Canada keeps a much lower profile in the hemisphere than the outspoken United States; perhaps it is the simple comparison to Washington which allows it to maintain largely friendly relations with every government in the West. Still, it is interesting that Cuba’s two large northern neighbors would have such very different relationships with Havana. One news item today brought the disparities to my attention: just a few weeks after the Obama administration tightened travel restrictions on flights to Cuba (and other nations it deemed “state sponsors of terrorism”), Canada’s Harper administration reached an agreement with Havana that would expand Canadian airline access to the island’s airports.
Under the arrangement, four Canadian charter airlines will be permitted to fly among multiple locations after landing in Cuba. Canadian vacationers will now be able to fly their nation’s airlines to several different cities on one trip to Cuba, which is a plus for the many tourists that so enjoy the island and visit Cuba several times a year. And that’s Havana’s motivation, as well; the Castro administration is hoping the arrangement will boost tourism in 2010. Last year, 900,000 Canadian tourists visited Cuba. The goal for the coming year is to break 1 million.
Canadian Prime Minister Stephen Harper continues to view the Cuban government as a regime with human rights problems, but his administration also has full diplomatic relations with Havana and stands against the U.S. embargo. His nation’s policy of engagement with Cuba stands in stark contrast to the policy of isolation preferred by the neighbor between them.
The Tropicana, Havana’s pre-revolution international celebrity haunt, celebrated its 70th anniversary on December 30, its future bright as a money-maker for the Cuban government. Under Fidel Castro, most such establishments in Cuba were closed during the 1960s. But the Tropicana, with its scantily-clad female dancers in feathers and sequins, endured, having been one of the world’s best-known nightclubs in the previous decade. Its casino was closed along with the rest on the island, but it was decided that the nightclub should continue in order to promote Cuban culture and bring the government money. The entrance fee, at around $65, does this latter job well, and around 10% of the tourists that visit Cuba come to the Tropicana.
At 60 to 65 thousand tons in 2009, Cuba’s unrefined nickel plus cobalt production was far below the nation’s average for the decade, which was 74-75 thousand tons. This is notable, as the island is one of the world’s largest nickel producers, and supplies 10% of the world’s cobalt. But nickel prices fell in early 2009 by around 80%, making production an ever more challenging enterprise. Cuban officials believed that prices threatened to make nickel exportation—Cuba’s most important export industry outside of services—unprofitable. Nickel has accounted for more than 50% of Cuban non-service export earnings in previous years.
As nickel and cobalt declined, Cuban citrus production increased by 9.1% in 2009. Impressive, after the three hurricanes in 2008 and previous years of storms that had repeatedly decimated the agricultural sector. This year’s production, however, at 427,500 tons, was far below the 2003 figure of 792,700 tons. And in the 1980s, Cuba was the world’s biggest citrus fruit exporter—mostly oranges and grapefruit—producing more than a million tons that mostly went to the Soviet Union.
Even as many foreign partners have seen their funds in Cuba frozen and had great trouble this year transferring profits and funds abroad, they seem to be sticking around. In July 2008, the government said there were 246 foreign investment projects in the country; now state media reports 258 joint venture and other investment projects operating domestically and 46 abroad. None of these are U.S. ventures, of course. Cuba’s top investing partners abroad are Venezuela, China and Angola; in country, the top investors are Spain, Venezuela, Canada and Italy.
For all of its economic problems, Cuba appears to have succeeded in the difficult task of diversification. The island is involved with a number of countries (after a difficult lesson on this when the Soviet Union collapsed) across a variety of different industries, including construction, tourism, oil exploration, communications, mining and others. Hopefully, such planning will help to cushion future economic blows coming from domestic problems in partner countries or international price fluctuations in certain industries.
Still, all this will not help much if Cuba cannot prove itself more financially responsible in the coming year, after finding itself unable—by billions of dollars—to back foreign investors’ funds in Cuban banks. Foreign firms are “hanging in there, hoping the situation will improve in 2010.” If it does not, diversification of international partners will do no good when they all walk out.
Above, see the full Great Decisions Television episode on Cuba from this fall.
Overview
Cuba has had a difficult year as its economy suffered from (1) the lingering effects of three hurricanes in 2008 and (2) the strain that continuing global economic downturn has had on state coffers as exports and foreign investment declined. The U.S. embargo certainly continued to take its own toll on the Cuban economy and on human capital development on the island, and was renewed for another year even as the United Nations General Assembly condemned it in a decisive 187-3 vote. Havana’s ties with many foreign powers have grown stronger, in particular with Venezuela, through ALBA and PetroCaribe; with the EU, as Spain moves to eliminate the EU Common Position and entirely normalize EU-Cuba relations come January 2010; and with a number of Asian countries, including Vietnam, Japan, and also China, whose president (Hu Jintao) has visited Cuba twice since gaining office—more times than he has visited any other Latin American country. Cuban relations with the United States, however, continue in limbo. President Obama relaxed Cuban-American travel regulations and rules regarding telecommunications access to Cuba, and expressed his willingness to move past antiquated policy; President Castro similarly claimed Havana will talk to the United States about “anything.” But each side demands further concessions from the other—Havana wants the embargo repealed and Washington wants proof of greater respect for human rights and political participation—and neither has yet budged. Even lower-level discussions on migration, an issue which both sides agree must not be political, have been postponed until 2010.
Person of the Year
Raúl Castro, whose profile is so much lower than that of his older brother Fidel, is the decision-maker that has made the most impact on the the island this year. Despite Human Rights Watch’s recent report, “New Castro, Same Cuba,” and the implications of such a title, Cuba under Raúl is a bit different and Raúl’s ideas differ in several important ways from Fidel’s. Holding of political prisoners and arbitrary detentions of dissidents remain a problem, indeed. But Raúl’s project to decentralize agriculture, long an inefficient state-run enterprise, has proceeded during 2009. His decrees have made access to the internet, cell phones and laptops more common, though practical ability to purchase these luxuries remains dismally low. Even as Fidel in his writing has insistently expressed anti-American views and negativity about improving relations with the United States, Raúl has not echoed this sentiment, and instead has claimed openness to discussions. Raúl also, while refusing to bend from the title of “socialism,” has been open to market-friendly changes, implementing wage reforms and slowly changing the age-old system of rations this year.
His leadership leaves more to be desired, but even with the specter of Fidel continuing to loom large in the press and abroad, Raúl has been the key actor in Cuba this year, determining its trajectory.
Most unexpected event
In March, Raúl surprised many in Cuba and abroad by reshuffling a long stagnant presidential cabinet. The shake-up was not necessarily a progressive move, however: the average age of Cabinet members remained quite high afterward; Raúl’s military cronies were given high ranks; and indeed, many onlookers believed that the reshuffle was to get rid of leaders who had strayed too far from the pack. In fact, soon afterward, Fidel called Carlos Lage and Felipe Perez Roque—two of those removed from their posts—”unworthy” individuals who had been “seduced by the honey of power.”
What to watch for in 2010
Keep an eye on bloggers in Cuba, and on development of technology and Internet and its increasingly important role in people’s lives on the island. Expect, perhaps, a more visible reaction by the state to these trends. Pay attention to Havana’s foreign ties, in particular those with its two most important partners, Venezuela and China, with the EU, and with the United States as all of these relationships continue to change. Watch the Cuban-American community in Miami and the effect of its demographic shifts: will the U.S. Congress finally have the support to eliminate the travel ban, or even the embargo? Much depends on the prevailing winds in this group.
The Cuba Blog will continue to follow all of these issues in the year ahead. Thank you for your readership and participation in 2009.
In a socialist state like Cuba, part of the grounding theory is that each citizen feels and responds to a moral imperative to work, to take only what he needs, and to help ensure that all are provided for (hopefully) equally. Applying this principle to the case of energy consumption then, one has the responsibility to turn off lights when they are not needed and to lower use of air conditioning and other such energy consuming devices because energy is a scarce resource that must be shared—and thus used sparingly so that all may enjoy some.
Indeed, at first glance this looks like the situation in Cuba right now: the government has pushed energy conservation as an absolute necessity as it tries to reduce the country’s consumption of these foreign supplies. And people have responded. According to Reuters, some neighborhoods are taking turns abstaining for an hour at a time in the evenings. Brigades of school children knock on doors reminding residents of the pressing need to save energy.
But at some point it becomes difficult to measure the effect the moral imperative has on reducing energy consumption versus the effect that can be attributed to simple self-preservation. In this case we might well be dealing with the latter. Cubans are scrambling to improve their record of energy consumption in order to avoid the dreaded blackouts that plagued the country in the 1990s, and which the Cuban state threatened to reinstate if voluntary actions could not make the desired improvement.
This way, life continues on with only minor inconveniences. Production has apparently not been significantly affected by the energy cuts. Reuters quotes one citizen in today’s piece as saying, ”The choice is simple. Save or suffer blackouts, and that is a situation nobody wants to live through again.”
Havana held its 27th annual International Trade Fair last week (November 2-7), with 652 companies in attendance for a total of over 1,600 participants from 51 countries. Spain, Canada, China, Russia and Venezuela boasted the largest delegations at the Fair, and Italy, Germany, Mexico and Brazil also had considerable presence.
Meanwhile, CNN ran a piece on the U.S. representatives at the Fair. See below.
Last week potatoes and peas were dropped from the monthly ration books that Cubans depend upon as one of their main sources of food. Not having these products in the ration books means, of course, that potatoes and peas will no longer be rationed. Islanders can buy as much of them as they want, if (1) they can afford the high prices and (2) the products are on the shelves in the first place.
With this new change (and considering the shortages that have long plagued Cuban stores) some believe that those Cubans whose relatives abroad send them money will be tempted to hoard supplies and be able to buy up all the potatoes and peas before ordinary people can save the money to buy their own fair portions. That, of course, is what rationing hoped to avoid in the first place.
Previously, Cubans were entitled to buy only up to four pounds of potatoes and 10 ounces of peas a month, with the price set at about a penny per pound for potatoes and just under a penny per pound for peas. Both were available only in state-owned ration stores or on the black market. Now, official buying limits are gone, but Cubans must pay 5 cents a pound for potatoes and 17 cents a pound for peas at the same ration shops.
The relatively huge price increase will be difficult for Cubans on a $20/month salary to swallow, but the Cuban government has clearly stated its intention to move away from the ration books, or libretas, so this change is not likely to be reversed. It is at least a test before doing the same with products that are more central to the Cuban diet, like rice and beans.
See Businessweek’s piece here for more information.
“The U.N. General Assembly on Wednesday overwhelmingly condemned the U.S. trade embargo on Cuba, an annual ritual that highlights global opposition to the policy.
“This year’s vote was 187-3 in opposition to the embargo, up from 185-3 last year, with only Israel and the tiny Pacific island nation of Palau supporting the United States. Micronesia and the Marshall Islands abstained both years.
“It was the 18th year in a row that the General Assembly has taken up the symbolic measure, with Washington steadily losing what little support it once had.”
Cuba’s official statement on the embargo, available on the “Cuba vs. Bloqueo 2009″ website (here), details what it considers the direct effects of the embargo on the Cuban population. The report argues:
The economic, commercial and financial embargo imposed by the United States on Cuba for the last 50 years is the most serious kind of cruel and inhumane policy, lacking legality and legitimacy, and deliberately designed to cause hunger, illnesses and desperation in the Cuban populace. (Note: this is my own translation from Spanish)
The report goes on to call the embargo an “act of genocide” and an “act of economic war,” according to generally accepted international conventions.
The United Nations General Assembly will vote tomorrow on whether to condemn the U.S. embargo of Cuba, and the question is not whether the resolution will pass (it will), but by how much this year (last year was 185 countries for the resolution, 3 against), and whether the Obama administration will react to what will inevitably be an expression of overwhelming international opposition to the policy.
Business between Cuba and four of its top five trading partners has declined sharply in 2009 in a painful reflection of the island’s economic crisis. China, Spain, Canada and the United States all reported 20 to 50 percent declines in exports to and (minus the USA) imports from Cuba.
Percent change in Imports from/Exports to Cuba, through August 2009 (Spain figures are through July)
China Spain Canada United States
Change in value of imports -48.2 -24 -55.7 (n/a)
Change in value of exports -12.7 -43 -52.4 -23
Venezuela, Cuba’s number one trading partner and supplier of oil, did not have figures available to Reuters. However, analysts assume that its value of exports to the island will have dropped considerably as well, from a lofty $5.3 billion in 2008 (this was more than eight times the value of second-place China’s exports to Cuba), at least due to the fall in oil prices.
