U.S. DOLLAR UNCHANGED AGAINST THE PESO- Republic of Cuba government-operated Cajas de Cambio S.A. (CADECA) sold the Convertible Peso, equal to US$1.00, for 22 Pesos and purchased the U.S. Dollar for 22 Pesos as it has since 16 June 1999.  CADECA had sold the Convertible Peso for 22 Pesos and purchased the U.S. Dollar for 21 Pesos since 13 April 1999.  The official international exchange rate of one Peso to one U.S. Dollar, in effect for more than thirty years, remained unchanged.  The government of the Republic of Cuba maintains a fixed exchange rate for its international dealings and a more flexible exchange rate for domestic use.  The government of the Republic of Cuba 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.
 

CADECA Buy	CADECA Sell	From / To
22	22	16 June 1999 to 4 July 1999
22	21	13 April 1999 through 15 June 1999
21	21	15 March 1999 to 12 April 1999
20	21	4 March 1999 to 14 March 1999
21	21	19 February 1999 to 3 March 1999
21	20	13 January 1999 to 18 February 1999
21	22	26 November 1998 to 12 January 1999
21	21	15 July 1998 to 25 November 1998
19	21	1 April 1998 to 14 July 1998
20	22	12 March 1998 to 31 March 1998
21	23	11 February 1998 to 11 March 1998
23	23	August 1997 to 10 February 1998

FLORIDA COMPANIES SEEKING LICENSES FOR FERRY SERVICES TO CUBA- Companies based in Fort Lauderdale, Florida, and in Key West, Florida, have applied to the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury in Washington, D.C., for licenses to operate ferry service between the United States and the Republic of Cuba.  The applied for routings would be Fort Lauderdale-Havana and Key West-Havana.  Travel on the ferry service would be limited to individuals subject to United States law traveling to the Republic of Cuba under the auspice of a general OFAC license or a specific OFAC license.  Individuals subject to United States law traveling to the Republic of Cuba on a “fully hosted” basis would not be permitted to travel on the ferry service.  The companies applying for the OFAC licenses confirm their intention to 1) decrease the roundtrip cost of a ticket from what is currently charged by regularly-scheduled aircraft charter companies with Carrier Service Provider OFAC licenses 2) increase substantially the quantity of baggage permitted for each traveler 3) lower excess baggage fees and 4) cargo would be transported at costs substantially less than the current average of US$2.00 per pound charged by companies with CSP licenses from the OFAC that use aircraft.

PRICEWATERHOUSECOOPERS REPORTS ON CUBA AS AN INVESTMENT- The Calgary, Canada, office of the London, United Kingdom-based PricewaterhouseCoopers, the international professional services organization, published the following information: In November 1997 the Alberta Court of Queen's Bench appointed PricewaterhouseCoopers Inc., as Interim Receiver-Manager of Calgary, Canada-based Bresea Resources Ltd.  PricewaterhouseCoopers is aware of a 8 June 1999 takeover bid circular from Toronto, Canada-based MacDonald Oil Exploration Ltd., wherein MacDonald Oil Exploration Ltd. offers to purchase the common shares of Bresea Resources Ltd. The common shares of Bresea have been cease traded by the Quebec Securities Commission and the British Columbia Securities Commission since May 1997 and have been delisted from the Montreal Stock Exchange (MSE).  Generally, the board of directors of a company that is the target of a takeover bid will evaluate the bid and make a recommendation to the shareholders to accept or reject the offer.  Bresea Resources Ltd. does not have a board of directors. PricewaterhouseCoopers, in its capacity as Receiver-Manager of Bresea Resources Ltd., is currently reviewing the propriety of the offer by MacDonald Oil Exploration Ltd. to purchase the Bresea Resources Ltd. common shares and will be preparing submissions to the securities commissions. The offer by MacDonald Oil Exploration Ltd. requests that Bresea Resources Ltd. shareholders consider receiving 1 MacDonald Oil Exploration Ltd. convertible preferred share and 1 MacDonald Oil Exploration Ltd. E-Warrant for each Bresea Resources Ltd. share.  Each convertible preferred share is convertible into 3 MacDonald Oil Exploration common shares until 1 June 2003 or redeemable by MacDonald Oil Exploration Ltd. for US$.28 per share in certain circumstances and each MacDonald Oil Exploration Ltd. E-Warrant entitles the holder to purchase 1 MacDonald Oil Exploration Ltd. common share for US$0.07 per share until 1 March 2000 or thereafter for US$0.14 per share until 1 March 2001. PricewaterhouseCoopers notes that, based on the information in the offer by MacDonald Oil Exploration Ltd., the net asset value (on a fully diluted basis) of MacDonald Oil Exploration Ltd. is US$0.28 per share.  During the past twelve months (June 1998 to May 1999), the common shares of MacDonald Oil Exploration Ltd. have traded from a high of US$0.07 to a low of US$0.02. PricewaterhouseCoopers also notes that, based on the information contained in the offering circular of MacDonald Oil Exploration Ltd., MacDonald Oil Exploration Ltd. is an exploration company focussed exclusively on oil and gas development opportunities in the Republic of Cuba. PricewaterhouseCoopers views this exploration as highly speculative and subject to political risks.  Furthermore, it could present legal issues for current Bresea shareholders subject to United States law.  PricewaterhouseCoopers, in its capacity as interim Receiver of Bresea Resources Ltd., does not believe that the offer by MacDonald Oil Exploration Ltd. is in the best interest of the Bresea Resources Ltd. shareholders and recommends that the offer be rejected.

TELECOM ITALIA CHAIRMAN’S REMARKS DO NOT PRECLUDE SALE OF ETECSA INVESTMENT- Mr. Roberto Colannino, Chairman and Chief Executive Officer of Rome, Italy-based Telecom Italia SpA, said that no specific decisions had been made as to the divestiture of non-Europe-based assets, including its investment in Republic of Cuba government-operated Empresa de Telecomunicaciones de Cuba S.A. (ETECSA).  Mr. Colannino, who may visit the Republic of Cuba in September 1999, has previously said that Telecom Italia would focus upon Europe-based investments and would dispose of “non-strategic assets.” ETECSA is a joint venture company controlled by the Ministry of Communications of the Republic of Cuba within which Brussels, Belgium-based Stet International, a subsidiary of Telecom Italia SpA, has a 29.29% interest purchased for a reported US$300 million.  Mr. Colaninno is also the Chief Executive Officer of Ivrea, Italy-based Olivetti S.p.A., which purchased 52.1% of the common shares (not savings shares) of Telecom Italia SpA in May 1999 for approximately US$33 billion.  Olivetti S.p.A. has a longstanding presence within the Republic of Cuba, having sold electronic equipment (including cash registers) to Republic of Cuba government-operated companies.

BAT SEEKS CIGARETTE PRODUCTION MONOPOLY IN CUBA- Mr. Flavio Andrade, President of the Brazil-based Souza Cruz subsidiary of London, United Kingdom-based British American Tobacco plc. (BAT) reported that BrasCuba, its Republic of Cuba-based joint venture with Republic of Cuba government-operated Union de Empresas del Tobacco, is seeking permission from the government of the Republic of Cuba to obtain the exclusive production rights for cigarettes within the Republic of Cuba.  “Today there exists a joint venture producing cigarettes in which we are a partner with the Republic of Cuba government, and another government cigarette producer which at the same time is our partner and competitor. We’ve proposed changing this and doubling our investment and are awaiting a response,” reported Mr. Andrade.

KOMATSU FORKLIFTS TO BE RECONDITIONED- Republic of Cuba government-operated Unecamoto, a subsidiary of the Ministry of Steel, Mechanical, and Electronic Industry of the Republic of Cuba, reported that the company would commence a reconditioning program for forklifts produced by Tokyo, Japan-based Komatsu Ltd.  The reconditioning program is being conducted with financing from The Netherlands-based Brandsma. There are a reported 5,000 Komatsu-manufactured forklifts within the Republic of Cuba, many inoperable.  Unecamoto will seek to develop a reconditioning center that can be used for Komatsu-manufactured forklifts which are located in Caribbean Sea-area countries.

LIVESTOCK TO BE CLONED- Mr. Jose Ramon Morales Carballo, Director of the Republic of Cuba government-operated Research Center for Improved Livestock, reported that cloned calves are expected to be born before the end of 1999.  The government of the Republic of Cuba currently clones fresh water carp for consumption by Republic of Cuba nationals.

SALT WATER FISH FOR EXPORT TO EUROPE- The Ministry of Fishing of the Republic of Cuba plans to produce up to 100,000 tons of high quality salt water fish, mainly for export to Europe. The fish farms will be located in various bays and inlets.  A pilot fish farm, using species with substantial sales (reportedly US$12.00 per kilogram) within countries in Europe, reportedly produced at twice the rate of similar farms in Europe.  Reportedly, large-scale fish production will begin later in 1999 with an unnamed non-Republic of Cuba-based company.

WHEAT IMPORT UPDATE- The Republic of Cuba imported 98,168 tons of wheat from 1 June 1999 to 30 June 1999 from the port of Rouen, France.
 

Total Imports of Wheat (in tons)	Reporting Period
98,168	1 June 1999 to 30 June 1999
70,868	1 June 1999 to 16 June 1999
25,300	1 June 1999 to 9 June 1999
51,660	1 May 1999 to 26 May 1999
26,250	1 May 1999 to 12 May 1999
101,017	1 April 1999 to 30 April 1999
48,411	1 April 1999 to 21 April 1999
35,286	1 April 1999 to 14 April 1999
22,161	1 April 1999 to 7 April 1999
26,250	1 March 1999 to 31 March 1999
447,000	July 1998 to March 1999
256,000	July 1997 to March 1998

SPAIN COMMERCE UPDATE- Total announced investment since 1990 within the Republic of Cuba by Spain-based companies is estimated to be US$350 million, of which approximately US$100 million has been committed/delivered within the Repulbic of Cuba.  Spain exported approximately US$554.80 million in products and services to the Republic of Cuba in 1998.  The Republic of Cuba exported (primarily tobacco) approximately US$144 million in products and services to Spain in 1998.  Spain was the Republic of Cuba’s largest bilateral trading partner in 1998.  The government of the Republic of Cuba owes approximately US$1 billion to the government of Spain (including approximately US$356 million to the export credit insurance agency, CESCE) and to Spain-based companies.  Four of the thirteen non-Republic of Cuba-based banks with offices located within the Republic of Cuba are Spain-based.  A reported 183 of the 700 offices within the Republic of Cuba of non-Republic of Cuba-based companies are from Spain.   Approximately 80 of the reported 360 joint ventures, economic associations, and financing arrangements are reportedly with Spain-based companies. Fifteen Spain-based travel agencies have significant operations with the Republic of Cuba. Approximately 50 Spain-based companies account for approximately 90% of total activity by Spain-based companies within the Republic of Cuba.  Spain-based companies with Republic of Cuba-focused commercial relationships include: Madrid, Spain-based Grupo Sol Melia, which manages and/or has equity interests within 13 properties within the Republic of Cuba; Madrid, Spain-based Tabacalera S.A., which is the largest source of financing for the tobacco industry; Barcelona, Spain-based Aguas de Barcelona S.A. (Agbar), the largest privately-held water company in Spain; Madrid, Spain-based Endesa S.A., the largest power company in Spain; Madrid, Spain-based Argentaria S.A., the third-largest commercial bank in Spain; Bilbao, Spain-based Banco Bilbao Vizcaya S.A., the second-largest commercial bank in Spain; Madrid, Spain-based Cofides S.A., a company with 60% of its shares controlled by the government of Spain, that provides financing for investments; Spain-based Cesco S.A, which is participating in the construction of four hotels; Spain-based Aldeasa S.A., which provides products and services for airports; and Madrid, Spain-based Iberia Airlines.

CUBA BEGINS USING EURO CURRENCY FOR SOME EU TRANSACTIONS- As scheduled, the Central Bank of the Republic of Cuba began on 1 July 1999 to use the Euro currency for transactions with eleven of fifteen European Union (EU)-member countries using the Euro currency: Germany, Austria, Belgium, Spain, Finland, France, The Netherlands, Ireland, Italy, Luxembourg, and Portugal.  The Government of the Republic of Cuba reported that approximately 35% of total 1998 bilateral trade of approximately US$5.67 billion was with EU-member countries.  The government of the Republic of Cuba announced that family remittances originating from EU-member countries would now be required to be sent to the Republic of Cuba using the Euro.  The remittance can then be exchanged for any currency at Republic of Cuba government-operated banks.  With respect to bulk food commodities, which are priced globally in U.S. Dollars, the Republic of Cuba will shift payment for such imports to the Euro.  The government of the Republic of Cuba is also seeking to use the Euro for transactions with the People’s Republic of China, North Korea, and with Vietnam, among other countries.

MEXICO MAY SIGN INVESTMENT PROTECTION AND PROMOTION AGREEMENT- The government of Mexico and the government of the Republic of Cuba may soon sign an Investment Protection and Promotion Agreement.  In 1998, Mexico exports (primarily oil) to the Republic of Cuba were estimated to be US$283 million.  In 1998, Republic of Cuba exports to Mexico were estimated to be US$36 million.

CORRUPTION UPDATE- H.E. Dr. Carlos Lage, a Vice President of the Council of State of the Republic of Cuba, reported that there was no corruption at the “higher levels” of the government of the Republic of Cuba, but confirmed that corruption existed within the “middle and lower levels” of society.  “If we are talking about corruption in government, we can say there is none,” said the Vice President.  “If we are talking about could there be someone in a position of responsibility at the middle level or base who at a given moment has a lifestyle superior to the austerity and modesty we demand, certainly and we take action when we find out about it,” he added.  The Vice President attributed the recent high profile firings to a “heightened demand for efficiency and discipline.” Some of the most recent instances of personnel changes include: 1) Dr. Manuel Limonta, the highly-respected and long time Director of the Republic of Cuba government-operated Center for Biotechnology and Genetic Engineering, who was replaced by the Deputy Director 2) The Director, the Vice Director, and the Administrator of the Republic of Cuba government-operated Hermanos Almejeiras Hospital in the city of Havana and 3) a senior-level official of the National Power Company of the Republic of Cuba, who reportedly accepted a personal computer and meal from a non-Republic of Cuba-based client.  Other Republic of Cuba nationals dismissed during the last months include at least two generals of the Revolutionary Armed Forces of the Republic of Cuba (FAR); officers of the FAR; the Vice President of Republic of Cuba government-operated Cimex S.A.; the Director of the Valle de Berroa Free Trade Zone which is managed by Cimex S.A.; the Director of the Hotel Division of Republic of Cuba government-operated Cubanacan S.A.; senior-level managers of Republic of Cuba government-operated Rumbos S.A.; managers of the U.S. Dollar retail stores of Republic of Cuba government-operated Carocol S.A., (a subsidiary of the Ministry of Tourism of the Republic of Cuba); warehouse managers of Republic of Cuba government-operated Cubalse S.A; and managers of Republic of Cuba government-operated Hoteles Horizontes S.A.

MONTHLY FOOD PRICE CHECK (TWELVE MONTH COMPARISON)- 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 Havana, respectively.  This Monthly Food Price Check compares end of June 1998 prices with end of June 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.  ( )- End of June 1998 price.  NA- not available. SSB-soda-sized bottle.  S- Soft.  H- Hard.  B- Bunch.  All prices are in Cuban Pesos.
 

Food Product	Havana	Camaguey	Santiago de Cuba
Rice (LB)	6 (5)	5 (3.5)	5-7 (5)
Black Beans (LB)	10 (7-8)	9 (7)	10 (8)
Pork (LB)	25 (25)	17 (15)	15 (16-17)
Cooking Fat (LB)	15 (20)	16 (16)	15 (13-14)
Lamb (LB)	25 (25)	14 (13)	14 (15)
Ham (LB) boned	37 (50)	29 (29)	28 (30)
Garlic (U)	1.5-2 (1-1.5)	.60 (1)	1-1.5 (1)
Onion (LB)	5-6 (5-7)	2 (2.5)	6 (3)
Tomato (LB)	6-10 (12-15)	6 (NA)	4 (NA)
Lettuce (B)	6 (NA)	3 (NA) small	2 (NA) small
Cabbage (U)	3-6 (4)	3 (NA)	NA (NA)
Cucumber (LB)	2 (2-2.5)	3 (1.5)	2 (3)
Carrots (LB)	3 (4)	1.5 (1.5)	2 (3)
Malanga (LB)	3-4 (3-4)	4 (3)	4 (3.5)
Yucca (LB)	2 (1.5-2)	1.5 (1)	1 (1)
Sweet Potato (LB)	1.5 (1.2)	1.5 (1.2)	1.5 (1)
Squash (LB)	2 (2)	2 (1)	1.5 (1)
Tomato Sauce (BSB)	10 (10)	8 (8)	8 (10)
Limes (U)	.50-1 (.50-1)	.6 (.50)	.10 (.15)
Oranges (U)	.50-1 (.50-1)	.20 (.33)	.20 (.33)
Tangerines (U)	NA (NA)	NA (NA)	.20 (.25)
Grapefruit (U)	NA (NA)	NA (NA)	.33 (NA)
Pineapple (U)	5-20 (10-15)	4-6 (5-6)	3-9 (6-8)
Papaya (LB)	4 (3.5)	1.5 (1.2)	1 (1)
Banana (U) Fruit	.50-1 (.50-1)	.60 (.50)	.50-1 (.50)
Banana (U) Soft Cooking	2-4 (2-4)	1.5-2 (1.2-1.5)	2-2 (1.5-2)
Banana (U) Hard Cooking	.50-1 (.50-1)	.33 (.25)	.25 (.20)
String Beans (B)	5 (4)	3 (4)	2 (2)
Peanuts (LB)	11 (9)	10 (8)	NA (10)
Corn Meal (LB)	5 (3)	3 (3.4)	4 (4)

13 July 1999 to 14 July 1999- Mr. John S. Kavulich II, President of the U.S.-Cuba Trade and Economic Council, will be speaking in Toronto, Canada, 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.  The Cuba Business Roundtable will be held at the Four Seasons Hotel in Toronto.  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

15 July 1999- Mr. John S. Kavulich II, President of the U.S.-Cuba Trade and Economic Council, will be speaking in Washington, D.C., on the subject of “Cuba: Production, Consumption, and Imports of Food and Agricultural Products” at the annual Attaché Seminar at the Marriott Hotel at Metro Center sponsored by the Washington, D.C.-based U.S. Agricultural Export Development Council.  The annual Attaché Seminar is attended by approximately 300 individuals.  For additional information about the Attaché Seminar, contact telephone: (202) 887-8992, facsimile telephone (202) 887-8993, E-mail: usaedc@msn.com