Party Congress in Havana ratifies economic reforms, sees end of Fidel Castro’s tenure; Obama’s (non-tourist) travel regulations finalized, opening doorway to more travel

The first meeting of Cuba’s Communist Party Congress since 1997 concluded in Havana this week with several actions that will accelerate the process of modernizing Cuba’s economy while deferring significant changes in the country’s leadership.

Our report on what happened in Havana dominates the news summary this week.

But the regulations released in Washington yesterday – putting into effect the new travel and remittance rules ordered by President Obama – also command our attention. While they do open more opportunities for Americans to travel to Cuba, they also contain caveats and limitations, which will ultimately restrict the amount of engagement the new rules could make possible.

Below you will find a summary of what the Congress did, a review of Cuba’s economic reforms, and links containing pictures, videos, and more detailed reporting on what happened at the 6th meeting of the Cuban Communist Party Congress, and what it might mean both for the future of Cuba and U.S.-Cuba relations.

The rap on what Cuba is doing – from some economic experts, from skeptics about Cuba’s commitment to reform, and from supporters of U.S. sanctions – is that the reform process amounts to nothing more than tinkering around the edges.   Read what we’re reporting this week and see whether you agree.

This week, in Cuba news…


Sixth Congress of Cuba’s Communist Party

Cuba held its Sixth Communist Party Congress from April 16-19, 2011, its first in fourteen years.  President Raúl Castro convened this Congress to debate and ratify reforms that are significantly changing Cuba’s economic model.  These are the headlines coming out of the Congress:

  • The Party ratified a package of approximately 300 economic reforms providing for more self-employment in the emerging private sector, state sector job cuts, more foreign investment, and less government spending.  Among them, significantly, Cubans will be allowed to buy and sell their homes for the first time since 1959.
  • The Party established a structure to speed the reform process and overcome bureaucratic resistance to the changes.
  • Marino Murillo, former economy minister and a leading architect of the reforms, will lead the Permanent Government Commission for Implementation and Development, in charge of driving the new policies through the bureaucracy, as Phil Peters reports in the Cuban Triangle blog.
  • The Party agreed to meet in conference in January 2012, as Marc Frank of the Financial Times reported, to address term limits and measures to remove the party from the day-to-day activities of the country’s government and economy.
  • The tenure of Fidel Castro as an official of the Cuban Communist Party officially came to an end.
  • Although the Party shrank the size of its ruling Politburo, and put in the line of succession to run the government the first-non Castro in over fifty years, the leadership, as Paul Haven of the AP reported, is still dominated by “men who came of age before television, let alone the Internet.”

How did all of this come about?

The economic reforms in brief

Years before the Congress, economic reforms were already underway.

Raúl Castro took over as Acting President in 2006, when his brother, Fidel, fell ill. On July 26, 2007, he gave a speech in which he outlined the managerial and structural problems facing Cuba’s state-run milk production sector. Since then, Castro has waged a campaign against inefficiency and corruption, and introduced significant reforms in the agricultural sector; redistributing idle land and making micro-credits available to farmers.

The urgency of these tasks only grew, as Cuba faced a growing economic crisis, weathered the enormous costs of hurricanes and seasonal storms, and suffered significant income losses due to the global recession.  By February 2009, Raúl Castro formally assumed the role of Cuba’s presidency.

In October of last year, President Castro announced that 500,000 state workers would be laid off by the first quarter of 2011 (that plan was later delayed), with more than one million shed from the state payroll in the next five years.  Also at the end of last year, he legalized 178 categories of private enterprise, allowing many Cubans to start their own businesses, with the hope of absorbing state workers in the non-state sector.  Cuba’s government then announced the decision to hold the Party Congress – to ratify and accelerate the process of reform.

How Cuba prepared for the Party Congress

With the announcement to hold the Congress, Cuba’s government released the 32-page “Guidelines for Economic and Social Policy,” (original Spanish here) which laid out in 291 bullet points the topics to be debated.  Seven million of Cuba’s 11.2 million citizens discussed these guidelines in thousands of meetings across the country in the months leading up to the Congress, expressing their criticisms and concerns about the proposed elimination of the ration book, low wages and the high costs of living, the need to unify Cuba’s two currencies, and the absence of a wholesale market for the self employed to buy necessary supplies, while expressing popular support for reforms such as the right to buy and sell homes.

Based on input from these grassroots meetings, two-thirds of the 291 points have been edited, but the revised Guidelines have yet to be released.

The Congress convenes

As we reported last week, the Sixth Party Congress began on Saturday April 16th, marking the 50th anniversary of the U.S. invasion of Cuba at the Bay of Pigs.  The anniversary was celebrated by a parade through Revolution Square. Though former president and historic Revolutionary leader Fidel Castro was not present for the parade, he penned a Reflection giving his blessing to the Congress.

President Raúl Castro started off the Congress by delivering a 2 ½ hour speech (here in Spanish and English), in which he praised the achievements of Cuba’s government and outlined the proposed economic changes. He also called for term limits, saying that the Party had reached the conclusion that officials in top government positions should be limited to two, five-year terms – although this decision was deferred until January 2012, and appointments to senior government positions continued the preference for historic leaders to remain in office. In his speech, Castro also praised the achievements to date of the opening of the private business sector, citing that over 180,000 licenses have been granted to Cubans to run their own businesses.

What the Congress did

Delegates passed a resolution approving the Guidelines with modifications suggested during the months-long popular debate process. Part of the approved reform will allow for the purchase and sale of homes and property, a step forward from the current system where Cubans are only allowed to swap housing. The processes and regulations that will be laid out to manage this reform have yet to be issued.

President Castro did, however, warn that the accumulation of private property would not be allowed, perhaps to address the concern of some that this reform could exacerbate inequalities in a society where there is great disparity in the value of homes, and many Cubans do not own homes at all.

The resolution also contained steps to implement the reforms and overcome resistance in the bureaucracy to them. It assigns to the government the task of creating a Permanent Commission for Implementation and Development, charged with the responsibility of “controlling, verifying and coordinating the actions of all of those involved in this undertaking, proposing the incorporation of new guidelines and leading, in coordination with appropriate parties, the administration of the process.”

The resolution requests that “the National Assembly, the government and corresponding bodies write and approve the judicial norms that will support the adopted functional, structural and economic modifications.” It also gives the Communist Party the responsibility of controlling, driving, and demanding that the process move forward, designating that the Central Committee meet in its entirety at least two times per year in order to analyze the process of modernizing the economic structure.

This resolution (available here with photos from the Congress) is ambitious, but like the Congress itself, gives little detail about the specifics of implementing the reforms proposed in the approved guidelines. We expect to see the reforms announced and implemented gradually following the Congress.

Changes in leadership

Nearly one thousand delegates at the Congress were also assigned the task of electing a new party secretary, second secretary, and Politburo (the executive cabinet).  President Raúl Castro was formally named first secretary and head of the Politburo.

José Machado Ventura, who formerly held the position of First Vice-President of the Council of State, was chosen for the second secretary position in the Politburo.  Machado, who is 80 years old, fought in the Cuban Revolution, and is a member of the old guard of the Communist Party leadership.   Opinion is divided about the meaning of his appointment – whether it conveys approval by senior, historical figures of the reform process, represents a brake on reforms, or signals that these reforms will be expressly economic and not political in nature.

Changes in membership

A complete list of those elected to the Politburo reveals that 11 officials, including five generals, maintained their positions, while three new representatives were elected, including Mercedes López Acea, who is the first woman to serve as the Party Secretary for the capital city of Havana.

Also new to the Politburo, and representing the emphasis put on the reform process, are Marino Murillo, who was recently moved from his position as Minister of Economy to specifically oversee reforms, and Abdel Izquierdo Rodríguez, the current Minister of Economy. The Politburo itself was reduced from 24 to 15 members, perhaps a reflection of the continued push for efficiency and reduced bureaucracy.

The Central Committee, for its part, increased the representation of women and Afro-Cubans in its ranks. The 115-member Committee now contains 48 women (41.7%), which is three times the percentage in the previous Committee. Afro- and mixed-Cubans hold 36 positions in the newly elected Committee, or 13.3%, a 10% increase.  You can observe the announcement of each Central Committee member and see the new make-up of the Central Committee on video here.  One addition of note: Josefina Vidal, who formerly served at the Cuban Interests Section in Washington, and is currently the head of the North America Department at Cuba’s Foreign Ministry, was added to the Committee.

While President Raúl Castro began and ended the Congress expressing the need for more youth involvement in order to rejuvenate the Communist Party, elections did little to bring new blood into leadership positions.  In what Reuters called a “stumble,” the top three spots within the Communist Party went to people over the age of 77.  In his speech marking the conclusion of the Congress, President Castro asked that Cubans be patient for generational change.

The AP reported that Cubans reacted to the modest changes in leadership with a mixture of support and resignation.

“It’s logical,” said Reina Rosa, 43, of Havana. Raul “had to put a man there (as second secretary) that he trusts completely and there’s none of those among the young people.”  “It’s the same thing with the same people,” added Maria Rubio. “These old guys don’t want to let go of power.”

How the Congress concluded

The Congress concluded with another speech by President Raúl Castro (here in Spanish and English). In his speech, Castro called the Congress “magnificent,” and stressed that the reforms discussed would not happen overnight. He also repeated, as was mandated by the Congress, that the Central Committee would convene in a National Conference in January 2012, with the goal of reporting on and updating the reform process.

Revolutionary leader Fidel Castro made a surprise appearance during the closing ceremony and was met with an emotional reception (video here) as he joined the party leadership on the platform for Cuba’s national anthem. State newspaper Granma offers all of the speeches and resolutions from the Congress, in Spanish.

As the closing announcement of the Party Congress proclaims: “The Party Congress is over; now, to work!”

Implications for U.S. policy?

The ambivalence that lies at the heart of U.S. policy was on clear display in Washington this week.

Prompted by reporters to comment on the Party’s action to move head on economic reform, Mark Toner, State Department spokesman, merely said “It is an internal process there,” and that the Obama administration remained “focused on getting Cuban people more access to freedom of information and other aspects.”

While these sparse comments give short shrift to the biggest changes in Cuba’s economic model since 1959, the administration also finalized and issued important new license application guidelines (see discussion below) that will enable more travel to Cuba and potentially provide new sources of financial support through expanded remittances for even those Cubans who do not currently benefit from having family ties to the United States.

More travel will increase access to information for Cubans and greater economic opportunities for those working in the tourism and retail sectors of the economy.  How Americans in the U.S. without family on the island will be enlisted to provide remittances remains to be seen.

What we believe

  • In their totality, the economic reforms go beyond what others dismiss as “tinkering around the edges.”
  • This is confirmed to us by our reporting – based on interviews with Cubans most recently in March 2010 in Havana and Pinar del Rio – in which they express a range of emotions from excitement to uncertainty to fear about how these foundational changes will affect their lives and livelihoods.
  • We have also been reminded that there is political and institutional resistance to the changes in Cuba’s government and Communist Party that has prolonged the effort to ratify and accelerate them.  A lot of “domestic diplomacy” has taken place to bring everyone along.
  • At the same time, economists tell us that while layoffs, self-employment opportunities, and reductions in social benefits are both economically important and loom large in the minds of Cubans, these reforms do not yet address structural problems in the Cuban economy and are unlikely to be sufficient for long-term growth.
  • While the responsibility for addressing these issues rests with Cuba, U.S. policy should be more encouraging.  Rather than betting on U.S. sanctions and diplomatic isolation with the hope that Cuba fails, U.S. policy should do more to help where possible to support reforms, because that will advance the economic interests – and we believe, the political interests – of the Cuban people.

Later this year, the Center for Democracy in the Americas will issue a detailed report on Cuba’s economic reforms as part of our 21st Century Cuba series.

As prices of imported food increase, government must spend more to subsidize

Igor Montero Brito, the president of Cuba’s food import company, announced in the state newspaper Granma this week that increasing prices on imported food products will force Cuba’s government to increase subsidies on these products, the Miami Herald reports.  Montero announced that the government would “increase its subsidies in amounts not contemplated in the [budget] plan, which will pressure even further the balance of payments and the country’s economic development.” The main affected products are wheat, corn, soy flour, soy oil and powdered milk.

Montero estimated that Cuba will be spending 25% more than projected to import these goods. He also stressed the need to increase domestic production of the most-affected products in order to decrease the need to import. Cuba currently imports about 80% of its food. Montero also added that the expected profits from other industries, such as nickel and sugar would no longer be net gains, but instead be used to cover the deficit in food imports, EFE reports.

Cuba focuses on self-sufficiency in the wood industry

This week the Cuban government released plans to inaugurate a new program that will closely manage and monitor timber plantations across the island in an attempt to meet high demands for wood domestically, reports Cuba Headlines. This news comes at a critical time, when 4,000 hectares of scrubland and woods burned at a timber reserve in the San Felipe Plateau, reports Cuban News Agency.

During the rainy season, efforts will be made to plant indigenous flora throughout the island. Botanists have estimated that “in Cuban forests there are over 600 species, including four endemic pines and a wide range of recognized quality timber such as mahogany.” The Cuban Ministry of Agriculture first launched the Forestry Development Project in 2008 in conjunction with the Canadian Agency of Development.


OFAC approves new travel service providers, publishes Cuba travel application guidelines

OFAC released the “Comprehensive Guidelines for License Applications to Engage in Travel-Related Transactions Involving Cuba,” on Thursday. Though the president announced new travel and remittance regulations on January 14th, they did not officially go into effect until the “fine print” of the guidelines was released this week.  According to the OFAC website:

The Application Guidelines are intended to assist persons who wish to engage in travel-related transactions involving Cuba in making their own determinations as to whether their activities are authorized by a general license (in which case no specific license from OFAC is needed), or their activities could be authorized by a specific license from OFAC (in which case an application is required).

As the Miami Herald reported, the new rules make it easier for U.S. schools, churches and cultural groups to visit Cuba, and boost the amount of money Americans can send to the island to support its growing private economy.

Under the official rules:

  • Americans can send up to $2,000 annually to any Cuban national, with a quarterly limit on the amount any American can send: $500 per Cuban citizen per quarter to “support private economic activity.” The Clinton administration had set that figure at $300 a quarter.
  • Religious and educational groups can travel to Cuba for certain types of events or study without applying in advance for a specific license.
  • “The commercial marketing, sales negotiation, accompanied delivery, or servicing in Cuba of telecommunications-related items that have been authorized for commercial export or re-export by employees of, or an entity duly appointed to represent, a telecommunications services provider” is allowed without a specific license.

“The biggest change in the rules, which were announced in January by Obama, is restoring licenses for so-called people-to-people educational exchanges, which the Bush administration had suspended several years ago. These rather broadly worded licenses had opened up Cuba travel to far more Americans,” reports the Los Angeles Times.

Though the new regulations, and their companion guidelines, offer greater opportunities for travel under general licenses for people-to-people exchanges, the guidelines also include caveats and restrictions which limit the regulations.  The introduction to the guidelines includes a paragraph in bold that reads, in part:  “Meeting all of the relevant specific licensing criteria in a given section does not guarantee that a specific license will be issued, as foreign policy considerations and additional factors may be considered by OFAC in making its licensing determinations.”  In other words, OFAC maintains the right to deny licenses for any reason. The risk is that politics will continue to intrude, and engagement will suffer until we have travel for all.

In a related action, OFAC also updated its list of authorized service providers offering travel to Cuba, including nineteen newly-approved travel service providers.

Visit our site for coverage of the reforms, initially announced in January.

Ladies in White honored by the U.S. State Department

The U.S. State Department released a statement this week praising the Ladies in White and announcing that the women have been named the recipients of this year’s Human Rights Defenders Award. The announcement states, that the Ladies in White’s “visible, consistently-observed vigils focused international attention not only on political prisoners, but the overall human rights situation in Cuba.”

The Ladies in White hold a weekly Sunday march demanding the release of political prisoners on the island.  The group is comprised of female relatives of some of the 75 dissidents arrested in March 2003. All have since been released; most accepted exile in Spain.

Cuba’s government regularly denounces the Ladies in White, considering them “common criminals who take money from Washington to destabilize the island and bring down its social revolution,” the Associated Press reports.

Wikileaks cable implies lack of reporting mechanism for USAID in 2008

New information about the level of U.S. government knowledge of and control over controversial USAID-funded “democracy promotion” programs in Cuba was revealed this week with the leak of a 2008 cable from the U.S. Interests Section in Havana. The cable details “early impressions and requests” from Chief of Mission Jonathan Farrar’s first few weeks in Cuba. The cable states that the U.S. State Department’s Bureau of Democracy, Human Rights, and Labor was working to provide quarterly reports to the U.S. Interests Section about its activities on the island, and requested that USAID do likewise. The question raises curiosity as to what – if any – reporting mechanism existed before this request for quarterly reports, and what kind of reporting and accountability mechanism is in place today.

Alan Gross’ wife asks for his release on Passover

As the Jewish holiday of Passover began Monday evening, Judy Gross, the wife of jailed USAID contractor Alan Gross, once again called for her husband’s release, stating:

I call on President Obama, in whom my husband believed so much, to make Alan’s release a top priority. And I call on President Castro to make a genuine gesture to the Jewish community around the world this Passover by releasing Alan immediately on humanitarian grounds.

Gross also claimed that her husband is “a pawn caught in the midst of a futile political war that neither side can claim to be winning,” reports the Miami Herald.

Mr. Gross was allowed a visit from a representative of Cuba’s Jewish community on Passover, CBS News reports. President Adela Dworin, President and Vice-President David Prinstein of the Jewish Cuban Community delivered traditional Passover food to Gross, who they described as “visibly emotional” but “in a good physical state.” Gross’ legal team recently filed an appeal with the Cuban Supreme Court.

Around the Region:

Former Salvadoran general faces deportation from U.S. over torture claims

Eugenio Vides Casanova, a former Salvadoran defense minister, faces deportation to El Salvador over torture accusations in a trial that began this week in Tampa. Vides is the first senior foreign military commander to face immigration charges brought by a special human rights office at the department of homeland security. In 2000, Vides Casanova was acquitted of the murder of four U.S. churchwomen. He was subsequently found liable in a separate civil suit, and ordered to pay $54.6 million to three Salvadoran torture victims, the New York Times reports.  Vides Casanova is retired and lives in Florida.

Extradition of alleged drug kingpin from Colombia to Venezuela indicates thaw in relations

Walid Makled is suspected of being one of the world’s biggest drug traffickers, helping to ship tons of Colombian cocaine to the U.S., some if it through Venezuela.

Makled, who also claims to have paid off Venezuelan state and army officers to help him in illegal activities, was captured by the Colombian government in August of last year.

Colombia’s president Juan Manuel Santos recently announced his decision to extradite Makled to Venezuela, despite another extradition request from the U.S.  According to Reuters, the Makled case “has become an unlikely symbol of friendship for Colombia and Venezuela whose rivalry for years mirrored Latin America’s deep ideological fissures.”  Reuters is also reporting that “prior to his extradition, U.S. investigators are being given access to Makled, whom President Barack Obama put on a list of important foreign traffickers in 2009.”

The restoration of ties, severed at the end of then President Uribe’s government, continues, as both countries reached a new agreement this week, restoring bilateral agricultural trade. Colombia will be re-allowed to export meat, poultry and dairy products to Venezuela. Colombia’s exports to Venezuela between January and May of 2010 were 71.4% lower than the same period in 2009 due to the political tensions.

Recommended Reading:

U.S. Fears Cuba Oil Drilling, Mexico Suggests Talks

After holding two meetings – a bilateral discussion with Mexico on drilling in the Gulf of Mexico and a multilateral conference on deepwater drilling – Ken Salazar, U.S. Secretary of the Interior, professed concern about Cuba’s plans to drill in the Gulf.  Cuba was not invited to participate in either meeting.

Dilma Rousseff named to the 2011 TIME 100 Most Influential People, Michelle Bachelet

Michelle Bachelet, the former president of Chile knowingly writes of the new president of Brazil:  “It’s not easy being the first woman to govern your country. Beyond the honor it signifies, there are still prejudices and stereotypes to confront.”

Message to Congress: Don’t Turn Your Backs on Vulnerable People in Latin America, Lisa Haugaard, Latin America Working Group

This week, Lisa Haugaard of the Latin America Working Group testified before the House Subcommittee on State, Foreign Operations, and Related Programs regarding U.S. funding to Latin America for FY 2012.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: