Cuba turns its back on foreign travel agencies in Cuba concerning Cuban Americans

TheCubaBlog:  Ever so quietly the Cuban government began a campaign to lock foreign travel agencies registered inside and outside Cuba out of the lucrative Cuban American travel market. From early November agencies reported abruptly canceled services for clients arriving in Havana´s terminal 2. Initially the motive was that their receptive agents in Cuba, the likes of CubaTUR, Cubanacan or Ecotur could not provide services in terminal 2 anymore and thus all bookings were cancelled. Some enterprising agents quickly began confirming services for Cuban Americans in terminal 3 and advising their clients to simply take the short jaunt between the two airports by taxi or on foot. This scheme, apparently not considered by the Cuban authorities, was quickly scuttled when a later “orientation” was transmitted by Ministry of tourism officials that “no services sold by a foreign agency would be honored if the tourist holds a U.S passport”. A UK agency owner based in Old Havana since 1999 said “this is highly ironic; many of us who have been here for years trying to make ends meet assisting the Cuban tourism ministry in increasing numbers of individual tourism (more difficult to promote than the mass package deals sold from Canada and Europe) were waiting in anticipation of increased sales from the newly relaxed laws on Cuban American travel by the Obama administration and now we´ve been shut out”

It is thought that the bigger picture is that, in fact, the Cuban government wants the Cuban American market for themselves and, by shutting out travel companies from making bookings or pre-reserving services, Cuban Americans would be forced to pay in Cash (credit cards or wire transfers from US banks are banned from use in Cuba) in Cuba and thus directly into government coffers.

This is yet another sign that the Cuban government holds little if any regard for the companies and agencies that have assisted the island to slowly increase tourism numbers from the low 100´s of thousand in the early 90´s to today’s 2+ million and that, at any opportunity, they´ll restrict sales in sectors to shut out collaborators in favor of direct income.

This latest move by the government is being watched closely by Canada´s Transat, one of Canada´s largest operators, who package holidays for over 200,000 Canadian’s each year to Cuba. One person who works for the company but requested not to be named said: “we´re watching their moves on this issue, we´ve already seen that they are promoting direct hotel bookings and car rental services on their government webpage and, at the beginning of the year, some Cuban run hotels from Cubanacan were publicizing a direct reservation portal for their hotel rooms to our travelers. The issue of governments trying to set up and run their own travel businesses to shut out major operators is a rather Taboo subject in the industry and, is not taken lightly. Cuba needs to understand that the Caribbean is a big place”

It remains to be seen if tourism officials will reverse this action or whether it’s a taste of things to come. It is already known that in the late 90´s, the government toyed with the idea of setting up a proprietary reservation network but quickly cancelled the venture when international operators began to question them on the issue.

Could they now think it’s time? – Travel to Cuba


CUC – Cuban Convertible Peso to be eradicated by Cuban Government

n another sign that Cuba´s economy is walking a financial tight rope the government is set to abolish the CUC or Cuban Convertible Peso by March 2010.

Introduced as the brain child of Fidel Castro in a measure to eradicate the U.S Dollar and also reduce the value of remittances, the CUC was an effective method to acquire up to 20% of all foreign currencies entering Cuba by reducing their value against the printed currency in addition to implementing a 10% penalty specifically against the USD from where most remittances emanate.

The CUC is pegged at a fixed 8% more valuable than a USD despite have no international exchange value. The printed note, introduced purely to cream this 8% plus a further 10% in government imposed penalties from remittances sent from the US directly into government coffers. For a better explanation of this see our article from August 12th 2009.

The plan is to abolish the CUC in order to oblige all of the current currencies holders to declare their holdings and to “start a fresh” with yet another exchange rate increase, this time set to be over 60% against all major currencies. By using this strategy Cuba will be able to re-price and re-jig its economy and essentially eradicate its debt with the currencies holders. A more sinister side to this is the blocked holdings of thousands of foreign businesses and individuals who hold accounts in Cuba and who will find themselves with bank accounts holding an extinct currency and whose exchange rate for the “new-old” currency will wipe out up to 95% of their supposed deposits overnight.

How does the Cuban Government plan to do this?

Well, the plan is to reuse the Cuban Peso, print billions of new notes and then peg the Cuban Peso (used today purely to pay wages and whose value today is 24 Cuban Pesos to the USD) 1 to 1 against the CUC. This would devalue Cuba´s debt to CUC currency holders by 60-95% leaving them with a currency whose use and value is only symbolic but can be explained “as a benefit” by proclaiming the Cuban Pesos increased value and thus symbolically increase salary payments to Cuban people. It is unsure if as a token gesture the government will verbally modify the Cuban Pesos value to slightly ease the blow to those holding the currency today.

What does this mean to foreigners, debt holders and those holding a rumored 300 million CUC (260 million USD) in blocked bank accounts?

Quite simply, these accounts and the currency in them will become obsolete and be replaced by the Cuban Peso at anything from 5 to 20 cents on the dollar. It will also mean that outstanding unpaid bills, contracts for imported goods and essentially the whole foreign exchange will be devalued by similar percentages.

The plan to eradicate the CUC will be heralded as a move to increase the values of an every day Cubans Salary and make the Cuban Peso “more valuable” in order to gain national support for the move which will be greeted with open arms by those Cubans being paid 300-400 Cuban pesos per month but, as any economist knows, the value of a currency is only that related to its ability to buy products. By pegging the Cuban Peso at say 8 Cuban pesos to one dollar this would achieve two objectives. The first is that Cuban salaries will technically be higher meaning instead of earning an equivalent of 10 USD per month Cuban´s who work will have about 60% more buying power. The second is that those holding the CUC today, essentially those with remittance savings and the aforementioned foreign account holders will pay for this stimulus by losing 60% of their assets. Assets touted today to be over 1 billion CUC or 970 million USD which the day after will represent one third of its value.

The date this is set to take place is obviously a closely guarded secret to obvert a mass exodus from the CUC but those with the blocked accounts can only sit and watch their money evaporate overnight. – Cuba unleashed

Cuba Makes Some Changes to Allow some Forms of Private Property

The Independent: Private holiday homes are on sale to foreign buyers for the first time in 50 years. For the time being, foreigners can only lease property for 75 years, but that it’s a huge change from the past.

For a communist country, Cuba has marketed itself pretty well over the years. It’s almost impossible to hear the island’s name without thinking of white rum, cigars, salsa, Ernest Hemingway and streets lined with battered 1950s American cars.

Cuba beach property

Cuba beach property

It’s also done a pretty good job with tourism. After decades of isolation, the government began promoting the island’s beaches and stunning crumbling capital city, Havana, to international visitors around 15 years ago. And despite concerns over its human rights record, it has become one of the most popular destinations in the Caribbean, with over two million visitors each year.

The island’s communist status, along with the trade restrictions imposed by the US government since 1959, have prevented large-scale investment by overseas companies. However, that may be about to change. One of the first things President Obama did on taking office this year was to signal a thaw in relations with Cuba.

Change has come to the country; private holiday homes are on sale to foreign buyers for the first time in 50 years, Cuban exiles can now travel freely from the US to visit their former home, and trade and investment restrictions are expected to be reviewed. Such moves will undoubtedly spark a rush from developers to buy up Havana’s colonial-style buildings and beautiful beachfront plots for hotels, apartments and holiday resorts.

The first of these is already underway. British company Esencia is building a residential golf development, The Carbonera Club, in the Varadero region. “Cuba is a wonderful country with great cultural significance and potential,” says chief executive Andrew Macdonald. “We didn’t base our business projections on America relaxing restrictions, but it’s an important step and makes it an exciting time to be in Cuba.”

It’s taken Macdonald six years to get permission for the project, but he is seeing interest from investors all over the world. Hollywood superstar Jude Law, pictured, has reportedly fallen in love with Cuba, and plans to buy in the new development. “Ours is the first residential resort sanctioned by the government and offers a mix of golf, sailing and access to the best beaches in Cuba,” Macdonald says.

The project will offer around 900 apartments and villas, with design input from Sir Terence Conran, plus a PGA golf course, hotel, spa and marina. Apartments start at £77,500 and rise to £1.1m for villas, but this doesn’t get you the freehold. “Foreigners can only lease property for 75 years, but I expect the law to change in time,” says Macdonald, who believes his will be the first in a wave of residential projects should the political situation alter.

That could be a slow and difficult process, according to Ian Taylor MP, chairman of the Cuba Initiative, a non-governmental body set up to facilitate British investment in Cuba. “Cuba is complicated, but there have been a lot of changes since the 1990s,” he says. “It’s inevitable that tourism is one of the first areas of growth and investment.”

Taylor admits there are issues with property ownership, and that the conditions of infrastructure are poor, especially the roads and rail network, but he says the Cuban government is keen to encourage foreign finance and that things will improve.

“Cuba has enormous potential and will be attractive to investors if it does open up, but you can’t make any assumptions that the political system will change. Any investment needs to be made within the context of the Cuban government.”

Cuba: Buyer’s guide

* Private property ownership in Cuba is prohibited, people have the right to swap homes but not to buy or sell.

* Non-nationals can only own designated property via non-renewable, 75-year leases. Ownership and residency issues are complex, so don’t be tempted to buy private homes.

* Cuba is in the centre of the hurricane belt and has been badly hit several times in the past few years.

* The political situation is still uncertain, so this is not an investment for a novice or the risk averse. – Buy property in Cuba

Cuba’s Trade Deficit Goes Sky High in 2008

Reuters: The trade deficit jumped to 65 percent during the last year due to several factors, including the three hurricanes that affected the country and the fall of their nickel exports.

Cuba’s trade deficit soared by 65 percent in 2008, driven by a doubling in the value of oil imports, higher costs of food imports and a decline in key export nickel, according to a government report released on Tuesday.

Exports totaled $4 billion, similar to 2007, while imports increased 41 percent to $15.4 billion, leaving a deficit of $11.4 billion, the National Statistics Office reported on its web page

Oil-rich Venezuela saw exports to its socialist ally soar to $5.3 billion from $2.9 billion in 2007 as it increased oil shipments and prices peaked, making the South American country by far Cuba’s most important commercial partner.

Cuba’s arch enemy, the United States, also benefited from higher prices as food exports, allowed since 2000 under its long-standing trade embargo, hit a record $860 million, compared with $608 million in 2007.

Despite trade sanctions in place since 1962, the U.S. held its ranking as the island’s fifth-largest trading partner.

China remained Cuba’s second partner at over $2 billion, followed by Spain and Canada as in recent years.

The trade data has to do with the trading of goods and does not include key income sources such as tourism and the export of medical services, primarily to Venezuela.

Earlier this year, the statistics office said Cuban exports of services grew by 6.2 percent to more than $9 billion in 2008, consolidating their position as Cuba’s biggest source of foreign exchange.

Cuba said it received $2.4 billion from tourism and related activities in 2008.

But nickel exports to Canada, Europe and China fell to $1.5 billion from $2.2 billion in 2007.

Last year’s poor economic performance, attributable in part to three devastating hurricanes and the global financial crisis, has forced Cuba to severely cut imports this year, postpone payments to creditors and impose austerity measures such as forced reductions in power consumption. – Hotel booking and budget accommodation guide in Cuba

The opening of Cuba will put Keys at risk of mosquito-borne illnesses


There is little doubt that travel to and from Cuba is on the horizon. Whether this will be good or bad remains to be seen. There is plenty to be said about the benefits of opening the gates and how it will give a much-needed boost to the local economy. However, this being paradise and not Eden, you might expect a few problems to arise from all the back and forth travel.

Outside Cuba, information regarding the presence of mosquito-borne diseases in that island country is essentially nonexistent. We can speculate that dengue and West Nile virus are present, and know from history there were devastating yellow fever epidemics in Cuba prior to 1900. That is when Maj. Walter Reed, a U.S. Army physician, and his team confirmed that yellow fever is transmitted by mosquitoes. Between 1867 and 1888, Key West suffered nine yellow fever epidemics without knowing mosquitoes were the cause. Despite the development of an effective yellow fever vaccine, and its commercial use beginning in the 1950s, non-vaccinated populations in Central and South America continue to be at risk.

The only thing preventing a recurrence of epidemics of mosquito-borne diseases in this country is mosquito control. All the mosquito species that were responsible for the great epidemics of the past still are with us today. We also have a very susceptible human population. The causative agents commonly are transported through the Keys via infected birds and humans. Infected travelers arrive almost daily at the Miami airport. Some are showing signs of illness while they are clearing through Customs and are detected. While others are in the early stages of the infection and show no symptoms of illness. They get through Customs without being detected and proceed to their destinations, where they may be bitten by a mosquito that then can spread the disease to unsuspecting individuals in the community.

This is where mosquito control comes into play. The causative agent, susceptible humans and the mosquito all are present in the same area, which constitute conditions that are required for an outbreak of a disease. In this case, the mosquito usually is the easiest to remove from the equation, thereby interrupting and, hopefully, preventing the occurrence of an outbreak.

Many of the very serious mosquito-borne diseases seem to originate in Africa. This is the case of an exotic mosquito-borne viral disease known as chikungunya, which was first isolated from the blood of a febrile patient in Tanzania in 1953. Chikungunya is a serious disease similar to, but more debilitating than, dengue. In the language of the Makonde people of Tanzania, chikungunya is derived from the word meaning “that which bends up.”

According to the U.S. Centers for Disease Control and Prevention, chikungunya virus has since been cited as the cause of numerous human epidemics in many areas of Africa and Asia, and most recently in Europe. The epidemics in Europe occurred in two neighboring villages in the province of Ravenna, Italy. The two villages were separated by a slow-moving stagnant river and lock system that produces large numbers of mosquitoes, including the Asian tiger mosquito that was the vector species in this case.

An excellent example of how such diseases are spread can be illustrated by the way chikungunya was transported from India to Italy. A male resident of one of the villages in Ravenna traveled to the chikungunya-active Kerala state in India during June of 2007. He had two episodes of fever in late June 2007. While ill, and back in his home village, he visited his cousin, who became ill on July 4. By Sept. 21, 2007, 292 chikungunya cases were identified within the transmission zone. However, by the end of August, cases were reported with no known exposure in the two villages. This indicated that local transmission in adjacent areas was probably fueled by the dispersal of infective mosquitoes.

Are the Keys at risk? Absolutely. According to the Centers for Disease Control, there have been at least 38 confirmed cases of chikungunya in travelers to the U.S. during the past three years. One of these cases occurred in Volusia County, Fla.

In addition to being a seasoned medical entomologist, I also have a master’s degree in epidemiology from Yale University School of Medicine. As such, I follow the spread of mosquito-borne diseases and I feel that our greatest potential vulnerability in the Keys will come when travel is resumed between Key West and Cuba. The risk could be lessened if strict procedures are followed at ports of embarkation in Cuba and entry ports in the Keys. These measures could prevent the entry of disease-carrying mosquitoes and travelers that are infected with a disease organism such as chikungunya virus or any other mosquito-borne disease causative agent. – Best selection of cuba travel products

Cuba’s so hot it’s cool: Island’s look ranges from quaint retro to new and upscale

Boston Herald:

Tell friends you have just been to Cuba, and depending on the circles in which you travel, you may be rewarded with a lot of envy. Cuba is hot, and we’re not talking about the tropical weather.

The old cars still on Cuban streets decades after they disappeared into junkyards elsewhere intrigue and delight some. Curiosity about a neighboring country that is the final American Cold War adversary certainly sparks interest.

Forbidden fruit is another factor. Because of restrictions imposed by the U.S. government, Americans are not free to travel to Cuba as they are to nearly any other country in the world. You must fit into narrow categories to legally qualify and receive a Cuba travel license from the U.S. Treasury Department.

The only direct air service between the United States and Cuba involves charter airline flights that whisk you from Miami to Havana in 45 minutes. That is how 26 other Americans and I, our Treasury Department licenses tucked into our hand luggage, recently made the trip on a humanitarian mission.

In as long as it takes to fly from Milwaukee to Chicago, we were on the ground in Havana after an overnight stay in Miami, and quickly thrust into a country and society that confirmed some of our preconceptions and exploded others.

The biggest false myth is that Cuba, the Caribbean’s largest island, has been frozen in time since the Castro brothers assumed control of the government on New Year’s Day 1959. It’s in a time warp, with street life looking like old movies from the 1950s and ’60s, a surprising number of writers and travel industry folks will tell you.

Wrong. Just as many of those old cars have Russian diesel or Japanese replacement engines in them, Cuba’s quaint vintage look is not much more than skin-deep.

The interiors of two big hotels built in the ’50s, the Habana Libre and the Riviera, do appear to be forlornly stuck in time. The Libre opened as the Havana Hilton in 1958, and when dictator Fulgencio Batista fled the island later that year, the Castro-led revolutionaries moved in to make it their headquarters.

Very little appears to have changed in the intervening 50 years. Photos on the lobby walls show the olive green-clad fighters lounging on the furniture, documenting the lack of a decorating update.

The Riviera, built by American mobster Meyer Lansky in ’57, epitomized the Mafia influence on the island, and its lobby and adjoining outdoor swimming pool have a retro appearance and feel that is cooler than the Habana Libre’s. Lobby wall photos chronicle the old entertainers who once performed at or stayed in the hotel. The casino closed with the arrival of the Castros, and the cabaret space appears to have changed little.

But Havana also boasts new upscale hotels, including a series of beautifully appointed boutique lodgings that are being opened on the narrow streets of the old city.

New cars, including vans and some sport utility vehicles, are on the road, with Hyundai appearing to have captured the largest share of the market. New articulated buses built in China cruise through Havana, providing public transportation.

The old cars are easily divided into two categories. Probably half of them are boxy and tinny Russian-made Ladas, a vestige of the Soviet Union’s close relationship with Cuba for more than 30 years. Ugly when they rolled off the assembly line, they are now rolling and rusting eyesores.

But the flip side of the coin is the incredible array of pre-revolution vehicles dating back to World War II that continue to provide transportation on the island. Most are American-made, with a preference for flashy fins, but ancient European cars are also still in use.

The oldies can be seen in all degrees of disrepair and restoration. Some are on the road for purely utilitarian purposes; others are clearly being maintained with car-collector loving care. A brand of taxis exclusively features well-restored old models, many of them convertibles.

Traffic watching on the curb of the Malecon, the busy thoroughfare running along the Havana seawall, provides some of the best entertainment on the island. And picture an Edsel loaded with people flying toward you on a divided four-lane highway in the country. You don’t have to be a car buff to be tickled by that.

The U.S. may have a 47-year-old commercial and financial embargo against Cuba, but in today’s shrunken world, nobody can impose a cultural embargo. Havana residents are current and fashionable in their appearance, right down to having the right tattoos in the right places. Move them and their wardrobes to any American city with a sizable Latin population, and they would fit in perfectly.

They follow American politics, have detailed knowledge of President Barack Obama and his background and are excited about the prospect of him improving relations with Cuba. Obama campaign buttons and T-shirts are prized possessions that can be openly worn.

Internet access is restricted by the government, but clandestine connections and e-mail accounts are not unusual.

I traveled through the Soviet Union, including stops in some far-flung places, in the ’70s, and I was eager to see if parallels existed between the two Communist countries that were close allies before the fall of the Iron Curtain. Political sloganeering on huge public banners and signs is common, as are giant portraits of Communist heroes.

My informal count has Che Guevara slightly ahead of Fidel Castro in Havana iconography. Interestingly, non-communist Jose Marti, the George Washington of Cuba who died fighting Spain for independence in 1895, also gets a lot of face time on posters, signs and sculpture.

Shortages of essential items, the bane of so many communist and some socialist countries, is a vexing problem in Cuba. Rice and beans are the dietary staples, and meat is a treat. Everyone gets a monthly ration book to parcel out things such as bread and sugar.

Farmers markets supplement the diets of people with the cash to buy bunches of fat carrots, heavy watermelons and red meat hanging from hooks. An entire pig carcass was being pushed in a wheelbarrow toward a market in a residential section of Havana on the Saturday morning we visited.

The Cuban health system, free to all citizens, has so many physicians that the island exports them to other countries. But when your doctor gives you a prescription, the state-owned pharmacy may not be able to fill it. I brought a large suitcase filled with prescription drug samples and disposable syringes for a free pharmacy that the Havana Jewish community opens to the public two days a week.

Foreign newspapers were impossible to find in Havana’s international hotels, and although tourists can watch CNN, ESPN and European television channels in their rooms, Cubans don’t have that access.

Fidel Castro’s high priority on eliminating illiteracy has yielded a well-educated population, but a paradoxical economy does not always reward high skills and abilities. A hotel bellman may be an engineer who has found he can make more money carrying luggage.

Housing is in extremely short supply. Newly married couples must move in with parents, usually the wife’s. The divorce rate is alarmingly high.

Cubans sympathetic to the revolution blame the economic problems on the American embargo.

As challenging as everyday life may be, the clenched-jaw grimness on Russian faces during the Soviet era is nowhere to be seen in Cuba. The dull drabness of the Soviet existence is visible only in the monolithic concrete architecture of buildings erected while the Russians were on the island.

Warm smiles, laughter, kids playing stickball in the front yard and music — so much music — fill the streets of Havana. These are not desperate people.

A 30-something woman with a rambunctious 5-year-old son she called “Denny the Menace” explained. “We have hopes, we have dreams, but we know how to be happy with what we have.” – Come to Cuba with us

Head of Cuban banking Francisco Soberon resigns

AP: The head of Cuba’s central bank has resigned as President Raul Castro pushes ahead with a government reorganization amid signs of a cash crunch, state television reported Thursday.

Francisco Soberon, 64, has been replaced by Ernesto Medina, who heads Banco Financiero Internacional, one of Cuba’s biggest banks, according to an official announcement read on the evening news. It did not say when the move had taken effect.

Soberon, who led the bank for nearly 15 years, also asked to be removed from the Cuban Communist Party’s policy-making Central Committee and as a parliament deputy, it said.

The statement offered no explanation for his resignation, but recent restrictions placed on large cash withdrawals suggest a liquidity problem on the island.

Soberon is known for carrying out the monetary policies of Castro’s older brother, Fidel, who resigned from the presidency last year because of health problems.

In recent years, he oversaw the introduction of the Cuban convertible peso, which replaced the U.S. dollar as Cuba’s legal tender. The peso’s value is tied to a basket of foreign currencies, including the dollar and the euro.

Cuban Foreign Minister Felipe Perez Roque and Vice President Carlos Lage were removed from the Cabinet in a stunning shake up in March. At the time, state media published letters that both men had written to Raul Castro, acknowledging they had committed errors and promising to continue to serve the country.

Since then, several other Cabinet members have also lost their jobs as a large scale streamlining effort fused ministries that were deemed to have similar, overlapping tasks. – Cuba Rent a car