Ending an era of error, 9 ways to a new Cuba policy

Dear Friend:

Happy Holidays!

It’s the end of the year, the end of the Bush administration.  It’s time for a fresh start, and time to break the diplomatic deadlock between the United States and Cuba.

While the case for ending this conflict is overpowering, one big obstacle remains: Washington and Havana simply don’t trust each other.  These governments have been talking past each other, and worse, for the last fifty years.  If politicians and diplomats on both sides can’t even conduct a simple dialogue, then real progress – and, ultimately, reconciliation – will be impossible.

We know how President Obama can get this conversation started.

It’s in our new report – “9 Ways for US to Talk to Cuba and for Cuba to Talk to US” – scheduled for publication in January.  You can download a summary here.

We recruited an exceptional team of scholars and experts to write about problems where Washington and Havana have strong national interests in finding solutions by working together.  They offer concrete proposals for cooperation between Cuba and the United States in many areas, including military affairs, law enforcement, hurricane preparedness and trade.

If Washington and Havana can begin to cooperate in these fields, we believe it will help build the confidence they need to engage in the difficult negotiations that will finally bring this conflict to an end.


In the news summary, we discussed last week how aggressively and strategically Cuba is moving to raise the visibility of the embargo as a foreign policy issue, before Obama’s inauguration, by organizing nations of Latin America and the Caribbean to call for changes in U.S. policy.

But the political center of gravity is also changing here as well – and has done so substantially since the presidential election just seven weeks ago.

We held a media call with reporters on Tuesday to talk about the increasingly open political space for changing the policy.

On this call, Congresswoman Rosa DeLauro, a member of the House Democratic Leadership,  discussed how she and her colleagues are working to pass legislation to repeal the travel ban.  Carlos Saladrigas, cochairman of the Cuba Study Group (www.cubastudygroup.org), discussed their recent report which calls for the total repeal of restrictions on travel and remittances.  Steven Clemons, who directs the American Strategy Program at the New America Foundation, talked about how he and other key foreign policy players believe that changing the policy is in the U.S. national interest.   Professor Bill LeoGrande, the Dean of the American University School of Public Affairs, talked about negotiations with Cuba and the United States, a subject that he and Peter Kornbluh have addressed in a new article, “Talking with Castro,” in a new article to be published in Cigar Aficionado magazine in January.

With new energy in Congress, with a new political climate in Miami, with key foreign policy players expressing their support, and with heightened intellectual and policy activity all coalescing around the idea of reforming U.S. policy toward Cuba, we’re really believe that we’re on the threshold of big changes here.


So, keep all of this in mind, as you read our news summary this week.

  • We’ve got “food for thought” which includes reports on how the U.S. agriculture community is looking at new opportunities for trade with Cuba in 2009;
  • We’ve got new information on Cuba’s economy, its prospects for growth, and the effects that the global financial crisis is having on the island.
  • You can say, “look who’s talking,” as you read reports about fresh calls from the region to end the embargo, and Guatemala announcing that its president will visit Cuba – the fifth leader from the region to announce plans to do so (following Argentina, Chile, Ecuador, and Mexico) in the early part of 2009.
  • Finally, see two reports on Internet breakthroughs on the island.

As usual, there is a lot of news and even more to think about…this week, in Cuba news:


US Rice industry sees opportunity for trade with Cuba under Obama

The U.S. rice industry is hopeful that President-elect Obama could lift some restrictions on agricultural sales to Cuba, which would help boost sales, the Dow Jones reported.

“The best case in our view would be to remove the restrictions regarding trade and economic relations and travel and all that, and just kind of open it up,” said Reece Langley vice president of government affairs for the USA Rice Federation.

“The main thing is, I believe that things will open up for travelers, people going between the U.S. and Cuba,” Milo Hamilton, co-founder of firstgrain.com, told Dow Jones.

Following the passage of the Trade Sanction Reform and Export Enhancement Act in 2001, rice sales to Cuba increased each year reaching 177,000 metric tons in 2004. However, the Bush administration tightened restrictions in 2005 and sales immediately dropped. About 60,000 metric tons were sold to Cuba in 2007 and only 12,000 to 15,000 through October of this year.

“From what we can tell, they’re using about 1 million tons per year, and we think can supply them 350,000 to maybe 500,000 metric tons of that, if things were opened up,” Langley said.

Since 2005 the U.S. government has prevented Cuba from using credit, forced them to send money to banks in third countries before the shipment leaves the U.S., and made is significantly harder for people in both countries to travel back and forth, all of which are obstacles to trade.

“If you’re going to sell, you might as well just sell it,” said Bill Nelson, a grain analyst with Doane Advisory Services.

All rice suppliers and analyst agree that easing banking restrictions and granting Cuba credit would facilitate more sales. A Chicago Board of Trade rice trader said prices would “really take off.”

“On the margin, when you’re talking 20-25 million hundredweight in ending stocks, you’re talking about 5%-10% of the ending stocks. That’s significant,” Nelson said.

You can read the Dow Jones article here.

Ag leaders excited about possibilities for trade with Cuba under Obama

Agricultural leaders say they are excited about the prospect of freer and more abundant trade with Cuba under the Obama administration, the Ag Journal reported.

“It’s already the eighth largest customer for hard red winter wheat even though we only have fifty percent of their market,” said U.S. Wheat Associates president Alan Tracy. “By comparison, the U.S. has 90 percent of the market in the rest of the Caribbean.”
“With a different president, there is a good chance of a different approach,” he recently told wheat growers.

“Both houses of Congress have passed legislation to lift the travel ban against Cuba, but they were always taken out of the final bills by the leadership because they knew it would ultimately not be signed by the president,” he added.

Former Iowa Governor Tom Vilsack, Obama’s choice to be Secretary of Agriculture, has expressed optimism about trade relations between the two countries.   In an NPR interview, he said that he was in favor of “stronger and better dialogue” aimed at “softening” relations between the two countries.

Tracy told a group of wheat growers to “(e)xpect an effort to get the travel ban lifted early in this next legislative session,” he said.

Oklahoma, Kansas, Colorado, Nebraska and Texas are among the states that will benefit the most from resuming direct trade and more open credit policies with Cuba, said Keith Kisling, a wheat producer from Burlington, Okla., and former chairman of U.S. Wheat Associates.

“It needs to happen. What we’ve been doing in the past, it’s not working. We can’t be closing countries off. They’ve got people who need our products. And we need some of their expertise,” said Kansas wheat farmer Jerry McReynolds, who traveled to Cuba in the past.

You can read the Ag Journal article here.

Cuba relying on local gardens after Hurricanes wiped out crops

After the recent crop destruction caused by three powerful hurricanes, Cuba is relying on urban gardens to feed its population, the Reuters news agency reported.

Thousands of urban cooperative gardens were planted in the early 90s to offset food shortages after the collapse of the Soviet Union, but with 30 percent of Cuba’s farm crops wiped out by recent hurricanes, the government has renewed an emphasis on the local food production.

Miguel Salcines, a member of a cooperative in Havana that produces food for local consumption, told Reuters that his cooperative has been working non-stop in the aftermath of the hurricanes.

“Our capacity for response is immediate because this is a cooperative,” he said.

Salcines said that they have been rushing to plant and harvest a variety of beets that take just 25 days to grow, among other short-cycle crops.

Since they sell directly to their communities, city farms don’t depend on transportation and are relatively immune to the volatility of fuel prices, allowing them to get food to the local population quickly.

In Cuba, urban gardens sprang from a military plan for Cuba to be self-sufficient in case of war, but were broadened to the general public in response to a food crisis that followed the collapse of the Soviet Union. They have proven extremely popular, occupying 35,000 hectares (86,000 acres) of land across the Caribbean island.

According to Salcines, workers at his cooperative make an average of 950 pesos, or 50 dollars, per month, much higher than the average salary, and they take home some of what they grow.

The gardens grow their crops organically and unlike in developed countries, where organic products are more expensive, in Cuba they are affordable.

“We have taken organic agriculture to a social level,” said Salcines.

Raúl Castro has also borrowed ideas from the urban gardens as he implements reforms to increase domestic agriculture production.   He has decentralized decision-making about agriculture, raised the prices that the state pays for products, and granted more freedom to private farmers and cooperatives to produce.

You can read the Reuters article here.


Cuba sees 2008 and 2009 growth at 4 percent

After signing new accords with foreign countries and domestic economic reforms offset negative international factors, Cuba expects to see economic growth in excess of 4 percent in 2009 Economy and Planning Minister Jose Luis Rodriguez said this week, the Reuters news agency reported.

Rodriquez said that hurricanes and tough global economic conditions would limit 2008 economic growth to 4 percent, in comparison to the planned 7 percent.

“We are going to grow more next year than this year,” Rodriguez during an interview with local Radio Rebelde on Monday.

Cuba’s economy, which grew 7.3 percent in 2007, has been hit hard by three powerful hurricanes, falling nickel prices and the international financial crisis.

Rodriguez said that increased cooperation with foreign allies would help the economy in the coming year. The presidents of Brazil, Russia and China have all visited Cuba recently and said that their economic relations with the island nation will broaden in 2009.

“The country has important cooperation agreements. Those signed with Venezuela, with Brazil and with Russia. Relations with China will continue and broaden,” he said.

He also said that reforms in the agriculture sector and to wage policy would lead to increased growth.   Raúl Castro has decentralized the agriculture sector, increased prices paid to agricultural producers, and given more land to farmers in an effort to increase domestic food production.

“Without a doubt the agriculture policy and most importantly substituting food imports will impact the economy,” Rodriguez said.

Castro has also called for a new “results-based” wage policy to create a more direct correlation between production levels and the salary workers receive, but implementation has been delayed.

Rodriguez said that additional wage reforms are planned, but did not offer details.

You can read the Reuters article here.

Cuba to Consolidate its Financial Balance

After a heavy hurricane season and weathering the impact of a difficult world financial climate, “Cuba will work in 2009 to maintain foreign financial balances and to create reserves for indispensable contingencies,” Ministry of Economy and Planning Jose Luis Rodriguez told the National Assembly this week, Prensa Latina reported.

Luis Rodriguez told members of the Parliament that in 2009 there will be “structural changes, mainly for agriculture and industry sectors,” in order to “increase efficiency and productivity levels.”

He said that “unstable domestic and foreign financial balances” were due to unexpected rises in food and fuel in 2008 at the same time that world nickel prices diminished. Rodriquez insisted that despite the 10 billion in damages from the hurricanes and a tough world market, Cuba experienced “6 percent during the first two quarters, finishing with a 4.3 percent GDP growth by December.”

You can read the Prensa Latina article here.


President of Guatemala will visit Cuba in 2009

The President of Guatemala, Álvaro Colom, will make an official visit to Cuba during the early part of 2009, EFE reported.

Ronaldo Robles, Secretary of Communication for the President, told EFE that Colom will make his first official visit to Cuba since becoming President of Guatemala last January. Robles said that the Colom was recently invited by Raúl Castro,

“The objective is to strengthen bilateral relations between both countries, increase cooperation agreements, and congratulate the Cuban Government for the 50th anniversary of the Revolution,” Robles said.

Guatemala and Cuba renewed political and diplomatic relations in 1997 that had been suspended since the triumph of the Revolution in 1959.

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

Cuba finishes free operation for Trinidad’s PM

Cuba will cover all costs of a cancer operation on Trinidad’s Prime Minister Patrick Manning, who is recuperating at Havana’s Center for Medical and Surgical Research, the Associated Press reported.

Cuban doctors removed a malignant tumor from Manning’s left kidney.

Prime Minister Manning, who is 62, also had his pacemaker installed in Cuba four years ago.  He is expected to return to Trinidad in early January.

You can read the AP article here.

Presidents Correa and Morales again call for an end to the embargo

The President of Bolivia, Evo Morales, said this week that President-elect Obama would gain unanimous support throughout the world if he would end the fifty year old embargo on Cuba, the EcoDiario reported.

“Everybody demands the lifting of the economic embargo against Cuba. If he (Obama) lifts it, he will truly be a leader of the world, and it will help the image of the U.S. people,” Morales told foreign reporters in the Government Palace.

“If I were Obama, the first day of my presidency I would lift the embargo on Cuba,” he said.

Morales said that he hoped relations would be based on “mutual respect,” adding that for Bolivia, “we would like international relations to change; our grand desire is that the United States lifts the economic embargo on Cuba and removes the troops from Iraq.”

In a separate interview, Rafael Correa, the President of Ecuador, said that President-elect Obama can show a truly different foreign policy by eliminating the embargo on Cuba, various news agencies reported.

“We will see if President Obama will truly change U.S. foreign policy” and eliminate the embargo against Cuba, which is “untenable, intolerable and unjustifiable in the 21st century,” Correa told reporters, Juventud Rebelde reported.

Correa said he was “a bit skeptical” with respect to big changes in relations with Latin America by the Unites States, but said that “he hoped he was wrong.”

“What we need are concrete actions. One serious one would be lifting the absurd embargo on Cuba that has lasted almost 50 years. Another would be to put an end to Plan Colombia, which has converted Colombia into the center of instability in the region,” added President Correa, EFE reported.

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

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

You can read the Juventud Rebelde article here.


The archdiocese of Havana launches new website

The archdiocese of Havana has unveiled a new website as “a means of institutional communication and evangelization,” the news agency Zenit reported.

The site featured a welcome letter from Cardinal Jaime Ortega Alamino, which said that “the site provides a history of the diocese, a directory with the names of the bishops, the priests, the religious communities and homilies and documents of the principal church events in the Cuban capital.”

Ortega also said that the Church will use the Internet “to inform about the life and mission […] of the Church that serves as a pilgrim in Havana — its clergy, religious people, lay movements, publications, etc.”   He closes by inviting readers “to be disciples and missionaries of Jesus Christ, so our people can live in Him,” the Miami Herald‘s Cuban Colada Blog reported based on a translation of the Zenit article.

The church has long requested the Cuban government to provide it with time and space in the official media as well as access to alternative forms of media.

Relations between the government and the Church have steadily improved over the last year. Raúl Castro and other government officials attended Cuba’s first ever beatification ceremony last month, and the Church and State worked hand-in-hand in recovery efforts in the wake of the hurricanes that slammed Cuba in September and October.

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

You can read the Cuban Colada summary and translation here.

You can check out the archdiocese’s new website here.

Government promotes website for Cubans abroad to buy gifts for family on the island

Spanish-based Grupo Excelencias and the Cuban government teamed to create the mallhabana.com website, which offers people outside of Cuba to buy products in U.S. dollars that can be delivered to homes in Havana within 24 hours, the Associated Press reported.

“It’s a good business but it’s also a way for Cubans (overseas) to help their family members here,” said Sergio Perez, the Havana director of the Spanish-language site, told the Associated Press.

With Christmas and New Years approaching, baggers and cashiers at state boutiques are passing out copper-hued business cards bearing the mallhabana.com site, hoping to entice purchases from visiting exiles.

Perez said the Web site, which sells everything from shampoo to flat screen TVs, has 20,000 registered customers and generates “millions of dollars annually” in sales.

Since many of the customers may be U.S. citizens, some believe it challenges U.S. legal limits on spending money in Cuba.

Although payment requires a non-U.S. credit card, which many Cuban-Americans do not have, customers can transfer money to Excelencias’ Spanish accounts or send U.S. money orders to company representatives in Canada, Perez said.

The U.S. Treasury Department declined to comment to the Associated Press, but Ninoska Perez Castellon, a member of the Cuban Liberty Council, said she views it as a violation of the law and expects U.S. authorities to shut it down.

However, Sergio Perez argued that “the company is Spanish and the United States can’t do anything.”

According to the article, Cuba has teamed up with foreign companies to offer online shopping in the past, but the extra holiday promotion is “unprecedented.”

You can read the AP article here.

You can check out the shopping site here.

Recommended Reading:

Fifty years on, Cuba still in grip of revolution, by Jeff Franks of Reuters

Aging Castro still rules 50 years after revolution, by Anita Snow of the Associated Press

In just months, Cuba back from storms, by David Adams of the St. Petersburg Times

Around the region:

Carin Zissis of the Americas Society gives a roundup of events in Latin America in 2008.

Until next week,

The Cuba Central Team

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