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Vol. 22, No. 9 September 2014 EU, Cuban negotiators prepare for trade and investment talks BY JOHANNES WERNER See Real estate, page 2 U.S. delegation explores real estate changes in Cuba BY VITO ECHEVARRIA See EU negotiations, page 2 T he Cuban government's open- ings that now allow locals to buy and sell real estate first circulated mainly in the Miami Cuban community. However, an upcoming trip to Havana by the Chicago-based National Association of Realtors (NAR) shows that Cuban real estate is being taken more seriously by a broader U.S. business audience. The NAR trip, planned for Sept. 21-26, is expected to draw 25 U.S. real estate agents and brokers interested in seeing first-hand the changes in Cuba's realty sector. In an email to CubaNews, Erin Jalón, Cuba Program Manager for Friendly Planet, which is organizing the people- to-people trip for NAR, acknowledged that U.S. realtors from firms such as Pru- dential Douglas, Sotheby's and Christie's may take part. NAR officials did not respond to repeat- ed inquiries, but two realtors from Re/ Max Alliance Group of Sarasota, Florida confirmed their plans to be there. “NAR extended the offer to those of us who hold the CIPS (Certified Interna- tional Property Specialist) designation,” said Patricia Baker, one of two Re/Max Alliance realtors headed to Havana next month. Baker said the group will be meet- ing with attorneys and bankers who will discuss buying and selling property in Cuba. “I am curious where this takes me, as we aren't able to work with Cuba at this time,” Baker added. She is optimistic that the Cuban real estate market will be lucrative, once political and legal condi- A t a meeting in Brussels last week, Cuban and European negotiators laid the groundwork for talks on trade and investment, to be held in Ha- vana at the end of this year. The two-day session in Brussels, the second in a series of talks seeking an EU- Cuba Political Dialogue and Cooperation Agreement, tried to stake out possible areas of cooperation. A first round of ne- gotiations in April in Havana focused on political issues. Minus oil, roughly half of Cuba's trade is with EU countries, and more than half of Cuba's foreign investments are from the EU. “In the current effort to modernize the Cuban society and economy, Europe is an essential partner,” Christian Leffler, the European Union's managing direc- tor for Americas, told reporters in a press conference after the talks. “The negotiation process is advancing with normalcy,” the Cuban foreign min- istry said in a statement, without elabo- rating. The Cuban delegation in Brussels was led by Deputy Foreign Minister Abe- lardo Moreno. “We have a very positive and prag- matic engagement,” Leffler said. “There is a recognition on the Cuban side of the EU's key concerns, including on gover- nance issues and on fundamental rights, and there is a recognition and respect on our side that Cuba is not quite like other partners in the western hemisphere.” “We made quite substantial progress,” he added. The dialogue in Brussels sought to identify areas of cooperation, such as human rights, rule-of-law issues, fight against drugs, fight against crime, cor- In the News Real estate not totally off-limits Miami consultant advises U.S. clients to look at offshore entities, LOI's ......Page 2 Domingo on Cuba Cuba's new leadership, foreign invest- ments, and public ranting ..........Page 3 Startup show-and-tell in Miami Five Cuban business owners talk about challenges and opportunities ........Page 4 Domingo on Cuba Discussing Cuba in Miami: ‘Economic bankruptcy' view still strong .....Page 5 The magical barrier, out of reach? Cuba's tourism may not reach the 3 mil- lion visitor mark this year .........Page 7 Wind power in Cuba Ambitious plans include construction of 14 wind farms ........Page 8 ‘Co-op’eration across Florida Strait U.S. co-op leaders visit peers in Cuba, of- fer support ........Page 10 Analysis: U.S. food sales to Cuba The amounts have been surprisingly sta- ble, but patterns are shifting ......Page 14 Tokmakjian loses $91m to Cuba Even before conviction and sentencing, his assets were confiscated .....Page 15 CubaNews (ISSN 1073-7715) is published monthly by CUBA MEDIA LLC. © 2014. All rights reserved. Annual subscription: $398. Nonprofit organizations: $198. Printed edition is $100 extra. For editorial in- quiries, please call (305) 393-8760, fax your request to (305) 722-4350, or email [email protected]. Also see Cuban real estate not totally off-limits, page 2

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Page 1: In the News EU, Cuban negotiators prepare for trade and ...for trade and investment talks BY JOHANNES WERNER See Real estate, page 2 U.S. delegation explores real estate changes in

Vol. 22, No. 9 September 2014

EU, Cuban negotiators prepare for trade and investment talks

BY JOHANNES WERNER

See Real estate, page 2

U.S. delegation explores real estate changes in Cuba

BY VITO ECHEVARRIA

See EU negotiations, page 2

The Cuban government's open-ings that now allow locals to buy and sell real estate first circulated

mainly in the Miami Cuban community. However, an upcoming trip to Havana by the Chicago-based National Association of Realtors (NAR) shows that Cuban real estate is being taken more seriously by a broader U.S. business audience.

The NAR trip, planned for Sept. 21-26, is expected to draw 25 U.S. real estate agents and brokers interested in seeing first-hand the changes in Cuba's realty sector.

In an email to CubaNews, Erin Jalón, Cuba Program Manager for Friendly Planet, which is organizing the people-to-people trip for NAR, acknowledged that U.S. realtors from firms such as Pru-dential Douglas, Sotheby's and Christie's may take part.

NAR officials did not respond to repeat-ed inquiries, but two realtors from Re/Max Alliance Group of Sarasota, Florida confirmed their plans to be there.

“NAR extended the offer to those of us who hold the CIPS (Certified Interna-tional Property Specialist) designation,” said Patricia Baker, one of two Re/Max Alliance realtors headed to Havana next month.

Baker said the group will be meet-ing with attorneys and bankers who will discuss buying and selling property in Cuba.

“I am curious where this takes me, as we aren't able to work with Cuba at this time,” Baker added. She is optimistic that the Cuban real estate market will be lucrative, once political and legal condi-

At a meeting in Brussels last week, Cuban and European negotiators laid the groundwork for talks on

trade and investment, to be held in Ha-vana at the end of this year.

The two-day session in Brussels, the second in a series of talks seeking an EU-Cuba Political Dialogue and Cooperation Agreement, tried to stake out possible areas of cooperation. A first round of ne-gotiations in April in Havana focused on political issues.

Minus oil, roughly half of Cuba's trade is with EU countries, and more than half of Cuba's foreign investments are from the EU.

“In the current effort to modernize the Cuban society and economy, Europe is an essential partner,” Christian Leffler, the European Union's managing direc-tor for Americas, told reporters in a press

conference after the talks.“The negotiation process is advancing

with normalcy,” the Cuban foreign min-istry said in a statement, without elabo-rating. The Cuban delegation in Brussels was led by Deputy Foreign Minister Abe-lardo Moreno.

“We have a very positive and prag-matic engagement,” Leffler said. “There is a recognition on the Cuban side of the EU's key concerns, including on gover-nance issues and on fundamental rights, and there is a recognition and respect on our side that Cuba is not quite like other partners in the western hemisphere.”

“We made quite substantial progress,” he added.

The dialogue in Brussels sought to identify areas of cooperation, such as human rights, rule-of-law issues, fight against drugs, fight against crime, cor-

In the NewsReal estate not totally off-limitsMiami consultant advises U.S. clients to look at offshore entities, LOI's ......Page 2

Domingo on CubaCuba's new leadership, foreign invest-ments, and public ranting ..........Page 3

Startup show-and-tell in MiamiFive Cuban business owners talk about challenges and opportunities ........Page 4

Domingo on CubaDiscussing Cuba in Miami: ‘Economic bankruptcy' view still strong .....Page 5

The magical barrier, out of reach?Cuba's tourism may not reach the 3 mil-lion visitor mark this year .........Page 7

Wind power in CubaAmbitious plans include construction of 14 wind farms ........Page 8

‘Co-op’eration across Florida StraitU.S. co-op leaders visit peers in Cuba, of-fer support ........Page 10

Analysis: U.S. food sales to CubaThe amounts have been surprisingly sta-ble, but patterns are shifting ......Page 14

Tokmakjian loses $91m to Cuba Even before conviction and sentencing, his assets were confiscated .....Page 15

CubaNews (ISSN 1073-7715) is published monthlyby CUBA MEDIA LLC. © 2014. All rights reserved.Annual subscription: $398. Nonprofit organizations:$198. Printed edition is $100 extra. For editorial in-quiries, please call (305) 393-8760, fax your requestto (305) 722-4350, or email [email protected].

Also see Cuban real estate

not totally off-limits, page 2

Page 2: In the News EU, Cuban negotiators prepare for trade and ...for trade and investment talks BY JOHANNES WERNER See Real estate, page 2 U.S. delegation explores real estate changes in

the protection of claims from pre-Castro owners whose properties were seized by the government,” he continued. “For in-stance, in looking at Florida real estate law (adverse possession), if someone takes over your property, maintains (it) and pays the taxes for seven years or more, this individual can .. become the owner. Why should we expect any differ-ent from a Cuban owner who has main-tained a property for 50 years?”

This isn't the first time the Re/Max brand is associated with Cuban real es-tate. In 1999, British tourism entrepre-neur Steve Marshall successfully sold a string of newly-built condos in Havana's posh Miramar neighborhood whose

CubaNews v September 20142EU NEGOTIATIONS —FROM PAGE 1

Cuban real estate not totally off limitsBY VITO ECHEVARRIA

See Real estate, next page

ruption, human trafficking, social de-velopment, education, public health, environment, disaster mitigation, water, agriculture, fisheries, support in the de-velopment of small and medium-sized enterprises, tourism, science and tech-nology, energy, and transport.

The session also included a presenta-tion by the Directorate General for Trade on what the EU would like to see on the agenda for the third session on trade and investment.

“That was just a presentation,” Leffler said. “We did not get into any further dis-cussion.”

The two sides agreed to hold the ses-sion on trade and investment in Havana,

most likely in early De-cember. The topics will center on “how to facili-tate trade and economic interaction,” Leffler said, adding it won't be about preferential trade.

There will be informal, technical exchanges in the meantime, to prepare the next round of nego-tiations, according to EU officials.

Meanwhile, diplomats advised journal-ists to not hold their breath regarding a speedy conclusion of the talks.

“The negotiations will end when we're

finished,” Leffler said, tongue-in-cheek, answering a reporter's question. “I prefer a good agreement, rather than an early agreement. I can't put any timetable on it.”

After the third round of negotiations, there will be “a fourth round, a fifth round, as many as we need,” he added. “There remains quite a bit of work to be done in the first pillar on political dia-logue.”

The Cuban negotiators agreed to allow participation of all actors on both sides, “including civil society” and the “eco-nomic sector,” as well as government on national, regional and local levels, ac-cording to Leffler. q

Leffler: In Cuba’s re-

forms, “Europe is an essential

partner.”

REAL ESTATE —FROM PAGE 1

tions open it to U.S. participation. “It will be a boon, like the old western gold rush. Cuba is definitely a place of interest.”

Some object to the NAR trip. Direc-tors of Miami-based human rights group M.A.R. por Cuba, who happen to be re-altors and NAR members, sent a letter Aug. 4 to NAR President Steve Brown, expressing their opposition to the trip on political and legal grounds. Sandor Ochoa, a Doral, Fl.-based realtor who left the island in 1960, also questioned the wisdom of thinking about investments in “a country where a dictator can change his mind and perform a 180-degree turn on what was supposed to be a law, rule or agreement.”

Others welcome the trip and the high-er profile it gives the island's real estate. That's in part because of clandestine Cuban-American investments in Havana that are already raising property values.

“Cuban-Americans who purchased property in Cuba through their families definitely go after the best locations on the island – Vedado and Miramar are definitely desired neighborhoods,” said Havana-born realtor Alexander Tuco-quiel, who has lived in Miami for nearly 20 years. He dismisses the notion that Cuban real estate is a high-risk invest-ment, as well as possible complications that may be raised in the future by pre-Castro era property owners. “The fact is that most of these owners who fled to the USA from Cuba, and had their property confiscated by the government, are now-adays older or have passed away, and a claim from their Cuban-American chil-dren is unlikely to occur, as they do not have the same attachment and emotional feeling to a land that they have never come to know,” said Tucoquiel.

“As the transition of government oc-curs by the people, it's my belief that the law will be consistent in protecting the rights of current Cuban owners with

construction was previously green-lighted by Cuban authorities – ranging from studios (for $90,000) to penthouse apartments ($400,000). In attracting buy-ers from Europe and the Middle East, Marshall used a Re/Max franchise he bought elsewhere in the Caribbean as part of his marketing efforts. The Re/Max head office in Colorado then sued Marshall to stop using the firm's name and logo in his Cuban real estate deal-ings and on his RealEstateCuba.com website. Marshall resisted and was held in contempt of court – subjecting him to arrest the next time he set foot on U.S. soil. By 2001, Re/Max had dropped its suit against Marshall, and his U.S. travel rights were restored.

Marshall was surprised to hear about NAR's upcoming Cuba trip and the par-ticipation of Re/Max agents. Neverthe-less, he declined comment. q

gin Islands), Isle of Man and Channel Islands, in strict accordance with U.S. laws and regulations. Similar to the procedures in place for a foreign inves-tor working in Cuba, that off-shore ve-hicle must set up another joint venture with a Cuban real estate-related entity. Through this JV, American real estate professionals can invest directly in Cu-ban real estate.”

Investors who want to wait until the U.S. government lifts the embargo may choose a different option: entering into a non-binding Letter of Intent with a Cu-ban real estate entity. Ashby says that by doing this, U.S. investors put them-selves “first in line” for Cuban real es-tate opportunities after the embargo is lifted and pre-Castro ownership issues

As U.S. interest in Cuban real estate is growing, an attorney and former

senior U.S. government official who ad-vises corporate clients on Cuban trade and investment asserts that despite the U.S. embargo, Cuban real estate is not necessarily off-limits to U.S. citizens and residents.

According to Timothy Ashby, there is the option of setting up an off-shore en-tity with a non-Cuban partner.

“U.S. real estate professionals and in-vestors can have passive investments in Cuba via off-shore joint ventures,” the Miami-based lawyer wrote in an email message. “I advise investors in this re-gard, and form such offshore entities on their behalf in a variety of jurisdictions, including the Caymans, (British Vir-

Page 3: In the News EU, Cuban negotiators prepare for trade and ...for trade and investment talks BY JOHANNES WERNER See Real estate, page 2 U.S. delegation explores real estate changes in

September 2014 v CubaNews 3

Sketch of Coral Capital’s Bellomonte project

are ironed out. According to Ashby, generating let-

ters of intent with Cuban parties will not get investors in trouble with the U.S. Treasury Department's Office of Foreign Assets Control (OFAC).

“Non-binding LOIs are not consid-ered a contract per se,” he said. “How-ever, the wording must not say ‘contin-gent on ending the embargo'.”

Marco González of Nicoll Davis & Spinella LLP, a New Jersey-based attor-ney who works on OFAC/Cuba issues, affirms that a number of U.S. nation-als have entered into letters of intent with Cuban entities during the mid- to late 1990s. González asserts that, since

Cuba is now devoting more efforts to making deals with countries like China, Brazil and Venezuela, Cuban officials are like-ly to be more selective in their dealings with potential U.S. inves-tors. He also stresses that due diligence on a given property's history is still a must, given the risks involved. “Should the embargo end, I would think that there will be a process for adjudicating claims involv-ing confiscated property, and if so, that may mire the real estate in arbitration, administrative proceedings or litigation that would defeat the purpose of having a jump-start LOI in place,” he said. q

REAL ESTATE —FROM PAGE 2

Cuba’s new leadership, investors and public ranting

Ashby

Is there a new leadership in Cuba? Yes. Temas editor Rafael Hernández, in a

recent analysis published by indepen-dent magazine Espacio Laical, provided key facts and ideas on the demographics of political institutions.

Communist Party of Cuba (2012): Between Party and Communist Youth, there's a total of 1,175,148 members. That's 22.17% of Cuba's labor force of 5.3 million; for every 4.5 Cubans older than 16 years, there is one militant. The num-ber of young members has increased from 10 years ago. Forty percent of the PCC membership is now below 45 years of age.

The Politburo average age is 68.57 years, and in the Central Committee it is 57 years. The average age in the Council of Ministers (32 members) is 58 years; eight members are younger than 50. In the Council of State (26 members), six are younger than 50. The National As-sembly's average age is 49.

Provincial PCC leaders have an aver-age age of 46. In the provincial assem-blies, 80% are younger than 50 years.

A rising number — 39% — of the PCC membership is female; women account for 52% of the Unión de Jovenes Comunis-tas. Women make up remarkable shares in some institutions: 70% of those work-ing in the justice system, including 77.8% of prosecutors are female; 60% of all doc-tors, 75% of medical school graduates, 70% of teachers, 70% of economics gradu-ates, and 53% of those working in science and technology are women.

To be sure, there is only one woman at the Politburo and at the Secretariat of the PCC. But of the Central Committee's 114 members, 43 are women; 45.25% of the

National Assembly deputies are female, with 44.7% at the level of the PCC's 16 provincial PCC structures.

Color of skin: The Politburo's 14 mem-bers include two black and two mulatos or mestizos; at the Central Committee, 16.6% are black and 14.9% are mulato or mestizo; and at the Secretariat, two of six members are black and mulato or mes-tizo.

The role of the military in Cuba's lead-ership: Of the Politburo's 14 members, seven are military, but just four are on active duty. Of the four new Politburo members, just one is military (retired); the other three are civilians. All six Sec-retariat members are civilians. At the Council of Ministers, 21% are officers, all of them engineers. The key positions in the economy are all held by civilians.

Professional background: Thirty-eight percent of provincial PCC leaders are en-gineers, 25% are economists, and 19% are teachers.

FINDING INVESTORS - A DIFFICULT QUEST?After more than six months since the

Mariel Zone and the new foreign in-vestment law bowed, there are no signs (maybe due to pervasive secrecy?) that would allow to measure Cuba's success or failure. On the other hand, U.S. sanc-tions against banks have continued to

gain momentum under the Obama ad-ministration, blocking Cuba's financial dealings in Western Europe, Mexico and other countries. There is a clear intent by U.S. authorities to defeat Cuba's reforms and investment projects, seeking to pre-vent potential partners from making seri-ous commitments.

Cuba, in the course of 2014, has made numerous efforts to find new partners.

What remains to be seen, after the visits of presidents Putin and Xi, is what Chinese and Russian companies, both private and state-owned, are prepared to risk investing in the Cuban market, con-sidering U.S. obstacles, pressures, and sanctions. The same applies to Brazil. Let's wait and see.

BLUNT COMENTARIOSComentarios in the online version of

Granma (Readers' comments): Harsh criticism of government/Party policies continue to be published almost on a daily basis, a healthy practice that — for those familiar with Cuban politics — can only come from the very top of the Cuban leadership. The question is why?

A couple of examples: Reader reactions to Joaquín Infante

Ugarte, a maverick economist and cur-rently adviser to the president of the National Association of Economists and Accountants of Cuba (ANEC). In an in-terview published Aug. 4, he shared his views on how important and urgent the currency unification process is. A host of reader comentarios zeroed in on econom-ic blunders committed since the early 1990s, and the distortions resulting from such blunders. One reader concluded that “What we have here has nothing to do with socialism. Socialism will be a so-ciety of free associated workers or edu-cated members of cooperatives, as Lenin used to say, not one of salaried workers exploited by the state.”

An analysis of how state negligence hurts the development of non-agricul-tural cooperatives in the Aug. 15 issue is followed by comments such as, “No sur-prises, it was to be expected,” or “Noth-ing can prosper if the state strangles it and tries to control everything.” One even mocks President Raúl Castro's phrase on the pace of the reforms, saying they are moving “without too much haste and with a lot of pause.”

PLAYING WITH FIRE? The complaint of a worker from Cai-

barién was published in the Granma online edition on Aug. 11, denouncing that for the last four years the payment of his and fellow workers' “wages has been delayed, first by eight days and

BY DOMINGO AMUCHASTEGUI

See Domingo on Cuba, next page

Page 4: In the News EU, Cuban negotiators prepare for trade and ...for trade and investment talks BY JOHANNES WERNER See Real estate, page 2 U.S. delegation explores real estate changes in

CubaNews v September 20144

DOMINGO ON CUBA —FROM PAGE 3

now for more than 20 days. How much harm is done to the workers and their families? It shows a complete lack of con-cern and sensibility”. Moreover — he asks — “how many more cases are there throughout the nation?”

The comentaristas were quick to men-tion other examples. Workers at state-owned airline Aero-caribbean suffered in July a 70% wage

cut, because of a Ministry of Labor reso-lution no one understands.

Tourism ministry employees experi-enced similar cases, as did construction and agriculture workers. The word abuso is repeated in many comments.

One reader concludes: “How on earth are we going to increase production and productivity with such practices? The work of the revolution is being de-stroyed. And the audits come and go and don't see anything. No ven nada, nadita!”

Former Cuban intelligence officer Do-mingo Amuchastegui has lived in Miami since 1994. He writes regularly for Cuba Standard and CubaNews on the Commu-nist Party, Cuba's internal politics, eco-nomic reform, and South Florida's Cuban community.

Cuban startup owners discuss business in MiamiMIAMI — Sandra Aldama Suárez

never aimed to become an en-trepreneur in Cuba. She studied

special education and worked in her pro-fession, but found facilities for children limited and rules constraining.

Her dad's mother had been em-ployed by a cosmetics firm in the 1950s and knew a bit about making natural products for skin care. So, Aldama picked her grandmother's brain to develop a product line that would face little competition in to-day's Cuba and could make the fam-ily some money to live better.

Today, Aldama makes artisanal soaps with honey, lime, mint and other natural ingredients. Her busi-ness D'Brujas (From Witches) runs a shop in Old Havana, employing three people: two cousins and a friend.

“My dream is to have a workshop,” instead of making soaps from my kitchen at home, said the 38-year-old mother and wife. “And I'd like to ex-pand to other natural products and grow.”

Aldama was among five budding businesswomen from Cuba who visited

Miami in August to speak at local con-ferences, see the U.S. marketplace and meet fellow entrepreneurs in Florida who could share experiences and tips and help boost their ventures back on the island.

The others run a pizza shop, gym,

party-decoration service and an upscale restaurant, all in Havana.

FROM SMALL TO MIDSIZE?Their visit was organized by the Cuba

Study Group, co-founded by Cuban-American entrepreneur and self-made millionaire Carlos Saladrigas. The group wants the Obama administration to loosen the U.S. embargo to allow U.S. commerce with Cuba's emerging private sector, including the nearly half a million people on the island recently authorized as “self-employed.”

“Hopefully, small business gets the op-portunity to grow into mid-sized business in Cuba,” Saladrigas said during a lunch for the entrepreneurs at the annual con-ference of the Association for the Study of the Cuban Economy (ASCE, see Do-mingo on Cuba column, next page). “And I hope the island becomes a truly demo-cratic market economy, not one that is controlled by oligopolies, but one based on small businesses.”

During Miami events, the five women said they launched their businesses from resources of family and friends on the island. They did not receive capital from abroad.

All said their operations are profitable, they earn more now than they did at gov-ernment jobs, and their employees also earn more -- in some cases, even a per-centage of sales or profits from the busi-ness.

They pay taxes, including 10% on sales and an annual income tax ranging from 15 to 30%, depending on the business and

its volume.

MANAGEMENT SKILLS NEEDED Their biggest hurdles for growth, the

group said, include the lack of a whole-sale market in Cuba, inconsistent supply in island stores of inputs they need, and

their limited know-how of business.Four of the five took an entrepre-

neurship course given by the Catho-lic Church in Cuba and found it help-ful to improve their accounting and other basic business skills. All would like to learn more.

“There are many ways to do ad-vertising and marketing in Cuba, but among entrepreneurs, there's little knowledge about strategy and segmentation,” said Yamina Vicente Prado, a former economics profes-sor at the University of Havana who launched Decorazón, a venture fo-cused on decorating and organiz-ing social events such as weddings, birthday parties and baby showers.

Of the five, Nuris Ysabel Higueras has the largest venture: the upscale Atelier restaurant that caters mainly

to tourists and foreign clientele. It em-ploys 15 people directly and another five indirectly, including carpenters and oth-er handymen.

Higueras started Atelier nearly four years ago in a section of her house, with about $250 borrowed from a friend. She rounded up plates, cups and chairs from her grandmother and other relatives. Some are still waiting to get their house-hold items back, she joked.

Changes in regulations have helped her business develop, Higueras said. Initially, the government allowed just 12 seats for guests at private restaurants and now permits 50. “I think by the end of the year, they will take away the limits on the number of seats,” she added.

The government also now permits in-novations, such as food delivery and a second license to operate a café. And tighter health inspections and financial audits raise standards, she said.

Yet challenges remain for all, especial-ly finding supplies. Aldama works from imported soap she buys at state-owned retail stores and melts down. Sometimes, those soaps are out of stock.

Some ventures supplement limited supplies from local stores with items that friends and family bring from trips over-seas. Starting September, new caps on those “gifts” and higher taxes on them could make inputs tougher to obtain.

“But there are no problems without solutions, and if someone doesn't offer a solution, I don't pay attention to them,” Higueras told a forum at Miami-Dade

BY DOREEN HEMLOCK

Five Cuban entrepreneurs visited Miami startup center Venture Hive in August as part of a visit organized by the Cuba Study Group. They include, from left, Nuris Ysabel

Higueras, Yamina Vicente Prado and Sandra Aldama Suárez.

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See Startup owners, page 6

Page 5: In the News EU, Cuban negotiators prepare for trade and ...for trade and investment talks BY JOHANNES WERNER See Real estate, page 2 U.S. delegation explores real estate changes in

September 2014 v CubaNews 5

BRIEFSCUBA SEEKS UK RENEWABLES INVESTMENTS

Cuban officials will be offering a semi-nar in London to British suppliers and investors about the island's renewable energy priorities and investments.

In 2012, the Cuban government established a commission to draw a plan for renewable energy policies, including construction of wind farms, solar energy facilities, biomass and biogas facilities, as well as a large number of windmills. Since a failed series of exploratory off-

shore oil drills that ended last year, the gov-ernment has been speeding up renewable-energy plans.

Only 3.9% of Cuba's energy

is currently from renewable sources, by far most of it from sugar biomass.

“One of the key problems for the de-velopment of renewable energy sources in Cuba is the low availability of financial resources,” UK Trade & Investment said in announcing the seminar in London, Sept. 15-19.

Key opportunities for investors, ac-cording to UKTI, include biopower, construction of solar parks and manu-facturing of solar panels, wind parks and design of hurricane-resistant turbines, hydropower and manufacturing of

BY DOMINGO AMUCHASTEGUI

ASCE: ‘Economic bankruptcy’ attitude still going strong

See Domingo on Cuba, next page

Since its first annual conference 24 years ago, most participants of the U.S.-based Association for the Study

of the Cuban Economy (ASCE) have fol-lowed one guiding hypothesis: the immi-nent collapse of the Cuban government resulting from its economic bankruptcy.

Although in recent years some have granted President Raúl Castro's reforms the benefit of the doubt, the economic bankruptcy hypothesis remains vibrant. Today, it is focused on five areas: the fail-ure of agricultural reforms, the failure of the Mariel project, the failure of the new foreign investment law, the failure of tax reform, and the failing policies of gradual currency unification.

Joaquín Pujol, IMF-retired, pointed at several major causes to explain failure in agriculture: a. Bureaucratic corruption in assigning land, credits & availability of agricultural inputs; b. a marketing and distribution system marred by arbitrary bureaucratic controls, mismanagement and theft; and c. minimal bank financing.

J o r g e Pérez-López, Department of Labor-re-tired, raises doubts on the Mariel Zone's potential for

success, such as: a. Mariel Zone pay ar-rangements that allow the government to confiscate a large percentage of workers' earnings (Pérez-López assumes a much larger percentage than Cuban officials and fellow economists); b. concerns over confiscation and prohibition for inves-tors to hire, direct and compensate their workers; and c. in international compari-son, the incentives offered by the Mariel Zone do not give it an edge.

Jorge Sanguinetty, a Miami consultant, in a debate on the new investment law, stated that the real reason for this law is to try to solve Cuba's chronic lack of solvency and its historical dependency on subsidies. Cuban lawyer and govern-ment opponent Yaremis Flores insisted

foreign investors must respect human rights, highlighted that incentives are insufficient, and that foreign investors should not contribute to the survival of the regime.

Lorenzo Pérez, IMF-retired, in his talk about taxation, stressed two angles: a. the current tax policy dis-incentivizes private business; and b. for the economy to grow, appropriate incentives must be provided, and the anti-private sector bias must be eliminated.

On the issue of currency unification, most of the Cuban American experts at ASCE coincided that the merger — re-gardless of inflation and social tensions — must be implemented ASAP.

OPPOSITION TO POSITIVE PRESENTATIONSFor the second consecutive year,

ASCE invited 22 representatives of Cu-ba's domestic opposition, most of them “independent journalists.” In addition to their own presentations, most of them played the role of an opposition bloc to every presentation showing any positive

hydropower plants, waste management, and supplies of equipment.

Cuba has the potential for 1,100 mw in wind energy, 135 mw in hydroen-ergy, 5 kWh/square meter photovoltaic day-average, 4,300 kcal/square meter in solar thermal energy, and 764 mw in sugar biomass, according to official sources. Current plans include construc-tion of solar parks between 1 and 10 mw, construction of a 51 mw wind farm with 34 turbines in Las Tunas province, and 1,000 organic-waste processing plants for electricity production.

A British company, Havana Energy, last year formed a joint venture to build a 60 mw biomass power plant at the Ciro Redondo sugar mill in Ciego de Ávila province. The estimated cost is $45 mil-lion.

CUBA CRUISE SECURES CHARTER FLIGHTSCalgary-based Cuba Cruise secured

once-weekly Air Transat charter flights for the second season of its around-the-island cruises, the company announced in a press release.

Air Transat will use a Boeing B737-800 for Cuba Cruise passengers during the upcoming winter season beginning Dec. 22, flying every Monday from Toronto Pearson International Airport to José Martí International Airport in Havana. The transfer from the airport to the cruise terminal in Old Havana takes 25

minutes.The

company chartered again the 1,200-pas-senger Louis Cristal from Cyprus-

based Louis Cruises for the seven-night Cuba cruises.

SUNWING MAY SEEK RESTITUTIONCanadian vacation airline Sunwing is

considering seeking restitution from two rowdy passengers who caused the pilot on flight 656 half-way from Toronto to Varadero Aug. 27 to turn around, escorted by Canadian jet fighter planes.

Saying it is a major cost setback to divert a plane, the airline estimates the total cost at US$46,000. Faced by the “disruptive behavior” of two drunk women while in U.S. air space off the coast of Georgia, the pilot asked for as-sistance from NORAD (North American Aerospace Defense Command).

It costs US$41,000 to put a Canadian CF-18 in the air for one hour.

Arrested upon arrival, both were granted release on bail. The pair face charges of smoking on board an aircraft, endangering the safety of an aircraft, mischief endangering life, mischief over CDN$5,000, and uttering threats.

The Louis Cristal in Havana

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angle on Cuban re-forms. Of 22 panels and conferences, five were entirely focused on, and handled by, Cuban

opposition figures.They were particularly hostile against

the lunch-break presentation organized by Carlos Saladrigas and his Cuba Study Group featuring five successful women entrepreneurs from Cuba (see article on page 4); they were equally hostile to some of the views expressed by Miriam Leyva, widow of dissident economist Os-car Espinosa Chepe and head of the Rec-onciliación Cubana movement, especially the notion that a transition is already tak-ing place in Cuba.

THE NOVELTIESNovelties and surprises were more

frequent this year. To start, Miami law-yer José Manuel Pallí insisted on the need for ASCE to invite “the other party” (meaning representatives from Cuban of-ficial institutions). Turning our backs to them will prevent us from exerting any influence on Cuban developments, he pointed out.

ASCE's outgoing president, Ted Hen-ken, a professor at Baruch College, ad-mitted in his opening remarks that the members of the board had a hard time agreeing on the title for the conference, and the middle ground was “Cuba's Per-plexing Changes”. He added that a small group of Cuban academics from official institutions had been invited, but — for reasons unknown — failed to attend; he mentioned that U.S. authorities had re-fused to extend visas to a couple of them.

Another novelty were the 23 presenta-tions that provided positive angles and creative criticism to the unfolding re-forms in Cuba, but with a big difference. Most U.S. scholars based their presenta-tions on in-situ research, obtaining fresh insights. From former State Department official Gary Maybarduk, comparing today's Cuba with the 1990s, to Joseph Scarpaci on “Entrepreneurial Realign-ment in Cuba”, from William A. Messina on changing food import patterns (see article on page 14), to Barbara Kotschwar with her presentation on “Economic Nor-malization with Cuba,” there was consid-erable evidence showing new, success-ful, trends derived from the reforms.

RESEARCH IN CUBASimilar in-situ research from Cuban-

American and Cuban presentations enriched the debates, such as Anto-nio Zamora on “New Opportunities for Business and Investment by Americans in Cuba Under the Economic Open-ing,” José M. Pallí, a Miami lawyer, on

CubaNews v September 20146DOMINGO ON CUBA — FROM PAGE 5

“Cuba's New Investment Law”, and Ma-rio González-Corzo and Orlando Justo on “Self-Employment in Cuba”, Arturo López-Levy with “Oposición Leal, So-beranía y Derechos Humanos: elemen-tos para una discusión cubana desde el derecho internacional”; and Lenier González and Roberto Veiga (Cuba Po-sible; former editors of Espacio Laical).

Zamora discussed Cuba's ups and downs with golf course, marina and con-do projects since the late 1990s, stressing that new and positive developments are unfolding. He suggested Cuban authori-ties establish a foreign investment com-mission, and to place special attention on small and medium-size investments. [Zamora is a partner of Cuba Media LLC, which owns this publication]

There were also four presentations by Cuban academics from official institu-tions. One, by José Luis Perelló on “Ac-tualización del turismo en Cuba”, con-cluded that thus far Cuba has not been able to reach its potential with European tourism; Jesús Bu Macheco, a Cuba-based lawyer, underlined that steady investment flows are hampered by U.S. embargo/terrorism/Helms-Burton leg-islation.

Two Spanish hotel experts, Julio Cer-viño and José Antonio Fraiz, crunched customer satisfaction data, comparing Cuban- and foreign-managed hotels on the island. They acknowledged that Cuban executives and managers are in-creasingly adopting the skills, technolo-gies, and standards of international hotel management.

Canadian economist Archibald Ritter pondered whether Cuba has an industri-al future. Considering a dramatic drop in industrial output and exports since 1989, his answer is ‘maybe' — if they get their act together. He explained Cuba's com-parative advantages and the benefits that could be derived from connecting to U.S. markets. He also pointed out that China has helped de-industrialize Cuba, flood-ing it with cheap products, among others via state-owned retail chains.

Bill Messina, after discussing the many advantages of Cuba's agriculture, came to the conclusion that the island could become an agricultural powerhouse, and Scarpaci concludes that a rise of the self-employed and cooperatives is taking place, despite overtaxation, the lack of a wholesale infrastructure, and the still narrow list of legal trades.

Maybarduk's presentation (“Cuba, 15 Years Later”) provided a set of first-hand observations and comparisons by a for-mer diplomat stationed at the U.S. Inter-est Section in Havana from 1997 to 1999. He found positive change, unthinkable in the 1990s. Maybarduk highlighted that in 2008, only 80,000 Cubans stayed in hard-currency hotels; by 2013, that num-ber had risen to 648,000.

Former Cuban intelligence officer Do-mingo Amuchastegui has lived in Miami since 1994. He writes regularly for Cuba Standard and CubaNews on the Commu-nist Party, Cuba's internal politics, eco-nomic reform, and South Florida's Cuban community.

STARTUP OWNERS — FROM PAGE 4

College titled “Startup Cuba?”Spending time in the U.S. was a culture

shock for the group in many ways.“When it comes to technology, we're

light years behind,” said Decorazón's Vicente. None of the five have In-ternet access at their business in Cuba. Going online is too expen-sive, Vicente said, up to $6 to $10 per hour in a country where wages still average about $20 monthly.

Yet the five said the U.S. trip brought contacts, sources and in-formation invaluable for growth.

Attendees at the talks also were encouraged. Juan Antonio Blanco, who runs the Center for Latin American and Caribbean Initiatives at Miami-Dade College, imagined the day when U.S. resi-dents could contribute online to crowd-funding campaigns for Cu-ban businesses, perhaps through Kickstarter or Kiva.

Until then, the entrepreneurs

suggested help with business manage-ment. “You could give workshops in Cuba,” said Decorazón’s Vicente, “be-cause we don't have a culture of busi-ness.” q

Carlos Saladrigas, founder of the Cuba Study Group, ad-dresses a luncheon in Miami to present five visiting Cuban entrepreneurs, including from left: Yamina Vicente Prado and Sandra Aldama Suárez. Photo: Courtesy Cuba Study Group

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September 2014 v CubaNews 7

Tourism slowing down, may not break 3-million barrierBY JOHANNES WERNER

For the second consecutive month, the number of foreign visitors dropped in July, according to of-

ficial statistics released by the National Statistics Office (ONE).

There were 211,456 foreign arrivals in July, down 0.5% from the same month a year ago. This comes after a 1.4% decline in June.

Year-to-date, visitor numbers are still up 3.4% from the same period a year ago. In mid-August, official media celebrated the arrival of visitor No. 2 million, with-out mentioning the slowdown.

Even so, in his report to the National Assembly in July, Tourism Minister Manuel Marrero rang the alarm bells, warning that reaching 3 million visitors and breaking this psychological barrier for the first time may not be possible this year.

Keeping pace with the growth of visi-tors, tourism revenues rose 3.9% in the first half of the year, to CUC 1.077 billion (convertible pesos, roughly equivalent to U.S. dollars).

Indicating that Cuba has been lower-ing its hotel rates, revenues from lodg-ing rose only 0.9% in the first six months, trailing the 3.9% increase in visitors through the end of June. However, retail spending was up 12.1%, food spending rose 6%, and revenues from transporta-tion rose 8.1%. Revenues from tourism-related entertainment dropped 11.7%.

“What has practically saved the Cuban tourism market with favorable economic yields is the explosion of North Ameri-can tourism,” said Emilio Morales, an independent consultant in Miami.

However, pointing at trouble ahead, visits from Cuba's three biggest source

4.6% in July, while the number of visitors from Britain dropped 27.1% in June and again 27.8% in July.

For the first six months, the number of visitors from the No. 1 source market, Canada, was still up 4.9%, and visitors from “other” countries (mostly U.S.) rose 6.3%, according to official statistics. But the number of visitors from Britain dropped 15.3% (with German visitors — +13.6% — taking Britain's spot).

Morales, partner of the Miami-based Havana Consulting Group, calculates that U.S. travel to Cuba was up 9.9% in the first half of the year, with a record 327,600 travelers. This is still less than half the number of Canadian travelers but clearly ahead of British or German travelers.

In July, Mexico (-11.6%) and Argentina (-37.1%) continued their steep declines, while — in a sign of a gradual European recovery — the number of visitors from Germany (+13.8%), Spain (+8.9%), Italy (+16.2%) and France (+7.1%) rose.

The vast majority of U.S. travelers — 90.7% — departed from Miami, accord-ing to Morales, but a rising share — 9.3% — came via Tampa. There were a total of 2,184 flights from the United States to seven airports in Cuba during the first half of the year.

According to ONE, the overall number of business travelers to Cuba in the first half stagnated at close to 7,500. Travel-ers who came for medical treatment rose 11.8% to 2,486; and event visitors rose 10.1% to 1,551.

In the first six months, the number of overnight stays rose 2.4%, but hotel oc-cupancy dropped 2.3% from the same pe-riod last year to 52.5%, most likely due to new hotel construction. q

markets — Canada, United States and Britain — have been teetering or declin-ing during June and July. The number of visitors from Canada — Cuba's No. 1 source market — dropped 1% in June and rose 2.2% in July. In a sign that the U.S. travel boom is petering out, visitors from “other” countries (mostly made up of United States) dropped 2.1% in June and

Concerned about a decline in har-vests, Vice President José Ramón Machado Ventura urged tobacco

farmers to increase output.“Cuban tobacco is the best in the

world, nobody disputes that. It's an ad-vantage we cannot afford to waste, there-fore we have to be strong in production,” Machado told farmers during a visit of the Vuelta Abajo region, according to of-ficial daily Granma.

The region in the western province of Pinar del Río is the main source of the tobacco used in Cuba's renowned pre-mium cigars.

Close to 70% of Cuba's tobacco is grown in Pinar, but production has de-clined in recent years, due to negligence and aging tobacco farmers, Machado said. “This is something we must solve,”

he added.Agricultural production data by the Na-

tional Statistics Office (ONE) excludes tobacco. According to surface statistics, the total area of tobacco cultivation ex-panded 2.5% in 2014 from last year.

Many tobacco farms remained fam-ily property throughout the decades since the Revolution. One of them, the Alejandro Robaina Plantation in Vuel-tabajo, has been so crucial to the pre-mium cigar industry that a brand was named in its honor.

Habanos S.A., a joint venture of Lon-don-based Imperial Tobacco Group Plc and state company Cubatabaco, sells more than 100 million Cuban ci-gars worldwide. Excluding the U.S. market, Cuban premium cigars cover 70% of world demand.

Habanos' premium sales have been rising since 2010, after a post-recession dip, mostly thanks to demand in emerg-ing markets such as Brazil, China, Russia and the Middle East. —Johannes Werner

Government concerned about decline in tobacco harvests

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CubaNews v September 20148

BY ARMANDO PORTELA

Wind power in Cuba: Potential and plans

See Wind power, next page

When the deep-sea drilling plat-form Scarabeo-9 departed Cuba in November 2012, right after

its third failed attempt to hit large off-shore oil deposits, thoughts and hopes returned to the overlooked renewable energies.

Authorities paid more attention to the subdued power-generation potential of biomass, sunlight, hydropower and wind, and some projects revived across the island. The interest was not new; these practices were common in the past, such as the large-scale use of bio-mass in the sugar industry or the com-mon use of wind-powered water pumps in agriculture.

Reports in the Cuban media of project-ed or existing wind farms across the is-land often lack depth, signaling growing official enthusiasm backed up by modest facts.

THE POTENTIALCuban specialists, using the dense

network of meteorological stations and some local measurements, have identi-fied 55 favorable wind power zones, most of them along the northern and north-eastern shoreline of the main island and the northern keys. Depending on the source, potential wind power capacity es-timates are highly variable, ranging from

1,200 mw to 3,500 mw — larger than Cu-ba's total installed capacity of 3,300 mw.

While such figures seem aimed at feed-ing enthusiasm, plans are more realistic, calling for a gradual increase in alterna-tive power generation capacity (not just wind power) to reach 24% of total capac-ity by 2030.

An assessment by the U.S. Department of Energy found that about 3.9% of the ter-ritory, or 1,653 square miles, are suitable for wind power development (Cuba – 50m Wind Power, 2008, by Donna Heimiller, National Renewable Energy Laboratory, USDE), with Class 3 to 7 winds at 50 m above the surface. The classes relate to wind density per square meter at 50 m above ground, with Class 3 considered moderate and anything above Class 5 excellent. However, most of Cuba ranks below Class 3, with just marginal pro-spectives, and the best zones –along the northern shoreline – rank Class-3 (mod-erate). The assessment shows that any-thing above Class 3 is exceedingly local and rare in the territory of Cuba.

Other estimates by Cuban sources mention an area of 194 square miles with good-to-excellent wind power potential

Trade winds blowing from Northeast-ern to Eastern direction — the most promising power source — can be felt virtually all across Cuba but it is along the northern shoreline where they are

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September 2014 v CubaNews 9

WIND POWER —FROM PREVIOUS PAGE

more intense and constant. However, variability is a challenge for the effective development of wind power, since generation and consumption should be tightly synchronized to keep supply

stable. Trade winds are highly variable along the year, peak-ing in April-May and again in October-November, but fading out during the summer. Trade wind intensity is increased in daytime by effect of the sea breeze, while in the evening their intensity tends to dissipate.

COSTSThis inconsistent availability of the wind-generated power

increases regulation costs and impairs operational reliability for major purposes.

One key adversity in wind farm development is money. In-vestment costs fluctuate from $10 million to $14 million per farm. For the wind farms operating in Cuba – excluding the experimental Turiguanó farm – the initial investment aver-ages $1,000 to $1,400 per kilowatt.

At the currently subsidized electricity price in Cuba ($0.008 to $0.04 per kw for domestic consumers with a generation cost of $0.211 per kw), the investment cost could be offset in 10 to 18 years, with a price set at $0.04 to $0.06/kW says Dei-vis Avila and co-authors in their paper “Economic Analysis of Wind Energy Generated in Cuba”. Other sources estimate a pay-off time of 10 years or less, considering the savings in non-use of oil for thermal power generation. Either way, those time frames are large.

Other factors that add to initial investment and operating costs include building transmission lines to connect new wind farms (generally far from economic hubs), making tur-bines hurricane-safe, environmental considerations, and the value of the land used – generally elevated waterfront land with spectacular ocean views – which could be significant in Cuba's future, even if disregarded at the present.

At 11.7 mw, the installed wind power capacity accounts cur-rently for 0.35% of Cuba's power generation capability. A new project at La Herradura, Las Tunas province, is scheduled to be on stream in 2015, quadrupling Cuba's wind power by adding 51 mw in planned capacity. Plans, which in Cuba tend to be overblown, call for the construction of another 14 wind farms along the northern coast, from Corralillo in Central Cuba to Maisí, at the eastern tip of the island. The power ca-pacity of each farm ranges from 36 to 51 mw. q

Havana-born Armando Portela has a Ph.D. in geography from the Soviet Academy of Sciences

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As Cuba allows worker-owned co-op-eratives to expand beyond farms, U.S. co-op leaders are looking for

ways to lend support and build closer links.

The National Cooperative Business As-sociation, a leading organization of U.S. co-ops, sent a delegation of 13 people to Cuba this summer to meet with co-ops in Havana and Pinar del Río and explore ways to strengthen ties.

Worker co-ops depend on their employ-ee-owners to run operations and take col-lective decisions on revenues and profits. The set-up requires a certain level of management skills, collective thinking and continuing education for members.

The visiting U.S. group sees the po-tential for Cuba to serve as a model for worker co-ops and socially-responsible business, building on its half century of socialism that has promoted education and instilled values of community and social justice.

Their trip came after the Cuban gov-ernment in late 2012 approved a law al-lowing the formation of worker co-ops outside of agriculture, where they long have been active.

As of July this year, 257 non-agricultur-

al co-ops have launched, most of them by workers who have taken over former state-run operations. Those include pro-duce markets, where farm goods are sold. Another 241 of the new co-ops have been approved but not yet started, ac-cording to Cuban government reports.

Delegates interviewed said they were struck by the enthusiasm in the new co-ops. Cuban worker-owners routinely said they now earn more money than they did when their operations were government-controlled, sometimes double or triple.

Yet while some workers were thrilled to own and control their business, oth-ers had little understanding of co-ops, their principles, or how they are run, del-egates said.

Cooptex, a sewing cooperative formed late 2013 and comprised of some 40 members, stood out for its passion for ownership, said Martin Lowery, execu-tive vice president at the National Rural Electric Cooperative Association and a first-time visitor to Cuba.

Worker-owners there said absenteeism

10

U.S. co-op leaders offer support to Cuban startups BY DOREEN HEMLOCK

Absenteeism is gone, productivity soared, and

product quality improved.

CubaNews v September 2014

Worker-owners: Auto mechanics at the Novedades co-opin Havana.

Photo: Stanley Kuehn

was virtually gone, productivity soared and product quality improved under new worker control. Members were holding regular association meetings and already had taken a joint decision on how to re-invest some initial profits: to fix the wom-en's restroom first, not broken floor tiles.

“I was very impressed by the sense of commitment coming from the people there,” Lowery told CubaNews. “The en-ergy level was palpable, and it was from being worker-owners, from that sense of ownership and control.”

CO-OP BY DEFAULTBut other co-ops seemed to be run

much as they had been by the state, with a more top-down style. At least one kept the same general manager, delegates said.

Cuba's new co-ops seem to stem “more from a push by the government to off-load businesses that it no longer wants to run … rather than from a group of self-empowered workers who seek to form their own businesses,” wrote co-op veter-an Steve Dubb, research director of the Democracy Collaborative, in a roundup of the trip published on www.communi-ty-wealth.org.

The U.S. delegation also included lead-ers of the U.S. Federation of Worker Co-operatives, National Cooperative Bank, CDS Cooperative Consulting, Sol Eco-nomics and other groups. They met with established farm co-ops as well as co-ops engaged in activities that ranged from auto mechanics to transportation and groceries.

SUPPLY AND MANAGEMENT CHALLENGESDelegates said the new co-ops face

many of the same challenges as other emerging private enterprises in Cuba: lack of a wholesale market, shortages of supplies in local stores and insufficient training in finance and management sys-tems.

For training, international co-op groups can help, said Lowery, who chairs the

National Cooperative Busi-ness Association's inter-national committee and serves as U.S. representa-tive to the International Cooperative Alliance.

Lowery suggests that Cuba become active in the Alliance's regionwide

group, Cooperatives of the Americas, based in San José, Costa Rica. The Amer-icas group has lots of training materials in Spanish and hosts meetings in Canada and Latin America where Cuban co-op members can find “great friends and col-leagues,” he said.

For supplies, Lowery and others would like to see a loosening of the U.S. em-bargo, at least to allow U.S. support for private enterprise in Cuba, including co-ops.

Cuba also can teach plenty to co-ops in the United States and Latin America, said Jonathan Rosenthal, executive director of Cooperative Coffees and a veteran in international fair trade, who was making his second visit to the island.

One initial lesson: Cuba's government offers preferences for worker co-ops, a model that could be adopted elsewhere, Rosenthal said. Those preferences in-clude lower taxes on co-ops, compared with businesses not owned by workers, the law states.

In addition, Cuba's long history of so-cialism offers a unique platform in the Americas to explore hybrid development models “to meet community needs and build a more sustainable economy for the future,” said Rosenthal.

To be sure, Cuba's new worker co-ops and the law authorizing them remain experimental. A more permanent legal framework is expected by 2017.

“There are some concerns that short-term failures may convince the govern-ment this may not work, so everyone was working hard to make sure it does,” said Lowery.

Lowery and others said they hope the co-op model can become permanent in Cuba and even expand later to consumer co-ops, such as credit unions popular in the USA.

“A third way of co-ops,” which is nei-ther pure capitalism nor pure commu-nism, Lowery said, “really does repre-sent a new way of thinking of economics and provision of goods and services.” q

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September 2014 v CubaNews 11

Cuba’s music powerhouse without electricityBY JOHANNES WERNER

Abdala Studios, the entrepreneurial brainchild of Silvio Rodríguez, is dying a slow death at the hands

of Cuban bureaucrats, the Nueva Trova star wrote on his blog Segunda Cita, as first reported by news agency efe.

The recording studio was created by the singer-songwriter, a cultural icon of the Revolution, in 1998 with the support and supervision of Fidel Castro. Abdala

had been part of state holding Cimex S.A., but it is now being transferred to the ministry of culture.

“Abdala Studios in these moments is without electricity,” a Segunda Cita blog entry on Aug. 22 said. “Second time in just a few months. The power company has decided to suspend the service for lack of payment.”

Abdala can't pay because the process of shifting the company from Cimex to

the ministry of culture has taken eight months, with no end in sight, “reasons unknown,” the singer-songwriter said, adding that a vice minister of cul-ture told him the ministry can't pay Abdala's power bill because enterprises must pay their own debts.

Rodríguez said that as of Aug. 25, the studio had contracts for recording services that could “bring our country a few thou-sands” of dollars.

“Abdala will not be able to provide it due to this

situation. Neither will it be able to pay its debt and, of course, it will continue to deteriorate as an enterprise. It seems like ‘an enemy plan', but it's not the CIA.”

Fidel Castro's project “is agonizing due to the complacency of many functionar-ies that know its situation, but don't do anything,” Rodríguez said bluntly. “Some of these culture functionaries will never forgive the existence of Abdala.”

“Don't believe I don't feel shame to confess this publicly,” he ended his blog entry. “But I will be more ashamed when I see the studio in shambles.”

Producciones Abdala S.A. operates Cu-ba's best-known music studio. According to its website, the company's main line of business are recording services at its three studios, with cutting-edge equip-ment “at really competitive prices.” Ab-dala also manages the Unicornio and Presto labels (whose productions have earned six Latin Grammy nominations), as well as a musical publishing arm. The company also offers contracting of Cu-ban musicians and sound technicians.

Abdala aims to “preserve and promote [Cuba's musical] heritage,” the website says. q

Silvio Rodríguez, l., started Abdala Studios in 1998.

Photos: Abdala Estudios

International Techno-Economic Coop-eration Group Ltd. to enter the hotel and resort business. It wasn't until 2010 that the partners opened the Gran Meliá Shanghai, a 685-room five-star hotel in the Pudong financial district operated by Spain's Sol Meliá.

A hotel in Cuba, planned to be built near the Marina Hemingway in a west-ern suburb of Havana, didn't materialize, according to Rodríguez.

Chinese undertakings in Cuba began with modest manufacturing joint ven-tures such as UCC-Fujian that produce apparel and sneakers, followed by a rice farm, and Gran Kaiman Teleco S.A., an electronic appliance manufacturer.

Rodríguez says that “Chinese invest-ments in Cuba have been below their po-tential, although this tendency is begin-ning to change.”

Several planned large-scale investment projects, such as a nickel plant and a re-finery, have not materialized. q

In a three-article series published on Cuban website CubaContemporanea, former Economy Minister José Luis

Rodríguez laid out a few previously un-known details about Chinese-Cuban joint ventures.

As of 2010, Cuba had invested some $40 million in joint ventures operating in China, and China had invested some $50 million on the island, according to Rodrí-guez, who is now a researcher and ana-lyst at the Centro de Investigaciones de la Economía Mundial (CIEM) in Havana.

Cuban investments in China include a five-star hotel in Shanghai, two biotech-nology companies, and a group of eye surgery clinics. Official media have pub-lished only cryptic reports about Cuban ventures in China.

Changchun Heber Biological Technol-ogy Ltd. (ChangHeber), the biotech joint venture between Cuba's CIGB and the Changchun Institute of Biotechnology Products, started manufacturing Inter-feron in the northern province of Jilin in 2000; it is one of China's five largest distributors of Interferon today. In 2013, ChangHeber opened a second plant that produces the Hib vaccine against Hae-mophilus influenzae, in cooperation with Jilin Boyce Technology Ltd. The joint

venture makes 180 products today.The second biotech joint venture is

Biotech Pharmaceutical Co. Ltd., made up of the Centro de Inmunología Mo-lecular (CIM) and China's International Science Center. Biotech Pharmaceutical manufactures monoclonal antibodies.

The eye clinics began with a first hos-pital in Xining in 2006, followed by a sec-ond facility in Zhijiashuang a year later. According to Rodríguez, the original plan was to open up to 50 eye clinics in differ-ent regions of China, as a joint venture between Cuba's Servimed and China's ministry of health. Official media have not reported any new clinic opening since 2007.

Finally, the Shanghai Suncuba joint venture was formed in 2002 by Cubana-can and China's Suntime

Ex minister sheds light on Chinese joint ventures

The Gran Meliá Shanghai hotel

ChangHeber online ad

BY JOHANNES WERNER

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CubaNews v September 201412

HEALTHCARE EXPORTS

Trinidad and Tobago boosts Cuban medical personnelBY JOHANNES WERNER

One year after launching the Mais Médicos program, the Brazilian government amended an agree-

ment with the Pan American Health Organization (PAHO), continuing the contracting of doctors from the Cuban government through PAHO, a Brazilian health ministry communiqué on Aug. 21 said.

While the program, which recruits Brazilian and foreign doctors to practice in underserved and poor areas of Brazil, is open-ended, participating doctors are assigned to their posts for three years.

More than 11,400 Cuban doctors par-ticipate in the popular program, mak-ing up the backbone of Mais Médicos' 14,400 doctors. It has helped boost ap-proval ratings for Dilma Rousseff, the beleaguered president who would like to be re-elected Oct. 5 for a second term.

“People can remain calm, because this new amendment guarantees the keep-ing of the [Cuban] doctors and their ac-tivities,” said Hêider Pinto, secretary for work organization and education in the health ministry, in the communiqué.

Mais Médicos has become the second leg of Cuba's service exports, after Ven-ezuela.

Brazil pays Cuba $4,200 per doctor per month, making for an estimated $587 million in revenues per year.

According to Spanish news agency efe, citing Brazilian health ministry of-ficials, the Cuban government passes on $1,245 a month to the doctors. While the amount seems low, it is exponential-

ly higher than the salaries they receive in Cuba.

A total of 11,456 medi-cal personnel from Cuba is now deployed in the South American country, Cristina Luna, the chief co-ordinator of Cuba's medical brigades in Brazil said on Cuban state TV last week, most of them women. She admit-ted there had been a handful of deser-tions among Cuban doctors, but added that they made up only 0.2% of all medi-cal personnel in Brazil.

According to the Brazilian health min-istry, Cuban doctors are providing Mais Médicos services in more than 2,700 cit-ies, covering some 50 million people.

The Brazilian government has boost-ed spending on basic healthcare ser-vices by 106% over the past four years, with a budget of $8.75 billion this year, the communiqué said.

Complementing the hiring of Brazil-ian and foreign doctors, the govern-ment also announced the expansion of medical faculties in Brazilian univer-sities, allowing the addition of 11,500 medical students.

Citing a recent Datafolha survey with high ratings for Mais Médicos, Pinto said that “the effort of the government in basic healthcare services is an impor-tant step on the path to guaranteeing the constitutional right to health.” q

More than doubling an ongoing pro-gram, the health

ministry of Trinidad and Tobago said on Sept. 3 that more than 130 medical pro-fessionals from Cuba had arrived, and that 170 more were expected over the next two months.

The boost comes after the health min-istry announced in June the arrival of two doctors and 44 nurses from Cuba.

At an orientation event in Port of Spain Sept. 3 for 130 Cubans, Health Minister Dr. Fuad Khan said there is a shortfall of more than 2,000 nurses and 200 doctors in Trinidad and Tobago, and announced the arrival of another 170 Cuban doctors and nurses through November.

According to the Cuban ambassador, there were 160 Cubans working in the Trinidad and Tobago healthcare sector early this year.

Healthcare exports will generate more than $8 billion in revenues for Cuba this year, representing 64% of all service ex-

ports, including tourism, economic re-form czar Marino Murillo said in March.

The Cuban personnel work under two-year contracts in the oil-rich Caribbean island nation, to address the shortage of “suitably qualified healthcare profes-sionals” amid an expansion of the coun-try's healthcare system, according to the health ministry.

In 2009, Trinidad and Tobago decided to contract 569 foreign healthcare profes-sionals. The country also signed a health-care agreement with China in July; 10 Chinese doctors arrived in August.

“The nightmare we seem to have been facing is the human resource aspect of it, the manpower needs,” Dr. Khan said at the welcome ceremony, according to Trinidad and Tobago Newsday.

“The recruitment of foreign profession-als forms part of the Ministry's overall

strategy to address the shortage of doc-tors and nurses within the health system in the short to medium term,” the Trini-dad and Tobago health ministry said in a press release in 2012. “Attracting, train-ing and recruitment of local human re-source to fill vacancies within the sector remains the ultimate goal for filling the employment gap in the long term. In the interim however, further retention of for-eign healthcare professionals remains a priority given the significant shortage of health professionals in the public health sector.”

“The population of Trinidad and To-bago is very happy to have the Cuban professionals,” Dr. Khan said in 2012, in welcoming Cuban personnel. “The work ethic of the Cuban professionals is some-thing that I ask our professionals to emu-late.” q

Brazil extends hiring of Cuban doctors

Khan

State biotech company Labiofam is beginning construction of the first of three production facilities for bio-

plaguicides and bio-fertilizers in Cuba, Granma reported.

The first plant is going up in the out-skirts of Villa Clara, at a construction cost of 29 million non-convertible pesos (CUP, US$29 million at the wholesale exchange rate), according to the official daily. Completion is expected for 2016.

Grupo Empresarial Labiofam is using mainly Chinese technology in the new plant. During a recent visit of President Xi Jinping to Havana, China Develop-ment Bank chief Hu Huaibang signed an agreement that grants Cuba a loan, amount and conditions undisclosed, for the equipment and construction of three biopesticide plants.

The other two plants will be built in Ha-vana and Holguín.

According to Labiofam executives, some 230 workers will produce CUP 80 million worth of goods per year in Villa Clara — including 1,000 tons of BioRat and six million liters of bio-plaguicides and bio-fertilizers — supplying Cuban agriculture as well as some export mar-kets. The new plant will allow Cuba to save millions of dollars in imports. q

China funds three biotech plants

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September 2014 v CubaNews 13

GOOGLE LETS CUBANS DOWNLOAD BROWSERSaying it “figured out how to make

more tools available” in U.S.-sanctioned countries, Google Inc. announced it made its Chrome browser software downloadable to users in Cuba.

“U.S. export controls and sanctions can sometimes limit the products avail-able in certain countries,” the Google+ announcement said. “As these trade restrictions evolve we've been working to figure out how to make more tools available in sanctioned countries. In the past couple years we've made Chrome downloadable in Syria and Iran. We're happy to say that Internet users in Cuba can now use Chrome too.”

Users in Cuba can now download Chrome for desktop and mobile devices via google.com.cu.

“U.S. trade restrictions are always evolving, and it takes some time to fig-ure out the details of how to implement the changes,” Google spokeswoman Chelsea Maughan said via email. She did not answer what specific change in U.S. sanctions allowed Google to make Chrome available to Cubans.

In March 2010, OFAC issued addition-al technology authorizations for Cuba, allowing companies to provide “software that is publicly available at no cost.” Google made Chrome, Google Earth and Picasa available in Iran and Syria in 2011 and 2012, respectively.

The small step comes a little more than a month after Chairman Eric Schmidt and three other top Google officials visited the island, to promote a “free and open Internet”.

In a Google+ posting after the trip, Schmidt said the U.S. government

BRIEFS

U.S. marine industry group to tour Cuba Havana Club sales rise in tough year

Amid a difficult year for Per-nod Ricard SA, Havana Club sales rose 5%, the

Paris-based liquor giant said in its annual report for 2013-14.

The Cuban-made rum was among the company's top performing brands in the fi-nancial year that ended June 30, thanks to sales of 4 million 9-liter cases. While that sales volume was up only 3%, net sales rose 5%. The price/mix index for Havana Club was up 2%.

Havana Club net sales rose 3% in the year before that, and stagnated in 2011-12.

Overall sales for Pernod Ricard in 2013-14 was euro 7.9 billion (US$10.41 billion), down 7% from the year before. Net profits were slightly above euro 1 billion ($1.32 billion), down 14%. The company blamed “a highly unfavorable foreign exchange effect”, a 23% decline of sales in China, and a slowdown in the U.S. market. Sales in Europe where up 2%.

“In this context which will remain chal-lenging, we anticipate a gradual improve-ment in our sales growth, and we will in-crease the investment behind our brands and priority innovations in order to sus-tain long-term growth,” said Alexandre Ricard, deputy CEO and chief operating officer.

In a joint venture with state company Cuba Ron, Pernod Ricard distributes Ha-vana Club rum worldwide. q

Richard Graves, a Fort

Lauderdale-based con-s u l t a n t , is putting together a

Cuba tour for marine industry players.

He said “five or six” people had already expressed interest, and that he would limit the group to 20.

The five-day tour in February, right after the Miami Boat Show, includes meetings with the commodore of Marina Hemingway in Havana, and with a ma-rine industry expert with the University of Havana, a stop at Marina Tarara, and a tour of Marina Gaviota Varadero, as well as opportunities to study Cuban tourism.

“Cuba is an excellent gateway to the Caribbean for U.S. boaters,” Graves said, adding that 60,000 U.S. vessels are ex-pected to visit Cuba in the first year after the United States lifts travel restrictions.

“Anticipating the end of the travel ban, Cuban state enterprises responsible for marine infrastructure have begun an unprecedented push to ready the island nation for yacht tourism and U.S. boat-ers,” he said in his invitation for the tour. The Cuban government is planning to add 23 marinas with 5,000 slips to the 15 existing ones with barely 800 slips. The most ambitious project is Gaviota Marina Varadero, with 1,200 slips at buildout and a five-star hotel.

Richard Graves & Associates is special-izing in marina business development, including on-site management for start-ups and troubled marinas. q

needs to “open the embargo.”

“Cuba will have to open its political and business economy, and the U.S. will have to overcome our history and open the embargo. Both countries have to do something that is hard to do politically,

but it will be worth it,” Schmidt wrote.He pointed out that Cuba is buying

Chinese IT hardware, due to the embar-go. Sales of U.S. “tools to Cuba for the development of a knowledge economy” would help Cubans, he argued.

Official daily Granma criticized Google after Schmidt's visit, saying that Google sites and services still remain off-limits to Cubans.

Ric Herrero, executive director of Washington-based pro-normalization group CubaNow, said Google's move was “commendable.”

“However, it is also a reminder that our current policy toward the island is contradictory to our stated goals. Sadly, our convoluted and outdated Cuba policy deters America's brightest minds from helping the Cuban people connect with one another and the outside world.”

Herrero added that many Internet services remain unavailable for Cubans, partly due to U.S. restrictions. “It's time to update our Cuba policy so that it meets the realities of the 21st century.”

Cuba is among the countries in the hemisphere with lowest Internet pen-etration. State telecom monopoly does not provide Internet service at home.

BANK OF IRELAND BLOCKS CUBA TRANSFERSBank of Ireland is blocking all financial

transfers to Cuba because of a business relationship with a U.S. bank.

Under U.S. sanctions, American banks are forbidden from processing payments involving Cuba.

The Irish bank has blocked Cuba transfers since the introduction of the Single European Payment Area (Sepa). The entity processing all Sepa transactions is a leading U.S. bank that must “comply with its own regulatory requirements and obligations, to avoid a possible exposure to regulatory sanc-tions and penalties,” a Bank of Ireland spokeswoman told the Irish Times.

“On the one hand we have the EU vot-ing as a single bloc against the block-ade, and on the other they introduced financial regulations which facilitate it,” the Times quotes the leader of an Irish Cuba support group.

Google’s Eric Schmidt

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CubaNews v September 201414

U.S. food sales to Cuba: Steady level, changing patternsIMPORTS

BY WILLIAM A. MESSINA, JR.

Despite several recent news reports to the contrary, the value of U.S. food and agricultural exports to

Cuba over the past four years has held surprisingly steady, averaging close to $378.5 million per year. However, the composition of the trade has been shift-ing.

Granted, recent annual averages are only slightly more than half the level of Cuba's food and agricultural product purchases from the United States in the peak year of 2008. However, 2008 was a year of particularly high global commod-ity prices, and other factors contributed to the record levels that year.

In 2009, the value of U.S. exports to Cuba declined as world commodity pric-es decreased and also as a result of Cuba beginning to shift some of its food and agricultural product purchases to third-country suppliers which began to offer Cuba increased credit lines.

In 2010, the value of U.S. exports to Cuba continued to decline, in this in-stance as a result of Cuba shifting more of its food and agricultural purchases to countries continuing to offer credit to Cuba, in some cases with extended terms

of as long as 12 and even 24 months.In 2011, the value of U.S. exports to

Cuba was similar to 2010. But in 2012, Cuba's purchases of food and agricultur-al products from U.S. suppliers increased by 29.7% to $454.5 million. Nearly all of this increase took place in the first quar-ter of the year, and it presumably was driven by Cuba's increased purchases in anticipation of expanding numbers of vis-itors and tourists in conjunction with the visit of Pope Benedict XVI in late March of that year.

Cuba's purchases of food and agricul-tural products in 2013 totaled $350 mil-lion, a value close to the values in 2010 and 2011. The relatively steady levels of Cuban purchases from 2010 through 2013 (2012 notwithstanding) might seem to imply that an equilibrium has been

reached in U.S. ex-ports to Cuba. But a more detailed ex-amination shows that important shifts are taking place in the composition of Cu-ba's purchases from the United States.

One of the U.S. Department of Agri-culture's useful data

formats involves breaking out trade data into bulk agricultural commodities (e.g. bulk grains such as wheat, soybeans or corn), intermediate agricultural com-modities (those with some processing, for example wheat flour or soybean oil), and consumer oriented food products (more highly processed

goods like meat products, dairy products, prepared foods, etc.). USDA refers to this data format as their BICO data series (for Bulk, Intermediate and Consumer Orient-ed), and it offers valuable insights on shifting trends in the composition of trade flows over time.

Fig. 2 contains the same data as Fig. 1 on total U.S. food and agricul-

tural exports to Cuba, except that the bar graphs in Fig. 2 are broken up into bulk, intermediate and consumer-oriented prod-uct categories. This graph shows that while the over-all value of exports to Cuba has been relatively stable for the past four years, U.S. exports of bulk commodities show a nearly 50% decline in 2013, while U.S. exports of intermediate and consumer-

oriented goods have been generally in-creasing for the past few years.

Cuba's agricultural output remains stagnant, so the Cuban government is having to replace the food and agricultur-al goods it used to purchase from United States with imports from other countries. With its demonstrated interest in invest-ing in and otherwise assisting the Cuban economy, one might expect Brazilian firms to be supplanting U.S. firms in sup-plying food products to Cuba. However, in recent years, Argentine firms are actu-ally replacing U.S. market share in Cuba for major bulk imports like corn and soy-beans, as well as for intermediate animal feed products (Global Trade Information System data).

Despite the declines in U.S. exports to Cuba since 2008, the United States

has been the largest supplier of Cuba's imported food and agricultural products for 11 of the past 12 years (in 2011, Brazil edged out the U.S. as Cuba's largest sup-plier of imported food products).

The cash sale terms required by U.S. policy for sales of food and agricultural products to Cuba represent a challenge to the Cuban government, given the economic stresses it is experiencing. And recent actions by the U.S. Treasury Department against foreign banks han-dling transactions for countries on the State Department's list of state sponsors of terrorism (of which Cuba is one) may generate further complications. That ac-knowledged, the geographic proximity

of the United States represents a very favorable advantage for U.S. suppliers, since transportation costs are lower, and Cuba is able to order in smaller econom-ic order quantities. It also is a particularly important advantage for suppliers of per-ishable, refrigerated food products, since the short transportation times help pro-vide fresher products and longer shelf life for the products once they arrive in Cuba.

U.S. firms have sold more than $5 bil-lion worth of food and agricultural prod-ucts to Cuba since resuming exports of these products in 2001. While the pros-pects for continued sales by U.S. firms would seem encouraging, political devel-opments and policy changes on both side of the Florida Straits can significantly im-pact U.S. exports to Cuba, both positively and negatively, as we have seen since passage of the TSRA legislation in 2000 that allows U.S. firms to sell food and ag-ricultural products to Cuba.

William A. Messina, Jr. is an agricultural economist with the University of Florida's Institute of Food and Agricultural Sciences (IFAS). In 1992, he became a founding co-director of a research initiative to provide data, information and analysis on the agri-cultural and fisheries sectors in Cuba. This research continues to be conducted in col-laboration with the University of Havana.

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September 2014 v CubaNews 15

POLITICS

Cuba seizes $90 million from TokmakjianBY JOHANNES WERNER

BRIEFS

Even before Canadian businessman Cy Tokmakjian has been convict-ed or sentenced, the Cuban gov-

ernment seized $91 million worth of as-sets, Tokmakjian Group employees and family members told City Life magazine.

Tokmakjian, 74, was arrested three years ago on corruption charges related to his import-export company, and has been held in the La Condesa prison since. His 12-day trial before a provincial court in Havana concluded in June; the court has yet to rule on his case.

The amount provided by the family matches that of the prosecution, which is demanding Tokmakjian “repay” $90 million in “damages to the Cuban econ-omy”, according to official daily Gran-ma. The prosecution is seeking 15 to 20 years in prison for Tokmakjian.

According to the magazine, the Tok-makjian Group filed suits in the Ontario Superior Court and in Barbados. It has also filed an arbitration case before the International Chamber of Commerce, seeking more than $250 million in resti-tution and damages from Cuba.

Tokmakjian Group Chief Financial Of- Tokmakjian

ficer Lee Hacker told City Life that Tok-makjian is currently in a military hospital.

The government and official media have not released any details about the economic crimes Tokmakjian allegedly committed. According to Granma, the al-legations included “bribery, actions dam-aging to the country's economic activity or its contracting, falsification of banking and trade documents, swindling, curren-cy trafficking and tax evasion.”

The attorney general accused Tok-makjian of “illegally expatriating ex-tremely large sums of money, altering information in accounting records and sworn declarations in order to evade taxes, and giving kickbacks t o workers, who performed work that was not legally authorized or contracted through Cuban agencies.”

“A simple and objective reading of recent court decisions will lead to the conclusion that what is shown as ‘corruption' is internationally accept-ed business practic-es,” a statement by

Ontario-based Tokmakjian Group said.In a document sent to the press in

July, the family said Tokmakjian didn't learn about the charges until May this year. According to the family, the court rejected, without explanation, 14 of 18 defense witnesses.

In connection to the Tokmakjian case, two Canadian employees, as well as five Cuban employees, and an unknown number of former officials at Cuba's Sugar Ministry, the Ministry of Basic In-dustry, and the Tourism Ministry have been indicted.

The Tokmakjian graft trial follows those against Canadian competitor Sar-kis Yacoubian, and British businessmen

Amado Fakhre and Stephen Purvis.Amid the uncertainty, at least one

Canadian company has left Cuba. In 2011, Pizza Nova, a

six-restaurant chain in Cuba, pulled out; com-pany owner Domenic Primucci said it was not related to the Tok-makjian case, accord-

ing to City Life. q

WTO CHIEF TOURS MARIELDuring a two-day visit to Cuba, the

World Trade Organization director gen-eral toured the new port and economic development zone at Mariel.

“There is a need to capture foreign in-vestors, and it seems to me that Cuba is in the process of finding its recipe,” Ro-berto Azevêdo said in an interview with Prensa Latina and Granma in Havana, mentioning the Mariel Zone and Cuba's new foreign investment law.

“The insertion into international trade,

the global economy, doesn't offer the same recipe for all,” the Brazilian diplo-mat added. “Each country has its pecu-liarities, its challenges. All are different, and each has to find its own formula, its recipe to insert itself into the system in a way that promotes economic growth and social development.”

During his visit Aug. 12-13, Azevêdo met in Havana with Minister of Foreign Trade and Investment Rodrigo Malm-ierca, Vice President Ricardo Cabrisas, and Deputy Minister of Foreign Affairs Abelardo Moreno. Cuba was a stop be-tween visits to Mexico and El Salvador.

He said his intent in conversations in Cuba was to “see how we can work to-gether, to maintain the system strong and workable, that it ultimately functions to give space and voice to the small economies.”

The WTO is the United Nations' body in charge of setting and enforc-ing rules of trade. Azevêdo

EMBARGO SUPPORTERS CALL ON OBAMAApparently fearing sanctions-easing

steps by the president, 17 members of the U.S. Congress, most of them Dem-ocrats, sent an open letter to Barack Obama, asking him to reaffirm his sup-port for the U.S. embargo against Cuba.

Anti-embargo activists expect Obama, during the waning months of his second and last term, to take executive action that would relieve pressure on Cuba.

“As you know, the embargo against the Castro dictatorship is codified in U.S. law, and cannot be lifted without an act of Congress,” the letter writers, led by Rep. Albio Sires (D-NJ), ranking mem-ber of the House Subcommittee on the Western Hemisphere, said. The letter concludes: “We hope that you will affirm to us, in no uncertain terms, that you remain committed to longstanding U.S. policy which supports the Cuban people in their struggle for freedom while deny-ing the pretense of legitimacy, and ac-cess to dollars, to their oppressors.”

Signatories include all Cuban American House Members, including Joe Garcia, a Miami Democrat who ran a campaign on unrestricted family travel to Cuba, against a harder-line Cuban American.

Other signatories include Reps. Debbie Wasserman-Schultz (D-FL), Matt Salm-on (R-AZ), Ted Deutch (D-FL), Gerald Connolly (D-VA), William Keating (D-MA) and Lois Frankel (D-FL).

CENTRAL BANK TARGETS MONEY LAUNDERINGAnticipating an influx of foreign capital,

Cuba's central bank adopted measures against money laundering.

The Banco Central created a special ac-count that will serve as a pass-through for all deposits made from foreign banks. Also, an investment evaluation commit-tee will examine financial and banking records before approving any bid.

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CubaNews v September 201416

CALENDAR OF EVENTS

If your organization is sponsoring an upcoming event, please let our readers know! Send details to CubaNews at [email protected].

Sept. 11-21: Habanarte 2014 — Dance, music, theater, cinema, visual arts, crafts — the first-ever combination in this all-in-one festival, the biggest of its kind in Cuba. www.habanarte.cult.cu.

Sept. 15-19: Latin American and Caribbean Congress on Food Quality and Safe-ty — Food Culture for Gastronomy, Food Sciences and the Audiovisual Mass Media. International Conference Center, Havana. http://www.congresoalimentoscuba.com

Sept. 22-25: International LABIOFAM Congress 2014 — event that focuses on Cuba’s pharmaceutical products, held in conjunction with the 3rd International Sym-posium of Cancer Therapy Products. Palacio de Convenciones, Havana. Contact: Lirka Rodríguez Pérez, [email protected].

Sept. 22-27: Ortopedia 2014 — 25th Cuban congress on orthopedics and trauma-tology. Hotel Ancón, Trinidad. Contact: [email protected]; http://promociond-eeventos.sld.cu/ortopedia2014.

Oct. 6-9: Pan-American Congress of Veterinary Sciences — 24th congress on ani-mal reproduction, animal welfare, animals in case of disaster, clinical and surgical pa-thology, and more. Palacio de Convenciones, Havana. www. http://panvetcuba.com.

Nov. 3-9: 32nd International Havana Fair (FIHAV 2014) — Cuba’s largest trade fair with major presence of Cuba’s foreign partners. PABEXPO, Havana.

Nov. 20-21: Cuba 2014 — What the U.S. Legal and Business Communities Need to Know. Conference. Loew’s Portofino Hotel, Orlando.

Dec. 4-14: Festival Internacional del Nuevo Cine Latinoamericano — one of the largest film festivals in Latin America. Contact: [email protected]; www.ha-banafilmfestival.com

Dec. (exact date TBA): International Crafts Fair (FIART), Pabexpo, Havana.

Feb. 12-22, 2015: 24th International Book Fair — the hemisphere’s largest book fair, at the Morro Castle in Havana.

February 2015: 17th International Habanos Festival — cigars. Havana, several venues. [email protected].

April 4-8: Geociencias 2015 — 6th Cuban Earth Sciences Convention and Fair (min-ing, oil and gas). Havana, www.cubacienciasdelatierra.com

April 20-24: Salud para Todos — 13th fair on healthcare, pharmaceuticals and bio-technology, organized by the Ministry of Health, Palacio de Convenciones, Havana, [email protected].

May 5-7, 2015: International Tourism Fair (FITCuba 2015) — Cuba’s biggest trade show and convention for the tourism industry. Cayo Coco, Jardines del Rey, [email protected]

EditorJOHANNES WERNER

Washington correspondentANA RADELAT

Political analystDOMINGO AMUCHASTEGUI

Feature writersVITO ECHEVARRIADOREEN HEMLOCK

CartographerARMANDO H. PORTELA

CubaNews (ISSN 1073-7715), founded in 1993, is published monthly by Cuba Media LLC, PO Box 566346, Miami, FL 33256-6346.

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