whole stores in Cuba” for private entrepreneurs, Costa told CubaNews. “It’s a huge business down there. Some mules go every weekend to bring things to the island, even bicycles.” The “mule” business works like this: Scores of U.S. offices accept goods for delivery in Cuba, See Freight, page 9

State Department asks Vatican to lobby for release of subcontractor Alan Gross BY ANA RADELAT

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State Department official said the Vatican ambassador in Washington has been lobbied to ask Pope Benedict XVI to seek the release of Alan Gross from a Havana jail. Benedict XVI plans to visit Cuba Mar. 26-28. But a spokeswoman for the office of Papal Nuncio Archbishop Carlo Maria Viganò said she had no comment on whether the pope will help Gross, a U.S. Agency for International Development subcontractor who’s been imprisoned in Cuba for more than two years. “Hopefully the pope raises the issue,” said a State Department official who asked to remain anonymous. “The pope’s visit gives the Cubans an opportunity to do the right thing.” Gross is serving a 15-year sentence following his conviction of crimes against the Cuban state for smuggling satellite phones and other hightech equipment into the island.

He traveled five times to Cuba covertly as a subcontractor for Bethesda-based Development Alternatives Inc. DAI has received millions of dollars for a USAID program aimed at destabilizing the Castro government. The 62-year-old man’s arrest has put U.S.Cuba relations into a deep freeze. But Cuba has adamantly refused to release Gross, despite several pleas from the State Department. A number of surrogates have pleaded for his freedom, including former New Mexico Gov. Bill Richardson, who was rebuffed by the Cubans last year. More recently, a delegation of visiting lawmakers that included Sens. Dick Durbin (D-IL) and Patrick Leahy (D-VT) asked for the same — and were also turned down. The latest appeal for Gross’ release came from a prominent New York rabbi, Arthur Schneier, who also met with the imprisoned subcontractor. When he returned to the United See Gross, page 3


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INTERNATIONAL RELATIONS

The Vatican and Cuba: Constructive engagement at work

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ope John Paul II made his groundbreaking journey to Cuba in 1998. Later this month, Pope Benedict XVI will also visit the island — but why? The answer dates back to the early 1960s, right after Vatican II and Pope John XXIII, when the Holy See decided to revise its antagonistic policy toward Cuba — not just vis-à-vis the communist government but toward the local Catholic Church as well. Its new policy of constructive engagement was entirely different approach than that employed by the Vatican toward Russia, Eastern Europe or Asia. The reason? Obviously enough, the Vatican reasoned that in Cuba, it was facing something beyond the conventional stereotypes of communism and the Cold War. It saw that the process taking place in Cuba involved much-needed changes in many different areas — regardless of ideological considerations and global alliances — and that the degree of popular support and legitimacy toward the revolution was extremely high. At the same time, the Vatican’s perception of the Cuban Catholic Church — despite its once-powerful resources and connections — was that it was quite weak compared to the situation in other Latin American and Caribbean nations. There were very few local priests and little appeal for priestly devotion, especially among blacks and mulattos. Important facts cannot be overlooked, among them: n The Catholic Church’s refusal to recognize the mulatta Virgin of Charity for more than 300 years (it took a lot of fighting and pressure from local patriots to achieve this). n The existence of a segregated order or nuns (the Oblatas), and n The church’s hostility toward the role of African religions and their syncretic expressions during Sunday Mass, even today.

VATICAN ENVOY ZACCHI WAS EXEMPLARY

Another key factor was the political influence from the ultra-conservative Spanish Catholic Church and their priests. The local church had been a major component of Spain’s colonial domination of Cuba, with only a few exceptions (such as the Virgin of Charity, who had inspired the mambises, Cuba’s fighters for independence). That Spanish influence was reinforced by the hundreds of thousands of Spaniards who continued to arrive in Cuba as immigrants until the 1950s. Subsequently, the Vatican followed a dual policy of building friendly, respectful relations with Cuba’s revolutionary authorities, and rebuilding a local Catholic Church capable of understanding — and working — within the new realities. The Vatican’s man for such a job was Monsignor Cessare Zacchi, who in 1962 was

named charge d’affaires and chief of mission at the Papal Nuncio in Havana. He worked hard to open new areas of cooperation, especially with regard to charities, social work and the recruitment of local Cubans as priests. Zacchi himself led many of these seminaristas to work in the fields cutting sugar cane; Fidel repeatedly praised Zacchi, who by then had become a close personal friend. As recognition for Zacchi’s accomplishments, the pope ordained him bishop in 1967. It was an entirely new way to approach developments in Cuba. By the end of the 1960s, REUTERS / ENRIQUE DE LA OSA

BY DOMINGO AMUCHASTEGUI

cessions, while social services and charities multiplied. The appointment of Jaime Lucas Ortega y Alamino — a critic of both communism and capitalism — as archbishop of Havana in 1981, and later cardinal, helped isolate the remaining conservative attitudes represented by Pedro Meurice, the archbishop of Santiago de Cuba. Finally, the Fourth Party Congress in 1991 put to rest, once and for all, any “atheist” policies and opened the Communist Party’s ranks to believers. Changes were becoming irreversible and the levels of understanding and cooperation between the Catholic Church and the Cuban government increased significantly. It was in this new context that Fidel Castro met John Paul II and a number of cardinals at the Vatican in November 1996, and the groundwork for the January 1998 papal was finally implemented. So, in a much improved atmosphere, Benedict XVI will now visit Cuba. In the meantime, Cuba has been visited by many cardinals representing the Vatican and other important dioceses, from Krakow to Boston to Miami. Notable visitors include Miami Archbishop Thomas Wenski and Tarcisio Bertone, whom European media consider to be the Vatican’s most influential politician. “It will be a watershed moment for the Cuban church as was the visit of John Paul II in 1998,” Wenski recently told reporters. “The pope goes on a mission of hope and as he has said many times, ‘A world without God is a world without hope, without a future,’ I think he comes to announce a future of hope for the island of Cuba.”

A poster welcomes Pope Benedict XVI to Havana.

DESPITE AGE, ORTEGA REMAINS ON THE JOB

church documents for the first time officially characterized the revolution as an act of social justice that improved the lives of Cuba’s people. In the 1970s, Fidel held dialogues with Christian churches active in social movements in Chile, Jamaica, Colombia and Nicaragua, providing the foundations of a new trend known as liberation theology. That trend was interrupted from 1975 to 1985, when Cuba’s leadership advocated a policy of so-called “scientific atheism” that had a freezing effect on any further improvement of relations with the church. But a decade later, this same leadership drastically switched gears, hoping to repair those damaged relations. That led to joint meetings between Party officials and intellectuals, and leaders of not only the Catholic Church but also other denominations such as Baptists, Methodists and evangelicals. Those meetings proved successful, and as a result, the Catholic Church was able to build an extensive network of publications and journals, having access to growing opportunities on radio and TV. It also took to the streets for its regular pro-

Meanwhile, the Cuban Catholic Church has continued to expand its network of journals, publications and newsletters. It recently inaugurated a new seminary while enlarging charities and social services (including religious services within the penal system). It has also sponsored language and IT courses, and more recently master’s courses on microeconomics and small businesses. Processions and religious celebrations are held regularly, culminating in December when thousands turned out as the Virgin of Charity was paraded throughout Cuba. The political dialogue between Ortega and President Raúl Castro has led, among other things, to the release of 130 political prisoners and amnesty for 3,000 common inmates. It’s noteworthy that the Vatican has kept Ortega on as archbishop despite a church policy that obligates members of the clergy to resign on their 75th birthday; he’s proven to be a skilled religious leader as well as an astute political player. Church weddings and baptisms are becoming popular among youth, though attendance See Vatican, page 3


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Vatican — FROM PAGE 2

Gross — FROM PAGE 1

at Sunday Mass remains low and still consists mainly of elderly white people, a few young couples and very few blacks and mulattos. On any given Sunday, one can visit 20 or 30 churches and find no black priests delivering sermons — except at St. Catherine in Sienna. As the late Dr. María Cristina Herrera — a devout Catholic very close to the church hierarchy — used to say, “Our Achilles heel is that we don’t have a black bishop and, unfortunately, this will not happen any time soon.” A humble priest at the Virgin of Mercy church recently recalled that Pope John Paul II — after hearing complaints about syncretic expressions inside the church during Mass — said two things: “Be more understanding, and open your arms to them.”

States, Schneier urged fellow Jews to pray for “a miracle” so that Gross would be freed. The State Department briefed Schneier before his trip to Cuba in early March. It has been lobbying the Papal Nuncio for several months. “They are very much aware of the situation,” the official told CubaNews. Christopher Sabatini, senior director of policy at the Americas Society and Council of the Americas, said he finds it “believable” that Pope Benedict will raise the issue of Gross’ imprisonment with Raul and/or Fidel Castro. “This is a humanitarian concern, and I would hope this would provide the Cubans with some way out of this.” Having Benedict XVI ask to have Gross freed would also prevent Cuban from insisting on preconditions, such as the release of the four remaining jailed members of the “Cuban Five” — a group of intelligence officers convicted in Miami of espionage. Sabatini also said that if the pope raises the issue of Gross publicly “it would be very difficult for the Cubans to walk away.” Sarah Stephens, executive director of the Center for Democracy in the Americas, said she’s not optimistic that the pope’s intervention would result in Cuba freeing Alan Gross. “The Catholic Church is doing really important work in Cuba right now. Cardinal Ortega has been in a dialogue with Raúl

CHURCH EXPRESSES OPPOSITION TO EMBARGO

But the problem endures among foreign and Cuban priests when they witness churchgoers addressing at the Virgin of Charity as Ochún, the Virgin of Mercy as Obatalá, the black Virgin of Regla as Yemayá and Santa Bárbara as Shangó, and praying to St. Lazarus — not the Catholic saint but the non-recognized San Lázaro/Babalú Ayé. The Holy See has made it clear, again and again, that attempts to use the church as a political tool of the local opposition against the Cuban government will not be tolerated. A similar approach was recently stated by Orlando Márquez, spokesman for Archbishop Ortega and editor of Palabra Nueva. Vatican officials have repeatedly stressed their disapproval of the U.S. embargo against Cuba while promoting the EU’s alternative approach, known as the Posición Común. After his last visit to Cuba, Cardinal Bertone publicly suggested that Washington should trade the Cuban Five as part of a process of normalization, something the United States has dismissed completely. John Paul II did not play into the hands of dissidents inside the church, such as Dagoberto Valdés and his foreign-financed journal Vitral, and José Conrado Rodríguez, righthand man to the late Bishop Pedro Meurice). He also refused to meet lay dissidents like Osvaldo Payá and others. When it comes to Cuba, Vatican sources have insisted that Benedict XVI will follow the pattern established by his predecessor. It’s quite clear that the relationship among the Vatican, Cuba’s Catholic Church and Cuban government authorities is an excellent example of “constructive engagement” — the product of a long process of give-and-take, and gradually improving ties. These ties won’t be altered or undermined by the usual attacks and pressures from the so-called local opposition, from South Florida’s aging exile community, or from certain quarters in Washington. It appears that 2,000 years of wisdom will prove Rome right. q Former Cuban intelligence officer Domingo Amuchastegui has lived in Miami since 1994. He writes regularly for CubaNews on the Communist Party and South Florida’s Cuban exile community.

Castro and was responsible to some degree for the release of political prisoners held since 2003, and the Church has been playing a very important role as a non-state actor in the changes going on in Cuba,” said Stephens, speaking Feb. 15 at Temple Emanuel, a reform synagogue in Kensington, Md. Stephens said her group of advocates has asked a Cuban cardinal if he thought the pope would intercede on Gross’s behalf; her conclusion was that “it’s unlikely they would want to venture into U.S.-Cuba issues.” Veteran activist Saul Landau, unaware of the State Department’s latest efforts to free Gross, told his audience — which included the jailed man’s sister-in-law, Gwen Zuares — that “the State Department has tossed Alan under the bus” and has absolutely no interest in working towards his release. “I feel badly for a man like Alan of his age and his integrity. I’m sorry he’s in jail and I’d like him to come home tomorrow. But in order to do that, we have to realize one thing: he was not simply setting up this really sophisticated apparatus with SIM cards in order to share our secret ancient matzo ball recipe with our Jewish brethren in Cuba,” said Landau. “This was about regime change. That was the purpose of the USAID program.” q Washington-based journalist Ana Radelat has covered Cuba-related issues on Capitol Hill for CubaNews since the newsletter’s birth in 1993. Larry Luxner contributed to this story.

OFAC nixes Florida-Cuba passenger ferry idea

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orget about boarding a ferry in Florida to see Pope Benedict XVI in Cuba this month. The U.S. Treasury Department’s Office of Foreign Assets Control has denied an application from Havana Ferry Partners to offer service to Cuba for the pope’s visit — or for any other occasion. OFAC, which oversees the U.S. embargo against Cuba, said ferry service is “beyond the scope of current policy.” While Washington has expanded the number of U.S. airports that can offer charter flights to Cuba, “ferry services were not included in the group of policy changes,” said OFAC’s Feb. 27 rejection letter. Havana Ferry plans to appeal, said managing partner Leonard Moecklin Sr. He sees no reason why authorized U.S. passengers can fly to Cuba and not take a ferry. Current rules on the embargo allow both “aircraft and vessels” to serve Cuba, and cargo already is shipped both by air and sea, he told CubaNews. “A ferry would be less expensive for passengers and would let them take more baggage,” said Moecklin, who plans to sell tickets at least $50 cheaper than round-trip charter flights. “The demand is there.” Havana Ferry has hired the Washington law firm Arent Fox and its senior policy adviser, former Sen. Byron Dorgan (D-ND) to handle its appeal. Dorgan sponsored the 2000 law allowing U.S. food sales to Cuba

and played a key role in writing its regulations. Moecklin knows Dorgan from his days working with a Colorado firm, Miller Farms Exports, that sold food to Cuba. Havana Ferry is one of several companies hoping to offer Florida-Cuba ferry service. Others are Orlando’s United Caribbean Lines, Paris-based Unishipping SA and Spain’s Balearia. The service was popular in the 1950s before the United States imposed its embargo on Cuba in 1962. Moecklin’s company aims to operate a ferry that would hold 500-600 passengers and their luggage and later, haul freight and vehicles too. Initially, most passengers would be Cuban-Americans, who may visit family on the island whenever they wish. U.S. ferry service also would need a license from Cuba, but Moecklin said he has assurances for Cuban approval once Washington gives its go-ahead. OFAC’s rejection came just two weeks after Moecklin went public with complaints about delays on an answer for his license application, first submitted in 2010. Moecklin likened the wait for a Treasury decision to being stuck in a black hole. Moecklin said he initially felt disappointed by the denial letter, but is now emboldened. He’s confident OFAC will recognize that ferries — like planes — are allowed under current U.S. policy. – DOREEN HEMLOCK


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POLITICS

Since relaxation of OFAC rules, ‘people-to-people’ takes off BY ANA RADELAT

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o a Google search for anything related to Cuba, and an ad for Insight Cuba — which organizes and sells trips to the island — will likely pop up. A division of the New York-based nonprofit group Cross-Cultural Solutions, Insight Cuba is among dozens of such organizations that have sprung up in the wake of President Obama’s 2011 decision to relax restrictions on American travel to Cuba. These companies will keep proliferating unless the Washington political scene changes after Nov. 6, when Obama, the full House and one-third of the Senate are up for re-election. “I would say we’re confident, but we do understand it’s a volatile situation,” said Tom Popper, president of Insight Cuba. As a nonprofit promoting “purposeful travel” to Cuba, Popper obtained a one-year, renewable license from the Treasury Department’s Office of Foreign Assets Control that lets him take groups of Americans to Cuba. These OFAC-sanctioned tours focus on Cuban salsa music, packages to Havana’s jazz festival and trips to Trinidad and other Cuban colonial cities. Hotels, meals and transportation on the island are all included.

“Your days will be filled with hand-picked experiences, followed by nights of bonding with the local Cuban people and your fellow travelers,” promises Insight Cuba’s website. Popper said he’s arranged 70 trips since the travel rules were relaxed and expects to organize 70 more before year’s end. “To some it’s an experience of a lifetime to say, ‘I played the bongos with Cuban musicians,’” said Popper, whose packages are limited to 24 travelers and cost $1,795 to $4,098, not including airfare to and from Cuba. GOOGLE HELPS INSIGHT CUBA BUILD BUSINESS

Insight Cuba has become the leading provider of U.S. authorized people-to-people travel in part because of savvy advertising techniques like Google Adwords, which uses keywords to target an audience. It also helps that Insight Cuba has years of experience in people-to-people travel. In 2000, when President Clinton relaxed travel rules, it became the first nonprofit to obtain an OFAC travel license. But only three years later, thenPresident George W. Bush tightened those rules, putting Popper out of business. “It was a shame because these visits are not about politics, they are opportunities for Americans to learn about Cuba and for

Miami-Dade to punish firms for Cuba ties

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lorida lawmakers have passed sweeping but little-noticed legislation this session barring local governments from hiring companies that do business with Cuba, the Miami Herald reported Mar. 13. The law appears to target one of MiamiDade County’s largest contractors: Odebrecht USA, the local subsidiary of the giant Brazilian conglomerate. The parent company’s Cuban affiliate is participating in a major expansion at the Port of Mariel. Legislators in Miami-Dade — with nearunanimous support of the Florida House of Representatives and Senate — pushed the bill as a way to keep taxpayer dollars out of the hands of repressive regimes. The law also applies to companies that work in Syria, which, like Cuba, is on the U.S. list of state sponsors of terrorism. “It puts the decision on the companies that are affected,” said Rep. Michael Bileca, a Miami Republican and one of the bill’s sponsors. “Do they want to do business in Florida, or do they want to do business in these countries?” Yet a major portion of the legislation, which applies to contracts worth at least $1 million, seems likely to face a court challenge for interfering with the federal government’s power to set foreign policy, experts told the Herald. Statutes limiting local governments’ con-

tracting decisions based on the vendor’s international work oversteps a state’s power, said Dan O’Flaherty, vice president of the Washington-based National Foreign Trade Council, which advocates trade with Cuba. “It’s unconstitutional,” he said, citing a 2000 case in which the U.S. Supreme Court struck down a Massachusetts law restricting state businesses from dealing with companies with ties to Burma. “States are barred by the Supreme Court decision from enacting procurement sanctions targeting companies doing business in foreign country X,” added O’Flaherty, whose NFTC sent letters to Gov. Rick Scott and House and Senate leaders opposing it. In general, state and local governments are barred from setting policy that conflicts with federal law. A Florida House staff analysis suggested Congress has authorized the type of contractual restrictions in the legislation, which takes effect July 1 and is not retroactive. But Miami-Dade has lost past fights over Cuba policy. In 2007, county attorneys advised that Miami-Dade couldn’t consider contractors’ Cuba ties in awarding the $607 million Port of Miami tunnel project. Activists had opposed giving work to Bouygues Travaux Publics because an affiliate of the French firm had built 11 resorts in joint ventures with the Cuban military. q

Cubans to get exposure to the United States,” he told us. “The trips are so enriching.” Marcel Hatch, president of Cuba Education Tours in Vancouver, said 99% of those who buy his travel packages are U.S. citizens. As a Canadian company, Cuba Education Tours is ineligible for an OFAC travel license — meaning his American travelers must get individual permission from OFAC to join his tours. Hatch’s tours are generally aimed at American teachers and focus on Cuba’s history and education system. But he also offers trips to music workshops as well as Cuba’s biennial arts festival, which he says promises “a cavalcade of gallery romps.” Hatch told CubaNews that many of his travelers are professionals, like doctors, who qualify for licenses for the purpose of research. “Even though Obama has opened travel, the economic downturn means anyone who travels would have to be a professional because they are the only ones who can afford it,” said Hatch, noting that he’s sent about 3,000 Americans to Cuba since last year’s change in travel regulations. In that time, said Hatch, at least 30 Cuba tour organizations have sprouted up in the United States — about the same amount that existed before Bush’s crackdown. “But these organizations had huge staff and overhead and when their business was cut by 90%, they folded,” he said, adding that there’s plenty of room for more companies that send Americans to the island. “There’s such a pentup demand for Cuba travel.” EMBARGO BACKERS URGE RETURN TO LIMITS

However, that demand hasn’t been strong enough for some U.S. airports — including those in Atlanta, Chicago and San Juan — to sustain charter flights to Cuba. Popper said the airports which do host new Cuba travel charters, like Tampa and Fort Lauderdale, don’t have the frequent flights he needs. As a result, his customers fly out of Miami International Airport, which has hosted charters to Cuba for decades. Embargo supporters in Congress want an end to purposeful travel and a return to the Bush-era limits. They say the trips authorized by OFAC now are thinly disguised Caribbean tourism vacations that bring the Castro government millions of hard-currency dollars and violate the embargo. The policy has prompted Cuban-American lawmaker Sen. Marco Rubio (R-FL) to block the confirmation of Roberta Jacobson, Obama’s choice to head the State Department’s Bureau of Western Hemisphere Affairs. Yet it’s unlikely embargo supporters will be able to roll back the new Cuba travel policy while Obama is in office. “We have support in Congress to do so,” said Rep. Mario Díaz-Balart (R-FL), “but Obama threatens to veto any bill that changes the policy.” q


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POLITICAL BRIEFS CUBA TO CREATE NEW ENERGY, MINING MINISTRIES Cuba will establish ministries of energy and mining as part of President Raul Castro’s campaign to reorganize government and make it more ef-fective, Reuters said Mar. 1, quoting state media. Cuba’s existing Ministry of Basic Industry will be eliminated and some of its key functions taken over by the two new ministries, the reports said. The restructuring has been in the works for months and is expected to continue with other changes aimed at both streamlining government and reducing its role in running the economy. The intent, said Communist Party newspaper Granma, is to put more of a premium on “efficient function, greater rationality and the reduction of all types of unnecessary expenditures.” The changes began last year with the elimination of the once-powerful Sugar Ministry, whose duties were turned over to a holding company. The creation of a Ministry of Energy comes as a consortium led by Spain’s Repsol-YPF SA drills the first of what Cuba hopes will be a number of offshore oil wells in the Gulf of Mexico. The Mining Ministry will oversee Cuba’s nickel operations, along with smaller projects. Nickel is one of Cuba’s top sources of hard currency. CUBA: WE WON’T ATTEND OAS SUMMIT IN CARTAGENA Cuba has decided not to attend an upcoming hemispheric summit following talks with Colombian President Juan Manuel Santos, averting a diplomatic showdown with U.S. leaders who had insisted Cuba not attend. Santos flew to Havana on Mar. 7 to discuss the Organization of American States summit in Cartagena with President Raúl Castro and Venezuelan President Hugo Chávez. The deal, brokered by Santos, will likely defuse threats by left-leaning states allied with Havana to boycott the summit if Cuba was not invited. It also marks a victory for Santos, who is striving to present himself as a regional mediator. U.S. leaders said Cuba can’t attend the meet because it isn’t an OAS member. Cuba was thrown out of the Washington-based organization in 1962 but invited back in 2009. Even so, it says it won’t rejoin because it sees the OAS as a U.S. “lapdog.” SANTERíA PRIESTS UNIMPRESSED WITH PAPAL VISIT The Afro-Cuban Santería religion may owe much to Roman Catholicism, but many Santeros are decidedly unenthusiastic about Pope Benedict XVI’s tour of Cuba, Fox News reported Mar. 5. Santero priests still remember the last time a pontiff came to town — and flatly refused to meet with them. They are expecting no better treatment this time, and some are openly disappointed. Their religion is by far the most popular in Cuba, with adherents outnumbering practicing Catholics 8-1. Yet as far as the Catholic Church is concerned, “we live in the basement, where nobody sees us,” said Lazaro Cuesta, a Santero high priest with a strong grip and a penetrating gaze. “We have already seen one pope visit,” he said, “and at no moment did he see fit to talk to us.” Cuesta’s bitterness stems from what many Santería leaders see as an unforgivable snub by Pope John Paul II during his historic 1998 tour.

In their own words … “The pope is determined to revive the faith in countries that were Christianized before but need a new evangelization, and he saw in this mission a true example of what it is to revive the faith of a people.” — Archbishop Jaime Ortega of Havana, speaking Mar. 14 on Cuban TV about Pope Benedict XVI’s impending visit to the island, scheduled for Mar. 26-28. “This is a case of Cold War ideology colliding with 21st-century environmental policy, and it is the environment that is at risk.” — Lee Hunt, president of the Houston-based International Association of Drilling Contractors, criticizing a U.S. policy which prevents American firms from coming to Cuba’s assistance in the event of a disastrous oil spill in the Gulf of Mexico. “Times are tough now. The Cuban people are having a rough time seeing what the future may bring. The situation back during Pope John Paul’s visit was just as rough, but at least then there was hope.” — Rev. José Conrado Rodríguez, a well-known Cuban priest and critic of the Castro regime, speaking Mar. 5 during a visit to South Florida. “When we speak about organizing a comprehensive fight against corrupt activities, indiscipline and disregard for the law, we’re thinking about all levels. The people aren’t responsible for the black market, it’s the responsibility of whoever has the product and doesn’t manage it correctly — but all of us have to deal with that situation, because if we lose the revolution, who loses? Those in charge of managing goods and every one of us.” — Gladys Bejerano, Cuba’s controller general, quoted Feb. 19 in Juventud Rebelde. “He says he has to be operated on abroad because the conditions don’t exist for him to be treated in his own country. What does that mean for common citizens if they have cancer?” — Henrique Capriles, Venezuela’s popular opposition presidential candidate, criticizing Hugo Chávez’s decision to have surgery in Havana, and govern from there, too. “Frankly speaking, we have no ‘shopping list’ for this visit. We will receive him with respect and appreciation. That is our greatest desire, both of the government and the people of Cuba, and not just the Catholics.” — Eduardo Delgado Bermúdez, Cuba’s ambassador to the Vatican, telling Reuters on Feb. 22 that Cuba will not ask Pope Benedict XVI to condemn the U.S. embargo. “Corruption is routine in Cuba. But this report is not about [stealing] three pounds of lard or a chicken. This is corruption at an extraordinary level.” — Pedro Roig of the Institute for Cuban and Cuban-American Studies, commenting on the Vista Hermosa scandal. The 32-acre farm in Matanzas province reportedly had lots of fertilizer, feed and other goods in short supply — thanks to crooked state workers. A former Hialeah man now sits in a Cuban jail, reports the Miami Herald. “When you talk about luxury products, that upturn is driven now by China. It’s booming. The Chinese are quite heavy smokers and much more interested in luxury products. The bestseller there is the Cohiba, our most expensive cigar.” — Javier Terres, vice-president for development at Habanos SA, noting that exports of Cuban cigars to China (including Hong Kong and Macau) rose by 39% last year. “I found him hopeful, and Purim is a festival of miracles. So we all pray that a miracle will allow us to see a resolution of the pain and suffering of all involved.” — Rabbi Arthur Schneier, a prominent New York rabbi, speaking after his Mar. 6 jailhouse visit to Alan Gross. Schneier brought the imprisoned USAID subcontractor a prayer shawl and traditional sweet pastries to mark the Jewish holiday of Purim. “I fully appreciate René González’s need to visit a dying family member. We need to remember that these are real people and real lives that are profoundly affected by these decisions.” — Judy Gross, wife of Alan Gross, in a show of compassion for René González, a convicted Cuban spy now on probation, whose request to leave the U.S. to visit his dying brother in Cuba was denied by federal prosecutors.


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SPECIAL REPORT: CUBA’S CEMENT INDUSTRY

Cuba attempts to revive its cement manufacturing sector BY ARMANDO H. PORTELA

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uba’s cement industry is a mix of high expectations and crumbling neglect. One can sense the potential if a sudden burst of good news should energize the Cuban economy — as well as sorrow at the deterioration of nearly irrecoverable facilities. Indeed, throughout the length and breadth of Cuba, brilliant examples of foreign investment, upgrading and profitability coexist with rusting, unsustainable factories. By the late 1980s — at the peak of the industry’s success — cement exports were virtually unheard of. A decade into the crisis, Cuba was selling abroad more than half its output (see related story, page 8). But that didn’t help the industry rebound much; in fact, it continued to shut down some facilities and downsize others. More than two decades after the industry lost momentum and turned to exports to stop the abrupt tailspin suffered in the wake of the Soviet Union’s collapse, it’s evident that merely shipping cement abroad won’t be enough to restore lost glory. It seems that only Cuba’s dormant domestic market — whose needs are enormous — has the potential to bring Cuba’s cement plants out of oblivion and make the industry bloom again.

CUBA AIMS TO CRUSH BLACK-MARKET CEMENT

Loosening the state’s grip on housing construction and building materials might jumpstart the ailing cement industry, however. Last summer’s decree by President Raúl Castro to stop subsidizing the sale of building materials in state-owned stores was aimed at ending a paternalistic, and woefully inefficient, egalitarian distribution scheme that has caused Cuba’s housing stock to wither away. It also aims to put out of business the black

market in cement and other building materials — which has been for decades the only place for most Cubans to get what they need to make urgent home repairs. More recently, the government announced its intent to lift a series of unspecified obstacles to home construction, leaving intact only essential norms such as zoning and architec-

prices are well beyond what most Cubans can afford. At $6.81 per 94-pound bag, an ordinary Cuban earning $18 a month can’t even afford three bags. Bought online — an alternative for Cuban exiles who wish help their relatives on the island — that same bag costs $9.03 (far more than the $1.62 wholesale price for Cuban cement exported to the Caribbean). All three prices seem outrageous, however, when compared to cement production costs in local factories. Apparently, it costs the 26 de Julio plant at Nuevitas only 118.63 Cuban pesos (less than $5) to make a ton of cement, according to a Granma report. That translates into production costs of about 21 cents a bag, not including packaging or transportation. These gross figures show profit margins in excess of 90% for the factory. CEMENT FACTORIES OPERATE UNDER CAPACITY

Karl Marx plant is now Cementos Cienfuegos SA.

tural regulations. “I insist, the solution is not to prohibit construction, but to show where and how to do it,” Raúl told the Council of Ministers in a Feb. 29 meeting, as reported by Granma. Although no further details were given, it’s apparent that Castro is referring to the inefficient bureaucracy that makes building a family house in Cuba an epic endeavor. If obstacles are effectively removed and construction materials really become affordable and easily available for common people, then Cuba’s oversized yet decrepit cement industry could get a much-needed boost. There seems to be ample room to play with prices to stimulate consumption and, ultimately, cement factory revenues. According to reports from Havana, cement is always available in state-run stores, though

Three out of the six cement plants currently operating in Cuba were built after 1959; the other three were enlarged and modernized repeatedly over time, until the post-Soviet economic crisis sent them all into oblivion. They are located conveniently near Cuba’s main oil refineries, thermoelectric plants and power transmission lines, as well as its main cities, industrial hubs, ports and rail lines. The six factories boast a combined production capacity of about five million tons a year, but actual production is nowhere near that. Santiago de Cuba’s José Mercerón plant, whose capacity is 600,000 tons/year), is idled, while the Siguaney plant in Sancti Spíritus operates at only 40% of capacity. Nuevitas, another former giant, has been producing at only 18% of its nominal capacity over the past six years with a downward tendency. As in many other Cuban industries, real production never reached capacity, even in the See Cement, page 8


March 2012 v CubaNews

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Cement — FROM PAGE 6 best of times. In 1989 — the top performing year after the beginning of the Soviet collapse — production was at 75% of installed capacity, while average output for the 1980s was only two-thirds of capacity. The problem can be attributed partly to the construction of huge, costly projects, which froze investments and made the industry inefficient. More important, however, is the energy factor. It requires 1.1 barrels of oil to manufacture one ton of cement in wet-process kilns, and 0.7 barrels per ton in dry-process kilns. As a result, oil consumption (not to mention high electricity prices) accounts for more than 60% of production. With oil above $100 per barrel and rising, the industry — especially the wet-process plants of Nuevitas, Siguaney and Santiago de Cuba — will need to scale back output or emulate Cementos Cienfuegos SA, which opted for a new coal-based technology instead of oil. ENVIRONMENTAL ISSUES THREATEN GROWTH

Pollution is another serious issue for Cuba’s cement sector. As is the case with other industries, these Soviet-era behemoths create huge amounts of toxic wastes that contaminate the environment. This represents not just a public health hazard but also production losses. Dust-covered facilities and adjacent towns are common sight. For years, Havana’s black market in cement fed on the dust that was simply shoveled from plant residues at Mariel and Artemisa. Cement manufacturing also generated relatively large volumes of CO2 from oil burning, not to mention oil spills and other toxic substances dumped into the groundwater. No matter how much the industry has fallen or how outdated its facilities may be, Cuba’s cement industry — once the pride and the epitome of socialist engineering and development — is poised for a comeback, along with a handful of other sectors. After seeing production levels from 3.45 million tons per year in the late 1980s to an annual average of only 1.7 million tons over the last five years, the industry is enjoying a modest recovery stimulated by increasing opportunities for exports, an incipient recovery in domestic demand and upgrades in the manufacturing process. Until the precipitous downturn of the Special Period in the early 1990s, cement was one of Cuba’s fastest-growing industrial sectors. Comparing average output from 1954-58 with 1985-89, production increased by a factor of more than six — from an average 563,000 tons/year to 3.47 million tons/year. The most significant growth occurred after 1970, when several important plants were built, and the existing ones were expanded. This resulted in an impressive 31.2% growth See Cement, page 9


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March 2012 v CubaNews

Freight — FROM PAGE 1 generally charging the sender $7-9/lb. The offices hand the goods over to consolidators, who divvy up the items among baggage to be carried on planes by mules. Representatives for the consolidators get the bags at Cuban airports, often keeping separate cars waiting outside to whisk the items off to different cities. Charter flight operators say their profits depend on excess baggage charged paid by passengers, including mules carrying gift packages to Havana, Holguín and other cities. Costa estimates parcel traffic to Cuba has tripled or even quadrupled since 2009. But with mules now handling most of that, she’s cut her staff from four to two in recent years. Most Cuba-bound air cargo moves through Miami International Airport, which also leads in U.S. passenger traffic to the island. MIA said its cargo shipments to Cuba have jumped since the 2009 travel and gift rules took effect — nearly doubling from 68,599 kg in 2008 to 134,709 kg in 2010, the latest year available. And that doesn’t count all the excess weight sent as luggage in passenger planes. Why ship gift parcels with mules when traditional air or sea freight would be cheaper? Part of the reason is timeliness, freight forwarders say. Delivery tends to take longer through traditional cargo channels because of

less frequent trips. It can take months, for example, to ship U.S. goods via Panama or other nations to Cuba via state-run TransCargo or CubaPack services. An anxious Cuban-American grandmother learned that lesson one recent Saturday morning. She stopped by a Miami shipping office to send two bags stuffed with items from Kmart to her 19-year-old relative about

ports like Mobile and Houston. It also explains why freight company ASC International of Tampa is looking to gather up some of the smaller food shipments in Houston and drop them in Cuba en route to its prime market in Africa. ASC founder Dana Reed says there’s just too little volume for Cuba to justify maritime service exclusively to the island, noting that

to give birth soon in Ciego de Avila province. “I want her at least have a nice robe, slippers, feminine care products, diapers and some clothes for the baby,” said the grandma. The clerk told her shipment by sea — for $1.99/lb — would take nearly two months, arriving in Cuba after the baby is due. The woman opted for air freight with pickup by another relative at Havana airport for $3.99/lb because that option was much faster. She could have sent her gifts even faster through mules, but delivery would have been about twice as expensive, the clerk said. The Miami company flies goods in minimum 20-lb boxes usually twice a month on allcargo flights to Havana. While the gift-pack business grows, commercial shipments to Cuba are shrinking. Cuba’s government is buying less food and medicine from the United States, as it opts for suppliers that can offer credit. By contrast, U.S. agricultural exports must be paid for in cash in advance, with no credit extended. Those exports fell 6% by value last year to $347.2 million, according to government data. That means fewer maritime shipments of grains and other products carried from Gulf

“for now, the only way my business with Cuba can work is to consolidate shipments.” Crowley Maritime, which ships mainly frozen poultry to Cuba on a larger Caribbean route, is adding gift-parcel shipments to help offset declines in food transport to Cuba. Since October, it’s takes personal gift parcels sent by consolidators in containers from South Florida’s Port Everglades to Cuba. The direct sailings are faster than sea freight routed through Panama; they also cost senders less than air cargo to Cuba, said Crowley’s vice-president, Jay Brickman. Crowley now handles about one 40-foot container of gift parcels for Cuba each week and hopes to expand to four or five, he told us. Last year, it carried 40 containers of food and medicine weekly to Cuba, down from about 60 a week in the mid-2000s when Cuba bought more U.S. food. For the future, one huge concern for the cargo industry is rising fuel costs, which may force greater consolidation of both air and sea transport. Already, Caribbean Direct’s Costa said she shares the cost of leasing freighters with rivals to trim operating expenses. q

Cement — FROM PAGE 8 rate annually from 1970 to 1981, which led to average output of 3.3 million tons per year during the 1980s. Moreover, the growth in cement production promoted rapid expansion in construction materials. Crushed rock production jumped almost 20-fold, from 2.5 million cubic meters in the late 1960s to 47.6 million cubic meters in the late 1980s. Over the same period, production of concrete blocks more than doubled, from 18.6 million units to 45 million. Yet a recent Granma report disclosed that 2011 was a bad year for Cementos Cienfuegos SA, with output 20% less than the 662,000 tons projected. Exports came to only 34,000 tons — barely 16% of the 208,600 tons authorities said would be sold abroad. Plant managers blame marketing company Ecocem and trucking entity Udecam for the failure. These problems are quite similar to those plaguing the 26 de Julio plant at Nuevitas. According to another Granma report, when warehouses are filled with cement, purchasers or state intermediaries fail to pick up the product, forcing the facility to shut down. The plant is fining Udecam 2.5 million CUC (nearly $3 million) in damages. q Havana-born Armando Portela has contributed to CubaNews since the newsletter’s birth in 1993. Portela, who has a Ph.D. in geography from the Soviet Academy of Sciences, lives in Miami, Fla.


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CubaNews v March 2012

NEWSMAKERS

Bill Hauf hopes to inaugurate BWI-Havana flights this fall

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magine boarding a Boeing 727 jet at Baltimore-Washington International right after lunch, and landing in Havana just in time for a late-afternoon stroll along the Malecón. Within six months, businessman William J. Hauf hopes his company will be offering weekly BWI-HAV charter flights, and maybe twice-a-week flights if demand warrants it. That would mark the first time in history — even before Fidel Castro’s 1959 revolution — that the capital cities of the United States and Cuba are linked by regular nonstop service. “There have never been flights from BWI to Havana, so it’s a big story,” he said. “That’s why journalists have expressed such an interest to be on the inaugural flight.” Hauf, interviewed earlier this month over breakfast in Fort Lauderdale, is president of Island Travel & Tours Ltd., a Tampa-based outfit that specializes in Cuba. The inaugural flight Hauf dreams of was supposed to take off Mar. 21 — right around Easter recess — but poor ticket sales forced him to put off that dream for at least another six months. “We didn’t have enough interest to get the 80 passengers we needed to break even,” he told CubaNews, noting that fewer than 10 tickets were actually sold. “We began promoting in mid-January, which turned out to be an inadequate amount of time — nothing that could develop into a large enough market.” Hauf said the market for the Baltimore area will consist of categories of people who may already visit Cuba — government staffers, think tanks, universities, religious groups, architectural schools, law schools, journalists and entities like the IMF, the World Bank and the World Health Organization.

those two Brothers to the Rescue planes were shot down. It was a Saturday, Feb. 19, and all air traffic had been halted,” recalled Hauf. The businessman estimates he’s been to Cuba more than 100 times in the last 16 years — constantly looking for ways around the U.S. embargo that’s crimped bilateral trade for the last half-century. In 1998, Hauf finally got serious about Cuba and called Gary Jarmin, a Washington politiLARRY LUXNER

BY LARRY LUXNER

FROM PLAYGROUNDS TO CHARTER FLIGHTS

LOBBYING FOR A U.S.-CUBA DIALOGUE

Hauf, 67, didn’t start out in the travel business — nor did he originally have any particular interest in Cuba. A native New Yorker, he made his money in the California real-estate boom, investing mainly in apartments. In 1988, he put together a 2,600-acre project in San Diego County consisting of 1,600 single-family homes. His Cuba obsession began in a conversation had 15 years ago with a woman whose ex-boyfriend had visited Cuba. “We were on a plane to go scuba-diving in the Cayman Islands, and we flew over Cuba,” he recalled. “I asked what that island was, and it piqued my curiosity because I didn’t know much about it.” Before long, Hauf was helping distribute a magazine called “Business Tips on Cuba” being published by Isidoro Malmierca, Cuba’s former foreign minister (and the father of current foreign trade and investment minister Rodrigo Malmierca Díaz). After the elder Malmierca’s death, the magazine ceased publication. “I happened to be in Cuba in 1996, when

place on Wisconsin Avenue and got up every morning, knocking on doors in Capitol Hill and going to the House and Senate buildings with a letter in my hand, giving it to legislative aides and asking if their boss would be interested in promoting the commission,” he said. “The idea was that they would write a letter to the president requesting the same thing,” he said.”I got nobody to back me up on this, but I felt it was the right thing to do.” Hauf finally struck gold with an aide to Sen. John Warner of Virginia, who later became chairman of the Senate Armed Services Committee. That ultimately led to a “Dear Colleague” letter with 12 signatories including Henry Kissinger, George Shultz, Larry Eagleburger and other prominent Republicans — all urging a review of Cuba policy. “Up until now, this issue had been a Democratic issue. Our effort was to bring Republicans into the issue so that it would become bipartisan,” Hauf said, noting that 25 senators eventually signed onto the idea.

Bill Hauf, above, hopes to begin charter flights between BWI and Havana’s José Martí International Airport by October; it all depends on ticket sales.

cal consultant with ties to the Republican Party. “We discussed how we might be able to open the Cuba issue so there would be more dialogue,” he recalled. “Jerry had five different ideas, but when he got to #3, I stopped him. The idea was to get President Clinton to establish a bipartisan national commission to review Cuba policy.” Hauf wrote a letter to Clinton, and a month and a half later got an encouraging response from Sandy Berger, who was Clinton’s national security advisor. “I relocated from San Diego to Washington solely to push the commission idea. I rented a

Ultimately, the Clinton administration turned it down, he said, “reasoning that Al Gore had asked him not to, because Gore was going to run for president and he didn’t want to continue with a commission that might go against the wishes of the Cuban-American community.” However, two weeks after that rejection, Clinton announced he would expand peopleto-people travel to Cuba. While Hauf doesn’t want to take credit for that, he does say that his letter-writing campaign “brought Cuba to the forefront of his priorities. I would hope that because of strong Republican support from two former secretaries of state, that would have been an attention-grabber.” Encouraged by the new opening, in early 1999, Hauf wrote to the U.S. Treasury Department’s Office of Foreign Assets Control, requesting a Travel Service Provider license, a Carrier Service Provider license and a Remittance Forwarding license. “In May 2000, I got all three licenses,” he said. “I also applied for a license from the Department of Commerce to ship playground equipment to Cuba. At that time, I was making money off the apartments, and got 62 volunteers to build playgrounds. I rented an A320 from Airtran, and we took the volunteers on a nonstop flight from Baltimore to Havana. That was my first flight from BWI.” Why playgrounds, we asked him. “Having traveled to Cuba a number of times, I met many Cuban families,” he said. “One had a four-year-old daughter, and we would go to the park on weekends. We saw antiquated, 50-year-old equipment, broken seesaws, swings with missing chains, and I kept thinking how wonderful it would be for these See Hauf, page 11


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Hauf — FROM PAGE 10 kids to have a playground to play in.” In 2003, Hauf incorporated It’s Just the Kids Inc., a Section 501(c)(3) organization dedicated to building playgrounds in Cuba. With help from Fernando Remírez, head of the Cuban Interests Section in Washington, and his counterpart in Havana, Vicki Huddleston, “we built our first three playgrounds: one in Regla, one in Vedado, near the Hotel Presidente, and the third in Marianao.” In September 2005, the group built four more, in the Havana districts of Cotorro, San Augustín, Arroyo Naranjo and Guanabacoa.

foot in Cuba in 40 years (the last time had been Mar. 21, 1959, when the Cincinnati Reds played the Los Angeles Dodgers). Fittingly, said Hauf, BWI was the first U.S. airport from which he requested government permission to offer flights to Cuba. HAUF: BWI IDEAL AIRPORT FOR CUBA FLIGHTS

“I felt that Baltimore was perfect for what I was trying to do, which was to bring the two countries closer together,” he said. “I thought that if there were a direct flight from BWI to Havana, more officials from Washington think tanks and policy institutes would travel to Cuba, get to know its people — and through

“I hope President Obama will show the leadership he professed in his campaign. The most definitive statement he can make regarding Cuba would be to fly Air Force One to Havana’s José Martí Airport and show that we are a strong nation and can talk to anyone.” — WILLIAM J. HAUF, PRESIDENT OF TAMPA-BASED ISLAND TRAVEL & TOURS LTD.

Asked if any embargo supporters on Capitol Hill have ever criticized his charitable work in Cuba, Hauf said not at all — “because the work I’ve done has been to help the Cuban community. I have a long track record of supporting Cuban children and seeing that they have a safe place to play. The playgrounds we build are put into neighborhoods, not behind government buildings.” In March 1999, Hauf traveled to Cuba to watch the Baltimore Orioles make history, as the first Major League Baseball team to set

that, a dialogue could be established.” In addition, he said, “BWI is along the East Coast corridor that has I-95 and Amtrak, so people as far north as New Jersey, Philadelphia and Delaware can come right to the airport by train. Dulles is somewhat isolated, and you have to take a bus or taxi or some other means to get to it.” But Hauf was told that he couldn’t be granted CSP status from Baltimore because BWI was not on the approved list of airports. ‘So I changed it to Miami, although we

knew Cuba wouldn’t give us permission [to fly from Miami] because there were already eight companies serving that market,” he said. “In July 2008, I went down to Cuba and met with Tony Díaz, vice-president of Havanatur, and told him that from all indications, Sen. Obama would be elected president. “Therefore, I wished to request landing rights to Baltimore but also include Tampa, because Tampa has one of the largest CubanAmerican populations in the United States.” Hauf enlisted the support of Rep. Kathy Castor (D-FL) as well as Louis Miller, thenexecutive director of Tampa International Airport, and several other organizations including the Tampa Bay Partnership, the Greater Tampa Bay Chamber of Commerce and the World Trade Center of Tampa Bay. On Jan. 21, 2011, the Obama administration announced the list of new cities, and Tampa was on it. But that’s not enough, he says. “I hope President Obama will show the leadership he professed in his campaign,” Hauf declared. “The most definitive statement he could make regarding Cuba would be to fly Air Force One to Havana’s José Martí Airport and show that we are a strong nation and can talk to anyone.” On Nov. 6, 2011, Island Travel & Tours began flying once a week between Tampa and Havana, charging $445 round-trip including taxes and fees. His planes are leaving full. “We have a waiting list of people but have not been able to accommodate them because we don’t have extra seats,” Hauf said, adding that he’s asked Cuba for permission to offer more flights but hasn’t heard back yet.“ “It’s a very competitive market, and prices haven’t yet stabilized. The cost of a single tickSee Hauf, page 14

U.S. charters struggle with weak demand for Cuba flights

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.S. charter flights to Cuba are getting a boost from Pope Benedict XVI’s visit to the island later this month, but demand for year-round service remains limited, delaying plans to add flights from more U.S. gateway cities. Even existing charter service to Cuba is performing below expectations, with flights added last year from Tampa and Fort Lauderdale slowing growth in Miami, charter operators say. The reason: Despite the relaxed travel regulations now in force, the U.S. Treasury Department has been cautious about approving new “people-to-people” trips to Cuba. A slow U.S. economy — and relatively high prices for charter flights — crimp visits by CubanAmericans. And charter operators themselves are wary to spend on expensive leases for planes unless they’re confident they will sell enough seats and luggage space to cover their costs. That explains why ABC Charters of Miami considered flying from Dallas-Fort Worth on leased American Airlines jets but opted to wait. President Tessie Aral wants to see stronger passenger demand first. Likewise, Airline Brokers of Coral Gables is launching two more flights a week from Fort Lauderdale starting April, but will cut two a week from Miami to compensate. “By eliminating these two flights, we’re making certain that we don’t oversaturate the market,” said executive Alexis Ravelo-Lombana. The pope’s visit is helping the charter companies temporarily — but not without headaches. Airline Brokers is adding several flights from Miami and Fort

Lauderdale, but logistics are tough. It will take some passengers to Santiago de Cuba, but can’t wait around to fly them out. Santiago’s runway is too small to hold all the planes for the pope’s trip. So its charter will return empty to Florida and then, fly back empty to Santiago to pick up those passengers heading to Havana. Meanwhile, some U.S. residents interested in seeing the pontiff have decided not to visit Cuba because of the cost. A week-long package including flights, hotels and other basics can top $2,000. That’s partly because Havana hotels are charging peak rates and rising fuel prices have increased costs for flights, travel executives say. The latest data from Miami — the top U.S. gateway to Cuba — shows that after a 55% jump in 2010, the number of passengers leaving MIA for Cuba rose only 5% in 2011 to 335,335. About 1,500 passengers also flew charters from Fort Lauderdale and another 3,500 from Tampa in 2011. Combined, that’s still less than 350,000 passengers taking charters from Florida to Cuba last year — far fewer than many operators had hoped (see map, page 14 of this issue). Said a recent headline in the Tampa Bay Business Journal: “Wanted: More Tampa-Cuba passengers.” In Puerto Rico, the charters also have struggled with weak demand. Cuba Travel Services, based in Oakland, Calif., confirmed it has halted its weekly flights from San Juan to Santiago de Cuba, though it may offer seasonal service later if demand warrants it. – DOREEN HEMLOCK


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CubaNews v March 2012

TOURISM

MINTUR officials deny charges of discriminatory pricing BY VITO ECHEVARRÍA

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ravel agents representing Cuba made an appearance at the New York Times Travel Show, held Mar. 2-4 at the city’s Jacob K. Javits Convention Center — along with tourism ministries and travel agencies from Western Europe, Latin America, Africa and the Far East. The event included a Mar. 3 seminar on options for visiting Cuba. It was coordinated by Marazul Charters, C&T Charters, Insight Cuba and the Center for Cuban Studies, but also featured three last-minute arrivals: Luís Sotolongo Otero, president of Cuba’s San Cristobal travel agency; Eduardo Mederos, director of Amistur, and Eloy Govea, commercial director of Havanatur. During a Q&A with journalists after their presentations, the subject of Pope Benedict XVI’s upcoming visit to Cuba came up — specifically allegations made recently by Oregon-based Ya’lla Tours USA and a European agency that Cuba’s Ministry of Tourism (MINTUR) imposes three different rates for hotels, airfares and other services according to the nationality of the visitor (see CubaNews,

February 2012, pages 1-3). “Starting with the pope’s visit to Cuba, MINTUR took the decision to have a series of weekly meetings to discuss the topic [pricing for hotel rooms and airfares],” said Amistur’s Mederos. “Given that this is the high season, this was why prices have been raised. The pope’s visit is an extension of the high season, which includes Semana Santa [Easter week].” Mederos continued: “We also have differences in pricing according to the hotels they’re staying in. On the other hand, Cuba has to take measures to ensure the security of the pope and his delegation, and security for the press he’s bringing in, as well as the foreign press. These are the prices set for the high season. If [tourists] can’t pay them, they can change the date [of their stay in Cuba].” The Cuban official denied that MINTUR imposes discriminatory pricing according to nationality, as alleged by Ya’lla Tours, which claims that U.S. travelers must pay a 70-80% markup over what others are paying. Mederos, along with Otero, also assert that the prices raised during the pope’s visit come down afterward, even though Ya’lla Tours and the European agency — which asked not to

be named — claim the pricing policy against Americans has been going on for far longer, and is likely to continue long after the pontiff flies back to Rome. Maria Díaz, who heads World Travel Service — a travel agency in New York’s Jackson Heights district — came to the defense of the three Cuban officials. “In any country in the world that has a major event, the price is going to be higher,” she said. “The European traveler is looking for a two or three-star hotel, while the American traveler likes a five-star hotel because anything else is no good.” Even so, both agencies quoted in our story last month insist Americans are being charged more to stay in the same hotels as their European and other foreign counterparts. Earlier this month, Ronen Paldi, the president of Ya’lla Tours, received an email from a Cuban colleague warning him that from now on, local guides and taxi drivers are not allowed to take foreign tourists to private restaurants (known as paladares). “Those who keep taking clients to any paladar will be fired and may also have other See MINTUR, page 13

Habanos Festival attracts cigar-smoking big shots to Cuba roCigar, a trade show held in Santiago de los Caballeros every song “You’re So Fine.” Manzanera performed back-up on his guitar, February for Dominican producers of fine hand-rolled cigars, to an audience of Casa del Habano cigar shopowners and VIP cigar attracts fans worldwide (see CubaNews, December 2011, page 11). lovers from Western Europe, Canada, Russia and elsewhere. Gordon Mott, executive editor of the New York-based magazine It’s no coincidence that ProCigar comes only a week before its Cuban competitor, Habanos Festival — given that are least some Cigar Aficionado, said Belushi’s appearance there was no accident. “We had talked several times international cigar marketers are over the years about arranging a expected to attend both of them. trip for him on his own, but he The difference with the jumped at the idea and immediHabanos event is its glitziness. ately blocked out the dates on his ProCigar is geared more toward calendar, even before an official inDominican cigar industry insidvitation was issued,” he said. “In ers, with attendees focusing on short order, Habanos executives the smokes themselves. The said they, too, were interested in Habanos Festival, though, tries to having Jim attend the festival.” attract celebrities and deep-pockFrankly, it’s surprising that eted cigar aficionados worldwide, Mott didn’t talk another celebrity using the allure of Havana itself into attending instead of Belushi: as a selling point. Hollywood icon and former This explains the presence of California Gov. Arnold SchwarzeHollywood actor Jim Belushi and negger, who in 1996 and again in Phil Manzanera, member of the 2003 appeared on the cover of British pop group Roxy Music. Cigar Aficionado. The two were among those at dinMeanwhile, some wonder if ner at Havana’s Museo de Bellas Artes to commemorate the 520th Hollywood glitterati mix with aficionados at this year’s Habanos Festival. the U.S. government will ever let travel agencies sell Cuba cultural anniversary of the discovery of packages involving the island’s tobacco in Cuba by the Europeans. The occasion also marked the cigar sector and possibly the Habanos Fastival itself. Assuming that launching of Cuba’s Montecristo 520 EL limited-edition cigar. Other big shots have attended the Habanos event before, ranging happens, U.S. reservations for such trips would fill up quickly. “Hell yes!” says Giovanni Baquerizo of cigar company Humo de from director Steven Spielberg to actors Jack Nicholson, Jeremy Diablo LLC. “For business reasons alone, I would love to attend.” Irons, Matt Dillon, Gerard Depardieu and Peter Coyote. Details: Daymi Difurniao Rodríguez, Habanos SA, Ave. 3ra #2006, Unlike those A-list celebs, Belushi did far more than show up and puff on a few Cohibas. In a nod to his brother John’s starring role in e/20 y 22, Miramar, Ciudad de La Habana. Tel: +53 7 204-0513/14, ext the 1980 film “Blues Brothers,” Belushi performed a rendition of a 565. Email: ddifurniao@habanos.cu. URL: www.habanos.com. – VITO ECHEVARRÍA Buddy Guy song, and played harmonica to the Little Walter blues

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March 2012 v CubaNews

REAL ESTATE

Is Cuba an ideal retirement haven for elderly foreigners? BY VITO ECHEVARRÍA

nternational Living, a magazine based in Ireland for retirees interested in living abroad, regularly names Latin American countries like Ecuador, Panama, Costa Rica, Belize and the Dominican Republic as being worthwhile options for Americans and Europeans. What about Cuba? Obviously, due to the ongoing embargo, that’s not a possibility for U.S. citizens. But it is a top consideration for Canadians and others who visit the island frequently and want to stay for extended periods. However, it’s extremely difficult for nonCubans to gain permanent residency, say experts in the know. Such individuals must be married to a Cuban national before they can even apply. For that reason, many recommend getting tourist cards and renewing them, under the assumption that retirees are only going to spend so many months of the year in Cuba. “Canadians can stay for 90 days [on a tourist card] — renewable for another 90 days without leaving the country,” says travel writer Christopher Baker, who’s best known for his “Moon Cuba” guidebooks. “Other foreigners can stay for 30 days plus [another] 30 days without leaving.” Baker implies that once the in-country extension runs out, tourists must leave Cuba for at least a 24-hour period outside the country (such as to Cancún or Nassau), and buy a new tourist card to re-enter Cuba. Since one of the main concerns of retirees is health care, Cuba and its well-regarded medical system stand out in comparison to those of other Latin American countries. And because all foreign visitors must purchase health coverage before entering Cuba, retirees have less to worry about than going to another country where they would have to buy it independently. “The need to buy insurance is merely theoretical,” says Baker. “I’ve made eight visits to

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MINTUR — FROM PAGE 12 problems, including jail time,” said the email, which is dated Mar. 2 and is based on a fivehour meeting MINTUR officials had with foreign tour operators in Havana the day before. “Tourists can go to private restaurants, but they have to make their own reservations and go by their own means. We have to feature and sell government-owned restaurants exclusively,” the tour operator told Paldi. “I have requested formal information about this issue in writing, but there is nothing official. I think MINTUR understands the implication for this to be in writing.” The operator ended his email to Paldi that “no guide or driver will now go to a paladar with your guests. No one will violate this new regulation, so we have to think what to do, and what’s best for our clients.” q

Cuba within the past 11 months, and never have I been asked to show proof of insurance. “Foreigners are served in Havana by Clínica García, considered the best facility in Cuba. I’m told the service is swift, cheap and of high standard. Elsewhere, foreigners are limited to clinics. Again, fully stocked with pharmaceuticals, but if you have to receive more than basic service, you may be sent to the local hospital.”

Havana’s Edificio Atlantic caters to foreign tourists.

Another key issue is housing. Since the late 1990s, permanent accommodations for foreigners have been extended only to international business executives operating in Cuba, with the authorities permitting the construction and sale of a few luxury condos in Miramar and other areas of Havana. REAL-ESTATE REGULATIONS STILL LACKING

Even with the fanfare surrounding new luxury developments like those by Britain’s Esencia Group — which plans a five-star resort, seaside golf courses and luxury residential villas near Varadero — much of that housing for wealthy retirees has yet to materialize. “The [Cuban government] regulations are not set yet for foreigners to buy real estate,” says Tamas Nagy, a sales executive at Marysol Travel Services, whose Panama-based firm rents out apartments at Havana’s Edificio Atlantic to long-term visitors. “I was told that they are working on it, as several golf and villa projects were approved, but no groundbreaking has been done yet

because of the lack of regulations,” Nagy told CubaNews. “Since last year, Cubans can sell and buy real estate, but it is limited only to Cuban citizens. I heard of some sales to foreigners, but everything is under a Cuban name. About two years ago there was a wave [from Cuban authorities] to permit foreigners to purchase state-built condos [in Edificio Atlantic], but after one or two purchases, they did freeze it and now they’re not approving any sales in Cuba.” Nagy said that despite all the hype, there’s no sign of any construction going on at Esencia’s Carbonera Club project in Varadero — not even a promotional billboard. Robert Sajo, the Canadian high-tech guru who launched CubaWeb.cu in the late 1990s, suggests an alternative for retirees on tighter budgets: marry a Cuban and have that person officially buy an apartment from a local, which will end up being a lot cheaper than any units likely to be offered by high-end developers. “At $3,000 to $4,000 a month, you can live like a king there,” Sajo told us. However, such deals must be conducted discreetly. “I’m aware of a few foreigners who have bought homes in the names of their [Cuban] spouses,” says Baker. “One unlucky Italian, who lived high-profile in Trinidad with one house for a wife and, in true Italian fashion, another for his mistress, was recently kicked out of Cuba. Meanwhile, there’s no shortage of upscale condos and apartments for longterm rental to foreigners, but they’re not cheap either. Several are on Plaza Vieja, including in the Edificio Gómez Villa, although most are in Miramar.” Nagy agrees, noting that in Havana, a 60-sqmeter, one-bedroom furnished condo at Miramar’s Cecilia building rents for 1,000 CUC ($1,100) per month, excluding electricity. “That, I think, is the highest rental in the area,” he said. “In Panama for that amount, you can rent a house in a gated community.” Regarding retirees’ access to their savings while staying in Cuba, Nagy says “it is not necessary to have a local bank account. The retirees have tourist status, and tourists cannot open a bank account in Cuba. They should use their foreign account and access their money through their credit cards.” Sajo advises budget-conscious retirees to transfer funds within Canada to a Transcard (prepaid debit card), which is widely used in Cuban retail stores and supermarkets but carries no fee for withdrawing money. Canadians and others considering Latin America would like Cuba for another reason: a crime rate far lower than the Dominican Republic or anywhere in Central America, due to the omnipresent police presence and the lack of guns, drugs and gangs on the streets. q Vito Echevarria, a New York-based freelance journalist, writes regularly for CubaNews about business, e-commerce, the arts and entertainment.


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Hauf — FROM PAGE 11 et to a charter company [between Tampa and Havana] is at least $500, and can be as much as $532 based on landing fees. We’re losing money on every ticket we sell. “That’s why if we filled a flight with nonCuban-Americans, we’d lose money because they don’t bring excess baggage. However, we invite them to fly with us, particularly in groups, so we can make all their ground services in Cuba. Those revenues help offset the loss we experience on their ticket sales.” In contrast, said Hauf, the average Cuban exile brings 100 lbs of luggage — and that’s down from an initial $150 per passenger.

CubaNews v March 2012

local Cuban-American population to fill seats. In New York, for example, Marazul pulled out from that market after many years. “Then when Obama made his announcement, Marazul wanted back in and got two flights, but then said they would terminate those flights,”

FLORIDA AIRPORT PASSENGER VOLUMES

BWI EAGER TO ADD CUBA TO ITS ROSTER

Hauf said his passengers are carrying mainly food items; one customer recently showed up with a 70-lb suitcase filled with coffee. Other suitcases are crammed with medicines, toothpaste, shampoo, linens, towels, children’s clothing, toys and Pampers. Hauf’s company charges $1.50/lb, though the two other Cuba charters out of Tampa — ABC Charters and Xael — charge $2/lb. “Hopefully at some point, we’ll be able to make a profit,” he said. “Since we’re flying more frequently from Tampa, we now have clients going every few weeks, so the amount of excess baggage they’re taking is considerably less than when these flights first began.” For the moment, he said, of the dozen or so new gateway charter cities to Cuba, only Tampa and Fort Lauderdale are doing well — and that’s because they’re drawing on the

Hauf said. “They also terminated their flights out of Atlanta, which surprised me.” Under an accord with Xael, Hauf’s passengers who can’t stay a whole week in Cuba may fly back to Tampa on Xael’s Thursday flight. “That’s why we chose to do our Baltimore flights on a Wednesday, so that people could

go for only half a week, return on our Sunday flight to Tampa and get a connection to BWI.” He added: “Tampa has the same challenge BWI has in recruiting international carriers. The people who work as air services development managers travel around the world, talking to those foreign carriers and trying to recruit them to establish routes. They see Cuba as a great opening. Once we begin, we hope there will be a flight every week until such time we’ll have enough passengers to open a second flight. That’s our goal, to have a minimum two flights a week.” BWI spokesman Jonathan Dean agreed. “The Washington region has many organizations and institutions which would benefit from nonstop charters. It would be a very nice service for BWI to feature,” he told us. “Cuba is a niche market, one that under current legislation is not available to your typical leisure traveler. But there is a specialized market for this service,” said Dean, whose airport handled 22.4 million passengers in 2011 and offers flights to London, Toronto, Aruba, Cancún, Freeport, Nassau and Montego Bay. Hauf remains hopeful he’ll launch his headline-making charters to Havana later this year. “We need more time to make people aware of these flights,” he told us. “Under DOT regulations, until we choose an exact date, I can’t promote flights. But clearly we’ll have to do more promotion because groups take four or five months to prepare for. We’re looking at the fall as a starting point because by then, there should be sufficient demand.” q Larry Luxner is a longtime freelance journalist and photographer based in Bethesda, Maryland. He has been editor of CubaNews since May 2002.

Cuba slowly phases out 50-year-old rationing system ry shelves for decades to come. n Mar. 19, Cuba’s ration “Two generations of Cubans card — the famous “libreta passed their lives under this de abastecimientos” — celerationing system that, in spite of brated its 50th birthday. its egalitarian character, offered It was introduced in 1962 as a for decades to all citizens access temporary measure to guarantee to basic foods at ridiculously subfood accessibility to all as Cuba sidized prices,” Raúl Castro said transitioned from an unfair distrilast April at the Sixth Party bution system under capitalism to Congress. He added that the socialist wealth. libreta had become “an unbearAt that time, plans called for a able burden on the national econfantastic leap forward in food proomy and a disincentive to work.” duction: milk, rice, beef, eggs, As such, the Castro governchicken, rabbits, beans, fruits and ment has made efforts to abolish vegetables were all supposed to the 50-year-old rationing system. become abundant in a matter of Potatoes, cigarettes, cigars, few years. Open discussions were soap, toothpaste and other items even held on what to do with were taken off the rationing sysfuture excess production. “By 1970 we expect to produce Page from a 2008 ration book. Cuba’s famous “la libreta” is on its way out. tem in 2008 and 2009, though plans to move further in this dir30 million rabbits per year, which means that we can put a rabbit coat on every child if we want to, but ection are on hold until the regime creates more jobs, boosts effiwe aren’t going to do this,” Fidel Castro declared in an Oct. 24, 1965, ciency and slashes more than $1 billion in annual food imports. The libreta should have been a short-lived phenomenon. speech to Communist Party leaders in Havana. “It’s better to export Instead, it stayed with Cubans for decades and now its sudden them to get a little money to enable us to carry out all these plans.” In the beginning, the libreta included ham, cheese and butter, but end threatens a big chunk of the population without the means to such luxury items were soon dropped and rationing was focused on earn enough to feed themselves. – ARMANDO H. PORTELA the basics. Any sort of delicatessen food wouldn’t be seen on groce-

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March 2012 v CubaNews

BUSINESS BRIEFS SHERRITT SEES DROP IN NICKEL, OIL, POWER

Sherritt International Corp., Cuba’s largest private foreign investor, projects lower nickel, oil and electricity production on the island this year, according to the company’s 4thquarter report released Feb. 22. The Toronto-based energy and mining conglomerate forecasts a 2% reduction in nickel and cobalt output, 4% lower oil production, and a 11% drop in power generation in Cuba. Sherritt said the drop in nickel production is due to lower ore grade; the shrinking oil production is caused by “natural reservoir decline rates,” partially offset by new production from exploratory drilling in 2011; and the drop in power production at Sherritt’s two combined-cycle plants is caused by “increasing gas supply shortages.” Even so, the company is boosting capital investments in nickel and electricity this year. Investments in the Moa nickel venture will be 33% higher this year than in 2011, mainly to replace machinery and to invest in transportation of ore from longer distances. Likewise, a 150-MW expansion of the Boca de Jaruco combined-cycle power plant continues in 2012. AVIANCA LAUNCHES BOGOTÁ-HAVANA SERVICE Colombia’s Avianca said that beginning Mar. 30, it will operate nonstop flights from Bogotá to Havana using Airbus A319 jets. The planes are capable of carrying up to 120 passengers — 12 in executive class and 108 in coach. Flights will operate Mondays and Fridays, leaving Bogotá’s Eldorado International Airport at 9:05 am and arriving at Havana’s José Martí International at 1:31 pm. Return flights will leave Havana at 6:15 pm, arriving in Bogotá 8:30 pm. “With the launch of this new services, Avianca looks to consolidate its options in the Latin American tourist market, which seeks alternatives for rest and relaxation in the Caribbean,” said Avianca’s president, Fabio Villegas Ramírez, in a press statement. “We are very happy to offer our clients this new route to Havana, a destination recognized for its history and natural attractions.” Passengers arriving from Cuba will have access to Avianca connections to Colombia’s main cities, as well as other destinations like Caracas, Quito, Panamá and São Paulo.equal

to levels in the 1970s. EXPORTS OF PETROLEUM PRODUCTS DOWN 4.2%

Cuban production of refined petroleum products, the country’s second-largest export after nickel, fell 4.2% in 2011, after a 3.5% drop in 2010, as work to expand capacity faltered, Reuters reported Mar. 5, quoting the National Statistics Office (ONE). Diesel fuel output fell slightly, from 1.224 million tons in 2010 to 1.221 million tons, while fuel oil fell 4%, from 2.436 million tons to 2.332 million tons. Gasoline production fell 11.8%, weighing in at 503,000 tons, down from 568,000 tons in

2010, said ONE. Kerosene output was 3,600 tons and lubricant oils weighed in at 47,000 tons, while liquid gas fell 9% at 50,300 tons. Cuban oil refining nearly doubled in 2008 as a new joint-venture refinery with Venezuela in Cienfuegos, 149 miles (240 km) southeast of Havana, completed its first year of operations, producing mainly for export. Cuba and Venezuela have big plans to turn the island into a refining center for future offshore oil as exploration begins in earnest this year and as a bridge for oil flowing from Venezuela to other parts of the world. As part of bilateral integration efforts, Venezuela is revitalizing Cuba's downstream operations and is using the island to supply the Caribbean with crude and derivatives with preferential financing. Plans to increase the Cienfuegos refinery’s capacity from 65,000 barrels per day to 150,000 b/d in conjunction with Chinese companies, announced three years ago, have yet to materialize. A new refinery in western Matanzas province is also planned. There are two other operating refineries in Cuba: the Nico Lopez refinery in Havana and Hermanos Diaz refinery in Santiago de Cuba, 540 miles east of the capital. The two refineries, with maximum capacity of around 65,000 b/d, have processed 42,000 b/d of Venezuelan oil mixed with 20% Cuban heavy crude in recent years, almost exclusively for domestic use. The Santiago de Cuba refinery is scheduled to be upgraded in a joint project with Venezuela. Cuba consumes around 160,000 b/d in petroleum products, some 60% of which comes from Venezuela. The rest is pumped from the northwest coast along with natural gas for power generation. COFFEE HARVEST UP 24% THIS SEASON

Cuba’s 2011-12 coffee crop topped 7,000 tons of semi-processed beans — the best performance in more than a decade — as reforms aimed at reducing imports apparently kicked in, Reuters reported Mar. 12. “With the collection of 7,100 tons of coffee Cuba produced 10% more than planned, and an increase of 24% compared with the previous harvest,” Radio Rebelde said. The Agriculture Ministry’s director of coffee production, Elexis Legra Pelegrin, said 88% of the crop was processed and 85% of beans were of high quality, a 15% increase over the previous harvest. Legra Pelegrin called on farmers to meet planting plans and improve efficiency during the 2012-13 harvest to meet the 8,500 tons planed. Picking begins in August and ends in March, though most beans are harvested from October into January. Cuba’s 35,000 growers, in exchange for lowinterest government credits and subsidized supplies, must sell all their coffee to the state at prices that have always been be-low what the beans fetch on the black market. Local analysts said 10-20% of the crop was diverted, though recent increases in state prices may have lessened the flow. The country’s plantations, which at the time of the

1959 revolution produced 60,000 tons of coffee, have steadily declined ever since. Cuba reported that it imported 18,000 tons of semi-processed beans from Vietnam in 2010 at a cost of $38 million. Cuban farmers are now growing coffee in the lowlands with the aim of both selling to the state and directly to consumers. Plans call for producing 22,000 tons in 2015 and eventually 28,000 to 30,000 tons a year. CIGAR SALES UP 9% DESPITE SLUMP IN SPAIN

Cuban cigar sales jumped 9% to $401 million in 2011 as spending on luxury items increased in countries with stronger economies, Reuters reported Feb. 27. Cuban cigar executives said smokers in China, the Middle East, Russia and Brazil helped overcome declining sales in economically troubled Spain and Greece. “We are selling our products in 150 countries, which allows us to compensate to a certain degree for sales declines in some countries with increases in others,” said Javier Terres, vice president of Habanos SA, the worldwide distributor of Cuban cigars. Stronger cigar sales followed “the world rising trend of luxury goods,” Habanos said. Terres spoke at the opening of the annual cigar festival of Habanos, a joint venture between Cuba and British tobacco giant Imperial Tobacco Group Plc. Western Europe accounted for 53% of Habanos sales last year, followed by Canada, Asia-Pacific, the Middle East, Africa and Eastern Europe. By country, Spain leads all others in Cuban cigar consumption, followed by France, China, Germany and Switzerland. Terres predicted that 2012 would be a “complicated year” because of economic uncertainties and the rise of anti-smoking laws, which have swept the globe in recent years. The company’s goal, he said, would be maintaining sales in a difficult environment. FLA. FIRM SUPPLIES MATTRESS FOR PAPAL VISIT

Keith Koenig, president of City Furniture, will have the satisfaction of saying the pope slept on one of his mattresses, reports the South Florida Sun-Sentinel. At the request of the Archdiocese of Miami he’s donating two of his chain’s Kevin Charles brand memory foam mattresses to ensure that Pope Benedict XVI will sleep tight during his Mar. 26-28 visit to Cuba. The pope will be spending his first night in Cuba at the priests’ residence in El Cobre, the small town outside Santiago de Cuba that is home to the Shrine of Our Lady of Charity of Cobre, the island’s patron saint. Koenig and his wife Doreen also will travel to Cuba on a pilgrimage led by Miami Archbishop Thomas Wenski. “The opportunity to see the pope will be a big deal, and since the archdiocese is organizing the trip, I wanted to support them,” Koenig said. It will be his first trip to Cuba. Because of the U.S. embargo, Kevin Charles mattresses aren’t sold on the island. “Maybe sometime in the future: City Furniture and Cuba,” Koenig said. “Who knows?”


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CALENDAR OF EVENTS If your organization is sponsoring an upcoming event, please let our readers know! Fax details to CubaNews at (3 0 1 ) 9 4 9 -0 0 6 5 or send e-mail to larry@cubanews.com. Mar. 2 1 : “Cuba Needs a (Technological) Revolution: How the Internet Can Thaw an Island Frozen in Time,” Heritage Foundation, Washington. Keynote speaker: Sen. Marco Rubio (RFL). Panelists: Daniel Fisk, International Republican Institute; Roger F. Noriega, American Enterprise Institute; Mauricio Claver-Carone, US-Cuba Democracy PAC; Carlos García Pérez, Office of Cuba Broadcasting; Ray Walser and Mike González, Heritage Foundation, and Carlos Saladrigas, Cuba Study Group. Moderator: James K. Glassman, George W. Bush Institute. Lunch; no charge. Details: Andrew Parks, Media Relations, Heritage Foundation, 214 Massachusetts Ave NE, Washington, DC 20002-4999. Tel: (202) 675-1752. Email: andrew.parks@heritage.org. Mar. 2 9 : “Current Change in Cuba: From Chaos to Market Socialism,” Inter-Cultural Center, Georgetown University, Washington. Lecture by CubaNews political analyst and former Cuban intelligence agent Domingo Amuchastegui. No charge. Details: Eusebio Mujal-Leon, Georgetown University, 3700 O Street NW, Washington, DC 20057-0002. Email: mujalleo@georgetown.edu. Apr. 1 7 : “Cuba in the 21st Century,” International Institute for the Study of Cuba, University of London. Keynote speakers: Carlos Alzugaray Treto (University of Havana) and Dr. Rafael Hernández, editor-in-chief of Temas magazine (Havana). Alzugaray, Cuba’s ex-ambassador to the EU, will speak on Cuban foreign policy economic reform. Hernández will speak on “Cuba: In Transition to What?” Cost: £25. Details: Olga Jiménez, IISC, PO Box 1406, Tring, Herts, Great Britain. Tel: +44 795 638-1640. URL: Email: olga.jimenez@sas.ac.uk. www.cubastudiesjournal.org. Apr. 1 8 : “Cuba: Today and Tomorrow,” Association for the Study of the Cuban Economy, The New School, Arnhold Hall, 55 West 13th Street, 2nd Floor, New York, NY 10011. Keynote speakers: Harvard University professor Jorge Domínguez and Bob Kerrey, former U.S. senator and governor of Nebraska. No charge; limited seating. Details: ASCE, PO Box 28267, Washington, DC 20038. Email: asce@ascecuba.org. URL: http://cubatodayandtomorrow.eventbrite.com.

CubaNews v March 2012

CARIBBEAN UPDATE You already know what’s going in Cuba, thanks to CubaNews. Now find out what’s happening in the rest of this diverse and fast-growing region. Subscribe to Caribbean UPDATE, a monthly newsletter founded in 1985. Corporate and government executives, as well as scholars and journalists, depend on this publication for its insightful, timely coverage of the 30-plus nations and territories of the Caribbean and Central America. When you receive your first issue, you have two options: (a) pay the accompanying invoice and your subscription will be processed; (b) if you’re not satisfied, just write “cancel” on the invoice and return it. There is no further obligation on your part. The cost of a subscription to Caribbean UPDATE is $277 per year. A special rate of $139 is available to academics, non-profit organizations and additional subscriptions mailed to the same address. To order, contact Caribbean UPDATE at 116 Myrtle Ave., Millburn, NJ 07041, call us at (973) 376-2314, visit our new website at www.caribbeanupdate.org or send an email to kalwagenheim@cs.com. We accept Visa, MasterCard and American Express.

Apr. 2 0 -2 2 : Intensive Certificate Program in Cuban Studies, University of Miami. Three-day program “is designed for professionals and others interested in Cuba and its future.” Topics range from the 1962 Cuban Missile Crisis to Cuban civil society today, the Cuban diaspora and current business challenges and opportunities. Professors: José Azel, Andy Gómez, Brian Latell, Vanessa López, Pedro Roig and Jaime Suchlicki. Cost: $495 (including recommended books for the course). Details: Vanessa López, Institude for Cuban & Cuban-American Studies, 1531 Brescia Avenue, Coral Gables, FL 33143. Tel: (305) 284-5386. Email: LVLopez@miami.edu. Apr. 2 0 -2 4 : “Culinary Tour of Havana.” Join Chef Guillermo Pernot and his wife Lucia on a trip to Cuba, meet the chefs that inspired the new menu at Washington’s Cuba Libre bar and restaurant. Dine at Bar Oviedo, El Gijonés, La Cocina de Lilliam, La Guarida. Travel provided by Insight Cuba, a licensed provider of people-to-people travel. Cost: $4,000 per person, double occupancy. Details: Emily Jarmuth, Sales & Marketing Director, Cuba Libre Restaurant, 801 9th St. NW, Washington, DC 20001. Tel: (202) 408-1600. Email: cubatrip@cubalibrerestaurant.com.

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Washington correspondent n ANA RADELAT n

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Political analyst DOMINGO AMUCHASTEGUI n Feature writers TRACEY EATON n n VITO ECHEVARRÍA n n DOREEN HEMLOCK n n

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March 2012 Issue