Chronicle on Cuba - August 2004

Economy

August 1: Cuban oil production through July was 17 million barrels toward a new record of more than 30 million barrels this year, the official media said. "The central oil producing region arrived at 1 million tonnes (7 million barrels)" the government's midday television newscast said. State-run radio said the 7 million barrels represented 41 percent of this year's output, which would therefore be 17 million barrels. Cuban oil production was 26 million barrels (71,300 bpd) in 2003 and 653 million cubic meters of gas. The media reports said natural gas production was 500 million cubic meters through July. Foreign companies, mainly Canadian firms Sherritt International Corp. (S.TO) and Pebercan Inc. (PBC.TO), have joint ventures and production agreements with state oil monopoly Cubapetroleo (Cupet) and account for around 60 percent of Cuba's oil and gas output. (Reuters 1/8/04)

August 2: Cuba is urging sugar workers to take advantage of recent rainfall and ease damage caused by drought, local media said, though reports left no doubt that the coming harvest was in trouble and some mills would not open. Light-to-moderate rainfall over the last few weeks has put some life back into cane plantations devastated by months of unusually dry weather, but the moisture was not nearly enough. "Last year we had 680 millimeters (26.8 inches) of rain through July and this year 190 millimeters (7.5 inches)," the deputy director of central Villa Clara province's sugar industry, Sergio Guillen Sosa, said. (Reuters, 2/8/04)

August 3: An end to the oil shipments from Venezuela, combined with recent US restrictions on travel and remittances to Cuba, could put the Cuban economy and Castro's government against the ropes. ''Clearly it is in the Cuban government's commercial and economic interests to have Chávez remain the president of Venezuela,'' said John Kavulich, president of the US-Cuba Trade and Economic Council, a New York-based group that monitors trade with the communist island. Kavulich compares a possible Chávez loss to the end of Soviet subsidies to Havana in 1992. ''Venezuela has clearly replaced the USSR in terms of the commercial and economic element,'' says Kavulich. ``Without Venezuela, Cuba would not be able to maintain its current commercial, economic, and political systems. There would have to be some changes.'' (The Miami Herald, 3/8/04)

August 5: Cuba has just inaugurated a new service to receive money remittances through Italy and Spain, five weeks after the restrictions approved by US President George W. Bush went into effect, according to a report in the press. The new service is called Sercuba and is provided by the Empresa de Telecomunicaciones de Cuba S.A. (ETECSA), a Cuban-Italian joint venture. Its offices will initially be in Italy and Spain, with prospects to spread to other countries. "Sercuba provides a safe, easy and rapid solution to send money transfers to your relatives and friends in Cuba," says the company on its website. (Radio Habana Cuba, 7/8/04)

August 5: Addressing the opening session of ASCE's three-day conference in Miami, Phil Peters, a Cuba expert with the Washington-based Lexington Institute, said the economic openings Cuba adopted in the early 1990s -- after its massive Soviet subsidies ended -- were positive in the beginning but `now we see things slipping into reverse.'' The island now has a ''culture of illegality,'' because of the mixture of private and state-controlled economic activities, and could achieve more positive results with ''minor changes,'' he said. But as long as Castro is in power, Peters stressed, ``they're going to keep things as they are.''. ASCE (The Association for the Study of Cuban Economy) is largely made up of academics and business people interested in Cuba issues. (The Miami Herald, 6/8/04)

August 5: The British government gave $34,785 dollars to the United Nations Development Program (UNDP) in Havana for the construction of a drinking water system in Guantánamo. The system will benefit 571 residents in Hatibonico, of which 251 are women and 108 are children, and will supply water for household and general consumption as well as for food production and other economic activities. (AFP, 5/8/04)

August 5: Cuba announced it will take new measures to reduce electricity consumption due to shortages caused by breakdowns in the generation system. The head of the Energy Conservation Program on the island, Víctor Puentes Monto, said on local television that the shortfall is estimated at 200 megawatts , mainly as a result of breakdowns in the Antonio Guiteras electrical plant in Matanzas . In an effort to reduce demand, the government has instructed state entities to halt non-essential production, to relocate indispensable staff to administrative headquarters and to send the rest on holidays. Other measures include turning air-conditioning off in state entities during peak demand, cut lighting and the use of electrical equipment as well as scheduling irrigation during early morning hours. (EFE, 6/8/04)

August 5: Sherritt International Corp., Toronto, plans to resume exploratory drilling in northern Cuba in the third quarter and is considering an increase in its $90 million capital spending plan in light of the current oil price. Capital spending was $46.2 million in the first half of 2004, and first half gross working interest oil production in Cuba fell 13% to 37,444 b/d (19,811 b/d net). The production dip was due to natural declines in Canasí and Puerto Escondido fields and delays in drilling several development wells in the last half of 2003. Exploratory drilling will start with the Santa Cruz prospect on Block 7. Sherritt said it has work commitments for several exploration wells in the next 12 months. With three rigs running, the company will refocus development drilling on the Seboruco area, where recent drilling has resulted in higher than anticipated initial production rates. It will undertake a 50% capacity expansion of the Yumurí oil treatment facility in late 2004 to process production expected from new wells at Seboruco and Yumurí. Construction was completed in the 2004 second quarter on a pipeline to ship gas from the Canasí facility to the Cuban gathering system at Puerto Escondido. (Oil and Gas Journal, 5/8/04)

August 5: Despite the current dramatic changes gripping the Cuban sugar industry, prompted by an international unfriendly market, the island´s government has continued to improve living conditions for the relocated workers. As part of the benefits, the Paraguay community, in the easternmost Guantánamo province, already boasts a baseball field, a primary school, a library and a video cinema hall. Carlos Lage, the Secretary with the State Council´s Executive Committee, said the government is also planning to increase the quality of life in former sugar-producing communities, while pondering other ways of improving conditions for residents in Paraguay community. (Prensa Latina, 6/8/04)

August 6: Despite the recent rain that fell in the east of Cuba, drought still persists in Holguín province, 164.7 miles away from Havana, as assured by Cruz Mario, director of the Enterprise for Aqueducts and Sewer Systems in this province, who told the press that the lack of water supply has been partially mitigated, due to the rain in the last days, but a real restoration is not foreseen yet. The lack of rain in the last 10 years made the level of water go down from 21.4 to 2.4 million cubic meters in a reservoir called El Rincon, and the coming rain increased the amount of water in 2 million. (Prensa Latina, 6/8/04)

August 6: Cuba is seeking alternatives to tackle the intense drought affecting the eastern part of the island, by building water pumping stations and wells in round-the-clock working sessions, among other options. As part of such efforts, Cuban Vice President Carlos Lage has called on sugar cane farmers in Santiago, 900 km east of Havana, to find new alternatives and make their best to reduce the effects of the drought on the sugar cane plantations. On a recent tour of the east, Lage recommended to growers and harvesters that the soil in sugar cane plantations be permanently covered with straw, in order to keep grass from growing and maintain the level of humidity amid the surrounding dryness. The government has already built 10 water-pumping stations and sunk 100 new wells in Holguin. Its greatest hope is a new pipeline, being built at the cost of $5 million dollars to channel water in a 32-mile distance from the river Cauto to the city of Holguín. (Prensa Latina, 6/8/04)

August 7: Cuban top engineers and operators are working round the clock to repair the turbine in one of the biggest sources of electric power in the country, interrupted since May, reported National TV News. The breakdown caused a deficit close to 200 mega-watts bringing frequent brownouts to many cities and localities of the island. (Prensa Latina, 7/8/04)

August 7: Cuba and Indonesia are exploring possibilities of stepping up cooperation in the fields of agriculture, pharmaceuticals and biotechnology sectors, Indonesian Ambassador to Havana, Indra Cahya, told local press. Quoted by Cuban newspaper Granma, Cahya stated that in order to further agree on future exchanges all that is left are visits by Cuban specialists to his country. Three commercial delegations from Indonesia have visited Cuba this year, following the Third Intergovernmental Meeting in 2003. (Prensa Latina, 7/8/04)

August 8: Professor Asma Ismail, a member of the Universiti Sains Malaysia-Cuba collaboration team, said that Malaysia and Cuba had both expressed interest in collaborating in vaccine development against infectious disease, development of monoclonal antibodies against cancer, biotechnology techniques in fish feed and fish production and human resource development programmes. "USM is interested in working with Cuba in medical biotechnology, which includes diagnostics, vaccinology, pharmacogenomics, stem- cell engineering and biomaterials. We also want to collaborate in neuro-science and aquaculture," she said. (New Sunday Time, 8/8/04)

August 9: Cuban energy authorities insisted that “it is indispensable” to fully observe a group of special measures adopted recently aimed at conserving electricity and curtailing consumption. (Efecom, 9/8/04)

August 9: Cuban trade unions have urged their members to join a voluntary work drive, to step up the country´s economic performance in various sectors. The call by the Cuban Workers’ Confederation (CTC) is aimed at boosting the sugarcane, tobacco and coffee harvests and other agricultural activities, as well as industrial production and construction of social works. (Prensa Latina, 9/8/04)

August 9: Cuban anti-cancer vaccines are gaining a place in the international market, according to AIN News Agency. One of these vaccines is the EGF-P64K which is a biomedicine based on the human epidermal growth factor and used for the treatment of different types of skin cancer, according to the Cuban weekly newspaper Opciones. Commercial manager of the Cuban Center for Molecular Immunology, Mauro Alfonso, commented on the large number of countries interested in the product. Agreements have been signed with an Indian firm and negotiations are underway with other nations. Some of the contracts include partial technology transfers while others cover marketing rights and cooperative production. (Radio Habana Cuba, 9/8/04)

August 10: The intense drought parching eastern Cuba since last year has severely damaged its ranching and agriculture, notably the sugar cane crop. Holguin, one of the provinces hardest hit by the drought, required an investment of $15.2 million last year to alleviate the situation, provincial deputy director of finance Raul Topes told the local press. "The amount," the official noted "could increase if the lack of precipitation persists, with resulting low levels of water in reservoirs." According to an Agriculture Ministry report cited by state-run Prensa Latina news agency, more than 2,200 head of dairy cattle have died, leading to a 418,000-liter (110,430-gallon) decrease in milk production over the past year. (EFE, 10/8/04)

August 10: Foreign investment in Cuba dropped last year for the first time since the communist-led island began opening to business more than a decade ago. Havana authorized fewer new ventures with foreign companies, and a record number of existing ones dissolved. That resulted in a 15 percent decline in the number of foreign economic associations, to 343 at the end of 2003, according to a study presented at a just-concluded conference in Miami. The drop comes as Cuba gets more selective about the foreign ventures it will allow, souring even more overseas companies on doing business with the island. That's a reversal of Havana's more open attitude toward business in the early 1990s just after the collapse of the Soviet Union and demise of Soviet largesse. "In the past year, there's been a clear trend toward re-centralization of the economy," said Paolo Spadoni, a doctoral student at the University of Florida who has been researching foreign investment in Cuba for years. (Sun Sentinel, 10/8/04)

August 12: Fidel Castro said the capital city was thoroughly prepared to face Hurricane Charley, thus providing Havana the opportunity to considerably minimize losses. Castro referred to the rapid movement of the hurricane, which within 24 hours moved from the sea off eastern Guantánamo province to areas just below western Cuba. “We were hoping it would not hit the capital city, that it would turn east or west, but meteorological forecasts have been made; we will see-once it passes through-what damage it has inflicted”, commented Castro. This situation is occurring while the country is still hard at work recovering from two previous hurricanes that hit the country just a couple of years ago, particularly Michelle, which was very destructive, explained the Cuban leader. He said he was concerned about similar damage that could be inflicted by strong winds hitting areas of the capital city. (AIN, 12/8/04)

August 12: The tobacco leaves harvested in the Cuban western province of Pinar del Rio, the first in the country, have been secured against the approaching gusts of Hurricane Charley. Juan Carlos Pozo, from the Ministry of Agriculture, told the press measures include speeding up the harvesting of 26,000 tons of leaves, while sheltering them all in safe places. (Prensa Latina, 12/8/04)

August 12: Hurricane Charley has passed through Cuba after gathering strength in the Caribbean and headed north towards the American state of Florida. In Havana, authorities created shelters to evacuate 20,000 people from low-lying areas and from several buildings for fear they will collapse, like in Old and Central Havana's historic districts. In Pinar del Rio, Cuba's biggest tobacco-producing province, 52,000 people were evacuated and 50,000 tons of tobacco have been secured. More than 1,300 tourists were evacuated from Cayo Largo del Sur to the resort town of Varadero in Matanzas province, some 140 kilometers (87 miles) from the capital. Tourism officials in Varadero told the press that around 18,000 visitors stayed in the area's hotels and authorities were able to accommodate evacuees in vacant rooms. In addition, mobile civil-defense units were on the streets giving instructions on safety precautions in Cuba's main resort area. The entire fishing fleet on the Isle of Youth off the southern coast of Cuba proper was safely in port and the cargo at the docks were transferred to safe places, according to the official newspaper Juventud Rebelde. Havana residents waited in long lines at stores and gas stations to gather basic provisions and fill their cars' gas tanks up with gasoline, while many churches began selling candles in preparation for the electricity going out in the storm. (EFE, 12/8/04)

August 17: Cuban Vice President Carlos Lage told reporters that a complete report on damage to food production, services and housing caused by hurricane Charlie has not yet been submitted. Lage called on local authorities to step up recovery efforts, noting that people in some areas are still without electricity after four days. Brigades of electricians and other experts from Cuba's central and eastern provinces have been volunteering in the capital and in the province of Pinar del Río -- in an effort to restore all services to area residents as quickly as possible. (Radio Habana Cuba, 17/8/04)

August 19: The International School of Cinema in San Antonio de los Baños, one of the most prestigious institutions in the world of filmmaking, was hit by Hurricane “Charley” in his path through Cuba. Dozens of palm and coconut tress were pulled up by the roots and scattered all over the grassy areas surrounding the school, while hundreds of aluminium roof covers were lifted and glass windows were shattered by the winds. The Hurricane also destroyed walls and ceilings of some classrooms. (EFE, 19/8/04)

August 21: Cuba, whose merchant fleet shrank during the economic crisis of the 1990s, has over a thousand seamen working in foreign vessels as part of a policy that seeks to have 10,000 of such contracts by 2010. The initiative is seen as an “important source” of income, reported the weekly “Opciones.” (Europa Press, 21/8/04)

August 21: Cuba’s National Centre for Protected Areas received a major boost when the UN Environment Programme (UNEP) confirmed it will fund several new projects on the island. The UN assistance will be used to fortify conservation efforts in three important ecological zones: dry, pine forests and wetlands specialist Pedro Ruiz, told the press. The Cuban conservation specialist added that his centre is currently focused on forest management and the promotion of environmental awareness. UNEP already cooperates with a bio-diversity and sustainable development program in the Sabana-Camaguey ecosystem. (Radio Habana Cuba, 21/8/04)

August 24: Hurricane Charley caused more than $1 billion in damage to Havana and its surrounding provinces when it roared through western Cuba on August 13, killing four people, a leader of the ruling Communist Party said. The storm demolished 4,177 houses and damaged almost 70,000 other homes, Politburo member Pedro Sáez said in Round Table program -- broadcast live on Cuban radio and TV. He said that 798 schools and 312 health clinics and hospitals were also damaged by the hurricane. Charley has been nicknamed the "lumberjack" hurricane because its 105 mph (169 kph) winds uprooted or snapped more than 8,000 trees in Havana, and destroyed 300 hectares (7,400 acres) of tree plantations outside the city, he said. It was the worst storm to hit Cuba since Hurricane Michelle in 2001 plowed through the center of the island in 2001, leaving 200,000 homeless and $1.8 billion in damages. Sáez, the party's first secretary for the City of Havana province, said Charley's most painful impact was to leave 2 million inhabitants without water for days on end because pumping facilities had no power. Large parts of the city's westside, as well as Havana and Pinar del Rio provinces had no electricity for 11 days due to the downing of 28 high-voltage towers from a power plant in Mariel. Some 23,000 hectares (56,800 acres) of bananas, citrus and other fruit were flattened in Havana province, where cattle, chicken and pig farms were badly damaged. (Reuters, Prensa Latina, 24/8/04)

August 25: The potential breaking-off of diplomatic relations between Cuba and Panama has given rise to concern among businesspeople of the Colon Free Zone. Cuba is not only their main client in the Caribbean but owes them over $200 million. The breaking-off would have “very negative consequences on the Free Zone and Panama”, said Hertsel Levy, president of the (Colon Free Zone) Association of Merchants (AU). He also added that Cuba is one of the top ten buyers of the Fee Zone, conducting $12 billion worth of business a year. (El Nuevo Herald, 26/8/04)

August 25: Over 100,000 Cubans are receiving water from tankers in Las Tunas province, due to a harsh drought that has been affecting eastern Cuba for ten years now. Nearly 140 communities in that territory of 2542 square miles and over 532,000 inhabitants are deprived of running water, which is getting scarcer, and into low level reservoirs, now at 30 percent of their capacities. Provincial authorities have estimated loses in 2004 in $26 million, prompted by damages to agriculture and stockbreeding, besides the resulting soil degradation. (Prensa Latina, 25/8/04)

August 27: Interests in Cuba as a tourist destination continue to grow, this time with Chinese vacationers. This was evident during a meeting at the Cuban embassy in Beijing, with the participation of some 40 tour agency representatives and the Chinese press specialized in tourism. Omar Pereira, in charge of Consular Affairs at the Cuban diplomatic mission in the Chinese capital, said that the island's tourism industry was increasing. He noted that Cuba plans to welcome a record number of visitors this year - over two million. (Radio Habana Cuba, 27/8/04)

August 27: Panama requested Mexico to take on its commercial representation in Cuba after the governments of Mireya Moscoso and Fidel Castro broke diplomatic relations, indicated Mexico’s Foreign Minister, Luis Ernesto Derbez. Derbez said that “all necessary steps are currently being taken so that Mexico can represent Panamanian interests on the island.” (Europa Press, 27/8/04)

August 28: Argentina and Cuba signed a trade agreement in Buenos Aires, to achieve bilateral exchanges worth $200 million per year. The accord was signed by Argentine Health and Foreign Ministers, and Cuba’s Alimport (Cuba Food Importing Company) Argentina will purchase biopharmaceutical products and Cuban medical technology. Alimport will import Argentinean products, according to the document expiring in 2007. (Prensa Latina, 28/8/04)

August 30: Executive Secretary of the United Nations Convention to Combat Desertification UNCCD, Hama Arba Diallo, said the UN is ready to analyze how the international community can cooperate in the implementation of strategies of all Cuban eastern provinces to combat the negative effects of drought. The UN representative praised the measures taken by authorities in Las Tunas, Holguin and Camagüey to counteract drought´s effects. (Prensa Latina, 30/8/04)

August 30: Cuba enjoyed almost an 11 percent increase in tourist visits during the busiest part of its high season, government officials said. The island this summer also broke its one-day record for hotel guests accommodated, with 44,415 on August 10 compared to 2003's one-day total of 40,026, the financial weekly Opciones reported. Jardines del Rey, Holguin, Varadero and the city of Havana remain the favorite haunts of tourists who last year hailed largely from Canada, the United Kingdom, Spain and Italy, the publication said. Cuba has some 40,000 rooms distributed among 273 hotels, 60 percent of which are in the four- and five-star categories. The government expects to reach its goal of receiving more than 2 million tourists this year. (EFE, 30/8/04)

August 28: Cuba continues to strive to restore power in some areas after Hurricane Charley hit the western part of the country two weeks ago. Cuban Vice President Carlos Lage said there are many hard-working days ahead before reestablishing power services completely in western Pinar del Río and Havana provinces. It is time to resort to experience and professionalism to restore electricity to 30,000 houses lacking that service in the region since the hurricane hit the island on August 13, he said. The Cuban leader noted that 23 percent of the population in the 11 (out of 19) most affected municipalities of Havana province still lack power, adding that workers will have to complete the recuperation of high-tension towers brought down by the hurricane. (Prensa Latina, 30/8/04)