Tuesday, April 29, 2014

Your tax dollars at work

A Dutch travel company that was acquired by U.S. investors will pay a $5.9 million fine to the United States because it continued to engage in Cuba transactions after the change in ownership, the Herald reports. 

This is part of our policy of defending human rights in Cuba.

Meanwhile, President Obama has agreed to send 10 attack helicopters to our friends in Egypt, home of the most efficient judges in the world.  One Egyptian judge yesterday issued a death sentence to more than 680 opponents of the government.  Last month the same judge issued another mass death sentence to more than 500, but he adjusted the sentence to life imprisonment for all but 37.  Both trials lasted less than an hour, and most of the defendants were not present at the first.

U.S. aid to Egypt is about $1.5 billion per year, and the U.S. embargo against Cuba dates from 1960. 

Monday, April 28, 2014

A new step on state enterprises (updated)

Cuban officials regularly say they are in the hard part of the reform process, and today they took a step forward by publishing new regulations on state enterprises. 

Today’s action was previewed last July by reform czar Marino Murillo, who expressed weariness at subsidizing businesses that can’t make it on their own. 

This is not an easy challenge.  Anyone can run a profitable hotel in Varadero, but thousands of Cuban enterprises have their origins in past decades where Cuba’s planned economy was connected to those of the Soviet bloc, and many – including in agriculture – are not profitable.  State enterprises belonged to ministries, and the ministries had to approve decisions big and small, including purchases of supplies and payroll changes such as dropping one engineer and adding two janitors.

As defense minister, Raul Castro began to tackle this problem in the 1980’s through a process called perfeccionamiento empresarial.  It is still being implemented today, although it never reached all state enterprises.  Its main features were cleaning up a company’s books, doing a tough diagnosis and planning exercise, giving managers greater authority and autonomy, and instituting incentive pay and profit sharing.  Today’s new regulations include many of these features, and they also give businesses flexibility to enter new and more profitable lines of work.  Today’s regulations are also incredibly detailed, presenting long, detailed lists of the functions of enterprises and managers – old habits die hard. 

Another difference in today’s context is that ministries are spinning off the businesses under their control to organizaciones superiores de dirección empresarial, where the businesses are supposed to function with greater autonomy.

These are rational economic measures – separating businesses from the ministries, giving managers more autonomy, institutionalizing incentive pay and profit sharing for workers. 

The hard part is politically hard – allowing managers to lay off excess workers and living up to the commitment to close state enterprises that can’t survive without subsidies. 

Those tasks are essential to a major goal of the reform program, which is to improve government finances.  They will be easier to carry out to the extent that other parts of the refoms proceed – more private sector job creation and the creation of new jobs and businesses through new foreign investment.

Here’s coverage from Granma and AP.

Update: further explanations of the policy in today’s Granma, and coverage from Reuters.

Wednesday, April 16, 2014

Odds and ends

  • Granma published the text of the foreign investment law today.

  • In the Mariel economic zone, as in foreign investment projects in general, workers are hired and paid through an employment agency.  Payment is made in hard currency, the agency keeps most of the money and pays the workers a normal Cuban wage.  Foreign businesses then make side payments to the workers to raise their wages and productivity, which is why jobs with foreign businesses are sought-after.  Trabajadores reports that in the Mariel economic zone, the agency will no longer have a “revenue-collecting” function and will pay workers 80 percent of the wage negotiated between the foreign business and the agency.

  • Reuters on Cuba’s new private non-farm cooperatives; more than 450 are now operating in the program’s “experimental” phase.

  • Granma: the new labor code makes Good Friday a holiday in Cuba, this week and permanently.

  • A granddaughter recounts an interview that her grandfather Clark Hewitt Galloway conducted with Fidel Castro in 1959.

  • Dodger phenom Yasiel Puig’s flight from Cuba was harrowing, and still is so, recounted in detail by Los Angeles Magazine in English and Spanish.


“The government of the Islamic Republic is clearly an adversary, but it is also a rational actor…the United States must make clear that we do not seek to overthrow the Iranian regime.  Iranian paranoia on this issue is virtually limitless and understandably so.  In 1953, the American and British intelligence services ousted a democratically elected Iranian prime minister, an episode that very few Americans remember and no Iranian will ever forget.”

– Former Ambassador Ryan Crocker, dean of the Bush School of Government and Public Service at Texas A&M, advocating negotiations with Iran in the New York Times last November

Friday, April 11, 2014

Alan Gross suspends his hunger strike

His announcement today:

Alan Gross Suspends Hunger Strike at his Mother’s Urging, Announces There Will Be Further Protests to Come

From prison in Havana, Alan Gross spoke to his attorney, Scott Gilbert, and declared that he is suspending his fast as of today. He dictated the following statement to Gilbert:

“My protest fast is suspended as of today, although there will be further protests to come. There will be no cause for further intense protest when both governments show more concern for human beings and less malice and derision toward each other.”

Gross’s family and friends have been very concerned about his health and have asked him to end his fast. Gross explained to Gilbert that he is suspending his fast today because his mother asked him to stop. She will be 92 years old on April 15, the first day of Passover.

Gross has been imprisoned in Cuba for four years and four months. He has asked President Obama to personally intervene to help bring him home.


“What Cuba needs is to free up the raising of cattle and the sale of milk and beef by prívate farmers, and to permit them to buy the necessary supplies directly from foreign suppliers who operate in Cuba, without government intervention.  You will see that within five years the problem of milk will be solved.”

– from a comment signed “Elsa Beltran,” one of many on Granma’s story on the hike in the price of powdered milk