Thursday, December 30, 2010

New USAID monitor

Tracey Eaton, former Dallas Morning News correspondent in Cuba and author of the blog Along the Malecon, has started a web-based project to monitor USAID’s Cuba programs: Cuba Money Project.

He cites a CubaNews subscription-only story that reports that none of the $20 million allocated for the program for fiscal year 2010, which ended October 1, has been spent. Another post links to interviews he did in Cuba last summer on the USAID program and other topics.

He is filing Freedom of Information Act requests on USAID and State Department programs, and he is making the requests and any responses available on the website.

This is a job no one else has taken on in a systematic way, and it promises to be a project that has value regardless of our opinions of the USAID programs, past or present.

Wednesday, December 29, 2010

Odds and ends

  • The last prisoner in Cuba facing the death penalty had his sentence commuted and a new 30-year sentence imposed. The prisoner is a Cuban-American who was convicted of killing a man after landing in Cuba in an armed raid in 1974, AP reports. Granma’s story refers to a 2008 Council of State decision that commuted other death sentences.

  • An Italian newspaper reports that Telecom Italia “is preparing to say goodbye to Cuba” by selling its 27 percent share of telecom monopoly Etecsa. (H/t Penultimos Dias.)

  • Why is it “updating” of the economic model and not “reform” in Cuba’s official parlance? Juventud Rebelde interviews a many-titled economist whose answer centers around a bonsai tree analogy. My hunch is simpler, and political: “Updating” better fits the argument that the economic model is basically good and just needs to change with the times. “Reform,” on the other hand, could lead to questions about why these changes didn’t come years ago. Just a hunch.

  • EFE: Spain’s new foreign minister believes that “the international community should be aware that the best we can do for the island is to support that process of reform through dialogue and greater opening toward Cuba.” In a nice touch, she spoke quietly so as not to wake the Obama Administration.

  • Someone should tell the CIA that there is NOTHING FUNNY about the leaking of classified material, even if from the State Department. The Agency created WTF, a Wikileaks Task Force.

  • Dow Jones: Angola’s state oil company bought exploration rights in two offshore blocks north of Pinar del Rio.

  • Nice comrades: “The governments of Cuba and China have renegotiated Havana’s debt to Beijing, which will also extend new credit to the island at no interest.” (EFE)

The withering away of the ration book

Penultimos Dias publishes a Ministry of Internal Commerce resolution (pdf) indicating that the libreta de abastecimiento, the monthly household ration book that provides food and other items at highly subsidized prices, will drop a series of personal hygiene products as of January 1.

The products will be available in state stores, and the resolution sets their prices in pesos.

The “orderly elimination” of the libreta had already been announced, and is apparently proceeding.

Plaza Vieja

Tuesday, December 28, 2010

No, nothing is changing in Cuba

In today’s Granma, the “Official Organ of the Central Committee of the Communist Party of Cuba,” a 1,300-word article appears with this headline:

For each problem, a solution

As we proceed, it is necessary to untie the bureaucratic knots that slow down the expeditious issuing of licenses to small entrepreneurs


The article described the visits of officials to nine municipal offices that take applications, provide information, and issue licenses for small entrepreneurs. These troubleshooters discovered “knots” in the process – such as an office that required applicants to supply four documents that are not required by law, or a case where health officials’ certifications for food vendors were coming too slowly – and fixed the problems.

The officials want applicants to get no “runaround” or “unnecessary irritation” and do not want them to face the same bureaucratic headaches “that have characterized other processes” that citizens must undergo.

At one office, a surly worker tried to turn the group away because they had not received prior permission. That was a “‘welcome’ that should already belong to our ancient history,” the article said. One of the officials retorted: “Didn’t you listen to compaƱero Raul? The locomotive is already starting to roll.”

Why remittances are now cheaper

Something has seemed not quite right to me about the stories regarding Western Union, remittances, and the supposed elimination of Cuba’s ten percent surcharge on dollar-to-peso exchanges.

The surcharge was imposed, Cuban officials have explained many times, in response to U.S. financial sanctions that hinder Cuba’s cashing-in of accumulated dollar reserves in third-country banks. Those sanctions always seemed absurd to me, considering that for many years the dollar was used in Cuba by travelers from all around the world, and it was used in the course of legal travel and remittances by Americans. During those years, i.e. from the opening to tourism in the early 1990’s until 2004, Cuba naturally accumulated large amounts of dollars in cash. The convertible peso existed then but was barely used.

The surcharge, Cuba explained, was to create an incentive for travelers to use other currencies than the dollar, and to compensate for the extra trouble of exchanging dollars in the international financial system.

As for the current stories, some have intimated that the surcharge has been dropped. From what I gather, that is not the case – it is being maintained, but it applies now and has always applied to cash exchanges only. Since Western Union is now paying out remittances in convertible pesos, and since Western Union is apparently purchasing the convertible pesos through some kind of normal bank transfer that is not a cash transaction, there is no surcharge. (This 2006 Bush Administration action [pdf] that allowed remittances to be provided to Cubans in any currency but their own, is now apparently inoperative.)

So this is good for those who send and receive remittances; they no longer lose ten percent of their money through the surcharge.

It’s bad for Americans who exchange dollars in cash in Cuba; they will continue to pay the surcharge.

It’s probably good for Western Union’s business and bad for that of the “mules” who carry money directly to Cuba. The mules continue to provide door-to-door service, but now have a ten percent price disadvantage.

Since the remittances are cheaper, their volume will probably increase, which benefits Cuban receivers and, in some measure, the Cuban government. The Cuban government will also benefit from a cash flow acceleration, as the Western Union remittances are converted to Cuban pesos as they are sent, not when the receiver decides.

In the spirit of the season, pro-embargo advocates look at this latter impact and not at the benefits to Cubans who will buy more food or clothing for their families. They call it, with typical exaggeration, a “$1 billion bailout” engineered by the U.S. government, which is easier than blaming Cuban Americans themselves for wanting to help their loved ones.

Merry Christmas!

Here’s more from BBC Spanish and AP.