6th February 2023

The case before the High Court in London to determine whether an offshore Cayman company, CFR I is a legitimate creditor of the Cuban Government and the Banco Nacional de Cuba (BNC), has now ended. It is unclear when any ruling in the high-profile trial may be made public.

The case revolves around €72mn (US$78mn) in commercial debt which CRF I accumulated; whether CRF I is as such a legitimate creditor of the BNC and Cuba, or as Cuba argues, the “CRF is not a creditor of the BNC or of Cuba and has never been”; and whether the UK commercial court has jurisdiction in the matter. (Background Cuba Briefing 16 January 2023).

During the trial Cuba argued that CFR I is not a legitimate creditor on the basis that the fund obtained the debt illegally, and that the debt “was contracted by the BNC before 1997 when it had functions as the Central Bank.” Since then, the Banco Central de Cuba (BCC) says “the BNC has had no authority to act on behalf of the Cuban government.”

Cuba’s legal counsel and Cuban officials and ministers, in some cases giving evidence in person, argued that correct procedures were not followed in relation to the acquisition of the debt, and that CRF I was not a “responsible” creditor but rather a “vulture fund” seeking redress through litigation. During the proceedings a former worker at the BNC convicted of bribery testified electronically from a Cuban prison.

In response CFR I, argued that it acquired the debt correctly, it was a legitimate creditor, that some of the evidence given lacked veracity, and that it was not as alleged a “vulture fund”.

Following the end of the trial on 2 February, the Cuban Justice Minister, Oscar Manuel Silvera, who attended the court’s closing days, praised “the seriousness and strict adherence to the rules by the English court and its authorities.” In an interview with Cubadebate he also expressed gratitude to the judicial authorities for their willingness to enable witnesses to testify from Havana in real time. Asked about when the outcome of the proceedings will be known, Silvera said that the finding of the court and its judgment would not be immediate.

The formal court finding on whether CRF I is a legitimate creditor of Cuba in respect of its claim is expected to take many weeks, may not necessarily be made public, and may well be appealed.

Any judgment favouring the plaintiff could have complex longer terms implications for the Cuban government and Cuban economy as with such an outcome further court cases could follow relating to recompense being sought against Cuban state assets held overseas.

The Spanish news agency EFE reported that CRF I “is the largest holder of Cuba’s sovereign debt and has accumulated bonds of €1.2bn” (US$1.3bn). The details of the case and the evidence given has had wide if partisan coverage in Cuba’s state media and the exile press.

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

23rd January 2023

Granma has published an interview that suggests that Cuba will be hard pressed in the coming years to achieve its objective of  producing domestically over 0.6mn tons of rice. This is the volume it requires if it is to deliver from domestic production alone enough rice to cover the regulated family food basket and for social consumption.

The official communist party publication quoted Oslando Linares, the Director of the Rice Technology Division of the state-owned Grupo Empresarial Agrícola attached to the Ministry of Agriculture, as saying that the country’s Comprehensive Rice Development Programme intended to achieve self-sufficiency by 2030 was now unlikely to meet its objective.

Linares told Granma that until 2018, the programme had been satisfactory with records being broken for rice production, reaching the historic high that year of 304,000 tons. However, since then, production has declined falling to 246,700 tons in 2019, he said, because of a “general lack of inputs, as well as spare parts for rice combines.”

The report quoted him as saying without indicating the actual production figure for 2022 that last year volumes decreased significantly, driven in part by “the loss of the supply chain.” Linares attributed this to the pandemic, the tightening US embargo,  and the war in Ukraine. These, he said, variously impacted on the cost of herbicides, pesticides, energy and fuel, and agricultural aviation.

Granma quoted Linares as saying the plan for 2023 has been set at around 40% of what was originally intended under the sector’s original development programme resulting in just 68,000 hectares planned this year, “a really poor figure.”

Asked by the publication about how and when the current situation could be reversed, Linares affirmed that recovery might begin in 2023 but would require three years for production to be consolidated, Better use would be made, he noted, of “the nation’s scientific and creative thought to support the nearly 25,000 cereal producers on the island.”

Linares told the publication that to try to achieve this, plenary sessions were being held to identify best and worst practice, and to promote “a group of endogenous technologies that allow us to take off, without the extensive demand for resources that we do not have.”  This he said involved using the proven expertise of some producers and “should influence the rise in agricultural yields and the quality of the grain.”

Linares also emphasised the potential  of the sector’s seed development programme which is receiving support from Vietnam and Japan involving long, medium, and short cycle varieties, some of which have low input requirements

“We rice farmers have to get used to the new working conditions, to using fewer chemical products and using a considerably greater number of bioproducts,” he told Granma.

Cuba’s original objective in achieving  self-sufficiency was to plant 0.2mn hectares, obtaining a yield of six tons per hectare, and wet cereal production of 1.2mn tons to provide the 0.6mn tons planned.

Rice is a cultural and nutritional staple in the Cuban diet. The failure of the plan and the absence of any production figures for 2022 suggest that for the foreseeable future  the island will have to rely on imports from the US, Latin America, the Far East  and elsewhere, placing further strains on the country’s budget and the timely delivery of the basic food basket.

Photo by Sandy Ravaloniaina 

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16th January 2023

Cuba’s Central Bank (BCC) has confirmed that legal proceedings will shortly begin in London before the commercial division of the High Court in a case relating to a debt recovery claim for €72mn (US$78mn) made against the Banco Nacional de Cuba (BNC) and the Republic of Cuba.

In a statement issued on 13 January, the BCC described the claimant, CRF I Limited, as a “vulture fund”  seeking to benefit from unpaid government debt that it had accumulated. CRF I Limited, the BCC said, is incorporated as a Cayman offshore company,

The BCC observed that typically “vulture funds” buy in the secondary market, at auction prices, “debts issued by countries, to demand immediate payment of 100% under threat of legal action.” It went on to note that the judicial procedure will determine  whether CRF I is a creditor of the BNC and Cuba, or as Cuba argues, the “CRF is not a creditor of the BNC or of Cuba and has never been.”

The BCC observed in its note that the object of the procedure relates to public debt because “it was contracted by the BNC before 1997 when it had functions as the Central Bank.” Since then, the BCC noted, “the BNC has had no authority to act on behalf of the Cuban government, neither to approve the assignment of public debt without the prior authorisation of the Ministry of Finance and Prices and the Council of Ministers, since the BNC cannot for any case authorise the assignment of guarantees granted by the State” in the form of sovereign guarantees.

The BCC further stated that “the BNC and Cuba have never ignored their debts, had always maintained their interest in negotiating with their legitimate creditors”, and “that both the BNC and Cuba are involved in the legal proceedings and will defend their rights.” It also indicated in its statement that the superintendence of the BCC “as a body of a technical nature, with autonomy for the exercise of its functions assigned by Law, related to the inspection, surveillance and control over the institutions that carry out financial and banking activities in the country” will provide more information in a timely manner as to the results of this process.

Reuters reported that CRF I Ltd, which it described as an investor in defaulted Cuban sovereign debt since 2009, filed the case in Britain’s High Court after Havana refused a debt relief offer made by CRF I and other bond holders in 2018.

The outcome of the case, which is being heard before Judge Justice Andrew Henshaw KC, has wider implications for both Cuba itself, CRF I and other similar funds that hold also large sums in Cuban debt. (Additional Background Cuba Briefing 12 September 2022).

In recent years Argentina and other Latin American nations have been engaged in similar lengthy legal battles with funds which have specialised in accumulating distressed securities.

Photo by JF Martin 

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9th January 2023

President Biden has announced that the US is to expand restrictions introduced during the COVID pandemic, to rapidly expel Cuban, Nicaraguan, and Haitian migrants caught illegally crossing the US-Mexico border. 

The decision extends what are known as ‘Title 42’ restrictions, the legality of which are eventually expected to be ruled on by the US Supreme Court. The two-track approach will additionally see up to 30,000 people per month from the three countries plus Venezuela able to legally enter the country by air.

Speaking about the decision, President Biden said, “If you’re trying to leave Cuba, Nicaragua, or Haiti, or have agreed to begin a journey …. do not just show up at the border. Stay where you are and apply legally from there”.

Biden said that anyone who did not apply, but sought to cross the border would not be eligible for the new programme. Anyone legally applying, he said, would require a lawful sponsor in the US and would need to undergo a rigorous background check.

The approach, which has been tried with some success with migrants coming from Venezuela, will according to the White House be expanded to nationals of Cuba, Nicaragua, and Haiti for a period of two years and will lead to work authorisation.

It will additionally mean that Cubans and citizens of the other three named nations who irregularly cross the Panama, Mexico, or US borders will now be ineligible for the US parole process and subject to expulsion to Mexico. In turn, Mexico has said that it will accept returns of 30,000 individuals per month from the four countries if they fail to use these new pathways. US officials describe the process as “expedited removal.”

The decision responds to US domestic political concern about surging illegal migration on the US’s southern border, and the inability of the US and state authorities and the judiciary to process claims for asylum.

In a statement, the Mexican government said that by capping the number of would-be migrants applying to enter the US at 30,000 a month, the new scheme would offer a “significant alternative to irregular migratory flows that can carry significant risks for the safety of migrants and refugees.”

Cuba’s state media reported the news factually. A commentary by the Director of Cubadebate quoted Ernesto Soberón, Director of Consular Affairs and Cuban Residents Abroad in the Ministry of Foreign Affairs, as saying that Cuba had “alerted the US government for years about the risks of stimulating irregular emigration through the Cuban Adjustment Act and the privileged and politically motivated treatment received by Cubans who arrive on US territory or its border.”

The commentary went on to observe the failure until recently of existing US  commitments to grant Cubans a minimum of 20,000 visas per year and the closure of visa processing at the US Embassy in Cuba. This it said had “caused an accumulation and significant growth” in migration, affecting not only Cuba and the US but transit countries as well.

US media reports indicate that many Cuban migrants who have left the island but hoped to, or who have recently crossed the US border are in despair to learn they may be sent back to Mexico and may not now automatically be processed for asylum under the US’s 1996 Cuban Adjustment Act.

According to the US Department of Customs and Border Protection, 224,607 Cubans sought to enter US territory in fiscal year 2022, usually transiting points in Central America and then seeking to cross the Mexico-US border to legally apply for migratory status. The US embassy in Havana resumed visa processing this month. Previously Cubans seeking to migrate to the US had to travel to Guyana for processing.

Some US analysts see addressing the irregular flow of migrants between Cuba and the US as a critical component in achieving the gradually negotiated normalisation of relations.

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

2nd January 2023

Four cruise lines that operate out of the US have been told that they must pay close to US$450mn in total to the heirs of the original owners of the Havana Cruise Terminal. The port was expropriated in the 1960s by the Cuban government.

The ruling in the Miami Southern District by US District Court Judge, Beth Bloom, follows from an earlier March 2022 ruling that the use of the Havana Cruise Port Terminal constituted trafficking under Title III of the US Helms Burton legislation.

The allegedly trafficked (utilised) property was once owned by the Delaware-registered Havana Docks Corp. The ruling in favour of relatives of its owners also requires the cruise lines to pay the legal fees and costs which are expected to amount to around US$3mn per company.

Although the cruise lines – Norwegian Cruise Holdings, Carnival Corp, Royal Caribbean Group, and MSC Cruises – may appeal, the landmark case is expected to set a precedent as it was the first to be allowed to proceed to trial under Title III of the Helms Burton legislation.

In 2019, the Trump administration allowed US citizens to sue third parties for ‘trafficking’ property in Cuba expropriated after the Cuban revolution. The provision had previously been waived by every US President.

In her March 2022 ruling, Judge Bloom said that the companies must pay the descendants of a US businessman for using the Havana cruise terminal. The case was brought by Havana Docks, whose President, Mickael Behn, is the grandson of a businessman, William Behn, who had three docks confiscated in 1960. The company holds a US-certified claim to the terminal and piers.

In their defence, the four cruise lines had said they had used the terminal for lawful travel, that there was no evidence they acted with intent of trafficking, that Havana Docks never owned the cruise terminal but held a concession to operate a cargo business, and the UK based principal of the plaintiff was not an eligible claimant.

However, Judge Bloom rejected the companies’ arguments in a 169-page ruling, noting that the defendants continued using the terminal after gaining actual knowledge of Havana Docks’ certified claim. This was, she said, “enough to establish liability under the Libertad Act.” She also found that Havana Docks, with its office and management in Kentucky, qualified under US law and had demonstrated it owns a claim to confiscated property.

Bloom noted also that because US officials including the then US President had suggested cruise lines encourage US citizens to visit Cuba, it did not automatically immunise them from liability if they engaged in statutorily prohibited tourism.

Earlier cases have been dismissed because the plaintiffs had inherited their claims after a cut-off date or because they were unable to establish jurisdiction. The US Justice Department’s Foreign Claims Settlement Commission has previously certified nearly 6,000 claims on property confiscated by Cuba with a principal value of US$1.9bn.

Photo by Peter Hansen

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19th December 2022

Cuba’s Minister of Economy and Planning, Alejandro Gil, has said that he anticipates the country’s economy will grow by a minimum of 3% at constant prices in 2023. The figure compares with a lower than expected GDP growth outcome of 2% this year. This compares to an initial forecast of 4%  (1.3% in 2021). The 2023 growth projection was he said 8% less than GDP growth in 2019.

Speaking to members of Cuba’s National Assembly, Gil told delegates that in 2023 he expected GDP growth to be spurred by a greater capture of foreign exchange and the restoration of productive activities.

 He cited as positive contributory factors, the control of COVID-19; “the positive results of the recent international tours of the country’s leadership” (Cuba Briefing 29 November 2022); the growing interest of foreign business as evidenced by discussions at the recently held Havana International Fair; “a more dynamic recovery of tourism”; the assurance of fuel supplies; the generation of enough electricity to meet demand; and progress in the country’s planned macroeconomic stabilisation programme.

In remarks reported in Cuba’s state media, Gil stressed that while the conditions exist to achieve the proposed objectives and said that 2023 “will be a better year”, he stressed that an increase in exports would be essential. He noted that in drawing up next year’s state plan, account had been taken of the intensification of the US embargo, an increase in the cost of inputs, and a growth in income-generating activities.

The anticipated outcome, he said, required “ an ambitious goal” of US$9.6bn in sales of goods and services, over US$1.04bn more than in 2022 but about US$3bn less than in 2019. It would also he told legislators depend on receiving 3.5mn international visitors, a figure double that received this year.

As in the past, a significant part of government expenditure will go on the price-regulated family basket of food, but, Gil warned, “the complex reality in which imports are carried out” means that imported inflation will affect the price of products such as oil, rice, milk powder, wheat, and corn, making increased national production essential.

Addressing state investments, he said that important projects are planned which relate to building thousands of new homes, improving water storage and supply, delivering ongoing projects in tourism, and in relation to food production and renewable energy.

Planned fuel imports at 7.87bn tons, he said, have been costed at US$4.41bn, while overall power generation of 20,140 GWh is projected as in 2019 to cost about US$500mn, with 50% coming from thermal generation, 15% from floating power barges paid for in foreign currency, with just 2.8% coming from renewable energy sources .

Speaking about the domestic market, he said that this is expected to grow but acknowledged that supply levels that fully satisfy demand have yet to be achieved. Of these he said that 80% of sales will be in Cuban pesos (including services), and 20% in MLC. The objective, he indicated, is to increase retail merchandise circulation by 15%.

Noting that a shakeup of the state business sector” has yet to be achieved, Gil confirmed that significant “larger-scale transformations in socialist state companies are planned.”  While eighty-three state enterprises were planning losses in 2023 and 480 (about 25%) will end 2022 with losses, he said that this did not mean that all were inefficient as some were “subject to price caps so as not to affect the population” and had experienced a rise in import costs.

Addressing inflation, Gil noted that from October 2021 to October 2022, the official rate increased by almost 40%. He also noted that from January to October 2022 the average price of the basket of goods and services as calculated by ONEI, Cuba’s national statistical agency, grew by almost 29% affecting the purchasing power of wages. He appeared to suggest that a part of the solution may lie in a national process underway that will see the decentralisation of power to approve prices locally but stressed that there can be no new wage increases.

“This is not a market economy, although there are spaces where it works. This is an inclusive economy. Here you must have regulations on costs,” Gil told National Assembly members.

In other remarks Gil noted:

• The high price of raw materials in international markets is resulting in the slow recovery of national production

• Pre-pandemic levels of export activity have been restored in relation to nickel, tobacco, rum, honey, and seafood, offset by lower earnings from telecommunications and tourism.

• Anticipated sugar production would be at a low of 455,200 tons with just 90,000 tons allocated for export.

• National tourism is growing, achieving 115% compliance with the state plan in 2022.

• With respect to the recently announced policy decision to encourage participation of foreign investment in Cuba’s retail and wholesale trade there have been more than sixty expressions of interest and some discussions were at an advanced phase .

• That as an objective there was a need to move from welfare care to true social care, and “the proper functioning of a mechanism that guarantees subsidising people and not products.”

• The non-state sector now delivers 12 to 14% of Cuban economic activity, 21 to 28% of passenger transportation and 1% of freight transportation. In 2022 the sector earned somewhere between US$14mn and US$15mn in exports. It had also contributed CUP58bn (US$2.4mn) to Cuba’s retail business.

Most analysts outside Cuba believe that the official rate of inflation is a significant underestimate as many Cubans have no option other than to buy in the informal market where the inflation rate is believed to be around 200% per annum.

Photo by Jason Leung 

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13th December 2022

Just days after the US Justice Department recommended the US Federal Communications Commission deny an application seeking the installation of a direct submarine telecommunications cable connecting Cuba and the US, Cuba and France have announced that a French company is installing a subsea cable between Cuba and Martinique.

The agreement between the Cuban state telecommunications company ETECSA and the French multinational Orange SA will see the link become operational next year, providing onward international links to the multiple undersea cables that serve the French speaking island.

According to ETECSA, work is to begin shortly on the laying of a 2,500km ARIMAO cable able to carry internet, data, and voice communications between a location in Cienfuegos and the eastern Caribbean Island of Martinique, which as a French Département d’outre-mer, is a peripheral but integral part of the European Union.

Speaking to Juventud Rebelde about the new telecoms link, the President of ETECSA, Tania Velázquez, said that it will provide a “robust and effective solution to expand communication capacities enabling Cuba and Cubans to interact with the world.” It will, she said, allow ETECSA to expand and diversify its international capacities to meet the demand for Internet connection and broadband services” and more generally to support its international expansion.

In making the announcement ETECSA said that all necessary permits were in place and that “the physical structure” of the cable will be ready in 2023. This will allow, Velázquez told the state publication, the company to continue expand connectivity.  At present Cuba has only one international submarine internet cable, ALBA-1, which provides links to and through Venezuela. It has been operational since 2012 but has not the capacity to meet present demand.

The new cable will be laid by Orange Marine. The decision will geographically diversify current connectivity and improve indirectly Cuba’s telecoms links to the US.

As reported in Cuba Briefing 5 December 2022 the US Department of Justice expressly advised against the installation of the proposed ARCOS-1 USA cable planned by Verizon and multiple Latin telecoms providers on the basis that ETECSA would manage the cable landing, and this posed a security threat enabling “access to sensitive US data traveling through the new cable”.

Following the US decision, Cuban media outlets have republished a report appearing in the leading Mexican daily, La Jornada, noting that the US decision based on the alleged danger that other “foreign adversaries” would use Cuba as a gateway to access US networks, was “ridiculous.”. The publication noted that the long-standing existing ARCOS-1 network which Cuba had hoped to link to, connects 24 international internet anchor points from 15 countries accessible to “US adversaries including China and Russia”, most of which are anyway routed through the vast Network Access Point (NAP) of the Americas data centre and Internet exchange point which is located in Miami.

Photo by Jackson David 

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5th December 2022

A US Department of Justice led committee has recommended to the US Federal Communications Commission (FCC) that they deny an application seeking the installation of a direct submarine telecommunications cable directly connecting the US with Cuba.

The new undersea cable was intended to carry internet, voice, and data traffic. The Justice Department panel said the proposal raised national security concerns because the cable-landing system in Cuba would be owned and controlled by ETECSA Cuba’s state-owned telecommunications company and would be the only direct, commercial undersea cable connection between the two countries.

ARCOS-1 USA, the entity seeking to lay the cable, had previously indicated in a 2021 filing to the FCC that the cable would “increase the means through which Cubans on the island can communicate with the United States and the rest of the world.” It had cited a 2019 State Department Cuba Internet Task Force that “recommended enabling the construction of new submarine cables to Cuba.”

Present routes of submarine cables in Caribbean

However, the Department of Justice committee said that while it supported the “Cuban people’s access to an open, interoperable, secure, and reliable internet” the proposal posed “unacceptable risks to US national security.” ARCOS-1, which incorporates eighteen carriers including Verizon plus others from Latin America and the Caribbean, had sought to land the cable at Cojimar, Cuba.

The ARCOS-1 submarine cable system connects twenty-four landing points in fifteen countries in the Caribbean, Central America, and South America including Venezuela, Colombia, Panama, Nicaragua, and Mexico with the US.

The company had previously said that it intended achieving the service by creating a branch from an existing part of the ARCOS-1 Cable that lies approximately 56km off the coast of Cuba. In recent years there have been other attempts to restore a direct link between the two countries in some cases involving links to other cables that pass close to Cuba’s shores.

Responding, Cuba’s Vice Foreign Minister, Carlos Fernández de Cossío, criticised the recommendation noting: “This is the way in which the US Government is supposed to fulfil its declared commitment to promote the use of the Internet in Cuba, to express in practice its declared concern for the well-being of the Cuban people, whom it ruthlessly punishes with the economic blockade.”

Photo by Alvaro Pinot

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28th November 2022

President Díaz-Canel has returned home from an intense four nation ten-day visit to Algeria, Russia, Turkey, and China. Official reporting suggests that there were significant immediate outcomes in China and Algeria but less so in Russia and Turkey.

The visits were aimed at deepening political and economic relations through in-person dialogue about possible support to help Cuba address its multiple economic problems including with energy and power generation, and its need to develop new trade and financing arrangements.

In an indication of the significance of the visits, Cuba’s President was accompanied by a delegation consisting of Vice Prime Ministers, Ricardo Cabrisas and Alejandro Gil; the Foreign Minister, Bruno Rodríguez; the Minister of Foreign Trade and Foreign Investment, Rodrigo Malmierca; the new Minister of Energy and Mines, Vicente de la O Levy; and the Minister of Public Health, José Angel Portal. The group travelled on an aircraft owned by the Venezuelan national airline Conviasa.

In this issue of Cuba Briefing, we report in detail on the outcome of the visits to Russia, Turkey, and
China. Details of the discussions in Algeria appear in Cuba Briefing 21 November 2022.

Photo by Engin Yapici

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21st November 2022

President Díaz-Canel has begun a ten-day intense programme of visits to Algeria, Russia, Turkey, and China, during which he is expected to discuss with his counterparts, Cuba’s problems with power generation, its need to develop new trade mechanisms, and the economic challenges the country faces.

In an indication of the significance of the visit, he is being accompanied by a high-level delegation consisting of Vice Prime Ministers, Ricardo Cabrisas and Alejandro Gil; the Foreign Minister, Bruno Rodríguez; the Minister of Foreign Trade and Foreign Investment, Rodrigo Malmierca; the new Minister of Energy and Mines, Vicente de la O Levy; and the Minister of Public Health, José Angel Portal. The group includes Díaz-Canel’s wife, Lis Cuesta.

Before departing, Cuba’s President wrote on Twitter: “A brief but intense journey awaits us, visiting friends, opening roads, managing outlets for our besieged economy” noting also that during his  tour he would “address essential issues for our country, fundamentally related to the electrical energy sector.”

His programme, he wrote, “responds to the political and economic priorities of Cuba” as well as to the efforts to alleviate the effects of a post-pandemic crisis, which in Cuba’s case, he said, “is exacerbated by the effects of the blockade of the United States.”

Indicating that the visits have both political and economic objectives, he said: “we will be working intensely to strengthen economic and political ties” to enable the continued development of Cuba, and to build a “horizon of well-being.”

Early reports from his first call in Algeria indicate that its government has agreed to resume the supply of oil and gas, restructure its debt with Cuba, and deepen the two nations’ already close cooperation in areas from agriculture to health.

Speaking to the media, Algeria’s President, Abdelmadjid Tebboune, said that his country  would offer “sister Cuba a photovoltaic power plant as well as re-establishing the supply of hydrocarbons, so that Cuba can reactivate the plants and combat current power outages.”

President Tebboune also noted that both governments had agreed to cooperate on issues including the production of medicines and the creation of joint ventures to manufacture vaccines against some African and non-African diseases.

At the beginning of 2023, he said, a session of the two country’s Mixed Commission involving a group of 150 businesspeople and officials will be held in Havana to examine investment possibilities.

In his remarks, Tebboune also spoke about the  values that both Cuba and Algeria share from the past and present, and their willingness to build the future together. In this context, he said, it had been agreed to “relieve a little the Cuban economic context, cancelling the debt servicing and postponing its repayment for another time”.  Algeria’s President also indicated exchanges would be developed in other commercial areas and in higher education.

Cuban reporting quoted Díaz-Canel as saying that in meetings in Algeria important areas for collaboration had been identified, with discussions centred on issues that “show mutual benefit.” “Above all,” he said, this means “for our country an important support that demonstrates the understanding that the Algerian government has towards our situation.”

Cuba’s President said that the areas identified as “the most promising for collaboration,” include “health; energy; renewable sources; the medical-pharmaceutical industry; and cultural, educational, scientific-technological exchange.”

Speaking to the media in Algiers, Díaz-Canel highlighted the possibility of Algeria undertaking joint programmes in sugar production and being willing to evaluate, “a possibility, a way to renegotiate or restructure the debt that Cuba has with Algeria.”

The two nations have had close relations since Algeria achieved independence in 1962, as well as through the Non-Aligned Movement and energy supply, with large numbers of Cuban medical professionals working in Algeria in various fields of health care. Díaz-Canel is due to meet President Putin in the coming week (See Russia below). Further details of what are the highest-level international visits undertaken by Cuba since November 2018 will appear in the next issue of Cuba Briefing.

Photo by Roland Larsson

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14th November 2022

After a two-year break because of the pandemic, the Havana International Fair (FIHAV) will in the coming week again take place with more than sixty countries represented, multiple official delegations, and a substantial business presence from Spain.

Speaking about the thirty eighth FIHAV, Cuba’s Minister of Foreign Trade and Foreign Investment, Rodrigo Malmierca, told viewers of the Cuban television programme, Mesa Redonda, that the numbers participating in the 14 to 18 November fair, is a “ sign of the confidence that the international community is willing to do business in the Cuban market,” despite, he said, the US embargo.

Among the larger delegations will be one from Spain consisting of over eighty companies, according to the Spanish Embassy in Havana. Organised by the Spanish Institute of Foreign Trade, a part of the country’s  Ministry of Industry, Commerce and Tourism, the Spanish enterprises will occupy four pavilions, including one consisting of many of the most significant companies in the Basque region. During the first day of the event a ‘dia de españa’ will be celebrated at FIHAV.

In a statement, the Spanish Embassy said that the country continues to be a strategic trading partner and the member of the EU that exports the most to Cuba. It noted that 47% of EU exports originate in Spain and were valued at almost €630mn (US$653mn) in 2021.

It is expected that during the Fair several announcements will be made about new investments

including a new Cuban beer brand to be launched as a joint venture with a European partner.  It is also anticipated that a joint venture with Unilever will be formally inaugurated in the Mariel Special Development Zone (ZEDM), and a stone laying event take place relating to the expansion of Richmeat De Mexico SA’s meat product operations in Cuba .

Addressing the complex economic challenges facing the country and Cuba’s indebtedness, Malmierca said that international business understood the difficulties the country is presently facing. “They have been informed that delays in payments or other problems in meeting the commitments made will be resolved gradually,” he told Cuban television viewers.

Malmierca noted that some 16,000 square meters of exhibition space at FIHAV had been taken, which he said was “a figure close to the best in recent years.”  

In terms of representation, this year’s fair will see China, Russia, Spain, France, Canada, Mexico, Brazil, and Venezuela having the greatest representation with about twenty-five countries having business groups led by ministers, deputy ministers and secretaries of state.

As in the past there will be a substantial presence of Cuban enterprise, with some 400 companies housed in the Fair’s central pavilion. This year, in addition to state enterprises, there will also be  represented joint ventures and several independently managed MSMEs which the Cuban government believes have the potential for export.

Speaking about the US presence at FIHAV, which peaked during the short period of détente under President Obama, Malmierca said that there will be companies from the US present, “not a large number,” but nine had confirmed their participation as exhibitors while others were participating in different delegations.

In his remarks he laid stress on the continuing importance of encouraging investment in Mariel’s ZEDM and said that a new updated portfolio of foreign investment opportunities will be detailed in presentations internationally accessible live online from ZEDM pavilion on Tuesday 15 November .

The Foreign Investment Forum which will include presentations by the Minister for Foreign Trade and Investment, the Director General of the Mariel Special Development Zone, the Head of Market Research Group, PROCUBA, and the Director of VUINEX, a one-stop-shop for foreign investors. To register and attend, interested parties should visit https://cuba.feriahabana.cu/en/investing-forein-forum/

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7th November 2022

Cuba’s state sugar producer Azcuba has confirmed that the 2022-2023 sugar campaign will  start in mid-November utilising just twenty-three of the country’s fifty-six functioning sugar mills. The objective it said, is to better use limited resources, increase efficiency, and stabilise future levels of production.

In an interview with Granma, Dionis Pérez, the Director of Information Technology and Communications of Azcuba, sought to allay the fears of Cuban sugar workers at some of the country’s largest sugar mills and associated facilities.

On the subject of what will happen to the workers of the mills that do not grind cane, Pérez told the official Communist Party publication that employment will be maintained with some involved in “the conservation and preservation of the mill”, while others will be “incorporated into the maintenance and repair work, after the authorisation of financing for these activities.”

Other workers, he observed, would be “relocated to cane production, food and diversified production” which will become “their main sources of personal income.”  He did not however provide any indication of how this might happen, the numbers involved, or over what period.

“In the plants that do not grind in this harvest, repair, maintenance and conservation work will continue to guarantee the next harvest, based on the management of resources within the national territory,” the Azcuba Director told Granma. Pérez stressed however, this would happen only where financing is available, and must consider present and future linked opportunities for the  production of sugarcane, food, and diversified products.

The article appeared to suggest that some factories will be repaired while others may be dismantled, which if correct would have a significant effect on many of Cuba’s rural communities.

Pérez told the publication that the objective now is to diversify the industry so that it engages in both the planting and processing of cane and growing food. In future, he said, it was envisaged that 45,000 hectares of sugar land will be allocated for the planting of cane and 12,426 hectares for food production. At present, just 16,024 hectares of land are operational, of which 9,837 are destined for cane.

In his published remarks he made clear that the restructuring and future of the industry is now based on what he described as “the real financing that can be made available,” guaranteeing domestic consumption, and obtaining derivatives including animal feed, alcohols, and honey, and if market prices permit, an allied export plan.

Others quoted in the article indicated that some of the country’s biggest mills, including Central Azucarero Uruguay in Sancti Spiritus, will instead of grinding have targets for shipping cane by rail to more efficient plants. They also suggested that workers would be supported economically through a two-year loan for factory repair that would “protect 80% or 90% of workers’ wages” with a possible state loan in 2023, for what was described as “the concept of a paralysed factory.”

The restructuring of the sector comes after years of falling production and was first announced by President Díaz-Canel in early September when he told a meeting of the Communist Party and government leadership in the thirteen territories involved in sugar production, that an innovative approach was required (Cuba Briefing 12 September 2022).

This would involve, he said, milling just 6.6mn tons to produce 0.46mn tons of sugar to meet the requirements of the country’s guaranteed family food basket, tourism, industrial production including rum and alcohol, and for medical purposes. 

The production figures mentioned effectively confirm that little if any sugar will now be available for export to China or elsewhere, and that previous plans to earn about US$150m per annum from such exports are now at an end.

Photo by Victoria Priessnitz 

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31st October 2022

President Díaz-Canel has told a group of visiting North American and Cuban-American businessmen that Cuba is open to dialogue with the US. If it is based on respect, there could be “a narrowing of relations, regardless of the ideological differences that we have,” he said.

Speaking during an informal meeting at the Presidential Palace, he told the group that their visit and participation in a business forum in Havana was significant and had meaning. It demonstrated, he said, that Cuba had the will to strengthen business and trade relations between both countries, as well as Cuba’s desire to develop business with “Cuban compatriots, living outside the homeland, who want to participate in the development of our country.”

More specifically, he told the group that the exchanges emphasised the importance of “a dialogue with respect; a dialogue where our sovereignty and integrity are not attacked; a dialogue where there are no unilateral positions of force. And if that is respected, he said, there can be that dialogue, there can be that narrowing of relations, regardless of the ideological differences that we have.”

Continuing, he observed: “Repeatedly we have proposed to the United States government, through the channels that we have been able to use, that we are open to dialogue and conversation without conditions, and with the possibility of covering all possible topics.”

Cuba “ratifies that we are open to strengthen, tighten dialogue and relations with any country in the world; and in particular with the United States,” he told the visiting US business group.

Speaking about the embargo, Díaz-Canel noted that although the Biden Administration had begun to announce some steps aimed at easing aspects of the measures introduced by the Trump Administration, and the direction was correct, what had been said had “not yet materialised in the fundamentals.”

The US business group were in Havana to participate in a 25-28 October business forum organised by the Cuban Chamber of Commerce and the Washington based Focus Cuba group.

Speaking at the Forum, Phil Peters, one of Focus Cuba’s two partners, said Cuba had made important progress in relation to the participation of non-state actors in the economy. The issue, he said, formed one of the topics of discussion in relation to the possibility of US businesses partnering with Cuban enterprise in the domestic retail and wholesale market (Background Cuba Briefing 12 September 2022).

Photo by Will Colavito

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24th October 2022

The Canadian miner and refiner of nickel and cobalt, Sherritt International Corporation, has signed agreements with its Cuban partners settling C$362mn (US$265mn) in outstanding debt over five years. It has also agreed the terms on which it undertakes future mining and other operations in Cuba.

Under the agreement, beginning 1 January 2023, its Moa joint venture will prioritise payment of dividends in the form of finished cobalt to each partner, up to an annual maximum volume of cobalt, with any additional dividends in a given year to be distributed in cash.

The company said that all of its Cuban partner’s share of such cobalt dividends, and potentially additional cash dividends, will be redirected to Sherritt as payment to settle the receivables until an annual dollar limit, including the collection of any prior year shortfalls, has been reached.

Under the terms of the cobalt swap, Compania General de Niquel SA (GNC), Sherritt’s Moa joint venture partner, has agreed to assume certain liabilities of amounts owed to Sherritt by CUPET and Energas SA to fully repay outstanding amounts over a five-year period.

In a statement, Leon Binedell, the President and CEO of Sherritt  said that the agreement was a testament to the strong working relationship the company had with its Cuban partners.

Observing that it believes that the agreement “ brings an end to the historical repayment uncertainty,” he said that “Combined with Sherritt’s portion of the dividends, this is expected to provide significant cash flow to deliver on our strategic priorities to reduce debt and aggressively expand our business.”

Bindell went on to note that the strong fundamentals for both the nickel and cobalt markets was driven primarily by the strength of the electric vehicle battery market. This, he said, made it “an opportune time for completing these agreements and ensuring that each of the partners benefit from it.”  He described the agreement as “innovative.”

In a lengthy statement the company said that on 1 January 2023, the outstanding receivable amounts owing to Sherritt from Energas and CUPET, estimated to total C$361.9mn (US$265.3mn), will be assumed by GNC, who in turn will enter into payment agreements of an equivalent amount, denominated in local Cuban currency with Energas and CUPET. The amount includes the Energas conditional sales agreement receivable of C$332.4 (US$343.7mn) and trade accounts receivable from CUPET of C$29.5mn (US$21.6mn).

As a result of the exchange, Sherritt will no longer have the responsibility for collection on the amounts solely from Energas and CUPET. Energas and CUPET will remain liable for payment of the Energas/CUPET liabilities, as applicable, only to the extent not satisfied by GNC. On distribution of any redirected amounts from GNC in cobalt or cash to Sherritt, GNC will receive an equivalent payment from Energas or CUPET denominated in Cuban pesos.

Sheritt said that on 12 October 2022, Cuba’s Executive Council approved the twenty-year extension of the Energas power generation contract with the Cuban government to March 2043, which was set to expire in March 2023. The Energas facilities have an electrical generating capacity of 506 MW from two combined cycle plants at Varadero and Boca de Jaruco.

Sherritt is engaged in a multi-pronged growth strategy in Cuba focused on expanding nickel and cobalt production by up to 20% from 2021 and intends extending the life of its mine at Moa beyond 2040. It is also the largest independent energy producer in Cuba.

Photo by Encal Media 

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17th October 2022

Cuba is hoping to bring together its experience in tourism and its capabilities in medical research and health care to become an international centre for health tourism and well-being. The intention is to seek foreign investment to develop the concept.

According to Dr Yamila de Armas, President of the Comercializadora de Servicios Médicos Cubanos SA (CSM), the initiative will be launched at the First International Fair of Medical Tourism and Well-being (FitSaludCuba). The event forms a part of the much larger 17-20 October ‘Health for All’ trade fair and convention which is expected to attract to Havana some 1,500 participants from 65 countries.

Speaking at a press conference about the event, Dr de Armas, the President of CSM, a state entity which offers a wide range of medical and health services to visitors to Cuba, said that the intention is to explore how Cuba’s tourism, scientific expertise and health care might be united in a manner that post-pandemic addresses the challenge of achieving universal health care.

FitSaludCuba will include a foreign investment forum and will, she said, also have the objective of identifying potential strategic partners interested in ventures that encourage the well-being of those vacationing on the Island and elsewhere.

According to Cuba’s state media, the event is intended to expose the products, experiences, and advances of health tourism in Cuba, consolidate alliances in medical and wellness tourism, consider marketing models in medical tourism, and explore the development trends of wellness tourism. Prensa Latina reported that it will address the country’s advances in biotechnology, medicine and science, and its potential to become a regional leader in health tourism.

CSM, a state linked entity, already offers a wide range of medical and health services to visitors to Cuba. It has branches in 13 of Cuba’s 15 provinces providing a range of medical and well-being services, with access to Cuban professionals in medicine, as well as to scientists and specialists. It presently provides rapid diagnostic services, therapies, health and wellness programmes, and facilities for convalescence which it says aim to strengthen an individual’s physical, mental, and immune status. The group also offers support with a range of diseases, dedicated locations for the rehabilitation of those addicted to alcohol and narcotics, and facilities for full medical checks.

At present it services are provided through the La Pradera International Health Centre, the Cira García Central Clinic, the International Centre of Neurologic Restoration (CIREN), and the Camilo Cienfuegos International Clinic. It works with the Pedro Kouri Institute of Tropical Medicine.

In May, CSM signed an agreement with the tourism related Cubanacán Group to promote health tourism on the island (Cuba Briefing 9 May 2022) at which time the group said that the development of medical tourism services was a priority for Cuba.

According to Dr Armando Garrido, the Director of Medicuba, since that time CSM has established several contracts with hotel companies in Havana, Varadero, and has plans for long stay health care at the Cienaga de Zapata National Park. He was quoted by Prensa Latina as saying that he anticipated that at FitSaludCuba “a group of actions will take shape [including] the signing of a significant number of contracts with international suppliers and letters of intent for new businesses.”

According to Cuba’s Ministry of Public Health (MINSAP), Health for All will be attended by regional and international organisations including ECLAC, Unicef, the FAO and the Pan American Health Organisation, a part of the WHO.

Photo by Max Letek 

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10th October 2022

Cuba is continuing to mobilise support and resources from around the island to try to restore power and water to the western province of Pinar del Rio and to parts of Artemisa following the devastation caused by Hurricane Ian which hit the  island on 27 September.

State media reporting indicated that at a high-level meeting held on 6 October to assess progress with recovery, President Díaz-Canel stressed to participants the importance of responding rapidly “despite accumulated problems” affecting the two provinces and the island generally.

In an indication of the Cuban government’s concerns about stability, Cuba’s President was reported to have reiterated previous comments about the importance of Communist Party cadres (party militants)  increasing direct contact with the population in each location and providing then with up-to-date information on the recovery work.

He also stressed the need for agility in the distribution of resources, the importance of providing the neediest individuals and families with support, increasing the number of locations selling processed food, and the maintenance of hygiene with special attention to the possible spread of dengue. Other Cuban reporting has indicated that many senior members of Cuba’s national assembly and Communist Party have been touring the most damaged provinces to meet with residents to assess need and encourage recovery efforts.

In an apparent indication of concern about the pace of recovery and the effect on social stability at a time of continuing nationwide shortages of food and medicines, and blackouts, Cuba’s Communist Party website and Granma published in full as a statement, informal remarks made on 2 October by Díaz-Canel in which he stressed to cadres the importance of taking responsibility to encourage residents to overcome the damage caused.

Speaking during the third of four visits to Pinar del Rio accompanied by senior party officials and ministers, he said. “We have to be convinced that we can solve this and that we can get out of the problem, and for this we have to work with the concepts that we can get out [of this situation] by ourselves and that everything we do we have to do better.”

In his remarks he described the population as being divided between those who immediately joined in the recovery process; those who were stunned and were initially difficult to motivate, but who are now gradually participating; those who are critical of the pace of recovery and the absence of information but who are arguing from “positions of decency”; and others who are “acting differently” and protesting.

Referring to the latter category he said: “We cannot allow that. Demonstrations of this type have no legitimacy”, he said, before going on to note that “those who act that way, who claim all the rights that the Revolution gives but who contribute little, must be confronted; confronted with arguments.”

Alleging that such actions are being supported and paid for from abroad, he went on to say that those who make “ counterrevolutionary expressions, trying to commit acts of vandalism such as closing roads, throwing stones at economic or social places …. These  situations will be dealt with by the rigor of the laws in our society.”

Meanwhile, Cuban ministers speaking on the television programme Mesa Redonda have confirmed that Hurricane Ian caused extensive damage to a wide range of crops and the farming system mainly in Pinar del Río, Artemisa, Mayabeque, and to a lesser extent Havana provinces.

During one of several high-level meetings taking place daily it was reported that much remains to be done for life to return to normal in Pinar del Río and parts of Artemisa in relation to housing, infrastructure, agriculture, and the provision of goods and services.

Desiree Díaz, the Coordinator of Programmes and Objectives for the Provincial Government of Pinar del Río, was quoted as saying that a first priority is to “find solutions to the damaged houses, so that no family remains in the evacuation centres”, but she made clear in her comments that progress will be gradual and will have to be from local resources.

Separately, it was reported that in Pinar del Rio power is available to barely 24% of the state power supplier’s customers. Etecsa the state telecommunications company however said that 75% of fixed telephony and 65% of mobile services there had been restored, and services in Artemisa and Havana were gradually returning to normal.

In Havana, power has been restored to most districts a week after Hurricane Ian struck, largely defusing tension in relation to blackouts and ending sporadic street protests (Cuba Briefing 3 October 2022). However, regular power outages continue in the capital and across most of the rest of the country because of inadequate generating capacity. Reuters reported that many Cubans remain angry and concerned about the difficulty of buying food to replace that kept in freezers which was lost, and that tension continues.

Photo by Mario Caruso

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3rd October 2022

One week after Cuba was hit by a category three hurricane, Havana and some parts of the country are gradually beginning to return to normal. However, swathes of the island remain without power, adding significant pressure to the Government which is already under criticism for increasingly frequent power outages and shortages of basic goods including food.

Hurricane Ian struck Cuba on 26 September, devastating the eastern province of Pinar del Rio, and severely affecting the provinces of Artemisa, Havana, Mayabeque, and the special municipality of Isla de la Juventud. It left in its wake three people dead and extensive damage to crops, power and water infrastructure, housing, and factories.

Across Havana and some provincial cities, sporadic street protests have broken out in response to the continuing blackouts with some protestors returning to earlier calls from last year’s protests for “Libertad”. The protests were mainly in densely populated districts, including some of the more prosperous areas of Havana. Reuters indicated, based on its monitoring of social media, that such protests continued through to a fourth night on the 2^nd October having erupted on the evening of the 29^th.  The extent and size of the protests is unclear but most appear to involve relatively small numbers of people.  

Officials said that it was hoped that power would be fully restored in the capital by 3 October, but many other areas of the country particularly in the west largely remain without power.

In an unusual departure, indicative of the severity of the damage caused at a time of shortages, foreign exchange scarcity, and ongoing efforts to fully restore the country’s aging power generators (Cuba Briefing 26 September 2022), the Cuban government has sought emergency assistance from the US.

First reported by The Wall Street Journal, Cuba’s government made a rare request to Washington for help following the hurricane. Quoting email communications, the publication said that US officials were still seeking more detail from the government in Havana to try to determine how much assistance might be needed if Washington were to provide aid relating to hospitals, water pumping facilities, sanitation, and other critical infrastructure.

In other hurricane related developments, emergency assistance has been forthcoming from Mexico and Venezuela; Gustavo Petro, Colombia’s President has offered his country’s support; Cuba’s aviation authorities have confirmed that all Cuba’s airports are now open; Etecsa, Cuba’s state telecommunications company, has said that Hurricane Ian effected 40 percent of its base stations and seven percent of telephone services in Cuba, and that recovery work is continuing; and Cuba’s media have reported that a significant number of vessels in the Pinar del Rio based fishing fleet that obtains 40% of Cuba’s lobster catch has been damaged, affecting exports.

Speaking on 30 September in his capacity as President of the National Defence Council, President Díaz-Canel, said that external groups and especially those based in the US were active on social networks seeking in the “midst of this situation, social outburst.”  He told participants that this made it fundamental that recovery work in the most hard-hit regions proceeded “more efficiently and more effectively,” and that care for those most effected be provided equally.

He also said that the recovery process must be fully explained. Noting that “at the moment we have limitations in providing information to the population through traditional means, as the electrical service was effected,” he told Defence Council members that it was vital that information be provided directly to the people.

“We have to establish it as a systematic method of work, especially where the greatest damage caused by the hurricane is – which is where recovery will take the longest,” the Presidency website quoted him as saying. The severe impact of the hurricane and the Cuban Government’s concerns about social stability, come on top of shortages of food, medicines and foreign exchange, and an energy crisis that has affected Cuba for months. Prior to the hurricane, Unión Eléctrica reported an electricity generation deficit of up to 38% and blackouts throughout Cuba for up to twelve hours a day as a consequence of a significant number of power plants being out of service for maintenance.

Photo by NASA 

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