OCTOBER 1997

IN THIS ISSUE:

1. Hopes for Incident-Free Papal Visit Discussed

2. US Medical Supply Firms Demonstrate Equipment in Cuba

3. New Avenues for Investment in Cuba

4. Cuban "Small Businesses" Tightly Controlled

5. Cuba & US Crack Down

6. Spain Restoring Relations with Cuba

7. EU-US Standoff on Helms-Burton Continues

8. Books Revisit Cuban Missile Crisis & JFK Assassination

9. Report Analyzes Castro’s Wealth

10. Castro Does His Homework For Negotiations

11. A More Visible Castro Again?

Semi-Annual Board Meeting Will Be Nov. 10. Plans are being completed for the Board’s fall semi-annual meeting on Monday, November 10 at the National Press Club. AmCham Cuba Directors will meet at 10 am, joining members and guests for lunch at noon. As soon as arrangements are firmed up for an unusual and outstanding speaker, we will advise further. Meanwhile, MARK YOUR CALENDARS

1. Plans for “Incident- Free” Pastoral Visit to Cuba by the Pope Described. A senior advisor to the US Catholic Conference told a sell-out crowd at the National Press Club on Sept. 19 that Pope John Paul II’s visit to Cuba is the result of years of slow progress in discussions between the Cuban Catholic bishops and Cuba’s government. Thomas Quigley, who has been intimately involved in planning the trip, emphasized the pastoral nature of the visit.

He predicted that the Pope will not focus on US- Cuban policies and will not likely press for reforms. He outlined the Pope’s schedule including open air masses in Havana, Santa Clara, Camaguey, and Santiago de Cuba; meetings with academic, scientific and arts communities, and representatives of other faiths; and a visit to the tomb of Felix Varela (“whose cause for beatification is well underway”). Other visits will include a leprosarium, but not a prison as requested.

Quigley reviewed earlier efforts to open a dialogue with Castro during the 1980s after the Vatican restored full diplomatic relations with Cuba in 1975. Plans for a Papal visit in 1991, however, foundered as Castro publicly accused the Cuban Catholic Church of failure “to identify with the revolution” and of being “the Church of those who live in Miami”. At the same time, Castro opened a dialogue with Protestant Church leaders and authorized the constitution’s description of the state as “atheistic” to be removed to allow believers to join the Communist Party.

After a period of continuing tension, relations improved. By the mid-’90s the Catholic Bishops were speaking out, criticizing both the “Ley Torricelli” of 1992 and the practice of Cuban secret police monitoring church services. In 1993, they issued a call for national dialogue which the government carefully refrained from attacking directly. The Church’s role became more visible with rising medical supplies deliveries by Caritas Cubana 1994-95 and its outreach into every diocese. In 1996, Castro accepted an invitation to meet John Paul II in Rome, leading to his visit January 25-29, 1998.

A tripartite Comision Conjunta (representing the Cuban Church, Cuba’s Government, and the Holy See) is planning and coordinating arrangements. As the US Bishops’ liaison, Quigley reported on its concerns like how to set up public address systems in the plazas, altar placements, fundraising for printing, etc. As few Cubans know yet about the visit except from US broadcasts, Quigley said all ten Cuban dioceses are arranging home visits to spread the word and distribute chatechisms or gospels.

Quigley confirmed that US permissions to pilgrims, by cruise ship from Miami and direct flights from Boston and New York, as well as Cuban visas, appear likely, though he said approvals have not been formalized. Through security check-ups in the home parishes of pilgrims signing up for the visits, the US Church hopes to help prevent incidents.

In summing up expectations, Quigley said all parties hope for an ”incident-free” visit. Cuba’s government “hopes to erase the stigma of being the only Latin American country without a visit from Pope John Paul, and possibly to shore up relations with a church that...may be expected to play some role in whatever changes accompany the inevitable transition [after]...the death of Fidel.” The Church wants to assure “a stable society in which [it]...has the freedom to preach its message and fulfill its ecclesial mission”.

(Quigley’s text is enclosed for AmCham Cuba corporate members, Advisory Council members, and officers.)

2. US Firms Demonstrate Diagnostic Equipment in Cuba. On recent visits to Havana licensed by the US, representatives of two US firms exhibited demonstration models of diagnostic equipment, reported Dick Lawrence in the Journal of Commerce. Exhibiting a firm’s wares as part of sales visits had been prohibited to US firms in the past. This departure from past practice has been viewed as a “ nod to humanitarian interests” by the Clinton administration. It could also impact the sales of such US medical equipment and pharmaceuticals, which have averaged $50,000 a year, but without such “sales visits”.

3. Foreign Investment in Cuba Finds New Avenues. Several US hotel chains have used a 1994 Treasury ruling to invest in Cuba as “minority holder” according to Time magazine recently. The article quotes Arthur Andersen’s consultant Michael Stein to the effect that most large hotel firms either have already quietly established links or are working to do so. These include three working with Canadian partners (Days Inn, Choice Hotels, and Robertson Stephens) and one (GE Capital) with a Dominican resort company.

According to other AmCham Cuba sources, some US firms regularly use officers of their foreign affiliates to explore conditions in Cuba.

In another development, a 10-year $200 million joint Israeli-Cuban venture to construct a major Havana business center has been announced. The Miramar Trade Center will rent modern offices to foreign and Cuban firms.

4. Small Cuban Entrepreneurs Face Tighter Controls. Analysis of the difficulties facing Cuban small business was offered by Juanita Darling in the Los Angeles Times. She called application of Cuba’s new rules for business operations “stifling” and asserted that they will lead to changes in the composition of the middle class. Over 18 months taxes and stepped up regulations have been imposed. One-tenth of small entrepreneurs have shut down voluntarily or been closed by inspectors. While tourism and foreign investment are of course still encouraged, she said Cubans now believe “opportunities are over” for the tens of thousands of small business owners.

Ms. Darling reported on suspensions of licenses for family restaurants serving food from other than the legal market sources, and said odd jobs for visitors are no longer permitted. Small entrepreneurs say they cannot exist without the businesses “when shoes, milk, and cooking oil can be bought only with dollars, and fresh vegetables are sold only in farmer’s markets at prices so high that one pound of carrots can cost a day’s wages.” Growing differences in levels of income in Cuba are both a reason for imposition of tighter controls, and “an inevitable characteristic” of Cuba’s economic future, according to Darling’s analysis.

5. Both Cuba and US Crack Down. A US citizen is being tried in Havana on charges of “promoting armed action against Cuba”. Walter Van der Veer of Florida was arrested last year and charged with gathering explosives and plotting attacks against police and tourists. The prosecution seeks the death penalty, but observers believe a 30-year sentence is more likely. His trial is closed to the public and press.

Cuba also arrested a Salvadoran, charging him with the four bombings of tourist facilities in Havana. One bombing resulted in the death of an Italian tourist. The Cuban Interior Ministry accuses the Salvadoran, Raul Ernesto Cruz Leon, of being in the pay of a Miami-based exile group under the direction of the Cuban American National Foundation, which CANF vehemently denies. It suggests that the bombings may be the work of disgruntled military officers. The militant exile group, Alpha 66, has claimed to be in contact with the responsible “clandestine cells”.

Cuba recently expelled David Norman Dorn, US citizen detained in August, because, Granma wrote, his human rights activities were a cover for providing “material and financial supplies to counterrevolutionary leaders”.

In early September, the US Coast Guard repatriated 10 Cuban migrants, and flew an 11th to Guantanamo for processing his appeal for political asylum.

A Spanish businessman accused of violating the US embargo agreed to plead guilty and testify against other defendants, according to the US attorney’s office in Miami. Francisco Javier Ferreiro-Parga was charged with masterminding a scheme to illegally ship $463,000 in groceries, furniture, and electronic goods to Cuba through Panama, the Dominican Republic, and Curacao, Reuters reported.

US Customs inspectors are topping their recent record for seizures of Cuban cigars at the US-Mexican border, reported the Journal of Commerce. The black market value of 108 cases being smuggled by one individual was estimated at $162,000.

6. Cuba’s Ties with Spain Returning to Normal. Although Spain’s Foreign Minister describes Spain’s relations with Cuba as having returned “almost to normal”, he said it is too early to appoint a new Spanish Ambassador. He added that “Spain continues to encourage reforms and political change to improve human rights in Cuba”, reported the Spanish daily El Pais in late September.

7. European-US Standoff on Helms-Burton Continues. Although the Europeans and the US agreed to try to resolve the issue of firms investing in confiscated Cuban properties by October 15, they are “quite a long way from a deal” according to a European Union spokesman. The US disagrees with the EU’s desire to ensure that any accord will apply only to future investments, with its view of jurisdiction, and with its requirement that expropriation is not illegal if so viewed by only one party, according to the US-Cuba Policy Report. The European position was echoed by two business professors, Riad Ajami and Marca Marie Bear, in a Journal of Commerce report, saying that “the problem with economic sanctions is that they endanger trade relations while rarely achieving their desired political outcome,” and that “35 years of economic sanctions against Cuba has achieved no change in that country’s government structure.” The Journal of Commerce editorialized Oct. 3 that “in virtually all cases, the "target" country continues its objectionable practices, and merely substitutes other countries’ suppliers for their unreliable US counterparts.” Though it is too early to be pessimistic, the EU spokesman said the EU could reinstate its challenge to Helms-Burton before the World Trade Organization (WTO) if negotiations are unsuccessful.

8. Books Revisit Cuban History. Another look at the threat to the world’s survival from nuclear war during the 1962 Cuba missile crisis is offered by The Kennedy Tapes, a 700-p. study by Ernest R. May and Philip D. Zeibikow of Harvard University. The voices of Kennedy and his advisors made it evident that Cuba was just one pawn in the larger geopolitical competition of the two superpowers. Fidel Castro was depicted as a frustrated by-stander in an intensely dangerous confrontation.

Recent release of 84 US intelligence documents confirm decades of scholarly and speculative reports that show that Castro feared that the US would use Kennedy’s assassination as an excuse to topple his government. The documents describe him as caught off guard by the assassination (“nervous and even frightened,”), and said he accelerated naval force build-up and troop movements, according to Neil A. Lewis in the Washington Post Aug.20.

9. Castro Personal Wealth Analyzed. Forbes magazine’s assertion that Fidel Castro’s personal wealth is $1.4 billion (10% of Cuba’s gross domestic product) was analyzed in the latest issue of DevTech’s Cuba Monthly Economic Report. The figure is much too low, the article asserts. Since 1959, Castro’s personal accounts have not required accounting, and have grown from state funds, forced dollar exchanges from Cuban workers at the US base in Guantanamo, cattle sales abroad from Castro’s own agricultural holdings and equipment reserves, the armed forces’ canned goods supplies, CIMEX which funds dollar stores like Panamericana and Treviso, also Cubalse and Medicuba, and interest earned on loans to the national economy from his funds. Jesus Fernandez, editor, describes evolution of the funds through JUCEPLAN, Soviet infusions, funds conversion by Department MC (Interior Ministry), Cubanacan, Placio de Convenciones profits, and transactions like sales of rum processing plans and citrus. He says remittances help some Cubans weather the difficulties even as they hide money laundering. The article names leaders in various deals, and asserts that banks also help Castro accumulate wealth.

The Report dissects today’s Cuba into four economic subsystems: 1/ Castro’s enterprises and control of resources, 2/ foreign enterprises who generate and repatriate earnings for a fee, 3/ the planned economy and generally poorly kept up public enterprises, and 4/ the marginal private sector. The author foresees a “free fall” of the economy, without apparent solution.

10. Castro’s Method of Preparing for Negotiations. Castro is well prepared for negotiations according to Bill Richardson, US Ambassador at the UN. "He knew everything about me.... .(even) how I voted in Congress”, said Richardson in a Parade Magazine article by Tad Szulc. Richardson reported on his negotiations with Castro over a reduction in emigration fees for Cubans heading to the US and release of a group of political prisons, attributing some success to several ingredients - Richardson’s minority status, and the knowledge of each man about the other which had been built up before the all-night session. Richardson said Castro finally began negotiating right after Richardson threatened to go home and announce that he had come back empty-handed, which he told Castro would not be in Castro’s interest.

11. Is Castro Becoming More Public Again? Following rare appearances this summer, CNN has shown Castro speaking on September 1 at a Havana school opening.

Keep your letters and comments coming, and use our Home Page!

Sincerely,

Phoebe Lansdale, Executive Director

October 24, 1997