U.S.-Cuba News Brief 07/31/2020

Dear Friends,

We hope you and yours are safe and healthy.

The beloved Havana City Historian, Eusebio Leal Spengler died this morning at 77 after a long battle with cancer. For decades, he advocated for and oversaw the restoration of Old Havana, transforming the city; in 1982, he helped make Old Havana a UNESCO World Heritage Site. Eusebio will be missed in Havana and throughout the island and the world. Our sincerest condolences to his family.

This week we are continuing our interview series with Cuban experts and their reactions to the recently announced economic reform measures in Cuba. This week we are interviewing Oniel Díaz Castellanos. He is a co-founder of AUGE, a Cuban business development and communications team. Throughout his career, he has held executive positions in political organizations, state-owned companies, private companies, and international firms in the biotechnology, consultancy, and communication sectors. He has an M.A. in International Relations from Cuba’s Higher Institute of International Relations.

Before this week’s news, an interview with Cuban Oniel Díaz Castellanos

CDA: In May, AUGE, in collaboration with Cuban economist Ricardo Torres, put together a set of recommendations to support Cuba’s private sector during the pandemic. In the report, you concluded that the pandemic is the greatest threat that Cuban entrepreneurs have faced since the government authorized their activity in 2010. Moreover, the report recommended similar measures to those announced by the government two weeks ago. What was your initial reaction to the reforms announcement?

Oniel: My initial reaction was satisfaction and joy. Together with several colleagues, we have spent a lot of time since 2015 insisting on the need to undertake reforms in the directions announced by the Cuban government. Therefore, listening to the authorities talk about opening up more space for the private sector in the national economy and finally implementing several measures that had been pending approval for years makes us feel that the effort to make our voices heard has not been in vain.

However, the details of how expanding self-employment and allowing the creation of private small and medium-sized companies will be implemented are still unknown. In the coming weeks, the new regulations will surely be published and we will be able to have a much clearer vision of how profound the announced transformations will be. For now, at AUGE, we are working hard to visualize the future scenario and define how we can take advantage of what is coming.

CDA: In an interview last week, Dr. Torres noted that the lack of domestic demand and scarcity of inputs will inhibit the robust growth of the sector. What other factors may inhibit the growth of private businesses despite these proposed changes? What additional actions would you recommend?

Oniel: The truth is that these measures have taken place at the worst possible moment, during an unprecedented global crisis that is going to sink the Cuban economy much more. But on the other hand, this same crisis seems to be the decisive element for the government to mobilize to implement many of the changes that have been urgently needed for years.

The fall in remittances to Cuba, the tourist crisis that the entire world is suffering from, and the regulations still in place for the sector are difficulties that represent immense obstacles not only for the growth but for the survival of thousands of businesses. Some of them have already reopened their doors and a level of consumption is resuming, but it will take a couple of months to understand how the market is reacting.

To continue reading the full interview with Oniel Díaz Castellanos, go to the “In Cuba” section of our news brief.

Cuba experienced an increase in COVID-19 infections this week, reaching 163 active cases at the time of publication. The island seems to have contained deaths, reporting no COVID-19 related losses in almost three weeks. 

CDA is seeking two fall interns! Interns work in three key areas: Policy and Advocacy; Communications and Social Media; and Nonprofit Development. The deadline to apply is August 5. Visit our website to learn more about the internship and to read reflections from past interns.

This week, in Cuba news…

U.S.-CUBA RELATIONS

Dollar remittances to Cuba are in limbo after French bank drops Cuban accounts

Under pressure from the U.S. and fearful of U.S. sanctions, the French bank Crédit Mutuel Bank ended service to FINCIMEX, the Cuban entity which controls remittances, the Miami Herald reports. Because of this, money transfers in USD from the U.S. to Cuba that agencies like Cubamax and VaCuba recently began processing were suddenly suspended. The agencies began allowing remittances to be sent in USD after Cuba opened stores selling food and other goods in USD. The Crédit Mutuel Bank also ended its work with the Cuban companies Havanatur, Cubapack and American International Service, which are all used by FINCIMEX. Cuba’s government has reportedly not yet found another bank who wants to take on services for these entities. Western Union continues sending remittances to Cuba, but Cubans receive them in the Cuban Convertible Peso (CUC), not USD. Because of the embargo, Cuba and the U.S. do not have direct banking relations, so those in the U.S. looking to complete financial transactions with those in Cuba must do so through third countries. The Trump administration has continuously targeted Cuban assets and bank accounts in third countries. On June 3, the State Department announced that FINCIMEX would be among the seven new subentities to the Cuba Restricted List, but remittances had not been affected up to this point.

“We are closing all doors.” The Trump administration goes after Cuban bank in London

On Thursday, the Trump administration sanctioned Havin Bank, a Cuban-owned bank based in London, the Miami Herald reports. Havin Bank (also known as Havana International Bank) has been added to the Treasury Department’s Office of Foreign Assets Control (OFAC) list of entities those in the U.S. may not engage with. Foreign companies which use the U.S. financial system could be found in violation of the regulation if they do business with the bank. A senior Trump administration official, who chose to remain anonymous, stated “Every time they think they will have a vehicle to conduct international financial activities, we will shut it down… We will continue with that until they change their behavior.” The bank had previously been included in this list but was removed in 2015 under President Obama’s move to normalize relations with Cuba.

Havana International Bank was founded in 1972 in London and experts believe it is used by a number of offshore Cuban companies. It is one of many financial institutions which Cuba’s government has founded over the years to avoid OFAC’s regulations. Emilio Morales, director of the Miami-based The Havana Consulting Group, stated that this latest move by the Trump administration will make it more difficult for Cuba to do business with foreign companies and will “close an access route for remittances themselves.”

Federal grand jury charges man responsible for shooting at Cuban Embassy in Washington (Spanish)  

On Wednesday, Alexander Alazo, 42, was charged by a federal grand jury with multiple offenses for his April 30 attack to the Embassy of Cuba in Washington, D.C., OnCuba News reports. At around 2 a.m. on April 30, Mr. Alazo fired 32 shots toward the Cuban Embassy using an AK-47-style weapon and intended to shoot anyone who came out of the building, the Washington Post reports. In addition, the shooter attempted, unsuccessfully due to rain, to set fire to a Cuban flag on which he had written “Stop Lying to People. Respect. Trump 2020. USA, Land and Family.” Staff were present in the embassy at the time of the shooting.

According to a note published by the U.S. Attorney’s Office in Washington D.C., upon Mr. Alazo’s arrest on April 30, he was charged with three federal offenses by criminal complaint “with a violent attack on a foreign official or official premises using a deadly weapon, willfully injuring or damaging property belonging to or occupied by a foreign government in the United States, and interstate transportation of a firearm and ammunition with intent to commit a felony.” Last Wednesday, the grand jury added an additional charge for “using, carrying, brandishing and discharging a firearm during a crime of violence,” totalling four federal offenses against him.

If found guilty, Mr. Alazo faces a mandatory minimum sentence of at least ten years for discharging a firearm during an act of violence. The crimes of a violent attack on foreign official premises using a deadly weapon and intentionally damaging foreign government property both carry a sentence of up to ten years in prison, a fine of up to $250,000, and up to three years of supervised release. The crime of transporting a firearm and ammunition across states for a premeditated offense carries a sentence of up to five years in prison, an additional fine of up to $250,000, and up to a year of supervised release.

In the note, Acting U.S. Attorney Michael R. Sherwin stated that “this investigation and prosecution is a testament to the commitment of American law enforcement to thwart the efforts of any individual who would target with violence any foreign embassy in the United States.” Director of the U.S. Diplomatic Security Service, Todd J. Brown added that “the Diplomatic Security Service is firmly committed to ensuring the safety and security of foreign missions in the United States.”

Progressives’ next foreign policy fight: Cuba sanctions

Progressive foreign policy groups are forming an alliance called the Alliance for Cuba Engagement and Respect (ACERE) which advocates for normalizing relations with Cuba, the National Interest reports. They recently partnered with Congressman Bobby Rush (IL-1), who introduced two amendments to an appropriations bill, which includes the Treasury Department’s operating budget for Fiscal Year 2021. In his floor remarks on Wednesday, Chairman Jim McGovern (MA-02) remarked “M. [sic] Speaker, there are two policy ideas put forward during this process that I especially want to highlight. The first was an effort led by my good friend, Congressman Bobby Rush, to create a more 21st century approach toward Cuba. This president has taken us back to a failed Cold War policy that held our country back for more than 50 years.” One amendment aimed to temporarily prevent the enforcement of caps on remittances and the other would prevent the Treasury Department from blocking food exports to Cuba. The amendments were ultimately withdrawn by Congressman Rush, but Chairman McGovern stated “He has shined a bright light on a failed policy that badly hurts the Cuban people and urgently needs to change.” In a press release, Congressman Rush stated “I have determined that these amendments are unlikely to be adopted by the Senate or signed into law by the President. I believe it best to withdraw these amendments from consideration at this time as we seek to broaden our coalition of support around this issue… My commitment to strengthening U.S.–Cuba relations remains as strong as ever.”

In September 2019, President Trump announced that Cuban-Americans would only be able to send up to $1,000 in remittances every three months to family members. Medea Benjamin, co-founder of the peace group CODEPINK, is a founding member of ACERE and stated that she feels the coalition “will bring new energy to change the criminal policy that, during a pandemic, is causing so much needless suffering for the Cuban people.” Over a hundred groups signed a letter supporting the Rush amendments. Many were small local groups but well-known progressive groups including Demand Progress, Win Without War, and Center for International Policy signed the letter. The Presbyerian Church, the United Methodist Church’s General Board of Church and Society, and the National Council of Churches of Christ also signed on. Ms. Benjamin stated that she expects the groups who supported the Rush amendments to make up the core of ACERE, though the details are still in the works.

U.S. State Department will switch out its top diplomat in Havana

Timothy Zúñiga Brown, current Coordinator of the Office of Cuban Affairs at the U.S. State Department, will soon become the Chargé d’Affaires of the U.S. Embassy in Havana, El Nuevo Herald reports. Mara Tekach has been the Chargé d’Affaires in Havana for the past two years and she will transition into Mr. Zúñiga Brown’s current role in Washington, D.C. Mr. Zúñiga Brown has extensive experience in U.S.-Cuba relations and worked at the then-U.S. Interests Section in Havana at the end of the 1990s. He has also been on diplomatic assignment in Ecuador, Mexico, and the Bahamas.

IN CUBA

Eusebio Leal Spengler, who oversaw renewal of Old Havana, dies at 77

Eusebio Leal Spengler, the Havana City Historian since 1967, died today at 77 from cancer, the New York Times reports. Mr. Leal Spengler is best known for his work restoring Old Havana, preserving its colonial roots and turning the city into a tourist hub and a UNESCO World Heritage Site in 1982. Mr. Leal Spengler was born in Havana on September 11, 1942 and earned a PhD in historical sciences from the University of Havana. Mr. Leal Spengler was also a member of Cuba’s parliament and of the Central Committee of the Communist Party, often managing political and cultural events. He oversaw the restoration of beloved Cuban monuments including El Malecón and El Morro. One of his best known projects is the restoration of the Capitol building, which is still ongoing, and in total his office has refurbished over 300 buildings. Mr. Leal Spengler also won multiple awards throughout his life, including Spain’s International Queen Sofia Prize for restoration in 2007.

Continued: CDA’s interview with Oniel Díaz Castellanos

CDA: Reforms that target the private sector include granting private businesses legal status and allowing private businesses to import and export goods and services. Cuba identified 37 state companies which will be able to work as intermediaries for the export of goods and services of the non-state sector in a way that keeps commercial margins low. What do you predict may be an effect of allowing state companies which will be able to work as intermediaries for the export of goods and services of the non-state sector?

Oniel: The possibility of doing foreign trade through state companies is not the ideal solution but it is a good first step. I see it as the prelude to an upcoming opening where private actors are allowed to export or import directly. The state really needs them to export, above all. When this inefficient mechanism shows its flaws, the government will have to allow companies to import and export goods directly without resistance.

Something that worries me is that, surely, the damage from sanctions and the U.S. blockade means that all state companies will automatically be transferred to the private businesses that import or export through them.

CDA: Cuba’s Minister of the Economy Alejandro Gil Fernández assured that the country is working on designing a wholesale market with goods which may be purchased in convertible currencies by the state and private sectors. Are these markets already working? How does the fact that the wholesale market will require access to convertible currency impact the beneficiaries?

Oniel: In recent days, a wholesale market, which, for a couple of years has been marketing products to non-agricultural cooperatives of the gastronomic sector, began to provide services to cuentapropistas in Havana. I have witnessed higher-than-usual attendance since they opened their doors. It seems that several entrepreneurs are taking advantage of this opportunity. State media reported that in just a few days this entity signed more than 200 new contracts with private clients. However, the wholesale market only offers around 30 different products and a paladar (a privately-owned restaurant), for example, may need almost 100 different items, so unmet needs will remain.

Regarding the USD wholesale markets, I think they will encourage many businesses to start charging for their services in that currency in order to resupply. This measure reinforces the need to continue advancing dollarization. The current panorama of shortages of foreign exchange, decreases in remittances, and the absence of tourism raise a huge challenge for private businesses and citizens to access this currency and make feasible this measure.

CDA: Private businesses are not as prevalent outside Cuba’s capital, Havana. What do you predict may be the impact of these private-sector reforms for the Cuban people in other provinces? Will some of these reforms potentially facilitate the growth of the private sector outside of Havana? How may these reforms affect agricultural cooperatives in rural areas?

Oniel: The health of the private sector in Havana is much stronger than in the rest of the country’s provinces, for obvious reasons, especially due to its capital status and its economic dynamism. But if, as they announced, the authorities put their energy into transforming agriculture and its marketing system, the new businesses that appear at this stage will probably become an important source of demand for these products. This may encourage further development of opportunities within the country and the creation of new jobs.

CDA: In AUGE’s 2019 survey, you found that 80.1 percent of the 126 private business owners in Havana that you interviewed reported that their business had been negatively affected by the Trump administration’s policies toward Cuba, demonstrating the direct impact of U.S.-Cuba policy on the island’s private sector. Have the new economic reforms announced in Cuba opened up new ways for U.S.-Cuba policy to support the Cuban private sector?

Oniel: I would say that the new measures announced reinforce the validity of the policy towards Cuba of the previous American administration in order to build bridges of understanding, support and prosperity for our two countries. The private sector and the Cuban people have never benefited from policies that isolate, sanction and punish without distinction. But, on the other hand, dialogue, exchange, trade, and travel have been decisive in improving the lives of many Cubans. The best evidence of this were the years 2015 and 2016. So, we need to return to the spirit of those years and project a relationship in which there is no room for sanctions and blockades. We need to travel to that past to reach the future.

Cuba loosens straitjacket on private sector to stimulate economy; Cuba: over 200 contracts in wholesale market for private businesses (Spanish)

Hoping to stimulate its economy which is under tremendous strain due to Venezuela’s crisis, U.S. sanctions, and the pandemic, Cuba has loosened restrictions on the private sector, Reuters reports. This change takes place as part of the recent package of economic reform measures which include various measures directed at the private sector. The reforms give greater autonomy to state-owned companies, farmers, and local governments. They also prioritize the expansion of the private sector, mainly composed of small business and cooperatives, artisans, drivers, and vendors. Private enterprises will now also have the right to import and export without government intervention and with state-owned companies acting as intermediaries. Forty percent of the estimated 600,000 private sector workers pre-COVID-19 were left without work as the tourism industry and public transportation were put on halt during the pandemic. Cuba’s GDP is expected to decrease between 8 and 10 percent in 2020, and continue shrinking in 2021.

One measure that has already been implemented is the opening of wholesale outlets for private businesses and non-agricultural cooperatives. Mercabal, Cuba’s first wholesale market has formalized more than 200 contracts in three days since its opening, OnCuba News reports. Mercabal already functioned as a wholesale market for state owned businesses. According to Agencia Cubana de Noticias, the new market is located in Nuevo Vedado, Havana, and will only sell products in Cuban pesos (CUP) using debit cards, to owners of restaurants, cafeterias, bars, and bakeries.

Luis Hernández, Mercabal’s manager, said that the market also offers delivery services priced according to distance, and a 20 percent discount, in efforts to improve the quality and service to the public. He added that the market has expanded its selection of goods and is currently selling rice, flour, eggs, oil, sugar, water, chocolate, and meat products, among others. 

The new economic reforms from Cuba’s government also include the opening of 72 foreign currency stores and the removal of the ten percent tax on the U.S. dollar. Two additional wholesale markets are expected to open in Havana by the end of August, and they are expected to gradually open throughout the rest of the island.

Cuba announces pensions will now be paid electronically

On Monday, Cuba’s government announced that the checkbook, used by an estimated 80 percent of Cubans to collect retirement pensions and social security, will not be used starting in August, OnCuba News reports. Pensions will now be paid electronically. With this new automated system, retirees will only need a valid ID or their bank number to cash their pensions. The bank cards are available in Havana and retirees need only apply for them to receive them. Additionally, advance payments will be eliminated in an effort to keep payments on a strict calendar schedule.  

CUBA’S FOREIGN RELATIONS

Cuban doctors return from Mexico to Cuba

Last Saturday, after three months of helping fight the COVID-19 pandemic in Mexico, Cuban healthcare professionals returned to the island, OnCuba News reports. The group of 578 Cubans are the last group of the Henry Reeve Medical Brigade to return home. Of the 578, 265 were doctors, 285 nurses, seven hygiene and epidemiology experts, and ten public health experts.

The group’s leader, Miladys Orraca Castillo, admired the disciplined work of the group. Marcelo Ebrard, Mexico’s Secretary of Foreign Relations, published a tweet thanking the Cuban healthcare workers for their “invaluable support” in these trying times and wishing them a safe return home. During their stay in Mexico, the Henry Reeve Medical Brigade worked in nine hospitals and treated 54,000 people, among them 43,000 who tested positive for COVID-19. They also trained 249 Mexican healthcare workers and provided support in emergency rooms, internal medicine departments, burn centers, and epidemiology departments.

Mexico was one of the 50 countries which received assistance from Cuban doctors amid the COVID-19 pandemic. The Trump administration has previously referred to these doctors as “slaves” and has been discouraging countries from participating in the program for the past two years. In early April, the President and the State Department condemned countries’ use of Cuban medical brigades, claiming their pay and labor conditions are unacceptable. Meanwhile, the Cuba Nobel Prize Campaign in favor of awarding Cuban Henry Reeve Medical Brigade the 2021 Nobel Peace Prize continues to gain support. The petition has over 30,000 signatures and has been endorsed by writer Alice Walker, musician Silvio Rodríguez, and actor Mark Ruffalo among others.

Cuba travel advice – GOV.UK

The United Kingdom will allow British nationals to travel to Cuba, according to an official publication by the Foreign & Commonwealth Office (FCO). Since July 24, Cuba has been exempt from the FCO guidelines against non-essential international travel. The FCO website also states that tourists may only enter Cuba on flights to Cayo Coco, Cayo Cruz or Cayo Guillermo (served by Jardines del Rey airport), Cayo Santa Maria (flying into Santa Clara airport), or Cayo Largo del Sur.

RECOMMENDED READINGS AND VIEWINGS

Karen Bass, a Potential Biden VP Pick, Explains Her History With Cuba, Edward-Isaac Dovere, The Atlantic

In this article, Edward-Isaac Dovere interviews Congresswoman Karen Bass (CA-37) about her 1973 trip to Cuba with the Venceremos Brigade, a group which has organized yearly trips to Cuba for young, leftist Americans. Congresswoman Bass returned to Cuba eight times in the 1970s and has since traveled to the island another eight times, including in 2015 with then-Secretary of State John Kerry to reopen the U.S. Embassy in Havana and with President Obama’s 2016 presidential delegation to Cuba. This article explores her experiences in Cuba as a young, leftist activist from California. It also discusses what the potential impact of her being Joe Biden’s vice presidential pick may be for his election chances in Florida, a key battleground state in the presidential election.

Joe Biden and the Future of the Americas, Juan S. González, Americas Quarterly

In this article, Juan S. González argues that the U.S. presidential election in November is high-stakes not only for the U.S. domestically but also for the future of Latin America and the Caribbean. Mr. González writes that the contrasting approaches to Cuba and Venezuela policy of President Trump and former Vice President Biden reflect a fundamentally different understanding of U.S. national interests. Mr. González alleges that President Trump’s Americas policy “runs through Miami… and the distorted prism of South Florida politics.” He argues that former Vice President Biden’s approach, on the other hand, is based on a belief that promoting a “secure, middle class and democratic hemisphere” is in the U.S.’ best interest. Mr. González ends his article by writing that Latin American and Caribbean countries are “at an inflection point” and that U.S. leadership is an influential example throughout the world, for better or worse.

Us Against Ourselves (Spanish), Ricardo Torres, Progreso Semanal

Cuban economist Ricardo Torres elaborates on the debate generated by Cuba’s new economic reforms that aim to stimulate Cuba’s dire economy. In this article, Mr. Torres argues that the topics currently being discussed are not so novel, they have been talked about for decades. The dollarization of the Cuban economy, for instance, is nothing new. While Mr. Torres hopes that Cuban authorities have learned the lessons related to these questions throughout the years, he highlights problems that the new reforms do not address. The article concludes that it is the inconsistency of Cuba’s internal policy, and not external influences, which have made the development strategy of the Cuban economy fail.

Cuba Wants Your US Dollars for Shampoo, Meat, Pastas and Grains, Eric Goodman, Startup Cuba

In this article, Eric Goodman shares excerpts and analyses from an interview with Cuban economist Oscar Fernández about the 72 newly opened dollar stores in Cuba. The state-run stores, which offer “high-end” products such as shampoo, meat, pastas, and grains, are controversial for two reasons: (1) some citizens believe that the sudden availability of these products indicates that the government was hoarding them and keeping them from the people during a time of intensified shortages; (2) there are concerns about purchasing opportunities for Cubans without access to foreign currency. This article is part of Startup Cuba’s series on Cuba’s new economic reforms.

Should Cuba promote introduction of genetically modified organisms in agriculture?, Dr. C Juan Triana Cordoví, OnCuba News

In his opinion piece, Dr. C Juan Triana Cordoví cautions about the use of genetically modified organisms (GMOs) in Cuba, especially when there are other ways to generate food with much less uncertainty about the effects on human health and biodiversity. The opinion piece is prompted by a recent announcement by Cuba’s government approving the Decree Law of the National Commission for the use of Genetically Modified Organisms in Cuban Agriculture which allows the controlled introduction of these products. In the article, Dr. Triana Cordoví provides summaries of the history of GMOs in Cuba and past research on this topic. Dr. Triana Cordoví urges Cuba to further investigate GMOs before implementing this policy.

Cuba sets example with successful COVID-19 strategy, Ed Augustin, Al Jazeera

This short clip by Ed Augustin sheds light on Cuba’s most effective strategies for containing the COVID-19 pandemic. Among them, Cuba’s door to door policy mobilized thousands of healthcare workers and medical students to knock on doors every day to identify people with COVID-19 symptoms has proven successful. State mandated face coverings, as well as the mandatory isolation of those suspected to have COVID-19, have also contributed to limiting the spread of the virus. This video demonstrates how this preventive approach seems to have successfully contained the pandemic in Cuba thus far.

Havana, from on High: Secret Rooftops of the Cuban Capital, Al Jazeera

This video documentary by Al Jazeera follows the lives of those who live on Havana’s rooftops, telling a unique story that reflects the experiences and hopes of many Cubans. Due to the housing shortage in Havana, many have been forced to turn their rooftops into makeshift homes. Looking over the decaying city, these residents struggle to make ends meet and witness an ongoing transformation process in Cuba.

‘The Cuban’: Film Review, Sheri Linden, The Hollywood Reporter

The Hollywood Reporter’s Sheri Linden reviews the Canadian film, The Cuban, released today virtually. The film, written by Alessandra Piccione and directed by Sergio Navarretta, stars Canadian actress Ana Golja and American actor Louis Gossett Jr. It tells the story of Luis García (Gossett Jr.), a former Cuban jazz star living with Alzheimer’s in a nursing home in Canada, and his young nurse, 19 year-old premed student Mina Ayoub (Golja). The two develop a friendship as he tells her stories about his time as a musician in Cuba. Linden offers her take on the film in this article.


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