AMCHAMCUBA,
910 17^th St. NW #422,
Washington DC 20006-2605

TABLE OF CONTENTS                                                        SEPTEMBER 2001

1.      Analyses of Cuba's economy

2.      US coins will no longer be accepted in Cuba

3.      Sources and Resources

AmCham Cuba Directors to meet September 28 morning.  See next page.

Opinion Corner – Former Under Secretary and AmCham Cuba Advisory Council member William D. Rogers, made  thoughtful recommendations in the Aug.16 NY Times to help smooth the way for working with post-Castro Cuba.  See below.

1. Reports on economic trends in Cuba.  The recent Congress of ASCE (Association for the Study of the Cuban Economy) was rich in reports by experts on Cuba's economy.  For example:

U. Florida researcher Paolo Spadoni of the Center for Latin American Studies made the case that the US embargo has not pre-vented foreign companies already in Cuba from expanding, or deterred significant new investments.  Nancy San Martin, writing in the August 26 Miami Herald, commented that of course supporters of the embargo disagree, and claim instead that the small number of foreign investors have made their impact minimal.  Spadoni said the US law missed other "main targets'', failing to force withdrawal of significant foreign firms operating in the island or to hinder economic recovery.  He said Cuba itself even helps foreign investors get around its penalizing investment restrictions, has set up "fiduciary mechanisms" for financing, and works with foreign banks to develop "off-the-shelf'' firms to disguise financial assistance to firms operating in areas with outstanding US claims. 

In contrast of course, Cuba has alleged that the US law has caused a loss of over $200 million, as companies have pulled out of deals or projects have required a lot more capital than anticipated to carry out, but it admits that foreign investment is on the rise.

Joint ventures, an area of concentration for Cuba, are growing steadily (392 international economic associations were active at the end of 2000) and spreading to different sectors (mining, light industry, food, real estate telecommunications, construction, services). Even with these relatively large investments, foreign direct investment between 1991 and 1999 still represented only 7% of the gross fixed capital formation - not insignificant for a country that's only been open to foreign investment for six years,'' says Kirby Jones of Alamar Associates.  He believes foreign investment has “set a business and economic path that is irreversible …and going to do nothing but grow.'' Spandoni concluded that “Cuba probably could have done better without Helms-Burton but, at the end, one must admit…[it is] recovering.''

Cuba has become more selective in forming joint ventures, Marc Frank, writing August 26 for Reuters.  He says but is making it easier and cheaper to invest in other ways, as part of its gradual recovery after collapse of Soviet.  A foreign bank representative said necessity forced Cuba to allow direct investment for still-depressed sectors, though “it's the last thing they really want."  Frank says some investors now skirt the nearly impassable bureaucracy and high labor costs, and can avoid lengthy Foreign Investment Ministry approval simply by signing two documents with a state-run company and its ministry.  Foreign Investment Minister Marta Lomas claims that, by 2001, investors (60% are from Spain, Canada, Italy, and France) have signed agreements valued at over $5 billion with the govern-ment, of which about 50% of the cash has arrived in Cuba.  Apparently nearly everyone, including Cuba, agrees it takes far too long, sometimes years, to win approval of a joint venture.  Foreign bankers, diplomats, and others who broker joint ventures are not happy about a policy shift toward greater selectivity. "They no longer look at joint venture proposals of less than a million dollars," a western diplomat complained.

Hope to see many of you September 28.  

Sincerely,

Phoebe Lansdale, Exec. Dir.

Robert Weekley, editorial review                                                     Sept. 8, 2001

SALLY GROOMS COWAL, US AMBASSADOR (RET.) AND PRESIDENT OF THE CUBA POLICY FOUNDATION

TO SPEAK AT LUNCH FRIDAY, SEPTEMBER 28, 2001 on

 “US –CUBA TRAVEL POLICY”

Concern about the impact of US restrictions on travel of Americans to Cuba has been a major concern of the president of the Cuba Policy Foundation.   Former Ambassador Sally Grooms Cowal will share with AmCham Cuba members and guests her observations based on analysis by the Council on Foreign Relations, of which she is a member, and on her own broad Latin American expertise.  She will discuss US policy on travel to Cuba, both Bush’s announced tightening of enforcement, and relaxations proposed in Congressional initiatives.  She will weigh alternatives in terms of impact on US politics, Castro, and the peoples of both countries, and will examine problems caused for Cuban-Americans, US business representatives, students and scholars, and various groups in Cuba. 

Having served in several Latin American posts, not including Cuba, Ambassador Cowal has long viewed improvement of relations with Cuba as “right for America.”  Then she provided a temporary home for Elian Gonzalez and in the fall of 2000 visited Cuba to reunite with the boy and his father – a trip which she says changed her life.  She became the first president of the new Cuba Policy Foundation, founded last March to provide a "strong and centrist voice" for change in frozen US-Cuban relations.  The Foundation works to empower our elected representa-tives to enact legislation, initially to lift the travel ban and remittance cap, and to allow food and medicine sales without crippling financial arrangements. 

Ambassador Cowal's distinguished US Foreign Service role included serving as Counselor for Political Affairs in Mexico under President Reagan, Deputy Assistant Secretary of State for Inter-American Affairs under the first President Bush, and Ambassador to Trinidad & Tobago under Presidents Bush and Clinton.

RESERVATIONS FOR SEPT. 28:  Mail check ($35/members, $40/non-members, non-refundable) to AmCham Cuba at 920 17^th St. NW #422, Wash. DC 20006-2605.  Reserve via fax 202-833-3549 or e-mail AmChamCuba@aol.com.  After Sept. 25, call 202-833-3548 to confirm space, fax the form, and pay at the door.

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