After a 14 year hiatus, there are signs that Cuba is ready to re-enter the world of international finance by reopening debt negotiations with the informal group of wealthy creditors known as the Paris Club, Reuters reported yesterday. Any negotiations would involve the restructuring of nearly $18 billion in debt—which does not include about $18 billion worth of Soviet-era debt forgiven by club-member Russia in 2013—and increased transparency on the part of Cuban government officials.
While the Paris Club includes the U.S. amongst its 19 members, the a special working group on Cuba that would participate in debt negotiations excludes the United States. Since 2011, Cuba has restructured its debts with China, Japanese commercial creditors, Mexico, and Russia, meeting its debt repayment obligations to those countries under the new plans.
Although the U.S. will not be able to participate in the debt negotiations, a recent report released by Americas Society/Council of the Americas’ Cuba Working Group details steps that President Obama can take to ensure that the U.S. isn’t excluded in financially supporting Cuba’s emerging non-state sector, despite the constraints of the 54-year-old embargo.
Since 2000, the Havana Film Festival in New York has been bringing Latin American cinema to New Yorkers—and after 15 years, it is still going strong.
Despite its name, the festival doesn’t limit itself to showing Cuban films. Its goal, said creative director Diana Vargas, is to place Cuba within a larger Latin American context and generate a better understanding of the region. This year’s festival includes 45 Latin American films—of which 26 are Cuban productions from the past 55 years. While the festival hasn’t always featured a majority of Cuban films, this year’s selection centered on films from the island as part of the festival’s 15th anniversary celebration.
Cuban and migrant-themed films dominated the closing night awards presentation at the NYC Directors Guild Theater on Friday. They competed for the Havana Star Prize in the categories of "Best Feature," “Best Director,” “Best Documentary,” “Best Screenplay,” “Best Actor,” “Best Actress,” and “Special Jury Mention.” No one seemed surprised when Conducta (Behavior), the newly released Cuban box office hit about a young boy and his sixth grade teacher, won the “Best Feature” award. Conducta filled the NYC Directors Guild Theater during the opening of the festival on April 3, as well as the Quad Cinema in its second showing the following Saturday evening.
Cuban director Jorge Perugorría's latest film, Se Vende (For Sale), also packed the Quad Cinema on Tuesday night. The audience laughed at the dark comedy’s morbid humor and social commentary. Se Vende tells the story of a young Cuban woman who is forced to sell her deceased parents’ bones for some extra cash. “It is a metaphor for Cuba’s recent economic changes taken to the extreme,” said Perugorría. “As Cubans, we have developed a great capacity for survival. Since we were born, we were in crisis [...] but that hasn’t taken away our will to live.”
This week's likely top stories: a deadly fire ravages Valparaíso, Chile; French Foreign Minister Laurent Fabius visits Cuba; Glencore sells Las Bambas mine to Chinese consortium; Venezuela investigates abuses during protests; a shipwreck spills fuel off the coast of Colombia.
Fire in Valparaiso, Chile: At least 12 people have died in a disastrous fire in Valparaíso, Chile that has forced some 10,000 people from their homes. The fire started on Saturday and rapidly engulfed the historic seaside city, whose town center is an UNESCO World Heritage Site. Many of Valparaíso’s buildings are perched on hillsides and susceptible to fire, posing a great challenge to the 1,200 firefighters that have been dispatched to the city. High winds fanned the blaze on Saturday night and the fires could still spread. The Chilean Red Cross has appealed for donations, and President Michelle Bachelet is in Valparaíso to oversee the emergency response. Meanwhile, a forest fire in the Colombian department of Boyaca has consumed at least 250 acres of land in the last three days, also due to high winds.
France’s Fabius Meets with Raúl Castro: French Foreign Minister Laurent Fabius met with Cuban President Raúl Castro on Saturday to discuss politics, human rights and economic reforms in Cuba, just weeks after the European Union agreed to begin negotiations with Cuba. Fabius’ meeting with Castro was the first visit to Cuba by a high-ranking French official in 31 years. Talks between the EU and the Cuban government are expected to begin on April 29 in Havana.
Glencore Sells Las Bambas Mine to Chinese Consortium: A consortium of Chinese companies announced Monday that it will purchase Peru’s Las Bambas copper mine from Glencore Xstrata for approximately $6 billion. The deal is expected to be complete by the end of September, but the consortium has agreed to cover costs of developing the mine from the beginning of 2014 until the transaction closes. The open-pit mine is currently being constructed and is expected to initially produce two million tons of copper a year.
Venezuela Investigates Abuses During Protests: Venezuela’s strategic command chief, Vladimir Padrino, said that 97 members of the country’s security forces are being investigated for abuses committed during the country’s two months of protest. So far, at least 41 people have been killed since the protests began on February 12, and some 2,000 people have been detained. Padrino said that the Venezuelan military has committed “some excesses,” but added that the officers being investigated represent less than 1 percent of the force.
Drummond Says Diesel Spilled in Shipwreck: A barge carrying construction materials off the Northern coast of Colombia for Drummond Co. Inc—a U.S. based mining company and Colombia’s second biggest coal miner—was shipwrecked on Friday, causing diesel fuel to leak into the sea. Drummond said that the cause of the accident is being investigated, but did not provide an estimate of the amount of fuel that was spilled. The company was fined nearly $3.6 million in December for spilling tons of coal into the ocean in a prior accident off the coast of Santa Marta, and its port was shut down between January and April. The company is still working to comply with new infrastructure requirements designed to lessen spillage.
Unchallenged Costa Rican Candidate Wins Presidency: Luis Guillermo Solís of the Partido Acción Ciudadana (Citizen Action Party—PAC) won Sunday’s presidential election in Costa Rica, claiming 78 percent of the vote. The challenging candidate, Johnny Araya of the Partido Liberación Nacional (National Liberation Party—PLN), dropped out of the running after a March 5 opinion poll ranked his support at 22 percent, compared to Solís’s 64 percent, but remained on the ballot due to constitutional law. The monumental vote marks the first time in 44 years that a third-party candidate has been elected. Solís has vowed to strengthen small businesses and social and environmental programs through an activist government, however passing new legislation may prove difficult as PAC holds just 13 of the 57 seats in the National Assembly. Solís will be sworn into office on May 8.
Pressure Increases on Obama Administration over Deportations: A New York Times report has shown that two-thirds of the nearly two million undocumented immigrants deported under the Obama Administration—a record number of deportations—had either committed minor infractions or had no criminal record at the time of their removal. Only 20 percent of those deported had been convicted of serious offenses, the demographic the Obama Administration has purported to target for removal. The President has typically side-stepped executive authority to act on this issue—with the exception of the 2012 passage of Deferred Action for Childhood Arrivals (DACA), which temporarily suspends deportation and authorizes approved applicants to work in the U.S. legally—in order to allow Congress time to move forward with comprehensive immigration reform. Yet pressure is mounting on his administration to halt deportations and fix the country’s broken immigration system.
Venezuela Slams Spain for Halting Export of Riot Gear: The administration of Venezuelan President Nicolás Maduro questioned the “moral authority” of the Spanish government after it halted the export of anti-riot and police equipment to Venezuela. Spanish Foreign Minister José Manuel Garcia Margallo said on Saturday that his government suspended sales in order to stop adding “fuel to the fire when there is a conflict.” The decision comes after weeks of violence between protesters, police and armed militia that have killed 39 people and injured over 600. A new round of protests erupted on Friday after Venezuela’s attorney general charged opposition leader Leopoldo Lopez with inciting violence, arson, damage to property and conspiracy.
FIFA Admits Brazil Is Still Behind Schedule: With less than 70 days before the 2014 World Cup kicks off in Brazil, FIFA’s Secretary General Jerome Valcke said that preparations are still behind schedule. During a press conference in South Africa on Wednesday, Valcke said, "If you want me to summarize... we are not ready.” Two stadiums, the Itaquerão in São Paulo and the Estadio Beira Rio in Porto Alegre, remain unfinished. Construction at Itaquerão, the venue for the opening match on June 12, has been delayed due to the death of a worker two weeks ago—the third to die while working on that stadium and the seventh preparing for the tournament countrywide. Still, Valcke guaranteed that Brazil would be ready for the start of the tournament, insisting that “there is no Plan B.”
The U.S. Agency for International Development (USAID) covertly created “ZunZuneo”—a Cuban version of the online messaging network Twitter—to cause civil unrest in Cuba, the Associate Press reported on Thursday. The program functioned through cell phone messaging to avoid the Cuban government’s controls over internet use, and planned to build a network that could mobilize quickly and potentially “renegotiate the balance of power between the state and society."
The program was activated in 2010 shortly after USAID subcontractor Alan Gross was arrested for distributing communications equipment in Cuba. It ended in 2012 and, at its peak, drew more than 40,000 Cuban subscribers. According to the Cuban press, ZunZuneo disappeared suddenly in 2012 when its funding ran out, and its users were unaware that the network had any ties to the U.S. government.
White House spokesman Jay Carney has denied that the program was covert, stating that it was “discrete” in order to ensure long-term success of the mission and that it was debated in Congress. According to Carney’s statement, the White House supports "efforts to help Cuban citizens communicate more easily with one another and with the outside world."
Cuba Approves New Foreign Investment Law: The Cuban government on Saturday unanimously approved a law that provides new incentives for foreign investment in the island. The law will reduce taxes on profits from 30 to 15 percent in most areas, will speed up the approval process for foreign investment, and will exempt new investors from paying taxes for eight years, among other incentives. The government hopes that the new law, which will come into force in three months, will help triple the country’s economic growth. However, the law will not become official until the full text is published in the Gazeta Oficial, which is expected to happen sometime this week.
Troops Clear Venezuelan Protest City: Venezuelan troops retook control of the western city of San Cristóbal this weekend, according to a top military commander. General Vladimir Padrino said that troops cleared barricades throughout the city and reported that no one was hurt in the operation. Meanwhile, San Cristóbal’s mayor, opposition member Daniel Ceballos, has been removed from office and sentenced to 12 months in prison for failing to order the removal of the barricades himself. The countrywide protests began in San Cristóbal nearly two months ago, and since then, at least 39 people have been killed. Last Friday, the Vatican said that it was willing to help facilitate a dialogue between the Venezuelan government and the opposition to resolve the crisis.
Solís Lacks Opponent in Costa Rican Presidential Runoff: Costa Rican presidential candidate Luis Guillermo Solís still has no opponent in Sunday’s presidential runoff between the ruling Partido de Liberación Nacional (National Liberation Party—PLN) and Solis’ Partido de Acción Ciudadana (Citizen Action Party—PAC). PLN candidate Johnny Araya dropped out of the race on March 5 due to financial troubles and a poor showing in the polls, where PAC candidate Solís enjoyed a 44 percent lead. However, Araya’s name will still remain on the ballot, and he said he would accept the presidency if voters gave him a majority—though Solís’ victory seems assured.
Brazilian Troops Occupy Maré Favela: Brazilian security forces raided the Maré favela in Rio de Janeiro on Sunday in an effort to take control of the neighborhood, which is home to 130,000 people. More than 1,000 troops entered with tanks and reportedly took control of the area in 15 minutes, seizing guns and drugs. But later that day, more violence erupted between rival gangs, a 15-year-old boy died, and three other people were taken to a hospital. Maré is located near Galeão/ Antônio Carlos Jobim International Airport, a major transit hub that will bring thousands of tourists into the country for the FIFA World Cup in June.
Chinese Mining Company Halts Toromocho Project in Peru: Chinalco Mining Corp. International has halted its operations at the Toromocho copper project after the national environmental agency said on March 28 that the company had failed to adhere to environmental standards. Inspections carried out by the Organismo de Evaluación y Fiscalización Ambiental (Environmental Evaluation and Fiscalization Organism—OEFA) earlier this month detected contaminants in Lake Huacrococha and Lake Huascacocha, which are located near the mine. Mining work, which began in December 2013, will be suspended until the issues are resolved.
The Cuban Council of State called an extraordinary session of the National Assembly in order to debate and approve a new foreign investment law on Saturday, March 29, the state-run Granma newspaper announced Wednesday.
The new law is meant to replace that current cumbersome 1995 law that requires foreign companies to pay both a profit tax and a labor tax and is seen as a part of massive reforms taken under President Raúl Castro to aid the ailing Cuban economy. Along with the upgrading of the Mariel Port and the creation of the Special Development Zone that will exempt businesses from the 12 percent profit tax for 10 years, the Communist Party Congress approved over 300 economic reforms in 2011, including moving 20 percent of state workers into the non-state sector and authorizing the sale of homes and cars.
While details of the law remained unclear, it is expected to make Cuba more attractive to investors who have pulled out of the island over the past 12 years due in part to Cuba’s burdensome tax system. Cuba’s economy only grew 2.7 percent in 2013, and with its commercial relationship with Venezuela at risk due to ongoing protests in the South American country, the Cuban economy could contract 4 to 7.7 percent this year.
As tensions between the United States and Russia over the future of the Ukraine’s Crimean peninsula continue to rise, Moscow officials may look to beef up their country’s stronghold in Latin America.
Russian Defense Minister Sergei Shoigu announced on February 26 that his country is planning to expand its long-standing military presence in Cuba, Venezuela and Nicaragua, possibly bringing the U.S. and Russia’s icy diplomatic standoff into the Western Hemisphere.
Although Shoigu mentioned that Russia would also boost its armed presence in Vietnam, Singapore, the Seychelles and several other countries, Moscow’s anticipated embankment in Latin America will surely be perceived as a threat to U.S. defense policymakers.
“The talks are under way, and we are close to signing the relevant documents,” Shoigu said in a press conference in Moscow. “We need bases for refueling near the equator, and in other places,” he explained.
It is still unclear, however, whether Russia will construct new Moscow-owned bases in the proposed countries. Russia may only seek permission from already-existing naval defense ports to increase its access to military stations with refueling, maintenance and repair capabilities. The country’s only naval base outside the country is located in Tartus, Syria.
The United States released the second member of a group of five Cuban prisoners—known as the “Cuban Five”—from an Arizona prison on Thursday. Fernando González, 54, was convicted in 2001 of spying on military bases and Cuban exiles in South Florida, and is expected to be deported back to Cuba within days.
René González, a native of Chicago with dual citizenship, was the first member of the group to be freed in 2011, and returned to Cuba last year. The other members, Antonio Guerrero and Ramón Labaniño, will complete their terms in 2017 and 2024, respectively. The last member, Gerardo Hernández, is serving a double life sentence for conspiracy to commit murder after two planes flown by a Cuban exile group, Brothers to the Rescue, were shot down in 1996.
Over the last decade, the “Cuban Five” have been at the center of diplomatic tensions between the U.S. government and the Castro regime. The Cuban government allegedly offered to release the jailed USAID contractor Alan Gross in exchange for the freedom of the five Cuban prisoners, but Washington rejected the deal, saying that Gross did not engage in any intelligence-gathering on the island. The Cuban government jailed Gross on charges of committing crimes against the state, and he remains in prison.
González’ release comes two weeks after a national poll found that the majority of Americans support normalizing U.S.-Cuba relations.
In a recent interview with The Washington Post, Florida sugar magnate Alfonso Fanjul said he is ready to do business with Cuba “under the right circumstances.” The questions are: “what are the right circumstances?" and “who benefits when American companies ‘do business’ with communist Cuba?”
The Fanjul family left Cuba in 1959 when Fidel Castro confiscated all of its holdings. Eventually settling in Florida, the family rebuilt their lives and fortunes, benefitting from the price supports extended to American-grown sugar by Congress, and Fanjul corporations are now international in scope.
As reported in The Post, Alfonso Fanjul’s comments and meetings with Cuban government officials were promptly condemned by Cuban-American members of Congress who didn’t hesitate to point out that the interview included no discussion of the absence of civil liberties and labor and human rights in Cuba that foreign corporations already exploit.
Foreign companies “doing business” in Cuba are best described as “minority partners” of the Cuban government. Such companies don’t “do business” with Cuban entrepreneurs, they “do business” with the Cuban government, which obligingly “rents” those companies a compliant, uncomplaining labor force.
Cuba’s government sets the rental price that companies pay to the government. In turn, the government pays the employees somewhat less (usually a lot less), and keeps the difference. Complaining employees are fired —not by the company, but by the government—and replaced by someone “willing to work.” This is how Cuban communism works and finances the repression that sustains it.