Cuba set for new revolution but US thaw could be a long way off


Irish Times: OPINION: Shedding public sector jobs, bolstering domestic enterprise while seeking foreign investment – does this sound familiar? Welcome to Cuba . . .

CUBANS HAVE entered a period of dramatic change with enormous implications for economic, political and social aspects of their lives, perhaps not seen since the collapse of Cuba’s old sponsor, the USSR.

With that cataclysmic break-up in the early 1990s, some 85 per cent of the Caribbean island’s income vanished, marking the start of a period of extreme hardship remembered bitterly as the Periodo Especial .

Not least among the changes now deemed necessary to deal with the country’s troubled economy by President Raul Castro is the laying off of 500,000 state employees between this month and the end of March. Effectively, this ends Cuba’s official policy of full state employment, with some commentators saying these changes could even mark the beginning of the end of the 50-year socialist economic experiment for the country’s 12 million people.

The demise of communism and the Castro brothers, Raul and Fidel, however, have been predicted many times before – indeed their deaths were once reported in a US newspaper by an Irish-American journalist in 1956 shortly after they had landed in Cuba from Mexico with a small group to begin the final phase of the revolution.

Despite the scale and scope of the proposed changes, however, President Castro is anxious to insist that the essential nature of the last communist state in the western hemisphere will not itself change. A recent 32-page document outlining proposed changes, Draft Guidelines for Economic and Social Policy , emphasised that “as we update our economic model, planning will be paramount, not the market”.

Preparing people for such seismic changes, Castro had said that Cuba would “fall off a cliff” if it did not make savings through efficiencies and “update” the tightly-controlled command economy. He said the economy was the first order of business for all the political leaders.

The measures are intended not only to correct the economy but to deliver improvements in living standards that ordinary Cubans have long and patiently desired. Most prominent of the changes are the dramatic shrinking of state employment; a significant expansion of the private sector; the encouragement of greater foreign investment in designated economic zones (not dissimilar to Vietnam and China, it appears); and a partial opening up of the property market, in which you may buy and sell property, but not accumul-ate.

On a recent visit to China, Cuban parliament speaker Ricardo Alarcon said: “Cuba is prepared to take advantage of China’s experience of development in reform and opening.”

China, now a major trading partner, recently signed a $6 billion (€4.53 billion) deal to upgrade an oil refinery and build a gas refinery in the southeastern city of Cienfuegos. This will process huge finds in the Cuban section of the Gulf of Mexico expected to come online this year.

More than 30,000 Cubans have already received licences to work privately as restaurateurs, mechanics, hairdressers and street vendors, for example, and for the first time such individuals may be allowed to take on employees and must pay taxes. As many as 250,000 licences may be issued eventually. Brazil, Latin America’s emerging economic superpower, has offered to share with Cuba its expertise in private enterprise.

Ordinary Cubans fear that if there is no match between jobs created in the private sector and the lay-offs, there will be a negative impact on the country’s social cohesion that full employment has delivered over the past half century. For example, it is feared that street crime, which is negligible by international standards, will rise.

Furthermore, Cubans express various degrees of anxiety as to whether they might be among the half million selected for efficiencies in the notoriously sluggish and bureaucratic state sector.

Alarm bells will also be ringing in Washington because of the potential for another mass wave of immigrants from Cuba.

Significantly, a long-awaited Communist Party Congress – the party forum which defines major policy issues and announces changes, but has not met since 1997 – has now been called for the end of April. At this meeting the proposals in the draft document and measures already taken will be discussed, and the shape of the new political order in Cuba will become clearer.

Cuba’s change in course is further hard evidence of Raul Castro’s shift away from the doctrinaire communism of his elder brother Fidel towards a more pragmatic, efficiency-socialism model. This approach was also evident recently with the state’s agreement with the Cuban Catholic Church and Spain to release more than 50 political prisoners, and with the opening of a Catholic seminary outside Havana, the first since the revolution.

All of this would suggest that now would be a fruitful time for the US to engage with Cuba, as indeed President Barak Obama promised in the early days of his presidency, which President Castro said he would respond to “measure for measure”.

However, the US economic downturn and mid-term elections have since changed the situation and the Republican Party’s control of the House of Representatives has given it sway over the powerful Foreign Relations Committee. From January, this committee will be chaired by Cuban-born, far-right Florida Congresswoman Ileana Ros-Lehtinen, best known for her visceral hostility towards the Cuban regime and other left-leaning administrations in Latin America.

In a 2006 Channel 4 documentary on the numerous attempts to kill the then Cuban leader, she was happy to announce: “I welcome the opportunity of having anyone assassinate Fidel Castro.”

So despite Cuba signalling an historic change in the state’s relationship with private enterprise, bar unforeseen circumstances it seems any likelihood of the US engaging with the new situation is likely to founder on the jagged rocks of old southern Florida émigré politics.

www.particularcuba.com

Brazil offers Cuba help to develop small businesses


BBC:

Brazil’s foreign minister says his country has offered to help Cuba develop small and medium businesses as part of a drive for economic growth.

Celso Amorim was quoted as describing Cuban plans to lay off half a million public-sector workers in the next six months as “very courageous”.

He said Cuba could learn from Brazil’s successful experience in fostering entrepreneurship.

Mr Amorim met Cuban President Raul Castro in Havana on Saturday.

He was speaking to reporters in New York on Monday, ahead of the 65th UN General Assembly which opens on Thursday.

Last week Cuba announced plans to lose a million workers from the public-sector payroll – half of who will go by next March.

The government currently controls almost all aspects of the Cuba’s economy and employs about 85% of the official workforce, an estimated 5.1 million people. There is also a burgeoning black economy.

The lay-offs are being seen as the latest – and one of the most dramatic – attempts to revive the island’s struggling economy.

‘Ready to co-operate’

Mr Amorim said Brazil had successfully developed small and medium businesses and reduced the informal economy, and could share this expertise with Cuba.

“It doesn’t pay off for Cuba to move 500,000 workers out of the public sector if they fall into the informal economy,” Mr Amorim said, according to news agency Reuters.

He said the lay-offs were “very courageous”, adding: “I believe Cuba’s evolution – and I use this word deliberately – is a process that will increase opportunities.”

“We’re ready to co-operate,” he reportedly said.

Analysts say Cuba’s move is being undertaken after long consultation with trade unions and other bodies.

They say many of the laid-off workers will not become unemployed but will become self-employed or be offered alternative employment in workers’ co-operatives.

www.cubaluxuryrent.com

Brazilian president says Castro seems recovered


AP:

HAVANA — Fidel Castro is “exceptionally well” and appears recovered from a health crisis that has kept him out of the public eye for more than 3 1/2 years, Brazil’s president said Wednesday, according to reports by his country’s news media.

Luiz Inacio Lula da Silva spent more than an hour discussing “various topics” with his longtime friend, the 83-year-old Castro, who ceded power to his younger brother Raul – first temporarily, then permanently – after undergoing emergency intestinal surgery in July 2006.

The meeting was closed to international news media based in Havana, but information about it was carried in Cuban state media and by Brazil’s private Agencia Estado news agency.

Fidel Castro has not been seen in public since falling seriously ill, and his exact ailment has remained a state secret, though he has appeared healthier in photos released periodically by Cuba’s government.

Photographs of Wednesday’s meeting released by Brazil’s presidency show a beaming Castro wearing blue-and-white exercise clothing, one of a series of tracksuits that have become his trademark uniform since he has been holed up in an undisclosed location.

The gray-bearded revolutionary was thought to be in far graver health – in fact, rumors of his imminent death were frequent – the last time Silva came to see him in January 2008.

This time, Silva felt Castro looked “much different” and improved, Agencia Estado said, citing unidentified presidential aides. Raul Castro and Franklin Martins, Silva’s communications minister, participated in the meeting. The pictures released by Brazil also showed Silva using a photographer’s camera to take a shot of Fidel Castro and Martins.

Fidel Castro and President Lula - http://www.particularcuba.com

Cuba’s state television led its evening newscast with a report on the meeting. although it didn’t broadcast any images of Castro until the 30-minute show’s closing, when it displayed several still photographs of the former leader.

The report said Castro and Silva discussed several matters, including the U.N. climate conference in Copenhagen. After that conference, Castro released a string of essays strongly criticizing U.S. President Barack Obama for Washington’s brokering of an accord that urges – but does not require – major polluters to make deeper emissions cuts.

Also visiting Cuba was socialist Venezuelan President Hugo Chavez, another close friend and confidant of Fidel Castro. Silva, Chavez and Raul Castro had all been in the Mexican Caribbean city of Playa del Carmen on Tuesday for a Latin American and Caribbean “unity” summit.

There was no word on whether Fidel Castro met with Chavez, a frequent visitor to Cuba.

Before their meeting with Fidel Castro, Silva and Raul Castro donned guayabera dress shirts and traveled to the port city of Mariel, about 30 miles (50 kilometers) west of Havana, where Brazil’s government is helping build a new port designed to handle full-size container ships.

The $600 million renovation is being split equally between Silva’s government and Cuba. Brazil is Cuba’s fourth-largest commercial partner, with nearly $700 million in trade between the two countries in 2008, the most current figures available.

Raul Castro became provisional president on July 31, 2006, and took over permanently two years ago Wednesday. But he played down the anniversary in comments to the news media.

Silva’s comments were not the first recent indication Fidel Castro has turned the corner on his health.

During a visit to Havana in October, the director of the World Health Organization, Margaret Chan, met with him for more than two hours and said he was “wonderful” and “very dynamic.”

Chan said at the time that Castro had more endurance than she did.

“I’m younger than him and I felt tired when he wasn’t,” she said.

http://www.particularcuba.com – Cuba online travel

Petrobras opens Cuba office for oil search


HAVANA, July 17 (UPI) — In a move to prepare for possible oil drilling in Cuba, Brazil’s state-controlled energy giant Petrobras opened an office in Cuba, the company announced Thursday.

As part of its exploratory stage, Petrobras is currently analyzing results of seismic surveys carried out within the block it acquired last October in the communist-ruled country’s waters of the Gulf of Mexico.

According to the terms of its contract with Cupet, Cuba’s state-owned oil company, Petrobras has until May 2010 to decide whether to begin drilling.

Joao Figueras, CEO of Petrobras’ Venezuelan arm, said the Havana office is “a point of reference” during the first exploratory phase, the Latin American Herald Tribune reported. Then, if Petrobras decides to advance to the drilling stage, it will further expand its representation in Cuba, he said.

Petrobras attempted to search for oil in the country’s territorial waters between 1998 and 2001. “It was a perfect operation, but unfortunately the well was dry,” acknowledged Figueras, who also heads up the company’s new Cuba office.

Currently Petrobras has a 32-year exploration and production agreement with the Cuban government, allowing it to operate in a 617-square-mile block “very well located from a geological point of view,” Figueras said.

“If we make the decision to drill, the company will have the means to carry out the drilling,” he pointed out. “That’s why our job now is to be very focused on the geophysical-geological work so that we make the best decision.”

Cuba produces the equivalent in oil and gas of 75,000 barrels per day, around 50 percent of its energy needs. It imports the rest from oil-rich Venezuela.

According to Cupet’s estimates last November, there are 20 billion barrels of offshore oil in the communist country’s waters in the Gulf of Mexico. That puts Cuba among the world’s Top 20 countries in terms of oil reserves. But the U.S. Geological Survey’s 2004 estimate is far lower, ranging from 5 billion to 10 billion barrels.

Petrobras is not the only oil explorer operating in Cuba’s territory of the Gulf of Mexico known as the Exclusive Economic Zone, which covers more than 43,000 square miles. Cuba has also awarded oil and gas exploration leases to companies from Canada, Spain, Norway, China, India and Venezuela.

Petrobras, an integrated energy company and a global leader in deepwater oil exploration and production, operates in 27 countries in the Americas, Africa, Asia and Europe.

It produces more than 80 percent of Brazil’s oil from offshore fields.

www.cubaluxuryrent.com – Luxury rent Havana vacation rental

Brazil’s Petrobras weighs Cuba oil prospects


HAVANA, July 16 (Reuters) – Brazil’s state-owned oil company Petrobras PETR.SA PBR.SA has completed seismic work in its leased Cuban offshore bloc and is studying whether to drill a well, the head of its Cuban operations said on Wednesday.

Under terms of the lease, the company has until next May to make the decision, Joao Figueira said in a press conference at Petrobras’s newly opened Havana office.

He said the bloc, located east of Havana and offshore from Cuba’s most prolific onshore oil field, has good prospects, but it remains to be seen if it has sufficient accumulations of oil to make wells profitable.

“From a geological standpoint it’s pretty well located in terms of oil generation,” he said. “The challenge and uncertainty are related to the reserve distribution, size and production per well.”

Cuba has said its offshore territory may contain 20 billion barrels of oil, but nothing has been produced from its waters so far.

It has divided its offshore zone into 59 blocs, 21 of which have been leased to a total of seven companies. Petrobras’ bloc hugs Cuba’s northern coast

Spain’s Repsol-YPF (REP.MC), part of a consortium with Norway’s Statoil Hydro (STL.OL) and ONGC Videsh (ONGC.BO) of India, drilled an exploratory well in 2004 and said it found traces of high quality oil.

But a planned second well has been postponed repeatedly due to problems that include difficulty getting a drilling rig that does not violate restrictions of the United States’ 47-year-old trade embargo against Cuba.

PDVSA, the national oil company of Venezuela, Cuba’s socialist ally, has said it plans to drill an exploratory well in Cuban waters next year.

Other bloc holders include Vietnam state oil and gas group Petrovietnam and Malaysia’s state-run Petronas (PETR.KL).

Figueira said Petrobras sunk a well in 2001 to probe Cuba’s offshore, but drilled it using an onshore rig based on an island.

The well, located almost 200 miles (320 km) east of the current bloc, was a dry hole, he said.

www.cubaluxuryrent.com – Luxury condo in Cuba for sale

Brazil Will Help Financing Cuban Port Project


Reuters: Cuba will receive $300 million in credits. $100 million has been already approved by the Brazilian government and the construction will be led by a Brazilian company.

Brazil said on Thursday it would give Cuba up to $300 million in credits to start rebuilding the island’s port of Mariel, better known as the site of a 1980 Cuban exodus to the United States.

Brazilian Industry and Trade Minister Miguel Jorge said $110 million had been approved by his government and the rest would likely be, as Brazil strengthens its ties with communist-led Cuba.

He said in a news conference that construction, to be led by a Brazilian company, would begin “very soon” with the building of infrastructure including highways and a railroad for the port about 30 miles (50 km) west of Havana.

Brazilian officials said Cuba expects the entire port project, which will be built in several phases, to cost up to $2 billion.

The first phase is projected to take four or five years to complete and cost $600 million, they said.

Mariel was the scene of the massive boatlift from April to October 1980 when a flotilla of vessels from the United States picked up 125,000 Cubans after the Cuban government said anyone wanting to leave the island could do so.

Now Cuba wants Mariel to serve as logistics center for its still-nascent offshore oil industry and to be equipped to handle shipments from around the world, including the United States, just 90 miles (145 km) to the north of Cuba.

U.S.-Cuban trade is restricted by a U.S. trade embargo imposed in 1962, three years after Fidel Castro led a revolution to topple a U.S.-backed dictator.

Jorge, who was on the second day of a two-day visit to Cuba, said Brazil’s state-owned oil giant Petrobras (PETR4.SA)PBR.SA, which last October was awarded a bloc for oil exploration in Cuban waters, would open an office in Havana on Tuesday.

He said Petrobras was completing seismic studies of the bloc and working on getting a drilling rig to Cuba.

Jorge did not say when Petrobras expected to begin drilling. So far, only one test well has been drilled in Cuba’s offshore fields — by Spain’s Repsol-YPF

www.particularcuba.com – Cuba travel and hotel booking

Cuba on the Obama-Lula Agenda


HAVANA TIMES,  — When US President Obama meets with his Brazilian counterpart Luis Inacio Lula da Silva on the weekend he may be forced to show some of his cards on his stance on Latin America and especially a glimpse of his policy towards Cuba and Venezuela.

Many analysts are saying that Obama wants to guarantee an upbeat meeting of the America’s Summit in Trinidad and Tobago in April 17-19, his first gathering with the region’s leaders.

Lula has repeatedly criticized the perennial US blockade on Cuba, and has called on Obama to improve ties with Venezuela, Cuba’s closest economic and political ally.

“I’m going to ask that the U.S. take a different view of Latin America,” Lula said before leaving Brazil. Now the question is whether Obama, is truly willing to break the ice that he suggested during his presidential campaign.

Energy policies, including the US import tariff on ethanol, and other forms of protectionism are other big topics expected to be on the bilateral agenda, at a time when the affects of the deep US economic crisis are spreading worldwide.

Relations between the United States and Latin American turned especially sour during the Bush administration which put little emphasis on the region. The South American leaders have been increasingly pursuing joint efforts for trade and cooperation as a more home grown alternative for development with less influence of the US transnational corporations.

www.cubaluxuryrent.com