Reform in Cuba; legislation in the Senate; Humanitarian aid siezed

Dear Friend:

News happens.

The reform process pushed back to center stage in Cuba this week. The government announced structural reforms in the construction industry, new licenses for private taxis, and a rise in the retirement age for pensions accompanied by increases in benefits. These efforts join decisions taken earlier this year to address Cuba’s economic problems and to battle back against sky rocketing food and energy prices that are debilitating economies around the world.

In the U.S. Congress, a Senate panel joined the House Appropriations Committee in approving limits on the Treasury Department’s authority to restrict travel by Cuban Americans to Cuba and to frustrate agriculture sales to the island. While this legislation is unlikely to become law, it is a welcome suggestion that after years of inaction and backsliding in the U.S. Congress, there exists a constituency among legislators for changing our policy toward Cuba in the future, especially if there is presidential resolve to lead on that change.

If a president takes office with a new vision of U.S.-Cuba relations, the Cuban foreign ministry signaled this week a willingness to engage in face-to-face talks with the United States “on equal terms.”

Perhaps such talks could start with an agreement to end the terminally ridiculous enforcement policies of the U.S. embargo. As Pastors for Peace moved 100 tons of humanitarian aid across the U.S. border into Mexico, it did so minus 32 computers that were seized by the U.S. Department of Homeland Security. So much for our challenge to Cuba to open up more lines of information.

This week, in Cuba news…


More decentralization

Following years of inefficiency, Cuba has begun decentralizing the decision-making process in the construction sector, the Reuters news agency reported. It is the second major reorganization of an industry since Raúl Castro became president in February and initiated agriculture reforms.

In a parliament hearing on Wednesday, Cuba’s ministers of Construction and Light Industry discussed why housing demands accumulated over the last twenty years still remain unmet. The meeting focused on the disorganization and theft plaguing the state-run industry and its failure to meet apartment building plans or conclude larger projects on schedule and within budget.
Vice President Carlos Lage announced that housing plans will be conceived at the municipal level starting in 2009.

“We are strengthening the role of local contractors, decentralizing the administration and day to day operations of construction projects,” Construction Minister Fidel Figueroa told the Granma newspaper.

Cuba launched a major effort three years ago to solve the chronic housing deficit and repair old buildings. Goals were not met and had to be scaled back, but the industry is still falling short, state media reported, blaming theft of materials and poor organization.

“The local authorities must say what they prefer to do with the resources assigned them, be it finishing new apartments or prioritizing the repair of others, because it is at the municipal level that authorities know best an area’s urgent needs,” Lage was quoted as saying.

Juventud Rebelde, the state newspaper, reported that deputies present at the meeting “insisted on the development of local construction materials industries, because everything cannot come from the big companies, whose distance on occasion impedes the arrival on time of the resources requested.”

Minister Figueroa also announced that the public will now be allowed to buy cement and dry goods in hard currency as a measure “to undertake renovation works that are currently done with materials that come from state works.”

The decentralization in construction has similar characteristics to the agriculture reforms. Decisions on resource and land use, distribution of produce and day to day agriculture issues were shifted from the Agriculture Ministry in Havana to the municipal level.

State and private farmers and cooperatives were given more independence to decide what to farm and were offered more land. Stores selling fertilizers, tools and other supplies in hard currency were opened up allowing farmers to purchase goods legally, and without delays in gaining permission from the state.

You can read the Juventud Rebelde article here.

You can read the Reuters article here.

You can read the Granma article here (in Spanish).

New licenses for private taxis

The Cuban government “has decided, and will begin to implement in the upcoming days, the granting of licenses to private taxis,” Cuba’s state radio reported on Tuesday, citing remarks made by Transportation Minister Jorge Luis Sierra to a parliamentary commission.

According to the Spanish newspaper EFE, Minister Sierra stated that the licenses will focus on transportation in rural parts of the country, where public “transportation is not arriving” now, but will also be provided for urban areas.

The change addresses a nine-year ban on new private taxis, allowing additional private enterprise on the island and possibly legalizing thousands of unauthorized cabbies already working.

Private operating licenses were established in the 1990’s during the special period, but the issuance of new licenses was suspended in 1999.

To some Cuba watchers, the move appears to be a break with the policies of Fidel Castro, who often made clear his dislike of even the legal private cabs, while accusing illegal drivers of fomenting a black market for stolen gasoline.

“We will approve (the licenses) one by one, give them the gas, set the fare, set the route and the schedule. It’s as if it were a public bus for the countryside,” Sierra was quoted as saying.

Enemelio Trujillo, an authorized private taxi driver, welcomed the decision in an interview with the Associated Press.

“This way everyone will have the right to work without committing any crime,” Trujillo said.

Dissident economist Oscar Espinosa Chepe viewed the initiative as pragmatic, recognizing that illegal taxis outnumber licensed ones in large cities.

“It seems to me like a logical thing, an intelligent thing,” said Espinosa Chepe, who has written essays arguing that unlicensed cabs fill gaps in Cuba’s woeful public transportation system.

You can read the Associated Press article here.

You can read the EFE article here (in Spanish).

You can read Phil Peters’ analysis on the Cuban Triangle here.

Cuba will increase the retirement age by 5 years

Cuba state media announced Thursday that the retirement age will be increased by 5 years as the government tries to deal with an aging population, El Nuevo Herald reported. The Minister of Work and Social Security, Alfredo Morales, said that the proposal will be submitted to a process of consultation with the workers before its probable approval next December, when the National Assembly meets for its second session of 2008.

The proposal calls for the retirement age for women to be raised from 55 to 60 and for men from 60 to 65. It is expected to be applied gradually between 2009 and 2015.

Morales attributed the necessity for the change in retirement benefits to the aging population and reduction of the work force that the country is facing, and said that the government is also studying ways to increase the birth rate and improve social security.
There are 1.82 million people 60 years or older living in Cuba today, but that number is expected to grow to 2.9 million in 2025. The country also has one of the oldest populations in Latin America.

The government is obligated to make the change due to the aging population, increased prices on the world market for food and oil and low domestic production, said economist Carlos Mesa Lago from the University of Pittsburg.

Morales said that the change will increase the pension paid to retirees and the state will offer “additional payments” for each year worked after the minimum 30 years. In April, pensions were increased by 20 percent.

You can read the El Nuevo Herald article here (in Spanish).


Cuba willing to talk with the US as equals

Cuba Foreign Minister Felipe Perez Roque told reporters at a Non-Aligned Movement conference in Venezuela last week that Cuba is willing to hold talks with the United States “on equal terms and without renouncing the principles of the Cuban Revolution,” reported Prensa Latina.

Perez Roque said that it is too early to discuss future relations with Washington after the upcoming presidential elections, but stressed that Cuba will remain consistent with its principles.

“Cuba will be ready, as we have previously said, to have respectful talks with US authorities, if they want to, on equal terms of rights, not as a subordinate or dependent country on its knees asking for an apology,” said the Foreign Minister.

“If we are offered to dialogue and debate on bilateral relations, we would do so, in line with some regulations and principles that are a must for Cuba,” he noted.

He cited the fight against drug trafficking and illegal migration as two areas where Cuba has offered to cooperate in the past.

Raúl Castro has offered on three occasions to have a dialogue with the United States, as long as it is based on equality and mutual respect. The Bush had administration has rejected his offers, insisting that he represents the continuation of a dictatorship.

You can read the Prensa Latina article here.

Update on the Economy

Although there were big expectations that Raúl Castro would open Cuba to more foreign investment, there are fewer investment projects now than there were when he took over for his brother Fidel Castro in July 2006, according to the Reuters news agency.

State media reported that state companies are involved in 234 joint ventures and 12 cooperative production agreements, compared to 258 joint ventures and 115 cooperative production agreements at the end of 2005.

However, officials say that despite fewer investors, direct investment has increased, as have venture revenues and profits.

Cuba has formed 24 new ventures with Venezuela, but Foreign Investment Minister Martha Lomas has said that Cuba remains interested in any offer that dovetails with its development plans.

State Media also reported that soaring fuel and food prices for the import-dependent country mean that economic adjustments and restrictions will need to be put in place.

The reports offered no additional details on what types of adjustments and restrictions were under consideration except that they involved social spending and retail prices.

“The substantial increase in the prices of fuel and food on the international market so far this year and projections for the remainder will inevitably force adjustments and restrictions on the economy and plans for next year,” said Economy and Planning Minister Jose Luis Rodriguez.

He did say that the economy was performing relatively well, with industrial production up 6.2 percent over the first half of 2007, agriculture 7.5 percent, and tourism 14.5 percent.

Meanwhile raw sugar production for the just concluded 2007-2008 harvest rose from 1.2 million tons on 2006-2007 to 1.5 million tons, refined sugar doubled and molasses for animal feed saw a 300 percent increase.

These were the first increases in output since the industry was downsized by more than 50 percent in 2003, and Cuba is investing in new equipment in preparation for a big jump in production in 2008-2009.

You can read the Reuters article on foreign investment here.

You can read the Reuters article on the sugar industry here.


Congress working to ease Cuba travel restrictions

The Senate appropriations committee approved legislation on Thursday that would undo harsh travel regulations imposed by the Bush administration in 2004 and loosen the payment process for agricultural sales to the island, the Associated Press reported.

The legislation, included in the 2009 Financial Services appropriations bill, would block enforcement of the 2004 restrictions, which limit family travel to Cuba to once every three years for no more than 14 days, and cap spending at $50 per day. Prior to 2004, Cuban-Americans could travel to Cuba once a year to visit relatives, spend up to $170 a day and visit for an unlimited duration.

It would also loosen agricultural trade restrictions to Cuba imposed by the Bush administration, lifting a requirement that forces Cuban importers to prepay all shipments, instead of the payment being made when the commodities are delivered.

Senator Byron Dorgan from North Dakota, pushing to loosen the travel restrictions, cited the case of Carlos Lazo, a U.S. soldier who fought in Iraq. Upon returning from the war, Lazo wanted to visit his children in Cuba but was denied permission to visit.

“That kind of perversion is nonsense,” Dorgan said.

The Appropriations Committee in the House approved similar language last month, but the efforts appear unlikely to loosen the restriction before President Bush leaves office in January. He opposes efforts in Congress to ease the embargo and the travel restrictions on Cuba. His veto promises have often led to Cuba language being stripped from legislation despite a majority support for loosening the restrictions on travel and trade.

The language has been attached to a measure funding the Treasury Department, which enforces the travel restrictions and the U.S. embargo. Congressional leaders have indicated they are unlikely to pass the Treasury funding bill and most other appropriations bills this year.

You can read the Associated Press article here.

Close races in South Florida with Cuba policy implications

According to an NPR special report, Congressional races in Florida’s 21st and 25th districts are very close and could “help determine whether Cuban-Americans continue as a bedrock Republican voting bloc.”

Rep. Lincoln Diaz-Balart will square off against the former mayor of Hialeah, Raul Martinez, in the 21st Congressional District, while his brother Rep. Mario Diaz-Balart is being challenged by Joe Garcia in the 25th District.

The Democratic Congressional Campaign Committee recently announced that it will help with fundraising and other campaigning for the races under the party’s Red to Blue program.

Republicans responded by announcing they will send resources to help both Lincoln and Mario Diaz-Balart, under a program aimed at supporting at-risk incumbents.

Martinez and Garcia support maintaining the embargo on Cuba, but easing restrictions on travel and remittances, while the Diaz-Balart brothers oppose any changes and support the tougher measures imposed under the Bush administration.

Meanwhile, McClatchy Newspapers reported that a new poll by Bendixen & Associates shows Reps. Lincoln and Mario Diaz-Balart are leading by only single digits with four months to go to the election.

The poll, which was conducted June 6 to 22, consisted of 350 respondents in each congressional district with a margin of error of plus or minus five percentage points.

It showed Lincoln Diaz-Balart leading Martinez, 41 to 37 percent, with 22 percent undecided and Mario Diaz-Balart ahead of Joe Garcia 44 percent to 39 percent, with 17 percent undecided.

You can read/listen to the NPR report here.

You can read the McClatchy News article here.

Donated Computers headed to Cuba seized by Federal Agents

Federal agents seized 32 computers from Pastors for Peace as they attempted to cross the Pharr International Bridge on their way to Cuba over the weekend, reported Bay Area Indymedia. The confiscated computers were donated by a Japanese-American group from the San Francisco Bay Area and part of a large humanitarian shipment delivered to Cuba by the group on an annual basis.

“We will not be intimidated. We have made every effort to be cooperative and they have responded with aggression. These computers are the same type as the hundreds we have taken in the past” said Rev. Walker, Executive Director of IFCO/Pastors for Peace.

It is the 19th Pastors for Peace US-Cuba Friendshipment Caravan and in addition to the computers, participants delivered 100 tons of humanitarian aid, including wheelchairs, medicine, medical equipment, musical instruments, sports equipment, six brightly-painted school buses and a bookmobile to be donated to the people of Cuba.

You can read the Indymedia article here.

Recommended Reading:

President Luiz Inácio Lula da Silva is nurturing Brazil into a regional powerhouse, The New York Times

Venezuelan, Colombian leaders look to mend ties, AFP

Recommended Viewing:

Cuba travel woes: CNN’s Shasta Darlington reports a new Florida law could double the price of air travel from Miami to Cuba

Until next week,

The Cuba Central Team

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