AMCHAM CUBA, 910 17^th St. NW, Washington DC 20006-2605, 202-833-3548, e: amchamcuba@aol.com, www.amchamcuba.org

TABLE OF CONTENTS                                                              

1. U.S. Congress votes defies Bush,  votes to weaken the Cuba embargo

2. Agricultural interests & other U.S. travelers visiting Cuba

3. Economy still faces problems

Short takes

Opinion Corner by AmCham Cuba Vice President Marasciulo: “Are there cracks in the embargo wall?”

1.  CONGRESSIONAL CHALLENGES TO THE EMBARGO.  Maintaining that “our government shouldn’t tell us where to travel and where not”, Rep. Jeff Flake (R-AZ) last month led a successful effort to repeal major provisions of the decades-long embargo which placed fines on most Ameri-cans visiting Cuba.  The House narrowly defeated a broader measure by Rep. Ran-gel (D-NY) to end funding for the entire embargo.  However, by 262-167 it lifted prohibitions on public funding for enforce-ment of the travel ban, limits on remittances to Cuba, and some barriers on sales of food and medicine.  Rep. Dick Armey, majority leader, told a Kansas audience that the U.S. “should open trade” with Cuba.  He said that ‘if [the restrictions]…last a year, it will be the last year they last’ as Congressional sup-port is fading and ‘opening these markets opens these minds’. He said this his prior votes for travel and trade restrictions had been cast ‘only out of loyalty to two Cuban-American Members.’  Embargo’s continuing supporters claimed that the embargo is vital to the war on terrorism, as Cuba “may be developing weapons of mass destruction.''  In voting, Congressmen crossed party lines.  For example from California conservatives from rural areas like Rep. Herger, R-Chico, voted to relax the bans, while moderates like Rep. Ose, R-Sacramento, and Rep. Radanovich, R-Mariposa, were still con-cerned about “the issue of Castro." 

AUGUST 2002

In the Senate, softening of travel restrictions was also approved - part of a bill to fund Treasury and other federal agencies.  As we go to press and before a Conference Committee has met to reconcile the bills, President Bush has threatened to veto any

Relaxation of the embargo.  Observers, like Chris Marquis of the NY Times, say the Administration’s stance is designed to help Gov. Jeb Bush's re-election in Florida and the president's own re-election in 2004. 

Reaction in Cuba was no surprise.  Reuters  reported that, before 150,000 in Ciego de Avila July 26,  Castro thanked U.S. legisla-tors “who…followed their own beliefs” to defy Bush’s veto threats, “overwhelmingly” voting to lift the travel ban.  He gloated over difficulties facing U.S. capitalism - corporate fraud,, falling stock prices, and “bare-faced …criminal swindling of millions …who had… invested …[in large corporations].  

A surprising new security regulation of the Bureau of Consular Affairs in July suddenly requires more clearances on Cubans and others seeking U.S. visas..  Protesters, who say this may delay issuance by some three weeks, have apparently failed to win relief for groups who hoped for prompt approval to visit or perform in the U.S., reports the Center for Cuban Studies.   

2. TRAVEL TO CUBA CONTINUES BY U.S. FARM INTERESTS & OTHERS.   A recent visit to Cuba by a North Dakota trade delegation got almost $2.1 million in orders for farm products. Gov. Hoeven said sales of lentils, peas, garabanzo beans, and malting barley were an important start to a potential state trade relationship with Cuba – one he hopes can be further developed at the September agricultural trade fair in Havana.  The travelers included represen-tatives of North Dakota’s Farm Bureau and Wheat Commission and the Northarvest Bean Growers Association of Frazee, MN.  Cuba now buys dry beans from China.

American producers can supply better-quality beans and ship them to Cuba in a week, compared to six weeks from China, said Tim Courneya of Northarvest Bean. "We possibly could grow this market into a No. 1 or No. 2 trading partner," he said.

California lawmakers are also trying to thaw the long freeze-out.  After the House vote to lighten travel restrictions, Rep. Cal Dooley, D-Hanford and member of the House Agricultural Committee, took a first visit to Cuba, "to gain a better understanding of the attitudes of the Cuban people" "consistent with [his efforts]…to ex-pand trade and enhance our influence in…human rights."  Dooley and other legislators cited potential benefits to California farmers of opening up trade and travel, which Dooley believes is inevitable.  Not an “official” delegation, Dooley's trip was licensed by the Office of Foreign Assets Control (OFAC) and sponsored by the Center for Interna-tional Policy which promotes "international cooperation, demilitarization and respect for basic human rights." 

California poultry representatives had earlier made a similar tour, on which Sen. Barbara Boxer brought samples of California cotton, rice, and durum wheat.  Shortly after this trip, however, following Bush policies, OFAC refused to allow a private farm group including Dooley's brother Dan and ex-Agriculture Secretary Dan Glickman to visit Cuba.  Press estimates say California farmers could sell some $90 million in agricultural products to Cuba annually if the embargo were lifted.

In late July, Tampa Mayor Dick Greco and Fidel Castro dined for nearly six hours discussing art, transportation, global warming and how garbage is picked up, reports The Tampa Tribune.  Afterwards, Greco and his travel companions told reporters they had been to Cuba only to learn about conditions on the beautiful island.  Traveling with him were attorneys who distributed medical supplies, Tampa’s Msgr. Higgins who hoped the visit’s timing might help “bring about change”, the president of International Ship Repair and Marine Services who was impressed by the Havana port’s “first-class container operation”, and a representative of Tampa’s Chamber of Commerce.  The Cuban-American National Foundation criticized the trip harshly, but others doubted it will impede Tampa’s hopes of hosting the 2004 Republican National Convention.

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Festival Cruisers seeks tourists beyond the US farm belt.  Its new option for leisure travel invites stops in several countries.  A new Discovery line ship, Caribe, with 250 cabins and 198 suites with jacuzzis, offers on-week tours out of Havana with stopovers in Calica (Mexico's Mayan Riviera, allowing a visit to Chichen Itza), Grand Cayman, Jamaica’s Montego Bay, and Cuba’s Isle of Youth.  Cuba’s Tourism Department boasts that Havana has been declared Humankind's Heritage by UNESCO,  

In early November, Canada’s Cuban Investments offers a “fully hosted” 7-10 day business trip from Cancun to Cuba.  It includes participation at the Partagas Cigars' Interna-tional Gala Dinner” and in its first International Marlin Fishing and Golf Tournaments, and will coincide with the 20^th Annual Havana International Trade Fair (see http://www.cubatravelexperts.com/businessform.html).

Other visitors include presidential contender Ralph Nader, recently invited by the National Assembly, and soon Gov. Jesse Ventura to “learn what it’s all about”. 

Regular flights to Cuba, weekly or better, are announced by Spain’s Iberworld Airlines to Veradero, and by Aero Continente Dominicana (ACD) to Havana.  Bahamasair plans low-cost frequent chartered flights via Nassau from three Florida cities, for those who hope to circumvent the US travel ban.  Sales are handled by the Toronto-based Havana Flying Club, reports CubaNews.

3. PRODUCTION & TRADE STILL SUFFER.  Cuba’s Ministry of Economy & Planning reports the first wide-ranging price increases since 1994 when Cuba opened up U.S. dollar retail stores, a year after Cubans were allowed to use U.S. dollars.  The Ministry said the price rises result from a) increased costs for imported oil, b) deterioration of revenues from sugar, nickel, and tobacco, and c) a sub-stantial drop in visitor arrivals and expenditures.  Further, family remittances, mostly from the U.S., have declined 25% since the fourth quarter of 2001.  Cuba’s bilateral trade in 2001 is reported below that of the previous year, reports the Cuba Trade & Economic Council.  Though nearly half the sugar mills have been closed due to lower profits, Cuba is still the fourth sugar exporter in the world.    Reuters reports that 2001 direct foreign investment was only $38.9 milllion, down from $48.8 million in 2000.  On the other hand, oil shipments from Venezuela on favorable terms were to resume August 1 after a 4-month hiatus.  

Cuba’s telecommunications continue to expand.  The Ministry of Communications & Information reported 8%  growth in dollar gross revenues in 2001 to US$664.7 million, while dollar investments in telecommunications were up by 22%, and line installations are up: ETECSA (Empresa Nac. de Telecomunicaciones de Cuba S.A.) claimed installation of 80,000 telephone lines compared to 55,000 lines in 2000, achieving 560,000 lines.  About 50% of active lines are in Havana (which has 20% of Cuba’s 11.2 million people) and 70% are now digital.  The U.S. is a big player:  For US-origin calls in 2001, OFAC approved  US$58 million+ to be paid by U.S. firms, including New York City, AT&T, MCI WorldCom Network Services, Sprint Communications, and Telefonica Larga Distancia de Puerto Rico, Inc. (TLDI).

Cuba’s ex-UN ambassador Alcibiades Hidalgo defected to Florida in July.  He reported concern among Cuba’s elite that “widespread economic problems could produce…a social explosion’ at any time,” wrote George Gedda.of AP (Associated Press).  Hidalgo cited ‘sky-rocketing unem-ployment, only one meal a day for many Cubans, a harsh drop in tourism, and slow recovery from last November’s hurricane.  Recently the second in charge of the news-paper Trabajadores, Hidalgo, who knows Raul Castro well, said Raul would be less inclined to one-man rule than his brother, more disposed to economic reform, and more flexible on U.S. relations, but “he drinks too much, has health problems, and doesn’t sleep much.”  This important defector believes lifting the embargo would be ‘an economic windfall for Cuba’ and a ‘gift for Castro.’   

SHORT TAKES. 

The annual meeting of ASCE (Association for the Study of the Cuban Economy) August 1-3 focused on "The State, Institutions & the Market Economy," with pre-sentations by Guy Pfeffermann, Director & Chief Econo-mic Advisor, IFC (Intl. Finance Corporation); Peter Eigen, Chairman of Transparency International; and Dr. Ramon Diaz, ex-President of Uruguay’s Central Bank, who examined "Criterios Economicos para una Constitución que Sustente una Economía de Mercado". (See http://lanic.utexas.edu/project/asce/).

Ex-Foreign Minister Robaina, recently expelled by Cuba’s Communist Party, acknowledges “errors,” perhaps involving taking foreign favors.

The European Union (EU) will soon open an office in Havana, even as some EU member nations oppose  relations with Cuba for its lack of democratic values.

A paper on the role of Raul Castro and Cuba’s FAR (Fuerzas Armadas Revolucionarias) in an eventual transition as assessed by Rhodes College’s Frank Mora, was presented in March to international experts examining Cuba’s integration into the international system.  It was issued by Pell Ctr. Director Richard Nuccio at Rhode Island’s Salve Regina Univ. (www.salve.edu/pellcenter).  It

Survival Story: Cuba’s Economy in the Post-Soviet Decade, published in May, offers Phil Peters’ view, based on interviews, of Cuba’s effective reliance on six signifi-cant measures which helped Cuba recover after Soviet subsidies ended (www.lexingtoninstitute.org/Cuba).   

The Varela Project and its petition may not be what they at first seemed to be.  Prof. Nelson Valdes, socio-logist at U. New Mexico, citing communications failures within Cuba’s church, says it “may have to do more with relations within the Catholic church than with a call to drastically change the Cuban political system.” 

Foreign investors in Cuba should end complicity with unsavory Cuban business practices, wrote Amb. Dennis Hays in the National Policy Assn.’s Cuba Today for June.  Hays calls on foreign firms to follow ILO (Intl. Labor Orgn.) conventions and internationally accepted labor standards, and cited growing interest in using the Alien Claims Tort Act to punish corporations who are “partners in repres-sion” as recently done with regard to Nigeria and Burma.

UPCOMING MEETINGS.

“Cuba transition; prospects, problems & recommenda-tions” will be explored Sept. 5 in an all-day session at the Rayburn House Off. Bldg.  AID-funded research of the Cuba Transition Project at the Univ. of Miami, directed by Jaime Suchlicki, will be presented.  Speakers include FIU’s Antonio Jorge, Barry U’s Robert Cruz, Ernesto Betancourt, UCLA’s Edward Gonzalez, GU’s Brian Latell, Attys. Matias Travieso and Oscar Garibaldi on confiscated property options, and Rep. Ileana Ros-Lehtinen.  Reserve at 305-284-6185, or e-mail: ctp.iccasmiami.edu. 

A National Summit on Cuba sponsored by USA*Engage, the American Farm Bureau Fedn., Americans for Humani-tarian Trade with Cuba, World Policy Institute, and other Cuba-watch groups will be held at the National Press Club September 17.   It will “showcase” delegations from each state, followed next day by lobbying Congress on the ”changed dynamics” among Cuban-American groups.  Register with Lissa Weinman (718-416-1653).

“Transition or Succession” will be discussed 12-2:00 in Spanish September 19 in Coral Gables, Casa Bacardi, with participation by Alcibiades Hidalgo, recent defector, and Prof. Jaime Suchlicki of ICCAS.  Call 305-284-2822. 

A  U.S. food and agribusiness exhibit in Havana Sept. 26-30 will host U.S.exporters.  To register, call Peter Nathan, pwn exhibicon intl., 203-222-8660, e-mail pwnathan@aol. com, www.cubaexhibitions.com.  

OPINION CORNER.  Dr. Edward Marasciulo,  AmCham Cuba Vice President,, former USAID Director in Central America and ex-President of the Pan American Development Foundation, asks: “ARE THERE CRACKS IN THE EMBARGO WALL?” 

All Cuba watchers know there are three constants in US-Cuban relations: (1) Castro will never change his irrational policies and swings in international postures that make him almost impossible to deal with.  (2) Fidel Castro will continue maintaining his health and education policies as the core of his 40-plus year revolution.  (3) The Bush Administration, on the other hand, with hard line constitu-encies in Miami and New Jersey Cuban communities and in the Congress, is immovable.  One policy change seems to checkmate another, and the adversaries in this relationship don’t like one another.

Irrationality and foolish political policies on both sides mean that nothing short of Fidel’s demise will open trade and allow freer contact with that socialist state.  We have seen some changes, particularly after the Soviet depar-ture: some local farm markets and other cautiously permitted private enterprises have appeared for local currency trade, and a dollar market now exists for those who make their living in the more vibrant tourist market.  These are cracks in the socialist wall.

Behind the scenes in the U.S., a growing crowd keeps trying to put more cracks in the embargo.  One focus is to overcome the prohibition and/or restrictions placed on Americans wishing to travel to the island – witness recent Congressional votes to relax certain embargo provisions.  Another crack in the embargo wall.

Most recently the Midwestern agricultural community put together plans for an agricultural trade fair in Havana.  The New York Times says it grew out of contacts resulting from U.S. agricultural shipments after last year’s hurricane that devastated parts of Cuba.  Humanitarian aid, for which the U.S. is well known, thus contributed to one of the cracks in the wall.  In fact, in late July the governor of North Dakota led an agricultural delegation to Cuba - the second US governor to do so, with more to follow.  Re-turned visitors enlarge the already significant lobby of mid-western corporations which cooperate to press Congress to further open trade with Cuba.

In a related way, a new Cuban Roman Catholic Cardinal with dialogue skills has created another one of the cracks.  He arranged for the Pope’s visit a few years ago.  More importantly, he has used his cadre of new clerics in Cuba to push the sacraments of marriage, baptism, first commu-nion and confirmation.  According to church sources, Catholic, Protestant (Baptist), and Jewish services are attracting more young people.  More cracks in the wall.

Economic assistance programs to the Cuban people have been become larger, both by USAID (Agency for Inter-national Development) and the Knights of Malta.  The Knights also were allowed to open a diplomatic mission in Havana.  More cracks in the wall.

According to the Miami Herald, one of the biggest cracks has been President Bush’s appointment to major Adminis-tration posts of a number of Florida residents who are not stellar performers.  One such performer is the publicized State Department Assistant Secretary for the Western Hemisphere who caused a row with comments about Cuban biotechnologies and allegations that these amount to Cuban terrorist activity – a view disputed by other observers.  These appointees all played active roles in the controversial Florida presidential election.

Those of us who have studied the transfer of Spanish culture to the New World are painfully aware of the heritage of the caudillo (dictator) system.  What Latin American governments in the New World inherited were dictators from the right, mainly supported by the military.  Castro has created a dictatorship of the left.  We can anticipate a big crack as a result of the Miami crowd and its Congressional representatives representing the right while Castro stays to the left.  This crack was signaled by the Elian Gonzales affair when the Florida demonstrators burned the American Flag rather obey US law. The biggest crack of them all. 

Or will there be still another?  A great crack will appear if Jeb Bush takes a hit in the upcoming elections.  It would prove that hard-line Cuban-Americans do not have that much clout in state politics.

[END OF OPINION CORNER]

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AmCham Cuba continues to gather Cuba-related information from both Washington “insider” circles and from the larger national and international scenes.  We do so even though we recognize current political realities, including the Administration’s hard line resistance to normalizing relations with Cuba.  We are also trying to be responsive to the views of some corporate members who urge us to maintain the integrity of “the“ American Cham-ber of Commerce of Cuba,” but not to engage in highly visible actions which could call undue attention to them.  In short, this does not seem to be a time for new initiatives, nor for financial growth for AmCham Cuba. 

We continue to make our presence felt at conferences on Cuban issues.  We stand ready to serve our corporate members who make specific inquiries or seek business contacts.  However, we will hold fewer lunches with expert speakers for the time being, and will issue our newsletters less often.  For corporate members in good standing, and for “Friends of AmCham Cuba,” we have arranged for an additional newsletter to reach them regularly. 

Because we know that long-standing international rela-tions can change suddenly under the right combination of events, we remain alert to resuming a more active reporting and organizational role as the situation permits. 

Feel free to contact any of us at AmCham Cuba with news about U.S-Cuba relations, business prospects, or broader questions, suggestions, and feedback.  We are always glad to exchange views with our members. 

        Sincerely,

                            Phoebe Lansdale, Executive Director 

Robert Weekley, President_s/s____               Aug. 30, 2002