Happy Friday! We hope you and yours are well.
This week, Cuba’s government made multiple efforts aimed at improving Cuba’s economy. On Thursday, it was announced that the island will no longer be accepting USD cash bank deposits given difficulties faced by the island when trying to deposit USD abroad. It was also clarified this week that recently announced prepaid USD cards are to be used by Cuban tourists and emigrants, not by the general Cuban population. The prepaid cards were introduced as a response to the current lack of liquidity faced by the Cuban peso in the island’s financial market. While the island adopted policies to ease economic turmoil domestically, Cuba’s Deputy Prime Minister Ricardo Cabrisas traveled to France on Thursday to renegotiate a 2015 debt forgiveness and payment plan agreement with the Paris Club. Cuba failed to meet payment obligations in 2019 and 2020 due to economic hardships allegedly frustrated by U.S. sanctions and the COVID-19 pandemic.
Meanwhile, Cuban rapper Maykel Castillo Osorbo, a member of the San Isidro Movement (MSI) and one of the two Cuba-based singers featured in the viral song Patria y Vida (“Fatherland and Life”), remains under state custody while facing charges of public disorder and evasion of authority. While state authorities claim that Mr. Osorbo has been offered legal representation and maintains contact with his family, independent organizations in Cuba have questioned the validity of his arrest and demanded his immediate release. Cuba was again mentioned in international headlines over suspicions that an Iranian warship thought to be carrying weapons potentially destined for Venezuela may also dock in Cuba. The concern sparked warnings from the Biden-Harris administration that such a shipment would be seen as a provocation and could be met with deterrence measures.
In news pertaining to COVID-19 in Cuba, the island’s vaccination campaign in Havana continues to expand, along with plans to eventually bring the island’s domestically produced vaccines to the international market. The island has also had a significant increase in intensive care unit (ICU) patients. As of last Thursday, Cuba reached the highest number of patients in ICUs since March of 2020 with a total of 161. Yesterday, Cuba reported 154,866 cases of COVID-19. There are currently 6,192 total active cases of COVID-19 on the island, an increase from the previous day. Havana reported the largest number of new cases by far compared to other provinces at 460. The total number of deaths since March 2020 is 1,065. For a graph of case numbers since March 2020, see here. For a detailed breakdown of all COVID-19 data, visit this website.
This week, in Cuba news…
As of Wednesday morning, two Iranian warships believed to be carrying arms had completed more than half of their journey across the Atlantic, Politico reports. While their final destination remains unclear, anonymous U.S. officials claim that the ships are potentially headed to Venezuela given that the country reportedly considered purchasing missiles from Iran last year. Iranian Foreign Ministry spokesman Saeed Khatibzadeh declined to comment on the ship’s final destination. There is also concern among U.S. officials that the ships may attempt to dock in Cuba. Satellite imagery from late April identified seven Iranian fast-attack crafts normally associated with the country’s paramilitary Revolutionary Guard on the deck of one of the two warships before they began their journey last month. If the ships are found to pose a direct threat to U.S. partners in the Americas, a senior Administration official has affirmed that the U.S. reserves the right to “take appropriate measures in coordination with our partners to deter the transit or delivery of such weapons.”
The Biden-Harris administration is currently requesting through diplomatic channels that Venezuela’s government not allow the ships to dock. Additionally, the Administration is urging Cuba’s government to reject the ships if presented with a possible landing. The Administration is also working with other countries in the region to ensure that the ships will be deterred. U.S. officials have reported that if the ships dock in Venezuela, the Biden-Harris administration will not ease sanctions imposed on Nicolás Maduro’s government under the former Trump administration.
On Monday, the Cuban Baseball Federation confirmed a fourth member of Cuba’s delegation defected during the team’s trip to compete in the Americas Olympic Qualifying Tournament in Florida last week, France 24 reports. The first member of the delegation to defect, César Prieto, did so upon the team’s arrival to Florida on May 26. The team’s psychologist, Jorge Sile Figueroa, became the second member of the delegation to defect a week later on June 3. Following the baseball team’s elimination from the Americas Qualifying Tournament last week, two additional players announced that they would not be returning to the island. Lazaro Blanco, a pitcher on the team, confirmed that he would not be returning to Cuba and shared that he made the decision for himself and his family. On Monday, it was announced that another pitcher on Cuba’s national team, Andy Rodriguez, had also defected. Both Mr. Blanco and Mr. Rodriguez had contracts to play in professional leagues outside of Cuba, but violated their contracts with their decision to stay in the U.S. The lack of a federal agreement between the U.S. and Cuba means that Cuban players must defect to play professionally in the U.S. In 2019, the former Trump administration prevented the implementation of a deal between Major League Baseball (MLB) and the Cuban Baseball Federation that would have allowed Cuban players to play in the U.S. without defecting from their country. As it stands, Cuban players in the MLB cannot return home at will.
As of June 21, Cuba will temporarily but indefinitely suspend cash USD bank deposits due to the difficulty that U.S. sanctions impose on depositing the currency abroad, the Miami Herald reports. The new measure will not affect cash deposits in other currencies or the ability to transfer money between or withdraw money from accounts. According to Yamile Berra Cires, Vice President of Cuba’s Central Bank, the move was designed to protect the local financial system. The move comes as the value of the black market price of the dollar in Cuba has more nearly tripled from 24 to 70 Cuban pesos (CUP) following the island’s elimination of its dual-currency system.
Cuban economist Pedro Monreal noted the dollar’s ongoing devaluation against the euro in a tweet. He also noted how those currently holding USD and needing to exchange the currency to make cash deposits to their accounts, should they choose to exchange into euros, will suffer a decrease in purchasing power. If those dollars are exchanged for euros on the black market, that decrease would be even greater due to the rising black-market price of the dollar. Mr. Monreal also speculates that because of this, the change would “transfer the risk of the devaluation of the USD to the private holders of USD and transfer the benefits of the appreciation of the euro to the state accounts.” Dr. Pavel Vidal Alejandro, an associate professor of economics at the Pontifical Xavierian University in Colombia, notes that this policy may affect families abroad attempting to send remittances to Cuba as the transaction costs in exchanging USD into euros and risks in sending money to the island through intermediate channels increase.
Decreases in tourism to Cuba due to the COVID-19 pandemic and heavy U.S. sanctions imposed on the island by the former Trump administration have resulted in less USD circulation throughout the island. Ultimately, this has decreased the liquidity of the Cuban peso (CUP) in Cuba and has created mass levels of inflation. In May, the island announced that travelers would no longer be able to exchange the CUP back into dollars, euros, or other hard currencies at official exchange rates in airports. This announcement followed the government’s decision to close down airport departure exchange booths given decreases in available hard currencies on the island, forcing travelers to spend the CUP while in Cuba. Additionally, in 2019, the island established certain stores that only accept payments in foreign currencies, specifically USD and euros. These stores are often the only places where Cubans can find certain foods, personal hygiene products, and home appliances, among other things, meaning that those without access to dollars and euros are left at a disadvantage. When these stores were established last year, Cuba’s government also eliminated the 10 percent tax imposed on the USD when completing purchases with the foreign currency. These policies were adopted by Cuba’s government in efforts to increase the flow of the USD and euro throughout the island.
Cuban rapper and artist Maykel Castillo Osorbo, a member of the San Isidro Movement (MSI) and one of the two Cuba-based singers featured in the viral song Patria y Vida (“Fatherland and Life”), has been in state custody in Cuba for the past three weeks under charges of public disorder and evasion of authority, Aljazeera reports. Cuba’s Interior Ministry confirmed that Mr. Osorbo faced provisional imprisonment for “crimes of attack, public disorder, and escape of prisoners or detainees.”
The event in question involves a protest that took place on April 4 in the San Isidro neighborhood of Havana. Participants protested state censorship on the island while demonstrating support for MSI. During the demonstration, authorities attempted to arrest Mr. Osorbo and stop the protest, but demonstrators reportedly prevented the arrest and state authorities were forced to leave the scene. Mr. Osorbo was ultimately detained on May 18 and transferred to the Pinar del Río provincial prison on May 31. While Cuba’s state-run online newspaper forum, CubaDebate, assures that the 37-year old singer has been offered a lawyer and maintains communication with his family, those close to Mr. Osorbo claim that the activist was only allowed to make his first phone call last Thursday. Opposition activists and organizations on the island demand Mr. Osorbo’s immediate release and deem his arrest “unjustified” and “arbitrary.” Samantha Power, Administrator of the U.S. Agency for International Development (USAID), urges Cuba’s government to stop its alleged “ill-fated attempt” to filter dissent on the island. The David Rockefeller Center for Latin American Studies (DRCLAS), the Hutchins Center for African and African-American Research and the Afro-Latin American Research Institute (ALARI) at Harvard University also released a document on June 1, emphasizing the importance of Cuba’s government adopting more pacifist measures towards activists and engaging in conversation with independent activists on the island.
Prepaid Cards in MLC will not be Marketed in Cuban Pesos (CUP), (Spanish) elTOQUE
In May, Cuba announced it would issue prepaid cards in dollars (USD) for the use of visitors on the island. The prepaid cards are part of the government’s efforts to respond to the worsening levels of liquidity faced by the CUP. Recently, misinformation circulated suggesting that the cards would be made available to the general population and sold in CUP. In response, the Cuban Mercantile Society Casas de Cambio S.A., better known as CADECA, a state entity which has currency exchange offices throughout the island, clarified that the credit cards are intended for Cuban tourists and emigrants. They also clarified other parameters of the cards, noting that they would be for exclusive use in Cuba, be sold in amounts of 1,000 USD, 500 USD, and 250 USD, and could not be acquired at the official exchange rate of 1 USD x 24 CUP. In addition, CADECA clarified that cash withdrawals from the card can be in CUP only, the amount purchased is non-refundable in foreign currency, and there is no obligation for the bank to return the unused amount. In response to the clarifications, many have raised concerns over how this change may decrease confidence in CUP, lead to the modification of relative prices, and expand the informal market in Cuba.
Last Thursday, the number of patients in intensive care units (ICUs) in Cuba reached 161, the highest number of patients in ICUs since March of 2020, OnCuba News reports. Dr. Francisco Durán, the National Director of Epidemiology at the Cuban Ministry of Public Health, notes that this increase in patients comes as a result of the high prevalence of the COVID-19 virus on the island. As Cuba faces an increase in patients in ICUs, the island’s vaccination campaign has begun its second phase of vaccination efforts by opening 473 Abdala vaccination sites throughout Havana during the last week of May. Since May 30, the island has administered a total of 1,843,490 doses of the Soberana 02 and Abdala vaccines. This includes 628,409 individuals receiving their second dose of either vaccine and 144,040 individuals receiving their third and final dose of the vaccine. The vaccination campaign comes as an “emergency step” to combat a recent increase in COVID-19 outbreaks on the island.
Last month, Cuba’s Ministry of Agriculture (MINAG) announced that the island faced an economic loss of more than $330 million between April and December of 2020, OnCuba News reports. The Ministry pointed to increased levels of U.S. sanctions and the COVID-19 pandemic for the economic damage.
In recent years, Cuba has undertaken measures attempting to boost its economy and prevent food and supply shortages, including 63 measures approved in April of 2020 to boost domestic food production. Recently, Cuba’s government has also granted more autonomy to state businesses to earn and spend hard currency, loosened regulations on small private businesses, and cut utility subsidies and subsidies on other goods. Additionally, it has unified its two currencies and began to introduce prepaid cards in dollars (USD). Last week the island’s Council of Ministers also approved the creation of a legal framework for private micro, small, and medium sized enterprises (SMEs or PYMES in Spanish).
CUBA’S FOREIGN RELATIONS
This Thursday, Cuba’s Deputy Prime Minister, Ricardo Cabrisas, traveled to France to renegotiate a deal with the 14 countries that make up the Paris Club, an informal group of officials from major creditor countries, Reuters reports. After defaulting on payments agreed upon in an initial 2015 agreement, the negotiations aimed to address the unfulfilled payments and create an outline for future payments. Mr. Cabrisas argued that Cuba’s economy has suffered significant financial loss because of the COVID-19 pandemic and increased levels of U.S. sanctions. Ultimately, the group of creditor countries agreed to offer Cuba an extended amount of time to complete the scheduled payments, but the present debt owed by the island will be maintained. Cuba failed to meet payment expectations last year while barely meeting payment obligations in 2019.
Cuba signed an agreement with the Paris Club in 2015, when the group agreed to forgive $8.5 billion of the $11.1 billion in foreign debt that the island had accumulated. The remaining balance would be repaid in annual installments through 2033 and a portion of this balance would be allocated to fund foreign investment projects on the island.
Along with the Paris Club agreement in 2015, the London Club offered a sizable debt relief proposal to Cuba in January of 2018. Cuba had defaulted commercial creditors in the London Club of commercial banks, which held $1.4 billion worth of Cuban debt, effectively excluding Cuba from international capital markets at the time. The proposal was seen as a move by the creditors to increase pressure on Cuba to meet a portion of its financial obligations.
RECOMMENDED READINGS & VIEWINGS
Biden Shifts from Obama on Cuba Post-Florida Losses, Max Greenwood and Celine Castronuovo, The Hill
In this opinion piece, Max Greenwood and Celine Castronuovo suggest that President Joe Biden is attempting to garner votes in Florida by not walking back Trump administration restrictions on trade and travel with Cuba, and that this has the potential to put the Administration at odds with their Party. Earlier this year, a group of 75 Democratic lawmakers urged the current president to normalize relations with Cuba.
On Telegram, Cubans are Coming Together to Revolutionize the Internet, Ricardo Martínez, Rest of World
In this article, Ricardo Martínez emphasizes the powerful economic potential that expanding internet access in Cuba has for everyday Cubans. Erich García Cruz, a Cuban YouTuber with over 61,000 subscribers, highlights how the internet is an essential tool for entrepreneurship. While appreciating the economic opportunities that increased levels of internet access have created for Cubans on the island, Mr. Cruz also notes the large obstacles faced by Cubans such as a lack of ability to use ecommerce platforms like PayPal and Venmo due to U.S. sanctions, and the high prices of accessing Wi-Fi networks at home or on personal phones through data usage. Cruz states that he believes that social media influencers should be viewed as “entrepreneurs, not political activists” and be afforded the access they need to fulfill their careers.
Pelicans Befriend Cuban Man Living by the Sea, Nelson Acosta, Reuters
This article tells the story of Leonardo Carrillo, a Guanimar native that has cared for brown pelicans in Cuba for the past two decades. Mr. Carrillo discusses the migration patterns of the brown pelicans, sharing that they spend the months of December to May in the Artemisa neighborhood. Throughout their numerous stays in his neighborhood, he says that they have developed a bond and have become his extended “children.” The 62-year-old feeds the pelicans three times a day and has even made a point to name the birds; “Michel the noble” and “Panchito the affectionate” are among his beloved flock. The brown pelicans have kept Mr. Carrillo company during the COVID-19 pandemic, after state-mandated protocols prevented him from traveling to visit his family.
Cuban artists Leoni Torres, Cimafunk, and Brenda Navarrete released a sneak preview of their new single, Aunque sea un ratico (Even if it is a Short While) on Monday. The highly anticipated collaboration of the three decorated Cuban musicians was released today on audio streaming networks including Apple Music and Spotify.
The New Cuba Libre in Fort Lauderdale Swaps What’s Familiar for What’s Real, Arlene Borenstein-Zuluaga, SunSentinel
This article discusses modern day Cuban cuisine and interviews Chef Guillermo Pernot, the chef-partner behind the Cuba Libre restaurants, as they anticipate another location opening. Mr. Pernot emphasizes the importance of adopting a menu that reflects the island’s many cultural influences including Indian, Spanish, French, English, Haitian, Chinese, Russian, and American culture. The chef notes, “My mission is to show Americans that Cuban food is not only picadillo, rice and beans.”
Cuba’s Drug Crisis: Bartering, Donations, Notices, Sales, and Smuggling, (Spanish) Glenda Boza Ibarra and Meilin Puertas Borrero, elTOQUE
In this article, Glenda Boza Ibarra and Meilin Puertas Borrero discuss the role that social media platforms including Whatsapp, Facebook, Telegram, and Twitter have played in addressing pressing medication shortages in Cuba. Many Cubans on the island have come to rely on groups created on the platforms to exchange and/or donate certain medications, including antibiotics like metronidazole which can be difficult to find at local pharmacies on the island.
Virtual, The Impact of U.S. Sanctions on Cuban Women, June 22
Oxfam, the Washington Office on Latin America (WOLA), Center for Democracy in the Americas (CDA), and Cuban Americans for Engagement (CAFE) will host a webinar discussing the impacts of U.S. sanctions on Cuban women and vulnerable populations in the context of the COVID-19 pandemic. The webinar will also examine the report “Right to Live Without a Blockade: The Impact of U.S. Sanctions on the Cuban Population and Women’s Lives,” published by Oxfam on May 25. The report advocates for a policy of engagement between the U.S. and Cuba, including lifting U.S. sanctions against the island as Cuba faces one of its most dire economic crises since the fall of the Soviet Union. The event will be live-streamed in English via Zoom on Tuesday, June 22, from 9:30 AM-10:30 AM EST. To join, register here and for additional information contact Stephanie Burgos at email@example.com
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