Cuba Renews Appliance Sales Amid Economic Changes


AP:

Cuba is renewing sales of energy-sucking appliances, reversing a pillar of Fidel Castro’s “energy revolution” in response to popular demand and to support the growing ranks of independent workers under an economic overhaul launched by President Raul Castro.

The measure covers appliances such as air conditioners, electric stoves, coffee makers, grills and sandwich makers. The appliances will begin going on sale gradually as they become available, according to a notice published in the Official Gazette and dated Friday.

It said the action was aimed at “supplying products to the population and independent workers.”

Appliance sales have been largely restricted since 2003, and they were key targets of former President Fidel Castro’s “energy revolution.”

That initiative sought to replace aging, inefficient kitchen appliances that taxed Cuba’s shaky electrical grid and contributed to frequent summer blackouts that lasted for hours.

The former leader regularly appeared on television to push conservation measures and flog less-power-hungry rice steamers and pressure cookers. Government workers went door to door in many neighborhoods to replace incandescent light bulbs with more-efficient alternatives. Officials also overhauled the antiquated electrical grid.

Blackouts are not as frequent or severe today, though officials still urge conservation. While most of Cuba’s electricity is generated by crude oil, there have been efforts to increase renewable sources like solar.

Raul Castro launched an economic overhaul last year that aims to rescue Cuba’s perennially weak economy by including a taste of the private sector, though Castro stresses that the government is “updating” its socialist model, not embracing capitalism.

The state is planning to slash expenses, subsidies and payroll, while allowing more islanders to open their own businesses and hire employees. Many of the independent business licenses are for restaurants, cafeterias and home-based snack bars, where something like a sandwich maker or an electric coffee pot could come in handy.

Friday’s note in the Gazette specifically mentions the needs of the small business owners, and says the appliances will be available on the domestic retail market.

www.particularcuba.com

Home sales would be a sea change for Cuba


Miami Herald: Selling an apartment in front of the Habana Libre, excellent conditionThe seller, Marita, is advertising this Havana apartment on revolico.com, an online marketplace that’s kind of like a Cuban Craigslist. She’s asking the equivalent of around $57,600 in convertible Cuban pesos.

Of course, at the moment real estate sales in Cuba are strictly illegal and have been for the past five decades. But that may change soon. As part of sweeping economic reforms unveiled at the Communist Party Congress in April, Cuba plans to allow the buying and selling of homes and cars.

A July 1 article in Granma, the Communist Party newspaper, painted the broad brush strokes of the real estate reform: such transactions would be permitted with little government interference beyond getting notary approval, making payment through a state bank and paying an as yet unspecified tax.

The real estate reform has yet to become law, but it’s possible it could when the National Assembly, Cuba’s parliament, convenes Monday for a three-day meeting at Havana’s Convention Palace. In any case, the government has said a new law will take effect by the end of the year.

This potential sea change has set off a flurry of activity on both sides of the Florida Straits. For years, Cuban-Americans have been funneling money to relatives to fix up tired properties or for under-the-table payments to “buy’’ a home or sweeten a permuta, or swap, the accepted form of acquiring Cuban real estate.

Now with the possibility of a true real estate market developing, people have been dusting off property titles or trying to find them and have been busy fixing up properties they anticipate putting on the market, said Antonio R. Zamora, a Miami lawyer who specializes in foreign investment.

“A lot of money is coming from Miami — some of it’s speculative,’’ said Zamora, who visited Cuba recently.

Some exiles say they have made under-the-table payments to purchase beach homes or other properties from family or friends with the understanding that some day they will own the homes outright. But they have no official paperwork to acknowledge such transactions.

In these cases, it should be buyer beware, said George Harper, a Miami attorney who left Cuba when he was 17. “That’s all well and good but any deal is subject to what the local laws are.’’

The expected law does not allow foreign ownership. The guidelines announced in Granma said that foreigners and Cubans living abroad can’t own property unless they are permanent residents of Cuba. Cubans will be allowed to own only one home and they can inherit a dwelling, even if the relatives of the deceased don’t live in the home, according to Granma.

Because of the influx of exile money, Zamora said it would be more realistic to “get the name of the foreign relative into the title.”

Phil Peters, a vice president at the Lexington Institute and a veteran Cuba watcher, said that the exile money flowing into Cuba may have an impact beyond investment.

“Now with the door open for Cuban-Americans to visit, to support their families, to invest and to perhaps indirectly buy real estate, it becomes not just an exile community but also an immigrant community with a foot in both places,’’ he said.

One thing that isn’t expected to be a topic of debate in Cuba is exile claims on homes.

Over time, Zamora said, families who occupied the homes of Cubans who left the island have essentially become the owners of the dwellings.

“There’s always been a difference of opinion on residential properties that were taken but now I think most people, with some notable exceptions, have given up on the notion of getting those properties back,’’ said Harper.

He’s been back to Cuba twice since he left as a teenager and visited the home where his family once lived. He found several families in the residence. “From a humanitarian point of view, it would be impractical to kick those people out,’’ he said.

Also expected to change once a property law is enacted is the messy permuta system. Currently, homes that are exchanged are supposed to be of “equal value.’’ But matching up the homes on offer with what people want is often a tricky business.

Sometimes two apartments are exchanged for a large home in a prime area and multiple parties are involved in so-called triangular deals. Although no money is supposed to change hands, there are sometimes under-the-table payments to even up deals or bribes paid to officials to let dubious swaps go through.

Under the new system, someone wanting to downsize from a four-bedroom home with a garage, for example, to a smaller apartment will probably just be able to do the swap and pay the difference in value, said Zamora. “The reform should make the permuta much easier and out in the open,’’ he said.

Besides cleaning up illicit housing transactions, the government has said the reform is designed to help with Cuba’s serious housing shortage.

But Harper said, “The fact that people can buy and sell homes won’t really impact the housing supply. If Cuba had money to build new housing, I think they would have done it by now.’’

Cuba, however, may be counting on real estate owners to expand and improve properties. In its effort to move more people off the state payroll into self-employment, the government has said that renting rooms, gardens and even swimming pools can be considered an alternative to state employment. Permitting home ownership may also encourage home building.

“If people are allowed to sell homes, this is a huge step forward in terms of property rights,’’ said Peters. “It makes assets liquid, a home can be used as collateral.’’

Because of the possibility of freeing up capital when a home is sold, other entrepreneurial activity may be unleashed, Peters said. “This really would be a sign of the Cuban government being serious about letting go of controls,’’ he said.

First new U.S. airport gets go-ahead from Cuba


Cuba Standard: Tampa International Airport is poised to become the first of a series of additional U.S. airports that will be able to offer flights to Cuba.

Miami-based ABC Charters, a company that has been offering flights from Miami to Cuba, has secured landing rights in Cuba for flights from Tampa, the airport said in a press release. Tessie Aral, president of ABC Charters, told the airport that the first flight from Tampa to Cuba could start as early as Sept. 10.

In March, U.S. Customs and Border Protection allowed all U.S. airports with “adequate customs and immigration capabilities” to host Cuba flights. More than a dozen airports have received approval from USCBP, but Tampa is the first to have secured a carrier service provider with landing rights in Cuba.

Aral said at a press conference in Tampa that ABC would offer once-a-week flights to Havana, with frequency rising to twice a week in October, on American Airlines-provided Boeing 737-800s. ABC Charters currently flies seven times a week to Havana and three times a week to Holguín from Miami, usually in larger jets.

At least two other travel providers are vying to offer Cuba flights from Tampa, including Air MarBrisa and Island Travel & Tours, Ltd.

Tampa is the U.S. city with the second-largest Cuban population, following Miami. There are nearly 140,000 people of Cuban ancestry living within 90 minutes of Tampa International Airport.

In Atlanta, Delta Airlines said it is already licensed to operate charter flights to Cuba. In Fort Lauderdale, Airline Broker Co., which also has a license, is vying to offer twice-weekly flights. Other airports that have expressed interest in offering Cuba flights are Dallas/Fort Worth, New Orleans, Chicago, San Juan, Pittsburgh, and Baltimore.

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Cuban Tourism: A Single Strategy of Stability and Growth


Havana (PL) The development of the Cuban tourist industry is a focus of attention for the government on the island, and its impressive growth was recently reiterated by Carmen Casals, director of communications of the Ministry of Tourism.

During a meeting with communicators from six Latin American countries at Havana´s José Martí International Institute of Journalism, the expert predicted a promising future for this sector.

She said that there have been many changes in Cuban tourism since 1961, because at that time it depended on the United States, and after the economic barriers imposed by Washington against Havana, which are still in force, the industry was seriously affected.

Between 1979 and 1989, the development of new holiday resorts started, along with the essential one in Varadero, 140 kilometers away to the east of the capital, and the country´s main recreational hub.

By the 1990s, with the demise of the socialist camp, Cuba opened up to international tourism as an industry as well as to new investment processes.

A country like this archipelago, with a 25 degree-centigrade average temperature, 11.2 million inhabitants, 800 thousand university graduates, a road network of 46 thousand kilometers, a 78-year life expectancy and 300 beaches, has many attractions, she stressed.

Nowadays, the main recreational hubs are Varadero, with 35 percent of all tourism on the island, Havana with 23, Jardines del Rey with nine percent and the eastern region of Holguín with 10 percent.

Other tourist destinations include such interesting places as the westernmost province of Pinar del Río or the southern area of Cayo Largo. Right now, officials are involved in enlarging the recreational industry by making the most of every site.

Cuba is connected by air to 39 cities in the world, by means of 90 airlines, either on regular or charter flights; ten international airports are in operation and the flow of visitors is steady.

She added that there are 3 cruise terminal stations, in Havana, the central province of Cienfuegos and Santiago de Cuba in the east. In addition there are ten international marinas, including two in Havana.

Hotel accommodation has grown significantly at a rate of 7.5 percent since 1990, and, at the moment, there are 52 thousand rooms in 334 hotels, 62 percent of them being four-and-five-star.

There is foreign participation by means of 65 managerial contracts for 28,854 rooms, through the Cuban companies Cubanacán, Gran Caribe and Gaviota.

These businesses involve 13 foreign hotel chains; among them Sol Meliá, Iberostar, Riu, Barceló, Occidentales Hoteles, Hoteles Blau and Hoteles C.

Concerning employment, tourism provides jobs for 110 thousand people, 60 percent of whom are high-school graduates and 22.3 percent university graduates; one third of them are under 35 years of age, 42.8 percent are women, and 31.5 percent are blacks and mixed.

Formatur, the tourist training system, is made up of 13 schools for upgrading, training and preparing staff, by means of different courses such as post-graduate, specialty and university training, among a large range of them.

This development makes things easier for the country´s economy, even though the U.S. economic barriers against Cuba, since 1961, have affected the sector with losses amounting to more than 22 thousand million dollars.

Casals added that in less than three years Cuba moved to the third position as an outstanding destination in the island Caribbean, and since 1990 has welcomed 30 million tourists.

She revealed that for some years now more than two million travelers per year have been received, and that figure is expected to reach 2.7 million visitors for the first time by the end of 2011.

She mentioned Canada, the United Kingdom, Spain, Italy, Germany, France and Mexico, in that order, as the main sending markets to the island.

Among her ministry´s priorities, she indicated, are improving marketing methods, developing the Auténtica Cuba promotion campaign, and recreational navigation.

She emphasized the importance of giving continuity to increasing the quality of the tourist product, spreading the training system and turning each hotel into a high-quality school, apart from plans for repairs and new constructions.

She wound up by mentioning the development of golf, the recovery of heritage facilities under the name of Hotels E (for encanto, or charm) and other projects supporting the strategy of a peaceful, healthy and safe tourism, one that protects the environment and gives prominence to culture.

www.particularcuba.com

Int’l tourism to Cuba rises 10.6 pct in first half of 2011


Fox News: More than 1.5 million foreign tourists visited Cubain the first six months of this year, a figure that represents an increase of 10.6 percent compared to 2010, according to a report by the National Statistics Office cited Tuesday by the official AIN news agency.

Canada headed the list of the countries sending tourists to the island, followed by Russia, Argentina, Britain, Chile and France, AIN reported.

In addition, the report said that the United States was in eighth place in terms of tourist flow to Cuba despite the economic, trade and financial embargo maintained by Washington for nearly 50 years.

Tourism, the second-biggest contributor of foreign currency to the Cuban economy after technical and professional services, last year generated $2.1 billion from the visits of some 2.5 million tourists.

Cuba hopes to receive 2.7 million tourists this year, most of them from Canada and Europe, according to predictions by the Tourism Ministry.

A Cuban housing market? Govt is lifting a taboo


HAVANA (AP) — Each morning before the sun rises too high, Cubans gather at a shaded corner in central Havana, mingling as though at a cocktail party. The icebreaker is always the same: “What are you offering?”

This is Cuba’s informal real-estate bazaar, where a chronic housing shortage brings everyone from newlyweds to retirees together to strike deals that often involve thousands of dollars in under-the-table payments. They’re breaking not just the law but communist doctrine by trading and profiting in property, and now their government is about to get in on the action.

President Raul Castro has pledged to legalize the purchase and sale of homes by the end of the year, bringing this informal market out of the shadows as part of an economic reform package under which Cuba is already letting islanders go into business for themselves in 178 designated activities, as restaurateurs, wedding planners, plumbers, carpenters.

An aboveboard housing market promises multiple benefits for the cash-strapped island: It would help ease a housing crunch, stimulate construction employment and generate badly needed tax revenue. It would attack corruption by officials who accept bribes to sign off on illicit deals, and give people options to seek peaceful resolutions to black-market disputes that occasionally erupt into violence.

It’s also likely to suck up more hard currency from Cubans abroad who can be counted on to send their families cash to buy, expand and remodel homes, especially since President Barack Obama relaxed the 50-year-old economic embargo to allow unlimited remittances by Cuban-Americans.

“All these things are tied in,” said Sergio Diaz-Briquets, a U.S.-based demography expert. “They want expatriate Cubans to contribute money to the Cuban state, and this is one big incentive for people who want to help their families.”

But few changes are likely to be as complex and hard to implement as real estate reform.

From the earliest days of the revolution, Fidel Castro railed against exploitative, absentee landlords, and enacted a reform that gave property ownership to whoever lived in a home, regardless of who held title. Most who have left the island forfeited their properties to the state. The government, Castro preached, would provide everything a citizen could need: employment, food, education and housing, all for little or no money at all.

But the housing stock, already run down before the revolution, continued to deteriorate, the U.S. embargo choked off the supply of building materials, and new construction failed to keep pace with demand.

Meanwhile, cyclones and salty air can start eating through metal bars in a year and have decimated rural shanties and older quarters of Havana. Empty lots dot the capital’s seaside Malecon boulevard as once-stately mansions regularly collapse following heavy rains. Many of those still standing are merely facades or are propped up by scaffolding and wooden beams.

While they wait for the new law to be enacted and the specifics to be announced, Cubans have few legal options. They can enroll in cooperative construction projects, build on existing properties or join the long waiting list for government housing. Or they can head to the open-air real-estate market in hopes of negotiating a “permuta,” which officially is a swap of equal-value properties but in reality usually involves illegal cash on the side.

Many enlist the services of “runners” like Manuel Valdez, an 83-year-old ex-military man who has been brokering the transactions for four decades. At the downtown bazaar, Valdez holds court on a concrete bench, keeping track of real estate offers in a tattered notebook and on posterboard that he tapes to a tree.

Gesturing at the people milling around hoping to strike a deal, Valdez said housing is such a problem that legalization was inevitable: “This is a situation that the state had to get off its back one way or another.”

There’s also www.revolico.com, a kind of Cuban Craigslist that has real estate ads asking tens of thousands of dollars. Site operators claim the real estate section alone gets 30,000 unique visits a month even though islanders must find a way around the Web censors.

Some Cubans enter into sham marriages to make deed transfers easier. Others move into homes ostensibly to care for an elderly person living there. They register at the address and, after enough time passes, can legally claim the “inherited” title. Nowhere is there an official record of the money changing hands.

A Havana professional with a job that pays far more than most salaries on the island told of swapping his tiny apartment about 10 years ago for a bigger, historic home whose bathroom and roof were falling apart, and whose occupants, a 60-something couple, could no longer manage.

The couple took over his recently remodeled and repainted flat. They also received $1,200 in cash — something that will no longer be illegal once Castro’s housing reform takes effect.

The professional reflected on the anomaly of people with money but no home to buy, and people with bigger homes than they need, and the risk they all run trying to change their circumstances. Some Cubans have had their homes confiscated when their illegal sales came to light.

“It would be so helpful if you could do that legally,” he said, speaking on condition of anonymity because of the transaction’s illicit nature.

“It is such a big problem, the housing situation,” said Diaz-Briquets, who estimated in a recent paper that the country of 11 million people was short 1.6 million units of “adequate housing” in 2010. “They have been trying for years to solve it, and it’s finally dawned on them that the state is never going to do it.”

The Cuban government puts the shortfall at closer to 500,000 homes. Still, the result is legions of bickering divorcees trapped under the same roof; newlyweds forced to bunk up with siblings, cousins, uncles, and aunts; and elderly people unable to repair their crumbling homes.

Juana Ines Delgado’s plight is typical. She shares her tiny studio in Old Havana with her grown son, married daughter and 4-year-old granddaughter, while her son-in-law spends nights at his aunt’s place down the street.

“It’s a marriage that’s not the way a marriage should be, you know what I mean?” said Delgado, 61. “My situation is what it is. … But I hope my children don’t have to end their days here.”

Cuba experts caution that the new measure is just a first step toward solving the housing crisis, and note that it deliberately stops short of creating a freewheeling, capitalist real estate market.

Raul Castro has said home ownership will be limited to one per individual to avoid accumulation of wealth. The government has announced plans to extend credit for purchasing building materials, but specifics are still unknown and no mechanism is in place for home loans. Duties will be levied on both sellers and buyers, and if taxes are too steep it could provide enough incentive to underreport transactions.

Only islanders and permanent residents will be able to buy property, but there’s at least a potential for Cubans to front for foreigners keen on owning a waterfront art-deco masterpiece.

“You start down a path of property accumulation and who knows where that’s going to lead,” says Rafael Romeu, a U.S.-based expert on the Cuban economy.

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Peruvian President-Elect Visits Cuba


Peruvian President-elect Ollanta Humala is in Cuba, his last stop on a multi-nation tour.

The visit comes a little more than a week before Mr. Humala takes office on July 28.

The Cuban Communist Party newspaper Granma quoted Mr. Humala as saying he had come to visit a “sister” country and share an open agenda with Cuban President Raul Castro.

Mr. Humala was elected last month in a runoff election. The leftist former army officer narrowly beat Keiko Fujimori, the daughter of imprisoned former president Alberto Fujimori. He has promised to give poor Peruvians a greater share of the Andean nation’s considerable mineral wealth and to honor the free market.

Since his election, he has traveled to several other countries, including Brazil, Venezuela and Mexico. He also visited the United States earlier this month, where he met with President Barack Obama.

Mr. Humala takes office after two previous unsuccessful attempts. In 2000, he launched a failed military coup against then-president Fujimori. And in 2006, Mr. Humala lost the presidential election to Alan Garcia, the current president who leaves office July 28.

In 2006, Mr. Humala was seen as a close ally of Venezuelan President Hugo Chavez, who publicly endorsed him for president of Peru at that time. Some reports alleged the Venezuelan government helped finance that campaign. Mr. Humala has since distanced himself from Mr. Chavez.

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