PESO UNCHANGED AGAINST THE U.S. DOLLAR- Republic of Cuba government-operated Cajas de Cambio S.A. (CADECA) sold the Convertible Peso, equal to US$1.00, for 21 Pesos and purchased the U.S. Dollar for 21 Pesos. From 4 March 1999 to 14 March 1999, CADECA purchased the U.S. Dollar for 20 Pesos and sold the U.S. Dollar for 21 Pesos. CADECA sold the Convertible Peso, equal to US$1.00, for 21 Pesos and purchased the U.S. Dollar for 21 Pesos from 19 February 1999 through 3 March 1999. CADECA had sold the Convertible Peso, equal to US$1.00, for 21 Pesos and purchased the U.S. Dollar for 20 Pesos from 13 January 1999 to 18 February 1999. CADECA purchased the U.S. Dollar for 21 Pesos and sold the Convertible Peso for 22 Pesos from 26 November 1998 to 12 January 1999. CADECA purchased the U.S. Dollar for 21 Pesos and sold the U.S. Dollar for 21 Pesos from 15 July 1998 through 25 November 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. 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.
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 9
April 1999. 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TICO TRAVEL RECEIVES TRAVEL SERVICE PROVIDER LICENSE FROM THE OFAC- Fort Lauderdale, Florida-based Tico Travel has received a license (C-49686) from the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., to provide travel-related services for individuals subject to United States law visiting the Republic of Cuba under 1) a general license from the OFAC or 2) a specific license from the OFAC. Tico Travel plans to develop an expertise in providing travel services to/from/within the Republic of Cuba for United States-based representatives of United States-based companies. Tico Travel is one of the largest United States-based travel agencies providing services within Costa Rica, where the company also has an office in the city of San Jose. Tico Travel is a member of the U.S.-Cuba Trade and Economic Council. For information please contact: Tico Travel, 161 East Commercial Boulevard, Fort Lauderdale, Florida 33334. Telephone: (800) 493-8426 or (954) 493-8426; Facsimile: (954) 493-8466; E-mail: tico@gate.net; Internet: http://www.ticotravel.com
MOODY'S INVESTORS SERVICE ASSIGNS RATINGS TO CUBA- New York City,
New York-based Moody’s Investors Service (established in 1909) has assigned
a foreign-currency country ceiling of Caa1 for ratings on long-term foreign-currency
bonds and notes of issuers domiciled in the Republic of Cuba, and a Caa2
country ceiling for ratings of foreign-currency bank deposits. Moody's
Investors Service reported that the ceilings reflect the debt moratorium
declared by the Republic of Cuba in 1986 which has led to a suspension
of all payments on foreign-currency debt obligations since then.
Moody’s Investors Service estimated the Republic of Cuba's foreign-currency
debt at US$10 billion, of which US$5 billion corresponds to past-due principal
and US$2 billion represents interest arrears (these amounts do not include
foreign-currency debt owed to the Russian Federation estimated to be approximately
21.5 billion rubles). In response to the economic crisis triggered
by the collapse of the U.S.S.R. in 1991, the government of the Republic
of Cuba “implemented a series of reforms directed to restructure the
economy. The measures included: (i) the opening of most sectors
of the economy to foreign investment; (ii) the legalization of U.S.
dollar holdings; (iii) the decentralization of the decision-making
process in the operation of public enterprises; and, (iv) the authorization
of certain private-sector activities in the agriculture and service sectors.”
According to Moody’s Investors Service, “the most important structural
change that resulted from the reforms was the emergence of the tourism
sector as the driving force of the economy. A fourfold increase in the
number of tourists during the 1990-1998 period has supported a shift in
the composition of foreign-currency revenues. The tourism industry has
become the most important source of foreign exchange- revenues increased
to $1.8 billion in 1998 from $245 million in 1990- accounting for more
than 40% of the total. Despite the aforementioned structural changes,
it is Moody's opinion that Cuba remains very much an economy in transition
and that its medium-term outlook will depend greatly upon the willingness
of the authorities to consolidate the reforms enacted to date.”
Moody’s Investors Service reported “that growth prospects will continue
to be hampered by a strong dependence on imported goods and by the lack
of access to long-term external financing, a factor that highlights the
need to normalize conditions with foreign creditors; and that, “in the
years to come, Cuba will face important challenges as the autonomy resulting
from economic liberalization increases pressure on existing political structures.
Equally important in this respect will be the issue of inter-generational
transfer of power and the definition of a regime capable of responding
to higher economic expectations and increased social demands.”
For information: Mr. Vincent J. Truglia, Managing Director- Sovereign Risk
Unit, at telephone: (212) 553-0300.
|
|
|
|
|
|
|
|
|
|
|
|
|
ING GROUP AND SOCIETE GENERALE HAVE PRESENCE IN THE UNITED STATES AND IN CUBA- An increasing number of well-known financial institutions are establishing representation offices within the city of Havana, Republic of Cuba. Amsterdam, The Netherlands-based ING Group NV has a representation office within the Republic of Cuba. ING Group NV subsidiaries and divisions within the United States include: New York City, New York-based ING (US) Capital Holdings; Boston, Massachusetts-based Baring Asset Management; Indianapolis, Indiana-based Indiana Insurance Company; New York City, New York-based ING Baring Furman Selz LLC; Atlanta, Georgia-based Life of Georgia (a health and insurance company); and Denver, Colorado-based Security Life of Denver Reinsuance, among others. Paris, France-based Societe Generale, has a representation office within the Republic of Cuba. Societe Generale subsidiaries and divisions within the United States include: New York City, New York-based Societe Generale; Chicago, Illinois-based FIMAT USA, Inc.; New York City, New York-based SG Cowen Securities Corporation, and London, United Kingdom-based SG Hambros (formerly Hambros Bank Ltd.), which has operates New York City, New York-based Hambro America Incorporated, among others.
HARLEM GLOBETROTTERS MAY PLAY EXHIBITION BASKETBALL GAMES IN CUBA- Mr. Mannie Jackson, Chairman of Phoenix, Arizona-based Harlem Globetrotters International, Inc., will visit the Republic of Cuba this month to discuss a holding a series of exhibition basketball games to be played in the Republic of Cuba and one exhibition basketball game to be played in the United States. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., has granted a license to Mr. Jackson for the purpose of negotiating an agreement for the exhibition basketball games. The exhibition basketball games may be broadcast by Bristol, Connecticut-based ESPN, Inc., which is 80% owned Burbank, California-based The Walt Disney Company (1998 revenues US$22 billion) and 20% owned by New York City, New York-based The Hearst Corporation (1998 revenues US$2 billion). On 28 March 1999, ESPN broadcast the Baltimore, Maryland-based Baltimore Orioles Major League Baseball Team exhibition baseball game against the Republic of Cuba government-operated National Team, which the Baltimore Orioles won by a score of 3 to 2, at the 50,000-seat Estadio Latinamericanos Stadium in the city of Havana. ESPN broadcast the exhibition baseball game and paid the government of the Republic of Cuba what the OFAC described as “normal and reasonable” fees. United States-based companies advertising on ESPN during the baseball exhibition game included: General Motors Corporation, Suzuki, Sprite, MCI Worldcom, MetLife, Roundup, Range Rover, Head and Shoulders shampoo, 10-10-321 long distance telephone service, Little Caesars, and Advil among others. Miami, Florida-based WPLG-TV, an affiliate of New York City, New York-based ABC, Inc. (which is owned by The Walt Disney Company), simulcast the baseball game with ESPN. WPLG-TV reported that it did not pay any fees to the government of the Republic of Cuba for rights to broadcast the baseball game. The Anaheim, California-based Anaheim Angeles Major League Baseball Team, which is owned by The Walt Disney Company, is seeking a license from the OFAC to play an exhibition baseball game in the city of Havana. The Walt Disney Company has many subsidiaries, including: 1) Hollywood Records (the OFAC permits the exportation of music product from the United States to the Republic of Cuba for distribution within the Republic of Cuba and the OFAC permits the importation of existing music product from the Republic of Cuba for distribution within the United States). 2) Disney Channel (the OFAC permits the exportation of television product and motion picture product from the United States to the Republic of Cuba for distribution within the Republic of Cuba and the OFAC permits the importation of existing television product and existing motion picture product from the Republic of Cuba for distribution with the United States. Individuals subject to United States law are permitted by the OFAC to remit to Republic of Cuba nationals profits from the distribution within the United States of music product, television product, and motion picture product. The San Diego, California-based San Diego Padres Major League Baseball Team is also reportedly discussing the holding of an exhibition baseball game in Havana.
WHEAT IMPORT UPDATE- The Republic of Cuba imported 22,161 tons
of wheat from 1 April 1999 to 7 April 1999 from the port of Rouen, France.
|
|
|
|
|
|
|
|
|
ADDITIONAL INFORMATION ON PANSEA HOTELS AND RESORTS US$52 MILLION JOINT VENTURE- In March 1999, Paris, France-based Pansea Hotels and Resorts S.A. and Republic of Cuba government-operated Cubanacan S.A. announced the establishment of a 50/50 joint venture, Franco Hotelera de Cuba S.A., to construct eight properties within the Republic of Cuba with a combined value of US$52 million. Cubanacan S.A. first announced plans to establish Franco Hotelera de Cuba S.A. in 1998. Initially, Franco Hotelera de Cuba S.A. will invest US$35 million to construct a total of five 120-room to 150-room properties to be located in the city of Havana; Playa Santa Lucia, 643 kilometers east of Havana; Trinidad, 335 kilometers east of Havana; Santiago de Cuba, 861 kilometers east of Havana; and in Vinales, 189 kilometers east of Havana. Pansea Hotels and Resorts S.A. operates properties in Bali, Tunisia, Turkey, Laos, Myanmar, and Thailand. Pansea Hotels and Resorts S.A. provided the following additional information at the request of the U.S.-Cuba Trade and Economic Council: Pansea Hotels and Resorts S.A. established Hospitality Services in the Caribbean (HOSIC) “to invest in Pansea brand boutique hotels in the region. HOSIC is controlled by the following principal shareholders (or companies controlled by them): 1) Mr. Robert Molinari was one of the earliest members of the small team that originated Paris, France-based Accor S.A., now one of the world's largest hotel companies, where he was originally the Director of Development. Mr. Molinari spent 25 years with Accor S.A. He was Chairman and Chief Executive Officer of Accor S.A.’s IBIS hotel chain for 15 years and was, until March 1995, Co-Chairman of Accor S.A’s operations in the Asia/Pacific Region. His group owns and operates several hotel properties in Europe. He is the Honorary President of the Franco-Thai Chamber of Commerce, and Co-President of the Thai Committee at the Federation of French Industries (CNPF). He is also Trade Counselor at the French Ministry of Commerce. In 1993 he was decorated with the Legion d'Honneur. 2) Mr. Stanislas Rollin was also one of the earliest members of the small team that originated Accor S.A. He was previously Director of Finance of Accor S.A., where for 13 years he controlled finance and for 5 years was responsible for the Accor S.A.’s international activities, including such activities in the Asia/Pacific Region. Today, he is the Chairman and Chief Executive Officer of Boissee Finances and of Fresh Mind Investment Company, a group specializing in international project financing. Mr. Rollin is the largest franchisee of Accor S.A. properties in Europe, where, with his associates, he owns and operates more than 20 hotels. 3) London, United Kingdom-based Commonwealth Development Corporation (CDC) is a leading international development finance institution operating in more than 400 businesses in 54 countries with investments of more than US$2 billion. The CDC is under the direction of the government of the United Kingdom operating under the Commonwealth Development Corporation Acts.”
BRITISH AIRWAYS BEGINS WEEKLY SERVICE- H.E. Brian Wilson, Trade Minister of the United Kingdom and H.E. Dr. Carlos Lage, a Vice President of the Council of State of the Republic of Cuba, attended the arrival ceremony at the city of Havana’s Jose International Airport for the inauguration of Harmondsworth, West Drayton, United Kingdom-based British Airways Plc’s weekly London-Havana-London service. British Airways is using a 383-seat Boeing 777 aircraft manufactured by Seattle, Washington-based The Boeing Company (1998 revenues exceeding US$45 billion). British Airways reported that all of the seats on the weekly flights through June 1999 are reserved and expects to carry 10,000 passengers during the first twelve months of operations. In 1998, approximately 60,000 United Kingdom nationals visited the Republic of Cuba. Approximately 100,000 United Kingdom nationals are expected to visit the Republic of Cuba in 1999.
CUBANA AIRLINES USING A-320 AIRCRAFT FOR SERVICE FROM CANADA- Republic of Cuba government-operated Cubana Airlines has begun service between Toronto, Ontario, Canada, and the city of Cienfeugos, Republic of Cuba, 254 kilometers east of the city of Havana. The weekly service is using an Blagnac Cedex, France-based Airbus Industrie-manufactured A-320 aircraft, of which two (2) were recently leased by Cubana Airlines from Dublin, Ireland-based TransAer International Airlines, an airline charter company operating 17 Airbus-manufactured aircraft.
INDUSTRIAL DETERGENT PRODUCTION JOINT VENTURE- Republic of Cuba government-operated Suchel S.A. and Spain-based Proquimia S.A. (1998 revenues approximately US$25 million) have established a joint venture, Suchel Proquimia S.A., to manufacture and market industrial detergents within the Republic of Cuba. Suchel reportedly has a total of five joint ventures involving the production of personal care products, cosmetics, and household cleaning products. Proquimia S.A. has been conducting business within the Republic of Cuba since 1993.
US$27 MILLION IN BUS PARTS REPORTEDLY IMPORTED- H.E. Alvaro Perez Morales, Minister of Transportation of the Republic of Cuba, said that US$27 million in parts to assemble 300 urban buses in 1999 had been imported. The Republic of Cuba imported bus parts and bus motors from Gotenborg, Sweden-based AB Volvo, Stuttgart, Germany-based Daimler Chrysler AG, and from various companies in Brazil. Seoul, South Korea-based Hyundai Group recently reported that the company was interested in selling bus chassis to the Republic of Cuba.
PORTUGAL’S GRUPO AMORIM EXPANDS HOLDINGS- Porto, Portugal-based Grupo Amorim and Republic of Cuba government-operated Cimex Inmobiliaria have established a joint venture with a reported value of US$30 million to construct two 250-unit condominium apartments in Miramar district of the city of Havana. Grupo Amorim also signed an agreement with the Ministry of Fishing of the Republic of Cuba, the details of which were not disclosed. Grupo Amorim has a reported US$20 million interest in at least ten hotels located within the Republic of Cuba. In October 1998, Mr. Americo Amorim, Chairman of Grupo Amorim, reported that his company planned to construct an additional thirty hotels within the Republic of Cuba by 2003. Mr. Amorim is also the Chairman of Corticeira Amorim, the world’s largest cork producer and exporter; controls Telecel-Comunicacoes Pessoais S.A., the second-largest mobile telephone operator in Portugal; and is one of the founders of Banco Comercial Portugues S.A., the largest publicly-owned bank in Portugal.
PORTUGAL PLANS MORE COMMERCE- H.E. Joaquim Pina Moura, Minister of Economy of Portugal, reported that his country plans to increase investment, trade, and technical cooperation with the Republic of Cuba. Minister Pina Moura led a twenty-three-member business delegation to the Republic of Cuba from 7 April 1999 to 10 April 1999. Minister Moura presided over the signing of agreements covering trade and investment promotion and cooperation in tourism. He reported that a visit from representatives of Portugal’s government-operated utility company, Electricidade de Portugal (EDP), and from Spain-based Iberdrola S.A. would be visiting the Republic of Cuba to evaluate commercial opportunities in the electricity sector. Bilateral trade was approximately US$30 million in 1998.
UNITED KINGDOM TRADE MINISTER VISITS; DISCUSSES DEBT- H.E. Brian Wilson, Minister of Trade of the United Kingdom, visited the Republic of Cuba from 8 April 1999 to 10 April 1999. Traveling with Minister Wilson were a group of business and financial executives, including those from the United Kingdom government-operated Commonwealth Development Corporation (CDC); Swindon, United Kingdom-based Burmah Castrol plc; Nectar Shipping; London, United Kingdom-based Uniliver PLC; Vitol; and London, United Kingdom-based Lambert Fenchurch. H.E. Francisco Soberon, Minister-President of the Central Bank of the Republic of Cuba, presented a proposal for the rescheduling of the Republic of Cuba’s short-term debt and medium term debt. A rescheduling of the debt is required for the United Kingdom’s export credit agency, the Export Credits Guarantee Department (ECGD) to renew medium term credits for the export of United Kingdom-produced products to the Republic of Cuba. The value of the short-term debt is approximately US$28 million out of total Republic of Cuba debt to the ECGD of approximately US$196 million. Bilateral trade was approximately US$70 million in 1998 with exports from the Republic of Cuba to the United Kingdom valued at US$25.6 million and imports from the United Kingdom to the Republic of Cuba valued at US$54.4 million). Republic of Cuba imports from the United Kingdom increased a reported 73% from 1997.
FOREIGN TRADE FIGURES SEEM TO HAVE DISCREPENCIES- The Republic of Cuba’s foreign trade decreased 10% in 1998 from 1997, according to the Republic of Cuba government-operated daily newspaper, Granma. Reported that 1998 foreign trade was US$5.143 billion, compared to $5.57 billion reported by the Central Bank of the Republic of Cuba for 1997. At the end of December 1998, H.E. Jose Luis Rodriguez, Minister of the Economy and Planning of the Republic of Cuba, reported that exports decreased 11% in 1998 and imports increased 6% in 1998. The Central Bank of the Republic of Cuba reported that 1997 foreign trade was US$5.5725 billion (exports- US$1.8115 billion and imports- US$3.761 billion), compared to US$5.4345 billion (exports- US$1.8655 billion and imports- US$3.569 billion) in 1996. Using the percentages reported by Minister Rodriguez, 1998 foreign trade would have been US$5.6991 billion (exports- US$1.6125 billion and imports- US$3.9866 billion), not the US$5.143 billion reported by Granma.
SECRETARIES OF STATE OF FINLAND AND OF INDIA VISIT- H.E. Jukka Valtassari, Secretary of State of Finland, visited the Republic of Cuba from 6 April 1999 to 7 April 1999. Finland has the presidency of the European Union (EU) beginning on 1 July 1999. H.E. Basundhara Raje, Secretary of State of India, visited the Republic of Cuba from 4 April 1999 to April 1999, during which time she signed a general cooperation agreement. The two countries are negotiating an Investment Protection and Promotion Agreement. Reportedly, a joint venture to produce pharmaceuticals and a joint venture to produce rodentcide are being discussed. Both joint ventures would be located in India.
MONTHLY FOOD PRICE CHECK- The following is the monthly free-market
price check for the cities of Havana, Camaguey, and Santiago de Cuba, 500
kilometers and 850 Kilometers east of the capital, respectively.
This Monthly Food Price Check compares end of March 1998 prices with
end of March 1999 prices. The average monthly wage is 217 Pesos
(versus 214 Pesos in 1998 and 203 Pesos in 1997). In July 1998, the
Ministry of Finances and Prices of the Republic of Cuba reported that 1,100,000
Republic of Cuba nationals (out of a workforce of approximately 4,500,000),
or 24%, were receiving U.S. Dollar or U.S. Dollar-related bonuses equal
to 1 to 7 times their monthly wage. Various senior-level Republic of Cuba
government officials continue to confirm, however, that more than 1,400,000
workers (out of a workforce approximately of 4,500,000), or 31%, receive
U.S. Dollar or U.S. Dollar-related bonuses equal to 1 to 7 times their
monthly wage. [In July 1997, approximately 1,300,000 workers (out of a
then reported workforce of approximately 4,200,000), or 30% received U.S.
Dollar or U.S. Dollar-related bonuses equal to 1 to 7 times their monthly
wage]. An estimated 35% of Republic of Cuba nationals have access
to U.S. Dollars, although the percentage with access to U.S. Dollars is
highest in Havana, where approximately 20% of the island’s 11 million citizens
reside. The government of the Republic of Cuba reports that approximately
56% of Republic of Cuba nationals have access to United States Dollars.
All Cubans receive a limited subsidized monthly food ration (which generally
does not cover needs for one month), free health care and education, and
pay no more than 10% of their wage for housing. Workers, with the exception
of the self-employed all receive various forms of social security coverage.
KEY: LB-per pound. U-Per unit. ( )-March 1998 price. NA-not available.
SSB-soda-sized bottle. S-Soft. H-Hard. B-Bunch. All prices are in
Cuban Pesos.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13 July 1999- Mr. John S. Kavulich II, President of the U.S.-Cuba
Trade and Economic Council, will be speaking on the subject of “Accessing
International Financing and the Current and Future Role of United States
Investors” at the Cuba Business Roundtable sponsored by New York
City, New York, office of London, United Kingdom-based The Economist Conferences
at the Four Seasons Hotel in Toronto, Ontario, Canada. For additional
information about the conference, contact telephone: (212) 554-0659, facsimile
telephone (212) 698-9732, E-mail: cateambrose@eiu.com,
Internet: http://www.eiu.com