Here in the U.S., we’re on the cusp of the Memorial Day holiday, formerly known as Decoration Day, which commemorates the service of U.S. soldiers who died in the course of duty.
This week’s edition of the news summary –with three days of holiday observances, families and fireworks, and the storied Indianapolis 500 auto race before us—aims to get the weekend started off right.
We begin with developments in the unfolding saga of Cuba’s economic reforms, including a tax holiday for certain small businesses, a new emphasis on home construction and repair in the emerging private sector, and the government’s plans for over a billion dollars’ worth of new golf courses and vacation housing being readied for foreign investors.
We also look at the jump in foreign tourism – visitors coming to Cuba from nations other than the U.S. – as well as new sources of legal travel from our country following President Obama’s travel reforms. And as you will read, at least one American visitor, Diana Nyad, plans to get back to the U.S. without the benefit of an airline ticket.
We also take a look at the diplomat being tipped as the new Assistant Secretary of State for Western Hemisphere Affairs – who, let’s just say, knows her way around “the Internets” and the dance floor.
So…before you slip on the sunglasses and slap on the sun screen, don’t forget to check out these stories and more in your weekly summary of Cuba news…
Happy Memorial Day.
In the hours before we went to press, Cuba’s government announced several reforms to stimulate private business, the Associated Press reports. The measures, approved by the Council of Ministers and announced in the state newspaper Granma, include a tax holiday throughout 2011 on payroll taxes for small business owners employing between one and five people, and allow private restaurants to serve up to 50 diners at a time, up from a previous limit of 20.
Retroactive Social Security payments for those who were previously self-employed have been extended from two to ten years. The Council is also allowing those people who rent rooms in their house, known as casa particulares, and those working in the auto industry to suspend tax payments for a period of three to six months while making necessary repairs to their homes or automobiles. Additionally, the tax for renting out rooms has been lowered from 200 to 150 Convertible Pesos (CUC) through 2011.
As a part of plans to increase the efficiency of state entities, the article also announces a plan to study government businesses with low profitability, particularly in the gastronomical sector, and consider if these businesses would be more profitable if rented to self-employed workers.
Newly approved categories of employment are those of insurance agent, party planner, and granite worker. The announcement also proclaims that the creation of a wholesale market is “at the center” of future plans, to the extent that the state of the economy permits such a market.
Granma reports that as of April 30th, 309,728 Cubans were in possession of private business licenses, with 221,839 of the licenses granted since October of 2010. Of the new licensees, the highest number of approved licenses have been for work in the food industry. Other popular categories are transportation, contracted workers, and sales of household products.
This increase in self-employment is part of the government’s plan to shrink the state sector and increase private enterprise, while softening the blow of announced lay-offs of state employees.
According to the article, 68% of those who recently received licenses were previously unemployed, while state workers and retired workers each made up about 16% of new licensees. The city of Havana continues to be the province with the most new licenses at 66,905, followed by Matanzas (17,943), Villa Clara (15,313), Camagüey (15,926) and Santiago de Cuba (14,354).
As the small-enterprise sector grows, competition and other complications have arisen, with complaints about the streets being crowded with vendors hawking their goods, reports Reuters. In addition, with the growth in the number of paladares, small Cuban diners, many have begun to advertise, something practically unheard of in Cuba in previous years.
Cuba’s government is beginning to look to the private sector to increase the sale of construction materials in order to address the nation’s perpetual housing crisis, AP reports. Since January, the sale of construction materials through the private sector has gradually been introduced, and a recent report from Granma says that there are now more than 1,000 stores selling construction materials on the island.
In the past, the government maintained strict control of most building materials by requiring all those seeking to build or make repairs to apply for various licenses and approvals. The requirements resulted in lengthy bureaucratic processes and extremely long lines at points of sale for construction materials. Recent economic reforms opened the possibility of avoiding bureaucracy and directly buying needed materials. According to Granma, “Acquiring these materials no longer means immersing oneself in the tangle of innumerable ‘legal’ documents that, in many cases, facilitated corruption and favoritism toward a ‘chosen’ few who were not always the most in need.” The government article also stated that bank credits would be offered in order to facilitate the purchase of construction materials, however, no details were given as to the specifics of this announcement.
As the government struggles to address the basic housing needs of its citizens, the first “green” building in Cuba is in planning stages, and will use sustainable technologies and design features meant to reduce its environmental impact, reports CubaDebate. The project is being led by the combined efforts of the Technical Center for the Development of Cuban Construction Materials, the Ministry of Science, Technology and Environment, the Norwegian government, and the United Nations Development Program.
Cuba’s National Office of Statistics (ONE) announced this week that the number of foreign tourists visiting Cuba in the first four months of the year increased 11.9% over last year’s numbers, CubaDebate reports. ONE reports that between January and April approximately 1,179,963 tourists entered the country, an increase of 125,580 over the numbers of tourists visiting the island during the same period last year.
Cuba’s government continues seeking ways to increase revenue from the tourism sector. In recent weeks Cuba has approved, on a preliminary level, the construction of four luxury golf courses, valued at approximately $1.5 billion, reports The New York Times. In addition to the construction of these golf courses, plans include the creation of private residences that foreigners will be allowed to purchase – an option that has to date been impossible due to current restrictions on the purchase and sale of homes to foreigners. Standing Feather, the firm in charge of the first project set to break ground in September, has announced that their development will include 1,200 villas, bungalows, duplexes and apartments on a plot of 520 acres, with residences estimated at about $600,000 and hotel rooms going for about $200 per night.
ETECSA, Cuba’s state communications enterprise, has reduced the cell phone activation fee from $40 to $30 Convertible Pesos (CUC), reports Café Fuerte. The fee reduction, which was confirmed in a statement released by ETECSA, marks a 63% decrease in activation costs since 2008, when President Raúl Castro legalized the use of cell phones for all Cuban citizens. Although cell phone use has increased on the island since 2008, Cuba continues to have low cell phone usage compared to the rest of Latin America.
Mary Blanca Ortega Barredo will replace Jacinto Angulo Pardo as Minister of Interior Commerce, Reuters reports. This decision marks another significant cabinet change that President Castro has made since he assumed his post in 2008. Ortega previously held the vice-Minister post at the Ministry of Interior Commerce, and her promotion is the sixth for a woman that Castro has made to the Cabinet of Ministers during his presidency, reports EFE. No specific reason was given for the replacement of Angulo, who had held the position for two years, and the official government note stated that he would be reassigned, “taking into account his experience and career,” AP reports.
After suffering a severe drought throughout the past months, Cuba has experienced its first rainfall, with many anxiously waiting to see if coming rains will be sufficient to support national agriculture and livestock, replenish reserves and relieve water shortages, IPS reports. Lack of rainfall has severely affected the soil and water reserves in Cuba’s central provinces, which are also the main source of water for Havana and Santiago de Cuba – the island’s two most populous provinces. Depleted reserves, coupled with a deteriorating water distribution system, have resulted in water shortages in Havana.
The Weather Center of Cuba’s National Meteorology Institute has attributed low levels of rain in May to the La Niña climate pattern, which results from the cooling of surface water in the Equatorial Pacific.
Cuban cultural institutions have announced plans to hold the 13th International Colloquium on the life of Ernest Hemingway from June 16th to the 19th in Havana, reports Radio Cadena Agramonte. This year’s event will commemorate the 50th Anniversary of Hemingway’s death. The colloquium will host 20 international experts on Hemingway’s life and writings. Margarita Ruiz, the president of the Council of Cultural National Patrimony, expressed the importance of preserving the legacy of “one of the most prolific writers in the history of the arts.” The event will be hosted in at various sites including El Floridita, Hemingway’s infamous favorite watering hole.
For a slideshow of photos taken at Hemingway’s home, click here.
CUBA’S FOREIGN RELATIONS
Cuban and Mexican officials met in Havana to discuss the agricultural reforms to be undertaken on the island following the conclusion of the Sixth Party Congress at the end of last month, Univision reports. In public statements, Mexican Agricultural Minister Francisco Mayorga announced that the Mexican government would use its agricultural expertise to help the Cuban people “reduce imports of grains, including maize, beans, wheat and rice.” After a meeting with his Cuban counterpart Gustavo Rodríguez, Mayorga stated that the two had also discussed the development of better market mechanisms within Cuba’s agricultural industry. During his visit to the island, Mayorga is also attending a business forum between Cuban and Mexican agro-business representatives.
Normando Hernandez Gonzalez, a journalist and former prisoner who was released and sent with his wife and daughter to Spain earlier this year, has now moved to Miami and is criticizing the living situations and resources provided to Cuban exiles in Spain, reports Bloomberg.
Hernández and his family were sent to Spain along with a group of more than 200 other Cubans, as a result of prisoner releases negotiated between Cuba’ government, the government of Spain, and the Cuban Catholic Church. Hernández claims that his family was given housing in a shabby hostel in the industrial section of Madrid, where they lived for 10 months as he waited for the Spanish government to grant them political asylum, which it never did.
Rep. Ileana Ros-Lehtinen, Chairwoman of the House Foreign Affairs Committee, introduced legislation with seven cosponsors to block foreign oil companies from helping Cuba explore for petroleum resources located in the Gulf of Mexico in lands that belong to Cuba.
The legislation – if enacted by Congress and signed into law by President Obama – would subject those oil companies to a range of sanctions under the Helms-Burton law. Joining Rep. Ros-Lehtinen in introducing the bill were five Members of the Florida Congressional delegation (Reps. Vern Buchanan, Mario Diaz-Balart, Connie Mack, David Rivera, and Allen West) along with Rep. Albio Sires of New Jersey and Rep. Gerry Connolly of Virginia.
In a separate but related action, Sen. Bill Nelson of Florida has asked Secretary of State Hillary Clinton to help delay Cuba’s plans to drill for oil off the coast of Florida, KeysNet reports. In a letter to Secretary Clinton, the Nelson said “I am asking that you raise this crucial issue with your counterparts in the current Spanish government and impress upon them the urgency of this situation.” Cuba is expected to drill for oil in the Gulf of Mexico in the third quarter of 2011 with its partner, Repsol, an oil company headquartered in Spain.
Sen. Nelson recently proposed legislation which would require international oil companies involved in off-shore oil exploration projects with Cuba to comply with U.S. safety regulations, including presentation of an oil spill response plan, at least one “worst-case-scenario oil discharge plan” and evidence of sufficient financial and other resources necessary for a cleanup effort.
In our report on energy published earlier this year, we examined the question of whether legislation like the House and Senate bills, if enacted, would work. Daniel Whittle of the Environmental Defense Fund was skeptical, saying “Cuba will eventually drill, if not with Spanish companies with Russians or with Chinese or others. The time to engage is now to make sure that drilling, if done, is done in the safest manner possible.”
Cuba is preparing for future exploration projects by encouraging young people to pursue careers in Geology, Reuters reports. The Dean of the Geology Faculty in the eastern province of Pinar del Río, Carlos Enrique Cofiño, states, “Oil exploration in the waters to the North of the western provinces presents a national challenge, for which young people who opt for careers associated with geology will have a promising future.”
Following President Obama’s January 2011 decision to increase options for travel to Cuba, AP reports on opportunities that are opening for U.S. citizens to visit the island under a realm of cultural exchange programs. Tom Popper, director of Insight Cuba, a travel group that has applied for a license under the new regulations, estimates that his group could take 5,000-7,000 Americans to the island each year on tours that include architectural, musical, and other artistic exchanges.
Separately, an article from The Washington Post details the trip of the Washington, DC-based Cosmo Club’s chess team to Havana earlier this month. Despite bureaucratic hurdles from both U.S. and Cuban officials, the American chess club was able to attend the International Capablanca Memorial Chess Tournament, which honors Cuban chess legend José Raúl Capablanca. Cosmos Club participant, Bob Lubic was impressed by the Cubans’ chess skills, relating his experience with a group of children who had gathered to watch them play, “They requested that they be able to play us. We said sure. We won a couple, but they beat the hell out of us. . . . I was creamed. My opponent I think was 12. Nice kid.”
Not everyone travels from Cuba aboard an aircraft. Endurance swimmer, Diana Nyad is planning her second attempt to swim the 103 miles from Cuba to Key West, Florida, reports The Washington Post. Nyad attempted this feat once before in 1978, but 8-foot swells and harsh weather forced paramedics to pull her out of the ocean after she’d been swimming for 49 hours and 41 minutes. The 61 year-old swimmer will be accompanied by two kayakers carrying “shark screens” that emit electric waves that ward off sharks. Nyad’s physician has carefully observed and supervised her endurance training and believes that she is physically capable of achieving her goal, stating “98 percent of it will be Diana and her determination. That’s the same as it was 30 years ago. I know she can do it if the conditions are right.”
Around the Region:
The Obama Administration imposed sanctions on seven foreign companies it says have illegally helped Iran acquire gasoline and other refined oil products which, according to the Department of State, could help fund the Iranian nuclear program. The list of sanctioned companies includes Venezuela’s state-owned oil company PDVSA, which has been prohibited from competing for U.S. oil contracts, obtaining U.S. export licenses, and receiving financing from the Export-Import bank of the U.S. PDVSA was accused of sending two shipments of oil additives to Iran, worth a total of $50 million.
President Chávez’s government rejected the decision through an official statement calling it a “unilateral and hostile action” that “violates the principles of the Charter of the United Nations.” According to sources within the Venezuelan government, PDVSA expects little commercial impact from the sanctions, Reuters reports. Venezuela’s Foreign Minister Nicolás Maduro suggested that regular oil shipments to the US could be affected, stating, “There are several proposals that are being evaluated by President Chávez to respond to the United States’ imperialist pretensions,” the Miami Herald reports.
Imposition of sanctions also provoked Venezuela’s political opposition. Julio Montoya, an opposition member of Venezuela’s National Assembly, said the political opposition “supports PDVSA unconditionally.” Teodoro Petkoff, a veteran Venezuelan politician, former guerilla, and journalist issued a statement denouncing the unilateral reach of United States law as a violation of Venezuela’s sovereignty and said that the sanctions would rally support for President Chávez at home and abroad.
The Permanent Council of the Organization of American States will convene a special session on June 1, 2011, to decide on the return of Honduras to the OAS.
This recent vote at the OAS paves the way for the reintegration of Honduras to the organization if former president Zelaya returns to Honduras on Saturday May 28th, as announced after the signing of the Cartagena Accord last week. The return of Zelaya has mobilized the resistance movement, which is preparing several activities including demonstrations and gatherings across Honduras. If the special session on June 1st results in the approval of Honduras’s reintegration, the Honduran government could participate with no restrictions at the OAS General Assembly that will take place on June 5-7 in El Salvador.
Ecuador opposed the special session claiming that it was premature because Honduras has not fulfilled previously outlined conditions to return to the OAS, especially in the area of human rights. Two journalists were recently attacked, with one shot and killed on May 19, AP reports. This week, another journalist, the manager of Honduran daily La Tribuna, survived an attack by several gunmen.
Kristie Kenney, U.S. Ambassador to Thailand, is likely to be tapped as the next Assistant Secretary of State for Western Hemisphere Affairs according to several current and former U.S. officials, The Envoy reports.
The administration is looking to replace outgoing Assistant Secretary Arturo Valenzuela who plans to return to academia.
Kenney has previously served in several Latin American and Caribbean posts, including as Ambassador to Ecuador, as well as representing the United States in the Philippines. At the conclusion of her tenure as Ambassador there, she moonwalked on national television.
Michelle Bachelet on UN Women, The Economist
Former president of Chile Michelle Bachelet provides an interview in which she discusses her new post as the head of UN Women.