5th June 2023

Senior officials from Cuba’s construction sector have said that they are attempting to finance its return to viability through developing an income from exports.

Speaking on the nightly television programme Mesa Redonda, the Directors of the Ministry of Construction (MICONS) and the GEICON Business Group identified energy supply stability and financing the cost of production as the main problems facing the recovery of Cuba’s construction industry as it attempts to deliver the homes, buildings, and infrastructure required.

Reynolds Ramírez, the First Vice President of GEICON, Herácleo Porto, the Director General of Grupo Empresarial de Cemento (GECEM) and officials from the Ministry of Construction (MICONS) told viewers that little improvement was likely in the immediate future without new sources of financing and energy stability. 

Speaking about the 2023 production plan, Ramírez stressed that to increase the delivery of construction materials “financing is needed.” This he said is “within our reach …. through exports.” In 2022 he said, GEICON sold US$1.05mn worth of  marble and mortar, some grey cement, and charcoal to earn income to maintain production.

This year the plan is to export just under US$17mn to recover and develop the construction materials industry. It was, he said, the only way the sector could achieve production on a larger scale and acquire the necessary raw materials not produced in the country.

The First Vice President of GEICON explained that although outcomes for 2023 had improved, so far “the expected results have not yet been achieved, due to the energy situation,” and output was far below installed technical capacity. “It is insufficient to satisfy the country’s demand,” he observed.

Despite this, he said, the  group was  developing new processes and modernisation plans with Cuban universities, citing as examples improvement in the production of sanitaryware, and automated methods of processing marble for export.

During the broadcast Porto, the Director General of GECEM the Cement Group, told viewers that government decided that this year it would prioritise the recovery of the cement industry.

The company’s Nuevitas plant, he said, is being modernised to recover the clinker capacity, while its Santiago plant is expected to  double its capacity after being modernised enabling the two together to produce around 2mn tons of cement annually. Porto also noted that GECEM’s Cienfuegos plant is currently exporting to some Caribbean countries, enabling the income received to be reinvested into increasing production capacity.

Cuban state media recently reported that the modernisation of the 26 de Julio Cement Factory in Nuevitas seventy miles northeast of Camaguey, is intended to lift its productive capacity from 150,000 to 750,000 tons per annum.

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.

Photo: Roberto Garaycoa/ Mesa Redonda

29 May 2023

Deputy Prime Minister, Alejandro Gil, the Minister of Economy and Planning, has told Cuba’s National Assembly that “tourism continues to be the fundamental way to stimulate the recovery of the economy.”

In a detailed address to Deputies on the country’s economic performance and priorities for recovery, he said that the sector was “essential to accompany and advance the gradual recovery of the economy.”

Although observing that by 3 May the country had welcomed 1mn visitors, he warned that achieving the tourism visitor plan for 2023 remained challenging, stressing “it does not depend only on us, but we are on that path.” In his remarks Gil noted that arrivals numbers at the end of April represented 28% of the hoped for 3.5mn arrivals this year and as such was 119% up on 2022 but was just 51.1% of the number recorded in the same period in the pre-pandemic year 2019. Growth in arrivals from Canada and Russia, he said, were of particular importance

Economic priorities

In his address, Gil identified Cuba’s economic priorities for 2023. These were, he said,  advancing macroeconomic stabilisation, consolidating foreign exchange allocation mechanisms, recovering the capacity of the national electrical system, and accelerating the introduction of renewable energy sources. In addition, he said, the intention is to make progress in reducing social inequalities, consolidate the process of decentralising powers to Cuba’s provinces, and to  comprehensively transform socialist state enterprises.

The non-state sector

In part, Gil focused on the increasing role of Cuba’s non-state sector in the economy and government’s concern about the level of imports of finished goods rather than raw materials. Noting  that in 2022 non-state forms of management had generated US$4.8mn in exports and US$270.1mn in imports, he observed that in the first four months of the year “these forms of management have imported US$166.6mn dollars. “At this rate we will exceed the figure of more than one billion in the course of the year,” he cautioned.

Warning that many such items were imported ready for sale often at high prices, he pointed out that the non-state sector must do more to contribute to the development of the country’s economy. New forms of management he said can import for production, but in recent months the trend has been “towards imports for direct marketing.”

Noting government’s concern about the tendency of the private sector to buy and sell finished goods, Gil reminded delegates that Cuba has “only one business system” that he said has to  function in the economic and social interest of the country as the law requires. He also expressed concern about speculation. “Excessive lucrative profits cannot exist, and it is a responsibility that we must face and that is billed and sold to the population.”

The foreign exchange market

Speaking about the foreign exchange market and the changes since August 2022 when the economy  was rapidly dollarising and hardly utilising Cuba’s domestic currency, he said that to ensure future economic development it had been necessary to  establish a market through CADECA with an exchange rate higher than the unification rate of CUP24 to US$1.

Noting that despite the CADECA  rate of US$1 to CUP120 being only available on a limited basis, demand “exceeds 100 days to buy foreign currency”,  and “an illegal market exists with an exchange rate that exceeds CUP180 or CUP190 to US$1,” he said that the Cuban state is now obtaining more foreign currency.

In an apparent acknowledgement that the currency unification undertaken in January 2021 (Cuba Briefing 5 January 2021) had been badly handled, he said, “Even with these insufficiencies, we are buying 10 times more currency than what we bought with the exchange rate of US$1 to CUP24.

This means, Gil said, captured currencies are being invested in the reactivation of industries such as electronics and agriculture and to purchase products such as rice and pork, and cleaning products. “The exchange market operates within its own resources. If we buy more we put more, and if we buy less we have less chance of boosting national industry and selling foreign currency to the population,” he told delegates. In doing so he made clear that while the sale of foreign currency to the population is not enough, government must now face down the informal market.

The digitisation of financial transactions   

In other remarks he suggested that there was a need to advance the digitisation of financial transactions and move away from the use of bank notes.  Gil recognised that the level of demand for paper currency exceeded the Central Bank’s capacity to provide it. Observing that the printing of physical banknotes “is costly in their issuance, custody and handing”, he stressed the importance of ETECSA, the state telecommunication’s company’s  mobile wallet, despite resistance in some parts of the country. This allows for electronic payments in Cuban Pesos and in foreign currency.

Reform of state enterprises

Addressing continuing concerns about the losses, poor productivity, and accountability of many state enterprises, he reported that in the first four months of 2023, 84% of state companies had achieved positive results and were generating profits. He warned however this did not mean they are all operating at maximum capacity or were efficient.

Gil told the National Assembly that the number of state enterprises losing money had been reduced to 285 but because  they had capped prices so as not to contribute to inflation it was not always possible to measure true outcomes. Still others , he said, are losing money  “due to lack of innovation, strategic thinking, due to the accommodation of managers, because they are not creative.” This Gil warned would require further analysis.

Speaking about closed currency schemes which allow some state exporters of goods and services to not depend on a central financial allocation, he noted that this had been particularly beneficial in the case of tourism, nickel, transportation, and communications. In his remarks he confirmed that this “innovative form of the Cuban economic model” now applied to 159 state affiliated companies and 105 state MSMEs.

More generally, when it came to state enterprise, Gil told the National Assembly that progress was being made in classifying state companies into different groups as it was recognised that a single system of management could not be universally applied. He also reported that work on a business law is progressing and confirmed that there are now  8,012 independently managed  enterprises of which 105 are state-owned, the rest private, and 65 are non-agricultural cooperatives, creating in all some 212,400 non-state jobs.

Agricultural Production

Regarding agriculture, he said that production levels of root and other vegetables, eggs, milk, rice, beans, and other products had decreased in relation to 2022 . Speculation in food prices for staples, he recognised had become a matter of great concern to Cubans. Making clear that maintaining the regulated family basket was costing government between US$1.5bn and US$1.6bn as most items were based on imports, he stressed that national producers must participate more in providing the inputs. The minister also called for progress in each municipality, to calculate the basic local demand for food in order “to promote local development” in 2024.

Elsewhere in his address Gil noted: there had been no progress in the country’s housing construction programme; that to achieve a gradual recovery in public transport, government was looking for new sources of financing for the sector; official inflation in the year from April 2022 amounted to 45.4%; there was a need after high levels of spending during the pandemic for new resources to recover social programmes, improve pensions, and care for the vulnerable. The requirement now, he said is for “more production, more efficiency, less resale, less diagnostics and more solutions.”

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.

Photo via: 14ymedio.com

22 May 2023

Russia and Cuba have agreed at a business forum in Havana a series of economic and commercial measures that suggest that investment and trade relations with Russia may now deepen significantly.

Remarks made there by Russian Deputy Prime Minister, Dmitri Chernishenko, and Boris Titov, the Russian Presidential Commissioner for Entrepreneurs’ Rights and Co-Chair of the  quasi-official Russia-Cuba Business Council, indicate Cuba is prepared to offer Russian enterprises unique concessions to encourage private investment in sectors including agriculture, agribusiness, rum, construction, transportation, and tourism,

During  the forum Chernishenko confirmed that: “The Governments of Russia and Cuba are working to create beneficial conditions for business, which means removing bureaucratic barriers, reducing taxes and tariffs, developing banking infrastructure to guarantee uninterrupted service of contracts, active work in expanding access to agricultural products in the market of both countries, and the development of logistics routes that meet the demands of our companies.” 

He also indicated that Russia is willing to propose comprehensive solutions in relation to digitisation, construction, and modern technologies, and in what he described as a most attractive sphere for Russian investment, tourism.

The event was notable for comments made in relation to incentives aimed at attracting Russian private investment.

During the opening session Titov alluded to land in usufruct being made available to Russian agricultural producers for 30 years, related tax exemptions, and several possible tariff and other incentives aimed at attracting Russian private investment, including new mechanisms to repatriate profits to Russia, and the development of a shipping line to facilitate Russia- Cuba trade. 

In addition, Russian Deputy Prime Minister Chernishenko referred to the creation of a banking infrastructure that will enable trade and a Russian business presence in Cuba, and to Moscow’s help in the modernisation of  Cuba’s inefficient sugar mills. He also announced that scheduled direct air services would restart soon (See Russia Below).

In addition, a statement by the Russian government quoted him as saying that Cuba had given the green light for Russian banks to open subsidiaries to finance Russian companies on the island and that both countries will use the Rouble for their joint projects.

Chernyshenko said that the Forum had made it possible to conclude agreements that should result in greater Russian collaboration in construction, tourism, sugar as an agro-industry and energy. He also noted that Cuba remained one of Russia’s principal allies and partners in the Latin American and Caribbean region, based not on the external situation but on principles of friendship and mutual respect.

In other  published remarks, Chernishenko said that “work is underway to inaugurate a Russian House of Commerce in Havana, which will provide a wide range of high-quality products for Cuban consumers.” He also noted that the upgrading of Cuba’s Antillana de Acero steel plant with Russian finance had been completed and it is expected to produce some 230,000 tons of liquid steel per year.

At the end of the meeting, eight documents were signed, including an Action Plan for the period 2023-2024, a memorandum relating to discussions in a joint macroeconomics working group, another on collaboration in relation to artificial intelligence, a contract for the supply of wheat, and letters of intent relating to joint ventures, including one for the development of a Russia-Cuba rum company.

Meetings described as offering new possibilities for Cuba

Speaking at the close of the Forum, Deputy Prime Minister Ricardo Cabrisas described the event as constituting “a milestone in the history of our bilateral relations in general and in business relations in particular.” He noted that new and greater possibilities were opening with Russia.

The meeting, he said, provided an ideal space for dialogue and business to strengthen ties between both nations demonstrating the will of both governments to raise their economic relations to the level of their political relations. Concrete agreements had been reached.

In his remarks Cabrisas emphasised that it was now up to the Cuba-Russia Business Committee, which he Co-chairs  with Titov, to lead and follow up the agreements and commitments adopted. He also underlined Cuba’s desire to reverse the existing imbalance in trade through increasing non-traditional Cuban exports to Russia. He also noted the significance to Cuba of Russia’s future support in relation to the supply of oil, raw materials, and technology, in helping change the island’s energy matrix, and in relation to tourism.

The forum, he said, enhanced not only relations between Russia and Cuba, but also between Eurasia and Latin America, as the two nations were central to interregional ties. He confirmed that Cuba’s Prime Minister, Manuel Marrero, will participate in the next meeting of the Council of the Eurasian Economic Union to be held in June  in Sochi in Russia.

According to the Cuban Presidency website, President  Díaz-Canel, who attended the closing ceremony of the Forum, highlighted during a later meeting with Chernishenko what was described as “a new moment in relations between the two countries”. It quoted him as saying that Cuba valued “the understanding that Russia has had, particularly President Putin, about the situation in Cuba” and its willingness to rapidly follow-up rate the agreements derived from the talks held when he visited Russia last year (Cuba Briefing 29 November 2022).

Noting that the follow up action had been “intense”, he said that Russia’s response would contribute “towards the realisation of projects that provide comprehensive solutions to Cuba’s problems and that are mutually beneficial for the two nations.”

“There is no doubt that we are in a very particular, very special moment in our bilateral ties.” “We ratify our willingness and desire to continue expanding relations”, Díaz-Canel told Chernyshenko.

The Presidency website quoted Chernyshenko as noting in reply, the intensity of the bilateral meetings in recent months, and as highlighting “the preferential treatment that is being given to relations between Cuba and Russia.”

Boris Titov outlines far reaching concessions for Russian business

During the Forum, Boris Titov, the Russian Presidential Commissioner for Entrepreneurs’ Rights, who co-chairs the Russia-Cuba Business Council and is close to President Putin,  was reported by Sputnik, the state linked Russian media platform, as having confirmed that Cuba is ready to provide more favourable conditions for Russian businesses than are available to investors from elsewhere.

Sputnik quoted him as saying: “Cuba is transforming, mastering new rules for interaction between the state and business. The Cuban authorities are ready to provide special conditions to Russian businessmen.”  The most favourable conditions being offered to Russian business, Titov said, “concern both long-term land leasing and duty-free importation of agricultural machinery, granting the right to transfer foreign exchange earnings, and much more.” Adding: “Of course, we are also waiting for the reduction of bureaucratic barriers.”

The online platform also quoted him as highlighting the fact that problems remained relating to transport, but that Cuba and Russia were working together to “establish permanent maritime lines for the supply of goods.” He also noted that under discussion were “subsidised loans from the Russian government”, that three Russian banks had requested registration from Cuba’s Central Bank to establish branches in Cuba, and that  Cuba had confirmed its interest in doing so.

The Russian news agency TASS separately quoted Titov as saying that plans were being developed to create a joint Russian-Cuban bank to finance independently managed Cuban SMSES. “We believe that it is necessary to open large-scale joint banks. Today the number of entrepreneurs in Cuba is growing and they need their own professional bank that can support a business project, finance small and medium-sized enterprises,” Titov said. He also noted that to this end proposals had been presented and that rapid progress is expected.

According to TASS, Titov confirmed that as of June it will be possible to pay for goods and services in Cuba using Russia’s Mir payments system through its credit and debit cards, but that consultations are due to take place soon in Moscow about a fast payments system being developed by Cuba using QR codes.  “Cuba has its own system of fast payments through a QR code. Cuban representatives will soon go to Moscow for a consultation with the Central Bank and, probably, an interaction will be established to unify the system of fast payments through a QR code,” the news agency quoted Titov as saying.

Other Russian media and western news agencies indicated that during the forum Titov confirmed joint plans for the opening soon of a store selling Russian products to Cubans; expedited processes to establish  mixed Russian-Cuban companies; and the possibility of business operations in both the Rouble and the Cuban Peso. “A lot is being done for Russian investors, there are preferential conditions,” Titov was quoted by AP as saying.

Some of the legislative issues required to make these concessions are believed to have been discussed when Vyacheslav Volodin, the Chairman of Russia’s State Duma (lower house) recently visited Havana and met with the President of Cuba’s National Assembly, Esteban Lazo, and others (Cuba Briefing 8 May 2023). Such changes by press time had not been reported in Cuba’s state media.

The business forum was attended by 52 Russian businesspeople and about 100 Cuban companies. A Russian Government statement indicated that Moscow intended “to do everything we can to help get the Cuban economy to a decent level”

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.

Photo: Prensa Latina

15th May 2023

Announcements made during and in the margins of Cuba’s recently ended annual tourism fair FITCuba 2023 suggest that international hotel groups invested in Cuba have confidence that visitor numbers will fully return to 2019 pre-pandemic levels.

Speaking at the fair, Gabriel Escarrer, the Vice Chairman and CEO of Meliá Hotels, said: “We have no doubt that Cuba will recover to pre-crisis levels and will be in a better state than ever before. For this reason, it is essential for us to continue improving our portfolio of hotels on the island; promoting new quality experiences in line with an increasingly demanding demand.”

Escarrer went on to announce four new hotels in Meliá’s Cuban portfolio: the INNSiDE Habana Cathedral, a new 50-room hotel marketed under its INNSiDE lifestyle brand which is intended for “adventurous travellers at an affordable price”; the 188-room Hotel Plaza in Havana, first opened in 1909, as a part of its luxury Meliá Collection portfolio; the historic 178 room Hotel Sevilla, close to Paseo del Prado in Havana; and the 531 room Sol Turquesa Beach in Holguín, which Meliá will manage. 

He also confirmed that the group’s Meliá Trinidad Peninsula, a 400-room five-star hotel in the colonial city of Trinidad will open in the autumn, and that the Sol Caribe Beach, a hotel in Varadero designed for families has just opened. The company, he said, is also upgrading many of its existing properties on the island and adding new facilities such as themed restaurants. 

Meliá was recently reported to now have more than 14,000 rooms in 38 hotels on Cuba.

According to the Spanish hospitality publication, Excelencias, its Cuba-related marketing is particularly focussed on, as priority markets, Canada,  Germany, Spain, and Portugal. The publication noted that it Meliá now has properties in all of the island’s most important destinations including Havana, Cienfuegos, Trinidad, Santiago de Cuba, Holguín, Varadero, Cayo Coco and Cayo Santa María.

Meliá, a privately owned company, is based in Palma de Mallorca in Spain and has been present in Cuba for more than 30 years. It recently reported a 2022 global profit of about US$117mn on operating income of about $1.79bn in revenue. “We want to consolidate all our leadership in countries such as Spain, Cuba, Mexico, Portugal, and Vietnam,” Escarrer recently told the media.

While not investing in Cuba on the same scale, other hotel operators have also expressed confidence of the future of the sector which the island’s Ministry of Tourism says it expects to receive 3.5mn visitors this year. Although the figure is significantly below pre-pandemic levels when the island received 4.3mn visitors, Cuba’s Minister of Tourism  Juan Carlos García recently suggested it is hoping, this year and next, to receive significantly more visitors from Latin America and Russia. (Cuba Briefings 1 and 8 May 2023).

The news agency EFE reported that during FITCuba hotel chains from Canada, Singapore as well as others from Spain and elsewhere in addition to Meliá indicated plans to grow their Cuban portfolio. It quoted the Canadian Blue Diamond Resort hotel chain, which has 28 hotels and nearly 11,000 rooms on Cuba as saying that it was growing in the east in Santiago de Cuba, Camagüey, and Holguín and is seeking to combine its offering with properties Trinidad, Havana, Varadero, and other tourist locations. Rafael Villanueva, a locally based manager, told EFE, “We are very optimistic, we see possibilities and we are hopeful that we will achieve the results that we set for ourselves.”

Banyan Tree Hotels Resorts, a Singaporean company, also has plans to expand its brand in Cuba to Havana. It presently has four properties  located on the northern keys in Villa Clara, as do  the Spanish group Barceló which has three properties on the island, and Iberostar, which presently operates 18 hotels and recently expanded its Hotel Gran Trinidad and opened a new property in Cayo Cruz.

In addition, the Indonesian hotel group Archipelago International now operates five hotel complexes in Cuba and will open a sixth in September, the Grand Aston, Varadero. In addition to two in Havana, the company manages properties in Cayo Paredon in Jardines del Rey, the Aston Costa Verde, in Playa Pesquero, Holguin, and the Grand Aston Cayo Las Brujas, on the northern keys off Villa Clara. It recently said that it has plans to develop tourism to Cuba from China, Japan, and South Korea.

In total Cuba has 81,000 hotel rooms across 42 properties that are operated either as joint ventures or under foreign management contracts, principally with Gaviota, a part of the Cuban GAESA group which usually constructs and owns the properties.

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.

Photo: Melia Hotels

8th May 2023

Cuba and Russia have signed a Memorandum of Understanding intended to lead to a deepening of Russian private investment in energy, tourism, food production, civil aviation infrastructure, mining, and the development of sugar as an integrated agro-industry.

At the end of a three-day visit to Havana, Makim Oreshkin, Presidential Adviser for Economic Affairs to the Russian Federation, and Cuba’s Deputy Prime Minister and Minister of Foreign Trade and Foreign Investment, Ricardo Cabrisas, agreed a document that is expected to lead to deeper long-term Russian engagement in the Cuban economy; the development of a new investment relationship with Cuban state enterprise; and an expansion in relations between the two countries.

The Cuban News Agency (ACN) reported that in Havana, Oreshkin discussed “Russian investors effective involvement in Cuba’s Economic and Social Development Program through 2030, in priority sectors.” It quoted Cabrisas as emphasising that the exchanges reflected “the excellent state of bilateral relations” and the political willingness of both governments to “advance rapidly” economic and commercial relations.

During the visit Oreshkin and an accompanying delegation of Russian officials and businessmen representing “companies willing to invest in various sectors of the Cuban economy”, met with the heads of Cuban state enterprises, President Díaz-Canel and other leading members of government.
The Cuban Presidency website noted that President Díaz-Canel, and Oreshkin confirmed that “the intention is to bring the economic, commercial and financial ties between their countries to the same state as political relations.” It also quoted him as saying that the presence of the delegation was “very significant” and as giving “continuity to the exchange of high-level visits that has been maintained in recent months.” It was “one more expression of the deepening of the historic bilateral relations between both governments and peoples,” he said.

Díaz-Canel was also quoted as saying of Oreshkin, “For us it is a satisfaction to receive him on his first visit to Cuba, which was expected and longed for in our country.” “We feel”, he was reported as saying, that there is in “the Russian Government, and in particular in President Putin, an enormous sensitivity towards the problems of Cuba.”

Oreshkin was reported to have said during the meeting the principal focus was on deepening economic relations between the two nations on energy, increasing tourist flows and the investment of Russian companies in Cuba.

In doing so, he referred to the three main work guidelines that have been proposed to strengthen economic relations, among which, he said, the first is energy, and the second the increase in tourist flows to Cuba. He recognised, however, that delivering the “the third area, the most important sector” able to provide long term results, investment by Russian companies, would be “quite difficult.” He noted however that negotiations on investments in mining, agriculture, tourism, infrastructure, and energy were already underway before his visit and will continue.

During their dialogue, Díaz-Canel, was reported to have conveyed an “affectionate greeting to our friend President Putin”, and emphasised, our “unconditional support” and our “firm and systematic denunciation, in all international events, in relation to the conflict orchestrated by the Government of the United States, with the aim of bringing NATO borders closer to inadmissible lines with Russia.” The Russian media platform Sputnik Mundo quoted President Díaz-Canel as saying “We feel that there is enormous sensitivity in the Russian government and, in particular in President Putin, towards Cuba’s problems.”

Also participating in the meetings were Deputy Prime Ministers Ricardo Cabrisas, the Minister of Foreign Trade and Foreign Investment, and Alejandro Gil, the Minister of Economy and Planning.

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.

Photo: By Prensa Latina

1st May 2023

In an indication of the seriousness of the fuel shortages presently facing Cuba, the country’s symbolic mass May Day parade in Havana was dramatically downsized and relocated.

Announcing this just days before it was due to take place, Ulises Guilarte de Nacimiento, General Secretary, of the Central de Trabajadores de Cuba (CTC), the national trades union body, said that in the capital this year’s parade would only involve those from five districts in central Havana and take place on the Malecón rather than in the vast Plaza de la Revolución. Elsewhere, he said, the objective would be to hold assemblies in central locations addressed by local speakers.  He attributed the change of plans to “the complex situation that our country is going through” and “limitations with the issuance of fuel.” 

In almost every year since the revolution, excepting during the pandemic and times of extreme austerity in the 1990s, Cubans have been bussed in, or come to the capital to participate in the May Day parade; arriving eventually in hundreds of thousands in the Plaza de la Revolución to demonstrate their national pride and solidarity, hear speeches, celebrate, and in recent years to be greeted by the country’s political leadership dressed informally.

Speaking about the fuel shortages, Lidia Rodríguez, the Commercial Director of CUPET, was quoted in the state media as saying that gasoline and diesel availability remained low and  rationing and controls had been introduced as the state company was “trying to avoid a total fuel shortage in the country.”

Cuba’s fuel crisis (Details Cuba Briefings 24 and 17 April 2023) is now having a much wider negative effect on the country’s already weak economy and on daily life.

Reports in the national and provincial media indicate that five universities have suspended face-to-face classes  due to the shortage of transport, cultural events have been cancelled, and reports of problems with planting, inputs and agricultural supply have begun to appear in some parts of the country. In addition, the news agency EFE quoted named farmers indicating that the fuel crisis is beginning to affect the country’s already difficult food supply, as a lack of transport is preventing deliveries of fresh produce to farmers’ markets.

To try to address problems caused by fuel rationing, Corporacion Cimex, which is responsible for the sale of fuel in Cuba, has announced a series of measures aimed at trying to restore order in Havana and other locations. “Given the complex situation in the country regarding the availability of gasoline and diesel , and “to avoid dissatisfaction among the population,” it said that it will introduce measures aimed at ensuring that “the constant flow of sales is maintained, without interruptions.”

In doing so, it said it will liaise with the police and the authorities in each territory to restore order. The announcement came after a detailed story appeared in the official La Tribuna de Habana alleging corrupt practices by those in charge of filling stations, disorderly scenes, and pictures appeared on social media of a brawl outside one filling station.

Among the measures introduced are oversight of work shifts; a  ban on filling containers; improving queue management through the introduction of an app; and close liaison with the police and local authorities. It noted that its intention is to “maintain the constant flow of sales without interruptions,” although given the widespread shortages of fuel and rationing it is not clear how it intends ensuring this.

In an unusual departure, Cuba’s state media reported a ship of unstated origin arriving to discharge diesel by ship-to-ship transfer.  The coverage indicated that its arrival at a dock at the Matanzas Supertanker Base was in “compliance with CUPET’s contracts with international suppliers.” The shipment will be for Havana, Camagüey, and Santiago de Cuba, which the reports noted had been suffering from a lack of fuel for days. Officials were quoted, however, as saying that the shipment, did not represent a significant improvement, but did “guarantee stability in vital services in each of the country’s provinces.”

Meanwhile, reporting by news agencies and the international energy media indicate that Cuba is increasingly turning to Russia and Mexico for shipments of diesel and gasoline to supplement dwindling supplies of Venezuelan crude and fuel. They suggest that Venezuela is struggling to meet its own needs, so far only supplying, according to World Energy News, 55,000 barrels per day (bpd), compared to almost 80,000 bpd in 2020.

Separately, Reuters quoted ship tracking data from Refinitiv Eikon noting that Cuba has imported at least five shipments from Russia since November 2022 and others from Mexico’s state-owned Pemex.  It noted that two shipments from Mexico involved crude oil for refining in Cuba for gasoline and one of liquefied petroleum gas (LPG) used for cooking. Other shipments are scheduled from Venezuela the news agency reported. Meanwhile Cuban state media has suggested that the shipment of LPG means that bottled gas for domestic use will gradually become widely available to consumers

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.

Photo: Getty Images

10th April 2023

The High Court in London has ruled that the Cuban State has no direct responsibility for €72mn (US$78.5mn) of accumulated Cuban debt held by CRF I Ltd, but that the Banco Nacional de Cuba (BNC) is responsible for meeting the claim (Background Cuba Briefing 6 February 2023).

In a 94-page judgement, Judge Sarah Cockerill said that Cayman registered CRF I lawfully purchased the debt with the BNC’s approval, but it lacked the authority to consent on behalf of Cuba.  As a consequence, the Cuba State is no longer part of the continuing court case since it is not a guarantor for the debt.

Justice Cockerill, however, also ruled that CRF I has the right to demand payment of the debt from the BNC, should at trial the court order it to repay the amount owing. As such, subject to appeal, she wrote, the case can continue solely against the BNC. This appears to mean that the sum owed can only be recovered from the BNC’s assets and resources.

Subsequently, Cuba’s Minister of Justice, Oscar Silvera, said the judgement will be the subject of an appeal in May.

If Cuba were to lose the appeal, it is expected that the High Court will then determine the merits of CRF I’s case, and Justice Cockerill would be, as she indicated, be “competent to judge the debt claims presented” at a future date.

Initial Cuban commentary described the ruling as “a victory,” with President Diaz Canel saying  in a Tweet: “[The] Republic of Cuba wins lawsuit in London: CRF is not a creditor of the Cuban State. Once again, the enemies of the nation failed. Their lies collided against a professional and prestigious court.”

In other remarks, Cuba’s Justice Minister told a press conference that the lawsuit had established that the Republic of Cuba and the Banco Nacional de Cuba were different entities.

“We are talking about two different entities, the Republic as a sovereign guarantor, a power that the State has to assume responsibilities in terms of guarantees in the face of debts awarded to other entities in the country, and the BNC as an economic and commercial entity,” he said.

Indicating that the ruling made clear that the Cuban State has no obligation to respond to the lawsuit and that it is immune from English jurisdiction, he said that the outcome should be regarded as a victory.  “The Republic as a sovereign entity is immune because at no time did the State approve guarantees on the debts assumed by CRF”, Silvera said.

In a statement issued following the ruling, CRF I’s Chairman, David Charters, noted “CRF remains committed to finding a solution with Cuba that has zero impact on its budget for at least five years, recognising the difficult economic situation the country is facing.”

 “Cuba won a technical point in this judgment which we have already remedied, and we do not expect this issue to impact the eventual final outcome, which is a complete victory for CRF,” he wrote. Charters also observed that “BNC was the central bank of Cuba and remains responsible for managing these unpaid Cuban debts.”

Earlier this year 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). It is a member of the private sector London Club of Creditors holding Cuban debt. CRF I has previously attempted to reach a settlement with Cuba, including a 2018 offer which it said received no response.

Cuba states that it has never ignored its debts or negotiations with “legitimate” creditors and has previously called CRF’s claims illegitimate, describing the firm as a “vulture fund.”. The Banco Central de Cuba (BCC) maintains that the debt was contracted by the BNC when it still operated as Cuba’s central bank. The BNC was dissolved and replaced in 1997 by BCC which took over many of the functions of the BNC. 

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.

3rd April 2023

Together with Cuba’s state owned Corporación CIMEX SA, Russian private sector interests are to open a wholesale supermarket selling Russian goods, and with Russian government funding will develop a first hotel for Russians. Additionally, a joint Russia Cuba Centre for Economic Transformation is expected to be established, and a new financial settlement system created.

In the last week the Russian news agency Interfax has quoted Boris Titov, Chairman of the Russia-Cuba Business Council, and President Putin’s Commissioner for the Protection of Entrepreneurs’ Rights, as telling the Russian media: “Many Russian manufacturers are interested in promoting their products in Cuba. We hope that the new trading house would become a single wholesale importer of products and independently determine prices on the retail market in this country.” The preliminary consent of the Cuban side has been received, we continue to expect the official signing of the contract,” he said.

The idea of a Russian trading house follows from discussions held during President Diaz-Canel’s visit to Moscow in late November 2022 (Cuba Briefing 29 November 2022).

According to Titov, the proposed ‘Rusmarket’ will sell food products, household products, and other goods. The arrangement will be based on a contract that will, he said, make it possible to resolve difficult issues with logistics, the transportation of Russian goods, and their insurance. Speaking about tourism, the Chair of the Russia-Cuba Business Council told the news agency that consideration was being given to closer cooperation with Cuba in the field of tourism.

“The flow of Russian tourists to Cuba is gradually recovering. Now we are considering the creation of a separate hotel specifically for guests from our country. Financing of such projects is possible at the expense of a fund under the Ministry of Finance”,  Interfax quoted Titov as saying. The fund referred to relates to a new offsetting arrangement for trade with Cuba through what previously has been described as “a specially formed account”.

Titov indicated that he expects a Cuban working group related to the economic reform of the Cuban economy to arrive in Moscow shortly. In January Interfax reported that the Russia-Cuba Business Council was exploring “economic transformation in Cuba based on the development of private companies.”

The forthcoming visit is expected to discuss the launch of a joint Centre for Economic Transformation, involving representatives of key Cuban ministries and the Cuban Central Bank, with Russian experts drawn from the Stolypin Institute for Growth Economics as well as the Centre for Strategic Research and the Institute for Economic Forecasting of the Russian Academy of Sciences.

Speaking about the new initiatives, Cuba’s Ambassador in Moscow, Julio Garmendia, said that Russia and Cuba are currently “in a new moment of promising relations.” In remarks to the Russian media quoted by Interfax he said that the Cuban National Assembly is preparing to develop legislation that will deepen contacts with Russia. “The main thing is that a political decision on this matter has already been made,” the Ambassador said.

As reported previously by Cuba Briefing, the Stolypin Institute for Growth Economics is a think tank with close ties with the Russian government and state academies of sciences. It conducts scientific research financed by the private sector, government, and grants from the President of the Russian Federation. Its views are broadly based on a belief in the need for the Russian economy to encourage private property and competition, cultivating markets, developing a middle class and small and medium-sized companies, and that Russia stops depending on oil.

Previously Titov, who is close to President Putin, has said that one of the proposals under consideration involves the creation of a new financial settlement system that would incorporate the trading accounts of all those participating. This would, he said, “Not only [be] a clearing centre, but, by and large, an organisation with a banking license, the main task of which is to significantly reduce the volume of cash payments. And, of course, we will have to deal with lending, leasing, and factoring”.

Separately, Cuba’s Minister of Foreign Trade and Foreign Investment, Rodrigo Malmierca, has said about the supermarket proposals being developed by Titov: “We are working to ensure that Russian investments in Cuba are subject to special protection. Despite the difficulties with liquidity, we can provide this joint venture with special treatment so that it does not have to repatriate its income.” (Background Cuba Briefing 30 January 2023).

As Commissioner for the Protection of Entrepreneurs’ Rights, Titov is in charge of protecting the rights of Russian businessmen who support the Kremlin.  In January, Titov met with President Díaz-Canel in Havana. He has previously been quoted as saying that the Russia-Cuba Business Council want to “breathe the energy of entrepreneurial initiative into these relations.” Corporación CIMEX SA is controlled by the US-sanctioned Cuban military related conglomerate GAESA.  The spokeswoman for the Russian Ministry of Foreign Affairs, María Zajárova, recently said that Moscow maintains its commitment to strengthen strategic cooperation with Cuba in multiple fields. 

Photo by Kir Simakov 

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.

27 March 2023

Cuba is relying on “the dynamic recovery of tourism,” the resuscitation of the productive sector, changes to state enterprises, and a better currency allocation system to deliver growth of 3% this calendar year, according to Deputy Prime Minister Alejandro Gil, the Minister of  Economy and Prices (MEP).

In remarks made to the annual audit meeting of the MEP, Gil laid stress on state enterprises assuming greater responsibility for outcomes, indicated that tax incentives would be introduced, and spoke about the creation of a new law for state enterprises.

In addition, he said, a new entity to manage non-state Cuban businesses would be created, and flexibility introduced into the state planning process “to recognise economic reality.”

These and other measures, Gil said, would be contained in a macro-economic stabilisation programme that will aim to rebalance the Cuban economy  and “guarantee a favourable environment that is conducive to economic growth.”

Speaking about the outlook for the Cuban economy this year,  the Minister said that the projected slowdown in the world economy due to high inflation, increased interest rates, and a reduction in investments presented “adverse risks”. This will mean, he said, Cuba will need to strengthen activities that generate exports, establish objective priorities, and create complementarity between state and non-state economic actors.

He also highlighted the importance of  the faster recovery of tourism in delivering a rapid recovery of the economy; the need for greater speed in addressing rising input prices; the importance of capturing more foreign exchange; the need to undertake the “internal transformation” of state enterprises; and accelerating the process underway of the decentralisation of power to the territories. 

Gil went on to say that government will address the negative issues that affected economic performance in 2022. In doing so he noted the partial dollarisation that has occurred between state companies and the non-state sector, retail price inflation, and the losses made by state enterprises.

Speaking about plans to transform state companies and devolve management responsibility, Gil announced that Government would this year begin to classify them to achieve their “effective performance as a main actor in the production of goods and services”. This, he said, would see in a proposed new Company Law, provision for the consolidation of enterprises, and their management model and governance classified in a review lasting up to the end of 2024.

He additionally told the meeting that the proposed macro-economic stabilisation programme will see work developed within the MEP on tax reform, the recovery of monetary balance, and “convertibility of the national currency.”

At the same time, he said, macro-economic governance and planning will be redesigned so that the MEP’s Coordination Committee has “the necessary technical analysis instruments and the capacity for decision-making with respect to macro-economic policies.”

State media reports of the meeting additionally indicated:

• That the role of the MEP in delivering Cuba’s National Economic and Social Development Plan, “will be strengthened.”

• The annual planning process will allow for “greater flexibility and adaptive capacity” in “the context in which the national economy now operates.” 

• It will be “necessary to defend the principle of not importing what can be produced in the country.”

• Traditional planning and regulation mechanisms will be transformed, combining their presently centralised character with decentralisation.

• The MEP will support the creation  of new economic actors.

• Greater emphasis will be placed on achieving efficient management of the investment process and on streamlining research.

• The currency allocation system will be reformulated, new self-financing schemes for exporting entities will be consolidated, and costs will be based on priorities.

• Control mechanisms will be created through the Directorates of the MEP in relation to the use of freely convertible currency and receipts prioritised.

• And measures will be introduced to mitigate the social impact of the new policies on Cubans.

In other reported remarks to the meeting, Cuba’s Prime Minister, Manuel Marrero, told attending senior members of Cuba’s Communist Party, Ministers, and the Minister-President of the Central Bank of Cuba and officials attending that while the impact of the US embargo could not be ignored, the macro-economic programme being proposed would become the “key and the guiding thread” in relation to future development. 

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.

20th March 2023

Speculation is growing in the US that some imprisoned Cuban protestors and dissidents may soon be released, possibly into exile, leading to an easing in relations with the US.

Reports from well-placed US NGOs and in mainstream media outlets including CNN, suggest that negotiations to this end continue. They cite the recent visit to Havana by the Papal Envoy, Cardinal Benjamin Stella, the comments he made following a meeting with President Diaz-Canel (Cuba Briefing 13 February 2023), the actions of European diplomats in Havana, and a recent speech made by the US Assistant Secretary of State for Western Hemisphere Affairs, Brian Nichols.

Speaking on 14 March at Florida International University (FIU) in Miami, Assistant Secretary Nichols indicated that the Biden Administration is open to the possibility of accepting Cubans currently imprisoned in Cuba.

Although saying nothing about the negotiations fostered by the Vatican, he noted that US officials continue to seek the release of political prisoners both publicly and privately in exchanges with Cuban officials. “If they want to come to the United States, we will explore the avenues available under US law to welcome them,” Nichols said, noting the large numbers of individuals imprisoned for their involvement in the 11/12 July 2021 street protests, and the contact the US Embassy in Havana has had with them and with  dissidents.

Separately, European diplomats in Havana indicate that they are preparing to issue humanitarian visas to any Cubans who may be released by the government and leave the island for exile abroad. Civil society organizations suggests that following the protest some 670 individuals were sentenced and over 1,500 detained. Cuba says the number involved is about 800, however the trials have remained closed, and in some cases very long sentences have been imposed.

The position of the Cuban government however remains unclear with the Minister of Justice, Oscar Silvera, reportedly having suggested to EU diplomats earlier this year that while amnesty is not legally possible in Cuba their request for pardons had been noted. Meanwhile, speculation continues as to whether any decision would be linked to exile, whether encouraged or forced, for those who might be freed.

In his remarks Nichols made clear that the US strongly opposes forced exile.  “The United States will not turn its back on political prisoners, and if they want to come to the United States, we will explore the avenues available under US law to welcome them,” he told those attending his address.

In remarks largely aimed at explaining Washington’s Cuba policy to the Cuban-American community, Nichols said that in its dialogue with Cuba, “we always emphasise that the Cuban people must be able to choose where to live and the government must allow its citizens to return to Cuba.”

In February, Benjamin Ziff, Chargé d’Affaires of the U.S. Embassy in Havana, stated that Cuba’s government’s imprisonment of protesters and dissidents “is the most serious obstacle to any improvement in the bilateral relationship” (Cuba Briefing 13 February 2023).

More generally in his address, Nichols sought to outline two key aspects of the present US Administration’s policy.  The first, he said, is to “promote accountability for human rights abuses,” and the second is to “explore meaningful ways to support the Cuban people while limiting benefits to the Cuban regime.”

Speaking about new policies he said that the Biden Administration was “exploring the expansion of access to services hosted in the cloud and other development tools for the Cuban people.” These tools, he told those attending, “will help activists and civil society to connect with each other and facilitate the flow of information inside and outside the Island. They will also help the Cuban people to access more services, including those that circumvent censorship.”

Nichols observed that “the economic situation is worse than even the so-called Special Period of the 1990s and the human rights situation is bleaker than it has been in decades.” He was also critical of the high rates of inflation facing Cubans and the shortages of food, medicine, and electricity.

“The Cuban government is quick to blame others for its economic ills without acknowledging the decades of mismanagement that led to the current crisis,” he said, noting Havana’s tendency to blame everything on the US embargo “ which Havana waves like a flag to justify all its failures.” 

“We continue to ask the Cuban government to implement economic policies that improve the country’s situation, such as greater freedom for private sector agents and much-needed agricultural reforms,” Nichols said.

Nichols also spoke about other aspects of the Administration’s Cuba policy, indicating that approximately 10,000 Cubans “from all walks of life” have successfully used the new US parole programme introduced in January this year. Since implementation he said, “the number of Cuban migrants attempting a dangerous irregular migration has plummeted.”

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.

14th March 2023

The Australian miner, Antilles Gold, has said that it has confirmed the presence of high-grade copper in samples taken from its El Pilar oxide concession in central Cuba. An expanded drilling programme will start in April 2023. This, it said, will focus, “on the copper-gold oxide domains and on a cluster of porphyry copper-gold intrusive targets.”

In two progress reports to the Australian Stock Exchange, Brian Johnson, the Executive Chairman, of Antilles Gold said that its 1800-metre drilling programme in 2022 at El Pilar in Ciego de Avilar had identified a 134.5-metre zone grading 1.13% copper from just under 50 metres, with a smaller zone grading up to 4.85% copper. In another drill hole, the company struck up to 38.31 grams per tonne of gold across 14 metres from a depth of 49.5 metres, as well as an 8-metre intersection of 1.27% copper.

Johnson said that the Bowral, New South Wales based company would now be splitting its activities in Cuba into two arms: one focused on small gold mines in its Minera La Victoria joint venture with Cuba’s state mining company GeoMinera SA,  and another that will be focussed on copper.

In a statement, he said that its gold mining operations in Cuba with GeoMinera had “the potential for worthwhile cumulative gold production and profitability” and that there were opportunities for another joint venture “exploring major copper targets.”

Antilles Chairman also noted that the company expects to use its anticipated surplus cash flow from its  existing La Demajagua mine development on the Isla de la Juventud to assist in funding subsequent gold projects, and in the exploration of the significant copper prospects that have been identified.

According to industry analysts this could see work on developing a mine at El Pilar come soon after the proposed open pit La Demajagua gold, silver, and antimony mine opens, which according to Antilles will be “development ready” in mid-2023, with commissioning expected in June 2024.

Antilles Gold reported that GeoMinera SA has indicated that Minera La Victoria “will be permitted to carry out multiple gold projects.”

The company also noted that a new subsidiary, Antilles Metals Inc, is being incorporated in the Cayman Islands to enter a separate joint venture with GeoMinera to explore the El Pilar copper-gold porphyry system.  Antilles added that it had signed a Letter of Intent with GeoMinera initiating negotiations on including in its Exploration Agreement “a second, highly prospective copper belt in Cuba.”

Australia’s The Market Herald reported on 3 March that in an indication of Antilles commitment to its partnership with GeoMinera, the miner’s Cayman Islands-registered subsidiary acquired an extra 1% in the Minera La Victoria joint venture making it an equal partner with GeoMinera.

Antilles is engaged in three projects in Cuba with GeoMinera: an open pit mine at the La Demajagua sulphide gold-silver deposit on the Isle of Youth; the potential gold-copper mine at Il Pilar in Central Cuba; and the Antonio copper-zinc mine in Villa Clara which involves extracting remnant ore from a Soviet-era mine that has not been operational since 1992.

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.

Photo by Lucas Kapla

6th March 2023

Habanos SA, has said that its revenue from cigar sales in 2022 was US$545mn, an increase of  2% on the previous year.

In a presentation to the media at the start of the recently ended Habanos Festival, the company’s Co-Presidents Luis Sánchez-Harguindey Pardo de Vera and Maritza Carrillo González, told journalists that  the company’s export product was in good health, and it had increased the numbers of its sales outlets globally by 10% last year to 4,769. 

Spain, France, Germany, China, and Switzerland were the main markets  with some 53.7% of sales being in Europe, 19.3% in the Asia Pacific region, 15.3%, in the Americas, and 11.7% in the middle East and Africa. Under US regulations, Cuban cigars cannot be sold legally in the US.

Also speaking to the media, Luis Blanco, the Agricultural Director of the Tabacuba business group, said that under a readjusted plan following the extensive impact of Hurricane Ian on Cuba’s western province of Pinar del Rio last September (Cuba Briefing 3 October 2022), overall planting nationally this year will be around 8,500 hectares of which 5,780 hectares will be in the province.

Although the campaign ended elsewhere in the second part of February, it will continue until the end of March in Pinar del Rio. Speaking about the recovery of the province’s 10,000 casas de cura and other tobacco storage facilities in what is Cuba’s most important high-value leaf producing province, he noted that 2,400 have been repaired while 1,700 are undergoing reconstruction.

Blanco confirmed that despite the damage caused, Cuba did not have a raw material deficit and would be able “to meet the plans established both for exports and for the segments and assortments destined for the population.” In the case of tobacco for export, the impact of the hurricane was minimal, he said. Just “15% was lost and the rest processed and recovered.”

Separately, Cigar Aficionado has reported that the results come at a time of considerably higher prices for Cuban cigars and shortages of many brands, particularly for high-profile lines such as Cohiba. Last year, Habanos said that its global pricing standard worldwide would be set in line with the prices in Hong Kong. The company said that the global pricing standard was similar to how other luxury goods like watches, jewellery or handbags are sold. Tariffs and taxes mean in practice that prices vary from market to market.

The Habanos festival saw the launch of a number on new lines, the Montecristo Open, Bolívar New Gold Medal and the Línea Maestra.

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.

27th February 2023

Cuba is struggling to produce the 0.4mn tons of sugar it needs from its 2022-23 campaign needed to deliver the quantities required for domestic consumption and export.

A report in Granma quoted Ángel Ríos, the General Director of Azcuba’s Productive Chain as saying that as of mid-February that there was a deficit of 95,000 tons against what was forecast. No figure was cited as to the overall production level to date.

The shortfall he said was a consequence of manufacturing delays caused in part by power plant breakdowns, a lack of fuel, tires, batteries and spares for transportation and cane cutting, an inability to prepare mills to start grinding on time, and financing difficulties arising from US sanctions. Unusually, Granma quoted him as indicating that migration, inflation, poor wages, and criminality were also taking their toll on the sector’s capacity to deliver.

Granma reported that of the just 23 mills involved in this year’s campaign (Background Cuba Briefing 7 November 2022) seven were experiencing problems. Two of the largest and most significant in terms of overall production, Urbano Noris in Holguin and the Antonio Guiteras plant in Las Tunas, were specifically reported to be facing labour shortages because of migration and an aging labour force.

The official publication quoted Ríos as saying that Cuba’s overall economic situation “marked by inflation” was also having an influence and that “production problems …. prevented workers from receiving decent wages and many leave.”  In addition, he said “the lack of a qualified workforce, especially intermediate managers, has had a negative impact, which had caused a lack of discipline and rigor. A group of important breakdowns, he noted, were associated with bad operating practices, while production “had been affected by fires in cane fields and sugar thefts committed by criminals.”

Asked about the problem of theft, he said that such incidents had “forced the directors of the centrals (mills) to concentrate on confronting criminal acts” in collaboration with law enforcement and local communist party militants. “The criminals have violated fences and warehouses, they have threatened the custodians and workers of the power plants, as well as the families of those who oppose them”, he told Granma, naming five mills in different provinces to have suffered in this way.

More positively, Ríos confirmed that some mills as planned will operate all year to make molasses to produce alcohol and spirits, offering workers “considerable income” benefitting the economy through tax contributions. This he said was enabling the mills to use the  income obtained from alcohol production to pay off debts contracted with cane producers, in order to encourage an increase in acreages. He also confirmed that some mills had associated plant producing animal feed from the residues of alcohol production.

Although the report provided few figures as to likely outcomes, Granma quoted the Azcuba Director as saying; “as the harvest is still young, we believe that we will be able to guarantee what is scheduled” although this may mean, he added, that the present harvest is extended to April or into May depending on weather conditions.

Last year Government took the decision to utilise fewer mills to grind cane, reducing the number from 36 and concentrating resources in fewer plants with the objective of obtaining greater efficiency. In 2022 just 0.47mn tons of sugar were produced. The 0.45mn tons planned for this year is divided between  the family food basket, tourism, manufacturing, and export.

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.

20th February 2023

A new law applicable to Cuban state enterprise is in preparation.  The document which is expected to be far-reaching is likely to be approved when the country’s National Assembly meets in December.

Reporting that discussions on a new business law are underway, the Cuban News Agency ACN quoted Deputy Prime Minister, Alejandro Gil, the Minister of Economy, and Planning (MEP), as referencing a call by former President Raúl Castro “to shake [up] socialist state enterprise”.

Speaking at a meeting of the Cuban Government’s Inter-Institutional Council, Gil said that the principles of future legislation relating to state enterprise will be guided by language in the country’s 2019 Constitution, and the economic and social guidelines agreed during the seventh Communist Party Congress.

ACN quoted Gil and Johana Odriozola, Vice Minister of the MEP, as saying that because of the “weight of the state company in the Cuban economy, as the main provider of goods and services, it must be distinguished by its efficiency and effectiveness.”

The legislation is expected to create a new approach to the organisation, motivation, responsibility, and future direction of state entities. Gil highlighted the importance of the debate and consultations that will soon take place across Cuba to inform thinking about the initial draft.

ACN reported that work has been underway since last year and has involved a survey of 646 business leaders of state enterprises “in search of a first consensus.” It also indicated that the date of presentation of the draft law to the National Assembly has been brought forward from what was originally planned.

Among the areas the new law is expected to address is the state business model that Cuba will need in future. ACN noted that it will define “the economic regime, autonomy, financial relations with the State, the participation of workers, their governing bodies …. management, social responsibility and control, and internal audit”. It will also establish the mission of state enterprises, their “governance, governing boards, OSDE (superior business management organisation), resource allocation, [and] powers to promote insertion international and business creation with foreign investment.”

In recent months, senior political figures from Cuba’s President downwards have stressed the need for Cuba’s inefficient, poorly managed, bureaucratic, and loss-making state enterprises, to operate on a decentralised, professionally-managed basis, making profits, taking independent decisions, and when relevant working with the non-state sector and foreign investors. At the same time, Cuba’s official media has been highlighting the experience of those enterprises that are well managed, responding to demand in the internal market, making surpluses, and in some cases developing their potential for export. 

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.

13th February 2023

President Díaz-Canel has been quoted in Granma as saying  that Cuba has the will to advance relations with the Vatican and continue building “with mutual benefit”, roads for “the solution of the expectations of both parties.”

The report which followed a meeting between Cuba’s President and  Cardinal Beniamino Stella, who was visiting Cuba as a Papal envoy,  did not however directly mention the Vatican’s hope that Cuba will offer an amnesty to many of those held after the widespread street protests that took place across Cuba in July 2021 (Cuba Briefing 19 July 2021).

Despite this, the President’s words were widely taken to be a reference to its ongoing dialogue with the Catholic Church about the impact of the arrests, prosecution, and jailing of Cubans since the protests. Earlier the Cardinal had told journalists that “the Pope greatly desires there to be a positive response” from the Cuban government to the requests of the Catholic Church.

During his 23 January to 10 February visit to Cuba which marked the 25th anniversary of Pope John Paul II’s visit to the island, Stella met with the Church’s leadership and congregation in Cuba, senior government and Communist Party officials, and spoke to the media.

A lengthy report of the conversation between the Cardinal and Cuba’s President published in Granma’s print edition on 9 February also referred obliquely to the Vatican’s  present efforts to encourage a dialogue with the US to resolve the two nations differences.

The official publication reported that during the meeting between the two men, Díaz-Canel emphasised the closeness between Cuba, Pope Francis, and the Holy See, noting that Cuba agreed with many of Pope Francis’ ideas; “on how to eliminate inequalities, on how to enhance social justice; (his ideas) against war, for peace, for concern for the environment.”

Thanking Pope Francis for his “criticism of the blockade”, Díaz-Canel was quoted by Granma as expressing gratitude “In the same line of reasoning [for] the efforts deployed by the current Supreme Pontiff” so that “there is a dialogue between the Government of the United States and Cuba, and that we can resolve in a civilised manner the differences we have.” Cuba’s President also recognised the closeness between Pope Francis and former President Raúl Castro.

In an address to the University of Havana attended by Cuba’s President, the Foreign Minister, Bruno Rodriguez, and other senior figures, Cardinal Stella stressed that “freedom cannot be subordinated to any calculation of interests, circumstances, waiting for better times.”

Cuba he said, “must be free of all interference,” while encouraging “its children to be free men and women,” to allow material and spiritual growth. Stella said that Cuba should “promote reconciliation and fraternity” from “diversity” and not “by similarity of ideas.” What was required, he said, was a “culture of encounter” that encourages the creation of bridges.

Speaking to the media after his address, Cardinal Stella, indicated that the Vatican wanted to see Cuba release those held following the street protests that took place on 11/12 July 2021. Pope Francis “very much wants there to be a positive response” from the Cuban government to the Church’s requests”, he told journalists.

The Catholic Church, he said, had sought in discussion with the Cuban Government an amnesty so that  “young people who at one time have expressed their thoughts … can go home.”

Stella who said that he had spoken to the Pontiff before traveling to  Cuba, was quoted as saying:  “I think the issue is there on the table … The Pope very much wants there to be a positive response, whatever it is called, amnesty, clemency.”

Stella says new dialogue with US must come soon

Asked about a possibility that the Pope might facilitate a new dialogue between the US and Cuba, Cardinal Stella said “”Not only is it possible, it must come. By speaking, solutions can be found, so the Church…lives with great inner longing, that those who have power can talk to each other, they can listen to each other.” “Hopefully it will happen soon and constitute an important step for the many advances that the Cuban people greatly need very much. There are things that must be done and done soon,” he told the media.

Cardinal Stella’s comments came a week after the US Chargé d’Affaires in Havana, Benjamin Ziff, told journalists that any return to the détente that existed  between Cuba and the US under the Obama Administration would be “difficult”  and that “the most serious obstacle to any improvement in the bilateral relationship” continues to be the Cuban government’s imprisonment of protesters and dissidents .

Speaking in Miami on 31 January, he told AP and the Miami Herald that although some measures had recently been put in place to bring families separated by the Florida Straits closer together, Washington did not see any easy return. “It’s hard to go back,” Ziff told AP. “The world has changed from the Obama era and now we have to deal with the world today.”

In his remarks Ziff suggested that the US found it difficult to deal with the island’s authorities, defining “US relations with Cuba as correct and pragmatic.”

Acknowledging that the dialogue  between the two governments had resumed on some issues, he stressed that the most important matter on Washington’s agenda was human rights. “That is our number one priority, to ensure that the Cuban population can have a future without repression and with economic hope,” he told AP.

The  US Chargé  however stressed that “the change in Cuba comes from Cuba, from the Cubans…the United States can support, can help, encourage, advocate, pressure, everything, but basically the future of Cuba depends on the Cubans.”

Photo by Simone Savoldi

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.

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.