Cuba to create agency to fight corruption “cancer”

HAVANA (Reuters) – Cuba’s National Assembly will set up a powerful new agency on Saturday tasked with fighting corruption, which President Raul Castro has called a “deadly cancer” plaguing the communist-ruled island’s economy.

In his regular Thursday spot on state television, Cuba’s top economic commentator Ariel Terrero said the Comptroller General’s Office, to be created through new legislation, will try to ensure that state revenues are properly used.

The office will replace the Ministry of Auditing and Control and be attached to the Council of State. It will have sweeping powers to audit and control all government and economic entities.

“This will … help avoid or limit the possibility (of corruption) and respond to corrupt acts,” said Terrero, who regularly comments on economic affairs in the state media.

Raul Castro, who took over the presidency from his ailing elder brother Fidel Castro last year, has vowed to make the struggling economy more efficient and productive. This includes cracking down on graft, he has said.

Cuba’s campaign against corruption in its society and economy has been a long one, with what leaders consider high stakes for the future of the communist system installed after Fidel Castro took power in a 1959 revolution.

Transparency International, a leading organization in the global fight against corruption, ranked Cuba 65th of 180 countries on its 2008 corruption index, better placed than most countries in Latin America and the Caribbean.

But fighting corruption is not easy on an island gripped by economic crisis where inequality is growing and the average wage of ministers and company managers is between $40 and $100 per month including bonuses.

One western diplomat said replacing the Auditing Ministry with the Comptroller’s Office was a “cosmetic” step, as most Cubans, from the humble to the privileged, struggle to make ends meet, often involving illegal transactions.

Diversion of goods to the black market and retail-level theft are so widespread that many people hawk their stolen wares in front of shopping malls.

SOCIALIST MORALITY

Former leader Fidel Castro once warned the country that corruption played a big role in the demise of the Soviet Union, for decades Cuba’s biggest economic benefactor, whose collapse plunged the Cuban economy into crisis in the early 1990s.

“Socialist morality must be preserved … We can’t let the idea get around that we can be bribed,” he said.

Current President Raul Castro, who served for decades as defense minister, has also spoken out often about corruption and its insidious effect.

“The deadly cancer has metastasized from our knees up to here (pointing to his chest),” he told national leaders in a closed-door speech in March 2006, according to a source who saw a video of the meeting.

In March of this year, Raul Castro took the dramatic step of replacing most of his cabinet, in part on grounds they were too cozy with foreign businessmen and lax in controlling graft beneath them.

Official information on corruption in Cuba is sparse but, in 2000, Attorney General Juan Escalona, testifying before a parliamentary committee, reported his office began the prosecutions of 5,800 white-collar criminal cases.

Foreign businessmen report that corruption at the very highest level of government is rare. But kickbacks are relatively common among state-run company managers and even more so at government offices where Cubans go to take care of housing and other problems.

“The other day I went to legalize my home and the housing director said ‘you have two choices, pay me $600 or wait two years,’” one Havana resident said.

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Hollywood Stars Visit Havana Amid U.S. – Cuba Thaw

HAVANA (Reuters) – Hollywood came to Havana on Thursday as Cuban writers and artists gave an award to Benicio del Toro, star of the 2008 movie “Che,” in a ceremony attended by fellow actors Bill Murray, Robert Duvall and James Caan.

Murray stole the show when he improvised a version of the song “As Time Goes By,” then jokingly passed around a hat, asking for money.

Their presence lent a bit of Hollywood glitz to warming U.S.-Cuba relations, and may have been the precursor for the making of a film in Cuba.

A spokesman for the group said del Toro was in town for the award, but that Murray, Duvall and Caan were working on a “research project.

When asked if he and his pals might make a movie on the communist-led island, del Toro told reporters: “That depends on the governments, on the American government.”

Because of the long-standing U.S. trade embargo against Cuba, Americans have been forbidden, with some exceptions, from visiting the island or doing most business there.

Hollywood stars such as Robert Redford, Arnold Schwarzenegger and director Steven Spielberg have come to Cuba in the past but cultural exchanges slowed due to restrictions imposed by former U.S. President George W. Bush.

The group’s spokesman said they were traveling under a license granted by the U.S. Treasury Department.

U.S. President Barack Obama offered earlier this year to “recast” relations with Cuba, which have been sour since the 1959 revolution that put Fidel Castro in power.

Obama has lifted travel restrictions for Cuban Americans and restarted immigration talks with Cuba that were suspended under Bush.

Last week, the United States said a Bush-era news ticker on the U.S. Interests Section building in Havana, which the Cuban government viewed as an affront, had been turned off.

Puerto Rican-born del Toro won acclaim here last year for his portrayal of Ernesto “Che” Guevara, an Argentine who fought alongside Castro in the Cuban revolution, in the title role of the two-part biopic “Che,” directed by American Steven Soderbergh.

The International Tomas Gutierrez Alea Prize, named for the late Cuban director who made the 1994 film “Strawberry and Chocolate,” “makes me feel small and proud at the same time,” del Toro said. “It’s an honor to win this prize.”

The other stars did not speak to reporters.

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Cuban MPs Insist on the Need of Saving Energy

ACN:

Cuban parliamentarians discussed on Tuesday the need of saving electricity, during a meeting of the Commission for Energy and the Environment, held as part of the 3rd ordinary period of sessions of the island’s Parliament.

Basic Industry Minister Yadira Garcia stressed the importance of preventing an excess of electric power consumption in the various territories.

She highlighted that local governments and State Central Administration Entities must demand the implementation and fulfilment of the energy saving programs, by way of mechanisms that will continue to be improved, she said.

During the session held at the Havana’s Convention Center, Garcia pointed out that several workplaces that are not implementing the saving mechanisms have been ddetected.

She announced that, starting August 1st, the rigor of the measures implemented some two months ago will increase, some of which could lead to the temporary closing of production facilities.

The Basic Industry Minister stressed the importance of self-control at enterprises with respect to energy consumption, which she suggested should be carried out several times a day in order to determine in what moment of the production process more electricity was spent.

Garcia added that 50 percent of the fuel Cuba consumes is used to produce electric power, hence the importance of a rational use of energy, both in governmental and private sectors.

She explained that there was an excessive use of electricity in July, which also happened in April and May, when over 40,000 extra tons of fuel were used. This led to the readjustment of plans and the implementation of new saving measures, like the turning off of air-conditioning equipments at certain hours of the day in offices.

During the session the deputies also analyzed the situation of the National Electricity and Energy System and the use of renewable energy sources, among other topics.

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Russia signs contracts for oil operations in Cuba

HAVANA, July 29 (Reuters) – Russia and Cuba have signed contracts that “set the bases” for Russian oil company Zarubezhneft to search for oil in Cuba’s part of the Gulf of Mexico, Cuba’s state-run press said on Wednesday.

In its online edition, Communist Party newspaper Granma said four oil-related contracts had been signed during a visit on Tuesday by Russian Deputy Prime Minister Igor Sechin to the island that was his country’s close ally during the Cold War.

Granma, without providing details, said the oil pacts between Zarubezhneft and state-owned Cuba Petroleo “set the bases for work in (Cuba’s) exclusive economic zone in the gulf.”

Cuba said earlier this year that Russian companies had been given their pick of 15 blocs to lease in the Gulf of Mexico, but there was no mention of a lease signing in Granma or other news reports on Wednesday.

Russian news agency RIA-Novosti quoted Sechin as saying “we consider that an outcome of this cooperation will be new opportunities both for Cuba as well as Zarubezhneft.”

Cuba has said it may have 20 billion barrels of oil reserves in its offshore fields, but only one test well has been drilled.

That well, completed in 2004 off Cuba’s northern coast near Havana, showed traces of oil, according to the operator, Spain’s Repsol-YPF (REP.MC: Quote, Profile, Research, Stock Buzz), but the company has not yet drilled a long-promised second well.

Cuba has divided its offshore into 59 blocs, 21 of which are under contract to a total of seven companies.

The U.S. Geological Survey has estimated that Cuba has about 5 billion barrels of oil and 10 trillion cubic feet of natural gas offshore.

Russia also granted $150 million in credits for the delivery of Russian agriculture and construction equipment that will be used in areas hit hard by three hurricanes last year, news reports said.

Russia and Cuba have been working to revitalize relations that went cold after the 1991 collapse of the Soviet Union.

Sechin also visited Cuban allies Venezuela and Nicaragua before his stop in Havana.

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Cuban Parliament Commissions Starts Sessions

Prensa Latina:

The members of the 12 Cuban Parliament’s permanent commissions are meeting separately Tuesday and Wednesday, prior to the ordinary session of the current mandate, slated for August 1.

According to the agenda, more than 300 legislators will analyze as common issues the impact on the country of the international economic and financial crisis, and adjustments to the national economy plans derived from that world situation.

Also on the list are the results of the first measures approved by the government in the economic-social sectors to alleviate such effects, mainly saving fuel, substituting imports, and reducing expenses.

Each one will particularly debate aspects concerning to the case of Constitutional and Judiciary Affairs that must get ready bills of the General Comptrollers of the Republic and the National System of Museums.

Both texts will be presented for consideration of almost 600 deputies on August 1, to be approved in the third ordinary session of the seventh legislature.

Commissions on Economy, Education, Culture, Science and Technology will be also approved by their respective decisions on these two legislatures.

Cuban legislators expect to hear Thursday and Friday reports from the Agriculture and Food Industry Ministries.

A report from the National Housing Institute, one of the most affected sectors last year after the passing of three hurricanes of great intensity that caused losses to the country close to $10 billion, is also on the agenda.

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Cuba ponders reduced state role in economy

HAVANA (Reuters) – Cash-strapped Cuba should consider putting more of its state-run economy in the hands of producers, as President Raul Castro has done with agriculture, the country’s top economic commentator said on Tuesday.

Ariel Terrero, during his regular Tuesday appearance on state-run television, did not call for private management, but suggested that sectors such as food services and retail could perform better if they were run in a new way.

“In the Cuban economy, there’s a need to look for formulas more dynamic, more intelligent, of understanding property, of running a business, of running a cafeteria,” he said.

About 90 percent of communist-led Cuba’s economy is under state control.

Terrero pointed to Castro-led reforms in the island’s agriculture that include decentralization of decision-making, greater emphasis on private cooperatives and farms, and the leasing of state lands to some 80,000 individuals.

“The leasing of state lands, which in the end is the placing of state property in the hands of producers, could be applied in other sectors, for example food services, retail trade, and other areas where really it is impossible, given the diversity and breadth, for the state to administer directly,” he said.

Terrero, who regularly comments on economic affairs in Cuba’s tightly controlled state media, said big, concentrated operations such as nickel plants, sugar mills, hotels and the power grid were not the same as an appliance repair shop or a cafeteria.

“I think this diversity requires new thinking about the concepts and manner of understanding property in the Cuban economy,” he said.

Raul Castro replaced ailing brother Fidel last year and since then has pushed for a more efficient and streamlined government and economy.

He replaced his economic Cabinet in March amid the worst financial crisis Cuba has gone through since the demise of former benefactor the Soviet Union in 1991.

Terrero said the current difficulties could open the way to reform, pointing out that in the 1990s crisis the economy was opened up to foreign investment, tourism and some small family businesses.

GOVERNMENT REPORT CONCURS

His comments follow a recent government report seen by Reuters that suggested similar changes.

The report by the Economy and Planning Ministry blamed hurricanes, the U.S. embargo and world financial crisis for a cash shortage that has forced cutbacks in imports, budgets and energy consumption.

But it also said long-standing structural problems were to blame.

“State-run socialist companies must be efficient and for that what they need for their optimal performance must be guaranteed,” the report said.

“The remainder of the economy must adapt to a form of property better suited to the resources available,” it said.

Many Cuban economists have long argued that the state should focus on large companies and wholesale trade and get out of the retail business, which it has monopolized since 1967 and which the government admits is plagued by petty theft, inefficiency and abysmal service.

Cuba expert Daniel Erikson at the Inter-American Dialogue think tank in Washington said it appears the Cuban government may be considering such a move.

“What this tells me is that the Cuban government is once again wrestling with the central dilemma of how to adapt the island’s outdated economic model to changing realities,” he said.

“At bottom this is a debate about reducing the role of the state and allowing controversial free market practices to take root,” he said.

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Airports Queue to Fly to Cuba

WSJ.com:

U.S. airports are pressing the government to broaden the list of ports of entry allowed to handle flights to and from Cuba, even though the White House is proceeding cautiously with changes in travel policy.

In a recent letter, Peter Horton, the director of Key West International Airport in Florida, urged the Treasury Department to add the facility to the list of three big international airports in Miami, Los Angeles and New York. Earlier this year, Tampa’s airport made a similar request. And airport officials in Houston, already one of the biggest gateways between the U.S. and Latin America, say local business leaders have pressed them to push for access to Cuba, too.

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Associated PressA new Key West airport departure terminal, opened in February, is part of a big expansion of passenger facilities.

In April, the Obama administration eased restrictions on travel and money transfers to the island by U.S. citizens or residents with family in Cuba. The recent requests are an effort by cities and airports to position themselves ahead of any further loosening of travel policy.

“Cities are looking to get ready for any other moves that could mean more travelers flying back and forth between the two countries,” said Kirby Jones, a consultant in Bethesda, Md., who advises companies on business with Cuba.

A spokeswoman said the Treasury couldn’t comment on specific requests for changes to existing travel policy, but that requests were reviewed when received.

Under Treasury rules, travel to Cuba by Americans is restricted to family members of Cuban citizens, government officials, academics and others who qualify for special licenses to travel there. About 50,000 American travelers, most of whom traveled by charter flights, received licenses last year.

If the travel ban were lifted, eventually as many as one million Americans a year would visit Cuba, according to the U.S. International Trade Commission, a federal agency. Already, charter operators say the changes earlier in the year have caused a spike in the number of Cuba-bound passengers.

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“There’s a lot of pent-up demand,” said Tom Cooper, chairman of Gulfstream Air Charter Inc., a Fort Lauderdale, Fla., carrier that has seen a 25% increase in passengers on the flights it operates between Miami and Cuba.

For decades, travel-related businesses have decried U.S. restrictions, designed to punish Cuba’s Communist government, because the rules prevent what could be a lucrative market from developing. Last week, Orbitz Worldwide Inc., the online travel agency, emailed customers asking them to sign a petition urging the U.S. government to lift the ban on travel to and from Cuba outright. The message cites bills, introduced earlier this year in Congress, that propose to do that.

The Obama administration, despite the easing of policy since it took office, hasn’t prodded lawmakers to make the bills a priority. Both President Barack Obama and Secretary of State Hillary Clinton have said that any further changes in travel policy, or the broader and longstanding economic embargo against the Cuban regime, would depend on whether Havana takes steps toward democracy.

Still, airports angling for future Cuba service say they need to get ready. Mr. Horton, the Key West airport director, said the island’s proximity to Cuba, plus the sizable Cuban-American community living nearby, are factors that would sustain a market for charter flights. The airport has been in the process of expansion and renovation this year.

The airport’s letter to the Treasury was accompanied by a letter from Cape Air, an East Coast carrier that flies to Key West, expressing interest in flying to Cuba.

If demand for flights were to increase because of further lifting of restrictions, Mr. Horton said, “the last thing that we want is to get lost in the shuffle as people scramble to try to fly there.”

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U.S. turns off Havana news ticker that angered Cuba

HAVANA (Reuters) – The United States has turned off a news ticker at its diplomatic mission in Havana that long had irritated the Cuban government, the U.S. State Department said on Monday, in another sign of efforts to improve relations with Cuba.

The five-foot-high (1.5-meter) news ticker ran across 25 windows on the outside of the fifth floor of the U.S. diplomatic mission’s building on Havana’s busy seaside Malecon drive. It streamed news, political statements and messages blaming Cuba’s problems on the country’s communist system and socialist economy.

The ticker infuriated Cuban President Fidel Castro when it was turned on by former U.S. President George W. Bush’s administration in 2006. President Raul Castro took over from ailing elder brother Fidel last year.

After the United States launched the ticker, Cuba erected obstructions so it could not be seen and put up anti-U.S. billboards. Cuba took down those billboards earlier this year.

State Department spokesman Ian Kelly told reporters in Washington that the news ticker was turned off in June.

Kelly said the ticker was “really not effective as a means of delivering information to the Cuban people” and, together with the earlier Cuban billboards, was “not serving the interests of promoting a more productive relationship.”

“It was evident that the Cuban people weren’t even able to read the billboard because of some obstructions that were put in front of it,” Kelly said.

The turn-off of the news ticker comes amid moves by U.S. President Barack Obama to ease nearly half a century of enmity between the United States and Cuba following Fidel Castro’s 1959 revolution.

‘BURY IT’

“Like other Bush initiatives, (the ticker) caused lots of fanfare in Miami (home to many Cuban-Americans) and very little impact in Cuba, and President Obama is right to bury it,” said Phil Peters, a Cuba expert at the U.S.-based Lexington Institute think tank.

US interest section in Havana

The United States broke diplomatic relations with Cuba in 1961, but since 1977 the two countries have maintained Interests Sections — diplomatic operations that are not full embassies — in each other’s capitals.

Earlier this month, U.S. and Cuban officials held their first talks since 2003 on Cuban migration to the United States, a step U.S. officials said showed Washington’s desire to engage constructively with the communist-ruled island. They also discussed how to ease restrictions on their diplomats traveling outside Havana and Washington.

The Obama administration this year also lifted restrictions on Cuban-Americans traveling to the Caribbean island and sending remittances to family members.

But Obama has made clear he will keep in place the 47-year-old trade embargo against Cuba until the Cuban leadership moves to improve political and human rights.

Cuba has expressed an interest in broadening the immigration talks to include drug trafficking, human smuggling and disaster preparedness.

The U.S. Interests Section news ticker in Havana often sought to cast blame for everyday problems experienced by Cubans on the communist authorities.

“Some go around in Mercedes, some in Ladas (a Russian car), but the system forces almost everyone to hitch rides,” read one message, playing on a common complaint that there are few buses and that Cubans need government permission to buy a new car.

Furious about the ticker, Fidel Castro accused the U.S. mission of becoming “headquarters of the counterrevolution,” which he said violated diplomatic protocol.

He ordered a parking lot in front of the building to be dug up and 100-foot-high (30.5 meter-high) flags installed to block the ticker from view.

He also marched a million people by the mission in protest, erected billboards around it depicting Bush as allied with anti-Castro terrorists and decreed there would be no more contact with U.S. diplomats in Havana as long as the ticker remained on.

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Cubana Airlines to Inaugurate London-Havana Route

DTC (Havana) – Cuban tourist authorities presented Cubana de Aviación’s new London-Holguín Havana route in Denmark.

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Operations will begin on July 29, according to the information provided to a score of representatives of travel agencies and tour operators in that European country.

The Cuban officials also briefed participants about new tourist products and the second stage of the tourist campaign Viva Cuba in that market.

A 258-seat IL-96 plane will fly every week between Havana and London, providing travelers with a new route not only from Great Britain, but also from Scandinavia.

Efforts are aimed at attracting more vacationers to Cuba’s tourist destinations.

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Cuba’s Revolution Day Brings Sobering Celebration

HOLGUIN, Cuba  —  Cuba’s economy has been hammered by the global credit crisis, U.S. relations have not improved much under President Barack Obama and economic reforms that were supposed to ease life on the island have been slow to come.

Cuban President Raul Castro seemingly has little positive to report in his speech Sunday marking Revolution Day, the communist country’s top holiday. In fact, he is likely to call for more sacrifice from Cubans in the face of even tougher economic times ahead.

“He was working to improve things, but with all that’s happened with the economy in the world, the effect has been minimal,” said Silvia Hernandez, a retired commercial analyst for a state-run firm in Holguin, the island’s fourth-largest city where Castro is leading celebrations.

Castro already has implored Cubans for more time as he implements “structural changes” to a struggling economy controlled more than 90 percent by the state. He also has said he’d be willing to meet with U.S. leaders over any issue — including the country’s political prisoners and human rights record.

Officials from Cuba and the U.S. discussed immigration this month for the first time since 2003. The Obama administration lifted restrictions on Cuban-Americans who want to travel or send money to the island. But Washington has said it wants to see small political or economic reforms before going further.

“The other side doesn’t want to do anything,” said 73-year-old housewife Elena Fuentes. “We’ve been like this for 50 years. That’s too long. They talk about ‘change,’ but the change we want is for things to get better with the United States.”

Others say improved relations aren’t up to the U.S.

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“Where our country is going, that is up to us,” Hernandez said.

Revolution Day marks July 26, 1953, the date Cubans consider the start of the revolution, when Fidel and Raul Castro led a rebel attack on the Moncada army barracks in the eastern city of Santiago. The assault was a disaster. Many rebels were killed, and others, including both Castros, were imprisoned. But the guerrillas went on to oust dictator Fulgencio Batista on New Year’s Day 1959.

In the past, Fidel Castro would speak for hours on Revolution Day. But his four-star army general brother, who took over for the ailing Fidel in February 2008, has a more efficient, military-like style. And Raul Castro scaled back celebration of the revolution’s 50th anniversary in January after three hurricanes caused more than $10 billion in damage across the island, and tough economic times began to set in.

More recently, the government has ordered lights and air conditioners turned off at banks, stores and other government institutions and closed state-run businesses and factories early to conserve oil — even though Venezuela sends the island about 100,000 barrels of crude a day at favorable prices.

Farming and land reform have bolstered production of vegetables, but government money problems have delayed imports of other food, causing shortages of basic staples such as cooking oil.

Other reforms have been implemented only sporadically. Castro has failed to keep his promises since taking power from his brother, said Oscar Espinosa Chepe, a state-trained economist who became a dissident anti-communist and was jailed in 2003.

“He knows times have changed but … he hasn’t confronted the very strong inertia within the government,” said Espinosa Chepe, who has since been granted provisional freedom for health reasons.

Cuba’s free health care and subsidized food and housing don’t make belt-tightening any easier in a country where nearly everyone works for the state, and the average wage is less than $20 per month.

“More steps against the crisis, more adjustments, aren’t going to be easy,” said Reina Delgado, a 70-year-old retiree.

Bicycles and horse-drawn wooden carts are a more common means of transport than cars in Holguin, a city famous for its well-manicured parks. The highway leading to Havana, 480 miles (760 kilometers) to the northwest, is cluttered with freshly painted billboards featuring Raul Castro extolling hard work and socialism.

In one front yard, residents dressed a pair of straw men in olive-green rebel uniforms.

Seated in her sweltering Holguin living room, an army lieutenant colonel said she needed special permission to talk to an American reporter.

“I can say what I want, but not to foreigners,” she said, deferring to Hernandez, her neighbor, to answer questions about the state of Cuba this Revolution Day.

“Raul doesn’t always have positive news,” Hernandez said. “But the people support him.”

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