EXCHANGE RATES UNCHANGED- Republic of Cuba government-operated Cajas de Cambio S.A. (CADECA) sold the Convertible Peso, equal to one U.S. Dollar, for 21 Pesos and purchased the U.S. Dollar for 19 Pesos, as it has since 1 April 1998. The U.S. Dollar on the informal market increased from as low as 18 Pesos three weeks ago to 20 Pesos. CADECA had purchased the U.S. Dollar for 20 Pesos and sold the U.S. Dollar for 22 Pesos from 12 March 1998 to 31 March 1998. CADECA purchased the U.S. Dollar for 21 Pesos and sold the U.S. Dollar for 23 Pesos from 11 February 1998 to 11 March 1998. CADECA purchased and sold the U.S. Dollar for 23 Pesos from August 1997 through 10 February 1998. CADECA began April 1997 purchasing the U.S. Dollar for 26 Pesos and selling the U.S. Dollar for 26 Pesos. In April 1995, the U.S. Dollar could be purchased on the unofficial market for 40 Pesos, as CADECA did not yet exist. The official international exchange rate of one Peso to one U.S. Dollar, in effect for more than thirty years, remained unchanged. The government maintains a fixed exchange rate for its international dealings and a more flexible exchange rate for domestic use. The government does not fluctuate the value of the Peso for commercial transactions regardless of any fluctuation with the value of the U.S. Dollar or other currencies on the international market. The Peso and the U.S. Dollar circulate freely in the Republic of Cuba.
WESTERN UNION TO EXPAND REMITTANCE FORWARDING SERVICE- Western Union Financial Services International, a division of Hackensack, New Jersey-based First Data Corporation, (1997 revenues US$4 billion) is expected to soon expand cash transfer services between the United States and the Republic of Cuba. Western Union Financial Services International has an existing license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury to serve as a Remittance Forwarder (FRF). In July 1993, Mr. Luis S. Mendez, on behalf of Western Union Financial Services International, obtained an invitation from Republic of Cuba government-operated Cimex S.A., the largest conglomerate within the Republic of Cuba, for executives of Western Union Financial Services International to visit the Republic of Cuba on a fully-hosted basis which resulted in a Letter of Intent being signed between Cimex and Western Union Financial Services International. On 26 July 1993, the government of the Republic of Cuba authorized Republic of Cuba nationals to use U.S. Dollars for transactions within the Republic of Cuba. Remittances sent from the United States to the Republic of Cuba under licenses (general and specific) from the OFAC on an annual basis from 1993 until 1996 were estimated to be US$275 million. In March 1996, the OFAC eliminated the sending of remittances from the United States to the Republic of Cuba under a general license and began requiring individual licenses; and remittances would only be permitted for purposes of emigration or in extreme humanitarian need. In March 1998, the OFAC re-authorized Individuals subject to United States law to send up to US$300.00 every four months (US$1,200.00 annually) under a general license to relatives who reside within the Republic of Cuba. The OFAC permits remittances to be transferred from the United States to the Republic of Cuba through remittance forwarders licensed by the OFAC or by United States-based depository institutions or directly through individuals traveling to the Republic of Cuba under a license issued by the OFAC. Republic of Cuba nationals will be able to obtain the funds through a Republic of Cuba government-operated transfer agent. The Republic of Cuba government-operated transfer agent will receive a portion of the fee obtained by Western Union Financial Services International from the individual subject to United States law sending the funds from the United States to the Republic of Cuba.
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Company C. & T. Charters, Inc. Airline Brokers Company, Inc. (ABC) Wilson International Services, Inc. |
Direct Routing and (Weekly Frequency) Miami/Havana (3) Miami/Havana (2) Miami/Havana (2) |
Indirect Routing and (Weekly Frequency) None Miami/Nassau/Camaguey (1) Miami/Nassau/Holguin (1) Miami/Nassau/Santiago de Cuba (1) |
UNITED STATES MUSIC PROMOTERS CRITICIZE STATE DEPARTMENT- An increasing number of United States-based music promoters who want to arrange tours of the United States by performers who are Republic of Cuba nationals believe that they are being penalized by the United States Department of State as a result of the increasing popularity within the United States of Republic of Cuba-based performers. The first issue is a requirement that Republic of Cuba nationals apply for their visas at the United States Interests Section in Havana, Republic of Cuba, at least 21 days in advance of their travel to the United States. The music promoters report that the nature of the music business often makes such advance planning impossible since there may be sudden changes in schedules, artists, etc. The second issue concerns the issuance of the travel visas to Republic of Cuba nationals. According to the music promoters, the visas are often not issued by the United States Interests Section in the city of Havana to the Republic of Cuba nationals until days (and in some cases hours) before the scheduled departure date. The music promoters report that the delays make virtually impossible the purchase of discounted airline fares and hotel rates, which must be paid in advance and are usually nonrefundable. The third issue concerns the type of venue within which a Republic of Cuba national is permitted to perform while within the United States. According the regulations issued by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., the only requirement for a Republic of Cuba national performing in the United States is that the individual is only to receive a per diem and expenses as compensation. Thus, popular music groups from the Republic of Cuba such as Los Van Van or Vocal Sampling or the Buena Vista Social Club are permitted by the regulations to perform in New York City's Madison Square Garden or at Los Angeles' Universal Amphitheater, for example, as long as the performer(s) receive only a per diem and expenses. According to several prominent music promoters, the United States Department of State is discouraging tours where the itinerary consists of "larger commercial venues" and is encouraging tours where the itinerary consists of a significant number of "non-commercial venues and smaller commercial venues" such as universities, social clubs, and charity events, even though the OFAC regulations make no such stipulation. The music promoters report that such "subjective interpretations" make difficult for them to coordinate financially successful tours in the spirit of promoting "people-to-people contact." The music promoters report that music from the Republic of Cuba is quickly gaining popularity and that neither they nor United States-based audiences should be "penalized because the music is popular, why should a promoter have to spend additional costs using smaller venues for multiple days if a Cuban performer can play an arena? Where else can Cubans and a large number of Americans learn more about one another than during a performance at an arena that seats 20,000?" The OFAC permits individuals subject to United States law to perform at venues within the Republic of Cuba and to receive compensation from such performances.
COMPANIES ADVERTISE ON WORLD CUP BROADCASTS- General Vision, Sanyo, Sharp Electronics, Mitsubishi Motors, Subaru, and Popular Cigarettes are sponsoring the television broadcast of World Cup soccer games throughout the Republic of Cuba. The name of each company is briefly flashed across the bottom of television screens every 45 minutes, with longer, full-screen advertisements being shown at the conclusion of each soccer match. The soccer matches are being broadcast on one of the only two Republic of Cuba government-operated television channels which are broadcast throughout the Republic of Cuba.
CUBAN REFRIGERATOR TO COMPETE WITH IMPORTS- Republic of Cuba government-operated Industria Productora de Utensilios Domesticos (INPUD) reported that it is now producing and marketing a "100% Republic of Cuba-produced refrigerator" to compete with imports. Mr. Tomas Angel, Director of Marketing at INPUD, said an expected annual production of 30,000 units would begin in August 1998 using technology imported from Italy. The refrigerator uses a Republic of Cuba-produced coolant that does not damage the environment. The refrigerators are being produced in Villa Clara, 270 kilometers east of the city of Havana. Mr. Angel said approximately 5,000 of the refrigerators already produced had been sold. Refrigerators available within the Republic of Cuba are mainly imported from LG Electronics (formerly Samsung) and Daewoo with prices ranging from US$487.95 to US$1167.60. The INPUD model is selling for US$495.95.
NEW HOSPITAL COMPUTER NETWORK- The Republic of Cuba's provincial hospitals began sharing x-ray, ultrasound, cat scan, and other photographic data through the "Telemedicina" computer network. During the last few years most Republic of Cuba government-operated banks, medical facilities, universities, and the police have been automated and linked by computer networks. The brand of computers used within the various networks include Acer, Siemens, and Olivetti among others.
BRITISH AIRWAYS SERVICE TO CUBA MAY BENEFIT AMERICAN AIRLINES- Hounslow, Middlesex, United Kingdom-based British Airways Plc will commence service from Gatwick International Airport to the city of Havana, Republic of Cuba, within twelve months. British Airways would become the largest airline to service the Republic of Cuba. The prominence of British Airways will assist the Republic of Cuba with increasing the existing low to medium demographic base of tourists visiting the country. Service to the Republic of Cuba by British Airways will result in additional publicity for the Republic of Cuba as British Airways-associated publications will feature the island in articles. British Airways and Dallas/Fort Worth, Texas-based American Airlines, which have been seeking approval from the United States Department of Justice and the European Commission to establish a global alliance to coordinate flight schedules and connections, frequent flyer programs, and to sell seats on each other's aircraft, are jointly purchasing a 10% share in Madrid, Spain-based Iberia Airlines, which has continued to increase its flights between Spain and the Republic of Cuba, and has technical and operational agreements with both Republic of Cuba government-operated Cubana Airlines and with the Institute of Civil Aviation (IACC) of the Republic of Cuba. American Airlines has a Carrier Service Provider (CSP) license from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., which authorizes the company to operate charter flights between the United States and the Republic of Cuba.
AEROLINEAS ARGENTINAS BEGINS FLIGHTS- On 20 July 1998, Buenos Aires, Argentina-based Aerolineas Argentinas is tentatively-scheduled to begin the following routing using a Boeing 747 aircraft- Buenos Aires/Mexico City/Havana/Buenos Aires. At this time, no passengers would be permitted to board the flights in Mexico City for travel to the Republic of Cuba. Dallas/Fort Worth, Texas-based American Airlines has an agreement to purchase a 10% share in Aerolineas Argentinas S.A.
BRAZIL'S TRANSAIR BEGINS FLIGHTS- Transair International, a Brazil-based air carrier, is beginning weekly charter flights between Sao Paulo, Brazil, and the resort area of Varadero, 140 kilometers east of the city of Havana.
MEXICO AND CUBA EXPAND CIVIL AVIATION AGREEMENT- The government of the Republic of Cuba and the government of Mexico expanded a 1991 Civil Aviation Agreement to increase the number of flights from 20 round-trips per week to 35 round-trips per week. Cubana Airlines, Mexicana Airlines, and AeroCaribbean Airlines currently provide service.
FRANCE TO EXPORT LESS THAN EXPECTED 600,000 TONS OF WHEAT- The government of France reported that it will export a total of approximately 600,000 tons of soft wheat to the Republic of Cuba during the 1997/1998 season (July to June). The original quantity under the barter agreement was to have been 750,000 tons of soft wheat. Republic of Cuba-based sources report that the decision to reduce the value of the agreement was due to lack of funds. The remaining 150,000 tons is now expected to be included in the 1998/1999 season agreement. France exports soft wheat, other grains, and milk products to the Republic of Cuba in exchange for Republic of Cuba-produced sugar and nickel plus cobalt. The total value of the reported 1996/1997 barter agreement, which included 544,000 tons of soft wheat, was US$175 million.
CUBA IMPORTING FROZEN ORANGE JUICE FROM MEXICO- According to the Ministry of Trade of Mexico, the Republic of Cuba imported 1.039 million kilograms of frozen orange juice from January 1998 to March 1998 and .44 million kilograms of frozen orange juice from January 1997 to March 1997. The Republic of Cuba is an exporter of fresh oranges and orange concentrate. One reason for such imports would be a favorable price deferential between the cost of importing frozen citrus product from Mexico and exporting frozen citrus product from the Republic of Cuba to markets in Europe and in The Americas.
CIGAR UPDATE- Republic of Cuba government-operated Habanos S.A., the exclusive worldwide marketing agent for Republic of Cuba-produced cigars, reported that it expected to produce approximately 160 million cigars in 1998, earning gross revenues of approximately US$280 million, and expects to produce 300 million cigars in the year 2000. The Republic of Cuba produced 50 million cigars in 1995. The Republic of Cuba produced 101 million cigars in 1997, producing gross revenues of approximately US$180 million. The number of small farmers producing tobacco has increased from 25,000 in 1995 to 37,000 in 1998. The quantity of acres dedicated to producing tobacco has increased from 100,000 in 1995 to 150,000 in 1998. The number of factories producing cigars has increased from 17 in 1995 to 33 in 1998, with plans for an additional 10 factories to be established by the end of 1998. More than 4,000 new cigar rollers have been trained during the last three years. An estimated 7 million to 8 million Republic of Cuba-produced cigars entered the United States in 1997, of which approximately 3 million were counterfeit. Approximately 70,000 individuals subject to United States law visited the Republic of Cuba in 1997. Each traveler authorized by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., is permitted to return from the Republic of Cuba to the United States with up to US$100.00 worth of Republic of Cuba-produced products for their personal use, not including informational materials and artwork. If each of the 70,000 travelers used their allowance to purchase cigars (which most travelers did), then US$7,000,000.00 would be spent on Republic of Cuba-produced cigars. At 25 cigars per box, the total number of cigars authorized to be imported to the United States would have been 1,750,000.
UNITED KINGDOM COMMERCIAL RELATIONS EXPANDING- Petroplastics & Chemicals Limited has established an office in the city of Havana, Republic of Cuba. A joint venture is under discussion between Khaleej Cars Limited and the Ministry of Steel, Mechanical, and Electronic Industry (SEME) of the Republic of Cuba to assemble "beach buggies" for domestic use and for export. Reported bilateral trade in 1997 was US$55 million- exports from the United Kingdom to were US$36 million and imports from the Republic of Cuba were US$19 million. During the first three months of 1998, exports from the United Kingdom to the Republic of Cuba increased 96% compared with the same period in 1997 and Republic of Cuba exports to the United Kingdom increased 45% compared with the same period in 1997.
ESICUBA LAUNCHES "EVERYTHING SAFE" INSURANCE POLICIES- Republic of Cuba government-operated Cuban International Insurance Company (ESICUBA), established in 1963, is marketing new insurance policies under the theme "Everything Safe" which cover residences, storage, accident, medical, commerce, and cargo transportation. The residential and storage policies cost approximately .04% to .07% of the total value of the covered items.
CUBA REPORTS ONE PHYSICIAN FOR EVERY 170 CITIZENS- The Ministry of Public Health (MINSAP) of the Republic of Cuba reported that the country will have approximately 65,000 physicians, or 1 for approximately every 170 citizens, after medical school graduations during the next several weeks. The Republic of Cuba has a population of approximately 11 million citizens. According to the Ministry of Public Health of the Republic of Cuba, the country had approximately 6,000 physicians before 1959, and approximately 3,000 of these individuals left the Republic of Cuba by the early 1960's. The MINSAP reports that infant mortality in 1997 was 7.2 per each live birth, which is lower than the infant mortality rate of the United States. The MINSAP reports that the maternal mortality rate was 2.2 per every 10,000 births. The MINSAP reported that the average life expectancy of the Republic of Cuba national is 75 years of age.
POTATO PRODUCTION DECLINES 25%- The 1998 potato harvest is 225,000 tons, compared to 315,000 tons in 1997, and 330,000 tons in 1996. Potatoes are the second most important rationed staple in the Republic of Cuba after rice, and account for more than 15% of all produce production. H.E. Alfredo Jordan, Minister of Agriculture of the Republic of Cuba, blamed El Nino-related bad weather and the Trips Palmi plague for the poor potato harvest. Republic of Cuba average yields are 30 tons per hectare, compared to 40 tons per hectare in Holland and Canada, for example, although this year yields within the Republic of Cuba were much lower. The government of the Republic of Cuba spends approximately US$30 million annually to import seeds, fertilizer, and other inputs to produce potatoes. Minister Jordan said the poor potato crop would be supplemented by increased production of other root and garden vegetables, as well as bananas. Minister Jordan predicted produce production would surpass 1996 record of more than 2 million tons, in part because urban gardens were expected to double production to 400,000 tons.
SUGAR CANE BAGASSE PRODUCES GLUE- Researchers at the Republic of Cuba government-operated Sugar Cane Byproducts Research Institute said that they were extracting resin and other compounds from sugar cane bagasse to produce the equivalent of an industrial "super glue." The product, Fural, reportedly binds various substances, including wood, metal, concrete, ceramics, glass, and plastics. The 11,000 tons produced in 1997 were used to bind airplane parts, produce industrial and agricultural tools, in railway maintenance, as an anti-corrosive construction sealant, and for residential use. The Republic of Cuba began exporting Fural to Spain in 1997, and is currently considering various joint venture proposals to increase production.
OIL SECTOR UPDATE- During a visit to Calgary, Alberta, Canada, to promote exploration and refining opportunities, representatives of the Ministry of Basic Industry (MINBAS) of the Republic of Cuba reported that in 1997 the island spent approximately US$1.2 billion to import oil and oil byproducts. MINBAS reported that the Republic of Cuba currently produces 33,000 barrels of oil per day, approximately 17% of daily consumption. The Republic of Cuba has four oil refineries. The Republic of Cuba has 23 blocks of onshore and offshore areas available for exploration. A total of fifteen companies from Canada, Spain, France, Germany, Sweden, and the United Kingdom have operations within the Republic of Cuba. Toronto, Canada-based Sherritt International Corporation is the largest of the companies operating within the Republic of Cuba, producing oil and natural gas, along with investments in nickel plus cobalt production, power generation, agriculture, and tourism.
1,000 COWS EXPORTED TO VIETNAM- Republic of Cuba government-operated Live-Stock Genetic Engineering Center (Empresa Pecuaria Genetica Bacuranao) reports that it will export 1,000 Cebu cows, including 9 bulls of different breeds for artificial insemination, semen, technology, medicine, a plant to produce animal feed, and personnel, to Vietnam, bringing the total number of cattle and breeding bulls exported to Vietnam to 2,000 by the end of 1998. The exports are for the Phu Ba joint venture established in 1997 with a reported US$8.6 million in capital.
CUBA BECOMES MEMBER OF CRPA- On 11 June 1998 the Executive Board of the Caribbean Rice Producers Association (CRPA) admitted the Republic of Cuba as the organization's twelfth member. The government of the Republic of Cuba began a rice growing program in 1995, with a goal of substituting 500,000 tons of annual rice imports. The Republic of Cuba's 11 million citizens consume an average 97 pounds of rice annually. In 1998, domestic rice production is expected to be approximately 300,000 tons. The Republic of Cuba receives technical assistance in rice production from Vietnam and from the People's Republic of China.
PRESIDENT CASTRO TO VISIT PORTUGAL- H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba, is expected to visit Oporto, Portugal, from 17 October 1998 to 18 October 1998 to attend the 8th Ibero-American Summit. The Republic of Cuba will host the 9th Ibero-American Summit in 1999. His Excellency Jaime Gama, Minister of Foreign Affairs of Portugal, is expected to visit the Republic of Cuba in July 1998.
5TH ECONOMIST ROUNDTABLE HAS NEW DATE- The Economist Conferences, the United Kingdom-based division of The Economist magazine, has tentatively re-scheduled its 5th Economist Roundtable from October 1998 to January 1999 in the city of Havana. A Spain-based financial company is expected to be the primary sponsor. The suggested title is "Reassessing Cuba." For information contact telephone 011 34 1 576 2507 or facsimile 011 34 1 431 1424.
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