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.

USCTEC NAMED AS “BEST SOURCE OF INFORMATION” ABOUT CUBA- The recently published 230-page book, “Culture Shock!- A Guide to Customs and Etiquette” written by Mr. Mark Cramer for Times Books International, states that the U.S.-Cuba Trade and Economic Council is the “best source of information on doing business in Cuba.”  In addition, the author writes that “John Kavulich, president of the U.S.-Cuba Trade and Economic Council and probably the person who has studied the Cuban business scene better than any other living foreigner, has a top-down perspective.”

BANCAMERICA ROBERTSON STEPHENS’ CUBA INVESTMENT TO BE TRANSFERRED- San Francisco, California-based BancAmerica ROBERTSON STEPHENS Investment Management, an investment banking company with assets of US$2 billion specializing in emerging growth companies, is being purchased by a group of investors, which includes the company’s original founders.  BancAmerica ROBERTSON STEPHENS is a subsidiary San Francisco, California-based BankAmerica Corporation (which recently merged with Charlotte, North Carolina-based NationsBank Corporation, the new entity having combined assets of US$572 billion).  BancAmerica ROBERTSON STEPHENS Investment Management purchased in 1997 a 26.2% (fully diluted) investment in North Vancouver, British Columbia, Canada-based Leisure Canada, which through its Wilton Properties subsidiary, plans to invest approximately US$400 million to develop within the Republic of Cuba hotels, marinas, golf courses, equestrian riding centers, cruise ship facilities, tennis courts, convention centers, health spas, retail facilities, and eco-tourism facilities in conjunction with Republic of Cuba government-operated Gran Caribe S.A., on of the three largest Republic of Cuba government-operated tourism companies.  Other investors in Leisure Canada include France-based Societe General and France-based LCF Rothschild.  Leisure Canada reports no current revenues from operations within the Republic of Cuba, but expects that within the next two years more than 51% of its revenues will be from operations within the Republic of Cuba.  Leisure Canada also has a 20% interest in Saskatchewan, Canada-based Points North Digital Technologies, which, in turn, owns Mississauga, Canada-based TravelPlus, one of the three largest travel agencies (more than 200 locations) within Canada, and Dallas, Texas-based International Tours, with 1,100 locations throughout the United States.  The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C. authorizes companies subject to United States law to have non-controlling investments in third country companies that have commercial activities within the Republic of Cuba provided that the investments do not result in control in fact of the third country company and provided that a majority of the revenues of the third country company are not produced from commercial activities within the Republic of Cuba. [OFAC 4 March 1994].

TILAPIA FISH TO BE GENETICALLY PRODUCED IN CUBA- Republic of Cuba nationals will soon add genetically-produced Tilapia fish to their diet.  Non-genetically-produced Tilapia has been available within the Republic of Cuba.  Scientists at Republic of Cuba government-operated Center of Genetic Engineering and Biotechnology report that they had modified the growth hormone of this fresh water species of perch which is native to Africa, doubling its growth without affecting protein content or flavor.  Human trials within the Republic of Cuba to date reportedly have shown no adverse side effects.  Plans are to produce 70,000 tons of Tilapia in 1999 for distribution through the Republic of Cuba’s food ration system at the equivalent of approximately US$0.20 per pound.  The largest producer of Tilapia within the United States is Decatur, Illinois-based Archer Daniels Midland Company (ADM), which produces the fish indoors (aquaculture) at company facilities in Decatur, Illinois.  ADM, with 1997 global revenues from various agribusinesses exceeding US$13 billion, exports Tilapia to countries in Asia.  According to ADM (http://admworld.com on the Internet), “Tilapia is known for its ability to grow to maturity quickly, tilapia is perhaps the most efficient form of nourishment on earth. The diets of Chinese, Vietnamese, and other Asian cultures depend on many thousands of pounds of tilapia every week.  Tanker trucks like giant aquariums on wheels are loaded each week for large metropolitan markets. The finest restaurants can now offer fresh, tasty, reasonably priced fish, grown under environmentally controlled conditions.  The fish food is made from ADM corn, soybean meal, and lysine. A feed conversion ratio of better than 2:1 is used with excellent success.”

CANADA’S YORK MEDICAL HAS BROTHER OF CUBA’S VICE PRESIDENT ON BOARD OF DIRECTORS- In what competitors are describing as “a brilliant political move,” Mississauga, Ontario, Canada-based York Medical, Inc., has elected Dr. Agustin Lage Davila, Director of the Republic of Cuba government-operated Centro de Inmunologia Molecular, as a member of the Board of Directors of York Medical.  Dr. Agustin Lage Davila is the brother of H.E. Dr. Carlos Lage Davila, a Vice President of the Council of State of the Republic of Cuba, who H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba, recently named as one of his possible successors.  York Medical has agreed to pay CIMAB S.A., a corporation representing Centro de Inmunologica Molecular, US$8,830,000.00, of which US$1,299,500.00 has been paid, US$1,230,500.00 is scheduled to be paid in 1999, and payment of the remaining US$6,300,000.00 has yet to be scheduled.  Another politically-connected member of the Board of Directors of York Medical is The Honorable Mark Entwistle, the immediate past Ambassador of Canada to the Republic of Cuba, where he served from 1993 to 1997.

TABACALERA ADVERTISEMENT IN FORTUNE MAGAZINE MENTIONS CUBA- Madrid, Spain-based Tabacalera de Espana, placed a four-page specially-sized insert into the 26 October 1998 issue of Fortune Magazine, which is published by New York City, New York-based Time Warner, which, in turn owns Atlanta, Georgia-based Cable News Network (CNN), which has a bureau in the city of Havana, Republic of Cuba.  In the text of the insert, “We also discovered the legendary charms of Cuban, Caribbean and Central American tobaccos.*” At the bottom of the page containing this sentence, “*Cuban tobacco not available for American distribution.”  An increasing number of non-United States-based companies which advertise in United States-based publications have been mentioning the Republic of Cuba in their advertisements, such as Madrid, Spain-based Iberia Airlines (of which Dallas Fort Worth Airport, Texas-based American Airlines has a minority investment), where previously there was no mention of the Republic of Cuba.

CARICOM SPECIAL ADVERTISING SECTION IN THE WALL STREET JOURNAL MENTIONS CUBA- A three-page special advertising section in the 18 November 1998 issue of The Wall Street Journal sponsored by the Georgetown, Guyana-based Caribbean Community (Caricom), included a discussion of the Republic of Cuba.  Traditionally, special advertising sections within United States-based publications sponsored by governments have deliberately excluded any mention of the Republic of Cuba.  A Senior-level official of Caricom said that “The organization’s relationship with the United States cannot be discussed without including Caricom’s expanding commercial relationship with the 11 million people in the Republic of Cuba.”  Caricom, with a combined member-population of 12 million and a Gross Domestic Product (GDP) of US$30 billion, includes Antigua and Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts-Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago.  The Republic of Cuba is not a member of Caricom, but has indicated its interest in becoming a member.   Currently, there exists a Cuba-Caricom Commission.  Haiti is expected to become a member of Caricom.  Associate Members of Caricom include the British Virgin Islands, Anguilla, and the Turks & Caicos Islands.  The Dominican Republic is an Affiliated Trade Partner of Caricom.

GDP INCREASE ESTIMATED AT 1% OR LESS FOR 1998- H.E. Ibrahim Ferradaz, Minister for Foreign Investment and Economic Cooperation of the Republic of Cuba, reported that the Gross Domestic Product (GDP) would increase approximately 1% for 1998, compared to the 2.5% to 3.5% planned.  Some Republic of Cuba-based economists have predicted that the 1% estimate is optimistic.  Throughout 1998, and as recently as one week ago, senior-level officials of the government of the Republic of Cuba had continued to maintain that the GDP would increase approximately 2.5% in 1998.  The Republic of Cuba’s GDP decreased by an officially-reported 35% from 1989 through 1993, although many Republic of Cuba-based economists and many non-Republic of Cuba-based economists believe that the GDP actually decreased approximately 70% from 1989 through 1993.  The Republic of Cuba’s GDP officially increased .7% in 1994, 2.5% in 1995, 7.9% in 1996, and 2.5% in 1997.  Sources within the government of the Republic of Cuba reported that the GDP increased 0.1% from January 1998 through June 1998.

PREFABRICATED CONSTRUCTION MATERIAL JOINT VENTURE- Caribbean Sordeal S.A., a joint venture between the Paris, France-based Sordeal S.A. and the Ministry of Construction of the Republic of Cuba, reported that US$8 million worth of contracts were signed during its first six months of operations.  The joint venture is converting Republic of Cuba-based prefabricated  construction plants to Switzerland-based PRELCO production for use in hotel and condominium development construction at two plants: one in the city of Havana and one in the city of Cienfuegos, 250 kilometers southeast of Havana; with plans for additional plants to be constructed near the resort area of Varadero, 140 kilometers east of Havana and in the north-central keys, 508 kilometers east of Havana.  Mr. Fernando Luaces, Director of Caribbean Sordeal S.A., said that discussions were underway to export prefabricated units to various Caribbean Sea-area countries.

CANADIAN COMPANY REGISTERS BUILDING PANEL PATENT IN CUBA- Vancouver, British Columbia, Canada-based International Hi-Tech Industries, Inc., announced that it had obtained a patent within the Republic of Cuba for its prefabricated building panel technology.  The company reports that it has already registered the technology in more than 150 countries.

GREECE EXTENDS TRADE CREDITS AND SIGNS TRANSPORTATION AGREEMENT- The Republic of Cuba and Greece signed an air transportation agreement permitting direct flights between the two countries.  Greece recently provided the Republic of Cuba with US$10 million in trade credits.  H.E. Isabel Allende, Vice Minister of Foreign Relations of the Republic of Cuba, visited the city of Athens, Greece, to sign the transportation agreement, to discuss a maritime shipping accord, and to discuss a tax treaty to eliminate double taxation.  Greece-registered ships carry a large percentage of Republic of Cuba cargo.

DIETARY SUPPLEMENT BEING EXPORTED- The Ministry of Health of the Republic of Cuba reported that Bipolar, a dietary supplement, is being exported to countries in Europe.  Bipolar is the latest in a series of placenta-based pharmaceuticals and placenta-based cosmetics developed in the Republic of Cuba.  The protein and mineral rich supplement is administered intravenously to patients in critical condition and has reportedly proven effective during use within the Republic of Cuba in saving lives and shortening the recuperation period.

LOBSTER AND SHRIMP EXPORT UPDATE- H.E. Orlando Rodriguez Romay, Minister of Fishing of the Republic of Cuba, reported that lobster exports had increased thus far in 1998, but that international prices had decreased.  He said that the industry had shipped 8,000 tons from January 1998 through October 1998, 1,547 tons more than during the same period in 1997.  Minister Romay said that  international prices were averaging US$10,000.00 per ton, compared with US$12,000.00 per ton in 1997, and gross revenues from lobster exports thus far in 1998 were US$80.2 million.  He said that the industry would export an additional 2,650 tons of lobster through the end of 1998.  Minister Romay said that 1,008 tons of shrimp were harvested from January 1998 through October 1998, below expectations due to this year’s drought which effected artificial shrimp breeding in the eastern part of the Republic of Cuba.  Shellfish exports are the Republic of Cuba’s fourth largest export in terms of gross revenues after sugar, nickel, and tobacco.

BRAZIL’S PETROBAS SIGNS OIL EXPLORATION AGREEMENT- Rio de Janeiro, Brazil-based Braspetro Oil Services Company, a unit of government of Brazil-operated Rio de Janeiro, Brazil-based Petroleo Brasileiro SA (known as Petrobas) and Republic of Cuba government-operated Cuba Petroleum S.A. (Cupet) signed an agreement (with a duration of six years) on 18 November 1998 whereby Braspetro will explore for oil in deep water off of the Republic of Cuba’s northern coast, approximately 300 kilometers east of the city of Havana.  Braspetro, one of the largest oil companies in the world, is the most widely-known oil company to search for oil within the Republic of Cuba since Paris, France-based Total S.A. sought for four years, but did not find, sufficient opportunities within the Republic of Cuba and ceased operations three years ago.  Approximately twelve primarily small non-Republic of Cuba-based oil companies have explored for oil within the Republic of Cuba during the last six years, during which such exploration by non-Republic of Cuba-based companies has been permitted by the government of the Republic of Cuba.  To date, there have been no significant discoveries of oil deposits, although some small reserves of extremely heavy crude, with a high sulfur content, have been found.  The high sulfur content crude oil is being used for power generation.  Initial surveys of the area to be explored by Petrobas, known as Block 50, reportedly indicate “that factors to assume oil are present and that reserves could total 500 million barrels, at 7 barrels per ton.”  If initial tests are positive, Braspetro plans to initially invest US$23 million to drill a test well.  Oil exploration contracts secured within the Republic of Cuba are on an at-risk basis.  If oil is found, the non-Republic of Cuba-based company is to establish a joint venture with Cupet and the profits are to be equally divided after exploration and production costs have been recovered by the non-Republic of Cuba-based company.  The Ministry of Basic Industry of the Republic of Cuba has reported that twelve non-Republic of Cuba-based companies (from Spain, Canada, France, Sweden, and the United Kingdom) are exploring 22 of 32 available blocks and that 300 oil wells are either producing or under development, mainly in the western provinces of Matanzas and Havana.  The ministry of Basic Industry of the Republic of Cuba reported that US$185 million had been invested in oil exploration by non-Republic of Cuba-based companies during the last six years.  The Republic of Cuba currently produces approximately 33,000 barrels of oil per day, or 1.5 million tons per year, 15% of its minimum oil needs.

SCRAP METAL EXPORTS INCREASE- CUREF-Habana, a joint venture between Rotterdam, The Netherlands-based Curef S.A. and Republic of Cuba government-operated Union de Empresas de Recuperacion de Materias Primas, reported that it would export 11,000 tons of scrap metal in 1998, compared to approximately 8,000 tons of scrap metal in 1997.  The joint venture, established in 1992, is one of the first joint ventures established in the Republic of Cuba.  Mr. Michael van Wout, President of Curef S.A., said that in 1999 the company would begin importing scrap metals not available within the Republic of Cuba, for processing and use by local industry.

INTERMAR HAS INSURANCE INSPECTION CONTRACT FROM LLOYD’S OF LONDON- Republic of Cuba government-operated InterMar S.A. signed a contract with London, United Kingdom-based Lloyd’s of London, to inspect cargos and ships represented by Lloyd’s of London upon their arrival to and departure from the Republic of Cuba.  InterMar S.A. will work in conjunction with Republic of Cuba government-operated Marinter S.A., the official representative of Lloyd’s of London in the Republic of Cuba.

TOURISM INDUSTRY INCREASES AGRICULTURAL PURCHASES- H.E. Alfredo Jordan, Minister of Agriculture of the Republic of Cuba, reported that the tourism industry would purchase approximately US$120 million worth of fresh produce and meat products from Ministry of Agriculture of the Republic of Cuba-operated companies in 1998, compared to US$75 million in 1997.

TOURISM INDUSTRY INCREASES FRESH FISH PURCHASES- H.E. Orlando Rodriguez Romay, Minister of Fishing of the Republic of Cuba, reported that fresh fish and shellfish sales to the tourism industry, Republic of Cuba government-operated restaurants, and to Republic of Cuba government-operated U.S. Dollar retail stores had increased 33% thus far in 1998 and would reach US$30 million by 31 December 1998, compared to US$20 million for 1997.  Minister Romay, directly and indirectly criticizing Republic of Cuba government policies, said that sales could have increased further with more flexible pricing and attention to demand. The 129 Ministry of Fishing of the Republic of Cuba-operated retail stores that sell fish products for Pesos to Republic of Cuba nationals reported gross revenues exceeding 60 million Pesos from January 1998 through August 1998, an increase of 10 million pesos from the same period in 1997.

BRAIN SURGERY TECHNOLOGY EXPORTED- The Ministry of Health of the Republic of Cuba reported that it had begun to export Estereoflex, a limited access brain surgery technology developed by the Republic of Cuba government-operated International Center for Neurological Restoration.  This computerized equipment is reported to be more versatile and accurate than similar technologies currently available on the international market.

HAVANA CLUB REPORTS SALES DISTRIBUTION- Havana Club International S.A., a joint venture between Paris, France-based Pernod Ricard S.A. and Republic of Cuba government-operated Cuba Ron S.A. which previously reported that gross revenues would exceed US$100 million from the sale of one million, 12-bottle cases of rum in 1998, has now provided product distribution information for thus far in 1998: Spain- 220,000 cases; Italy- 150,000 cases; Germany-  60,000 cases; Mexico- 60,000 cases; France- 25,000 cases; Bolivia- 15,000 cases; and Canada-15,000 cases.  Havana Club International S.A. reported that the Havana Club brand was currently registered in 90 countries and that gross revenues would double by 2000.

ANTIGUA AND BARBUDA SIGN AGREEMENTS- H.E. Lester Bird, Prime Minister of Antigua and Barbuda, visited the Republic of Cuba 16 November 1998 to 21 November 1998 during which he met with H.E. Dr. Fidel Castro Ruz, President of the Republic of Cuba.  Prime Minister Bird signed agreements focusing upon economic, social service, and cultural cooperation.

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 scheduled for 8 December 1998 at 12:30 p.m. 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 Council.
 

HAPPY THANKSGIVING!