Tuesday, October 21, 2008

Cuban foreign minister: Salary reform advancing


Cuban foreign minister: Salary reform advancing
By E. EDUARDO CASTILLO, Associated Press Writer E. Eduardo Castillo, Associated Press Writer Tue Oct 21, 7:11 pm ET

MEXICO CITY – Cuba is making progress in a salary reform that will ensure waiters don't make more than doctors, but the changes must be handled carefully to avoid economic turmoil, the island's foreign minister said Tuesday.

Appearing before business leaders in Mexico City, Felipe Perez Roque said reforms within the communist system will help guarantee that people earn a salary more commensurate with their career.

"We are in a salary reform that allows people to earn for what they do and resolves the contradiction in Cuba ... in which the bellboy of a hotel or the employee of a restaurant, with tips, earns more than a surgeon," he said.

But he cautioned that the change "has to be done in phases."

"If they just start throwing money in the streets without support, there will be inflation and it will damage our currency," he said.

Under the island's communist economic system, nearly all Cubans work for the government and earn an average monthly wage of 408 Cuban pesos, or just under US$20. That is supplemented by food and other subsidies.

People working in the tourist industry often receive tips that can far surpass state wages and give them greater access to luxury goods at hard-currency stores.

President Raul Castro and other Cuban officials have talked of the need for salary reforms and the government announced in June it would start paying workers on the basis of individual rather than group production so that workers who don't do their share or are frequently absent don't earn the same as those who show up regularly and do a good job.

The government in April raised salaries of court workers and increased monthly pensions for all workers. But the salary increases could not be extended to other sectors immediately because of insufficient resources.

Perez Roque also said that Cuba is working toward having a single currency.

Cuba has had two primary currencies since the collapse of the Soviet Union wrecked its economy and spurred its turn to tourism. Tourist businesses took U.S. dollars and charged U.S. prices, while the peso was maintained for everyday transactions.

A convertible peso, largely linked to the dollar, is now used for tourism and at stores offering goods that are often unavailable in local pesos.

Officials have repeatedly said they hope to bring the two systems together, but say that cannot be done until productivity increases.

Perez Roque also said that relations with the European Union have improved after the EU moved last year to lift sanctions imposed on Cuba for its jailing of 75 dissidents in 2003.

"There has been a process of reconstruction of Cuba's relations with the European Union," Perez Roque said. "In general, Cuba's relations with the EU are advancing and improving."

Also Tuesday, Perez Roque met with President Felipe Calderon and invited the Mexican leader to visit Cuba. No date was set for a visit.

Both Perez Roque and Calderon celebrated closer relations. Ties between the countries soured under the 2000-2006 presidency of Vicente Fox, when Mexico voted at the U.N. in favor of monitoring human rights in Cuba. Relations reached a low in 2004, when both countries called home their ambassadors.

Mexico signed an agreement with Cuba on Monday to deport Cubans caught moving through Mexico illegally to reach the U.S.

Monday, October 20, 2008

20bn barrel oil discovery puts Cuba in the big league


20bn barrel oil discovery puts Cuba in the big league
• Self-reliance beckons for communist state
• Estimate means reserves are on a par with US

* Rory Carroll, Latin America correspondent
* The Guardian,
* Saturday October 18 2008

Friends and foes have called Cuba many things - a progressive beacon, a quixotic underdog, an oppressive tyranny - but no one has called it lucky, until now .

Mother nature, it emerged this week, appears to have blessed the island with enough oil reserves to vault it into the ranks of energy powers. The government announced there may be more than 20bn barrels of recoverable oil in offshore fields in Cuba's share of the Gulf of Mexico, more than twice the previous estimate.

If confirmed, it puts Cuba's reserves on par with those of the US and into the world's top 20. Drilling is expected to start next year by Cuba's state oil company Cubapetroleo, or Cupet.

"It would change their whole equation. The government would have more money and no longer be dependent on foreign oil," said Kirby Jones, founder of the Washington-based US-Cuba Trade Association. "It could join the club of oil exporting nations."

"We have more data. I'm almost certain that if they ask for all the data we have, (their estimate) is going to grow considerably," said Cupet's exploration manager, Rafael Tenreyro Perez.

Havana based its dramatically higher estimate mainly on comparisons with oil output from similar geological structures off the coasts of Mexico and the US. Cuba's undersea geology was "very similar" to Mexico's giant Cantarell oil field in the Bay of Campeche, said Tenreyro.

A consortium of companies led by Spain's Repsol had tested wells and were expected to begin drilling the first production well in mid-2009, and possibly several more later in the year, he said.

Cuba currently produces about 60,000 barrels of oil daily, covering almost half of its needs, and imports the rest from Venezuela in return for Cuban doctors and sports instructors. Even that barter system puts a strain on an impoverished economy in which Cubans earn an average monthly salary of $20.

Subsidised grocery staples, health care and education help make ends meet but an old joke - that the three biggest failings of the revolution are breakfast, lunch and dinner - still does the rounds. Last month hardships were compounded by tropical storms that shredded crops and devastated coastal towns.

"This news about the oil reserves could not have come at a better time for the regime," said Jonathan Benjamin-Alvarado, a Cuba energy specialist at the University of Nebraska.

However there is little prospect of Cuba becoming a communist version of Kuwait. Its oil is more than a mile deep under the ocean and difficult and expensive to extract. The four-decade-old US economic embargo prevents several of Cuba's potential oil partners - notably Brazil, Norway and Spain - from using valuable first-generation technology.

"You're looking at three to five years minimum before any meaningful returns," said Benjamin-Alvarado.

Even so, Cuba is a master at stretching resources. President Raul Castro, who took over from brother Fidel, has promised to deliver improvements to daily life to shore up the legitimacy of the revolution as it approaches its 50th anniversary.

Cuba's unexpected arrival into the big oil league could increase pressure on the next administration to loosen the embargo to let US oil companies participate in the bonanza and reduce US dependency on the middle east, said Jones. "Up until now the embargo did not really impact on us in a substantive, strategic way. Oil is different. It's something we need and want."

Sunday, October 19, 2008

Cuba's first Russian Orthodox cathedral opens

Cuba's first Russian Orthodox cathedral opens
Sun Oct 19, 2:06 pm ET

HAVANA – Cuba's first Russian Orthodox cathedral was consecrated Sunday amid church bells, liturgical chants and the presence of President Raul Castro, in a sign of goodwill toward the island's former chief benefactor.

Russian diplomats and members of Cuba's dwindling Russian community crowded into the whitewashed seaside cathedral, which is topped by a gleaming gold dome.

Dressed in a dark suit and tie, Castro attended the opening but left before the liturgical service that followed. His good relations with Russian officials date to Soviet times, and his older brother Fidel attended the consecration of a nearby Orthodox church for Greek and other non-Russian Orthodox Christians in 2004.

The new Our Lady of Kazan cathedral has been welcomed by many in Cuba's Russian community, which has dwindled to several hundred as most returned home following the collapse of communism in Eastern Europe. Tens of thousands of Russian technicians and military officers lived in Cuba before the Soviet Union dissolved.

The Russian Church's top foreign relations official, Metropolitan Kirill, traveled from Moscow to perform Sunday's ceremony, which was also attended by Cuban National Assembly President Ricardo Alarcon and other officials.

Sunday, October 12, 2008

In food crisis, Cuba limits sales so all can eat


In food crisis, Cuba limits sales so all can eat
Oct 10 02:54 PM US/Eastern
Associated Press Writer

HAVANA (AP) - Cuba is limiting how much basic fruits and vegetables people can buy at farmers' markets, irritating some customers but ensuring there's enough—barely—to go around.

The lines are long and some foods are scarce, but because the government has maintained and even increased rations in some areas, Cubans who initially worried about getting enough to eat now seem confident they won't go hungry despite the destruction of 30 percent of the island's crops by hurricanes Gustav and Ike last month.

"Of the little there is, there is some for everyone," 65-year-old Mercedes Grimau said as queued up behind more than 50 people to buy lettuce, limited to two pounds per person.

"I'm not afraid that I will be left without food, but it's a pain to think about all the work we are going to have to go through," Grimau added. "Two or three months ago the farmers markets were well-stocked."

Cuba's government regularly stockpiles beans and other basics, and Economics Minister Jose Luis Rodriguez said authorities are ready to increase the $2 billion they already spend on food imports annually. The world credit crisis won't affect much of those imports because U.S. law forces communist Cuba to use cash to purchase American farm goods. But imports from other countries bought with credit could become more difficult or expensive.

The government is delivering all items distributed each month on the universal ration that provides Cubans with up to two weeks of food—including eggs, beans, rice and potatoes—at very low cost. In some hard-hit provinces, extra food has been added.

But the rest of the food Cubans supplement their diets with at supply-and-demand farmers markets and government produce stands has dwindled, prompting the government to limit consumer purchases and cap prices on items including rice, beans, root crops and fresh greens.

Rodriguez has sought to dispel speculation about a replay of the desperate early 1990s, when shelves were bare and people survived for weeks on one small meal daily. Cubans who lived through deprivation after the Soviet Union's collapse say the current food situation doesn't come close.

"It is true that it will take us some time to bring the agricultural production up to the levels that existed before the hurricanes," Rodriguez told state television this week. "Nevertheless, there is no reason to speculate or assume that there will be any hunger."

Although Cuba's relative financial isolation partially protects it from the jolts of the world economy, an extended credit crisis could stunt the island's foreign currency income if Cubans living abroad lose jobs and stop sending family remittances, or if potential tourists can no longer afford to travel.

But now, Cuba's top challenge is to increase local production of fruits and vegetables sold at the farmers' markets.

Waiting at one market on a recent morning, 55-year-old homemaker Regla Suazo said, "At least with the measures I know I can buy something." Shortly thereafter, the first truck of the day pulled up with green beans, green onions, guavas, avocados, corn, squash, cassava root and sweet potatoes.

But quantities were much smaller than usual. Vendor Nadia Gomez, who received nothing that day, said police checkpoints leading into Havana now turn away trucks unauthorized to market produce in the capital or have been ordered send their goods to harder-hit areas.

Cuban agricultural officials expect six months of food shortages, and are increasing short-cycle crops such as salad greens and taking other measures to ensure everyone gets enough to eat.

At Cuatro Caminos farmers market, among Havana's largest and most varied, vendor Juan Carlos Martinez lamented he had only papayas, guavas and pineapples to sell. "This isn't the business it used to be," he said.