Odds and ends

● Cardinal Jaime Ortega and bishops and clerics from all Cuba’s dioceses are in Rome for a week-long encounter with Pope Benedict XVI to discuss the state of the church in Cuba. Notimex report here, Cuban Colada’s summary in English here.

● Panama’s president is in Cuba; AP reports that an agreement on energy, plus discussions of health care and Cuban debt, are on the agenda.

● A story in Mexico’s El Universal, based on Mexican foreign ministry sources, adds to the rumor that Cuba will eliminate the tarjeta blanca exit permit requirement and make other changes in migration policy. It says the changes will be announced within two weeks, and that the Cuban policy changes will lead to signing of a migration accord between Mexico and Cuba to help reduce the flow of illegal immigration to Mexico. How the agreement would do that, the article doesn’t say.

Two Republicans on Cuba

In Miami last weekend, Senator McCain reiterated his position on Cuba. From El Nuevo Herald (my translation): “Raul Castro wants our aid, but there will be none until there are elections, they free political prisoners and allow human rights organizations to work effectively.”

Meanwhile, a friend sent this item from the Charlie Rose Show – former Secretary of State George Shultz, from the Reagan Administration, on Cuba: “I think our policy of sanctions against Cuba is ridiculous. During the cold war it made sense because it was a Russian base. And they used it for flying spying missions, and so on, but that’s over. And all we do by our sanctions is allow Castro, and now maybe his brother, to blame the problems of Cuba on us. And at the same time I think particularly now that there’s some transitioning of some kind probably coming about, we’re much more likely to get a constructive outcome if there’s a lot of interaction. And to try to prevent interaction under these circumstances, I don’t think is sensible.” You can see it here, on the April 24 program, around the 30-minute mark.

Announcements from Cuba [updated]

Raul Castro announced yesterday that a communist party congress, the first since 1997, will be held in the second half of 2009. Also, from the Reuters story: “He said an executive body, made up of the same seven officials who hold the Council of State presidency and six vice presidencies, and with an average age of more than 70, would make day-to-day decisions for the Political Bureau until the Congress. This would imply that Fidel Castro is no longer active in party affairs, though the two brothers insist he is still consulted on all important matters of state.” In addition, he announced that some death sentences are to be commuted, although the death penalty remains on the books. See coverage from Reuters here and here, and from AP.

[Update: It’s hard to envision that the naming of the “executive body” mentioned above will have an impact on decisionmaking, considering that it’s the same seven individuals who are already at the top of the council of state. But this morning I left out something that is at least of symbolic importance: the creation of this group puts an end to Fidel Castro’s July 2006 ad hoc designation of specific officials to supervise specific policy areas during his illness. Raul Castro’s statement is here.]

Separately, modest increases were announced in pensions, social assistance payments, and salaries of court and justice ministry employees, and a five percent social security tax will “gradually be extended” to workers who do not now pay the tax. Granma (English) here.

CANF: Overhaul the USAID program

The Cuban American National Foundation (CANF) has issued a thorough report (pdf, 22 pages) on the USAID Cuba program. It traces the history and original purposes of the program, and it calls for major changes in the program at a time when its funding is increasing and USAID is reportedly considering a shift away from Miami groups that have received most of its grants.

The key issue it discusses is the decision made by a USAID official in 1996, at the program’s inception, to prohibit cash assistance to people and organizations in Cuba.

This decision, not required by law, has remained in place all through the Clinton and Bush Administrations. CANF wants it reversed; it says it is the “single most direct cause of the substantive failures of Cuba democracy support programs.”

By “substantive failure,” CANF mainly means the fact that a minority of USAID program funds result in resources that reach Cuba.

CANF examined four grantees that received $24.5 million from USAID between 1998 and 2005 – the Center for a Free Cuba, the Directorio Democratico Cubano, the Grupo de Apoyo a la Democracia, and Accion Democratica – and found that 36 percent of funds were spent on resources that reach Cuba; the rest are spent off the island, an “egregious misdirection of resources,” CANF says. The percentage of funds reaching Cuba for these four organizations was, respectively, 19 percent, four percent, 81 percent, and 27 percent.

USAID probably sees things otherwise. One of the goals of the funding, CANF notes, is to “build solidarity with Cuba’s human rights activists.” That can be interpreted as providing direct aid to dissidents. But it can also mean paying U.S. groups to encourage Europeans and Latin Americans to get involved in the issue, through conferences, solidarity networks, grants to organizations overseas, etc.

One can debate whether political activity in third countries has any impact, or is a good use of taxpayer money, but it is within the scope of the program. The law authorizes “support for democratic and human rights groups in Cuba,” and USAID interprets that to mean both direct material support and political support from abroad.

The USAID program deserves to be debated, and CANF’s report and recommendations, which go far beyond the points I summarized here, deserve attention.

San Ignacio

"Structural" changes on the farm

Many of the policy changes made so far under Raul Castro involve public investment (the new bus fleet), ending nuisance regulations (pharmacies), or allowing Cubans to buy things previously off-limits (cell phones, hotels, computers, dvd’s). I don’t scoff at these changes, but they are not big economic policy measures geared to generating increased output, jobs, and incomes.

Agriculture seems to be a different story, where the “structural” changes called for by Raul Castro may indeed come into being.

Right up front, one has to say that Americans – with our agricultural subsidies, government-driven land allocations, and distortion of market signals through tariffs, ethanol mandates, and other measures – are not in the best position to discuss “socialist” farm policies in Cuba, and we should hope the Cubans don’t look our way for a model. (See here for the side effects of ethanol policies, and here for a look at the farm bill under consideration in Congress.)

Since the economic crisis of the early 1990’s, Cuba’s agriculture sector has had a measure of incentives and market mechanisms. All producers, from individual private farmers to all varieties of cooperatives, have to deliver a quota to the state – but they are then free to sell any surplus on the open market. That surplus production, most supplied by private farmers, is sold at market prices at 300 farmers markets across the country. (Study here, pdf.)

But Cuba produces far below its potential, many of the larger farm cooperatives have never turned a profit, and Cuba’s annual food import bill is now about $1.6 billion. Raul Castro has focused on agriculture – he settled debts to producers and raised prices paid to producers for milk and beef, and he called for broader changes in his speech last July.

These are the changes under way:

● Idle lands are being distributed to private farmers – the most productive of all Cuba’s producers – and cooperatives. This report says that half Cuba’s agricultural land is idle or underutilized.

● The agriculture ministry bureaucracy is being reorganized, and decisionmaking is being decentralized. Offices are being created at the municipal level, with the promise that decisions once made by central authorities will be made in Cuba’s 169 municipalities, with the benefit of local knowledge. These offices are to make decisions about land distribution, delivery of products to market, and other matters. Also, some of the agriculture ministry’s enterprises are being combined. Here’s a report on this from Camaguey, and another from Havana province.

● Producers are increasingly selling directly to local state institutions (schools, hospitals, businesses) instead of selling to a state enterprise that would then distribute the product. This report says that the “intermediary enterprises” will “become providers of services” to cooperatives. This article discusses the same thing. (It used to be that discussion of eliminating “intermediaries” meant going after those Cubans who earn a living by transporting produce and re-selling it to vendors in the farmers markets. There has never been a real crackdown on these alleged profiteers, surely because the markets would grind to a halt without them.)

● Stores are being created where farmers can buy tools, and farmers are being given credit to make purchases at these stores. This is a small step to reverse an absurd, decades-long policy where the state distributed supplies of its choosing, when it chose, to whom it chose – and farmers’ actual needs were not a driving factor.

● On a lighter note, when it comes to getting rid of marabu, the bush that takes over idle fields, Granma reports that two guys in Las Tunas have found a great way to kill it: flood the fields for 72 hours, clear the field, then plant something else.

If you sum this all up, it looks promising. One step alone, the distribution of additional land to private farmers, is almost guaranteed to raise production and put Cuba on a path toward lower imports and lower food prices. But much remains to be seen.

The key to the incentive structure for all agricultural producers in Cuba is the amount of product they are required to deliver to the state, which in turn determines the amount of product they can sell for profit on the open market. Will the state tilt this ratio in favor of farmers and cooperatives, and thereby increase their incentive to produce and their chance to earn higher incomes? And regarding the new municipal-level offices of the agriculture ministry, how much autonomy will these offices have, and what kinds of decisions will they make?

Finally, there has been talk of eliminating the libreta, the ration book that is the mechanism for distributing heavily subsidized staples to every Cuban household. And we are seeing reports that there is a decreasing reliance on the state as the buyer, transporter, and distributor of food, and increasing use of direct sales to end-users. If the result of all this is elimination of the huge state distribution system in agriculture (the acopio) and a new policy where the state abandons mass rationing and instead targets food aid to those in need, that would mark a very large “structural” change, one that could point to later policy moves in other economic sectors.

Regarding all this, some good journalistic accounts are these: from Reuters in English, and from La Jornada in Spanish, here and here.

Odds and ends

• In ten days, 7,400 Cubans signed up for cell phone contracts.

• Cuba has a new education minister, and Fidel Castro took the occasion to kick the old one as he was on his way out the door: he was “spent,” was taking one trip abroad per month, had lost “revolutionary consciousness,” and no one had confidence in him anymore. In this “special and important case,” Fidel writes, “I was fully consulted and informed.”

• From Fortune magazine, a brief look at U.S. companies’ property claims in Cuba. The author of the Creighton University study of the subject (discussed here and here) tells the reporter that U.S. companies don’t want to be paid for their claims in money; rather, they want their “assets back or replacement assets or development rights.” In other words they are looking for a way to do business there, and their claims should count for something if and when they do. Of course, they can’t cut a deal of that type until the embargo ends. But the idea that for some corporate claimants, claims could be settled as part of deals that move the Cuban economy forward, as opposed to simply adding to Cuba’s financial burdens, is positive.

• Has anyone seen, anywhere on the Internet, the “Agenda para la Transicion” document announced last week, where dissidents agreed on more than 30 items regarding Cuba’s future?

• Speaking of dissidents, another article from Luis Cino at Cubanet (h/t Penultimos Dias) where he discusses the challenges facing Cuba’s opposition. To paraphrase: 1) repression; 2) irrelevance.

• The Economist, taken by the rumors that Cuba will legalize car sales, looks at the state of the market now.

Hoops at night, 23 & B

Odds and ends

• The State Department spokesman started his briefing last Friday and ran into a series of questions on Cuba, where reporters asked why the Administration welcomes and encourages incremental changes in some countries, but not others. The Herald’s Cuban Colada summarizes the exchange; the full transcript is here.

• Cuba’s food importer tells AP that rising food prices will cause Cuba to spend 20 percent more in 2008 to import the same amount of food as last year.

• Added to the blogroll at right: Miami and Beyond, an eclectic blog with sharp commentary on Cuba, written by Alex, formerly of Stuck on the Palmetto.

• When in Rome…AP’s Will Weissert decides to find out what the fuss about Cuban cigars is all about.

Havana demonstration broken up

Cuba’s Damas de Blanco, demonstrating yesterday morning for the release of their jailed relatives near the Plaza de la Revolucion, were forcibly removed from their sit-in site, packed onto a bus, and driven home.

Reuters account here. A Christian Science Monitor reporter, in Havana, describes the Damas’ movement.

And a BBC report from Havana (in Spanish) puts the action in the context of overall opposition activity. The Damas, correspondent Fernando Ravsberg writes, are “the only dissident group that undertakes street activities. The bulk of the opposition has limited itself to working indoors, with press conferences, meetings, and statements.” Ravsberg describes divisions within the movement regarding political issues and tactics in the face of a government that “practically every week announces changes, the large majority of which are well received by the public.” The movement, he writes, is “small, divided, and with very little social influence.”

I’m sure that many will read that as criticism, but Ravsberg is leading to an interesting question. If changes in Cuba continue, and especially if additional changes materially affect all Cubans, not only those with hard currency to spend, will that change the political context in which the opposition operates? Will it change tactics? Should it?

[Reuters photo]

More reforms to come?

Wilfredo Cancio’s story in Sunday’s El Nuevo Herald claims that more reforms are in store. His reporting is based on anonymous government sources in Havana who said the following changes are on the way:

• ending the requirement for Cubans to obtain an exit permit to travel abroad;

• “free rental” of homes to Cubans and foreigners (this can already be done by Cubans who obtain a license and pay tax accordingly; it’s not clear if the license requirement, the tax, or both will be done away with);

• unrestricted sales of privately owned cars; and

• ending restrictions on internal migration, which mainly affects Cubans moving to Havana.

According to the article, other ideas are under study, such as increasing the Cuban peso’s value against the convertible peso, from 24:1 to 19:1, easing restrictions on Cuba’s small entrepreneurs, and initiating government sales of cars – Ladas for 9,000 convertible pesos.

Petition for migration policy reform

Pedro Riera Escalante, a former Cuban intelligence official, last week submitted a petition to the National Assembly in which he seeks a national referendum on a proposal to change Cuban law. His proposal includes, among other provisions, abolishing the exit permit so Cubans can travel abroad freely, eliminating barriers to Cubans returning to Cuba, giving Cubans abroad the right to vote, and guaranteeing that Cubans who leave the island to reside abroad do not lose their property.

AFP describes Riera Escalante’s proposal and his personal history here in English. El Nuevo Herald’s treatment is more detailed and links to a pdf of the proposal itself. The proposal, of course, comes amid rumors that the government has already decided to abolish the exit permit requirement.

It’s an interesting proposal for a radical change in Cuban policy, and it does not come from the opposition composed of dissident groups. Riera Escalante frames his proposal by favorably citing Raul Castro’s calls for strong debate and by applauding the government’s signing of the UN human rights conventions. He refers to Cuba’s 1940 constitution as a possible foundation for the right to depart and return. And in his proposal, he writes that his ideas could “contribute to a climate favorable to the elimination of the restrictions established by the government of the United States on travel and the sending of remittances to Cuba.”

Antonio Gades

A statue of the late Antonio Gades, Spanish dancer and choreographer, in the Plaza de la Catedral.

Odds and ends

• A New York agricultural trade delegation is en route to Cuba. Meanwhile, last year’s trip by an Idaho delegation seems not to have paid off.

• Two stories from AFP: The White House says the changes in Cuba are “cosmetic;” while Admiral James Stavridis, head of the U.S. Southern Command, says, “I think it is too early to tell as yet, but it is interesting that Raul is opening some of the economic freedoms such as cellphones, access to tourist hotels, property rights. We need to watch to see if this is a sincere change or just cosmetic.”

• Cuba’s minister of basic industries says that the Repsol-led consortium will drill again in Cuba’s Gulf waters in 2009, Reuters reports. Previously, the new drilling had been slated for this year. Repsol last drilled in 2004.

• There are many reasons why the Cuban government is trying to improve the agricultural sector. One is to substitute national production for expensive imports. See this item from the Economist, showing that since January 2007, the price of rice is up more than 250 percent, and corn and wheat are up more than 150 percent.

• On Cuban television this week: The Sopranos and Gray’s Anatomy.

Exit permits to be eliminated?

Spain’s El Pais reports from Havana that the requirement that Cubans obtain an exit permit (tarjeta blanca) from their own government before traveling abroad, will soon disappear for nearly all Cubans. The requirement for letters of invitation will also go, the paper says. The article cites “sources close to the government” who say the decision has already been made, and only a few details remain to be ironed out.

Mercury...

...atop the Lonja de Comercio.

Odds and ends

• $1,087, $411.04, $400 – those are fines levied against Americans, according to a recent OFAC enforcement report (H/T Havana Journal) for “allegedly dealing in property in which Cuba or a Cuban national had an interest.” In these three cases, that meant buying Cuban cigars on-line. Let’s hope the cigars weren’t fakes.

• Is there a potential for revolt among Cuban youths, as has been speculated? No, that’s “wishful thinking” according to Cubanet writer Luis Cino, writing from Havana.

• “The Castro Clan,” a fact sheet from the University of Miami’s Cuba Transition Project, lists Castro relatives in government and party positions in Cuba. It includes Marcos Portal, “married to Raul Castro’s niece,” as being “in charge of nickel industry.” The fact sheet notes, “Two former officials of the Cuban government, Roberto Hernandez del Llano and Eugenio Yáñez, contributed to this report.” Did I miss something? Wasn’t Portal dumped from his position as minister of basic industries in 2004?

• The idea of replacing Little Havana’s Bay of Pigs Museum with a new one on bayfront land north of the American Airlines Arena was deferred for further study by Miami-Dade commissioners.

A change in housing policy (corrected)

If there’s one thing that’s clear about the changes taking place in Cuba, it’s that there is no roadmap, no published 20-point plan, no guide for observers there or here who are looking for an endpoint. Sometimes I guess that Cuban officials, when it comes to removing “prohibitions” or trying to improve economic performance, are rolling out measures one by one, seeing how each one works out, and deciding that they will decide sometime in the future what the endpoint will be.

One example came last week. Salary ceilings are being lifted and workers are going to be able to earn more, according to their output. But how much more? In Cuban pesos or in hard currency? And what will the incentive structure be? In time, we’ll find out.

And then last Friday came news of a change in housing policy.

Maybe it’s the start of a broader reform that will someday allow Cubans who hold title to their homes to price and sell them. According to AP, two housing officials said that more changes in housing policies are to come.

But the action taken last Friday was narrow. It affects Cubans who are by law entitled to gain title to their homes after paying rent for 20 years. The change streamlines the bureaucratic process for acquiring title.

It is not, as I thought when I first heard the report, a decision to allow Cubans who have rented properties – and had no prospect of owning them – to become owners. That decision was made long ago. What changed is the procedure by which certain renters can become owners.

This new procedure is related to a 1987 resolution and a 1988 law that govern housing that is “vinculada,” i.e. linked to a government entity that rents housing to its workers. Examples include members of the military, sugar workers, and others.

That law and resolution established that after 20 years of paying rent, the workers are entitled to own the property. Since the entitlement was established 20 years ago, large numbers of Cubans are now at the point where they can claim ownership.

The new procedure sets forth how the workers’ “right to transfer” – or that of their heirs – is to be exercised. Workers can start the process without waiting for the employer to start it, the municipal housing office (rather than a provincial or national bureaucracy) can carry it out, and once a document is delivered indicating that the process is complete, that document serves as title to the property.

With title, Cubans can bequeath property to heirs or seek a license to rent it in national or convertible currency. They cannot sell it, but in fact there is a real estate market of sorts. Legally, they trade properties, and under the table they transfer money that makes up for the difference in value.

The decision, a resolution issued by the housing institute and published in the Official Gazette, is here. Reuters coverage here. AP coverage here. (Correction: I'm told that family doctors' housing is not in the category covered by the resolution, and deleted that from the post.)

Bay of Pigs comparison

Don Bohning, the Miami Herald’s venerable former Latin America editor and author of The Castro Obsession: U.S. Covert Operations Against Cuba 1959-1965, asked one of his sources to compare the current war in Iraq with the Bay of Pigs debacle. The source, Jack Hawkins, 91, was a military advisor assigned to the CIA during planning of the Bay of Pigs operation. The result was an article in yesterday’s Herald, a very interesting read.

Odds and ends

• A mass was celebrated last weekend to re-inaugurate a church that was confiscated in 1975 and used as a warehouse and disco, AFP reports. The church is in Tarara, a big housing development on the coast about 10 miles east of Havana, which I understand is now full of Chinese students studying Spanish.

• A group of 18 dissidents led by Martha Beatriz Roque issues a “transition agenda” that needs to be carried out in an “atmosphere of reconciliation.” Its points include freeing political prisoners, ending police action against the opposition, and economic liberalization. (If anyone has a link to the document itself, please pass it on.) Oswaldo Paya did not sign on. No recommendation was made regarding the U.S. embargo, an issue “that divides us,” Roque said.

• A report on Russian investment, by state and private companies, in Cuba’s aviation infrastructure. And from Venezuela, an announcement (without much detail) that funding is approved to build an iron and nickel foundry with Cuba.

• Another article on the purchasing power/income inequality problem, this time from AP.

[Photo: Havana, Palm Sunday]

Salary limits to go

Reuters’ Marc Frank reports on a statement on Cuban television announcing that ceilings on Cuban state-sector salaries will be removed, and workers’ earnings will increase with their productivity.

This seems to be less than the comprehensive new salary policy that was to be formulated some time ago. But it’s another sign that in order to increase output, more incentives will be employed and more inequality will be accepted. From the same reporter, a second story on the income inequality in Cuba’s labor force now.

Foreign investment in agriculture?

Raul Castro says Cuba needs more foreign investment.

There are three ways to get it. Cuba could work harder to market Cuba as an investment destination. It could improve Cuba’s investment climate. Or it could open sectors that have been largely closed to foreign investment, such as agriculture.

It seems that the last option is being followed. La Jornada reports on a press conference by foreign investment minister Marta Lomas, where she says the “fundamental effort” in agriculture remains Cuban alone, but points to the possibility of joint ventures to increase rice and cattle production.

La Jornada also says there are proposals circulating that would create joint ventures to supply the tourism sector. This would reflect an admission that the current system, where a few state enterprises are assigned the task of supplying food to the tourism sector – and tourism businesses cannot contract directly with farmers or cooperatives – has failed. After more than a decade of tourism development, Cuba still imports fruits and other fresh produce for hotels.

A second report (in English) on Lomas’ comments is here.