U.S. Imposes New Sanctions on Cuba and Denounces Cuba’s Detention of Dissident   

On October 18, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) imposed new sanctions against Cuba while the State Department denounced Cuba’s detention of dissident Jose Daniel Ferrer.

New Sanctions[1]

The BIS revoked “existing licenses for aircraft leases to Cuban state-owned airlines, and will deny future applications for aircraft leases.” This was based upon the Department’s assertion that  “the Cuban regime is resorting to transporting tourists on leased aircraft subject to BIS jurisdiction.”

Additionally, “BIS is expanding Cuba sanctions to include more foreign goods containing U.S. content, and is imposing additional restrictions on exports to the Cuban regime.” According to a regulation set for October 21 publication, the Export Administration Regulations will be amended so that goods with as little as 10% U.S. content will be subject to U.S. jurisdiction and, thus, require a license from the U.S. Department of Commerce for export or reexport to Cuba. Previously, the policy only applied to goods with 25% or greater U.S. content. In addition, the amendment will, prohibit certain donations to the Cuban government and communist party  and clarify the scope of telecommunications items that the Cuban government may receive without a license.

This action, says the Department, “supports the Administration’s earlier decision to hold the Cuban regime accountable for repressing its own people as well as continuing to provide support to the illegitimate Maduro regime which has terrorized the Venezuelan population and wantonly destroyed the once-prosperous economy relied on by millions.”

The Department’s Secretary, Wilbur Ross, said, “This action . . . sends another clear message to the Cuban regime – that they must immediately cease their destructive behavior at home and abroad. The Trump Administration will continue to act against the Cuban regime for its misdeeds, while continuing to support the Cuban people and their aspirations for freedom and prosperity.”

Cuba’s President Miguel Diaz-Canel in a tweet said these new sanctions were “an expression of impotence, moral degradation and imperial contempt. It is an inhuman, cruel, unjust and genocidal act that we strongly reject. We will not give up. and we will give sovereign answer.”

A similar tweet came from Cuba Foreign Minister Bruno Rodriguez: these are “additional acts of economic blockade, representative of a moral bankruptcy policy, internationally isolated and promoted by a corrupt government. The Cuban people will continue to give due and sovereign response.”

Denouncing Cuban Detention of Dissident[2]

The Cuban dissident who has been detained is Jose Daniel Ferrer, the founder of  the Patriotic Union of Cuba (UNPACU).

According to the State Department, “On October 1, “Castro regime officials detained Mr. Ferrer and several other human rights defenders in Santiago de Cuba.  Mr. Ferrer reportedly has still not been informed of any charges against him, and has been denied access to a lawyer and to medical care.  Mr. Ferrer’s family has not been permitted contact with him since October 4.”  In addition, other “UNPACU activists Roilan Zarraga Ferrer, José Pupo Chaveco, and Fernando González Vailant also remain in custody.”

“Ferrer’s case is one more example of the Castro regime’s continuous and flagrant violation of human rights, which has recently escalated into a wave of repression against freedoms of speech, expression, and religion.  The United States will not allow these abuses against the Cuban people to go unnoticed or unanswered.  We will continue to increase sanctions and trade restrictions to diminish the resources available to the Cuban regime, which uses its income to suppress its own citizens and to prop up other regimes with shameful human rights records, including the former Maduro regime in Venezuela.”

Therefore, the U.S. “strongly condemns the Cuban regime’s unconscionable detainment of . . . [Senor] Ferrer, founder of the Patriotic Union of Cuba (UNPACU).  We call on the Castro regime to immediately disclose Mr. Ferrer’s location and condition, to treat him humanely, and to release him from detention without condition.”

Similar protests of this detention have been registered by UNPACU, Cuba’s Legal Information Center (CUBALEX), Cuban Prisoners Defenders, Freedom House and Amnesty International.

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[1] Commerce Dep’t, U.S. Department of Commerce Further Tightens Cuba Sanctions (Oct. 18, 2019); Reuters, U.S. Hits Cuba With New Sanctions Over Human Rights, Venezuela, N.Y. Times (Oct. 18, 2019); Assoc. Press, U.S. slaps new sanctions on Cuba over human rights, Venezuela, Wash. Post (Oct. 18, 2019);Center for Democracy in Americas,  U.S. restricts additional exports and re-exports to Cuba, U.S.-Cuba News Brief: 10/18/2019.

[2] State Dep’t, Detention of Cuban Human Rights Defender José Daniel Ferrer (Oct. 18, 2019); The arrest of José Daniel Ferrer is ‘a mechanism of repression against all civil society,’ Diario de Cuba (Oct. 17, 2019); Cuban Prisoners Defenders denounces the Cuban regime in Geneva for the case of José Ferrer, Diario de Cuba (Oct. 17, 2019).

 

Cuba Struggling with Energy Shortages     

On September 11, after several days of marked cutbacks on public transportation, Cuba President Miguel Diaz-Canel warned on national television that Cuba was facing an immediate energy crisis due to lack of diesel fuel. As a result, he said, “There may be problems with the distribution of products that depend on diesel-fueled transport, in public transport and in energy generation, which we’re trying to take measures to avoid.”[1]

 The Cuban Government’s Initial Comments on the Shortages

In those September 11 remarks, the President recognized problems with the supply of fuels that have caused the congestion of the bus stops, but insisted that it is a “short-term” situation and called the Cubans, tired of going through moments of this type, to see it as ” a workout.” “We have a strategy to win. Beauty is in the challenging situations … what happens is convenient.”

He also called for “sharing the promotion of savings as a practice of life and altruism as an attitude to the lack of fuel.” Likewise, to “confront with rigor and firmness manifestations of crime associated with the diversion of resources, and to the possible opportunistic attitude with which certain people may behave in the middle of this situation (…) raising prices, monopolizing products or speculating.”

There was no new “special period,” Diaz-Canel said, even though “there may be tense situations in the distribution of some products and the provision of services to the population in the coming days.” Now, however, “we have strengths that didn’t exist [in the 1990s] and that draws a qualitatively different scenario.” However, according to Diario de Cuba, the following “new strengths” are distrusted by the Cuban people: the “economic and social development strategy” of the [Communist Party of Cuba],” the “conceptualization of the economic and social model,” the “basis for the elaboration of the economic and social plan to 2030 and to keep moving forward” and the new Constitution.

This shortage will continue until the expected September 14 arrival of a tanker with diesel fuel and then another shipment at the end of the month. Contracts for October shipments are being negotiated.

A related problem was the negative impact on Cuban imports of food.

The government officials blamed the U.S. for this shortage. The U.S., they said, persists in “trying to prevent the arrival of fuel to Cuba” and applying “unilateral measures to limit our contracts with shipping companies that deliver resources to Cuba.” Some of these shipping companies have ceased to provide this service.

The government officials  also pointed out that Cuba produces about 40 percent of its demand for petroleum that is uses to operate its thermoelectric plants.

Díaz-Canel concluded his address with these words, “These are times of Fatherland or Death.”

Only the preceding day (September 10) Diaz-Canel held a public meeting to discuss the status of projects to construct and maintain the country’s roads. He said the government intended to spend more than 174  million pesos on such projects by 2020. Such efforts this year had been adversely affected by lack of fuel and cement and limited financial resources.

The Cuban Government’s Other Comments on the Shortages[2]

 On September 12, President Diaz-Canel again appeared on television to comment on the shortage. He said, with a laugh, “”Now we have to go tighter.” After the prior announcement of the shortage, he has “received revolutionary feelings, support, understanding . . . [that] is more than a fuel supertanker can contribute.” People express “concerns,” but few “dissatisfactions.” There is “enthusiasm,” especially “among young people,” with the call for “austerity” and “solidarity.”

The next day, Friday, “Cubans queued for hours for public transport on Friday at peak times in Havana, sweating in the heavy heat, while queues at gas stations snaked several blocks long, as a fuel shortage that the government blames on U.S. sanctions began to bite.” In addition, government inspectors “flagged down workers with state cars or trucks to get them to pick others up.” An ordinary 55-year-old Cuban, Alexei  Perez Recio, said, “The transport situation is getting ugly, even if the state says it is only temporary” as he was fixing up his bicycle he had not used since the Special Period. “I have to have (my bike) ready.”

Reactions[3]

 An editorial in Diario de Cuba, which is a website from Madrid, Spain, complained about the Cuban government’s again blaming the U.S. embargo for the island’s ills, not “the lack of foresight of the Cuban Government, nor its profound inefficiency or the failed system it defends.”

The Government’s solution, according to this editorial, was to reprogram trains, ask the people to squeeze together on the buses and seek solidarity from the citizens.

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[1] Diaz-Canel evaluates the progress of economic programs in Cuba, Cubadebate (Sept. 10, 2019); Assoc. Press, Cuba’s President Warns That Energy Cutbacks Are Looming, N.Y. Times (Sept, 11, 2019); Cuban President announces measures to deal with conjunctural fuel shortage, Granma (Sept. 12, 2019); Havanans support government measures to face energy situation, Cubadebate (Sept. 12, 2019); ‘We have to endure, it’s a few days’: Diaz-Canel minimizes the fuel crisis in Cuba, Diario de Cuba (Sept. 12, 2019); Cubans warned of imminent severe fuel crisis due to US sanctions, BBC News (Sept. 12, 2019).

[2] ‘We have to endure, it’s a few days’: Diaz-Canel minimizes the fuel crisis in Cuba, Diario de Cuba (Sept. 12, 2019); Gamez Torres, Cuban leader blames Trump for oil shortages, announces more austerity measures, Miami Herald (Sept. 12, 2019); Diaz-Canel: ‘Now we have to go tighter, ’Diario de Cuba (Sept. 13, 2019); Reuters, Cuba’s Acute Fuel Shortage Begins to Bite, N.Y. Times (Sept. 13, 2019).

[3] Editorial: What the Round Table explained about the ‘conjuncture’ in Cuba, Diario de Cuba (Sept. 13, 2019).

 

U.S. Unjustified Campaign To Discredit Cuba’s Foreign Medical Mission Program 

Over the last several years, the U.S. has been waging a campaign seeking to discredit Cuba’s foreign medical mission program. This campaign includes the State Department’s annual reports on human trafficking that have alleged Cuba has been engaged in illegal forced labor of some of its medical professionals in these programs. Another part was the recent decision to deny U.S. visas to Cuban officials directing the medical mission program.[1] The most recent measure has been the U.S. Agency for International Development (USAID’s) soliciting bids to conduct research and analysis of evidence regarding the forced labor allegation. Some Congressmen also have suggested reactivation of a U.S. program providing U.S. parole visas for such medical professionals to be admitted to the U.S.[2] Unsurprisingly Cuba denies these allegations and condemns these U.S. programs. (Emphases added.)

Here we will look at key parts of this trafficking in persons report, the recent USAID solicitation of bids for research and analysis, Cuba’s response to that solicitation and a demonstration why the U.S. allegations are specious.

U.S. 2019 Trafficking in Persons Report [3]

The most recent such report, which was issued on June 20, 2019, said the following, in part:

  • In November 2018, Cuban healthcare workers filed a class action in the U.S. District Court Southern District of Florida under the Trafficking Victims Protection and the Racketeering Influenced and Corrupt Organization Acts alleging the Cuban government profited from the export of healthcare professionals; the case remains pending.[4] In Brazil, the Cuban government collected revenue for each professional’s services and paid the worker a fraction of the revenue depositing a large percentage of the worker’s wages in an account in Cuba only accessible upon completion of the mission and return to Cuba. . . . Some participants in foreign medical missions as well as other sources allege Cuban officials force or coerce participation in the program; the government has stated the postings are voluntary, and some participants also have stated the postings are voluntary and well-paid compared to jobs within Cuba. Observers report the government does not inform participants of the terms of their contracts, making them more vulnerable to forced labor. The Cuban government acknowledges that it withholds passports of overseas medical personnel in Venezuela; the government provided identification cards to such personnel. Some Cuban medical personnel claim they work long hours without rest and face substandard working and living conditions in some countries, including a lack of hygienic conditions and privacy. Observers note Cuban authorities coerced some participants to remain in the program, including by withholding their passports, restricting their movement, using “minders” to conduct surveillance of participants outside of work, threatening to revoke their medical licenses, retaliate against their family members in Cuba if participants leave the program, or impose criminal penalties, exile, and family separation if participants do not return to Cuba as directed by government supervisors.” (Emphases added.)

USAID’s Solicitation of Research Bids [5]

On August 12, 2019, the U.S. Agency for International Development (USAID) announced that it was offering up to $3 million to organizations that would “investigate, collect, and analyze information related to human rights violations – including forced labor – of Cuban medical personnel exported overseas.”

USAID purported to justify this effort by alleging, “The Cuban regime exploits its medical professionals, teachers and other workers, using them to buy international financial and political support and keep its struggling economy afloat, while pocketing the majority of these workers’ salaries and subjecting them to poor living conditions, constant surveillance, and threatening those who wish to leave their mission. At the same time, Cubans on the island struggle to find adequate healthcare and other basic services while the regime touts the false narrative that it has the best medical care in the world.” (Emphasis added.)

In addition, USAID said, “the information collected should also document the effects of these practices on Cubans on the island. The data collected would be used for advocacy within Cuba, in Latin America and with regional and international bodies, such as the Inter-American Commission on Human Rights (IACHR) and the United Nations Human Rights Council (UNHRC) in an effort to pressure the Cuban regime to improve the living conditions of doctors and other workers, and promote greater respect for labor and other basic human rights for all Cuban citizens.”

Cuba’s Response[6]

In an August 30 Declaration, the Cuba Foreign Ministry “energetically denounces and condemns the recent aggression of the government of the United States against Cuba via a USAID program designed to fund actions and information searches to discredit and sabotage the international cooperation being provided by Cuba in the health area in dozens of countries for the benefit of millions of persons.  This is an endeavor added to the crude pressures exercised against a number of governments in order to obstruct Cuban cooperation and to the earlier efforts for the same purpose such as the special ‘parole’ program designed to steal human resources trained in Cuba.”

“The heart of this immoral calumny consists of alleging, with no factual foundations whatsoever, that Cuba is involved in the traffic of persons or in the practice of slavery, and wishing to degrade the meritorious work that hundreds of thousands of Cuban health professionals and technicians are voluntarily undertaking, and have been undertaking, throughout history, in a number of countries, especially in the Third World.”

This is “an affront to the bilateral and intergovernmental cooperation programs, all lawfully set up between the Cuban Government and the governments of dozens of countries, which have been consistent with the [U.N.] guidelines referring to South–South cooperation and which have responded to the health requirements that those same governments have defined in a sovereign manner.”

“This is an attack against the efforts in solidarity which have received the acknowledgement of the international community and the specific praise from the most senior officials of the United Nations, the World Health Organization and the Pan-American Health Organization.”

“These lies reveal the low morality of the [U.S.] government and its politicians who devoted themselves to the business of aggression against Cuba.  The campaign has millions of dollars of funds and the complicity of a number of the mass media giants and, particularly, of unscrupulous reporters who have sacrificed their so-called impartiality and objectivity in the service of the political interests of the [U.S.] government.”

“For decades . . . in those nations having more unfavorable economic conditions, that cooperation has been provided, and is being provided, as a gesture of solidarity; its expenses are covered by Cuba practically in their entirety. Likewise, and following the [U.N.] conceptions on cooperation between developing countries, this is being offered in various nations on the basis of complementarity and partial compensation for services rendered.”

Cuba has provided “self-sacrificing and humanist professionals ready and willing to work of their own free will in the most difficult of conditions, and of the ideas of health coverage that years of successful experience has permitted us to build up.”

“The Cuban technicians and professionals participating in those programs do so in an absolutely free and voluntary manner.  While serving their missions, they continue to be paid their entire Cuban salaries and they also receive stipends from the destination countries, along with other forms of compensation.”

“In cases where Cuba receives compensation for the cooperation being provided, those . . . [countries] distinguish themselves by contributing a highly valued, fair and totally lawful amount for the funding, sustainability and development of the massive and free health system that is accessible to each and every Cuban, as well as for the cooperation programs that are carried into many parts of the world.”

“Access to health is a human right.  The United States is committing a crime when it wishes to deny that or to obstruct it for political reasons or as aggression.”

This Cuban criticism was echoed in an August 31 tweet by President Miguel Diaz-Canel, who said, “The carelessness, the lie, the perversity of the empire crumble before the moral height accumulated by the dignified history of the Cuban missions in health.”

The Specious U.S. Allegation of Illegal Forced Labor [7]

The contention that Cuban medical personnel in Cuba’s foreign medical mission program are engaged in illegal forced labor is meritless for at least the following reasons:

  • Medical education in Cuba is free and requiring medical graduates to pay the country back by such participation seems entirely appropriate and may indeed be a contractual or quasi-contractual obligation.
  • International medical aid has been a significant part of the Cuban people’s tradition of international solidarity, and some Cuban medical personnel have said that such service had a major positive impact on their lives and medical careers.
  • The relevant standard for evaluating the allegationthat Cuba’s international medical mission program violates international law is the International Labor Organization’s Forced Labour Convention, 1930.
  • That multilateral Convention or treaty provides that “for the purposes of this Convention, the term forced or compulsory labour shall not include . . . any work or service which forms part of the normal civic obligations of the citizens of a fully self-governing country.” (Art. 2(2)(b).) (Emphasis added.)
  • Although it is true that the Cuban government receives direct payment from other countries for the foreign medical mission program and that the Cuban government retains some of those payments before paying the Cuban medical professionals, it also is true that such payments to those professionals exceed what they would have earned for similar services in Cuba. In addition, some of the payments to the Cuban professionals are deposited in Cuban accounts only accessible upon their completion of service and return to Cuba. But such practices do not constitute proof of forced labor.
  • While it also is true that some Cuban medical professionals who have participated or are now participating in the foreign medical mission program allege that they were coerced into doing so, the report indicates that the Cuban government and other participants deny that allegation and that there has been no independent adjudication of that allegation. (Emphases added.)
  • Also relevant to this allegation is Cuban medical professionals’ undoubted awareness of the significantly higher compensation they potentially could obtain if they were able to relocate in the U.S. or certain other countries.
  • A detailed study by Indiana State University’s Emeritus Professor of International Politics and Latin America, Dr. H. Michael Erisman, has rejected this accusation of forced labor.

The latest report on Cuba also fails to mention that the U.S. and Cuba apparently had friendly bilateral discussions about other human trafficking issues during the Obama Administration (2015 through January 17, 2017) and the Trump Administration (2017-2018).

The hypocrisy of the State Department’s repeated assertion of this claim of forced labor without recognizing the ILO’s Forced Labour Convention is shown by Secretary of State Pompeo’s congratulating the ILO on its centennial anniversary only one day after the release of the 2019 Trafficking in Persons Report. The Secretary said:

  • “The dignitaries that convened in Paris in 1919 to end the Great War knew that any lasting peace needed to be rooted in the protection of individual rights, including the rights of workers and employers to associate freely and bargain collectively. “
  • The United States proudly hosted the first International Labor Conference in 1919 and the “war-time conference that enshrined the ILO’s enduring founding principles and aims in the Declaration of Philadelphia. As strong supporters of the ILO and its mission, we reflect on the important role played by Americans to create and sustain this organization, including David Morse, who served as ILO Director-General for 22 years, and under whose leadership the ILO won the Nobel Peace Prize.”
  • “As the ILO enters its second century pursuing objectives critical to economic prosperity and security around the world, the United States recommits itself to advancing the rights of workers globally.

Another rebuttal of the U.S. allegations about the medical mission program recently was provided by a U.S. citizen, Dr. Graham Sowa, who has a Cuban medical degree and who now is a resident in internal medicine in a Florida hospital. He did not participate in the Cuban medical mission program, but his Cuban friends who are now physicians have done so and who totally reject this allegation. Sowa said, ““Cuba says they want to provide humanity with medical care. It is their commitment toward international solidarity.”

Conclusion

No matter how many times the U.S. alleges that Cuba’s foreign medical mission program engages in illegal forced labor does not make it so. The U.S. has not even publicly submitted an attempted legal justification for these allegations.  The U.S. is wasting money on this specious claim.

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[1]  New U.S. Government Hostility Towards Cuba’s Medical Mission Program, dwkcommentaries.com (Aug. 14, 2019)

[2] Senators Rubio and Menendez Call for Restoring U.S. Parole Program for Cuban Doctors, dwkcommentaries.com (Jan. 11, 2019). See also posts listed n the “Cuban Medical Personnel & U.S.” section of List of Posts to dwkcommentaries—Topical: CUBA.

[3] State Department Unjustly Downgrades Cuba in Annual Report on Human Trafficking, dwkcommentaries.com (June 22, 2019).

[4]  Pais, Health Organization Accused of Trafficking Doctors to Brazil, Courthouse News Service (Dec. 3, 2018)  The class action complaint, which was filed November 30, 2018, alleges that the Pan American Health Organization collected over $75 million since 2013 by enabling and managing the illegal trafficking of Cuban medical professionals in violation of the Trafficking Victims Protection Act and the Racketeering Influenced and Corrupt Organizations Act. Nothing of substance has happened so far in this case. The last docket entry was on July 2, 2019, for an order setting a hearing on July 18, 2019, for Pan American Health’s objections to and appeal from a magistrate judge’s order denying its motion to transfer the case to the U.S. District Court for the District of Columbia. (Civil Docket, Rodriguez v. Pan American Health Org., Case #: 1:18-cv-24995-DPG (Aug. 30, 2019).

[5] Eaton, USAID plans to spend up to $3 million to investigate Cuban doctors, Cuba Solidarity Campaign (Aug. 12, 2019).

[6] Cuba Foreign Ministry, Statement: The Government of the United States Is Earmarking Millions of Dollars To Obstruct Cuban Medical Cooperation (Aug. 30, 2019); The regime blames the US for complaints about the exploitation of Cuban doctors, Diario de Cuba (Aug. 29, 2019); Diaz-Canel described the ‘attacks’ and the ‘attacks by the US on the slae of medical services, Diario de Cuba (Sept. 1, 2019).

[7] State Department Unjustly Downgrades Cuba in Annual Report on Human Trafficking, dwkcommentaries.com (June 22, 2019); Guzzo, Are Cuban physicians human trafficking victims? No way, says Brandon doctor with Havana degree, Tampa Bay Times (Aug. 29, 2019).

 

 

Cuba’s Suffering from Continued U.S. Hostility  

After the Obama Administration had taken steps to improve U.S. relations with Cuba, the Trump Administration has gone in the opposite direction, as discussed in many earlier posts.[1]

U.S. Actions and Policies Against Cuba

These negative actions and policies include the following: continuation of U.S. embargo of Cuba; elimination of one of the “general licenses” for U.S. nationals to travel to Cuba; cancelation of right of U.S. cruise ships to make stops on the island; reducing amount of money U.S. nationals legally may remit to relatives and friends in Cuba; allowing litigation in U.S. federal courts over alleged trafficking in U.S.-owned property on the island under the Halms-Burton Act; additions to the U.S. “Cuba Restricted List” of entities and sub entities with which U.S. nationals may not transact business; U.S. negative reports on Cuban human rights, religious freedom and human trafficking; unilateral U.S. report about increasing Cuban Internet access; U.S. consideration of re-designating Cuba as a State Sponsor of Terrorism and of re-instituting U.S. parole for Cuban medical professionals; additional U.S. sanctions against Cuba for its alleged support of Venezuela.[2]

While there are recent bilateral bills in Congress to end the embargo and enhance U.S. nationals’ rights to travel to Cuba, they have not received, and are unlikely to receive, any consideration in the current Senate and perhaps the House of Representatives.[3]

Negative Impact on Cuba of U.S. Actions and Policies[4]

The negative impact, especially of the recent U.S. limiting the ability of Americans to travel to the island, has especially harmed Cuba’s emerging private sector. For example, a website and app used to make reservations, rate restaurants, and pay for meals at most restaurants throughout Cuba (AlaMesa) had to reduce its staff from 20 to 12 in response to a 30 to 40% decline in reservations.

But “Cuba’s economic woes go beyond U.S. policy. The island, with one of the world’s last communist governments, has been caught in a perfect storm. Its economy has been stagnant for years, averaging only about 1 percent annual growth. Its centrally-planned economy imports over two-thirds of its food. Its ally, Venezuela, has been in political and economic turmoil, causing an overall decline in oil shipments from the South American country. The island’s medical exchange program, a major source of revenue, also took a blow. Last November, Cuba recalled 8,517 medical professionals from Brazil in response to President Jair Bolsonaro’s tough stance against Cuba.”

The U.S. allowance of litigation over alleged trafficking in Cuba property owned by Americans is seen as discouraging foreign investment today.

Recently “there have been shortages in basic goods such as eggs, cooking oil and chicken.”

Cuban Government’s Response to Rough Economic Conditions[5]

At the July 13 closing  session of the National Assembly, President Diaz-Canel reported that a series of emergency measures announced that month aimed to stimulate domestic production and he hoped for slight growth this year. “Even in the eye of the hurricane of adversity that the enemy conceived to suffocate us, the Cuban economy can grow slightly, thanks to the fact that we have the potential to resist and continue advancing in our development.” He added that the economy grew 2.2% in 2018, compared with an earlier estimate of 1.2%, and that stronger base would make it harder to reach this year’s goal of 1.5% growth.

The President also said there will be price controls and policies aimed at stimulating local production to meet increased consumer demand without sparking inflation.

The next week of July 15, Cuba experienced power outages and fuel shortages that prompted citizen concern about the possible emergence of a “Special Period II” of harsh economic shortages. Cuba Energy Commissioner Raul Garcia sought to reassure citizens that the power outages were due to breakdowns in power plants, not oil shortages, and that those outages would be fixed by the end of the week.

These measures came at a time when falling Cuban imports have caused scattered shortages of food, hygiene and other products across the country. Diaz-Canel admitted the country was suffering from a liquidity crisis and bureaucracy and was short on fuel. He called on officials and the public to join together in the national emergency and each do their part to move the country forward. “Putting aside vanities and selfishness, practicing honesty, industriousness and decency, we will also be contributing to GDP,” he said.

On August 2, the Cuban government for the first time published details of its foreign exchange earnings from services such as telecommunications, hotels, health and education assistance, in an apparent concession to creditors. The biggest export earner in 2018 was health services at $6.4 billion, followed by “support services” at $1.3 billion while hotel and related services garnered $970 million, followed by telecommunications at $722 million and transportation and support services, which includes everything from airlines to docking fees, at around $600 million. Total exports were $18.6 billion in 2013 and $14.5 billion last year, down from $18.6 billion in 2013. Imports fell from $15.6 billion to $12.6 billion.

All of these developments have resulted in an increase in the country’s foreign debt from $11.9 billion in 2013 to $18.2 billion in 2016, an increase of almost 53% percent.

Cuba Introduces Price Controls[6]

In early July  President Miguel Diaz-Canel announced that the government had adopted a series of emergency measures to fight economic stagnation and dwindling foreign currency earnings that began in 2015 as the economy of key ally Venezuela imploded, and that have been aggravated by a series of new U.S. sanctions. The measures included increased wages and pensions for more than 2 million state employees, amounting to more than 8 billion pesos annually, or close to 13 percent of this year’s budget. The President also said there will be price controls and policies aimed at stimulating local production to meet increased consumer demand without sparking inflation.

The other shoe dropped on July 30, when the President announced a ban on all retail and wholesale price increases except for products imported and distributed by the state where already-set profit margins cannot be increased. In recent weeks, regional authorities have slapped price controls on taxi fares, beverages and haircuts, among other items. The price controls differ from province to province.

These price controls are especially difficult for the private sector.

For example, on August 15, retail prices in Havana were set for some basic foods such as beans, pork, lemons, bananas, onions and cabbage. The retail price of pork, a staple of the Cuban diet, was set at 45 pesos a pound, although market sellers said it previously went for some 65 pesos a pound. And farmers still charge 28 pesos a pound for pork. Another example is lemons, which used to sell for 30 pesos a pound,  now has a new maximum price of 10 to 15 pesos, which is the same price that farmers charge for the lemons.

On August 12, Cuba  Minister of Finance and Prices, Meisi Bolaños, stated, “We are going to be rigorous with those who try, by means of devices, to evade and violate the new measures approved to avoid the increase in prices. . . . We cannot allow that measures like these that the country approves to boost the  economy and generate greater capacity to buy in the population to be spoiled by a few unscrupulous that cause Cubans to lose confidence in state control.” The Minister also denied that the purpose of the measures is “to stop the development of non-state forms.”

Economists assert that such price controls are ineffective. Andrew Zimbalist, a Cuba expert at U.S.’s Smith College, said, “Such measures are usually okay for short periods of time, but if they stay in place they begin to create serious distortions in the economy.” A similar opinion was expressed by Pavel Vidal, a former Cuban central bank economist who teaches at Colombia’s Universidad Javeriana Cali. He said, “The more they control prices in formal markets, the more inflation and instability there will be in informal markets and the less incentive the productive sector has.”

Experts also have criticized Cuba’s verbose regulations of the private sector that were introduced at the end of 2018. They concluded that these “regulations approved by the Council of Ministers were written in reverse: excessive documents (29) and processes that represent obstacles in the application process for licenses, cracking down on violations, excessive inspections, the definition of twenty-two oversight agencies for the private sector (with specific departments to deal with them), the new requirement of a bank account with two months’ worth of taxes as credit in this account, needing to pay payroll taxes from the very first employee, etc.”

Conclusion

 Obviously Cuba is in a very perilous situation that the U.S. has helped to create. All who support normalization of the two countries relations need to voice their opinions to their senators and representatives and to Trump Administration officials.

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[1] See List of Posts to dwkcommentaries—Topical: CUBA.

[2] E.g., Sabatinni, Trump Doubles Down on Failed Cuba Policy, N.Y. Times (July 24, 2019); U.S. Updates Cuba Restricted List (July 26, 2019); U.S. State Dep’t, State Department Updates the Cuba Restricted List (July 26, 2019); U.S. State Dep’t, List of Restricted Entities and Subentities Associated With Cuba as of July 26, 2019 (July 26, 2019); New U.S. Government Hostility Towards Cuba’s Medical Mission Program, dwkcommentareis.com (Aug. 14, 2019); “U.S. (Trump) and Cuba, 2016-2017,”  “U.S. (Trump) and Cuba (2018),” “U.S. (Trump) and Cuba, 2019,” “U.S. Parole Program for Cuban Medical Professionals, 2019,” “Cuba, Venezuela and U.S., 2019,”  “Cuba Restricted List, 2019,”  “ Helms-Burton Act Title III Authorization, 2019” and U.S. Embargo of Cuba, 2019” sections  in List of Posts to dwkcommentaries—Topical: Cuba.

[3] See these posts to dwkcommentaries.com: New Bill To End U.S. Embargo of Cuba (Feb. 9, 2019); Senator Leahy’s Senate Floor Speech To End Embargo of Cuba (Feb. 18, 2019); Congressional Bipartisan Bills for Reversal of U.S. Policies Regarding Cuba (Aug. 13, 2019).

[4] Sesin, In Cuba, entrepreneurs see a steep decline with Trump policies, NBC News (July 6, 2019); Cuba Says Fuel Shortage, Blackouts Are Temporary, Being Fixed, Reuters (July 19, 2019); Frank, Cuba hopes for slight growth as Trump pummels Caribbean island, Reuters (July 13, 2019).

[5]  Kuritzkes, The End of Cuba’s Entrepreneurship Boom, Foreign Policy (July 15, 2019); The decline in tourism from the United States to Cuba already feels strongly on island, France23 (July 18, 2019);Taylor, Cubans Talk About Impact of Trump Administration Travel Policy Changes, Travel Pulse (July 22, 2019); Myers, A Visit To Cuba Reveals Economic Pain of Trump’s Travel Ban, Travel Weekly (July 29, 2019); Eaton, Cuba Trying to Attract Tourists and Investors Even as U.S. Clamps Down, Tampa Bay Times (July 30, 2019); Reuters, Cuba Reveals Health, Hotel, Other Service Earnings, N.Y. Times (Aug. 2, 2019); Whitefield, Cuba Feels the Pinch of the Trump administration’s travel restrictions, L.A. Times (Aug. 11, 2019); Torres, Cuba’s foreign debt is on the rise despite big profits from medical services abroad, Miami Herald (Aug. 12, 2019);Myers, Taking the pulse of demand for Cuba travel, Travel Weekly (Aug. 13, 2019); The Cuban economy is increasingly indebted, official figures reveal, Diario de Cuba (Aug. 15, 2019).

[6] The Government of Havana sets maximum prices for sale of products, Cubadebate (July 28, 2019); Frank, Cuba, battling economic crisis, imposes sweeping price controls, Reuters (July 30, 2019); Vela, Cuba’s Price Control Is Short-Term Fix To Production Problems, Economist Says, ABC10 News  (July 30, 2019); Fuentes Puebla & Romeo Matos, Price control, a necessary complement to the salary increase in the budgeted sector, Cubadebate (Aug. 1, 2019); The Cuban Government warns that it will be relentless in the face of ‘artifice’ to avoid its price cap, Diario de Cuba (Aug. 13, 2019); Reuters, Cuban Government Imposes Price Controls as It Seeks to Keep Lid on Inflation, N.Y. Times (Aug. 15, 2019); Fernandez, It’s a Long and Winding Road for Cuba’s Private Sector, Havana Times (Aug. 15, 2019).

 

 

Cuban Reactions to New U.S. Anti-Cuba Measures

Naturally the Cuban government and its officials condemned the new U.S. measures. Other Cubans voiced various opinions on this subject.

Cuban Government[1]

“Today, the 17th of April, we celebrate another anniversary of the start of the military aggression at the Bay of Pigs (Playa Girón) in 1961. The decisive response of the Cuban people in defense of the Revolution and socialism resulted in the first military defeat of imperialism in the Americas, in just 72 hours. Oddly enough, it is the date chosen by the current government of the United States to announce the adoption of new aggressive measures against Cuba and to reinforce the application of the Monroe Doctrine.”

“The Revolutionary Government rejects in the most energetic of terms the decision to permit hereinafter that action is taken in US courts against Cuban and foreign entities outside the jurisdiction of the United States, and that of intensifying the impediments for entry into the United States of the executives of companies that legally invest in Cuba and their relatives in properties that were nationalized.  These are actions envisaged in the Helms-Burton Act that were rejected a long time ago by the international community, that the Cuban nation has repudiated from the time when they were enacted and applied in 1996, and whose fundamental aim is to impose colonial protection over our country. Cuba also repudiates the decision to return to limiting the remittances which Cuban residents in the US send to their families and next of kin, to restrict even further travel by American citizens to Cuba and to apply additional financial penalties.”

“It energetically rejects the references that in Cuba attacks have been produced against American diplomats. They would like to justify their actions, as usual, using lies and blackmail. On last 10 April, General of the Army Raúl Castro declared: ‘Cuba is blamed for all evils, using lies in the worst style of Hitlerian propaganda.’To cover up and justify the evident failure of the sinister coup d’ét maneuver of designating, from Washington, a usurper “president” for Venezuela, the government of the United States resorts to slander.”

“It accuses Cuba of being responsible for the soundness and steadfastness shown by the Bolivarian and Chavista government, the people of that country and the civilian-military union which defends the sovereignty of their nation. It brazenly lies when it declares that Cuba keeps thousands of troops and security forces in Venezuela, influencing and determining what is happening in that sister country.”

“It has the cynicism of blaming Cuba for the economic and social situation besetting Venezuela after years of brutal economic penalties, conceived and applied by the United States and a number of allies, precisely to economically suffocate the population and to cause its suffering. Washington has gone to the extremes of pressuring the governments of third countries to attempt to persuade Cuba to withdraw this presumed and unlikely military and security support and even for it to stop providing backing and solidarity to Venezuela. The current US government is known, in its own country and internationally, for its unscrupulous tendency of using lies as a resort in domestic and foreign policy matters.   This is a habit coinciding with the old practices of imperialism.”

“Still fresh in our minds are the images of President George W. Bush, with the support of the current National Security Advisor John Bolton, lying shamelessly about the supposed weapons of mass destruction in Iraq, a fallacious argument that served as an excuse to invade that country in the Middle East.”

“History also records the blowing up of the battleship “Maine” in Havana and the self-provoked incident in the Gulf of Tonkin, episodes that served as excuses to unleash wars of pillage in Cuba and Vietnam. We should not forget that the United States used fake Cuban insignia painted on the planes that carried out the bombing runs as a prelude to the aggression at the Bay of Pigs, in order to cover up the fact that they were really American planes”

“It must remain clear that US slander rests upon complete and deliberate lies. Its intelligence services possess more than enough proof, surely more than any other State, to know that Cuba has no troops nor does it participate in any operations of a military or security nature in Venezuela, even though it is a sovereign right of two independent countries to decide how they shall cooperate in the sector of defense, something that does not correspond to the United States to question. That accuser keeps over 250,000 soldiers on 800 military bases abroad, some of these in the American hemisphere.”

“Their government also knows that, as Cuba has publicly and repeatedly declared, the nearly 20,000 Cuban collaborators, over 60 % of them women, are in that Latin American nation to fulfill the same tasks that approximately another 11,000 Cuban professionals are fulfilling in 83 nations:   contributing to provide basic social services, fundamentally in the area of health, a fact that is acknowledged by the international community. It must remain absolutely clear that steadfast solidarity with the sister Bolivarian Republic of Venezuela is Cuba’s right as a sovereign State and it is also a right that forms part of the tradition and essential principles of the foreign policy of the Cuban Revolution.”

“No threats of reprisals against Cuba, no ultimatum or blackmail by the current US government is going to divert the internationalist conduct of the Cuban nation, despite the devastating human and economic damages caused our people by the genocidal blockade.”

“It behooves us to remember that Mafioso threats and ultimatums were already being used in the past when Cuba’s internationalist efforts were supporting the liberation movements in Africa while the US was backing the scurrilous regime of apartheid. They would have liked Cuba to renounce its commitments of solidarity with the peoples of Africa in exchange for promises of pardon, as if the Revolution had anything whatsoever that needed to be pardoned by imperialism.”

“At that time, Cuba rejected blackmail, as it rejects it today, with utmost disdain.”

“Last April 10th, General of the Army Raúl Castro recalled: ‘In 60 years of facing aggression and threats, we Cubans have demonstrated the iron-clad will to resist and overcome the most difficult of circumstances. Despite its immense power, imperialism does not have the capacity to crush the dignity of a united people, who are proud of their history, and of the freedom they have attained by the strength of so much sacrifice.’”

“The Government of Cuba calls on all members of the international community and on the citizens of the United States to stop the irrational escalation and the policy of hostility and aggression of the government of Donald Trump. With complete justification, year after year the Member States of the United Nations have called practically unanimously for the end to this economic war.  The peoples and governments of our region must see to it that, for the benefit of all, the principles of the Proclamation of Latin America and the Caribbean as a Zone of Peace prevail.”

“Last April 13th, the President of the Councils of State and Ministers Miguel Díaz-Canel Bermúdez declared: ‘Cuba continues to trust in its strength, its dignity and also in the strength and dignity of other independent and sovereign nations.  But it also continues to believe in the American people, in the Land of Lincoln, that they should be ashamed of those who act on the fringes of universal law on behalf of the entire American nation.’ Once again, Cuba repudiates the lies and threats, and reiterates that its sovereignty, independence and commitment to the cause of the peoples of Latin America and the Caribbean are not negotiable.”

“Two days away from commemorating the 58th anniversary of the Playa Girón Victory, a historical point in national geography where the mercenary forces sent by imperialism tasted the dust of defeat, the Cuban Revolution reiterates its firm determination to face up to and prevail over the escalated aggression of the United States.”

Cuban Government Officials[2]

Cuban President Miguel Diaz-Canel responded defiantly with these tweets: ‘Cubans do not surrender, nor do we accept laws about our destinies that are outside the Constitution. In Cuba we Cubans will not change the attitude towards those who hold the sword against us.’ He added,  ‘No one will rip the (Fatherland) away from us, neither by seduction nor by force, We Cubans do not surrender.’’”

In another tweet, Diaz-Canel said,  ‘Title III is not worse than the I and II, which are in the portfolio of actions against all the people of Cuba, Cubans do not give up.”

Also initially responding with tweets was Cuba Foreign Minister Bruno Rodriguez. He “called it an attack on international law, Cuban sovereignty and countries that would do business with the island: Aggressive escalation by US against Cuba will fail. Like at Giron, we will be victorious.’”

On state television, Rodriguez said, ‘”We will always be willing to have a dialogue based on absolute respect, but if the U.S. government has chosen a confrontational path we will not hesitate to defend the gains of the revolution at any cost.’” According to Rodríguez, ‘These decisions of Washington are an aggressive escalation of the US against Cuba that ‘will fail.’”

In another tweet, he also repudiated the ‘aggressive discourse, calumnies and measures to intensify the blockade announced by the US National Security Adviser [Bolton that] constitute a new aggression against the people of Cuba, the American people, Cuban emigration and sovereign states.’”

.”’But now there are nefarious interests in the government of that country, an increasingly monopoly, more McCarthyist policy against Our America and against our people, based on true slander.’”

“’We, of course, will not give up one bit of our principles. We will continue our solidarity support to the sister Bolivarian Republic of Venezuela and we will follow the course that our people, now in a free and universal referendum, has confirmed towards an increasingly just, advanced, increasingly inclusive Cuban socialism and the foreign policy of the Revolution Cubans will continue to be the same, as the Constitution confirms. Our principles are unchangeable and invariable.’”

  Other Cubans[3]

The most cogent opinion on these issues was provided by Rafael Rojas, who is one of Cuba’s most distinguished historians with many publications and the holder of university positions around the world. He wrote the following 10 objections to what he calls “the Bolton Doctrine” in Madrid’s El Pais.

  • “1. In the conflict between the United States, Cuba, Nicaragua and Venezuela, the symbolic dimension weighs heavily. From Washington, Havana, Caracas, Managua and, of course, Miami, these differences are assumed as inertias or continuations of the Cold War. But in most of the world this is not the case: the conflict between communism and anti-communism is marginal on the planetary level. To have announced the new policy in Miami, on the anniversary of the failed Bay of Pigs invasion of 1961, is to persist in that local, archaic entanglement that favors Manichaeism and the binary visions of contemporary politics.”
  • “ The announcement of the new measures from Miami, by Bolton, reinforces a double and harmful subordination: that of the policy towards Venezuela, Nicaragua and Cuba to the sphere of the “national security” of the United States and that of the Washington agenda for those countries to the electoral cycles in the state of Florida.”
  • “ The sanctions against the three regimes adopt a totally unilateral sense at a time when various global institutions and diplomatic initiatives (OAS, UN, Lima Group, International Contact Group of the European Union, Prosur, Uruguayan and Mexican chanceries) try to arrange multilateral actions to face the Venezuelan and Nicaraguan crisis.”
  • “ During the last two decades, the US Department of State has maintained a differentiated policy for Venezuela, Cuba and Nicaragua. It is evident that these regimes act coordinated in a permanent strategy of promoting authoritarian alternatives to democracy in the hemisphere, but, at the same time, the differences between the three political systems, the peculiarities of their respective relations with civil society and society are indisputable [as are] the opposition and nuances of its international commitments and Government priorities.”
  • “The definition of these regimes as “troika of tyrannies” is not only a theoretical simplification, that almost the whole of Latin America and the European Union, plus the UN, China and India, Africa and the Middle East do not share, but an incentive to the deployment of a greater diplomatic and military collaboration of those governments among themselves and with their allies in the world, especially Russia and Iran.”
  • “The application of Titles III and IV of the Helms-Burton Act, passed in 1996, had been postponed by all the governments of the United States until now: the second by Bill Clinton, the two by George W. Bush and the two of Barack Obama [and the two??? by Trump]. The reason was always a mixture of recognition of the global unpopularity of the embargo against Cuba and the complications that could arise in relations with Europe, Canada, Latin America and Asia, in case of demands to companies from those regions that operated in Cuba with confiscated properties. The thousands of cases of Cuban-American citizens that will be presented before the US justice system, in addition to being complicated and burdensome, will generate costs at the international level, as already observed with the European Union’s appeal to the World Trade Organization (WTO).”
  • “Restrictions on American tourist trips and remittances from Cuban-Americans from the United States will not only affect the income of Miguel Diaz Canel’s government: they will also damage the small market sphere that attempts to articulate within the island. The new policy towards Cuba returns to the old paradox of the republican right to promote capitalism, closing the external ways by which capitalism can reproduce itself.”
  • “The sanctions against the Central Bank of Venezuela continue the punitive strategy undertaken so far by the Trump administration against the financial networks of the Government of Nicolás Maduro. Who announces that measure in Miami is the same one that recently proposed the sending of 5,000 soldiers to the border between Colombia and Venezuela and the same government that already openly complains about the inability of its ally, President Ivan Duque [Colombia’s current president], to reduce drug trafficking.”
  • “ The measures against the Government of Daniel Ortega also try to affect the sources of income of the Sandinista State, through the freezing of funds from the Corporate Bank of Nicaragua and the official investment and export agency, ProNicaragua, headed by the son of the presidential couple, Laureano Ortega Murillo. So far, this type of personalized sanctions has not yielded results in Cuba or Venezuela, in terms of promoting greater economic and political openness. Daniel Ortega, a leader so discredited by the Latin American left, gains prestige with the Bolton doctrine.”
  • “ The purpose of the unilateral US offensive against Venezuela, Cuba and Nicaragua is not, apparently, a flexibilization but a breakdown of those regimes. But for that to happen, unlikely scenarios would have to occur: a military uprising in Venezuela, a coup in Nicaragua or a popular uprising in Cuba. In a possible conjuncture of simultaneous economic asphyxia in the three countries should not rule out a greater cohesion against the external enemy, despite the greater or lesser wear and tear of their respective leaders. Not even the collapse of one of those regimes would necessarily mean the collapse of the other two.”

Another article critical of the new U.S. measures in tones similar to those  expressed by the Cuban government and its officials appears in Granma, the official newspaper of the Communist Party of Cuba.

On the other hand, some Cubans disagreed with the Cuban government’s lengthy and vitriolic attacks on the new U.S. measures. These articles were an editorial in Diario de Cuba and one of its articles by Elias Amor; this Internet periodical is published in Madrid, Spain and says that “the  views expressed are not those of any government, nor of any corporate entity other than K&M Productions, LLC, of Boston, Massachusetts.”

A surprising opinion on the new U.S. policies was voiced by Antonio Rodiles, a member of the Cuban opposition, when saying he supported the new U.S. restrictions. “”Pressure is needed. In what other way will it be possible to stop a regime like this? I do not see another Possibility.”

Conclusion[4]

 The lengthy declaration by the Cuban Government was to be expected. Criticism of the official position of the Cuban Government on these issues from  Dario de Cuba was also to be expected as it always publishing such pieces and makes one wonder whether it secretly is funded by the U.S. government.

Most persuasive are the 10 reasons advanced by respected historian Rafael Rojas. I agree that the speech by John Bolton seems erroneously anchored in the views of the Cold War, which has been over for some time; that the new measures seem derived from U.S. political concerns about the state of Florida in national politics; that the new measures totally ignore multilateral efforts to solve the many issues in Cuba, Venezuela and Nicaragua; that the new U.S. measures encourage these three countries to seek help from Russia and Iran; that the previous U.S. waiver of enforcement of provisions of the Hale-Burton Act were based on realistic assessments that the related U.S. embargo of Cuba was rejected by virtually every country in the world whereas enforcement of those provisions of the Act would generate costs at the international level, including tension with U.S. allies; that the restriction of U.S. remittances and travel to Cuba will harm emerging Cuban free enterprise; and that the true purpose of these new U.S. measures does not appear to encourage actions consistent with U.S. interests, but instead to cause a breakdown of their regimes.

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[1] Cuba Foreign Ministry, Declaration of the Revolutionary Government of Cuba: The Cuban revolution reiterates its firm determination to face the escalation in aggression by the United States (April 18, 2019).

[2] Solomon, Reichmann & Lee (AP), Trump Cracks Down on Cuba, Nicaragua and Venezuela, Wash. Post (April 17, 2019); DeYoung, Trump administration announces new measures against Cuba, Wash. Post (April 17, 2019); Reuters, Trump’s Cuba Hawks Try to Squeeze Havana Over Venezuela Role, N.Y. Times ( April 17, 2019).

[3] Rojas, Ten Objections to the Bolton doctrine, El Pais (April 18, 2019); Capote, Let’s talk Cuban about the Helms-Burton, Granma (April 17, 2019); Editorial, The Helms-Burton Act and the responsibility of the Cuban regime, Diario de Cuba (April 18, 2019); Amor, Will the Cubans be impoverished by the Helms-Burton Law?, Diario de Cuba (April 20, 2019).

[4] As always corrections and opinions about this post are welcome. Are there any other significant Cuban statements on these new U.S. measures? If so, add them in comments to this post.

Cuba’s Current Dire Economic Situation 

In the midst of the flurry of recent commentary about the new U.S. policies regarding  Cuba, including this blog’s current exploration of the many facets of those policies, it is easy to ignore or forget Cuba’s very difficult current economic situation, which only will be made worse by these U.S. policies. Here is some information about that economy.[1]

According to the Associated Press, “After two decades of relative stability fueled by cheap Venezuelan oil, shortages of food and medicine have once again become a serious daily problem for millions of Cubans. A plunge in aid from Venezuela, the end of a medical services deal with Brazil and poor performances in sectors including nickel mining, sugar and tourism have left the communist state $1.5 billion in debt to the vendors that supply products ranging from frozen chicken to equipment for grinding grain into flour, according to former Economy Minister José Luis Rodríguez.”

“That economy is afflicted by deep inefficiency and corruption. Many state employees demand bribes to provide services to the public. Others spend only a few hours a day at their jobs, spending the rest of their time doing informal private work or selling supplies stolen from their office, warehouse or factory. Despite a highly educated and generally well-qualified workforce, Cuba’s industrial sector is dilapidated after decades of under-investment. The country produces little of value on the global market besides rum, tobacco and the professionals who earn billions for the government working as doctors, teachers or engineers in friendly third countries.”

“The agricultural sector is in shambles, requiring the country to import most of its food. Economy Minister Alejandro Gil said Saturday that Cuba would spend $5 billion on food and petroleum products this year.”

“Over the last 20 years, many of those billions came from Venezuela’s socialist government, which has deep ties to Cuba’s and sent nearly 100,000 barrels of oil daily for years. With Venezuela’s economic collapse, that has roughly halved, along with deep cutbacks in the economic relationship across the board. And the news has been bad in virtually every other sector of the Cuban economy. Nickel production has dropped from 72,530 metric tons in 2011 to 50,000 last year, according to Rodríguez, the former economics minister. The sugar harvest dropped nearly 44%, to a million tons. The number of tourists grew only 1%, with many coming on cruise ships, a relatively unprofitable type of visitor. Overall GDP growth has been stuck at 1% for the last three years.”

“Meanwhile, under agreements Castro struck to rehabilitate Cuba’s creditworthiness, the country is paying $2 billion in debt service to creditors such as Russia, Japan and the Paris Club.”

“Stores no longer routinely stock eggs, flour, chicken, cooking oil, rice, powdered milk and ground turkey, among other products. These basics disappear for days or weeks. Hours-long lines appear within minutes of trucks showing up with new supplies. Shelves are empty again within hours.”

“No one is starving in Cuba, but the shortages are so severe that ordinary Cubans and the country’s leaders are openly referring to the ‘special period,”’the years of economic devastation and deep suffering that followed the collapse of the Soviet Union, Cuba’s Cold War patron.”

“‘It’s not about returning to the harshest phase of the special period of the ’90s,’ Communist Party head Raul Castro said last week. ‘But we always have to be ready for the worst.’”

“Two days later, President Miguel Díaz-Canel said cutbacks were necessary because: ‘This harsh moment demands we set clearly defined priorities in order to not return to the worst moments of the special period.’’”

==============================

[1] Assoc. Press, Shortages Hit Cuba, Raising Fears of New Economic Crisis, N.Y. Times (April 18, 2019).

 

 

New U.S. Sanctions on Cuba and Venezuela

On April 5, the U.S. Treasury Department announced new sanctions on Venezuela and Cuba. The sanctions are on 34 vessels owned or operated by Venezuelan state-run oil company Petróleos de Venezuela, S.A, or PDVSA , and also on two companies and a vessel that delivered oil to Cuba in February and March. The announcement stated, “The United States continues to take strong action against the illegitimate regime of former President Nicolas Maduro, not only to isolate corrupt Venezuelan enterprises, but also to target Maduro’s supporters in Havana who continue to enable the oppression of the people of Venezuela.” [1]

The announcement further said, “The relationship between Cuba and Venezuela hinges on a two-decade long political, security, and economic alliance, particularly given Cuba’s reliance on a barter system for Venezuelan oil imports.  Cuba is a major importer of crude oil from Venezuela, and in return, sends assistance to Venezuela in the form of political advisors, intelligence and military officials, and medical professionals, all of whom are used to ensure Maduro’s hold on power and complete social control over the people of Venezuela.  Cuba’s influence has contributed to Venezuela’s failure.  Maduro continues to send aid to Cuba as Venezuelans suffer from a deepening humanitarian crisis while denying entry to food, medicine, and other supplies provided by the United States and our allies and partners.”

“As a result of today’s action, all property and interests in property of these entities, and of any entities that are owned, directly or indirectly, 50 percent or more by the designated entities, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC [Treasury’s Office of Foreign Assets Control]. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.”

The Treasury Secretary, Steve Mnuchin, said, “Treasury is taking action against vessels and entities transporting oil, providing a lifeline to keep the illegitimate Maduro regime afloat. Cuba continues to profit from, and prop up, the illegitimate Maduro regime through oil-for-repression schemes as they attempt to keep Maduro in power. The United States remains committed to a transition to democracy in Venezuela and to holding the Cuban regime accountable for its direct involvement in Venezuela’s demise.”

Vice President Mike Pence also voiced support for these new measures on April 5, actually just before their official announcement.. He said, “The United States will continue to exert all diplomatic and economic pressure to bring about a peaceful transition to democracy, calling oil shipments “the lifeblood of that corrupt regime” with its oil shipments being “the lifeblood of that corrupt regime.”Pence also called Cuba’s “leaders as the “real imperialists” in the Western Hemisphere, adding: “The time has come to liberate Venezuela from Cuba.”[2]

Cuban President Díaz-Canel immediately responded to these new sanctions. He tweeted, The U.S. “sanctioned Friday vessels and companies involved in the transportation of fuel between [Cuba and Venezuela], a legal activity and covered by trade agreements. These measures are an act of extraterritoriality, interference and imperial arrogance.”[3]

=============================

[1] Treasury Dept, Press Release: Treasury Sanctions Companies Operating in the Oil Sector of the Venezuelan Economy and Transporting Oil to Cuba (April 5, 2019); Reuters, U.S. Targets Cuba’s Oil Supply From Venezuela in New Sanctions, N.Y. Times (April 5, 2019).

[2] Reuters, U.S. ratchets Up Pressure on Venezuela, Cuban Backers, N.Y. Times (April 6, 2019).

[3] Diaz-Canel qualified as an act of extraterritoriality, interference and imperial arrogance, the recent sanctions against Venezuela and Cuba, Granma (April 6, 2019).