Cuba’s Many Problems Prompt Speculation Galore  

Cuba’s facing many problems: the collapse of its ally and benefactor, Venezuela; recovering from the damage caused by Hurricane Irma; increased hostility from the Trump Administration; Cuba’s government’s fear of an expanding private sector of the economy; declining visitors from the U.S.; a declining national economy; the imminent political transition next February and the regime’s blocking 175 independent candidates from the upcoming election of municipal councils.

A Miami Herald article gathers experts’ speculation over whether Raúl Castro will in fact relinquish the presidency next February; whether the presumed new president, Miguel Diaz-Canel, will be capable of handling all of these problems; whether hardliners in the regime have been or will be empowered. Read it to get the full flavor of these and other speculations.[1]

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[1] Whitefield & Gámez, Raúl Castro: Will he stay in power in Cuba or retire? Miami Herald (Nov. 21, 2017).

Trump’s New Regulations Adversely Affect Cuban Entrepreneurs

The new travel regulations and anti-Cuba rhetoric of President Trump already are hurting ordinary Cubans, especially those who have become entrepreneurs and who employ 600,000 of the island’s 11 million people.  The “self-employed” sector, a euphemism used by the Cuban government to avoid the words “private” or “entrepreneur,” already is encumbered by Cuban regulations that leave little room for development.[1]

Now an “association of Cuban businesswomen has asked to meet with Senator Marco Rubio (Rep., FL), a Cuban-American who has never been to the island and who is believed to be a major influencer on the Trump Administration’s Cuba policies. These women want to explain ” the impact on the country’s nascent private sector of rolling back a detente in U.S. relations.” They say, “The current situation has us very worried and we would like to share our personal histories and perspective from Cuba.”

One of these women, Niuris Higueras, the owner of the Atelier restaurant in Havana, said her  “business is down 60 percent from a year ago.” Another woman, Julia de la Rosa, who runs a 10-room bed and breakfast, said rentals were down 20 percent in October and she expected a further decline as new U.S. regulations on individual travel kick in this month.

The Trump Administration’s evident hostility toward Cuba also has caused U.S. businesses to reduce their interest in trying to create and build business in Cuba. At this year’s Cuba trade fair only 13 U.S. companies had booths compared with 33 last year. Another cause of this reduction is growing awareness of the difficulty of doing business in Cuba.[2]

Former U.S. Secretary of Commerce Carlos Gutierrez, the Cuban-born head of the U.S.-Cuba Business Council, said, “This is a huge step backwards. We had made so much progress.”

U.S. airlines with licenses for flights to Cuba also are seeing the reduction in U.S. demand for visiting Cuba. As a result, five airlines have cancelled all flights to the island while others have reduced the number of their flights.[3]

A caveat to this negative reaction is the opinion of some that the new regulations on business dealings “produce brighter lines that may make it easier for companies to identify who exactly they can do business with when trying to operate on the island.”

One who expressed this view is Peter Harrell, an adjunct senior fellow at the Center for a New American Security who previously served as a deputy assistant secretary for counter-threat finance and sanctions in the U.S. State Department, said that the new regulations “made trade easier with the country’s private sector.” A significant point in this regard was the State Department’s FAQ document stating that “entities not on its restricted list, even if they’re subsidiaries of those on the list, are [not] restricted until they themselves appear on the blacklist.”[4]

Another caveat is “the new regulations limiting “disruption to pre-existing commercial activities, ensuring that U.S. companies can continue to do business with Cuba’s nascent private sector.” Examples of such preexisting deals are Deere & Co. and Caterpillar Inc.’s arrangements for distribution of their products on the island.[5]

Myron Brilliant, the head of international affairs at the U.S. chamber of Commerce, urged the administration “to continue to keep business in mind and avoid further steps to restrict the economic relationship between the U.S. and Cuba.”

Nevertheless, the U.S. regime of Cuba sanctions presents risks to U.S. companies. The latest example is the November 17 announcement by the U.S. Treasury of an OFAC settlement with American Express Co. for $204,000 for its 50%-owned Belgian credit-card issuer’s corporate customers’ 1,818 transactions in Cuba between 2009 and 2014.[6]

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[1] Reuters, Cuban Businesswomen Seek Rubio Meeting as U.S. Policies Bite, N.Y. Times (Nov. 17, 2017). The above topics and others are the subjects of earlier posts listed in the “Cuban Economy” section of List of Posts to dwkcommentaries—Topical: CUBA.

[2] Reuters, Blooming U.S. Business Interest in Cuba Wilts Under Trump, N.Y. Times (Nov. 10, 2017).

[3] Reuters, Alaska Airline Discontinues Los Angeles-Havana Daily Flight, N.Y. Times (Nov. 14, 2017); Assoc. Press, Alaska Airlines to Halt Flights to Cuba, N.Y. Times (Nov. 14, 2017).

[4] Rubenfeld, New U.S. Cuba Regulations May Make Compliance There Easier, W.S.J. (Nov. 9, 2017).

[5] Schwartz & Radnofsky, New Trump Rules Pare Back Obama’s Opening to Cuba, W.S.J. (Nov. 8, 2017).

[6] Rubenfeld, American Express Unit Fined Over Cuba Sanctions Violations, W.S>J. (Nov. 17, 2017).

Another U.N. General Assembly Resolution Condemns U.S. Embargo (Blockade) of Cuba                                                                                                       

On November 1, 2017, the United Nations General Assembly again overwhelmingly adopted a resolution condemning the U.S. embargo (blockade) of Cuba. The vote this year was 191 to 2 (the negative votes by the U.S. and Israel), as shown in the following photograph of the Assembly’s scoreboard.[1]

Preparation for Debating the Resolution[2]

The debate on the resolution was preceded by (a) Cuba’s 47-page report, dated June 2017, on the previous U.N. General Assembly Resolution on the subject and which alleges that Cuba has sustained damages from the embargo totaling $130.2 billion (at current prices); (b) the July 26, 2017, Report of the U.N. Secretary-General containing statements in support of this year’s resolution from 32 U.N. organs and agencies and from 160 U.N. member states and 2 observers, but nothing from the U.S. and Israel, which prior to 2016 opposed similar resolutions and which abstained in 2016; (c) Cuba’s report on its achievements despite the embargo (blockade); and (d) Cuba’s report on the embargo’s impact on the country’s development.

The Actual Resolution[3]

The actual resolution, “Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba” (A/RES/72/42) had two principal operative paragraphs.

It reiterated “its call upon all States to refrain from promulgating and applying laws and measures [like the U.S. embargo against Cuba] . . . in conformity with their obligations under the Charter of the United Nations and international law, which, inter alia, reaffirm the freedom of trade and navigation.” (¶ 2). It also urged “States that have and continue to apply such laws and measures to take the steps necessary to repeal or invalidate them as soon as possible in accordance with their legal regime.” (¶ 3).

The resolution’s preamble reaffirmed “the sovereign equality of States, non-intervention and non-interference in their internal affairs and freedom of international trade and navigation, which are also enshrined in many international legal instruments” and recited the previous General Assembly resolutions against the embargo.  It then recalled “the measures adopted by the Executive of the United States [President Obama] in 2015 and 2016 to modify several aspects of the application of the embargo, which contrast with the measures announced on 16 June 2017 [by President Trump] to reinforce its implementation.”

Cuba’s Presentation of the Resolution[4]

 The resolution was presented by Cuba’s Foreign Minister, Bruno Rodriguez Parrilla. Here is the U.N.’s summary of his remarks:

  • The U.S. “new policy on Cuba was intended to take relations back to a past of confrontation.  Two thirds of the [U.S.] population, including Cuban immigrants living in the[U.S.], were in favor of lifting the blockade. Action to the contrary meant that the [U.S.] Government was acting in an undemocratic fashion.  He recalled that on 16 June, President Trump announced a series of measures intended to tighten the blockade in a hostile speech before an audience made up of staunch followers of the Batista regime, annexationists and terrorists.”
  • There was “total isolation of the [U.S.] in this room” and “without any evidence, it was using as a pretext the ailments affecting some diplomats in Havana and adopting new political measures against Cuba which further tightened the blockade.  President Trump does not have the least moral authority to question Cuba.  He is heading a Government of millionaires destined to implement savage measures against lower‑income families, poor people, minorities and immigrants. The [U.S.] had its own set of issues to deal with, including the country’s lack of guarantees in education and health, the assassination of African‑Americans by law enforcement and the brutal measures threatening the children of illegal aliens who grew up in the [U.S.]”
  • “Recalling the military interventions carried out by the [U.S.] against Cuba, he said that 60 years of domination had been ended by the triumph of the Cuban Revolution in 1959.  When Cuban President Raúl Castro Ruz and then United States President Barack Obama made their hopeful announcement in December 2014, Mr. Obama described the blockade against Cuba as an obsolete policy which had failed to meet its goals.  However, the embargo was never recognized for what it was: a massive violation of the human rights of Cubans and an act of genocide.  Citing Cuban figures, he said between April 2016 and April 2017, losses caused by the blockade to the Cuban economy had been estimated at over $4 billion. There is not a Cuban family or social service that has not suffered the deprivations resulting from the blockade.”
  • The statements of the U.S. Ambassador Nikki Haley “were disrespectful,” and the U.S. “does not have the slightest moral authority to criticize Cuba.” The U.S. Ambassador “is lying.” Now the U.S. is using “as ailments affecting some diplomats in Havana without any evidence” in order to adopt “new political measures against Cuba which further tightened the blockade.”

 Other Countries’ Statements of Support[5]

During the debate, at least 38 other countries expressed their support of the resolution.

U.S. Opposition to the Resolution

 In voting against the resolution, the U.S. Ambassador to the U.N., Nikki Haley, stated the following:[6]

  • “For over 55 years, the Cuban regime has used this debate in the [U.N.] General Assembly as a shiny object to distract the world’s attention from the destruction it has inflicted on its own people and on others in the Western Hemisphere.”
  • “Even during the Cuban missile crisis, when the Castro dictatorship allowed the Soviet Union to secretly install nuclear missiles in Cuba, the Cuban regime and its Soviet allies claimed that the real threat to peace wasn’t the missiles aimed at America. The real threat, they said, was the [U.S.’] discovery of these missiles. At the time, the U.S. Ambassador to the United Nations, Adlai Stevenson, identified the Cuban regime’s habit of pointing fingers anywhere but at itself. He said, ‘This is the first time…I have ever heard it said that the crime is not the burglar but the discovery of the burglar – and that the threat is not the clandestine missiles in Cuba but their discovery and the limited measures taken to quarantine further infection.’”
  • “Today, the crime is the Cuban government’s continued repression of its people and failure to meet even the minimum requirements of a free and just society. Our response has been to stand with the Cuban people and their right to determine their own future. For this, each year, this Assembly’s time is wasted considering this resolution. And the [U.S.] is subjected to all manner of ridiculous claims – anything to deflect attention from the regime that is actually responsible for the suffering of the Cuban people. But the [U.S.] will not be distracted. We will not lose sight of what stands between the Cuban people and the free and democratic future that is their right.”
  • “For that reason, and for the 25th time in 26 years, the United States will vote against this resolution.”
  • “One year ago, the United States abstained when voting on the same resolution. The reason given was that the continuation of the embargo was not isolating Cuba but was in fact isolating the [U.S.] It is true that we had been left nearly alone in opposition to this annual resolution. No doubt there will be some here who do not understand how we can take such opposite positions, separated by just 12 months. They will wonder how we could passively accept this resolution last year and energetically oppose it this year.”
  • “To those who are confused as to where the [U.S.] stands, let me be clear: as is their right under our constitution, the American people have spoken. They have chosen a new president, and he has chosen a new ambassador to the [U.N.]”
  • “As long as the Cuban people continue to be deprived of their human rights and fundamental freedoms – as long as the proceeds from trade with Cuba go to prop up the dictatorial regime responsible for denying those rights – the [U.S.] does not fear isolation in this chamber or anywhere else. Our principles are not up for a vote. They are enshrined in our Constitution. They also happen to be enshrined in the Charter of the[U.N.]. As long as we are members of the [U.N.], we will stand for respect for human rights and fundamental freedoms that the Member States of this body have pledged to protect, even if we have to stand alone.”
  • “The resolution before us aims to end the [U.S.’] ‘economic, commercial, and financial embargo’ against Cuba. But let’s be honest about what we really see going on here. This assembly does not have the power to end the U.S. embargo. It is based in U.S. law, which only the [U.S.] Congress can change. No, what the General Assembly is doing today – what it does every year at this time – is political theatre.”
  • “The Cuban regime is sending the warped message to the world that the sad state of its economy, the oppression of its people, and the export of its destructive ideology is not its fault.”
  • “In the spirit of sending messages, I would like to direct the rest of my comments towards the Cuban people. The American people strongly support your dreams to live in a country where you can speak freely, where you can have uncensored access to the internet, where you can provide for your families, and where you can determine your leadership. We know that many of you have been made hopeful by the opening of diplomatic relations between the [U.S.] and Cuba. That status is not changing. Our friendship and good will toward the Cuban people remain as strong as ever.”
  • “What you probably don’t know is that your government responded to this gesture of good will, not by joining in the spirit in which it was offered, but by expanding its politically motivated detentions, harassment, and violence against those who advocate for political and economic freedom in Cuba. What you cannot know because your government won’t let you know is that there were credible reports of almost 10,000 politically motivated detentions in Cuba in 2016 alone. That’s a massive increase in detentions over recent years. We had hoped our outreach to your government would be met with greater freedom for you.”
  • “Your government silences its critics. It disrupts peaceful assemblies. It censors independent journalists and rigs the economy so the government alone profits.”
  • “Your government has exported its bankrupt, destructive ideology to Venezuela. It has taught the Maduro regime how to silence journalists, crack down on the political opposition, and impoverish its people. Now, millions of Venezuelans join you in being denied their basic rights.”
  • “As we speak here today, your government is busy choosing the successor to the Castro dictatorship. It is attempting to fool you into believing you have a voice by holding local and regional so-called elections. But the process you are engaged in is not freedom. The results were determined before the first vote was cast.”
  • “When the [U.S.] abstained on this resolution last year, its decision was explained by saying, ‘We recognize that the future of the island lies in the hands of the Cuban people.’ There is a casual cruelty to that remark for which I am profoundly sorry. Regrettably, as of today, the future of Cuba is not in your hands. It remains in the hands of your dictators.”
  • “The [U.S.] opposes this resolution today in continued solidarity with the Cuban people and in the hope that they will one day be free to choose their own destiny.”
  • “We might stand alone today. But when the day of freedom comes for the Cuban people – and it will come – we will rejoice with them as only a free people can.”

The U.S. opposition was no surprise in light of the prior consistent Trump Administration’s statements supporting the embargo and the preceding request to do so from U.S. Senator Marco Rubio.[7]

Reactions to the Resolution [8]

 The day before the U.N. vote, 10 Democratic Senators wrote to President Trump urging the U.S. to abstain on the vote. The “failed embargo,” they said, has been repeatedly and publicly condemned by the international community as ineffective and harmful to the people of Cuba. The longer we maintain this outdated Cold War policy the more our international and regional credibility suffers.” Moreover, “the overwhelming majority of Americana, including Cuban-Americans, and Cubans, including Cuban entrepreneurs and many dissidents, [plus international human rights organizations] oppose the embargo and favor engagement by the [U.S.] with Cuba. These Senators were Patrick Leahy (VT), Amy Klobuchar (MN), Chris Van Hollen (MD), Sherrod Brown (OH), Elizabeth Warren (MA), Jeff Merkley (OR), Jack Reed (RI), Edward Markey (MA), Al Franken (MN) and Sheldon Whitehouse (RI).

The President of Engage Cuba, a U.S. national coalition of private companies, organizations and state and local leaders working to lift the embargo, said, “”Ambassador Haley’s comments highlight the Trump administration’s misguided approach toward Cuba. If the administration spoke to real Cubans, they would know that fears for the future are rooted in what a rollback of engagement means for their businesses, communities and families. The Trump administration seems determined to stand alone in the world, supporting an archaic policy has failed for the last 55 years. And the biggest losers are the people of Cuba.”

Conclusion

As an U.S. citizen-advocate for ending the embargo as soon as possible, I am not pleased with the U.S. opposition to this resolution and to the very hostile tone of Ambassador Haley’s remarks. I obviously regret the U.S. abandonment of last year’s abstention by the U.S. on the prior resolution.

Moreover, too many in the U.S. believe the Cuban damages claim from the embargo is just a crazy Cuban dream, but I disagree. Given the amount of the claim, Cuba will not someday tell the U.S. to forget it, nor will the U.S. write a check for Cuba in that amount. A prior post, therefore, suggested that the two countries agree to submit this claim and any other damage claims by both countries for resolution by an independent international arbitration panel such as those provided by the Permanent Court of Arbitration at The Hague in the Netherlands.

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[1] U.N. Press Release, As General Assembly Adopts Annual Resolution Urging End to United States Embargo on Cuba, Delegates Voice Concern About Possible Reversal of Previous Policy (Nov. 1, 2017) [hereafter “U.N. Press Release”]; U.N., UN General Assembly again calls for lifting US embargo against Cuba (Nov. 1, 2017); Minute by Minute: The world against the Blockade, CubaDebate (Nov. 1, 2017); Reuters, U.S. Votes Against U.N. Resolution Calling for End to Cuba Embargo, N.Y. times (Nov. 1, 2017). A prior post covered the similar resolution passed in 2016 by the General Assembly, 191-0 (with abstentions by the U.S. and Israel).

[2]  Cuba Foreign Ministry, Cuba vs. Bloqueo: Cuba’s Report on Resolution 71/5 of the United Nations General Assembly entitled “Necessity of ending the economic, commercial and financial blockade imposed by the United States of America against Cuba” (June 2017); U.N. Sec. Gen Report, Necessity of ending the economic, commercial and financial embargo imposed by the United States of America against Cuba (July 29, 2017); Cuban report on development. Cuba’s Foreign Ministry’s website has a special section on the embargo (Cuba vs. Bloqueo), which includes a scorecard of the General Assembly votes on resolutions against the embargo (blockade), 1982-2016.

[3] U.N. Gen. Assembly, Resolution A/72/L.2 (Oct. 2017).

[4] Cuba Foreign Ministry, Cuba denounces in UN force and intensification of the US blockade (Nov. 1, 2017); U.N. Press Release.

[5] U.N. Press Release.

[6] Ambassador Haley, Remarks at a UN General Assembly Meeting on Cuba, U.S. Mission to U.N. (Nov. 1, 2017). Essentially the same message was delivered the same day by the U.S. Deputy Permanent Representative to the U.N., Ambassador Michele J. Sison. (Sison, Explanation of Vote at a UN General Assembly Meeting on the Cuba Embargo,U.S. Mission to the U.N. (Nov. 1, 2017).

[7] E.g., White House, Remarks by President Trump at the 2017 Values Voter Summit (Oct. 13, 2017); Rubio, Letter to President Trump (Oct. 19, 2017). Unsurprisingly the State Department on October 31 announced that the U.S. would oppose the resolution. (U.S. State Dep’t, Department Press Briefing-October 31, 2017.)

[8] Letter, Senators Leahy et al to President Trump (Oct. 31, 2017); Engage Cuba, Statement on U.S. Vote Against U.N. Resolution Condemning the Cuban Embargo (Nov. 1, 2017).

 

 

Emerging Development of Cuba’s Mariel Port 

Only 28 miles west of Havana, Cuba has been developing the Mariel Special Economic Development Zone around a deep-water port. Now this project is reaching fruition.[1]

With a goal of becoming a bustling commercial city built on high-tech, advanced manufacturing and sustainable development, the Zone of 115,000 acres now has large tracts of land leveled and ready for construction of the following two major manufacturing operations:

  • The BrasCuba factory — a joint venturebetween Brazil’s Souza Cruz and Cuba’s Tabacuba–will turn out Popular, Cohiba and H. Upmann cigarettes for export and the domestic market.
  • Womy Equipment Rental, a Dutch company that rents cranes and other heavy equipment, has just finished its building as shown in this photograph.

In addition, a site has been prepared for a Cuban biotech factory, and two foreign companies–BDC-Log and BDC-Tec– have begun operating in the zone’s logistics sector.

Although only nine companies are currently operating there, another 18, including firms from Spain, the Netherlands, Panama, Brazil, Mexico, South Korea, Vietnam, France, Belgium, and Cuba itself have been approved and are getting ready to start.

The port has more than 2,300 feet of wharf space, four super Post-Panamax cranes and the capacity to handle 820,000 cargo containers annually.

In light of President Trump’s June 2017 announcement of still forthcoming regulatory restrictions on U.S. business’ doing business in Cuba, U.S. firms have been reluctant to make commitments for Mariel projects.

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[1] Whitefield, Mariel is Cuba’s big industrial gamble. Could U.S. companies be among investors?, Miami Herald (Oct. 23, 2017). An earlier blog post discussed potential U.S. interest in Mariel.

Cuba Pays $60 Million of Indebtedness to Major Creditor Nations     

The week of October 15 Cuba paid $60 million of indebtiness to 14 wealthy creditor nations. Last year Cuba paid $40 million to the same group. The total debt is $2.6 billion after the creditors in 2015 forgave $8.5 billion of $11.1 billion upon which Cuba had defaulted through 1986 plus charges.[1]

These creditor nations known as the Club of Paris are the following: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom.

Under the 2015 agreement, Cuba agreed for the first time to grant the creditors equity in development projects, in areas like manufacturing and agriculture, in exchange for a portion of their debt holdings. Many of these restructuring agreements include the establishment of so-called counter-value funds, under which a percentage of debt is discounted in exchange for the potential profits stemming from participation by a creditor country’s firms in Cuba joint-development projects.

The counter-value funds have an estimated combined value of around $750 million of the $2.6 billion owed. Japan, Spain, France and Italy – Cuba’s largest Paris Club creditors – are furthest along in negotiating swaps.

  • For example, a $46 million French project to develop cattle ranching and dairy products in central Camaguey province is ready to sign, according to France’s ambassador to Cuba, Jean-Marie Bruno.
  • Another example is Spain which has a project ready to manufacture cardboard and another aluminium structures for construction capable of resisting earthquakes and hurricanes, both involving Spanish companies.

This access to Cuban development projects gives the European countries and companies an advantage over U.S. companies who are banned by various U.S. laws from such projects.

This payment happened during dire economic times for Cuba due to the political and economic crisis in its ally Venezuela, declines in Cuban exports and tourism due, in part, to the damages caused by Hurricane Irma.

Cuba’s payment in these circumstances showed the importance Cuba attaches to the 2015 agreement with this group of major creditor nations.

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[1] Reuters, Cash-Strapped Cuba Makes Debt Payment to Major Creditors-Diplomats, N.Y. Times (Oct. 18, 2017); Chow, Cuba Reaches Deal to Pay $2.6 Billion in Arrears to Paris Club, W.S.J. (Dec. 12, 2015); Paris Club, Agreement on the Debt Between Cuba and the Group of Creditors of Cuba (Dec. 12, 2015).

Update on Hurricane Irma’s Impact on Cuba

Now that Hurricane Irma has left Cuba, greater details have emerged about its impact.

Early Reports

On the morning of Sunday (September 10) Reuters reported that “waves of up to 36 feet (11 meters) smashed businesses along Havana’s sea-side drive, . . . pummeling famous hotels such as the Copacabana, which were evacuated along with flooded neighborhoods.  Although the hurricane “did not hit Havana directly and brought only moderate wind and rain, . . .  the storm surge was still driving giant waves over the sea wall.” Associated Press added, “Seawater penetrated as much as 1,600 feet (500 meters) inland in parts of the city. Trees toppled, roofs were torn off, cement water tanks fell from roofs to the ground and electrical lines are down.” As a result, “emergency workers in inflatable boats navigated flooded streets Sunday along Havana’s coastline, where thousands of people left their homes for safer ground before Hurricane Irma hit Cuba.”[1]

Late Sunday afternoon Cuban authorities warned that the floodwaters in Havana could linger for more than a day as waves as high as 20 feet (6 meters) continued to pound the city. The U.S. Embassy astride the Malecon was damaged; its black perimeter fence, exterior panels, windows and doors were damaged. High-end hotels Melia Cohiba and Rivera also were damaged.

72 miles (116 km) east of the capital, Varadero, the country’s most important tourist resort, was whipped by winds, but it appeared to escape the full fury of the storm. The head of civil defense for the province said, “Our preliminary estimate of damage in Varadero is that it was concentrated in metal structures, false ceilings, and some buildings.”

On Sunday morning Raúl Castro as the President of the National Civil Defense Council issued a statement that the hurricane “has strongly impacted electrical infrastructure in practically the entire country, which impedes the concentration of brigades of specialized linemen in a particular zone.”[2]

Early Sunday afternoon that Council’s Advisory No. 6 stated, “Although Irma is gradually moving away from the island, it continues to represent a threat to Cuba. Its outer bands continue to affect the country’s central and western regions, with heavy and locally intense rainfall. Tropical storm strength winds continue to be felt from Sancti Spíritus to Artemisa, as well as storm surges along the northwest coast from Matanzas to Artemisa, the northern coast of the provinces of Sancti Spíritus and Villa Clara, and the southern shoreline from Camagüey to Matanzas.”

The Miami Herald has been publishing photographs of the effects of Irma in Cuba.[3]

Center for Democracy in the Americas’ Special Report

On Monday, the Center for Democracy in the Americas issued a special report, which is reprinted here in its entirety.[4]

“Hurricane Irma slammed into Cuba over the weekend, leaving 10 dead and causing destruction and flooding across the island. Irma, which made landfall in the country’s northeastern provinces as a Category 5 storm, was the strongest storm to hit Cuba in 85 years, according to Reuters.”

Damages

“The hurricane wrought havoc in Cuba’s keys, badly damaging most structures and all but destroying the international Jardines del Rey airport in Cayo Coco. Cuba’s President Raúl Castro released a statement Monday, saying, ‘Given the immensity of [Irma’s] size, practically no region has escaped its effects.’”

“Though Havana avoided a direct hit, the capital city saw extensive flooding, with 36-foot waves rising well over the Malecón (seawall) and seawater reaching one-third of a mile inland, according to Reuters and the Associated Press. The U.S. Embassy in Havana, which is located along the Malecón, saw structural damage to its fence and severe flooding inside the building.”

“According to CubaDebate, 7 of the 10 reported deaths across Cuba occurred in Havana, mostly due to falling structures and live electrical cables lying in the city’s flooded streets. Much of the island remains without power or cell service.”

“Cuba had evacuated over 1 million people, including over 8,000 tourists, prior to the storm’s arrival.”

Economic Impacts

“Irma has brought consequences for a number of Cuba’s principle economic sectors, including the sugar and tourism industries.”

“According to Granma, 300,000 hectares of sugarcane crops and 40 percent of sugar refineries in Cuba suffered some degree of damage from the storm. Cuba harvested 436,000 hectares of sugarcane in 2015, the last year for which data was available.”

“Meanwhile, the extensive damage to the Cuban Keys has left many of the country’s most popular resorts uninhabitable. President Castro stated that damages ‘will be recovered before the start of the high season’ for tourism.”

Response

“In his statement, President Castro said, ‘It is not time to mourn, but rather to rebuild what the winds of Hurricane Irma tried to destroy.’ Countries including Ecuador, Bolivia, and Russia have stated their intention to deliver aid to the island.”

“Prior to the storm reaching Cuba, the country sent nearly 800 doctors to affected Caribbean islands, according to Granma.”

President Castro’s Public Statement

The previously mentioned statement on Monday morning, September 11, by President Raúl Castro.[5] said “practically no province was spared [Irma’s] effects,” especially “severe damage to [the island’s] housing, the electrical system, and agriculture.”

“It also struck some of our principal tourist destinations, but damage will be repaired before the beginning of the high season. We have on hand for this the human resources and materials needed, given that this constitutes one of the principal sources of income in the national economy.”

“The days that are coming will be ones of much work, during which the strength and indestructible confidence in the Revolution of Cubans will again be demonstrated. This is not a time to mourn, but to construct again that which the winds of Irma attempted to destroy.”

Economic Impact

New York Times reporters talk about the problem of rebuilding tourist infrastructure facing many Caribbean islands, including Cuba.[6] They report, “Travel and tourism accounts for a higher share of the Caribbean region’s gross domestic product than it does in any other region in the world, according to the World Travel & Tourism Council, supporting more than 2.3 million jobs. . . . In Cuba, the long-term implications could be even worse. The hardest-hit parts of the islands contain a significant share of its tourist infrastructure and bring in precious foreign currency for the communist nation. Without that, the country loses one of its primary sources of income to purchase items on the global market, including the construction materials it will need to repair the damaged infrastructure.”

On Monday, they report, “President Raúl Castro recognized the importance of resorts to the Cuban economy and promised they would be rebuilt before the start of the peak season, which runs from December to April. The target is ambitious, but with Venezuela, the island’s main economic partner, racked by its own crises, Cuba can’t afford to miss it. The Cuban government announced on Monday that 10 people had died as a result of the storm, bringing the death toll in the Caribbean to at least 37.”

Cuba’s sugar industry, another important Cuban industry for employment and export earnings, suffered significant damage. According to Liobel Perez, spokesman for AZCUBA, the state sugar monopoly,  “Some 300,000 hectares (740,000 acres) of cane were affected to different degrees” and 40 percent of the country’s mills were also damaged, as were warehouses and other parts of the industry’s infrastructure.[7]          

Conclusion

To meet the huge problem of rebuilding Cuba’s housing and infrastructure this blogger suggests that Cuba rescind its new restrictions on cooperatives that engage in construction that were discussed in a prior post.  Cuba needs all the help it can get as soon as possible.

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[1] Reuters, Irma’s 36-Feet Waves Slam Havana, Winds Pummel Varadero Resort, N.Y. Times (Sept. 10, 2017); Assoc. Press, Cuba Sees Devastation as Hurricane Irma Veers Toward Florida, N.Y. Times (Sept. 10, 2017); Assoc. Press, Waves from Irma Flood Havana Coast Even as Storm Moves Away, N.Y. times (Sept. 10, 2017); Advisory No. 6 from the National Civil Defense General Staff regarding Hurricane Irma, Granma (Sept. 10, 2017); Cuba responds to Irma, Granma (Sept. 10, 2017); Irma disappears the melecón of Havana, Cubadebate (Sept. 10, 2017) (photos of Havana); Irma: The sad trace of an unwanted visitor, Cubadebate (Sept. 10, 2017) (photos of Havana); In photos, trees shot down by Irma in several places in Havana, Cubadebate (Sept. 10, 2017); National Civil Defense Council General Staff announcement regarding deaths associated with Hurricane Irma, Granma (Sept. 11, 2017).

[2]  Instructions from President of the National Civil Defense Council, Granma (Sept. 10, 2017).

[3] Photo gallery: Hurricane Irma Cuba/Sun,. Sept. 10, 2017 , Miami Herald (Sept. 10, 2017); Hurricane Irma in photos: heavy flooding on the Cuban coast, from Matanzas to Havana, Miami Herald (Sept. 10, 2017); Photo gallery: Hurricane Irma strikes Cuba/Sat., Sept. 9, 2017, Miami Herald (Sept. 10, 2017).

[4] Center Democracy in Americas, Cuba Central News Brief Special Report: Cuba Recovers After Irma (Sept. 11, 2017).

[5] Castro,  A call to our combative people, Granma (Sept. 11, 2017).

[6] Ahmed & Semple, In the Caribbean, Rebuilding Nations—and the Tourism Industry, N.Y. Times (Sept. 11, 2017); Reuters, Hurricane Irma Kills 10 in Cuba, Castro Calls for Unity, N.Y. Times (Sept. 11, 2017).

[7] Reuters, Irma Severely Damages Cuban Sugar Industry, Crop: State Media, N.Y. Times (Sept. 11, 2017).

Cuban Criticism of Government’s Crackdown on Private Sector  

Diario de Cuba, a Cuban independent news outlet, criticizes new details about the Cuban Government’s crackdown on cooperatives involved in construction.[1]

Such private entities are now prohibited from carrying out projects outside the provinces in which they were constituted and now are required to finish projects within three months. In addition, they may not hire labor and self-employed workers and instead only members of the cooperative may work on their projects coupled with a ban on increasing the number of their partners.

According to Diario de Cuba, these restrictions are a result of “fear” of the state bureaucracy, especially in construction, of their inability to compete against the higher quality of private construction cooperatives and the higher wages they pay their workers.

As a result, all workers are more aware of  “the reactionary nature of the state-wage model” and the lack of true socialism in Cuba. Instead, says Diario de Cuba, Cuba has “a system controlled by a group of people interested in staying in power forever.”

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[1] Campos, More bans on cooperatives, Diario de Cuba (Sept. 7, 2017). Previous posts have discussed the recent Cuban government’s crackdown on the private sector: New Cuban Limits on Private Enterprise (Aug. 2, 2017); Why Is the Cuban Government Trying to Slow Down the Private Sector? (Aug. 3, 2017); Cuban Government Shuts Down Accounting Cooperative (Aug. 7, 2017) (comment on 8/3/17 post); Cuba Tries To Calm Private Sector (Aug. 8, 2017) (comment on 8/3/17 post); More Cuban Government Explanations About Actions Regarding Private Sector (Aug. 9, 2017) (comment on 8/3/17 post); Exodus of Cuban Professionals? (Aug. 16, 2017) (comment on 8/3/17 post); Bleak Economic Prospects for Cuba (Aug. 20, 2017).