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Vol. 19, No. 1

In the News Costly connection TeleCuba: FCC approval of rate hike may lower cost of calls to Cuba ............Page 2

National Assembly Reform-minded lawmakers pave way from chaos to market socialism ............Page 3

Outlook for 2011 Two Miami conferences offer rival scenarios for Cuba’s future ....................Page 4

Political briefs Board: Ice, pilot error caused ATR crash; OFAC OKs peso remittances .......Page 5

Iconic branding Final installment of 3-part series looks at Cuban consumer preferences ......Page 6

Golf courses galore Special 2-page map pinpoints the location of more than a dozen golf and marina projects planned across Cuba ............Page 8

SPECIAL REPORT Cattle, livestock industry — once the pride of Cuba — takes a beating .........Page 10

Saving the herd Florida cattle rancher J. Parke Wright tells CubaNews how to do it right .......Page 13

Business briefs Trabajadores criticizes rice import policy; Meliá opens 25th property .........Page 15 CubaNews (ISSN 1073-7715) is published monthly by CUBANEWS LLC. © 2011. All rights reserved. Subscriptions: $479 for one year, $800 for two years. For editorial inquires, please call (305) 393-8760 or send an e-mail to: info@cubanews.com.

January 2011

With U.S. subcontractor still in prison, USAID freezes all new Cuba programs BY ANA RADELAT

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he U.S. Agency for International Development has slammed the brakes on various controversial new Cuba initiatives. USAID and the State Department have not spent one cent of the $20 million that President Obama asked for — and Congress allocated — for the controversial Cuba program this year. As lawmakers prepare to approve that program’s FY 2011 budget, USAID hasn’t even sent Congress its proposal on how this year’s funds for Cuba would be spent. “Because we have yet to notify Congress of our specific plans to spend the funds, we have not issued any awards with fiscal 2010 funds,” USAID spokesman Drew Bailey told CubaNews. USAID and State did hand out about $15.6 million to Cuba program grantees earlier this year from its 2009 budget after key Democratic lawmakers released their hold on the money. Bailey said most of that went to “incremental funding” of five organizations with multi-year

contracts: Freedom House, International Republican Institute (IRI), People in Need, Creative Associates International and Institute for Sustainable Communities (ISC). USAID declined to say how much money each grantee received. But the activities that money financed appear to be winding down. Brendon Keleher, vice-president at ISC, said his Vermont-based NGO had an 18-month, $1.2 million contract to work with artisans in Cuba. “We wanted to help them understand the marketplace and work with other artisans in the Caribbean and Latin America,” Keleher said. ISC’s contract expired Dec. 9. When Keleher asked for an extension, he was turned down. “USAID chose to end the program,” he said. Steve Horblitt, director for external relations of Creative Associates, based in Bethesda, Md., said “USAID guidelines” prevented him from speaking about his company’s Cuba program. Creative Associates’ staff includes Caleb See USAID, page 3

Secret cables unearthed by WikiLeaks offer dramatic look at U.S. view of Cuba BY LARRY LUXNER

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idel Castro, bleeding internally on a domestic flight from Holguín to Havana in 2006, nearly died from diverticulitis of the colon after refusing to submit to a colostomy. Three years later, Fidel’s brother Raúl — now running Cuba — wanted to open secret talks with the White House as the only way his government could “make major moves toward meeting U.S. concerns,” according to Spain’s ambassador to Cuba, Manuel Cacho Quesada. Officials of the U.S. Interests Section in Havana, while clearly opposed to the Castro regime, have concluded that Cuba’s traditional dissident movement — the focus of millions in aid from Washington over the years — is unpopular, ineffective, greedy for American taxpayer dollars and riddled with government spies. China, meanwhile, is exasperated over Cuba’s habit of not paying its bills on time, and the Cubans are so upset with Jamaica’s reluctance

to confront drug smugglers that they’ve even complained to their U.S. counterparts. None of these dramatic revelations might have ever come to light if not for WikiLeaks, a shadowy “new media” nonprofit website that since Nov. 28 has been embarrassing U.S. diplomats around the world through its gradual release of classified State Department cables to Spain’s El País and other newspapers. While most of the uproar surrounding WikiLeaks has focused up until now on Afghanistan, Pakistan and the Middle East, it’s clear that before long, virtually every country with a U.S. mission on its soil will be dragged into the fray — and Cuba is no exception. Only a fraction of these 251,287 once-secret cables has actually been published. Even so, the biggest diplomatic bombshell in recent history has already been “devastating and destructive” for U.S. foreign service officers overseas, says See WikiLeaks, page 14


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CubaNews v January 2011

TELECOMMUNICATIONS

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alling Cuba from the United States costs around $1 per minute. That’s 13 times more expensive than calling London or Madrid, and 11 times more expensive than calling the Vatican to chat with the Pope. “To have a normal conversation with a family member, you must budget the cost of a dinner,” said Tony Martinez, a New York lawyer and editor of the United States Cuba Policy & Business Blog. “It’s tough on families.” One reason Cuba calls are expensive is that they are routed through third countries such as Italy. Miami-based TeleCuba Communications Inc. wants to establish a cheaper direct connection that some analysts say could eventually lower phone costs for consumers and allow U.S. visitors to Cuba to use roaming while making calls. To do that, TeleCuba first needs the FCC’s permission to pay Cuba 84¢ per minute of phone talk, up from current 60¢ per minute. Both Verizon and AT&T have filed letters with the FCC supporting TeleCuba’s request — which is in line with President Obama’s 2009 directive aimed at improving phone links with Cuba. State and Treasury don’t object, either. But the FCC, which must approve TeleCuba’s request for a waiver, has not acted. An FCC spokeswoman declined to say when her agency might make a decision. TeleCuba executives and their lawyers, who have been traveling to Washington to meet with FCC officials and argue their case, wouldn’t speculate either. TeleCuba wants to lay a fiberoptic cable between the two countries, and put into effect an international roaming agreement it has with Cubacel, Cuba’s mobile phone company.

FIBEROPTIC CABLE CONTINGENT ON RATE HIKE

A year ago, we reported that TeleCuba, in agreement with Great Eastern Group Inc. of Fort Lauderdale, plans to design, construct, install and maintain a 110-mile-long cable from Cojimar, Cuba, to Key West, Fla., the same route occupied by an existing 1950s-era copper phone cable linking the two countries. Once up and running, TeleCuba claims in a press release, its $18 million fiberoptic cable “will eliminate the need for satellite communications” between the United States and Cuba, “allowing for an array of new telecom products and services such as high-speed Internet and cable TV, which are not feasible using current satellite communications” (see CubaNews, November 2009, page 4). But Cuban officials say they won’t move forward unless TeleCuba raises its payments to 84¢ per minute, according to a May 21 letter from TeleCuba President Luis Coello to FCC Secretary Marlene Dortch. Phone companies around the world pay

each other to handle international calls. In benefit, said Jose Magaña, a senior analyst at May 2003, the FCC gave TeleCuba permis- Pyramid Research in Cambridge, Mass. “AT&T and Verizon definitely want to sion to pay Cuba’s state-run phone monopoly Etecsa 60¢ for every minute of calls it chan- strengthen their position in the Hispanic marneled to Cuba. In turn, Etecsa agreed to pay ket, where Cuban-Americans are important,” TeleCuba that same rate for calls originating he said, adding that enhanced phone communication — including roaming — would boost in Cuba. One year later, Etecsa asked that its pay- phone companies on both sides of the Florida ment be raised to 84¢. But Treasury didn’t Straits. “There are definitely a few hundred agree, forcing TeleCuba to end direct phone million dollars there. There’s a good amount service to Cuba. Last March, Coello requested FCC permission to pay Etecsa at the 84¢ rate so it could reestablish service. Because U.S. authorities haven’t yet taken action, Coello’s May letter said, Etecsa and Cuba’s Ministry of Communications “question the commitment of the U.S. to truly enact policies that reflect the directives set forth Miami storefront advertises, among other things, long-distance service to Cuba. in the April 2009 of money to be made.” speech delivered by President Obama.” Asked why the FCC hasn’t acted on On Oct. 26, Jennifer D. Hindin, a lawyer for TeleCuba, told Dortch that the company’s TeleCuba’s waiver request, Magaña speculatrequest would “serve the public interest” and ed that conservative pro-embargo activists improve phone communication between “the may be trying to influence the regulatory U.S. public and their friends and family in agency, creating delays. “There are a lot of politics going on,” he Cuba … consistent with the President’s recently expressed policy in favor of fostering said. “President Obama was more flexible deeper communication between the United toward Cuba in the beginning of his term.” But sentiments in Washington have since States and Cuba.” On Nov. 24, Hindin sent another letter to taken a turn to the right, and that “might the FCC, saying the public record “indicates cause things to be delayed a little bit longer.” Magaña said FCC approval of TeleCuba’s nothing but support” for her client’s petition. Karen Zacharia, a lawyer for Verizon, told waiver would help open up Cuba’s telecom the FCC that the TeleCuba waiver was “rea- market and eventually lower the cost of calls. As it is, calls to Cuba are expensive – from sonable” and in the public interest. An FCC waiver, she said in a letter to the 91¢ to $1.20 per minute, for instance, for cusagency, “would facilitate greater contacts tomers of AT&T. That’s roughly five times more expensive between separated family members in the United Sates and Cuba and increase the flow than calling the Dominican Republic, six times more expensive than calling China or of information between the two countries.” Brazil, and 10 times more expensive than calling Hong Kong or Denmark. AT&T, VERIZON SUPPORT TELECUBA REQUEST AT&T prices for 192 countries and territoAT&T lawyer James J. R. Talbot echoed ries show that Cuba ranked in 51st place. The Verizon’s position. In his own letter to the FCC, he wrote that most expensive calls, at $3.25 per minute, “to implement the stated U.S. foreign policy were to the Wallis and Futuna Islands, a objectives, AT&T agrees that it may be nec- remote French overseas territory in the essary to allow some additional temporary Pacific with only 2,500 phone lines in service. The five next priciest were: Chad, at $2.42; flexibility in U.S. carrier settlement rates as a the South Pacific atoll of Vanuatu, $2.41; Laos, predicate to the re-establishment of bilateral international traffic arrangements on the $2.39; Comoro Islands, off the African coast, $2:25, and Burma, $2.17. q U.S.-Cuba route.” Tracey Eaton, former Havana bureau chief of The rate waiver would lead to increased competition in the U.S.-Cuba phone market, the Dallas Morning News, now lives in St. Augusand companies like AT&T and Verizon would tine, Fla., and writes regularly for CubaNews.

LARRY LUXNER

TeleCuba, planning fiberoptic cable, asks FCC for rate hike BY TRACEY EATON


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January 2011 v CubaNews

POLITICS

Cuba’s National Assembly: From chaos to market socialism BY DOMINGO AMUCHASTEGUI

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n his closing remarks Dec. 19 to Cuba’s National Assembly, President Raúl Castro described the gathering as “an exceptional assembly” — and indeed it was. Never before had criticism been so prevalent, blunt and naked when discussing the structure and functioning of Cuba’s socialist economy, and its disappointing performance. The event was marked by a recitation of past blunders — and illustrated by scores of examples of inefficency, waste and mismanagement, as well as outright fraud and lies. Raúl described it as “la historia repetida.” Of course, the central issue was not lack of discipline or missed opportunities, but rather a failed approach to socialism and ill-conceived policies that ended in disaster. Warning that “the life of the Revolution is at stake,” Raúl told the 611-member body that “many Cubans confuse socialism with handouts and subsidies, equality with egalitarianism. We can assure you that, this time, there will be no going back.” The 80-year-old Castro, speaking on behalf of Cuba’s so-called “historic generation,” assumed full responsibility for these mistakes and said the country’s leaders “have the duty to correct the errors we have made in these five decades of building socialism in Cuba.” The government expects Cuba’s economy to grow 3.1% in 2011, up from a projected 2.1%

USAID — FROM PAGE 1 McCarry, a hardliner who was the Bush administration’s Cuba Transition Coordinator. In that position, McCarry urged USAID and State Department money to be used to foment dissent and civil disobedience on the island. Washington-based Freedom House, which over the years received more USAID money for Cuba programs than any other grantee, did not return repeated phone calls. IRI and People in Need, a Czech NGO, also didn’t respond to interview requests. Before President George W. Bush assumed office, most USAID Cuba grants went to exile organizations. But Bush sharply boosted funding for the program while directing more cash to groups like IRI and People in Need that had helped destabilize Soviet bloc regimes in the late 1980s. The theory was that such NGOs were most qualified to weaken the Castro regime. But after Alan Gross, a American subcontractor for former USAID grantee Development Associates Inc., was jailed in Cuba just over a year ago, Sen. John Kerry (D-MA), head of the Senate Foreign Relations Committee, and Rep. Howard Berman (D-CA), his outgoing counterpart in the House, held up USAID funds to change the program’s focus.

growth in 2010. The budget, estimated at 2.47 billion pesos, will run a 3.8% deficit instead of 3.5% as originally predicted. Yet Jorge Marino Murillo, minister of economy and planning, joined Lina Pedraza, minister of finance and prices, in complaining about “incumplimientos” [not meeting goals] “in every sector of the state economy, without exception.” As a result, Murillo said, Cuba lost over $200 million, and will be forced next year to spend $1.6 billion on food imports. RAÚL CALLS FOR AN ‘END TO SECRECY’

State investments from the budget will be spent as follows: 50% on short-term productive activities that generate hard currency; 19.2% on housing; 13% on infrastructure connected to industry; 10.6% on sidewalks, sewers, power lines and other public works; 4.3% on aqueducts, and 2.1% on urbanization. In addition, 68 projects that weren’t properly designed and documented were dismissed. In agriculture, 493 million pesos will be earmarked for input and supplies to farmers and finqueros, and 1.52 billion pesos for construction materials. Pedraza said “tax income over the last three years has financed only 55% of the budget.” That’s why the 2008 budget deficit was 6.7%. At that point, cuentapropistas were kicking in 200 million pesos, or only 1% of the total. The state’s contribution was 24.8 billion pesos, and state-run enterprises, 19.4 billion pesos. Rather than attempt to destabilize the Castro regime through protests and dissident activities, Kerry and Berman sought to use the program to help the Cuban people bring about peaceful change. That shift may be reflected in one USAID program funded with 2009 funds this year. The agency gave Loyola University $3 million to “create networks and empower communities in Cuba.” Loyola spokesman Steve Christiansen did not want to discuss the school’s activities in Cuba. The university won a $425,000 USAID grant in 2004 to provide English courses to adults in a poor Havana neighborhood. But six months later, Loyola announced it had suspended the school project because of the political nature of that program. ‘GREAT SENSITIVITY’ AT USAID

USAID also gave a $1.5 million grant to Grupo de Apoyo a la Democracia, an exile group based in Miami, for “delivery of humanitarian assistance to political prisoners and their families.” The group, also known as GAD, is involved with various dissident groups in Cuba, including Las Damas de Blanco [Ladies in White]. Since 2000, GAD has received $11 million from USAID. In 2006 it was accused of wasting some of these funds on computer games,

This ratio will change drastically in 2011, and even more later on. Taxation will play a major role considering that by 2015, some 1.8 million Cubans will be engaged in private businesses. At the same time, financial administration and taxation will be decentralized, with more power handed over to Cuba’s provinces and municipalities. For now, no value-added (VAT) or salary tax will be imposed, at least not until stability is in place concerning prices and salaries. Joaquín Infante, a prominent economist linked to the former economic system, has stated that 2011 and the first half of 2012 will be “extremely tense,” but that by 2013, “results and improvements will be quite visible.” Lastly, Raúl made three highly unusual remarks. One was that with few exceptions, secrecy must be banished from Cuba, particularly with regard to the way in which the government and the Communist Party work. He also said the self-employed and smallbusiness sectors will expand in the short term, and that “the state doesn’t have to mess around trying to regulate relations among individuals” such as selling and buying. Not long ago, such remarks would have been considered pure heresy. q Former Cuban intelligence officer Domingo Amuchastegui has lived in Miami since 1994. He writes regularly for CubaNews about politics, economic reform and Cuba’s Communist Party. sweaters, crab meat and Godiva chocolates. Rep. Ileana Ros-Lehtinen (R-FL), an embargo supporter, is expected to try to ramp up the Cuba program when she picks up the gavel of the House Foreign Affairs Committee from Berman in January. She’s likely to press for more funding of exile groups and destabilizing activities. “I don’t want to talk about it now,” RosLehtinen told CubaNews. “But we’ll see.” Yet Ros-Lehtinen’s efforts may be checkmated by her counterpart in the Senate. “We have undertaken a review of the programs, and the State Department and USAID have reassured Sen. Kerry that they’re improving oversight and policy direction over the programs,” an aide to Kerry told us. “The senator is in an ongoing dialogue with [Secretary of State] Hillary Clinton and [USAID Administrator Ravij] Shah.” In addition, the continued detention of Alan Gross — suspected of distributing high-tech communications equipment in Cuba — has dampened the White House’s enthusiasm for funding provocative missions in Cuba. Quipped a State Department official: “We’re handling things with great sensitivity now.” q Washington-based journalist Ana Radelat has been covering Cuba-related issues on Capitol Hill for CubaNews since the newsletter’s birth in 1993.


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CubaNews v January 2011

POLITICS

Outlook for 2011: microbusinesses and a new junta? BY DOREEN HEMLOCK

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orecasting the future of Cuba is tricky, but four panelists at last month’s 34th Annual Miami Conference on the Caribbean and Latin America offered scenarios for 2011 that include a surge in microbusinesses, slowing trade with the United States and even a new governing junta on the island. “I predict we will see a peaceful leadership change in Cuba this time next year, not to a person … but to a junta,” said Tim Ashby, a Miami-based lawyer active in Cuba for years. Ashby said President Raúl Castro will name a group of perhaps five people to lead Cuba as it reshapes its struggling economy. That group would feature as “first among equals” Raúl’s son-in-law, Maj. Luís Alberto Rodríguez López Callejas, now chief executive of the powerful Cuban holding company Gaesa. And it will include Raúl’s son, Alejandro Castro Espín, Ashby said. The junta, he predicted, would likely boost the efficiency and autonomy of state-owned enterprises, many of them run by young military leaders trained at business schools in capitalist Europe. Ashby and his fellow panelists spoke during the annual Miami conference, which is organized by the Washington-based nonprofit group Caribbean Central American Action. C/CAA’s acting director, Sally Yearwood, moderated the Dec. 2 discussion on Cuba.

LIFTING OF TRAVEL BAN UNLIKELY FOR NOW

Cuba’s elite now is debating ways to stoke the economy, with a younger generation of market-oriented reformers pitted against generally older, communist hardliners, said Teo Babun of Miami-based Babun Consulting Group. “Both want to save the revolution but differ on how,” he said. Castro already announced plans to lay off at least one million government employees, but questions remain over how to help them build microbusinesses and how much to tax them. Babun’s recommendation: Don’t overtax the new entrepreneurs, or you’ll fuel tax evasion and a backlash. “Welcome to rookie capitalism. As the Cuban government will find out soon, where there are high taxes, there will be changes in people’s behavior and at least, civil misbehavior,” Babun said. In trade, Cuba has been slashing food imports from the United States partly because of its financial woes, shifting purchases to countries that offer credit such as Vietnam and Argentina. That’s the word from Jay Brickman, an executive of Crowley Maritime Corp., which ships food to Cuba with U.S. approval. Havana had hoped that buying food from as many U.S. states as possible would boost pressure on Washington to ease its embargo on Cuba. But with little progress on that political front and Cuba short on dollars, “we will

probably continue to see an erosion” in U.S. sales to Cuba in 2011, Brickman predicted. Washington also won’t thaw ties with Cuba anytime soon, now that Republicans have added seats in Congress and boosted their clout in November 2010 elections, Ashby added. Legislation to lift the ban on U.S. travel to Cuba “is dead at least for the next two years,” the lawyer said. “And the executive order to expand travel to Cuba on Obama’s desk, I don’t think it will be released. [The Democrats] don’t want to lose Florida and New Jersey” by alienating Cuban-American hardliners in those states, Ashby said. POTENTIAL OIL DISCOVERY A GAME-CHANGER

Several factors could shift the scenarios. For one, a significant find of oil in waters off Cuba could portend a financial windfall for Havana, probably slowing momentum for economic reform and certainly reducing the Castro regime’s reliance on Venezuela as an oil supplier and a benefactor, panelists said. “Cuba is extremely vulnerable [to changes in Venezuela], at least as vulnerable as it was with the Soviet Union,” said Rafael Romeu, a Washington-based economist who collaborates with the Association for the Society of the Cuban Economy. He referred to Cuba’s previous dependence on Soviet oil supplies and how the demise of the USSR in 1991 triggered economic crisis in Cuba.

A significant oil discovery also would boost pressure from U.S. oil companies to do business in Cuba, paving the way to ease that part of the embargo, panelists added. “That’s not dead. Congress could support” U.S. oil companies doing business in Cuba, Ashby said. Stronger support from Brazil, Canada and other nations for Cuba’s new microbusinesses also may influence how much Cuba’s private sector grows and how the Castro regime treats it, Babun said. Spain alone has offered at least $600,000 in credit for private farmers. The United States also might aid microbusiness in Cuba to improve the lives of dismissed state workers and avert a mass exodus — a nightmare concern that haunts U.S. authorities. Warned Babun: “We don’t want to see one million Cubans jumping on boats and coming to Key West.” Caribbean nations are looking to see how they too can help Cuba in its transition. Trinidad & Tobago is considering a multimillion-dollar line of credit to Cuba to buy Trinidadian products, hoping to build sales in a market far less competitive than the United States, said panel attendee Brian Cecil Awang, chief executive at the Export-Import Bank of Trinidad & Tobago Ltd. q Details: Sally Yearwood, Acting Director, Caribbean/Central American Action, 1710 Rhode Island Ave. NW, Suite #300, Washington, DC 20036. Tel: (202) 331-9467. URL: www.c-caa.org.

An alternative view from UM’s ICCAS

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t’s October 2011, half a year after the 6th Cuban Communist Party Congress, and many people who had hoped for significant change in Cuba are disappointed. The island instead keeps muddling along. The government and the Party, now both led by Raúl Castro, are slowly implementing reforms approved at the congress. More than one million state workers have been laid off, but fewer than expected have sought self-employment licenses because of taxes; many work informally. Public frustration runs high, but the political opposition remains small and fractured, with no common agenda. The Catholic Church keeps negotiating with the regime, which lets more Cubans attend seminaries but still bans church-run schools. And U.S-Cuba relations remain chilly, as Washington sees no overriding national interest in Havana. That’s the bleak picture painted by Andy Gomez, the University of Miami’s assistant provost and a senior fellow at UM’s Institute of Cuban and Cuban-American Studies (ICCAS), at a Dec. 13 media briefing on the outlook for Cuba in 2011. “Life goes on in Cuba. Nothing changes

under Raúl Castro,” Gomez told reporters and analysts. “Many Cubans on this side [of the Florida Straits] have expected change, and that change may not come.” Researchers from the UM institute said they generally see little chance of “bottomup” or democratic-style change in Cuba. After nearly 50 years of military-backed communist control, Cubans have adjusted with a mindset to wait for change from the top down, said business specialist José Azel. Yet a government that specifies 178 categories approved for self-employment — including refilling disposable lighters and pruning palms but not other trees — “in no way signals serious change” to loosen its grip, said Azel. The Castro regime doesn’t even use the term “private sector” in offering new microbusiness licenses to laid-off workers, referring only to activities “outside the state sector,” he pointed out. That controlling attitude, he said, contrasts with Chinese leaders in the 1980s who showed their willingness to move toward a market-oriented system with such slogans as “To get rich is glorious.” Pressure from Cuban-Americans for See ICCAS, page 15


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January 2011 v CubaNews

POLITICAL BRIEFS NEW OFAC RULE LETS CUBANS WIRE MONEY IN CUCs Western Union has received approval from the U.S. Treasury Department’s Office of Foreign Assets Control to begin paying out money transfers in local Cuban convertible pesos (CUCs). Effective Dec. 20, says WU, “consumers will receive money in CUCs at the exchange rate set at the time the money transfer transaction is sent. The [sender] will receive a receipt that provides both the exchange rate and the exact amount that the receiver will be paid in local currency. Payout in local currency will relieve the receivers of the 10% tax imposed on U.S. dollars.” Also, the $5,000 limit for family remittance transactions has been raised to $10,000. “This is a great step forward that will benefit Cubans living on the island, since they won’t have do any kind of currency exchange to get their money,” said WU’s Victoria López Negrete, whose company has been sending money to Cuba since 1999. “This measure makes our work a lot easier.” The new ruling allows anyone living in the U.S. to send money orders to Cuba to parents, brothers, sisters, children, aunts and uncles, said OFAC. Details: OFAC Field Office, PO Box 229008, Miami, FL 33222-9008. Tel: (786) 845-2828. BOARD: ICING, PILOT ERROR CAUSED ATR CRASH Icing and pilot error caused the Nov. 4 crash of an AeroCaribbean commuter plane which killed all 68 passengers aboard, Cuba’s Civil Aeronautics Board announced Dec. 16. Investigators found that “extreme weather conditions” led to a “severe” buildup of ice on the plane that, “combined with errors by the crew in the handling of the situation, caused the accident.” It said the ATR 72-212 twin turboprop had been in good condition and functioned properly before plummeting to the ground near Sancti Spíritus. On that day, Cuba had the unusual condition of a cold front sweeping down from the north while a small hurricane brushed along Cuba’s eastern tip. The combination of cold air and very high humidity from the storm created the unusual conditions conducive for icing, aviation experts said. POSADA LOSES BID TO KEEP EVIDENCE FROM TRIAL A U.S. judge has rejected Luis Posada Carriles’ request to throw out evidence against him provided by the Cuban government, and kept his scheduled Jan. 10 trial date in Texas, the Miami newspaper El Nuevo Herald reported Dec. 18. Posada is charged with lying under oath during immigration procedures about his role in a dozen 1997 bombings of Havana hotels. He’s not charged with the bombings, which killed an Italian tourist. U.S. District Judge Kathleen Cardone in El Paso Thursday denied a motion by Posada’s Miami lawyer, Arturo Hernández, to throw out 6,200 pages of evidence gathered by the Cuban government and submitted in the case by U.S. prosecutors. Hernandez claimed he received the documents in November, although prosecutors had them in March 2007 and he repeatedly asked for a copy beginning May 2009. Posada, who lived in Venezuela and El Salvador for much of his exile life, was detained after he turned up in South Florida in 2005.

In their own words … “When I first came to this country with my family as a young girl, we were fleeing from oppression and seeking an opportunity to live in freedom. In Cuba, activists are condemned to the gulag and denied every basic human right and dignity ... I pledge to do all that I can to isolate U.S. enemies while empowering and strengthening our allies, and I will not make apologies for doing either.” — Rep. Ileana Ros-Lehtinen (R-FL), longtime embargo supporter and incoming chairwoman of the House Foreign Affairs Committee in the 112th Congress. “We see very little evidence that the mainline dissident organizations have much resonance among ordinary Cubans. [Without changes], the traditional dissident movement is not likely to supplant the Cuban government.” — Jonathan Farrar, chief of the U.S. Interests Section in Havana, in a secret dispatch to Washington dated Apr. 15, 2009, that questions prevailing U.S. policy on Cuba. The cable was one of 251,287 exposed by WikiLeaks (see story on page 1 of this issue). “We track every pound that goes on the airplane. Our average bag weight in the last year has gone from 85 to 132 pounds [40 to 60 kg] per person.” — Tom Cooper, owner of Miami-based Gulfstream Air Charter, which flies a 146-seat Boeing 737 to Havana daily. Cooper, quoted Dec. 16 by Associated Press, said his company’s passenger load has jumped from 23,000 in 2009 to nearly 50,000 this year. “This is terrific news for thousands of Cuban families and for communities across Florida.” — Hiram Ruíz, Miami-Dade director of refugee services at Florida’s Department of Children and Families, commenting on a U.S. decree reversing an earlier decision by the Departments of State and Homeland Security that would have denied a broad range of public assistance to about 3,200 Cuban migrants upon arrival in the U.S. “Alan’s incarceration for a year without clarity of the legal process he will face or its timing is a travesty. It violates every international standard of justice and due process ... We urge Cuban authorities to release Alan immediately on humanitarian grounds, as well as the fact he has already served one year in prison.” — Peter Kahn, Washington attorney for the Gross family, in a statement issued on the one-year anniversary of his client’s imprisonment by Cuba on suspicion of espionage. “Sadly, I believe Alan Gross may stay in jail a long time, as long as these [USAID pro-democracy] programs continue. I see the key to unlocking his freedom lies in our ending these covert and subversive programs.” — New York attorney Tony Martínez, editor of the US-Cuba Policy & Business Blog. “You’ve got to stop this war in Afghanistan.” — The last words of Richard C. Holbrooke, President Obama’s special representative to Afghanistan and Pakistan. Holbrooke, who died Dec. 13, began his diplomatic career in Vietnam and brokered a 1995 peace accord that ended the war in Bosnia. “They got it ‘bass-ackwards.’ They are laying off first and hoping and praying that the small private sector is going to expand enough to absorb them.” — Archibald Ritter, Cuba scholar and professor at Ottawa’s Carleton University, quoted by the Miami Herald’s Juan Tamayo in a Dec. 20 article about Raúl Castro’s reforms entitled “Panic, Anger As Cuba Plans To Lay Off 1 Of Every 10 Workers.” “Almost all of us, if we haven’t planted a bomb or picked up a rifle, we’ve done other things. I went to prison for 20 years for Cuba. These are things that we thought were right at a given time. And at least I do not renounce my past.” — Angel de la Fana, 71, a close friend of militant exile Orlando Bosch, speaking at a Dec. 9 gathering in Miami’s Little Havana for the unveiling of Bosch’s memoirs. “You follow me on Cuba, and I’ll follow you on Israel, and we’ll be all right.” — Rep. Lincoln Díaz-Balart (R-FL), who’s retiring from Congress after 18 years, to thenfellow Florida lawmaker Robert Wexler, a Jewish liberal Democrat. Wexler, now president of the Center for Middle East Peace, recalled Díaz-Balart’s comment from the early 1990s in a Dec. 12 story in the Chicago Tribune.


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CubaNews v January 2011

MARKETING

Iconic brand potential: What’s ‘Cuban’ about this product? BY EMILIO MORALES & JOSEPH L. SCARPACI

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n the last issue of this newsletter, we discussed the importance of iconic branding and presented categories that reflect broadly held values which Cubans hold dear (see CubaNews, December 2010, page 15). These values, machismo/marianismo, creativity and resourcefulness, sugar and tobacco

heritage, and the underdog syndrome (a.k.a. David and Goliath) are readily identifiable by Cubans. If advertisers can bundle their products with a widely held value, they have the potential of establishing an iconic brand. In this issue, we present the results of our focus groups. As such, we organized 10 focus groups comprising 84 participants to explore

the potential of taking popular national symbols and assessing to what extent they are associated with the top 10 Cuban brands (see CubaNews, November 2010, page 10). One open-ended question central to the issue of iconic brands was posed: “Is there anything Cuban about this product?” We counted the number of times respondents referred to Cuban myths or folklore in describing the top-10 Cuban brands. Four findings stand out. First, the sugar and tobacco legacy registered more comments (123) than the second(marianismo (70)) or third-place (creativity (66)) categories. Half of the top 10 products (cola, coffee, tobacco, and alcohol products) come from sugar and tobacco. Second, the Thaba backpack and Suchel soap and moisturizers failed to reveal any myth affiliations. Our hunch was that the backpack might symbolize the Revolution’s commitment to universal education, and thus could reflect the “creativity” dimension. We also thought the soap would tap into a social value that because Cubans wash often, it might be a stalwart symbol of purity, and therefore reflect the marianismo dimension. A third finding was the distinction between the “light” Cristal versus the “strong” Bucanero beers, even though just 0.4% alcohol content separates them. Participants associated the green (lighter looking) Cristal can and would read the label “suave” [smooth] word out loud, and then contrast the word “fuerte” [strong] printed on the darker (heavier looking) Bucanero can. See Brands, page 7

Havana Club and other popular Cuban rum brands.


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January 2011 v CubaNews

ARTS & CULTURE

New York’s ICP hosts ‘Cuba in Revolution’ photo exhibit

Brands — FROM PAGE 7 Modifiers of Cristal’s lightness included “easy to drink”, “goes well with food”, “the women prefer it”, and it’s good “for relaxing”. The heavier Bucanero pulled the opposite way: “good for parties”, “it’s more for men”, “its good for dancing”, and even “it’s gets you drunk quicker”; all characterizations of extroverted machista behaviors. The strongest iconic content was Alicia Alonso perfume, even though very few participants in our survey had actually used the fragrance (much like Montecristo cigars, which few had actually smoked). It registered strongly on the creativity (64) and marianismo (24) dimensions. Three reasons underscore this iconic branding potential. First, Alicia Alonso, the “primera bailarina de Cuba” [first lady of ballet], epitomizes creativity. At 90, she’s a living legend in ways that Fidel Castro, Che Guevara, and other revolutionary figures are not. She has overcome adversity and has used professional and feminine talent to bridge ideological gaps. Cuban national and regional ballet performances reach all corners of the world, despite opposition against the regime. Cuban sensuality is also embodied in the product and the woman herself; at least in her youth. Both the person and the product exude elegance and femininity. This perception taps into strong beliefs about the role of men (machismo) and women (marianismo). Third, Alicia Alonso herself represents how inhabitants of a small island can have an impact worldwide. This is also evident in Cuba’s quest to excel in sports, spread the

was like to cover Fidel Castro as his 1959 revolution literally exploded before their eyes. The IAHF has assembled an extensive collection of well-regarded 20th-century photoBURT GLINN

F

rench financier Arpad Busson and New York’s International Center for Photography last month co-sponsored a panel discussion on Cuba’s political future, against a backdrop of historical photographs assembled by Busson’s London-based International Art Heritage Foundation (IAHF). The Dec. 8 event, “La Revolución: Complexities of Cuba Today,” was moderated by veteran CNN anchor Christiane Amanpour and held at the New York Times Center. Participating in the discussion were Peter Kornbluh, director of the Cuba Documentation Project, and journalists Jon Lee Anderson, Rafael Pi Román and Patrick Symmes. Independent filmmakers Saul Landau and Jauretsi Saizarbitoria also speculated on the direction Cuba will likely take once the Castro brothers pass away. Amanpour asked Busson about his involvement with ICP’s current photo exhibit “Cuba in Revolution” — a collection of 150 photos on display until Jan. 9. Photographers Roberto Salas and Elliott Erwin talked about what it

RENE BURRI

BY VITO ECHEVARRÍA

Fidel enters Havana, 1959; Che in his office, 1963.

journalism, including an archive of more than 2,000 photographs of Cuba. Along with the work of Salas and Erwin, on display were the works of 30 other photographers, including those of 1950s Cuba by Constantino Arias. At one point, Busson traveled to Cuba to help assemble that collection. “It was fascinating to see the beauty of these images,” Busson told Amanpour. “But when I met these photographers, I realized that there was a much wider range of [Cuban] photos that have never been shown.” A shot of Castro and his band of rebels entering Havana was used as the exhibit’s promotion (see picture, upper left). There were also some rarely seen photos, including one of Fidel skiing in Russia, and Che Guevara at his office in Havana — as well as familiar iconic images by Alberto Korda and others. After New York, the exhibit will travel to Washington, Moscow and Paris. q Details: International Center for Photography, 1133 Avenue of the Americas at 43rd Street, New York, NY 10036. Tel: (212) 857-0003. URL: www.icp.org/museum/exhibitions/cuba.

here [in Cuba] as it does outside the island.” In this regard, Alicia Alonso is cultural icon, artist, feminist, and heroine. Her perfume is enhanced in consumers’ minds in ways that Havana Club rum does not; no transcendental figure is associated with Havana Club. Alicia Alonso products are high-value goods that, on the export market, at least, could allow perfume users to tap into the “feminine side” of Cuba, CONCLUSIONS much like the allure that forbidden Cuban cigars hold for men. Our findings indicate the In a future market in Cuba, greatest potential to develop Alonso’s line will have to square iconic products, within and off against Chanel perfumes, outside Cuba, rests in Alicia while Havana Club will go headAlonso products and, to a lessto-head with Bacardí, Coke and er extent, Havana Club. Pepsi will encroach on tuKola’s Several people identified the market share, and the many latter as the rum of Cuba and only a few stated that they did Cheap, locally made cigarettes. product lines of Budweiser will rival Cristal and Bucanero. not like it or that substitute These findings hold promise for brand rums were widely available for less cost. Rum, of course, derives from sugar, an advertising in the future when a broader arimportant resource historically. However, the ray of consumer goods might be promoted closure of nearly half the island’s mills since across the island. Such brand novelty will reflect the level to 2002 — coupled with a saturated global market of Caribbean rum — could make it diffi- which Cuban consumers acquire experience about particular brands — as well as their cult to become an iconic brand. Moreover, Havana Club taps only into our attachment to iconic national symbols. q “sugar and tobacco” category, whereas Alicia Emilio Morales, a former marketing direcAlonso spans several value dimensions. tor of Cuba’s CIMEX SA, and Joseph L. Iconic features about Alonso were captured well by one 33-year-old woman from Sancti Scarpaci, an adjunct marketing professor at Spíritus: “She, just like the product itself, repVirginia Tech, wrote this article for CubaNews. resents the best of Cuba … what the typical Details: The Havana Consulting Group. Cuban woman aspires to in her own life: sucURL: www.thehavanaconsultinggroup.com. cess and elegance. And that matters as much revolution and serve as cultural goodwill ambassador wherever possible. Such a strong national perception taps into the national belief that Cuba can produce heroes, not only in the context of the Davidand-Goliath tensions between the island and the “imperio yanqui” but also between someone who lived before and after the revolution, and who excelled during both eras.


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CubaNews v January 2011

TOURISM

CUBA’S EXISTING AND PLANNED LUXURY GOLF/MARINA PROJECTS

NOTE TO READERS: The above map, prepared by cartographer Armando Portela, is being published in this issue of CubaNews as a reference for our subscribers. Several months ago, we began a series of articles looking at the 15 or so luxury golf and marina developments now in various stages of planning across Cuba. Our November edition took a look at Bacunayagua, along Cuba’s north coast between Havana and Varadero,


January 2011 v CubaNews

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while our December issue examined La Altura, a similar project east of Pinar del Río in the new province of Artemisa. Likewise, the February 2011 issue of CubaNews will offer a detailed look at Leisure Canada Inc.’s three luxury hotel projects planned for Havana, Jibacoa and Cayo Largo. For more information on these new ventures, please see our extensive report on tourism which ran in the October 2010 issue (see pages 1-4).


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CubaNews v January 2011

AGRICULTURE

Cattle industry, once the pride of Cuba, takes a beating

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ith its herd reduced to 1915 levels and little chance for a rapid recovery, Cuba’s cattle-raising industry faces its most severe challenges ever — a victim of prolonged neglect and problems that have gone unattended for decades. All sectors of the Cuban economy were devastated by the collapse of the Soviet bloc in the early 1990s, but unlike other areas, cattleranching is still in a free fall — and experts say recovery would take 5 to 10 years at best. The crisis unleashed in the cattle sector is systemic. As one part failed, it knocked down the next in a domino effect that weakened the whole industry, to the point that for many experienced farmers, the situation is irreversible without a comprehensive overhaul to make it self-sustaining. Half a century ago, Cuba nationalized the island’s entire cattle-ranching structure, removing it from private hands and changing the genetic composition of the herd itself. What had been a well-adapted, unpretentious system that fulfilled the needs of the domestic market became a much more modern system — but one highly dependent on financial, energy and material inputs from abroad that proved to be unsustainable once Soviet patronage collapsed. The sudden loss of credits, fuels, machinery, fertilizers, medicines, fodder, irrigation capacity, personnel and genetic quality after 1990 translated into a devastating blow for the whole sector. Several consecutive droughts — including a particularly severe one in 200405 — made things even worse. After peaking at 7.3 million head in the early 1970s, Cuba’s herd declined to an average of 5 million in the 1980s and fell again in the 1990s. It now stands at an average 3.78 million head over the last five years — the

This is the 2nd in a series of articles by our correspondent Armando H. Portela that examine various sectors of Cuban agriculture. In our next issue, we’ll take a look at the cultivation of rice.

lowest number since 1915 (see chart, page 13). In per-capita terms, the herd has shrunk from 88 head of cattle per 100 inhabitants in 1960 to only 33.7 per 100 over the last five years — not enough to supply the domestic

Finally, the average weight per animal sent to the slaughterhouse has dropped from 725 lbs in the 1980s to only 698 lb in the last five years. The late scholar Leví Marrero mentions an average weight of 1,000 lbs per animal slaughtered in the 1950s. Soon after the fall of the Soviet bloc, pasturelands began to be invaded by marabú, a thorny hardwood bush that creates impenetrable thickets and requires continuous LARRY LUXNER

BY ARMANDO H. PORTELA

Cows graze on a farm near Matanzas. Cuba’s livestock industry has declined sharply since the early ‘90s.

market, considering the herd’s low productivity (see chart, page 12). Meanwhile, the overall weight of slaughtered cattle has dropped by 60%, from 296,400 tons in the 1980s to 116,600 in the past few years (see graph below). These figures translate into annual per-capita production of 66 lbs of boneless beef in the 1980s, dropping to 23 lbs per-capita in the last few years.

investments to keep it under control. In Camagüey, Cuba’s leading cattle-producing province, marabú covers over 70% of the land, while nationwide 48% of all pasture lands are “highly infested” by the bush, concedes Cuba’s Ministry of Agriculture. Compounding their problems, Cuban cattle See Cattle, page 11


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January 2011 v CubaNews

Cattle — FROM PAGE 10 ranchers could no longer readily purchase fodder, since without Soviet subsidies Cuba had no money to buy wheat, maize or other commodities on the world market. The downsizing of Cuba’s sugar industry sharply cut the supply of molasses, torula yeast and other valuable nutritional supplements. As a result, the whole herd suffered, while some Cuban premium cattle breeds simply starved to death. Camagüey lost half of its herd, according to one article in the Cuban journal Bohemia. In addition, the specialized farms near Havana lost their highly productive animals — many of them averaging 25 liters or more milk per day — by the tens of thousands. Anecdotic references describe starving livestock weighing less than 500 lbs as they were brought to slaughter. See Cattle, page 12


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CubaNews v January 2011

Cattle — FROM PAGE 11 One ironic outcome of the crisis has been the fate of the F1 breed, Cuba’s cherished milk cow created by crossbreeding India’s resistant Zebu — from which the F1 gets onefourth of its genetic makeup — with the European Holstein that makes up the other three-fourths. The F1, highly vulnerable to dry climate spells, proved to be unsustainable under current conditions and is being slowly substituted by the Siboney breed, which carries more Zebu blood and is therefore more resistant but less productive when it comes to milking. In recent years, meanwhile, costly irrigation systems have been lost to neglect while the lack of transport makes it hard to bring water trucks to fields during the dry season. Farmers who lived through the “special period” of the early 1990s still remember how thousands of animals died of thirst in the dry months from November to May. Barbed wire, crucial to keeping cattle under control, simply disappeared from state warehouses, indirectly causing more damage due to unrestrained grazing. RECOVERY ON THE HORIZON?

Another particularly serious problem was the exodus of skilled people — from inseminators and engineers to agronomists, pasture specialists, veterinarians, managers and celadores (the ones who check whether females are ready to mate). With dollarization in 1994, many such workers earning the equivalent of $15 a month or less left the farms in search of better-paying jobs. Other problems included awful roads, large-scale theft and lack of seeds, fertilizers and medicines. These days, agriculture officials see a glimmer of hope in some improved figures after See Cattle, page 13


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January 2011 v CubaNews

AGRICULTURE

Fla. rancher Parke Wright: U.S. is key to industry’s recovery

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uba’s cattle industry could have a really bright future — if only the Castro government privatizes state lands to attract foreign investors, and Washington restores diplomatic relations with Havana so that U.S. tourists could flock to Cuba by the millions. So says John Parke Wright IV, a Florida rancher from Naples who’s been to Cuba numerous times and probably knows more about the island’s livestock industry than any cattleman in America. Days after returning from a cattle fair in Bayamó — capital of the eastern province of Granma — Wright spoke to CubaNews with passion about an industry that’s been a part of his family for generations. “Beef cattle production is up. The head count of beef cattle is increasing, especially with the cattle of Flora y Fauna SA, MININT (Ministry of Interior) and of course the Ministry of Agriculture,” he said. “The quality of the herds I visited has

increased dramatically in the last four years, with much healthier weights and appearance than before. It took me 11 hours to drive from Bayamo to Havana, and I noticed very healthy herds in Camagüey and Jagüey Grande.” Wright, 60, is a lifelong Floridian, a devout Catholic and the owner of Naples-based consulting and trading firm J.P. Wright & Co. Profiled six years ago by this newsletter (see CubaNews, July 2004, page 8), Wright and his family have been shipping cattle to Cuba since the 1840s. LARRY LUXNER

BY LARRY LUXNER

Cattle — FROM PAGE 12 2005, the year of the great drought. Since 2005, the herd has grown 5% in size, while beef production has risen 8% and milk production has shot up by 66%. It’s hard to know, however, what part of the recent recovery can be credited to government initiatives and what part was thanks simply to better weather. Authorities must decide what kind of recovery they want and how far to pursue such initiatives. If their goal is just to keep the industry from falling further, probably not much more has to be changed. But if their target is to return to a self-sustaining herd with an affordable, non-subsidized supply of milk and beef for the people of Cuba, reforms will obviously have to go much deeper. q

Cattle insemination lab, Camagüey province (top); Fidel Castro and the Kaehler boys sign contracts.

Havana-born Armando Portela, a contributor to CubaNews since the newsletter’s birth in 1993, has a Ph.D. in geography from the Soviet Academy of Sciences. Portela resides in Miami, Fla.

Lykes Brothers, a shipping firm started by his great-great-grandfather, owned a 15,000acre ranch near Bayamo which was expropriated shortly after the 1959 revolution. “Between 1929 and 1956, my family shipped 359 Brahma bulls from the Hudgins ranch in Hungerford, Tex., to Cuba,” Wright said proudly. “My ancestors were responsible for introducing the Zebu brand into Cuba. I’m now following in the same footsteps.” Despite a $3.6 million claim for his family’s confiscated land, Wright doesn’t appear to hold any grudges. On the contrary, he says he’d like to help Cuba as much as possible. “Governments don’t know how to run ranches. We wouldn’t have any meat in McDonald’s if the government was running ranches in our own country,” said Wright, who counts Fidel’s older brother Ramón among his closest buddies. “I’m hopeful that privatization will come, and that Cuba will reach out to foreign investment, so that people like myself can invest in cattle-ranching again in Cuba, and be back in the saddle.” Ralph Kaehler of St. Charles, Minn., was the first U.S. cattleman to sell livestock to Cuba after the embargo was relaxed in 2000 to allow food and medical sales to the island. In 2002, Kaehler and his two young sons became local celebrities after news photos were published around the world as they showed Fidel Castro one of their bulls, named Minnesota Red, during a Havana trade show. In subsequent years, Wright managed to sell 400 to 500 Brangus heifers, Brafords, Black Angus and Beef Masters to the island’s food purchasing agency, Alimport. In the last two years, Alimport has also bought 3,000 to 4,000 head of cattle from Canada, but there have been no purchases from the United States since 2004. However, he said, “I have a contract in the works for frozen Brahma and Brangus bull semen. I’m involved in an artificial insemination program to increase beef production.” So far, Wright says he’s shipped 2,500 “straws” of frozen bull semen to Cuba worth a total of $100,000, with another 2,500 straws to be delivered shortly. “We’ve also been giving workshops for the last seven years in Cuba on breeding and feed technology at Cuba’s Institute for Agricultural Sciences,” he told CubaNews. “There’s a lot going on behind the scenes. I see the Cuban government making a conscientious effort to raise standards of living by reducing restrictions,” Wright said. “Secondly, the development of agriculture and tourism fits into their long-term plan, but the opening of relations with the United States is vital to economic activity. So I’m looking to President Obama to normalize relations with Cuba.” q Washington-based journalist and photographer Larry Luxner is the editor of CubaNews.


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WikiLeaks — FROM PAGE 1 George Washington University professor Edward “Skip” Gnehm, former director-general of the U.S. Foreign Service and former U.S. ambassador to Jordan, Kuwait and Australia. “This has broken our confidence and has left most of our interlocutors fearful and angry,” Gnehm told CubaNews in a phone interview from Amman, Jordan. “In the future, people are going to be wary about talking to us, and it’ll be harder for us to give our own governments the information they need to make analytical decisions.”

CubaNews v January 2011

confrontational: “best-friends-forever,” “keepit-private,” “we-respectfully-disagree” and, in rare cases, “take-your-visit-and-shove-it.” The Times article quoted that cable as saying that most countries with diplomatic posts in Havana “do not raise human rights issues with the Cuban government in public or private. A handful of countries including Britain, Germany and the Czech Republic have refused to send senior officials to Cuba, rather than accept the government’s restrictions on who they can meet while there.” Commenting on that apparent discrepancy, Julia Sweig — a Cuba expert at the Council on

PREDICTING FIDEL’S DEATH — AGAIN

When it comes to Cuba, the sheer volume of traffic exposed by WikiLeaks could keep an enterprising journalist busy for years. One cable dated Mar. 16, 2007, almost eight months after Fidel ceded power to Raúl, has received lots of attention. In it, Michael Parmly — then-chief of the U.S. Interests Section in Havana — quotes unnamed sources as saying the elder Castro fell ill on a domestic flight after a long day of giving speeches. “They had to land urgently once they knew of his bleeding,” it says. “He was diagnosed with diverticulitis of the colon.” That same cable quotes a medical source as saying Castro “won’t die immediately, but will progressively lose his faculties and become ever more debilitated until he dies.” Parmly himself adds: “We are missing too many variables to be able to predict accurately how many more months Fidel will live.” In a January 2009 dispatch, Parmly’s successor in Havana, Jonathan Farrar, said “GOC [Government of Cuba] officials would most likely manage the death announcement and subsequent funeral arrangements in great detail with a view toward putting the best face on the situation, both domestically and to the world.” It goes on to speculate that Fidel’s death could even spark a drop in the number of Cubans seeking to emigrate, as islanders wait to see what unfolds. U.S. HAS DOUBTS ABOUT CUBA’S DISSIDENTS

On another topic, a series of cables sent to Washington in May 2009 and signed by Farrar hints that Cuba’s dissident movement is no longer worthy of America’s full support. “Many opposition groups are prone to dominance by individuals with strong egos who do not work well together,” Farrar told his superiors. “We see very little evidence that the mainline dissident organizations have much resonance among Cubans.” In that cable, the USINT chief suggested that new generation of “non-traditional dissidents” such as blogger Yoani Sánchez would have more impact in post-Castro Cuba, but that “the most immediate successors to the Castro regime will probably come from within the middle ranks of the government itself.” The New York Times reported that in a cable about how other countries deal with Cuba on official visits, U.S. officials classified those approaches on a scale from kowtowing to

against the largely black Santiago team. CHINESE VIP GETS THE COLD SHOULDER

Here’s another tidbit from Parmly’s missive: “A couple of weeks ago, there was a concert at Amadeo Roldan theater that featured a Chinese conductor as guest of the National Symphony ... The Chinese Embassy made a big deal out of the Chinese guest conductor, turning out a pretty much full house of Cubans and others, and most importantly, the visiting Chinese vice-minister of culture, who was in town on an official visit. “After the concert, several officials got up to speak,” the cable continues. “Leading the Cuban cohort was Abel Prieto, minister of culture, who had the usual things to say about the depth and strength of Cuban-Chinese ties. All the speakers got the usual polite applause. “Then the Chinese vice-minister got up. Rather than just respond with counter-inanities, he launched into a speech on the success of China’s economic model, including noting the degree to which openness to the world, encouraging private initiative and letting individual creativity have free rein were key to economic progress. The audience went cold. Not a clap, not a peep when the minister finished speaking.” SOME QUESTION RELEVANCE OF U.S. CABLES

Foreign Relations — told the Times that “on the one hand, the U.S. is saying the dissidents are hopeless and aging. On the other hand, the same interests section is saying that Canadian and EU engagement is not helping progress on human rights.” Not all the diplomatic traffic out of Havana deals with life-or-death issues. A colorful dispatch dated Jun. 5, 2006, and signed by Parmly touches on baseball, health care and racism. “USINT is always looking for human-interest stories and other news that shatters the myth of Cuban medical prowess, which has become a key feature of the regime’s foreign policy and its self-congratulatory propaganda,” said the cable. It went on to describe a prominent Jamaican surgeon, Dr. Albert Lue, who “has publicly denounced Cuban medical incompetency in handling Jamaican patients who traveled to Cuba for eye surgery. Of 60 such patients he surveyed, three were left permanently blind and another 14 returned to Jamaica with permanent cornea damage.” The cable continues with an eyewitness account of racial slurs and name-calling during a baseball game pitting Havana’s Industriales For an in-depth analysis of the impact of the WikiLeaks scandal on U.S. diplomacy, see this reporter’s article in the January 2011 issue of The Washington Diplomat, page 9, or online at http://www.washdiplomat.com.

Other cables describe cooperation between U.S. and Cuba in counternarcotics efforts — especially in the face of Jamaican indifference — and harassment of Cuban doctors in Venezuela who quit their jobs and want to leave. One 2010 report issued by the U.S. Embassy in Caracas says physicians approved for humanitarian parole via the Cuban Medical Professionals Program have been physically and verbally abused while trying to fly out of Venezuela’s Maquetía International Airport. “Many of those allowed to board flights to Miami are only able to do so after paying sizeable bribes (generally $700 to $1,000) to Venezuelan immigration officials or Cuban officials said to be working at the airport,” it said. Another cable describes how Cuba has successfully taken over the management of Venezuela’s ports, yet in a February 2010 dispatch out of Havana, Farrar quotes a top Chinese diplomat there as expressing “visible exasperation” with Cuba’s insistence on retaining a majority control of any joint venture. “No matter whether a foreign business invests $10 million or $100 million, the GOC’s investment will always add up to 51%,” the unhappy Chinese diplomat told USINT staff. The commercial counselor also complained about Cuba always paying back loans late. Yet just as diplomats are suspicious of WikiLeaks, so is at least one veteran Cuba-watcher. “We should not accept what the cables are saying as the absolute truth. The Interest Section in Havana talks to people and they get the information and send a cable,” Jaime Suchlicki, chief of the University of Miami’s Cuba Transition Project, recently told reporters. “We are not getting the whole picture.” q Washington-based journalist and photographer Larry Luxner is the editor of CubaNews.


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BUSINESS BRIEFS SOUTH AFRICA FORGIVES $160m CUBAN DEBT South Africa will cancel 1.1 billion rand (about $160 million) of debt owed by Cuba in an effort to boost trade between the two countries, said Rob Davies, the country’s trade and industry minister. Bloomberg also reported on Dec. 8 that South Africa will offer R70 million of extended credit lines, R40 million of support to Cuba for seeds and fertilizers and R100 million from its African Renaissance Fund to fund purchases from Africa’s largest economy. Meanwhile, the Moscow Times — quoting a preliminary prospectus for Russia’s first sale of ruble-denominated Eurobonds — reported that Cuba and North Korea owe Russia a combined $37 billion, more than half of all foreign assets claimed by the Russian government. CUBAN MEDIA SLAMS RICE IMPORT POLICIES In 2011, Cuba will once again have to import twice the amount of rice it produces in order to meet domestic demand, the official weekly Trabajadores reported Dec. 13, citing the island’s deputy minister of agriculture. Cuba needs “more people growing rice and selling it though various channels, but with discipline,” said Juan Pérez Lamas in a meeting with growers, according to the publication of Cuba’s only legal trade union, the CTC. Trabajadores slammed the fact that a lack of resources, general disorganization and apathy toward such options as cutting by hand have caused “regrettable losses” in the rice fields. “We’re left with the impression that rice production goes at a faster pace than the development of a national infrastructure to sustain it.” In that sense, it said, there are problems with machinery like tractors, mills and dryers, and a “poorly maintained network of canals between reservoirs and plantations” that loses half the water meant for crops. “Cuba now spends on producing the grain seven times more than Vietnam,” according to Trabajadores, which stressed the importance of “better planning.”

It also suggested that in the new context of economic adjustments being planned by the Castro regime, “it would be healthy to explain to the grower just how much the government can promise him.” “It’s absurd and anti-economic that we can't come up with the $250 that it costs to produce a ton of rice here when it’s needed, but we can find the $500 it costs to bring it from Asia,” the weekly said. In 2009, the Agriculture Ministry’s Rice Program launched a state plan aimed at substituting 29% of imports that year, a number projected to rise to 56% by 2013. Cuba spent more than $2 billion on rice imports in 2009, according to official figures, which show that Cuba’s 11.2 million inhabitants each consume an average of 11 lbs. of rice per month, translating into annual consumption of more than 600,000 tons. ANGOLA TO DRILL FOR OFFSHORE CUBAN OIL Angola’s state-run oil company Sonangol has won rights to operate two Cuban offshore oil blocks in a venture with Cupet SA, Angola’s official news agency said Dec. 20, as Angola expands its international footprint. Sonangol already has interests on the U.S. side of the Gulf of Mexico and in Brazil. T&T CONGLOMERATE EXPLORES CUBA POTENTIAL Trinidad’s ANSA McAL Ltd., parent company of Guardian Media Ltd., Trinidad Broadcasting, Carib Brewery Ltd. and 50 other local businesses in the brewing, manufacturing, financial services, media and real-estate sectors, sent a five-day mission to Cuba in late November to explore investments there. ANSA chief executive Gerry Brooks led the delegation to Cuba — the first in the company’s 129-year history, said a press release. Brooks was accompanied by the heads of ANSA’s various divisions, including ABEL Building Solutions, ANSA McAL Chemicals, ANSA Polymer, Caribbean Development Co. Ltd., and Carib Glassworks Ltd. “A rapidly expanding market, promising business environment and commitment to attracting foreign investments in strategic sec-

ICCAS — FROM PAGE 4 change on the island also is waning. Recent surveys of exile voters in South Florida show their top concerns are the Iraq war, rising health-care costs and the U.S. economy — not Cuba. Gomez said Florida’s new U.S. Senator-elect, Marco Rubio, reflects that trend, with his prime focus on U.S. domestic issues including jobs and not on Cuban affairs. Of course, Cuba’s leadership must change some time, especially when Raúl and many of his top aides are in their 70s and 80s. ICCAS Director Jaime Suchlicki predicted a growing role for Raúl’s son, Alejandro Castro Espín, now a colonel and possibly “the next heir” to the presidency. But ex-CIA official Brian Latell warned that Raúl — a four-star general and the world’s longest-serving military leader — would be making one of his “biggest political mistakes” to name his son as heir, and that “it might create some kind of rebellion in the Cuban military.” For serious change, Latell said Cuba would need a real reformer like a Gorbachev in the Soviet Union. But outspoken reformers have been pushed aside by Raúl and could be shunted in the future too.

tors puts Cuba among the region’s most promising markets in the non-English speaking Caribbean,” said the company. “These internal developments align well with the ANSA McAL Group’s business strategy.” The company, which already operates in Trinidad & Tobago, Barbados, Guyana, Grenada, St. Kitts & Nevis, St. Lucia and the United States, has annual revenues of $790 million and a workforce of over 6,000. Brooks said ANSA wants to export to Cuba as well as joint ventures with Cuban entities in generic drugs, biotechnology, food, construction supplies and plastic and glass containers. Last year, bilateral trade reached barely $40 million, mainly made up of petroleum products from Trinidad. Even so, the twin-island nation is Cuba’s largest trade partner in the 15-member Caricom bloc. Details: Norman Sabga, Chairman, ANSA McAL Ltd., 11th Fl., Tatil Bldg., 11 Maraval Rd., Port of Spain, Trinidad. Tel: (868) 625-3670. Fax: (868) 624-8753. URL: www.ansamcal.com. U.S. BEAN GROWERS MAKE NEW SALES TO CUBA Industry sources are now confirming recent sales of U.S. dry beans to Cuba, totaling 20,000 metric tons, or 440,000 bags, according to the Northarvest Bean Growers Association. WestStar Food Co. sold Cuba’s state purchasing agency Alimport 5,000 tons of pinto beans, which left Corpus Christi, Tex., on Dec. 13. PS International has sold 10,000 tons, split evenly between blacks and pintos, to Cuba, and St. Hilarie Seed Co. has sold the Cubans 5,000 tons of black beans. In early December, a delegation from North Dakota discovered that Alimport wanted to buy 5,000 tons of black beans. This is in addition to its recent purchase of 20,000 tons. MELIA INAUGURATES 25th PROPERTY IN CUBA Spanish hotel chain Sol Meliá has opened its 25th resort in Cuba after 20 years of doing business on the island. The 105-room Meliá Buenavista — an “allinclusive royal service and spa hotel” — is located on Cayo Santa Maria, along the north coast of Villa Clara province.

“It’s almost as likely there’s a Putin lurking out there as a Gorbachev,” said Latell, referring to the former Russian president widely criticized for keeping a hold on power even after leaving office. The researchers warned that laying off a million state workers will boost tensions in Cuba, since most of them will lack the credit, skills, raw materials and tools to operate microbusinesses successfully. Plus, so many new entrants into service jobs from repairs to food sales will likely reduce the incomes of people already hustling to make a living in those job categories. “Perhaps one of the ironies is that the capital will mostly come from the Cuban diaspora, so a Cuban family member can sell used books or trim palm trees” to make ends meet on the island, said Azel. Growing social and economic tensions — especially among Cubans with no relatives abroad to help financially — could lead to incidents of protest, but researchers don’t foresee a mass uprising. Cubans are “all about bread-and-butter,” not democracy, Azel said. And state repression is likely to increase to quell the tensions, Suchlicki said. “The pot is boiling,” he said, but “not to the point of social explosion.” – DOREEN HEMLOCK


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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 larr y@cubanews.com. Jan. 2 9 : “ALBA and the future of Caribbean and Latin American Integration,” Tower Bldg., London Metropolitan University. Participants: Carlos Alzugaray Treto, University of Havana; Michael Erlsman, Indiana State University; LMU’s Emily Morris; Ken Cole, International Institute for the Study of Cuba, and others. Details: Stephen Wilkinson, Director, Center for Caribbean and Latin American Research, London Metropolitan University, 31 Jewry Street, London N7 8DB, England. Tel: +44 20 7320-3060 / +44 795 638-1640. Email: s.wilkinson@londonmet.ac.uk. Feb. 3 : “Outlook on the Americas” luncheon, InterContinental Hotel, Miami. Speakers: José Fernández, assistant secretary of state for economic, energy and business affairs; Eduardo Solorzano, CEO of Wal-Mart Latin America; Susan Kaufman Purcell of the Center for Hemispheric Policy, and Jeffrey Schott of Peterson Institute for International Economics. Cost: $75. Details: Allison Parmiter, Association of American Chambers of Commerce in Latin America, 1615 H Street, NW, Washington, DC. 20062. Tel: (202) 463-5573. Email: aparmiter@uschamber.com. Feb. 7 -1 1 : Informática Habana 2011, Palco, Havana. 14th International Convention & Fair. Cost: CUC 300 . Details: Palacio de Convenciones, Calle 146, e/11 y 13, Cubanacán, La Habana. Tel: +53 7 202-6011. Fax: +53 7 202-8382. URL: http://evento.informaticahabana.com. Mar. 1 5 : Lecture by Gen. Gustavo Chui, London Metropolitan University. Chui is co-author of book, “Our History is Still Being Written: The Story of Three Chinese-Cuban Generals in the Cuban Revolution.” No charge. Details: Stephen Wilkinson, Director, Center for Caribbean and Latin American Research, London Metropolitan University, 31 Jewry Street, London N7 8DB, England. Tel: +44 20 7320-3060 / +44 795 638-1640. Email: s.wilkinson@londonmet.ac.uk. Apr. 3 -6 : 12th Sustainable Tourism Conference, Fairmont Southampton, Bermuda. STC-12 will bring together Caribbean and global tourism specialists to share their experiences in sustainable tourism. Cost: $695. Details:Caribbean Tourism Organization, 80 Broad St., #3200, New York, NY 10004. Tel: (212) 635-9530. Fax: (212) 635-9511. Email: CTony@caribtourism.com.

CubaNews v January 2011

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. 4 -8 : IV Cuban Earth Sciences Convention & Fair, Palco, Havana. Focus is on Cuban and Caribbean earth sciences. More than 600 abstracts already received; abstracts accepted until Jan. 30. Cost: CUC 260. Details: Palacio de Convenciones, Calle 146, e/11 y 13, Cubanacán, La Habana. Tel: +53 7 202-6011. Fax: +53 7 202-8382. URL: www.cubacienciasdelatierra.com. Apr. 2 3 -May 5 : US/Cuba Labor Exchange Seminar to Cuba. Includes one week of labor courses at the Lazaro Peña School of the Cuban Workers Central Union. Hosted by the Confederación de Trabajadores Cubanos. Price: $1,650 (inc. round-trip airfare between Cancún and Havana; 2 meals a day, transportation, translation and visas). Details: US/Cuba Labor Exchange, PO Box 39188, Redford, MI 48239. Tel: (313) 575-4933. Email: laborexchange@aol.com.

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Washington correspondent n ANA RADELAT n

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May 1 0 -1 2 : Caribbean Hotel & Tourism Investment Conference, location TBA. “Highlights the attractive business and investment opportunities available in the Caribbean.” CHTA 2010 conference featured a special panel on Cuba. Details: Alec Sanguinetti, Director-General and CEO, Caribbean Hotel & Tourism Association, 2655 LeJeune Road, Suite #910, Coral Gables, FL 33134. Tel: (305) 443-3040. Fax: (305) 443-3005. Email: alec@caribbeanhotelandtourism.com.

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

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INTERNATIONAL STOCK PHOTOS If your business needs high-quality photographs of Cuba — or anywhere else — to illustrate annual reports, articles, brochures or presentations, you’ve come to the right place. Luxner News Inc. has over 20,000 color images on file from 95 countries in North, South and Central America, the Caribbean, Africa, Europe, the Mideast and Asia, depicting a variety of topics ranging from agriculture and aerospace to tourism and zoology. For details, please call Luxner News Inc. at (301) 452-1105 or search our user-friendly website at:

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(ISSN 1073-7715), founded in 1993, is published monthly by CUBANEWS LLC, PO Box 566346, Miami, FL 33256-6346. Subscriptions: $479/one year, $800/two years (special rates available to academics and non-profit groups). Please visit www.cubanews.com to learn more about our newsletter. To order a subscription, just call at (305) 393-8760, fax us at (305) 670-2290 or send an e-mail to info@cubanews.com. Contents may not be distributed by any means without prior written permission of the publisher. CUBANEWS LLC grants authorization to photocopy items for internal or personal use, provided the appropriate fee is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923. For details, visit www.copyright.com.

January 2011 Issue  

Saving the herd Business briefs Outlook for 2011 Political briefs Special 2-page map pinpoints the location of more than a dozen golf and ma...

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