Exchange Rates Unchanged-1
NATIONAL BANK OF CUBA EXCHANGE RATES- The following are the biweekly
official exchange rates between the Republic of Cuba Convertible Peso, equal
to one U.S. Dollar, and selected international currencies as of 15 October
1998. The National Bank of the Republic of Cuba cautions that these
rates do not necessarily reflect the exchange rates at all Republic of
Cuba government-operated banks as each bank is authorized to establish
its own exchange rates.
MARRIOTT IN THE BAHAMAS FEATURING CUBAN ARTISTS- The Nassau Marriott
Resort and Crystal Palace Casino located in Nassau, the Bahamas, is featuring
a nightly one hour and forty-five minute joint performance offering a musical
review of Cuban culture and Bahamian culture by 38 Republic of Cuba nationals
and 22 Bahamian nationals. The performance, taking place in the Rain
Forest Theater, which has a capacity of 900 quests, is reportedly being
seen by approximately 540 guests each evening. The performance costs
per person US$39.00 with a cocktail or US$59.00 with dinner. Reportedly,
the government of the Republic of Cuba has earned US$577,000.00 between
October 1997 and August 1998 from its share of the revenues from the performances.
A small portion of the government of the Republic of Cuba’s share of the
revenues from the performances is used to pay the Republic of Cuba nationals
who appear in the performance. The performances began again on 13
October 1997, after a short hiatus, and are expected to continue through
October 1999. The Nassau Marriott Resort and Crystal Palace Casino
is managed by Washington, D.C.-based Marriott International, Inc. (1997
revenues US$13 billion), which operates 1,300 properties in 56 countries.
The Nassau Marriott Resort and Crystal Palace Casino is owned by Wichita,
Kansas-based Mr. Philip Ruffin, an individual subject to United States
law who owns thirteen other properties, including Marriotts, in the United
States and in the Bahamas.
SPANISH COMPANY WITH VENTURE IN CUBA OWNS 20% OF CALIFORNIA COMPANY-
Interagua, a subsidiary of Barcelona, Spain-based Aguas de Barcelona S.A.
(Agbar), the largest privately-held water company in Spain, is investing
approximately US$25 million for a 20% interest (thus becoming the largest
shareholder) in San Diego, California-based Western Water Company, a water
wholesaler. Interagua is partly owned by Madrid, Spain-based Endesa
S.A., the largest power company in Spain, and by Madrid, Spain-based Argentaria
S.A., the third-largest commercial bank in Spain. Endesa and Argentaria
each engage in commercial transactions within the Republic of Cuba.
Aguas de Barcelona S.A. is partly owned by Bilbao, Spain-based Banco Bilbao
Vizcaya S.A., the second-largest commercial bank in Spain. Banco
Bilbao Vizcaya S.A. has a representative office in the city of Havana,
Republic of Cuba. Aguas de Barcelona S.A. is working on the renovation
of the water system in Havana; and has worked on the renovation of the
water system in the resort area of Varadero, 140 kilometers east of Havana;
and in the surrounding areas of Varadero. In July 1998, H.E. Dr.
Carlos Lage, a Vice President of the Council of State of the Republic of
Cuba, reported that US$10 million would be invested in the western part
of the city of Havana to upgrade water delivery. The program will
benefit 440,000 of the capital's 2.5 million residents, and include new
piping, the sale of plumbing fixtures to the population, and the installation
of water meters. Currently, all Republic of Cuba households pay 1
Peso per month for water service. When the new water meters are installed,
the rate will then be 25 centavos per 1000 liters up to 3,000 liters, 50
centavos per 1000 liters from 3,000 to 4,500 liters, 75 centavos for the
next 1,000 liters, then 1 Peso, 1.50 Pesos, etc. Vice President Lage
said that Havana's water works were in poor condition- with the city using
twice the water of the city of Madrid, Spain, which has twice the population
of Havana. The Vice President said that US$600 million would be required
to modernize the total water system in Havana.
UNITED STATES TELECOMMUNICATIONS PAYMENTS- Pursuant to provisions
of the Cuban Democracy Act (CDA) signed into law in October 1992 by The
Honorable George Bush, President of the United States, the Office of Foreign
Assets Control (OFAC) of the United States Department of the Treasury in
Washington, D.C., has reported the payments by United States-based telecommunications
companies to entities within the Republic of Cuba for the period 1 January
1998 to 30 June 1998. The OFAC has, since 1992, issued eight licenses
to United States-based telecommunications companies for transactions incident
to the receipt or transmission of telecommunications between the United
States and the Republic of Cuba. Since November 1994 when direct-dial
long distance telephone services were actually re-established between the
United States and the Republic of Cuba, annual gross revenues to United
States-based long distance telephone service companies have increased from
US$10.3 million prior to 1993 to a projected US$160 million in 1998.
United States law requires that per minute charges be shared on a 50-50
basis between United States-based long distance telephone service
companies and the government of the Republic of Cuba based upon a maximum
of US$1.20 per minute cost from which the government of the Republic of
Cuba can be paid. United States-based long distance telephone service
companies have charged above the US$1.20 per minute cost to some United
States-based customers, particularly commercial users, thus retaining a
larger share of the per minute overall revenues. The majority of
the long distance traffic between the United States and the Republic of
Cuba, approximately 65%, at an average per minute cost of US$.74 per minute,
is residential use by individuals of Cuban descent speaking with their
relatives who reside within the Republic of Cuba. United States-based
long distance telephone service companies reported that the average per
minute costs are above US$1.20 per minute, reflecting a higher (and increasing)
volume of commercial users paying approximately US$1.60 per minute.
To date, only the “first-tier” long distance telephone service companies
have been approved by the government of the Republic of Cuba to provide
services, despite a continuing and increasing interest by at least ten
“second-tier” companies (such as resellers) to directly enter the market.
CANADIAN INSURANCE CLAIM SETTLEMENT ANNOUNCED- The Government
of Canada announced that it had signed an agreement with the government
of the Republic of Cuba concerning monies owed the Canada-based Confederation
Life Insurance Company, nationalized by the government of the Republic
of Cuba in 1960. The claim was the last Canadian-based commercial
claim against the Republic of Cuba over nationalizations following the
1959 revolution. The proposed agreement was first announced in April
1998 during the visit of H.E. Jean Chretien, Prime Minister of Canada,
to the Republic of Cuba, and reported at the time to be worth US$8.4 million.
Confederation Life Insurance Company, which has been in liquidation, was
placed ahead of four other Canada-based companies- Sun Life Assurance,
Crown Life Insurance, Manulife Financial, and Imperial Life Assurance,
which also have claims against the government of the Republic of Cuba.
The four companies agreed to permit Confederation Life Insurance Company
to negotiate an agreement because of the fact that the company was being
liquidated. All other claims by Canada-based companies against the
government of the Republic of Cuba for assets seized during the 1959 revolution
were settled in 1981. The insurance companies remained outside of
the 1981 settlement due to the complexity of their negotiations.
RECOVERY STALLED DURING FIRST SEMESTER- Republic of Cuba government
sources report that the Gross Domestic Product (GDP) increased 0.1% from
January 1998 through June 1998, in part, the result of a 25% decrease in
raw sugar production and decreasing commodity export prices. The
sources said while Republic of Cuba government officials continued to publicly
state that the GDP could still increase 2.5% to 3.5% for 1998, the reality
was a 0.5% to 1% increase.
CUBA SUGAR EXPORTS- Sources within the Ministry of Sugar of the
Republic of Cuba reported that the country exported approximately 2.4 million
tons of raw sugar from the 1997/1998 sugar harvest, more than one million
tons of raw sugar less than was reportedly exported from the 1996/1997
sugar harvest. The Republic of Cuba reportedly produced approximately
3.0 million tons of raw sugar to 3.2 million tons of raw sugar during the
1997/1998 sugar harvest. The 1996/1997 sugar harvest produced a reported
4.25 million tons of raw sugar.
CAJA GALICIA BANK PLANS CUBA OPERATIONS- La Coruna, Spain-based
Caja Galicia Bank announced that it will establish in November 1998 a cooperation
agreement with Republic of Cuba government operated Banco de Credito y
Comercio. Last week Madrid, Spain-based Caja Madrid announced the
establishment of a joint financial venture with Republic of Cuba government
operated Banco Popular de Ahorro. There are currently thirteen non-Republic
of Cuba-based banks authorized to operate within the Republic of Cuba.
There are four non-Republic of Cuba-based finance companies authorized
directly, or through joint ventures, to operate within the Republic of
Cuba.
BANKING MODERNIZATION CONTINUES- H.E. Francisco Soberon, Minister
President of the Central Bank of the Republic of Cuba, said that the diversification
and modernization of the country’s banking system would continue.
Minister Soberon said that since 1995 more than 5,000 computers (many from
Taipei Hsien, Taiwan-based Acer Inc. and Munich, Germany-based Siemens
AG) had been installed and real-time banking services had been established
between the city of Havana and all provincial capitals. He said that
connecting all banks and the use of consumer bank debit cards, automated
teller machines, and consumer credit cards would continue to be introduced.
Minister Soberon said that continuing staff training at all levels to keep
pace with modernization and the need to develop more consistent relationships
with the world’s financial markets were essential.
DOMESTIC BANKING UPDATE- The Central Bank of the Republic of
Cuba, which was created in 1997, reported that there were currently five
Republic of Cuba government operated banks (date of creation in parentheses):
The Banco National de Cuba (1950); the Banco de Credito y Comercio (1997);
Groupo Nueva Banca S.A. (1995); Banco Financiero Internacional (1984);
Banco Popular de Ahorro (1983). Various Republic of Cuba government-operated
finance companies have been established during the last several years.
The Central Bank of the Republic of Cuba reported that the Republic of
Cuba government-operated Grupo Nueva Banca S.A. (1995) now included the
following subsidiaries: Banco Internacional de Comercio S.A. (1994); Financiera
Nacional S.A. (1994); Casas de Cambio S.A. (1995); Banco Metropolitano
S.A. (1996); Banco de Inversiones (1996); and Compania Fiduciaria (1996).
The Central Bank of the Republic of Cuba reported that all Republic of
Cuba government operated banks were licensed to operate in Cuban Pesos
and convertible currencies. The Central Bank of the Republic of Cuba
reported that two of the banks, Republic of Cuba government-operated Banco
Popular de Ahorro (500 offices) and Republic of Cuba government-operated
Banco de Credito y Comercio (221 offices) were the largest banks operating
within the Republic of Cuba and that both banks operated mainly in Cuban
Pesos, while the other Republic of Cuba government-operated banks each
had only a few offices, mainly in the city of Havana, and that the remaining
banks operated almost exclusively in convertible currencies.
FOREIGN DEBT UPDATE- H.E. Francisco Soberon, Minister President
of the Central Bank of the Republic of Cuba, told London, United Kingdom-based
Reuters News Agency that progress was being made with the country’s approximately
US$10 billion in foreign debt. Earlier this year the Republic of
Cuba rescheduled US$750 million of the debt which is owed to a consortium
of Japan-based companies. The Republic of Cuba owes approximately
US$2 billion to the government of Japan and to Japan-based companies.
Japan is the largest creditor within the approximately US$10 billion of
foreign debt by the Republic of Cuba. Minister Soberon said that
agreements had been reached with another three unnamed creditors, representing
a total of approximately US$200 million in foreign debt. He said
that discussions continued with other creditors. The Republic of
Cuba announced a rescheduling of US$73 million in short term debt to Italy
in September 1998. Minister Soberon said that 57% of the approximately
US$10 billion in foreign debt was government-to-government, 25% of the
approximately US$10 billion in foreign debt was to banks, and the remainder
of the approximately US$10 billion in foreign debt was to companies.
AUDIO DIAGNOSTIC EQUIPMENT EXPORTS INCREASE- Republic of Cuba
government operated Neuronic S.A. reported that international demand for
its Audix hearing diagnostic machine was increasing. The computer-based
Audix measures neurological responses to audio stimulus, and does not depend
on a patient’s cooperation. The Audix sells for US$15,000.00 to US$20,000.00
per machine, and, according to Neuronic S.A., is the only such technology
in the world.
GRAIN IMPORT UPDATE- Republic of Cuba wheat imports from the
French port of Rouen between 1 October 1998 and 7 October 1998 were 26,250
tons.
NICKEL DEVELOPMENT SLOWED BY PRICE DEPRESSION AND INTERNATIONAL FINANCIAL
CRISIS- Continuing depressed international nickel prices and international
financial market uncertainties have all but ceased the Republic of Cuba’s
ambitious nickel plus cobalt development plans, reported a senior-level
official of the government of the Republic of Cuba. “The crisis has
affected all nickel producers, all commodity producers across the board,
including Cuba,” he said. The Republic of Cuba had planned to increase
production from 68,000 tons to 70,000 tons in 1998 to 100,000 tons by the
year 2002. The country produced 53,700 tons of nickel plus cobalt
in 1996 and 61,500 tons of nickel plus cobalt in 1977. The Republic
of Cuba’s three operating plants in Holguin Province, 850 kilometers east
of the city of Havana, reportedly have costs ranging from US$1.00 per pound
to more than US$2.00 per pound. International nickel prices are currently
between US$1.70 and US$1.75 per pound. Plans with Toronto, Canada-based
Cobatec Inc., to complete and then to operate the existing partially-completed
nickel plus cobalt sulfide plant, known as the “Cupey Project” or Camarioca
nickel plant, ceased after Cobatec declared bankruptcy a month ago.
Reportedly, plans by at least two non-Republic of Cuba-based companies
to construct plants and a refinery are likely to be delayed due to continued
depressed nickel plus cobalt prices and due to problems with obtaining
financing, although feasibility studies will likely continue. On
21 January 1996, Republic of Cuba government-operated Caribbean Nickel
S.A. and Australia-based WMC Limited established a US$500 million joint
venture to construct a fifth nickel plus cobalt refinery, the first to
be located in Holguin Province. Executives of WMC Limited report that the
project remains in initial stages, with any construction not scheduled
to begin for a few years. Australia-based QNI Limited announced earlier
this year that its 100% owned subsidiary, San Felipe Mining Ltd., had established
an economic association with Republic of Cuba government operated Geominera
S.A., to explore and conduct test drilling for nickel plus cobalt at San
Felipe, Camaguey Province, 550 kilometers east of the city of Havana. The
economic association, owned 75% by San Felipe Mining Ltd. and 25% Geominera
S.A., has five years to determine the size and character of the deposit.
Cuban nickel is considered to be Class II with an average 90% nickel content.
The National Minerals Resource Center of the Republic of Cuba reported
that Holguin Province contained 34% of the world’s known reserves, or some
800 million tons of proven nickel plus cobalt reserves, and another 2.2
billion tons of probable reserves, with lesser reserves in other parts
of the Republic of Cuba. H.E. Marcos Portal, Minister of Basic Industry
of the Republic of Cuba, said earlier this year that the country contained
the world’s second-largest reserves of cobalt and third-largest reserves
of nickel.
CARIBGOLD STARTS DRILLING PROGRAM- Toronto, Canada-based CaribGold
Resources, Inc., reported that it had begun a 12,000 foot diamond drilling
program on its Jacinto Project in Camaguey Province, 550 kilometers east
of the city of Havana. The company said that the estimated US$1 million
project was implemented on a 50%/50% basis with Republic of Cuba government
operated GeoMinera. The company said that the purpose of the project
was to better define a 395,000 ounce gold vein running through the property.
Miramar Mining, a subsidiary of Toronto, Canada-based Orion, in conjunction
with GeoMinera, has begun mining operations at the Mantua copper mine in
the province of Pinar del Rio, 100 kilometers west of Havana. Plans
include mining a gold cap of 8,300 ounces, then an estimated 166,500 tons
of copper. The total investment is estimated to be US$158 million.
The two companies have also begun exploiting the Delita gold and silver
deposit located on the Isla de la Juventud, 150 kilometers south of Havana.
Delita contains an estimated 1.75 million ounces of gold and 14 million
ounces of silver. H.E. Marcos Portal, Minister of Basic Industry
of the Republic of Cuba, said in March 1998 that the Republic of Cuba had
signed fifty two contracts with non-Republic of Cuba-based companies to
prospect for nickel, gold, silver, copper, lead, zinc, and other minerals.
Mr. Antonio de las Reyes, Mining Advisor to Minister Portal, said that
40,000 square kilometers had been identified for exploration and more than
US$60 million spent to date. He said that Republic of Cuba government-operated
companies had been established, often in association with non-Republic
of Cuba-based companies, to service the sector. The continuing depressed
nature of metal prices has resulted in a decreased amount of investment
capital available to many of the smaller mining companies, most of which
are located within Canada, that are exploring within the Republic of Cuba.
EXPANDED SANTIAGO DE CUBA MARINA UNDER CONSTRUCTION- Republic
of Cuba government operated Marlin S.A. said that it was expanding the
Santiago de Cuba Marina in Punta Gorda, 850 kilometers east of the city
of Havana, to accommodate up to sixty yachts, compared to the current twelve
yacht capacity. Marlin S.A. said that repair and supply facilities,
restaurants, cafeterias, bars, miniature golf, game rooms, and other activities
would be added. Marlin S.A. specializes in the development and servicing
of aquatic tourism.
UNITED STATES NEWSPAPER EDITORS DELEGATION DUE- A delegation
of thirty two United States newspaper editors will visit the Republic of
Cuba from 21 October 1998 to 25 October 1998. The editors are members of
the American Society of Newspaper Editors.
HAVANA NIGHTCLUBS AND DISCOS TEMPORARILY CLOSED- The government
of the Republic of Cuba closed the nightclubs and discos at the Comodorro
Hotel, Havana Club Disco, Marina Hemingway, Papas Disco, Riviera Hotel’s
Palacio de la Salsa, National Theater’s Cafe Cantante, and other locations
frequented by tourists, business representatives, and Republic of Cuba
nationals who have access to U.S. Dollars. The closures were part
of an offensive on prostitution, drugs, and crime (increase in rapes, robberies,
and murders). The discos and nightclubs are to be reopened after
implementing new regulations to prevent various illegal activities on their
premises.
PRESIDENT CASTRO MEETS ITALIAN BUSINESS REPRESENTATIVES- H.E.
Dr. Fidel Castro Ruz, President of the Republic of Cuba, met 14 October
1998 with H.E. Roberto Formigoni, President of the Lombardia Region of
Italy and a delegation business representatives. The Lombardia region’s
city of Milan is the host of Europe’s largest international trade fair.
PRESIDENT CASTRO ATTENDS IBERO AMERICAN SUMMIT- H.E. Dr. Fidel
Castro Ruz, President of the Republic of Cuba, attended the eighth Ibero
American Summit from 17 October 1998 to 18 October 1998 in Oporto, Portugal.
President Castro was one of nineteen Latin American Heads of State at the
Summit, along with the Heads of State of Spain and Portugal. The Republic
of Cuba will host the ninth Ibero-American Summit in 1999.
ANNUAL MEMBER LUNCHEON SPEAKER CONFIRMATION The principal guest speaker will be Mr. David G.P. Allan, Chairman
of Mississauga, Ontario, Canada-based York Medical, Inc. York
Medical was created in 1994 to bring together Canadian experts in pharmaceutical
licensing, regulatory and clinical affairs, and marketing with the Republic
of Cuba-based life-sciences establishment. The annual member luncheon
of the U.S.-Cuba Trade and Economic Council is being tentatively-scheduled
for November 1998 at The “21”Club in New York City. Invitations
will be sent soon. The luncheon is complimentary for members of the
U.S.-Cuba Trade and Economic C5ouncil.
NEW SPEAKING SCHEDULE 29 October 1998 to 31 October 1998, Mr. John S. Kavulich II,
President of the U.S.-Cuba Trade and Economic Council, will be a guest
of The Stanley Foundation (headquartered in Muscatine, Iowa) at its “Cuba
and the United States: Approaches to Engagement” at the 39th Strategy
for Peace Conference at the Airlie Center near Warrington, Virginia.
The conference will bring together approximately fifty experts from the
public and private sectors from the United States and from the Republic
of Cuba.
3 November 1998, Mr. John S. Kavulich, President of the U.S.-Cuba
Trade and Economic Council, will be the featured after-dinner speaker before
a group of 150 senior-level United States business executives (investment
bankers, bankers, attorneys, and investment brokers, retail) at a gathering
sponsored by a private, United States-based group. The topic of the
Mr. Kavulich’s discussion will be “United States-Republic of Cuba Relations:
Myths and Realities.”
6 November 1998, Mr. John S. Kavulich II, President of the U.S.-Cuba
Trade and Economic Council, will appear at the annual College Music Journal
(CMJ) Music Marathon-Musicfest & Filmfest at the Millennium Hotel in
New York City as a panelist for a discussion entitled “Whirled Music:
The Cuban Experience.” The CMJ Music Marathon- Musicfest &
Filmfest is the world’s largest and longest running new music convention
and festival featuring panels, workshops, and 1,000 musicians performing
at more than 60 venues in and around New York City. The projected
attendance is 8,000.
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 21 Pesos, as it
has since 15 July 1998. CADECA purchased the U.S. Dollar for 19 Pesos
and sold the U.S. Dollar for 21 Pesos from 1 April 1998 to 14 July 1998.
CADECA 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 purchased the U.S. Dollar for 24 Pesos and sold the U.S. Dollar
for 24 Pesos in August 1996. 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.
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