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Cuba Business News

Posted November 24, 2003 by publisher in Business In Cuba

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[url=http://www.CyberCuba.com]http://www.CyberCuba.com[/url]

Cuban Economy

The Cuban economy continues its shift to become more diversified than relying simply on agriculture, esp. sugar cane, as a booster of Cuban Gross National Product. Cuba has closed many sugar operations and will be training “laid off” workers for the tourist industry.  Finished agricultural goods, such as cigars, continue to be expanded. Over 100 million Cuban cigars were manufactured in 1998.  2002 production will exceed 150 million cigars despite damage due to two hurricanes.  Cuba has lost its trademark infringement suit in U.S. courts for the “Cohiba” and “Havana Club” trademarks. Cuba has threatened not to protect trademarks of U.S. corporations within Cuba in retaliation.  The European Union is unhappy with the continuing trademark disputes between European companies using controversial trademarks derived from products and services arising from Cuba.  A new brand of Habanos, Vegueros, is being produced in the Francisco Donatien factory.  The cigars once reserved for visiting diplomats, the “Trinidad”, is now being produced in commercial quantities to be sold overseas.

Tourism is now the second largest provider of “hard currency” to Cuba.  Tourists increasingly boost the Cuban economy. President Coolidge visited Cuba in 1928. President Truman visited Cuba in 1948.  Cuba received 1.4 million tourists in 1998 and expects up to five million tourists per year by 2007. The Cuban government received another media windfall when the President Carter visited Cuba in Spring, 2002 and Governor Jesse Ventura in September, 2002. Governor Ventura even joked about being the first USA Ambassador to Cuba after USA Cuban political relations are normalized.

The Pope said, ” Cuba should open herself to the World, and the World should open itself to Cuba”, which is astonishingly similar to our motto, “Bringing the World to Cuba, and Cuba to the World”...ours since 1994. Even Cubana Airways has “borrowed” the first one-half of our slogan!!!

Cuba has officially joined the International Chamber of Commerce (ICC).  The ICC is based in Paris, France.  Cuba now has full privileges in the ICC to utilize all ICC resources available to members promoting international trade and investments. The International Court of Arbitration is part of the ICC. Cuba is trying to be the host for the Olympics.

Despite U.S. objections, Cuba has become a full member of ALADI.  Cuba nows has an opportunity for increased trade and exchanges with other ALADI members in Latin America. Paraguay is the latest South American nation to normalize relations with Cuba. The European Union is pressuring Cuba in the area of human rights and democracy.

CYBERCUBA®  receives many questions about the Internet and computers in Cuba.  It is one of our primary interests in a future Cuba.  Internet access costs about $260 per month for Cubans.  Needless to say, not many Cubans, whose average pay is $10 to $20 per month ,can afford private access to the Internet.  The antiquated phone systems, shortage of computers and other details have restricted the Internet Age in Cuba.  Internet access is provided for foreign diplomatic and business interests, embassies, research and governmental agencies and universities. InternetCUBA©, where the Internet meets Cuba, is a publication which will address the Internet and related issues in regard to Cuba.Internet Cuba

Foreign Investments

Japan will assist Cuba with two new aid projects.  Japan is Cuba’s largest debtor. One project will deal with diabetes in children and teens.  The other project will deal with sexually transmitted diseases.  Educational materials, laboratory testing, insulin, and therapies for the sexually transmitted diseases will be offered. Germany businessmen have asked the German government to address the debt issue between Cuba and former East Germany.  They want the issue to be resolved so Germany can actively participate in the new Cuban economy.

The French group, Pansea, has joined with Cubanacan to form a $52 million dollar venture called, Hotelera S.A.  Eight luxury hotels will be built throughout Cuba over the next five years. France is Cuba’s largest grain supplier. France trades sugar for wheat under a barter agreement.

Argentina has restarted debt repayment negotiations with Cuba. Only Japan exceeds Argentina as to which country Cuba is indebted. Argentina and Cuba wants a reasonable and attainable repayment schedule that includes provisions for bilateral trade and better relations between the countries. Argentina is embroiled in its internal economic problems also.

Sol Melia and Sherritt International have agreed to seek the authority to build an additional 14 hotels in Cuba over the next few years.  Sol Melia currently operates several successful hotels in Cuba, esp. Varadero and has announced in May that it intends to manage five more five star rated hotels in Cuba.  A recent royal visit by King Juan Carlos of Spain generated considerable interest by the global media especially since he stressed the importance of the formation and protection of true democracies in all countries and respect for basic human rights.

BLACK CUBA ™

Sherritt Power has commenced electricity generation in Cuba. Sherritt Power is a joint venture with the Cuban government and is affiliated with Sherritt International. A second power generating facility is planned in Cuba. Exploration for oil and other energy resources in Cuba is ongoing.

The British are stepping up the UK presence in Cuba with many joint ventures, a Havana office for British Airways, and a $30 billion financing package to bolster the Cuban economy.  British insurer, Heath Group, has begun a joint venture for insurance in Cuba. Britain sent a large delegation to the Havana Trade Fair. Italian investors have recently signed an $18 million dollar joint venture with Cubanacan Grupo.  The joint venture finances resorts in Santa Lucia and a 150 bed bungalow in Varadero. Varadero: The Good Life

Train tourism has begun in Cuba through a joint venture with a Dutch tour firm. The train tours of Cuba are two weeks in length and provide numerous stops and options for the tourist. ING Bank was the first international bank operating in Cuba. Holland-Cuba Line offers multi-purpose shipping liner service between Cuba and Europe. MelBridge Container Lines offers shipping between Cuba and Mexico.

Three “free-trade” zones now actively seek joint venture operations on the outskirts of Habana. There are hundreds of joint ventures in Cuba today with foreign firms. Five years ago, there were only about 60 joint ventures in Cuba. More than 140 of these foreign firms operate in these “free-trade” zones.

And now there are three:  B.M. Group of Israel joins Sherritt International and Grupo Domos as the third company whose officers’ and directors’ families and agents are barred from entering the USA until B.M. Group divests itself of holdings in Cuba specifically addressed by the 1996 Helms Burton legislation.  B.M. Group participates in an agricultural joint venture with Cuba.

Club Med Varadero has an “Indian village” style with 266 air-conditioned rooms, the luxurious Cohiba bar, and the Cienfuegos disco. The French L’Alliance Francaise has expanded its cultural activities from France to Cuba. There are numerous Franco-Cuban alliances being discussed. Cuba Solidarity groups in France are very strong.

Agriculture

Wine production in Cuba has commenced in Cuba. The Italian company, Vinos Fantinel, has formed a joint venture with Cuba.  Thirty hectares of land in Havana province have been granted to the new joint venture.  A winery in Cristobal has been built.  The cost was US $9 million.  It has an annual production capacity of six million bottles.

In June, 1998, a Nebraska farmer transported corn seed to Cuba as part of a mission sponsored by the U.S. Feed Grains Council. Corn is used for beef and pork production. Cubans are severely limited in the rations of dairy and meat products they yearly receive. The September, 2002 USA Food Exhibition in Cuba was very successful with Cuba buying almost $175 million dollars of USA agriculture products.

Cuba is increasing bilateral trade with France across the entire spectrum of agricultural products and services.  Sugar for grain barter is active and Cuba plans a line of cigars for consumption in France.  Organic farming opportunities will also be pursued. Expansion into coffee and cacao production is being aggressively pursued.

“Make me no little plans; they have no magic to stir men’s blood”  Daniel Hudson Burnham

Tourism

The head of the American Farm Bureau, representing 5.5 million USA farmers has called for unfettered travel to Cuba by USA citizens as well as private financing of agriculture sales to Cuba. Under current law, sales to Cuba must be “cash only”. The Bush Administration is unlikely to support further easing of the USA Embargo until substantial changes internally in Cuba are adopted.

Cuba has 174 hotels with approximately 30,000 rooms. Another 70,000 rooms are planned for construction as soon as possible. Construction is very evident in Havana, Varadero, Pinar del Rio and Villa Clara. As mentioned above, Sol Melia and Sherritt International intend to build additional hotels in Cuba in the near future.  Cuba expects at least 2,000,000 tourists in year 2005 who will add $2.0 billion U.S. dollars to the economy.  Tourists have increased 20% year over year to Cuba.

SuperClubs of Jamaica operates six resorts in Cuba. The agreements was signed with representatives from Cubanacan Grupo.  Caribbean nations, esp. Jamaica, are working with Cuba on mutually beneficial relationships.

Gran Caribe chain of hotels is expected to have hosted 500,000 visitors to Cuba by the end of 2002.  The Gran Caribe chain has about 7,000 rooms in Cuba and plans to increase its number of rooms in Cuba to 10,000 by the year 2,002.  Gran Caribe has a 50% market share of tourists and visitors to Cuba annually.

Divers, filming for the Discovery Channel, were in Cuba from December 3, 1997 through January 3, 1998 diving around Cuban waters in search of “blue holes” and other underwater sites.  The dive was a joint effort between U.S. and Cuban underwater scientists.  One representative contacted our SCUBA CUBA® affiliate and we provided information. The research oceanographic vessel was offshore for dives on January 2, 1998.  A U.S. flag bearing vessel readily within view of Habana caused quite a stir. We appreciate any and all information about Underwater Cuba from anyone!

Spanish Galleon gold from ships off of Habana and Isle of Youth has been recovered by Visa Gold Resources and are being sold to the public.  The funds for the recovery wereraised privately.  The profits will be split equally between Cuba and Visa Gold Resources. Jose Contreras signed a $32 million dollar, four year stint with the New York Yankees on December 24, 2002, only a few months after defecting from Cuba.

SCUBA CUBA® is trying to improve the quality of hyperbaric and dive medicine in Cuba. The Underseas and Hyperbaric Medical Society is the premiere international organization in Dive Medicine and Hyperbaric Medicine.

“...on the inside, gentlemen, is Guillermo.  See how green she is and full of promise?”  Ernest Hemingway: Islands in the Stream

Varadero now has a submarine, Mundo Magico, that is capable of carrying 44 passengers to explore underwater marine life.  The submarine will descend to a depth of 30 meters and journey up to one hour while submerged. The cost of this venture is $3.5 million dollars and was funded and organized by Spanish and British investors. SCUBA CUBA® believes this new venture will help Cuba recognize more fully the need for Cuba to preserve its wetlands, fresh water and martime resources.

CUBA BIOTECHNOLOGY COMPANY® has initiated efforts to improve quality in medical laboratories, esp. in rural areas, in Cuba.  There is a lack of modern technology, reagents, etc. in Cuba due to money being utilized elsewhere and the U.S. Embargo. Guidelines developed by a major healthcare organization in the USA are being used to update Cuban medical laboratories.

Surfer Magazine has also contacted us about places to surf in Cuba.  The June, 1999 issue of Surfer Magazine has two articles on Cuba and surfing. Holguin and Havana are discussed. When those Norwesters or Noreasters blow in, there are huge waves around Cuba.  There are many photos and stories about waves crashing down upon the Malecon. Of course, a beach landing is better than a concrete seawall landing if you are “hanging 10”.

Cuba: The land of son, mambo, rumba, merengue and salsa!!!

Real Estate

Gardens of Fifth Avenue continues its rollout.  Costa Habana, a joint venture between Cuba and Spain, will construct this residential complex of 175 duplex apartments, studios, and penthouses, two commercial centers, an underground parking area, a swimming pool, and other amenities.  The new project will be located at Fifth Avenue and 114th Street in the Miramar zone of Habana.  A new hotel has been completed on Cayo Coco.  The 250 room, 5 star Sol Club offers many luxury features to vacationing tourists.

CLUB HABANA, formerly the Biltmore Yacht and Country Club, has been opened to foreigners. Initiation membership fees and annual dues entitle members to the business center and recreational activities.  Sol Melia Group will oversee CLUB HABANA’s operations.

Miramar Trade Center, consisting of 18 office buildings on seven hectares of land, has been started.  The initial stage of the project will be the construction of two six-story buildings by the end of 1998. It is anticipated that the Miramar Trade Center will be the “business center of La Habana” and cost US$200 million dollars. The Center is being constructed by INDUCOMER, S.A., which is a joint venture between Spain and Cuba. ETECSA, ING Bank, BM Group, and others will occupy part of the new complex.  It is expected to function at full capacity within 10 years.

Cuban/U.S. Relations

The U.S.A. has completed its removal of perimeter land mines from the naval base at Guantanamo Bay, Cuba. Thirteen Marines and five Cubans have been killed by the mines since their installation.  Cuba also has a perimeter mine field around Guantanamo No decision has been made by the Cuban government to remove its mines from the same perimeter around the U.S. base. Cuba’s Special Forces unit is also stationed around Guantanamo Bay.

Castro stated that religion will flourish again in Cuba and there was “no need to put the genie back in the bottle”. Christmas has been re-instated in Cuba after a three decade hiatus. Eleven University of Chicago medical students recently visited Habana as part of Cuba AIDS Project. The Cuba AIDS Project is a humanitarian effort, started in 1995, to help the people of Cuba regarding HIV/AIDS epidemiology, diagnosis, and treatment, especially through the efforts of Father Fernando de la Vega, Monseratte Church, Central Havana. Governor George Ryan from Illinois has visited Cuba twice. Governor Jesse Ventura from Minnesota attended the September 2002 USA Food Exhibition in Havana.

USA Engage is promoting a new relationship with Cuba, citing the nonprogress of the Embargo to better relations as well as the Embargo punishing the citizenry of Cuba and not the Castro government. Associated Press has opened a bureau in Havana. AP is the second U.S. news bureau operating in Cuba….the first being CNN.  The Dallas Morning News and the Chicago Tribune also have opened bureaus in Havana. The two baseball games between the Baltimore Orioles and Cuba are now baseball history. A group of high school soccer players from Lincoln, Nebraska played a similar aged Cuban team in August, 1999 in Varadero. Outstanding Cuban baseball players routinely defect to USA when feasible.

Buena Vista Social Club, a group of renowned, aging Cuban musicians, performed at New York City’s Carnegie Hall, Wednesday, July 1, 1998. Standing ovations were given as the musicians initially walked onto the stage and at the finale of the performance. The concert was recorded and commercial videotapes of the concert can be purchased. Flights from New York and Los Angeles to Cuba commenced December 3, 1999.

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