APRIL 1998

IN THIS ISSUE:

1. Tad Szulc, Fidel biographer, to speak Thursday, April 16 after AmCham Cuba directors meet

2. Administration eases licenses for medicine sales, humanitarian charters, increased remittances

3. Congress unlikely soon to open up food and medicine shipments to Cuba’s NGOs

4. Cuba’s economy: foreign investment up, power lags, small business progress unclear

5. Cuba seeks more international organization participation

6. American groups visit Cuba 7. Meetings ahead on Cuba

8. DOD reports Cuba is not a security threat

1. LUNCH & SEMI-ANNUAL MEETING THURSDAY, APRIL 16, NATIONAL PRESS CLUB. At our next lunch (First Amendment Room of the National Press Club, 14th & F Sts. NW), award-winning author and journalist Tad Szulc will draw on his book, Fidel: A Critical Portrait, and on his reporting on Cuba, to assess Cuba’s future. A question period will follow his talk which is entitled The Bells are Tolling: Cuba after the Papal Visit.

AmCham Cuba’s directors’ meeting will begin at 9:30 a.m. on the Press Club’s 14th floor.

2. CLINTON EASES EMBARGO IMPACT ON CUBANS. In direct response to the January papal visit to Cuba and Secretary Albright’s March visit to Rome, the U.S. announced simplification of licensing of sales of medicines and medical devices, approved resumption of humanitarian charter flights to Cuba, and authorized Cuban-Americans to send up to $1200 per year to relatives in Cuba. The Washington Post on March 21 described the measures, which restored provisions in effect when Clinton took office, as consistent with peaceful multilateral efforts encouraging political openness, respect for human rights, support for civil society, and preparing Cubans for transition to democracy.

Secretary Albright said tracking of travel and remittances will be better in “transparent and legal channels”. The policy change was both hailed by some and strongly criticized by others including several members of Congress.

Meanwhile, the U.S. informally warned three firms of possible “trafficking in expropriated property”, reported CubaNews in March. Actual notification letters to Premier Oil and British Borneo of the U.K. and a Canadian firm, Genoil, would make them vulnerable to sanctions under the Helms-Burton act.

3. CONGRESS UNLIKELY TO RELAX EMBARGO RESTRICTIONS THIS YEAR. Consistent with a “more assertive” role by groups seeking to end U.S. trade restrictions affecting Cuba’s poor, since the Pope’s January visit, “hundreds of anti-embargo activists” have pressed Congress the first of April to allow sales of food and medicine, wrote Tom Carter in the Washington Times. Church and peace group representatives joined Senator Dodd and Representative Torres in defending the corresponding bill. However, embargo defenders Reps.Diaz-Balart, Menendez, and Ros-Lehtinen blasted the bill as “disingenuous” because laws now allow licenses for sales. They charged anti-sanction groups like U.S.A.-Engage and the U.S. Chamber of Commerce with lobbying for market shares and supporting removal of sanctions for the larger goal of lifting them on Iran and Libya.

A proposal by Senator Helms and CANF (Cuban American National Foundation) to facilitate donations of food and medicines to non-governmental organizations (NGOs) has yet to become a bill in Congress. Some opponents of this proposal con-tend that it fails to soften the Cuban embargo law.

Cuba-watchers doubt that Congress will schedule hearings this year on eithe the Dodd-Torres or the Helms-CANF initiative.

4. MIXED REVIEWS ON CUBA’S ECONOMY. A new UN survey entitled “The Cuban Economy: Structural Reports and Performance in the 90s” describes mixed Cuban results in the global economy since the end of Soviet aid. Former Mexican Minister David Ibarra, one of the authors, hails Cuba’s movement toward Western markets and relaxation of the state’s grip on the economy while maintaining welfare provisions. However, drawbacks remain in that Cuba relies too heavily on commodity exports, falls short in capital formation, is unable to produce adequate consumer goods, and overstaffs collective farms.

Vice President Carlos Lage said that Cuba’s 332 enterprises with foreign participation include 15 start- ups, writes CubaNews, which helped create 66,000 new jobs in the civilian economy in 1997.

Phil Peters, in Georgetown University’s Briefing Paper Series in March, said the “jury is still out” on Cuba’s small business sector. Licensed cuenta-propistas peaked at 209,000 in1996, and have dropped since then to 160-180,000 as a result of new taxes and regulations allegedly applied most heavily to small firms competing with the state.

To keep up with tobacco demand, expected to reach 160 million cigars this year (compared with 45 million in 1993), Cuba plans to add 14 factories to the 36 now devoted to twisting tobacco for export, reported CubaNews in March.

Canada’s Sherritt Corporation has bought 37.5% of Cubacel, Telefonos Celulares de Cuba. Earlier, a subsidiary, Sherritt Power, committed $150 million for a joint venture with Cuba’s Energas to build an electric generation project in the Varadero/Boca de Camarioca area, using natural gas previously burned off the oil fields.

France has donated 7,300 tons of wheat flour to Cuba, supplementing World Food Program and other donations following Hurricane Lily and to replace imports, reported the February Monthly Economic Report issued by DevTech. In Havana, ACCOR, a French hotel chain, will operate three hotels managed by the Cuban firm Gaviota, plus two other hotels.

Guatemala’s Ministry of Foreign Investment has announced that it is considering contracting Cuban professionals in various fields.

Increased trade with Iran was the goal of a February Cuban delegation to Iran (-- AFP).

Italy’s STET/Telecom Italia debt equity swap with AT&T, worth $390 million, may be near collapse, especially if AT&T’s “indirect investment” in Cuba’s domestic telephone network is seen as violating Helms-Burton (-- Financial Times, March 23).

The Japan-Cuba Economic Association, representing about 180 Japanese creditor firms, has rescheduled Cuba’s debt of nearly $750 million, which was largely incurred for sugar and rum traded for machinery and parts in the 1960-70s. It will be rapaid over 20 years at current exchange rates (-- Financial Times March 19). Willis Witter of the Washington Times views the “big debt break” for Cuba as a “potential blow to U.S. efforts to isolate Cuba.”

Russia sent a trade delegation in February to strengthen bilateral ties with Cuba, and confirmed a $350 million credit, Reuters said in February.

5. EXPANSION OF INTERNATIONAL ORGANIZATION PARTICIPATION BY CUBA? Is it a signal of U.S. policy relaxation that Secretary Albright “took no position” this week on Cuba’s joining the Caribbean Community (CARICOM)?

Canada, for its part, has urged OAS membership for Cuba, the Journal of Commerce wrote March 12, provided Havana accepts” the norms and standards ...applied” throughout the organization.

On the other hand, Cuba’s human rights record may quash its efforts to join a 71-nation trade/aid pact with the EU (European Union), warns Canute James in the Journal of Commerce, March 26. Fifteen CARICOM members of the African, Caribbean and Pacific group (ACP), acting under the Lome Convention with the EU, earlier this year agreed that Cuba should become the next member, though the Dominican Republic would oppose Cuba’s participation in the ACP protocol on sugar prices and quotas. However, EU members are expected to press for adherence to democratic principles by new ACP members.

Talks will resume this month in Chile on a Free Trade Area of the Americas, with Cuba probably absent. Canada’s trade minister, Sergio Marchi, has said Cuba should join, but would require “democratic rule and an open-market economy”, wrote Kevin Hall, Journal of Commerce, March 24.

6. SEVERAL U.S. GROUPS TRAVEL TO CUBA. U.S. businessmen met with Fidel Castro and other top Cuban leaders March 6. The Alamar Associates’ trip to Cancun and Havana, which was “acknowledged in writing” by the U.S. Treasury Department, and “consistent with U.S. laws". Firms joining the trip included Bristol-Myers Squibb, Caterpillar, Continental Grain, Lincoln Property, Manatt Phelps, Phillips, Mobil, Pharma-cia & Upjohn, Texaco, and Wyeth-Ayerst, plus port officials from Houston and Tampa, according to the Washington Times and Miami Herald. The next Alamar US-Cuba Business Summit for U.S. businessmen will occur September 10-13, this time co-sponsored by USA*Engage. In addition to meetings with experts and Cuban officials, it will include a “fully hosted” overnight stay in Havana. The pre-registration fee is $3,250 (plus $900 for spouses), including Cancun-Cuba charter airfare and visas arranged by Alamar (tel. 202-778-1714).

A fact-finding trip March 11-14 by the Center for International Policy examined embargo impact on Cuban health care. The delegation, led by Amb. Robert White and Prof. Wayne Smith, included Gen. John Sheehan, ex-Sen. Claiborne Pell, Baltimore Mayor Schmoke, and Atty. Mario Baeza.

An American Friends Service Committee trip on the “Ethics of the Culture of Development: Building a Sustainable Economy” will travel in May. AFSC might still accept registrations (tel: 215-241-7159).

The Institute for Policy Studies has scheduled its next fact-finding trip to the island to study the impact of the embargo June 6-13 (tel. 301-564-0577).

7. UPCOMING MEETINGS ON AND IN CUBA.

Wednesday, April 15, on Capitol Hill ( Rayburn HOB, Rm. 2200), U.S. Policy on the Supply of Food and Medicine to Cuba will be addressed at an open meeting sponsored by Georgetown University’s Caribbean Project. Starting at 10:00 a.m., experts who will explore the question, “Does Current U.S. Policy Damage the Health of the Cuban Population?”, include Dr. Peter Bourne, Board Chairman of the American Assn. for World Health; Michael Ranneburger, Coordinator of the State Department’s Office of Cuban Affairs; Amb. Otto Reich, RMA Intl.; and Dr. Rolando Suarez, Executive Director of Caritas Cubana. At the 2:30 p.m. session, “The Appropriate U.S. Response” will be considered by Jose Cardenas of the Cuban American National Foundation; Dr. Wayne Smith, Center for International Policy; Jose Sorzano, Chair of the Austin Group; and Maria Werlau of Orbis International.

April 27 at 6:30 p.m., Returned Peace Corps Volunteers (RPV/W) are to meet upstairs at D.C.’s Banana Cafe (8th & E Sts, SE) on the topic, “Cuba: Good Policy or Bad Idea?”. Speakers will include Jim Robinson (Cuban Humanitarian Relief Comm.), David Sullivan (State Depart-ment.), Amb. Bob White (Center for International Policy), and George Lister (State Dept. Human Rights Desk). Call 202-547-6864.

At the XIX Tourism Convention May 11-15 in Havana, the Minister of Tourism, in cooperation with the World Tourism Orgn., Orgn. of Caribbean Tourism, and Fedn. of Travel Agents, Cuba plans to offer joint promotional opportunities for tourist installations and to promote Cuba as the “lowest priced in the area.” Given top priority for the island’s economic resources, tourism facilities are reportedly being used 20% more than in 1997, no doubt related to tightened restrictions on private hostels and paladares.

An international “Economia 98" meeting July 1-3 in Havana, sponsored by the government and the Assn. of Cuban, Latin American and Caribbean Economists will focus on Sustainable Development, Equity, and Competitiveness. The Castro regime calls on the 1,000-plus foreign economists who are expected to attend to seek to perfect methods for managing the socialist economy rather than become a forum for “strange ideas”, says the March Monthly Economic Report. issued by DevTech.

8. DEFENSE DEPARTMENT SAYS CUBA NOT A MILITARY THREAT TO THE U.S. A U.S. Department of Defense (DOD) report declares that “Cuba’s military does not pose a national security threat to the U.S.”, reported Dana Pries in the Washington Post March 31. DOD concludes that Cuban armed forces have become significantly diminished and focus now on Cuba’s defense rather than on offensive actions. The Pentagon notes that shortages have reduced Cuba’s MiG jet fighter force to two squadrons flown only intermittently. The report does not eliminate the possibility that Cuba might produce biological weapons. The findings have been reaffirmed by retired Marine Corps Gen. John J. Sheehan who visited Cuba in March.

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NEW BOOK ON IMMIGRATION EXAMINES CUBAN-AMERICANS’ REACTIONS.. Robert Suro’s new book, Strangers Among Us: How Latino Immigration is Transforming America, examines why Cuban post- Castro first-arrivals often do not open their doors to more recent boat-lift people from the island.

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Corporate members will find enclosed a Guide to Cuban Information on the Internet which may speed efforts to explore Cuba via the computer. This work in progress offers the Internet addresses and a brief description of about a dozen selected web sites which can help members keep abreast of Cuban events and U.S.-Cuba relations. Web pages were selected with a view to supporting efforts of the U.S. business community to plan for investment and commerce in Cuba when conditions permit. We welcome additions and comments to this Guide.

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We look forward to a successful semi-annual meeting and stimulating talk on April 16. I hope to see you there.

Sincerely,

Phoebe T. Lansdale

April 8, 1998 Executive Director

[Editorial Committee Members: Bruce Henderson, Henry Goethals]