JANUARY 1998

1. Amb. Larson on Feb. 11 to Discuss US Talks with EU on WTO-Cuba Dispute

2. Legal Framework for Post- Castro Cuba Outlined for Miami AmCham

3. Recent Eyewitness Reports from Cuba

4. Cuban Economic Problems & Projections

5. The Pope’s Visit - Plans &Comments

6. Immigration Policy Exceptions

7. English-Speaking Carribean Nations’ Rapprochement with Cuba 8. New Radio Marti Director

9. Brothers-to-the-Rescue Losses Compensation

10. Welcome to New AmCham Cuba Advisory Council Member

11. New Publications on Cuba

1. WED., FEB. 11 SPEAKER TO REVIEW NEGOTIATIONS WITH EUROPE ON CUBA EMBARGO. Amb. Alan P. Larson is Asst. Sec. of State for Economic & Business Affairs and the lead US negotiator in talks with the European Union (EU) and World Trade Organization (WTO) on Europe’s complaint about US use of “secondary boycotts” and its unilateral embargo on Cuba, and on promoting European pressures on Cuba for democracy, human rights, and a market economy. At noon in the First Amendment Room of the National Press Club, he will update AmCham Cuba members and guests on the status of these talks and US views. An announcement and reservation form are enclosed. Dr. Larson has for 25 years filled economic posts in the State Department, including top negotiating roles.

2. MIAMI AMCHAM CUBA HEARS CONSTITUTIONAL OPTIONS FOR A POST-CASTRO CUBA. On December 4 at the Coral Gables Biltmore Hotel, Jose E. Sirven, Esq., international business attorney at Holland & Knight, urged that drafters base the legal framework for a democratic and free-market Cuba on its 1940 constitution -- but drop many of its outdated details. He endorsed essential provisions of that Constitution which would protect basic human rights and property, while suggesting that others, too specific for a national constitution (such as that one must be born in Cuba to hold high office, payment scales for teachers, and minimum vacations) should be dropped. Though Sirven recognized that there have been useful efforts to assemble Cuban-American lawyers in the US to discuss fundamental principles for such a constitution, he cautioned that a final constitutional design must be worked out by Cubans in Cuba, and that in all probability no design from an outside group would be acceptable as a legal framework for a post-Castro Cuba.

3. EYEWITNESS REPORTS FROM CUBA. Three participants in an “educational” trip to Cuba November 16-23 sponsored by IPI (the International Policy Inst.), namely Ken Crosby, Fred Tetzeli, and Amb. Timothy Towell of AmCham Cuba, are scheduled to report their findings at a lunch January 15. All three visited places and people they had known when they lived in Cuba, received briefings by high level officials, met other observers of the sociopolitical scene, were impressed by the availability of consumer items for dollars, and witnessed the general poverty of urban and rural populations. [IPI has a tight deadline for applications for its next US-licensed trip, planned for February 15-22, tel. 301-564- 0577.]

Another member of the IPI tour, Jim Robinson, saw “a gentle push toward change that one million tourists paying in dollars is giving to the outdated state-run economy.” He is creating a Cuban Humanitarian Relief Committee to promote the lifting of sections of the US embargo which curtail exports of drugs, vitamins, and medical procedures. Such action, Robinson contends, would benefit needy children and women. He cited the Cuban Deputy Health Minister’s assertion that the US embargo adds $400 million to costs of such imports.

A recent “business trip” to Cuba by American businessmen was described in the November 30 issue of Latin American Law and Business Report, published by WorldTrade Executive, Inc. Dan Martin, former CEO of E-Z EM, Inc., and AmCham Cuba member Tom McDermott, recently retired Managing Partner of Ernst & Young’s New England region, reported that both governments took time to approve the trip but arrangements were “not excessively complex.” Moreover, hotels and restaurants they enjoyed on the island were ”very acceptable”, meeting the needs of many tourists from Europe, Canada, and Latin America. “Whatever surveillance we noticed was...to be sure our [limited, future] business objectives were on track and being met,” they wrote, noting two changes in Cuba with important business significance: These were the set-aside of free tax areas for inbound manufacturing investors and “arrangements for private ownership of land accompanying fresh investments.”

While Martin and McDermott focused on assessing health centers as potential markets for medical products, they also drew politicoeconomic conclusions from contacts with nearly a dozen different groups impacting on the Cuban scene, including US officials and Cuban- Americans, as follows:

• the revolutionary fervor has been supplanted by a survival mentality;
• though Police State security is less intrusive than in the past, Cubans on the island still look over their shoulders before discussing sensitive subjects;
• the embargo hurts but will not topple the regime;
• Castro has two passions: assuring the equal net worth of all Cubans, and a burning hatred of the US;
• economic hardships are contributing to a breakdown of the early puritanism of the revolution, evidenced by prostitution, theft, trafficking in stolen and counterfeit goods, and payoffs;
• solutions proclaimed by Miami exiles for Cuba’s future will absolutely not be welcome;
• creative responses to withdrawal of Soviet support are reaching their limits, and dollars earned from tourism, medical clinics for foreignors, diversified exports, etc. have created a “new class” -- the opposite of what the revolution preached; and, finally,
• US entities may now seek Washington’s approval to pursue opportunities in the Cuban market where the comparative advantages are significant.

On another visit, although media reports of the late November trip to Cuba by celebrity publisher John F. Kennedy Jr. for his George magazine were sketchy, he did meet with “several Cuban officials,” according to a Kennedy aide. This provoked a State Department spokeman to reaffirm that “we have...provisions in US law that permit journalists to travel to Cuba [and ]...think a closer exchange and better reporting on Cuba is important to democratization,” according to Aaron Crum writing in CUBAInfo December 11.

4. CUBA’S ECONOMY. Sugar remains disappointing. Official harvest expectations for 1998 are below the 1996 level of 4.45 million tons and well below the most recent, 1993, peak of 8 million tons. Despite unfavorable weather and rising credit costs, Deputy Sugar Minister Fernandez predicted a “systematic increase” for 1999.

Germany’s Secretary of State for Foreign Affairs recently declared that “important things have happened since the dollar’s de facto establishment as a second currency” in Cuba, but that the island’s economic situation remains “unsatisfactory”. If Cuba’s German debt is renegotiated in 1998, German government financial guarantees will be available for “a large number of German businesses” interested in investing in Cuba, reported Agence France Presse.

Additional economic reforms by Cuba have been urged by Jesus Seade of Mexico, Deputy Director General of the WTO (World Trade Organization). Reuters quoted Seade as calling for increased government efficiencies, reduced subsidies, looser price controls, incentive schemes, and more transparent government, though he deemed Cuba’s education and health systems a success.

So as to curtail use of energy and to end imports of goods for later sale, as of December 14 Cuba banned imports of most electric appliances including video recorders, microwave ovens, freezers, and stoves. A Journal of Commerce report noted that Cuba said it had “spent $1.1 billion in 1996 importing 85% of its energy needs.”

5. PLANS FOR AND COMMENTS ON THE POPE’S VISIT. Castro will meet John Paul twice during his visit, first on his arrival January 21. On December 20 the Commuist Party paper broke precedent by publishing the Pope’s wishes for Christmas (authorized by Castro as a one-time public holiday in a gesture to the Pope). John Paul expressed hope that the Roman Catholic Church would have increasing freedom in Cuba. Meanwhile, the media reported that Christmas was variously celebrated, with some Cubans attending church, some joining special family meals, and others simply enjoying the day off.

A trip to Cuba by a 1000-passenger cruise ship from Miami to coincide with the Pope’s visit was cancelled by Miami’s Roman Catholic Archdiocese afrer “sailing into a storm of Cuban-exile opposition,” Reuters reported on December 20. More than 400 pilgrims had purchased berths. Critics complained to Archbishop Favalora that a luxury liner’s arrival in Havana would be “morally wrong” and that Castro would manipulate its arrival for his own ends. As a substitute, Roman Catholic officials have chartered a plane for about 180 passengers for a round-trip visit January 25.

Media speculation about potential benefits and problems of the papal visit has increased in recent weeks:

• Tad Szulc, biographer of both Castro and John Paul, suggested December 14 in Parade Magazine that the Pope might succeed in making the Catholic church a major force in Cuba, but possibly could also be charged with legitimizing a dictator. On his part, according to Szulc, Castro might find that a new relationship with the Church could prevent civil unrest, even though the Pope’s visit could strengthen his political opponents. Szulc compared the two power personalities, suggesting that they are attracted to each other by similar qualities which they share -- both are swift to suffocate dissent before it threatens to get out of control, and both are natural orators with a superb sense of drama and the cameras. However, Szulc also pointed out the not unimportant fact that the two differ, in that John Paul II scolds his adversaries while Castro imprisons and executes his opponents.
• Columnist and AmCham Cuba Advisory Council member Georgie Anne Geyer sees the possibility “that the confrontation between these two aging and extraordinary men in January could well turn out to be one of the clarifying ideological and theological confrontations in recent history” (Washington Times, December 23). She, too, cited the two men’s similarities, including their criticism of “savage capitalism” and belief in “a borderless world”. She said the Pope is seeking “his own form of ideological valedictory over Marxist materialism.”
• Shawn Malone, Associate Director of Georgetown University’s Caribbean Project, cautioned in the Wasthington Post January 11 that the visit “is creating a schism” in the Miami exile community which could reduce the ability of hardliners to influence US policies, and enhance Castro’s opportunity to portray the regime’s enemies as “intransigent and extremist precisely at the time that Castro appears more flexible.”
• US policy toward Cuba, meanwhile, remains unchanged, said US National Security Advisory Sandy Berger, though Castro “is saying things he never said before,” such as asking Protestants to pray for his country, allowing 10 charter airplane flights to bring pilgrims from Miami, and promising the Church “limited access to the media”, according to The Economist December 6. Even so, “no one expects John Paul to convert the communist gray beard to democracy and capitalism,” concluded Douglas Waller and JFO McAllister inTime December 22.
• The Pope himself, in his “state of the world” address to diplomats January 10, expressed hope that his visit will help Cubans achieve a “more just and united” homeland, Reuters reported.

6. IMMIGRATION POLICY INCONSISTENCIES. During the eighth round of US-Cuba migration talks in Havana last month, Ricardo Alarcon, President of Cuba’s National Assembly, complained that the US still accepts illegal Cuban immigrants despite signed accords not to do so. In response, the US delegate Assistant Secretary of State John Hamilton contended that the agreements have promoted “a safe, legal and orderly migration.”

Indicative of issues involved, at year’s end the Cuban American National Foundation, together with wealthy Miami developer Geraldo Capo, helped two defecting Cuban baseball players, pitcher Orlando “El Duque” Hernandez and catcher Alberto Hernandez, plus Orlando’s girl friend, to gain “humanitarian parole” from the US.“ It was granted on grounds that he would face harrassment” on return, said Don Baker in the Washington Post. Media editorials have expressed concern about the five other rafters left in Nassau, and whether their acceptance of Costa Rican or Nicaraguan humanitarian visas may be subject to a Bahamian-Cuban repatriation agreement calling for returning illegal migrants.

7. ARE CARIBBEAN NATIONS’ TIES TO CUBA “BURGEONING”? “Strategic relationships” are being struck by Cuba with English- speaking Caribbean islands, wrote Larry Rohter in The New York Times December 21. The deals include teacher exchanges, more frequent meetings with Castro through Caricom and the Association of Caribbean States, and new trade and technical agreements. Some US Congressional initiatives would penalize Caribbean and Central American countries that support Cuba’s entry into expanded free trade arrangements.

8. NEW RADIO MARTI DIRECTOR. After resigning from Miami’s radio station WQBA, Roberto Rodriguez-Tejera has taken over as Director of the USIA Radio Marti which broadcasts to Cuba. He explained that WQBA, called “La Cubanisima”, had changed to broaden its appeal among South Florida’s Hispanics.

9. DAMAGES AWARDED FAMILIES OF DOWNED “BROTHERS”. US District Judge King awarded $499 million in compensatory damages to families of three US citizens killed when Cuban fighter jets shot down two small “Brothers to the Rescue” planes in international airspace in February 1997. He also ruled on December 17 that Cuba’s air force should pay $137.7 million in punitive damages. The ruling was critized by Cuba’s Foreign Ministry as “part of a trend by US courts to stretch beyond their jurisdiction” and is unlikely to result in collection, as President Clinton would have to authorize drawing on the $148 million in impounded Cuban assets in the US, and the Cuban air force has “no known assets in the US”, according to the Associated Press. The families were previously awarded $300,000 from frozen Cuban accounts as a “humanitarian gesture”.

10. AMBASSADOR TOWELL JOINS AMCHAM CUBA ADVISORY COUNCIL. We are delighted that long time AmCham Cuba member Ambassador Timothy L. Towell has agreed to join our Advisory Council, replacing Ambassador Harry Shlaudeman who has moved to California. Ambassador Towell is President of the Foreign Policy Group in Washington and chairs both the Uruguay-US and Paraguayan-American Chambers of Commerce. In addition to US Foreign Service posts in Bolivia, Europe and Washington, he served as ambassador to Paraguay 1988-91 and as Deputy Chief of Mission of the US Interests Section in Havana in 1979-80.

11. NEW PUBLICATIONS ON CUBA. Cuba and the Caribbean offers scholars’ views concerning the region’s relations in the post-Cold War era, emphasizing economic development, regional trade, the reintegration of Cuba, and non-state phenomena including drug trafficking and migration. Editors Joseph Tulchin (Smithsonian Latin American Program Director), Andres Serbin (Venezuelan Institute of Social & Political Studies), and Rafael Hernandez (Cuba’s Juan Marinello Center for the Study & Development of Cuban Culture) secured additional contributions by Jorge Dominguez, Armando Fernandez Soriano, Hilbourne Watson, Anthony Maingot, Maby Gonzalez Vilaseca, Jorge Duany, Anthony Bryan, Jacqueline Braveboy-Wagner, Julio Carranza Vales, Wolf Grabendorff, and Gerardo Gonzalez Nunez. (Published by the Smithsonian’s Woodrow Wilson Center, $50)

Elisa Munoz’s report on The Effect of Travel Restrictions on Scientific Collaboration between American and Cuban Scientists is due out this month, according to the Report on Science and Human Rights of the AAAS (American Association for the Advancement of Science). Interviews with more than 25 Cuban scientists whose scientific work was at one time or another negatively affected by US travel restrictions “demonstrate that travel restrictions originating in both countries have had a significant negative impact on the scientific community,” according to the book, and that application of US policy is “arbitrary”. The pair of AAAS representatives met only three scientists actually denied the right to travel outside Cuba. Hosted by the Cuban Academy of Science, the team noted complaints about new requirements of the Havana Foreign Ministry for Cuban scientists to be cleared, and, on the part of the US Interests Section in Havana, interrogations, delays, and failures to explain reasons for denials. The report is designed to facilitate a meeting among US and Cuban travel officials, scientists, and human rights organization representatives, set for March 27, 1998.

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Commentators have speculated about the impact of Jorge Mas Canosa’s death on US policy and on the Cuban-American National Foundation which he created, and about a possible successor to his leadership of conservative Cuban-Americans. An article by Ana Radelat on these aspects of Mas Canos’a passing and his role in the US is enclosed.

Corporate members of AmCham Cuba are invited to attend a gala dinner of The Atlantic Council on January 28 at the Willard Inter-Continental Hotel in downtown Washington. Though this event is not related to the Council’s outstanding work on Cuba, it will attract prestigious leaders in the DC community. William J. Perry, former Secretary of Defense, will present an award to Norman R. Augustine, Lockheed executive and former Assistant Secretary of Defense, for an “outstanding contribution to national security.” A copy of the invitation is enclosed for corporate members, including information on making reservations directly with The Atlantic Council.

With good wishes for a fine New Year.

Sincerely,

Phoebe T. Lansdale, Executive Director

January 14, 1998