March2017-Flipbook

cubatrade

MARTÍ AND YBOR: CUBA’S CENTURY OLD LINK TO TAMPA

The Magazine for Trade & Investment in Cuba

March 2017

COFFEE’S COMEBACK

Small scale farms meet global demand

CONGRESS

AND CUBA

The prospects of rolling

back the embargo

Proponents for Changing Course: Sens. John Boozman (R-Ark.)

and Amy Klobuchar (D-Minn.) on the steps of the U.S. Capitol.

ENERGIZING CUBA

Investor’s guide to oil, gas and nickel

TAKING OFF

U.S. commercial airlines fill the skies

PRIVATE SECTOR PIPELINE

Remittances pay the service bill

THE CHINA QUESTION

Will Beijing fill the Caracas void?


Arkansas: Outfront on Cuba Trade

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a natural for sprinting to the front of the pack when it comes to food-source trade with Cuba.

In Arkansas, we’re proud to help our neighbors to the south by sharing our resources and our

expertise — which in the end will help both economies to grow and prosper.

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content 03/2017

UP FRONT

10 PANORAMA

Deals, events and transactions of note

for trade and investment in Cuba

26 THE CUBA BRAND

Stocks and bonds from before the

Revolution are still in demand, just

not at par value

28 REMITTANCES

For Cubans who travel back and

forth between Miami and their island

home, Ño Que Barato has become an

institution

46 TOURISM

Banyan Tree Hotels & Resorts has big

ambitions for its second destination in

Latin America

14 INDEX

Up in the Air: The Surge of Flights

from the U.S. to Cuba

16 IDEAS + INNOVATION

A Miami-based auto distributor is

shipping electric cars to Cuba

18 INTERVIEW

A Q&A with Mariel Special Economic

Development Zone Director

Ana Teresa Igarza

DEPARTMENTS

20 WASHINGTON REPORT

Warming U.S.-Cuba relations have

resulted in a lobbying boom from U.S.

corporations

22 POLITICS

Florida Gov. Rick Scott’s chilling effect

on ports seeking to trade with Cuba

24 TRANSITIONS

With Venezuelan support waning, a

big question is whether China wants

to fill the gap

4 CUBATRADE MARCH 2017

30 RECREATION

How a Vermont non-profit resurfaced

Cuba’s Tennis Federation courts in

Havana. Next: Grass Courts?

32 TRADE

Charcoal made from Marabún, is

the first cargo shipment to the U.S. in

more than 50 years

34 ENTREPRENEURS

How one family of farmers in eastern

Cuba made the transition to becoming

a small business

38 MEDIA

How American companies are

tackling the nuances of audio-visual

productions in Cuba

42 FINANCE

Money remitters are starting to play a

vital role in business transactions

48 AGRICULTURE

Cuba’s sugar harvest this season

should be its biggest in years, and even

though it’s starting from a small base,

it could have an economic impact.

LIFESTYLE

86 CUBAN ART

A Talk with Cuban Sculptor Alberto

Lescay.

90 REPORTERS NOTEBOOK

A visit to Cuba’s Villa Blanca.

94 BOOK REVIEW

Richard E. Feinberg’s guide to the

Cuban economy is nothing less than a

handbook on how to fix what’s broken

FINAL WORD

96 IN CLOSING

Soy growers hope for a continued

opening of Cuba to U.S. agriculture


How do we move food

from Hastings to Havana?

Break down barriers.

When America farmers are able to freely

export their crops to other countries, it

nourishes the people who need them

most. Opening new markets for US

agriculture boosts food production, spurs

job creation and puts food on more tables

across the globe. That’s why we champion

open trade flows – to raise incomes for

all and build local economies that thrive.

Learn more at cargill.com/food-security.

Cargill is committed to helping the world thrive.

© 2016 Cargill, Incorporated


features

50

50 CONGRESS AND CUBA

Executive orders may come and go, but only Congress

can end the half-century trade embargo

60 THE SMELL OF SUCCESS

The Cuban Mountain Coffee company looks forward

to new foreign markets—including the US—as it

moves forward with a deal to revive production in

Eastern Cuba

65 THE TAMPA-CUBA CONNECTION

A new renaissance for Tampa’s centuries-old ties to

the island

65

81 INVESTMENT REPORT

Analyzing Cuba’s call for foreign direct investment

in energy and mining

ON THE COVER

Sens. John Boozman (R-Ark.) and Amy Klobuchar

(D-Minn.) stand on the steps of the U.S. Capitol.

Photo by Mark Finkenstaedt.

81

6 CUBATRADE MARCH 2017


A FIVE STAR DESTINATION

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Puerto Rico’s natural beauty and world-class attractions make it a must-visit vacation spot,

but the All Star Island's incentive package for the tourism and hospitality industry is just as enticing.

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docking facilities for tourists

• Natural resources that are useful as a source of active or

passive entertainment or amusement

• Other facilities or activities that , due to the special attractive

features deriving from their usefulness as a source of active

or passive entertainment or amusement, constitute a

stimulus to domestic or foreign tourists

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There's much more the All Star Island has to offer. For more information call 787.721.2400 or visit:

WWW.PUERTORICOTOURISM.PR.GOV


editors note

Taking it to the Hill

Our cover story this month looks at the legislative initiatives

inside the U.S. Congress to either loosen the restrictions to trade

and travel with Cuba, or to end the embargo outright.

Make no mistake. It will not be an easy fight for these new

bills to win passage.

Despite the fact that an overwhelming majority of Americans

(including Cuban Americans) support lifting the embargo,

there remains strong resistance to change from a handful of Cuban

American senators and congressmen who continue to hold

our national policy hostage. They accomplish this by blocking any

new bills from coming to the floor of the Senate or House, where

an open vote could turn them into law.

Now all eyes are on the new president, Donald Trump, to

see whether he will be open to change—or if he will fall to the

blandishments of Cuban American legislators who cannot let

go of grievances that date back a half century. Trying to figure

out which way he will lean is the Cuba game of the moment, as

all interested parties read signs in the tea leaves of his cabinet

appointments—or in his most recent dinner guests.

What is important to understand, however, is that the president

does not have the exclusive executive power to abolish the

embargo. President Obama advocated for its end, and punched

enough holes in the rules and regulations to move things forward.

But the embargo still stands, and those advances can now

be reversed by Trump.

Even if the new president chooses to move forward, Congress

must still weigh in. When the embargo was started by

Eisenhower and made comprehensive by Kennedy, it was a matter

of executive order. After 1992, things changed. The embargo

became a U.S. law that was tightened by additional legislation

in 1994 and 1996. And those laws will require Congressional

action to undo.

Yes, a presidential signoff must nonetheless accompany the

passage of any pro-engagement, anti-embargo legislation. The

president can still veto any new bills, and the odds of overcoming

any presidential veto, historically speaking, are about one

in ten. The hope for all those who find the embargo to be both

useless and cruel is that President Trump, having been elected by

a populist movement, will head the voices of that movement—

and not fall prey to a contentious minority holding onto a Cold

War mentality. H

J.P. Faber. Editor-in-Chief

Publisher

Richard Roffman

Editor-in-Chief

J.P.Faber

Executive Publisher

Todd W. Hoffman

Associate Publisher

Ritchie Lucas

Art Director

Jon Braeley

Production Manager

Toni Kirkland

Associate Editor

Nick Swyter

Copy Editor

Larry Luxner

Writers

Michael Deibert

Doreen Hemlock

Suzette Laboy

Victoria Mckenzie

Emilio Morales

Oscar Musibay

Ana Radelat

Ariana H. Reguant

Photographers

Mark Finkenstaedt

Bahare Khodabande

Tina-Jane Krohn

Monique LaRouche

Matias J. Ocner

Vice President Sales

Sherry Adams

Sales Executive

Magguie Marina

Research & Development

Sydney Glanz

Aviation Consultant

Lauren Stover

Cuba Trade Magazine is published each month by Third Circle Publishing, LLC,

at 2 S. Biscayne Blvd., Suite 2450, Miami, FL USA 33131. Telephone: (786)

206.8254. Copyright 2016 by Third Circle Publishing LLC. All rights reserved.

Reproduction in whole or part of any text, photograph or illustration without prior

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8 CUBATRADE MARCH 2017


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panorama

Deals, events

and transactions

of note for trade

and investment

in Cuba

Record number of tourists

Cuba’s Ministry of Tourism says the

country welcomed a record four million

tourists in 2016––up 13 percent from

2015. Tourist arrivals have steadily

increased each year since 2008. The arrival

of U.S. cruises and commercial airlines is

expected to spur more growth in 2017.

Sailing to Cuba

Norwegian Cruise Line, Royal Caribbean

International, Carnival Cruise Line, and

Pearl Seas Cruises—all of which recently

won approval from the Cuban government

to sail to the island—announced plans for

2017. Pearl Seas Cruises completed its

inaugural Cuba trip in January. From May

through November, Royal Caribbean’s

Empress of the Seas will offer 5-night

trips from Tampa. From June through

December, the Norwegian Sky will sail

with weekly 4-night trips from Miami.

The Carnival Paradise will take customers

from Tampa to Havana on a dozen

four- and five-day trips between June and

October.

More flights to Havana

Alaska Airlines and Frontier flew their

inaugural flights to Havana in early

January. The Alaska Airlines flight from

Los Angeles is the only one to Cuba from

the West Coast of the U.S. At the same

time, several airlines have cut the number

of flights to Cuba, following weaker

demand than expected.

Cuban economy slumps in 2016

In late December, Economy Minister

Ricardo Cabrisas told the National

Assembly that Cuba's GDP fell 0.9

percent in 2016. The slide comes after

four years of nearly 3 percent annual

growth. Cabrisas said cutbacks in crude

oil deliveries from Venezuela, a drop

in the number of contracts for Cuban

professional services in Venezuela, and

the U.S. trade embargo all contributed

to the slumping economy. He said

economic reforms can boost GDP

growth to 2 percent in 2017, but most

experts doubt that’s possible.

A show of strength

Cuba made a rare show of force in early

January by parading thousands of troops

through Havana’s Revolution Square. The

parade was originally planned for December,

but it was postponed due to the death

of former President Fidel Castro.

Expanded travel bill reintroduced

to Congress

In early January, Rep. Mark Sanford

(R-S.C.) reintroduced the Freedom to

Travel to Cuba Act to the House of

10 CUBATRADE MARCH 2017


Representatives. The bill aims to ease

tourist travel to Cuba. Sens. Jeff Flake

(R-Ariz.) and Patrick Leahy (D-Vt.)

introduced a Senate version of the bill in

the last Congress, which did not vote on

either version of the bill.

‘Wet foot, dry foot’ policy ends

In a surprise move, former President

Obama ended the “wet foot, dry foot”

policy eight days before his term ended.

Previously, Cubans who reached U.S. soil

without a visa could become legal permanent

residents a year after their arrival.

Obama also ended the Cuban Medical

Professional Parole Program, which

allowed Cuban doctors dispatched in third

countries to defect to the United States.

Cuba, meanwhile, is allowing some doctors

who defected to return to the island.

Cabinet hearings signal tough approach

to Cuba

Secretary of State Rex Tillerson, UN

Ambassador Nikki Haley, and Treasury

Secretary Steve Mnuchin all took a tough

stance on Cuba during their confirmation

hearings. Tillerson told Sen. Marco Rubio

(R-Fla.) that all Obama-era actions on

Cuba are under review. He also said he

would recommend Trump veto any bill

to lift the trade embargo unless there is

democracy on the island. Haley wrote to

Sen. Tom Udall (D-N.M.) that she will

not continue last year’s historic decision to

abstain from Cuba’s annual UN resolution

condemning the embargo. Mnuchin wrote

to Sen. Bill Nelson (D-Fla.) that he will

enforce all statutorily mandated sanctions

on Cuba.

Obama era ends with flurry of deals

In the final days of the Obama presidency,

the U.S. and Cuba rushed to sign

several deals, including agreements to

cooperate on search-and-rescue missions

in the Straits of Florida; setting territorial

limits in the oil-rich Gulf of Mexico;

and cooperation on combating oil

spills. The U.S. and Cuba have signed 22

accords since the two countries normalized

relations. Obama also suspended a

section of the Helms-Burton Act that

allows business owners who had property

confiscated during the Revolution to sue

companies using their former holdings.

Every president has routinely suspended

the lawsuit provision every six months

since 1996.

Castro meets U.S. Chamber of Commerce

president

U.S. Chamber of Commerce President

Thomas Donohue spoke with Cuban

President Raúl Castro in early January to

discuss “issues of mutual interest,” according

to Reuters. The meeting happened

before the inauguration of President

Donald Trump, whose policy towards

Cuba remains uncertain.

Cuban cargo reaches Florida

Charcoal made from marabú, a woody

weed known for decimating Cuban farms,

was on the first legal cargo shipment

from Cuba to the U.S. in more than half a

decade. About 40 tons of the charcoal was

shipped to Fort Lauderdale’s Port Everglades

in late January.

Anti-embargo advocacy group fined

Tampa’s Alliance for Responsible Cuba

Policy Foundation was fined $10,000 for

arranging two trips to the island that the

Office of Foreign Assets Control (OFAC)

says were not authorized. OFAC says

it reduced the original fine of $100,000

because the organization did not cause

significant harm.

Castro: Willing to work with Trump

Cuban President Raúl Castro said Cuba

is willing to work with Trump on normalizing

relations with the U.S., but not if it

leads to concessions affecting the country’s

sovereignty. Castro made the comments

at a summit of Latin American and

Caribbean leaders five days after Trump’s

inauguration.

Rubio has Trump’s ear on Cuba

President Trump told reporters on Feb. 16

that he and Sen. Marco Rubio (R-Fla.)

“have very similar views on Cuba.” Rubio

has been one of the staunchest opponents

of engagement with Cuba.

Last-ditch effort to sway Trump

Before Donald Trump assumed

the presidency, two prominent proengagement

coalitions wrote letters urging

him to continue engagement with the

island. The Cuba Study Group and 17

other cosigners asked Trump to conduct

a “comprehensive evaluation of progress

made in U.S.-Cuba relations.” Dozens

of agricultural groups signed a letter that

said: “We urge you not to take steps to

reverse progress made in normalizing

MARCH 2017

CUBATRADE

11


PANORAMA

relations with Cuba, but also solicit your

support for the agricultural business sector

to expand trade with Cuba.”

Museum spurned

An exchange between the Bronx Museum

of the Arts and the Cuba’s National

Museum of Fine Arts fell apart after

Cuba backed out of exhibiting its artwork

in New York. The Bronx Museum

director told the New York Times that the

exchange dissipated after Cuban officials

refused to allow National Museum art

pieces to leave the country. The Bronx

Museum loaned more than 80 pieces of

art to Cuba in the summer of 2015.

Bipartisan group of lawmakers visit Cuba

Sens. Patrick Leahy (D-Vt.), Thad Cochran

(R-Miss.), Michael Bennet (D-Colo.),

and Tom Udall (D-N.M.) joined

Reps. Jim McGovern (D-Mass.) and Seth

Moulton (D-Mass.) on a trip to Cuba to

promote economic development. Cuban

state media reported that the delegation

met President Raul Castro to discuss the

"common interest of both countries."

renewable resources by 2030, up from

about 5 percent today.

First local TV station in Cuba

Miami’s WPLG–Channel 10, an ABC

affiliate, became the first local TV station

in the U.S. to have a full-time crew in

Havana. The team consists of reporter

Hatzel Vela and photojournalist Brian

Ely. WPLG says its arrangement with the

Cuban government comes with “no strings

attached.”

Agriculture financing bill reintroduced

to Congress

Rep. Rick Crawford (R-Ark.) reintroduced

the Cuba Agricultural Exports

Act to the House in January. Sens. Heidi

Heitkamp (D-N.D.) and John Boozman

(R-Ark.) introduced a Senate version of

the bill, which aims to remove restrictions

on offering credit for agriculture exports

to Cuba. The last Congress did not vote

on previous versions of the bills.

Colorado explores ties to island

Colorado Gov. John Hickenlooper

visited Cuba with a business delegation

to expand ties to the island. Hickenlooper

told the Denver Post he was impressed

by the island’s entrepreneurs and that

educational exchanges would be mutually

beneficial. He also said Colorado can

share its expertise on renewable energy

and agriculture with Cuba.

12 CUBATRADE MARCH 2017

Southern ports sign deals with Cuba

Days after several Florida ports backed

away from signing memorandum of

understanding with a Cuban trade delegation

that toured cities across the U.S.,

the Alabama port of Mobile signed

one with Cuba’s National Port Authority.

The deal, inked in Tampa, aims to

expand business ties between Alabama

and Cuba. The Mississippi ports of Pascagoula

and Gulfport signed similar deals in

Havana several weeks later.

China invests in renewable energy

Chinese and Cuban companies signed

10 agreements in February to expand

renewable energy on the island, according

to news agency Xinhua. The deals were

signed during a forum analyzing clean

energy cooperation strategies. Cuba hopes

to generate 24 percent of its energy from

Florida governor to ports: No Cuba trade

Three Florida ports backed away from

signing memos of understanding with a

Cuban trade delegation after Gov. Rick

Scott tweeted a threat to cut state funding

for ports that ink deals with the island.

Scott’s 2017-18 budget proposal says “no

funds in Specific Appropriations 1873

through 1876 may be allocated to infrastructure

projects that result in the expansion

of trade with the Cuban dictatorship

because of their continued human rights

abuses.”

Starwood delays opening of Hotel

Inglaterra

Starwood, a subsidiary of Marriott International,

said it would open its second hotel

in Cuba on Dec. 1. The Hotel Inglaterra

in Old Havana was originally expected

to open under Starwood management in

2016. The company, which did not give

any reason for the delay, has managed the

Four Points by Sheraton in Havana since

summer 2016. H


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INDEX

Up in the Air

The Surge of Flights from the U.S. to Cuba

By Emilio Morales

Photo by Jon Braeley

An American Airlines flight from Miami to Holguin touches down at sunset

Among the many changes in U.S.-

Cuba policy enacted by former

President Obama, the two that have

helped Cuba’s economy the most

are commercial flights to Cuba and

the increase in remittances. Thanks

to those policy changes, U.S. airlines

now offer daily scheduled flights to

Cuba—and several already have offices

in Havana.

The year 2016 saw a record 7,461

flights from the U.S. to Cuba—a 55.6

percent jump over 2015. This marked

not only the most such flights since the

1,694 recorded in 2009, but the most

ever (see Figure 1). In just eight years,

Cuba-bound flights grew 339.7 percent,

while overall air traffic to Cuba grew by

an average 22.4 percent annually.

Florida is the top source of flights

to Cuba, with Miami accounting for

6,213 of the 7,427 flights in 2016

(followed by 768 from Fort Lauderdale-

Hollywood, 413 from Tampa, and 33

from Orlando (see Figure 2).

Overall, more than 806,000

passengers flew from U.S. airports

to Cuba last year (up from 700,000

in 2015), making the United States

the fastest source market for Cuban

tourism in 20 years. Of the 2016 total,

more than half a million were Cuban-

Americans who travel to the island

annually and Cuban citizens who

returned to the island after visiting

the United States. They pay hundreds

of millions of dollars a year in airfares

and baggage fees, 95 percent of which

were paid in the United States to U.S.

entities. From 2009 to 2016, the sale

of Cuba-bound flights alone generated

about $1.8 billion for U.S. airlines.

Cuba’s tourism industry is already

starting to feel the impact of travel

from the United States. In the first half

of 2016—even before the launching of

regular U.S. commercial flights—total

U.S. tourist arrivals (including Cuban-

Americans) grew by 27.4 percent

compared to the same period in 2015.

In contrast, arrivals from Canada, still

the top source of tourists to Cuba, fell

by 6.7 percent, marking the first such

drop in 20 years (see Figure 3).

Cuba-bound flights from the

United States now dominate Cuban

airport traffic, with volume for the

final trimester of 2016—when regular

commercial flights were authorized—

doubling compared to the same period

in 2014 and 2015 (see Figure 4). Yet

this surge will undoubtedly strain

Cuba's tourism infrastructure, which

has not kept pace with growth. The

country needs major investments

in four- and five-star hotels—and

not just in new construction but in

the maintenance and renovation of

existing ones. Airport capacity will

have to be expanded as well as options

to bring tourists to Cuba’s interior—

all projects that can represent huge

opportunities for U.S. companies. H

Emilio Morales is CEO of the Havana Consulting Group.

14 CUBATRADE MARCH 2017


Figure 1. Number of flights from United States to Cuba, 2009-2016.

Figure 2. Number of flights from Florida to Cuba, 2016.

Source: The Havana Consulting Group and Tech from daily monitoring of

the flights from the United States to Cuba from the airports of Miami, Fort

Lauderdale, Tampa Orlando and New York.

Source: The Havana Consulting Group and Tech from daily monitoring of

the flights from the United States to Cuba from the airports of Miami, Fort

Lauderdale, Tampa and Orlando.

Figure 3. Arrival of tourists from Canada and the United States in the January-June

periods of 2015 and 2016.

Tourists to Cuba January-June 2015 January-June 2016 % Growth

Canada 833,889 777,678 -6.74

United States 332,250 423,368 27.42

Difference 501,639 354,310

Source: The Havana Consulting Group and Tech form its own research and data published by Cuba’s

National Office of Statistics and Information (ONEI).

Figure 4. Number of flights from United States to Cuba (from Miami and Tampa), 2014-2016

Source: The Havana Consulting Group and Tech from daily monitoring of the flights from the United States to Cuba from the airports of Miami and Tampa.

MARCH 2017

CUBATRADE

15


IDEAS + INNOVATION

Start Your Engines

This whole process took over four

years, so patience is my virtue.

John Felder , CEO, Cayman Automotive

A Miami-based auto distributor is shipping electric cars to Cuba

By Nick Swyter

Photo supplied by Cayman Automotive

The streets of Havana—iconic for its

1950s Chevys and Soviet-era Ladas—will

make way for electric cars thanks to a Miami-based

auto distributor that’s won U.S.

approval to ship vehicles to Cuba.

In early January, the U.S. Commerce

Department's Bureau of Industry

and Security granted Premier Automotive

Export, a subsidiary of a Cayman

Islands auto dealer, a four-year license

to deliver electric cars and charging

stations to the island. By the end of

the month, Cuba's Ministry of Foreign

Affairs (MINREX) gave the OK for

shipments to begin.

“This took time because it was the

first time anyone in the U.S. had requested

such an approval of an export license,” said

Cayman Automotive CEO John Felder.

“This whole process took over four years,

so patience is my virtue.”

Premier is only authorized to ship

16 CUBATRADE MARCH 2017

cars to non-government entities, which

includes embassies, private entrepreneurs,

and foreign-owned or foreign-managed

businesses. The cars cannot change

ownership or be re-exported without U.S.

government approval.

The auto distributor’s first shipment

was a Nissan Leaf and electric charger to

the Guyanese Embassy in Havana. Crowley

Maritime Corp., which has transported

goods from the U.S. to Cuba since

2001, shipped the car in early February.

Felder says several embassies and business

have already lined up to receive the next

delivery.

“Once the word got around that a

vehicle was being shipped to Cuba, the

telephone calls have not stopped yet. It’s

been unbelievable,” Felder said. Although

it is hard to predict, Felder says he expects

to ship dozens more cars and charging

stations to the island by the end of the year.

Felder is also taking steps to make

sure Havana can accommodate electric

cars, a steep task considering many of

Cuba's vehicles are decades-old and run

on diesel. The company is partnering

with New Jersey-based Advanced Solar

Products to install a network of charging

locations at gas stations across Havana.

Felder also hired a retired General Motors

engineer to train Cubans how to repair

and maintain electric cars.

Felder sees his investments in

charging stations and training as mutually

beneficial to Cuba and the U.S.

Even though electric cars are unlikely

to ever dominate the Cuban market, the

installation of charging stations will reduce

the country’s carbon footprint and

dependence on Venezuelan oil while

creating jobs on both sides of the Straits

of Florida.

“It’s a win-win situation,” Felder said. H


American wheat

growers stand ready

to meet demand

in Cuba.

It’s time to end

the embargo.


INTERVIEW

Q&A:

Ana Teresa Igarza,

Director,

Mariel Special Economic

Development Zone

Photo by Matias J. Ocner

Cuba recently sent a trade delegation to visit the ports of Houston, New Orleans, Norfolk,

Fort Lauderdale, Palm Beach, and Tampa. It used the tour to promote the benefits

of investing in the Mariel Economic Special Development Zone (ZED Mariel), which

is also the island’s largest port. By offering incentives for foreigners to invest, Cuba

hopes to make Mariel a mega-shipping hub for Latin America and the Caribbean. Here

are excerpts of our interview with Ana Teresa Igarza, general director of ZED Mariel.

By Nick Swyter

CT: Tell us about your visit to the U.S.

How did the various port representatives

treat you?

AI: In all of the places we’ve received a

very positive welcome. The port authorities

have been looking after us. They have

been very open, very transparent. And the

port authorities and the business community

we’ve met with have both shown a

willingness and desire to work with Cuba.

CT: Obviously, there are some changes

with the new president. Have you

noticed any differences under the Trump

administration?

AI: In relation to Cuba, no. So far, as it relates

to Cuba, there have been no changes

or new regulations different than what we

were doing with former President Obama.

CT: How did you react to Florida Gov.

Rick Scott’s threat to cut state funds

18 CUBATRADE MARCH 2017

to ports that want to do business with

Cuba?

AI: I didn’t have to react to that. Our

interest is the development of the Port

of Mariel and the Cuban state is actually

contributing all the necessary funds to

ensure the development of the Port of

Mariel. That’s a question better suited for

the port authorities of Florida.

CT: How is progress going at the Port

of Mariel? What companies are already

there?

AI: Right now we have 23 approved users,

of which eight are already operational. I

have to say that most of these users are

wholly owned foreign companies, which

is foreign investment into our country…

These companies come from 10 different

countries. There are four Cuban companies,

and they have focused on advanced

manufacturing, logistics, and high-technology––mostly

in the biotech industry.

There are companies from Mexico, Spain,

Brazil, the Netherlands, South Korea,

Belgium, and Vietnam, among others.

CT: Which companies would you like to

approve in the future?

AI: High-tech companies, companies in

the area of logistics, and advanced manufacturing.

You should wait for the news

and you will learn which companies are

going to be approved.

CT: I’ve read, and you have explained,

that ZED Mariel is more interested in

projects with advanced technology. But

it approved a cigarette factory, which is

not considered advanced technology.

Can you explain why?

AI: I think you are mistaken there. The

cigarette manufacturing industry is an

advanced manufacturing industry. It is


A container ship docks at the Port of Tampa Bay

not high technology, which is a different

concept. But the technology it uses falls

under the classification of modern technology,

because it uses robotics and mechanization

for the cigarette making process.

This is not something done by hand. This

is not a labor intensive industry. It is actually

a technologically intensive industry.

CT: Can you explain some of the benefits

of investing in ZED Mariel?

AI: ZED Mariel has its own regulatory

framework that sets it apart from the rest

of the country for development… It has a

very expeditious approval level. It also has

a one-stop shop system that provides users

of the zone with all the paperwork, and

getting all the authorizations and permits

and licenses. And the infrastructure available

to investors includes all of the necessary

components for the development

of their facilities, for example electricity,

water supply, IT, waste management,

and road connections. In addition, ZED

Mariel has a very attractive tax regime,

including a number of tax exemptions and

tax relief measures.

CT: In one of your presentations you

said Mariel can approve projects in 35

to 65 days. How does that happen? Does

Cuba have to make any changes to make

that happen?

AI: When the file with all the documents

is OK, it is submitted to the

zone. ZED Mariel has five days to

review it through an assessment commission,

which is headed by the general

director and includes a number of experts

from organizations in the country.

Once the assessment commission OKs

the project file, there are two approval

levels… If it’s not specifically indicated

that a project needs to be approved

by the council of ministers, there is a

period of 30 days. If a file needs to be

approved by the council of ministers,

it takes about 60 days. Therefore, when

you put everything together the approval

turnaround is around 35 to 65 days

in total. Everything can be improved,

but I think what we are doing right

now is being done solidly, and with all

the expertise required for the current

situation.

CT: We’ve read several explanations on

why Cleber [an Alabama-based tractor

maker that sought to build a factory at

ZED Mariel] was not approved. We

read it was rejected because it was not

high-tech. Is that the reason or are there

others?

AI: It is definitely related to the

technology. Cleber approached the office

and in the preliminary documents of

the application [Cleber co-founder Saul

Berenthal] said he wanted to produce

tractors. This activity falls within the

interest of the special development

zone so long as the technology supports

it… We realized the technology he

was proposing to use in the zone was

dated from 1940. It was completely

obsolete and it was not compliant with

the existing regulations in terms of

safety and work occupational health.

Therefore, we contacted him and we

communicated to him that what he was

presenting was not attractive for the

Special Development Zone, and I

don’t think it is attractive to the

rest of Cuba. H

MARCH 2017

CUBATRADE

19


WASHINGTON REPORT

Signing Up

for the Push

Warming U.S.-Cuba

relations have resulted

in a lobbying boom

By Ana Radelat

Former President Obama’s normalization

of relations with Havana has prompted

dozens of U.S. companies to do something

they've never done, at least not in decades:

add Cuba and the embargo to their lobbying

agenda in Washington.

Last year, more than 120 companies,

lobbying firms, trade organizations, and

nonprofits notified Congress in writing

that they are working on Cuba issues.

That's a big jump from the three dozen or

so that filed similar forms in 2014, before

Obama’s executive orders on Cuba were

fully implemented.

Companies that have shown a new interest

in Cuba include Hilton International

and Starwood Hotels, Chevron, Cisco

Systems, Corning, Halliburton, Marriott,

Shell Oil, Orbitz, Royal Caribbean, and

nearly every major U.S. airline. Meanwhile,

others with a long-time interest in Cuba––

including farm groups and trade associations

representing U.S. businesses––have

increased their lobbying focus on Cuba.

Many companies and organizations,

including agricultural giant Louis Dreyfus,

several state farm federations, and cable

network giant Viacom specifically instructed

their Washington representatives

to lobby for legislation that would end or

curtail the U.S. embargo.

Kendall Keith, a lobbyist for Louis

20 CUBATRADE MARCH 2017

Dreyfus, said the commodity giant “is

interested in ways to facilitate trade.”

Keith said the introduction of legislation

that would facilitate payment terms

on shipments of U.S. farm products to

Cuba captured his company's attention.

He said Dreyfus is not lobbying for an

immediate end to the embargo but that

“interest has been growing to do some

minimal things. Maybe legalizing commercial

credit. That seemed to get some

traction last year.”

The number of issues involved in the

flurry of lobbying activity has increased

alongside the number of lobbyists.

The Tampa-based Florida Aquarium

hired a lobbyist to promote the reauthorization

of the Coral Reef Conservation

Act “and its implications for supporting

coordinated research with Cuba.” Cisco

Systems hired lobbyist Ian Rayder to take

part in “general discussions regarding

Cuba and (its) technology needs.” Meanwhile,

the National Association of Police

Organizations says it is lobbying to seek

“extraditions of cop-killers and violent

felons from Cuba.”

Even before this year’s bumper crop

of new registrations, lobbyists were being

hired to push for change with Cuba.

The National Cooperative Business

Association (NCBA) added Cuba to its

lobbying agenda and formed a U.S. Cuba

Cooperative Working Group just a few

months after Obama announced he wanted

to normalize relations.

“The idea is to promote U.S.-Cuba

collaboration whenever possible,” said

NCBA spokeswoman Sarah Crozier.

“Co-ops are the preferred form of business

in Cuba. As the former administration

moved to normalize relations, that accelerated

our work on the embargo.”

The Air Transport Association of

America, whose members include the

nation’s leading passenger and cargo airlines,

began lobbying on Cuba travel––alongside

major U.S. airlines––after Obama eased

travel restrictions and negotiated with the

Cuban government the re-establishments of

direct commercial flights.

The association’s lobbyist, Vaughn

Jennings, said his group’s members “serve

evolving markets all over the world” and

that Cuba suddenly became one of them.

Lobbying disclosure forms show that

even before Obama eased sanctions, the

Office of the Commissioner of Baseball

paid lobbying giant Baker & Hostetler to

work on “issues related to Cuba.” Since

then, Major League Baseball has hired

Dakota Strategies to lobby on the “issue

of tourist travel to Cuba revolving around

baseball activities.” H


“WE GROW TRADE” is a registered trademark of the World Trade Centers Association.

WE GROW TRADE ®

CELEBRATING 10 YEARS OF TAKING THE BEST OF ARKANSAS TO THE WORLD

RICE

TIMBER

POULTRY

SOY


POLITICS

THE

GOVERNOR

WHO

SAID NO

Despite his state’s obvious

advantages for future trade

with Cuba, Florida Gov.

Rick Scott has threatened to

cut funding to ports that try

By J.P. Faber

Florida Gov. Rick Scott at a press conference on the day he tweeted his threat to ports

Photo by Jesse Romimora

The timing could not have been worse—

or better, if the intention was to embarrass

your guests. Just one day before the arrival

of a Cuban trade delegation at Fort Lauderdale’s

Port Everglades, on the very eve

of a historic ceremony to sign a memo of

understanding (MOU), Florida Gov. Rick

Scott tweeted his threat:

“I will recommend restricting state

funds for ports that work with Cuba in

my budget.”

He tweeted a few other barbs, but the

threat to cut infrastructure dollars for Florida

ports cooperating with their Cuban

counterparts was the one that stung. It had

dollars attached, and it took port officials

from Palm Beach and Fort Lauderdale off

guard; both had scheduled press events

to showcase the MOU signing with the

National Port Administration of Cuba.

“The Governor’s position was surprising,

to say the least,” Manuel Almira, the

Port of Palm Beach’s executive director,

emailed the Miami Herald. In short order,

however, both ports backed down rather

than risk losing money from the Florida

Department of Transportation and other

state agencies—as much as $125 million

for Port Everglades alone.

22 CUBATRADE MARCH 2017

“We are in a major expansion here,

and we want to make sure that it goes in

that direction,” Port Everglades executive

director Steve Cernak told Cuba Trade.

“To do trade with Cuba is an issue, because

there is an embargo in place.”

Coincidentally, Port Everglades made

history the day before the governor’s

tweet when the first cargo from Cuba to

the United States in more than 50 years

landed: a load of artisanal charcoal made

by independent Cuban farmers.

“It’s an honor when something like

that happens,” said Cernak. “But the port

itself did not do that business with Cuba.”

That kudo went to the Crowley shipping

line, and “the [federal government that]

approved it for entry.”

While port directors in Florida were

slow to criticize the governor, however,

there were howls from the editorial boards

of the local papers. “What a disappointing

trump card Gov. Rick Scott played

this week,” wrote Fort Lauderdale's Sun

Sentinel. “This economic potential deserves

the state’s support, not to be held hostage

to politics of the moment,” wrote the Palm

Beach Post.

But why would Gov. Scott attack

trade with Communist Cuba, but not, for

example, with Communist China? When

asked that question by Cuba Trade, the

Governor’s office responded, “Florida has

a lot of Cuban refugees who have suffered

at the hands of the brutal Castro dictatorship.

At the state level, we give significant

state funds to our seaports for infrastructure

projects and the announcement that

some Florida ports were going to sign

MOU’s was concerning. Governor Scott

does not support using state funds to help

the Cuban dictatorship.”

No mention was made of China. But,

as Miami Herald columnist Carl Hiassen

wrote, “The governor has been a gushing

supporter of free trade with China, where

human rights are trampled daily by the

government.” Why then attack Cuba? The

answer, says Hiassen, is simple: Gov. Scott

is positioning himself as “a tough guy” for

the U.S. Senate race in 2018.

The trade delegation of Cuban port

officials, meanwhile, downplayed the

MOUs and said their signing was not

needed, inviting Gov. Scott to visit Cuba.

Not unexpectedly, Scott turned them

down, and instead included his threat in

his 2017-2018 state budget proposal. H


Of all the economic possibilities in Cuba today, none comes

close to the explosion of tourism.

Want to reach 120,000 readers who want—and need—to travel to Cuba?

COMING IN MAY: THE TOURISM ISSUE

In 2016 there were a record 4 million tourists visiting Cuba.

This number is expected to more than double to 10 million by

2030—and that does not include the 5 million annual cruise

passengers expected by then.

Most of this growth will come from the U.S. According to

Gallup, more than 40% of Americans want to travel to Cuba.

And about half of those say they are VERY interested in

going there.

What this means is that hotel chains, cruise lines, private

B&Bs, airlines, travel companies, etc. will all experience excellent

opportunities for growth.

Now, Cuba Trade, the only national magazine exclusively devoted

to trade & commerce with Cuba, announces its Tourism

Issue—the definitive look at who is doing what in the hospitality

industry, on the land, on the sea and in the air.

To confirm your participation contact Gail Scott at 305-987-1169

or email gail@scottmediasolutions.com


TRANSITIONS

THE

CHINA ENIGMA

With Venezuelan support waning, a big question

is whether China wants to fill the gap

By Doreen Hemlock

Photo by Jon Braeley

Huawei Technologies shows off a smartphone at a recent trade fair in Havana

China has been Cuba’s No. 2 trade partner

for years, eclipsed only by the island

nation’s close ally and energy supplier,

Venezuela. As a fellow communist nation,

China has been a stalwart supplier of

goods and credit. But as Cuba’s economy

slips into recession for the first time in two

decades—largely due to cut backs in Venezuelan

oil shipments, loans, and aid—will

China pick up the slack?

Experts say the Asian giant likely will

cover some of the loss, partly out of political

solidarity, but not enough to replace

the massive support provided by Venezuela

for more than a decade.

The Chinese tend to be businessoriented,

say specialists in China-Latin

America relations, and Cuba doesn’t offer

too much in the way of natural resources,

guarantees for loan repayments, or investment

opportunities that could serve as a

platform for the United States or other

major markets worldwide.

“As long as Cuba continues not to have

money, the amount of support they will

get from the Chinese will be limited,” said

Evan Ellis, Latin American research professor

at the Strategic Studies Institute of the

U.S. Army War College in Carlisle, Pa.

What’s more, the Chinese are frus-

24 CUBATRADE MARCH 2017

trated by the slow pace of Cuba's economic

opening.

“China has been trying to advise the

Cuban government on ways forward with

economic reform [but] with little progress,

much to the dismay of the Chinese government,”

said Margaret Myers, director

of the China-Latin American program at

Washington's Inter-American Dialogue.

More Chinese engagement will be predicated

on reform, she said, including less

red tape for investors.

China could still become Cuba’s No.

1 commercial partner as Venezuelan trade

shrinks. Yet preliminary data for 2016 suggests

that China isn’t expanding to fill Venezuela’s

void. Chinese government statistics

for 2015 show $2.21 billion in two-way

trade with Cuba, including $1.88 billion

in Chinese sales to Cuba and $330 million

in Cuban sales to China. For the first 11

months of 2016, that trade appeared to be

running flat or slightly down: $1.96 billion,

including $1.69 billion in Chinese sales and

$270 million in Cuban sales.

In addition to stagnating, the trade is

lopsided, because China sells Cuba mainly

higher-priced telecom equipment, buses,

and industrial goods, and buys mainly sugar

and other lower-priced Cuban commodities.

Beijing already finances some sales

to Cuba, partly based on politics, offering

the island “no-interest loans you don’t

see much elsewhere in Latin America,”

said Myers. Yet that financing is relatively

limited. Myers estimates that China’s two

main development banks have provided

some $5 billion in low- or no-interest

loans to Cuba in the past decade or so.

That’s far less than Soviet subsidies to

Cuba, which topped $3 billion yearly in

the 1980s, and even less compared to Venezuela’s

contribution, estimated as high as

$7 billion annually at its peak.

The Chinese remain active on some

infrastructure projects, including wifi

expansion supplied by Huawei Technologies

and port improvements in Santiago

de Cuba estimated to top $120 million.

But other proposed Chinese ventures have

yet to materialize, including a Geely auto

plant in Mariel.

How much China compensates for

Venezuela’s decline also depends on President

Donald Trump. The Chinese were

hoping that thawing U.S relations with

Havana would accelerate Cuba’s economy

and create new opportunities for Chinese

business on the island. They’re now waiting

to see what Trump does. H


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CUBA BRAND

A CUBAN STOCK

EXCHANGE

...OF SORTS

Stocks and bonds from before the Revolution

are still in demand, just not at par value

Photo by Monique LaRouche

By J.P. Faber

Bob Kerstein, CEO of Virginia-based Scripophily.com holding a Cuban stock certificate

Even years after the Revolution, even

after the companies were nationalized,

shareholders of the Camaguey Sugar

Company of Cuba, the Cuban Portland

Cement Corporation, and the 7up

Company of Cuba, Inc. continued to hold

onto—and even trade—their increasingly

worthless stocks and bonds.

“Cuba is interesting because the

bonds were still traded after Castro took

over, until [the holders] realized they

could never be redeemed,” says Bob Kerstein,

Virginia-based CEO of scripophily.

com, a company that specializes in the

sale of original stock certificates. “After

Castro took over Cuba the prices were

way down, but they were still hoping the

U.S. would invade.”

Today those stocks and bonds are

experiencing a small rally. Collectors seek

them as valuable mementos, like baseball

cards from Cuba’s capitalist past. “It’s

picked up recently because of the opening

of ties and our relationship with Cuba,”

says Kerstein. “These are pieces of history,

and they all tell a story.”

26 CUBATRADE MARCH 2017

Scripophily.com sells about two

dozen different Cuban financial certificates,

including ones from railways, power

companies, hotels, and banks, all long

gone. Prices range from $9.95 for a Camaguey

Sugar Company stock certificate

(100 shares!) to $295 for a 100 peso bond

issued in 1882 by a railroad company in

Guantánamo. Kerstein says shares from

sugar companies are the most popular.

Kerstein is far from alone in catering

to a growing interest in collectables

from Cuba’s past, and the mystique of its

memories. Leslie Pantín, a Miami-based

PR professional, is also the proprietor of

the annual Cuba Nostalgia show. Last

year the fair attracted 30,000 visitors who

came for the sights and sounds of Cuba’s

past, including a chance to buy memorabilia.

“With everything that is happing in

Cuba there is a fascination with Cuban

things, all over the place,” says Pantín,

who has put on the weekend-long show

for the past 18 years. “The difference now

is that when we started, there were people

who just sold memorabilia, something

that was in their Florida room or in their

garage. Now we have a lot of people who

do this as a business.”

On Miami’s Coral Way, for example,

a store called the Cuban Museum sells

everything from old Havana phone books

to silverware from the presidential palace

(now the Museum of the Revolution).

The store also sells stocks and bonds, but

don’t have quite the range as Kerstein.

Kerstein's catalogue of offerings

includes certificates from numerous times

and places in history, but he gets a special

kick out of his Cuban collectables, which

he acquires at auctions, from private individuals,

and “as we come across them.”

“About 15 years ago I got a lot from

an old warehouse,” says Kerstein. “Victor

Astor was big in Cuba at one time, and

many of them had his name on them.”

And for a mere $34.95 customers can

own a 100-share stock certificate issued

in 1947 by Victor, son of hotel magnate

John Jacob Astor, for the Vertientes-Camaguey

Sugar Company of Cuba. H


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REMITTANCES

HOMEBOUND BARGAINS

For Cubans who travel back and forth between Miami and

their island home, Ño Que Barato has become an institution

By Ariana H. Reguant

Photo by Matias J. Ocner

Shoppers hunt for deals at Ño Que Barato in Miami's Hialeah neighborhood

At the start of every school year, families

line up outside the studios of America

TV––a popular local Spanish-language

television station in a Miami suburb––to

receive a backpack filled with school

supplies, courtesy of Ño Que Barato.

Hundreds of children are served, and

every immigrant home knows storeowner

Serafín Blanco gives back to the community.

Indeed, Ño Que Barato is more than

a business.

Blanco, a Cuban immigrant, founded

Ño in 1996 to cater to the newly arrived

balseros who, unlike earlier migrant

cohorts, remained in close communication

with their families on the island.

Some 20,000 immigrant visas were being

granted every year to Cubans and, by the

end of the decade, both Cuba and the

U.S. had eliminated travel restrictions for

Cuban-Americans returning for family

visits. This led to a growing consumer base

for underpriced clothes, shoes, and plastic

household wares that could be transported

in suitcases.

Known for his sense of humor, Blanco

came up with a business name that was

a stroke of genius. “Ño” is shorthand for

a colloquial swear word that denotes surprise.

The entire expression, Ño Que Barato,

could be translated as “Wow, that’s cheap.”

The motto quickly stuck. As the store’s

advertisements proclaim, “the name says

it all.” In addition, the candid promotions

on local TV, spoken directly to the camera

by program anchors, local celebrities, or

Blanco himself, convey proximity and familiarity,

as in “I am one of you.” Any day

of the week, people flock in to buy—by

the dozen and by the pound.

Located in an industrial area of

West Hialeah outside of Miami, Ño Que

Barato functions like a department store.

The large warehouse space, lacking in

air-conditioning, is filled with racks of

cheap clothing and shoes for men, women,

and children, including school and work

uniforms, guayaberas, lingerie, baptismal

baby robes, and beddings. At Ño, one can

also find religious objects, USB drives,

unlocked cell phones, perfumes, watches,

mosquito netting for beds, hand fans, and

everything else conceivably useful in Cuba.

Along the walls, independent sellers rent

counter space with specialty services and

merchandise, like optic and jewelry shops.

On the floor, the sales staff is older, much

like the average shopper.

A life-size statue of San Lázaro, also

known as Babalú Ayé in Afro-Cuban

religions, greets the public and guards the

store. San Lázaro—St. Lazarus—was an

old beggar who suffered from leprosy and

was saved by Jesus in the New Testament;

as they exit the store, many patrons leave

spare change at his feet as a sign of respect

and devotion. As Babalú Ayé, however,

he experienced a rebirth and became a

righteous ruler who punished humans for

their transgressions.

When thieves broke into Ño Que

Barato last year, they might have thought

they could escape the saint’s wrathful

watch. Police caught them in the act, and

one who ran was later found unconscious

inside a hot industrial dryer in the laundromat

next door. At Ño Que Barato, staff

and clients expressed relief, knowing well

that under San Lázaro’s watch, no bad

deed goes unpunished—and no good one

goes unrewarded. H

28 CUBATRADE MARCH 2017


CFI

US-Cuba Trade Relations &

Investment

“As proud members of the USACC,

we support improved trade relations

and thank the efforts of the coalition.”

We aim to create stable and synergistic consensus,

trade, and foreign direct investment

partnerships.

Established 2008

www.ChicagoFoodsInternational.com


RECREATION

BUILD IT

AND THEY

WILL PLAY

How a Vermont

nonprofit resurfaced

Cuba’s Tennis Federation

courts in Havana.

Next: Grass Courts?

Photo courtesy of Kids on the Ball

By Oscar Musibay

Jake Agna, founder of Vermont-based Kids on the Ball Program, on the courts in Cuba

At its height in 1991, Cuba's National

Tennis Federation was host to tennis

players from across the Americas, as part

of the 39-nation Pan American Games.

Its courts were immaculate.

Twenty-five years later the 10

concrete courts in Havana were cracked,

faded, and basically unusable. In some

cases, players used a cord between chairs

to simulate the net. Cuba’s national tennis

courts needed a $600,000 overhaul.

“They were the worst I have ever

seen,” said Jake Agna, founder of Vermont-based

Kids on the Ball Program,

who first visited Cuba in 2014. “Yet I

counted 100 kids there ranging in age from

5 to 20 that were using it regularly. They

didn’t have a choice.”

Despite the difficulties, the facility

was also where the Cuban Davis Cup team

practiced. So, Agna recruited Hinding

Tennis of West Haven, Conn., to take on

the resurfacing project.

Finding a contractor to do the work

turned out to be the easy part. It took 18

months for the project to get clearance

from both U.S. and Cuban officials. It finally

received U.S. approval via a “human-

30 CUBATRADE MARCH 2017

itarian” classification from the Department

of Commerce, which made sense since

Kids on the Ball’s nonprofit mission is to

use tennis to improve the lives of at-risk

youth. A for-profit project would have

stalled, said brothers Tom and Steven

Hinding, of Hinding Tennis.

Helping them along the way was

Cuban Sports Minister Alberto Juantorena,

Agna said. On the U.S. side, the tennis

pros engaged Sen. Patrick Leahy (D-VT)

as well as the Cuban American Friendship

Society (CAFS) of Burlington, Vt., with

the latter doing all the legal heavy lifting.

The memorandum of understanding that

moved the project forward identifies

CAFS as the licensed exporter of the

needed gear.

Not unexpectedly, there were a few

glitches that contributed to cost increases,

said Steven Hinding. Temperature and

humidity were factors; the project was approved

in the spring of 2016, but didn’t get

started until November, when the weather

was more manageable (and past the rainy

season). Cuban officials then delayed

Crowley Maritime Corp.’s delivery of the

five shipping containers that held all the

necessary new equipment and materials.

The containers were to be delivered to the

site by Nov. 21, but it took nearly another

week, which meant additional crew costs.

Without the shipping containers, no work

could begin.

“Whether you need a gas can or a

screwdriver, there is no Home Depot or

Lowe’s,” explained Hinding. “The hardware

store they have down there is the size

of a one-car garage and they don’t take

credit cards.” Fidel Castro’s death on Nov.

25 also meant the city and its resources

were shut down for nine days.

But in the end, all the work was

worth it.

“It was the most challenging project

we have undertaken, but also the most

gratifying,” Hinding said.

Agna is now looking to raise $1.2

million to reconstruct two grass courts that

were part of the facility, as well as a tennis

federation building that includes showers,

a weight room, and a conference space.

“We are looking for sponsors that can

help us with the money,” he said. After

that, it’s time to train for the Olympics or

Wimbledon, whichever comes first. H


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TRADE

From pesky weed to artisanal export

Charcoal made from marabú, a plant known for ravaging Cuba’s farms,

is the first cargo shipment to the U.S. in more than 50 years

By Nick Swyter

While rum and cigars may be Cuba’s

most iconic products, charcoal made from

a weed known for decimating its farmlands

was the first Cuban cargo to unload

at a U.S. port in more than 50 years.

About 40 tons of marabú charcoal arrived

at Fort Lauderdale’s Port Everglades

at the end of January. The charcoal was

delivered by Crowley Maritime Corp., a

company that has shipped U.S. agriculture

goods and medicine to Cuba since 2001.

“There were three years of development,

so it was really nice to see that come to

fruition,” said Jay Brickman, who leads

Crowley’s Cuba services.

The export was made possible thanks

to an Obama administration change that

allows some products made by private

individuals to be exported to the U.S. The

producers must prove they are independent

of the Cuban government.

“Marabú charcoal is cut and produced

by private Cuban cooperatives, providing

them with a growing market less

than 100 miles away,” said Scott Gilbert,

chair of Reneo Consulting LLC—the

group that arranged the charcoal deal.

Gilbert also represented former USAID

32 CUBATRADE MARCH 2017

Marabú exports to the U.S.

are just a drop in the bucket,

but it is significant that this

deal happened.

subcontractor Alan Gross, who was jailed

in Cuba for five years before the U.S. and

Cuba normalized relations.

After unloading at Port Everglades,

the marabú charcoal was delivered to

Hialeah-based Fogo Charcoal, which

repackaged it in 33-pound bags for retail

customers. Fogo describes the charcoal

as having a neutral flavor with a long and

hot burn—making it ideal for baking

bread and pizza.

The conversion of marabú from

invasive plant to charcoal marks a turning

point for Cuban farmers. The woody weed

has a reputation for overruning otherwise

fertile farmland. According to an International

Model Forest Network report,

the plant covers an estimated 1.7 million

hectares of once productive land in Cuba.

“Now it can be used to produce this

fantastic artisanal charcoal, thereby clearing

the fields and making them available

for agricultural growth,” Gilbert said.

Fred Royce, a University of Florida

staff member specializing in Cuban

agriculture, says marabú could potentially

become an important cash crop. Cuba

has been shipping thousands of tons of

charcoal to Europe and Latin America for

years. The country is also seeking foreign

investors to help build power plants

that convert marabú and sugar cane into

bioenergy.

“Marabú exports to the U.S. are just a

drop in the bucket,” Royce said. “But it is

significant that this deal happened.”

It’s not yet clear whether the charcoal

will stick in the U.S. market. Cuban

sellers should be encouraged that Fogo’s

pre-orders sold out before the first shipment

reached U.S. shores. But, according

to the Associated Press, Reneo Consulting

purchased the charcoal for $420 per

ton—significantly more than the $360

per ton market price for regular charcoal.

It’s not yet clear whether American consumers

are willing to pay a premium for

artisanal charcoal. H


BEFORE THE EMBARGO,

Cuba was the top

destination for our rice.

LET’S GET THERE AGAIN.


ENTREPRENEURS

How one family of farmers

in Eastern Cuba made the

transition to becoming a

small business

By Doreen Hemlock

Photo by Jon Braeley

Hundreds of small roses, some red, yellow and pink, and some two-toned, ready for transport.

Drive off the main road, down rocky dirt

lanes, past concrete houses with cactus

hedges, past men on horseback wearing

wide-brim hats, and you’ll reach the farm

of the Sanchez family in Cuba’s eastern

province of Holguín.

Like his father before him and grandfather

before that, Isidro Sanchez Jr. works

the land as an independent farmer. But

these days, the sturdy 45-year-old has lots

more options of how to do business.

The Sanchez family received its plot

as part of a government redistribution

after Cuba’s 1959 Revolution. For decades,

they depended on the state as an intermediary

to buy and distribute produce from

their farm. The family received payment

34 CUBATRADE MARCH 2017

only in cash, and only in Cuban pesos.

But with recent economic reforms,

Sanchez now has a license to sell directly

to buyers as well as to the state. He’s

teamed up with fellow entrepreneurs in a

venture that offers landscaping and related

services to hotels and others. And he can

be paid in pesos, Cuba’s CUC currency, or

even by check.

“Now, when we get big contracts, I

can hire more people,” said Sanchez, walking

shirtless through his small farm that

grows ornamental plants, from palm trees

to roses. “Before, I couldn’t do that.”

More options means chances for

higher income. By selling direct, Sanchez

can charge more than what he’d get from

a state intermediary. His clients can get a

better deal without middlemen—a lower

price and longer-term guarantees on the

quality of the produce, for instance. And

he can pay the government more; his 10

percent tax paid on higher revenue puts

more cash in state coffers.

Sanchez now proudly employs six

people full-time and up to 18 on major

landscaping projects. Yet like other entrepreneurs

in Cuba, he faces challenges,

especially to obtain supplies. There are no

wholesale markets or retail stores to buy

farm inputs, so he relies on government

distributors.

“Sometimes, it’s a bit hard to get fertilizer,

because you have to wait until the


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Photo by Jon Braeley

Isidro Sanchez Jr. walking shirtless through his small farm.

state brings it to you and sells it to you,”

said Sanchez during a walk through fields

at the farm.

Misleidys Gonzalez, 33, teamed up

with Sanchez several years ago to sell

landscaping services and floral arrangements

to hotels and others under the

Belleza Maxima or Bellmax name. She’d

left her job as a government nurse earning

less than $20 per month, hoping to

expand her horizons. She chose Sanchez

as her farming partner in this eastern

province, partly for practical reasons.

“He’s very responsible and hard-working,

has good fertile land to develop, and

had a truck. With the vehicle, we could

easily transport plants and crews,” said

Gonzalez. “Renting vehicles costs more.”

Sanchez still sells some products through

state intermediaries. Among them are

36 CUBATRADE MARCH 2017

Now that

the old man

[Fidel] died,

they’re buying

a lot more

flowers for

the cemetery.

flowers bound for cemeteries—including

Santa Ifigenia in Santiago de Cuba, where

Fidel Castro’s ashes are buried. On a recent

weekday, his crew filled a trough with

hundreds of small roses—some red, yellow

and pink, and some two-toned—all ready

for transport. Quipped Sanchez’s jocular

dad, Ignacio Sr., already 82: “Now that the

old man [Fidel] died, they’re buying a lot

more flowers for the cemetery.” H


MEDIA

Cuba has become more open to

foreign films and Hollywood

because it's good for the economy.

Fermin Rojas,

Cuban-American filmmaker

FILMMAKING

IN CUBA

Fermin Rojas on location in Havana

HOW AMERICAN COMPANIES ARE TACKLING THE

NUANCES OF AUDIO-VISUAL PRODUCTIONS IN CUBA

By Suzette Laboy

For the last half-century, Cuba has been

forbidden territory for American film

companies. Following the 1959 Revolution,

directors who wanted Caribbean

settings—or even faux Cuban backgrounds—had

to settle instead for the

Dominican Republic or Puerto Rico.

But since diplomatic relations

have eased between the Cold War foes,

Hollywood and other media industries

are turning their attention—and

dollars—to the island. The full-length

feature “Papa Hemingway in Cuba,” was

filmed on the island in 2015. Discovery

38 CUBATRADE MARCH 2017

Channel’s “Cuban Chrome” depicted its

obsessive car culture. Comedian Conan

O’Brien and chef Anthony Bourdain

both filmed episodes in Cuba for their

TV shows. Hollywood blockbusters

“Transformers: The Last Knight”

and “Fate of the Furious,” were also

filmed there, as was Martin Scorsese’s

documentary about the Rolling Stones

concert in Cuba, “Havana Moon.”

Not only do these productions require

substantial expenditures to bring equipment

into Cuba, they also require permits

and connections. For this, filmmakers

typically turn to European or Canadian

companies to help them through the

process.

“It’s absolutely essential to use somebody

that knows what they are doing,”

said Cuban-American filmmaker Fermin

Rojas, who contracted a Canadian production

company in 2012 to help obtain

permits for “Alumbrones”––a documentary

that follows 12 Cuban artists living in

Havana. “That was the only company at

the time who had been doing it for, like,

20 years.”

Last year, the Obama adminstration


Cuba is unknown

territory with

locations that have

never been used

before by American

companies

Barry Pasternak

CEO of Cuba International Network

Pasternak testing a new camera system in Havana

gave the green light for Florida-based

Cuba International Network (CIN) to

provide equipment and personnel to

American companies filming in Cuba.

“Cuba is unknown territory, with

locations that have never been used

before by American companies,” said

company CEO Barry Pasternak of Cuba’s

allure. “We handle it from concept to

completion,” with everything from film

equipment to food service, soundstage,

and security.

Although CIN has yet to work on

any major productions on the island,

Pasternak—an Emmy award winning

veteran of the TV industry—has consulted

on various projects, including the

uplink of the Tampa Bay Rays baseball

game watched by President Obama

during his 2016 visit to Cuba. CIN now

has the availability and approval to bring

in equipment for full production work, as

well as experience with Cuban authorities

on getting proposals approved and

permits processed.

Moviemaking in Cuba can be

challenging. Filming requires work and

location permits via the state film commission

Asociacion Cubana del Audiovisual

(Cuba’s Audiovisual Association). Among

other things, strict script approvals are

required. On the technical side, CIN

works with Cuba’s Instituto Cubano del

Arte e Industria Cinematográficos (the

Cuban Institute of Cinematographic Art

and Industry or ICAIC).

Like many industries now exploring

opportunities in Cuba, filmmaking is

waiting to see what the Trump administration

will do.

“I get requests just about every

day regarding any potential threat to

U.S.-Cuba engagements that have

been so fruitful and advanced over past

two, three years,” said Bill Martinez, a

California-based attorney who works on

U.S.-Cuba cultural exchanges and artists’

visas.

Before the Obama administration,

filmmaking in Cuba required a specific

license. Now filmkmakers no longer

need to formally apply to the Treasury

Department’s Office of Foreign Assets

Control (OFAC), which enforces trade

sanctions. It is “based on good faith that

you are there to actually do filmmaking

and not drink mojitos on the beach,”

says Martinez.

“Cuba has become more open to

foreign films and Hollywood because it’s

good for the economy," said filmmaker

Rojas.

Pasternak added: “We all need to

work together so the industry can promote

the areas that are going to become major

profit centers [and] we could be a major

assistance to the government of Cuba

because we can bring these people to the

table.” He also said U.S. companies would

employ Cuban technicians and artists to

work on projects, from major league sports

to entertainment, music concerts, and

more.

Politics aside, Pasternak said the

future for the industry in Cuba looks

promising. “What’s really happening is we

believe these are the kinds of things that

Americans want to see: Sports from Cuba,

the Latin jazz, to really be able to see a live

concert,” he said. “It’s not a tourist thing,

it’s a cultural thing.” H

MARCH 2017

CUBATRADE

39


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www.worldtrade.org


FINANCE

A PIPELINE

TO CUBA'S

PRIVATE SECTOR

Money remitters

are starting to play

a vital role in business

transactions

By Nick Swyter

When Cuba legalized the U.S. dollar in

1993, it was difficult to use remittances

for anything other than food, household

goods, and utilities. Now, after 24 years of

changes in U.S.-Cuba remittance policies,

cash transfers are so valuable that they are

propelling private businesses on both sides

of the Straits of Florida.

Elsa Vazquez Velar is just one of

several small U.S. business owners who

use money remitters to pay Cubans for

services in the private sector. Her business,

CasasCuba B&B, consists of several casas

particulares (bed & breakfasts) in Santiago

de Cuba. Vazquez Velar manages reservations

from her home in Miami, and uses

Western Union to pay her uncle in Santiago

de Cuba for welcoming those guests.

“I have no complaints,” Vazquez Velar

said. “Obviously, we are over here and my

uncle is running the B&Bs over there, but

it is still very efficient.”

CasasCuba B&B is not alone in

using money remitters to pay for services

in Cuba’s burgeoning private sector. Its

best-known competitor, hospitality giant

Airbnb, pays many of its hosts through the

Miami-based remitter VaCuba.

The casas particulares industry's use

of money remitters to pay hosts illustrates

how remittances are pivoting towards

conducting business transactions. U.S. and

Cuban policy changes helped make that

42 CUBATRADE MARCH 2017

pivot happen at an astonishing speed.

According to the Havana Consulting

Group, annual remittances to Cuba rose

by 116 percent from 2008 to 2014, making

Cuba the fastest-growing remittance

market in Latin America. Cash transfers

to Cuba––worth more than $3 billion

dollars in 2015—now rank among one of

the most valuable sectors of the Cuban

economy.

The Cuban government has authorized

several money remitters to operate

on the island, though none are as recognizable

as Western Union. Today, WU

facilitates cash transfers worth thousands

of dollars each at more than 400 locations

throughout the country.

WU set up shop in Cuba in 1999,

six years after the Cuban government

legalized the possession of the U.S.

A Western Union office in Havana

dollar as a way to offset its dependence

on the collapsed Soviet Union. In order

to operate in Cuba, the company signed

a contract with FINCIMEX, the Cuban

government entity that manages—and

takes a cut from—all remittance wire

transfers to the country. WU charges a fee

of 8 to 10 percent. Since then, the amount

and frequency of WU’s cash transfers has

been largely dependent on U.S. policy.

Remittance flows to Cuba fall into

three eras: Clinton, Bush, and Obama.

Wire transfers first took shape

under the Clinton presidency. Cubans

mostly used those transfers to pay for

food, household goods, and repairs. Even

though remittance flows to Cuba were

relatively small during those years, some

Cubans used the foreign capital to finance

small private businesses.

Photo by Matias J. Ocner


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• Reasonable rates. Breakfast included.

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Under the Bush administration, it

became more difficult for Cubans to use

remittances to finance private businesses.

In 2004, Bush tightened the policy to

allow Cuban emigrés to send no more

than $300 to relatives every three months.

Authorized Cuban-Americans were only

allowed to travel to the island once every

three years—cutting off another valuable

avenue for remittances.

Under Obama, remittance flows

skyrocketed and became an invaluable

resource for aspiring Cuban entrepreneurs.

In 2009, Obama increased the remittance

limit to $500 per quarter. By September

2015, that restriction had been lifted

entirely, along with the $10,000 limit

that authorized travelers were allowed to

carry to Cuba. Those loosened restrictions

paved the way for entrepreneurs to finance

everything from ingredients for a private

restaurant to the remodeling of homes

into B&Bs.

“It is the principal support for the private

sector,” said Emilio Morales, CEO of

Havana Consulting Group. He added that

Cubans are also using remittances to pay

for telephone bills, hotel stays, and flights

to visit relatives outside the country.

Western Union appears to be embracing

its role as an intermediary for business

transactions in Cuba’s private sector. In

June 2016, WU innovated by putting its

CasasCuba B&B 's Elsa Vazquez Velar (center) and staff

Cuba cash transfer services online and

on mobile apps—making transfers more

convenient than ever.

“To have the service and do it right

away right from my office is priceless,”

said CasasCuba B&B’s Vazquez Velar. She

recently helped guests who ran out of cash

during their stay in Santiago de Cuba by

referring them to WU’s online services.

Even though remittance flows to

Cuba are at an all-time high, Morales

warns that WU may have some challenges

on the horizon. Unlike many

other sectors of the Cuban economy, real

competition exists among money remitters.

VaCuba is an up-and-coming rival

since it already conducts transactions for

Airbnb and does direct delivery for many

of its cash transfers. Moneygram and

TransCard are also serious competitors.

Even PayPal has announced its intentions

to enter the fray, though up until

now it has actively blocked transfers that

involve Cuba.

“It could be the end of an era, because

there are going to be other competitors,”

Morales said.

Money remitters must also keep a

close watch on President Trump’s approach

to Cuba. Trump has made several non-specific

threats to undo Obama’s Cuba

opening. Just like Bush, he could decide to

tighten the current remittance policy. H

U.S. CASH TRANSFERS TO CUBA

A TIMELINE

1993

Cuba legalizes the use of the U.S. dollar. Most

remittances to Cuba are delivered by hand

through visitors to the island.

1995

Cuba’s FINCIMEX creates American International

Services to create contracts with

money remitters from around the world.

1997

Canada-based TransCard becomes the first

foreign company in Cuba to handle cash

transfers. Customers transfer cash to Cuba

by loading a beneficiary’s debit card.

1999

Western Union enters Cuba after signing a

contract to work with FINCIMEX. It opens

with dozens of locations throughout the

island.

2004

President Bush tightens the remittance

policy. People can send only $300 to immediate

family members every three months.

Authorized travelers are only allowed to visit

the island once every three years.

2009

President Obama raises the remittance limit

to $500 per quarter. Travel limitations are

loosened and authorized visitors are allowed

to carry $3,000 to the island.

2015

In January, President Obama increases the

remittance limit to $2,000 per quarter and

allows authorized travelers to carry $10,000

in cash to the island. By September, the limits

are lifted entirely.

JUNE 2016

Western Union starts mobile remittance

services.

OCTOBER 2016

The Department of Treasury expands the

list of authorized recipients of remittances

to include certain members of the Cuban

government.

44 CUBATRADE MARCH 2017


TOURISM

Singapore Plants its

Flag in Cuba

Banyan Tree Hotels & Resorts has big ambitions

for its second destination in Latin America

By Nick Swyter

Photos supplied by Banyan Tree

The 516-room Dhawa Cayo Santa Maria on Cuba’s northern coast

Cuba’s hotel industry—which has been

dominated by Spanish brands such as

Meliá and Iberostar for the last 25 years—

is making way for a new player from Asia.

Singapore-based Banyan Tree Hotels

& Resorts plans to open four resorts in

Cuba by 2019—enclaves that will extend

their brand of “naturally-luxurious,

ecological, culturally-sensitive” properties

in anticipation of the steep growth in

tourists heading for the island nation.

While Banyan Tree is relatively

unknown to Americans, it’s a recognizable

hotel chain in Asia. The company

has dozens of luxury properties across the

continent and in parts of Africa. Now it’s

expanding its presence to Latin America

by opening resorts in both Cuba and

Mexico.

“In a lot of our hotels we’ve been a

relative pioneer developer,” Banyan Tree

Managing Director Des Pugson told

Cuba Trade. “Cuba fits that pioneering

spirit, combined with the medium and

46 CUBATRADE MARCH 2017

long-term potential of the whole country

for tourism.”

About 4 million people visited

the island in 2016, according to Cuban

government statistics. The country hopes

to welcome 10 million visitors annually

by 2030—but to make that happen Cuba

must speed up foreign tourism projects.

“The opportunities for the industry

to grow are really vast and enormous,”

says Richard S. Newfarmer, co-author of

a recent Brookings Institution report on

tourism in Cuba.

Banyan Tree’s Cuba play is centered

on two geographic regions. The company

recently soft-opened its 516-room Dhawa

Cayo Santa Maria on Cuba’s northern

coast, about 70 miles east of Santa Clara.

It plans on opening an adjacent 220-room

Angsana Cayo Santa Maria by November

of this year. Banyan Tree’s other destination

will be Cayo Buba, a small island

known for its mangroves that sits next to

Varadero’s resort strip. The company plans

on opening adjacent resorts here by 2019.

As is required by Cuban law, Banyan

Tree is partnering with state enterprise

Gaviota SA to build its resorts. Pugson

says Banyan Tree has a management

agreement with Gaviota that allows the

Singaporean company to manage properties

owned by the state enterprise.

Opponents of U.S. engagement

with Cuba consider the move controversial

because Gaviota reports to the

Cuban Ministry of Defense (MINFAR).

According to the recent Brookings report,

Gaviota controls about 25 percent of the

rooms available to international tourists.

U.S.-based Starwood also partnered with

Gaviota for its Four Points by Sheraton

hotel in Havana.

“As an owner they have been very

supportive. They have delivered the hotel

on time, which is pretty good,” said

Pugson, adding that it's not his place to

comment on U.S. skepticism of Gaviota.

While U.S. companies interested in


The lobby of the 516-room Dhawa Cayo Santa Maria

Cuba have earned a lot of media attention,

Banyan Tree’s entry highlights Singapore’s

growing desire to forge relationships

with the island. That's evident with

PSA International, a Singaporean port

operator that signed on to manage Cuba’s

ambitious Mariel Special Economic

Development Zone in 2011.

The Singapore-Cuba relationship

appears to be moving forward despite

the two countries having little in

common. About the only similarity is

that they are both island-nations with

strong central governments. In 1959,

Lee Kuan Yew’s Singapore embraced

free-market capitalism while Fidel

Castro’s Cuba inched towards Sovietstyle

communism. Singapore is also

renowned for streamlining bureaucracy

for foreign companies. Cuba does not

have the same reputation. Regarding

tourism, Singaporean hospitality brands

tend to promote modernity while Cuba

specializes in nostalgia. The two countries

are also separated by an 11-hour time

difference.

These stark comparisons beg

the question: Why is a Singaporean

hospitality company betting big on Cuba?

“The progression to Latin America

is just us spreading our wings that much

further, to where the great opportunities

exist,” Pugson said. “It’s quite clear that

now, and when we started working with

the owners, that there was going to be

future opportunity [to capture tourists]

from places like Europe and the U.S.”

Pugson added that he is confident

Banyan Tree can shake-up Cuba’s tourism

industry by offering perks that aren’t

available at other hotels. Banyan Tree

plans on installing wifi in every guest

room. The company is also making a push

to attract younger customers—as opposed

to the couples and older families who

have tended to visit Cuba’s beach resorts.

What makes Banyan Tree stand out

from the competition, says Pugson, are the

interactions between staff and customers.

While many foreign enterprises have

criticized the Cuban government for

making them hire and pay employees

through a state staffing agency, in recent

years these practices have been loosened

to permit foreign companies to choose

from a pool of potential employees—and

to offer them minor performance bonuses.

Pugson says Banyan Tree has had success

selecting its staff through this system.

“[Gaviota] provided the potential

candidates to us for the hotel, so we’ve

been able to have a choice,” Pugson said.

“They are not the ‘it’s just a job’ brigade.

We’ve been able to pick a younger group

desiring to learn, desiring to grow, and

have that sort of passion to do well.”

In total, Banyan Tree is expected to

bring some 1,250 hotel rooms to Cuba

by 2019. The country has made foreign

investment in tourism a priority and it

aims to add 108,000 rooms to its current

roster of about 60,000 rooms by 2030. H

MARCH 2017

CUBATRADE

47


AGRICULTURE

Without sugar, there

is no country.

Elsys Pupo, Lopez Peña Sugar Mill

Photos by Jon Braeley

Cuba’s sugar harvest this season should

be the biggest in years, and even though

it’s starting from a small base, it could

have an economic impact.

A Sugar Comeback?

By Doreen Hemlock

Lopez Peña, a sugar mill in Eastern Cuba

In her 32 years working in the sugar industry,

Elsys Pupo has seen lots of change.

When she was younger, sugar was so vital

to the economy that Cubans would say,

“Without sugar, there is no country.” But

after the Soviet Union's collapse and end

of subsidies from Moscow, officials closed

nearly half the island’s mills, leaving more

than 200,000 sugar workers unemployed.

This year, Pupo is proud that the Lopez

Peña mill where she works in Eastern

Cuba’s sugar heartland is again grinding

cane. Last year, a drought––followed by

heavy rains––hurt cane production, and

harvests were too small to supply the

area's mills. But this season, some 430

48 CUBATRADE MARCH 2017

people are busy at Lopez Peña, up from

the 255 employed last season only for

maintenance.

“Now we are more technologically

advanced,” said the 50-year-old agro-industrial

technician. “Now, you can watch

the entire process of the factory from one

machine.”

Pupo’s not the only one optimistic

about sugar nowadays. Sugar will likely

grow faster than any other sector of the

Cuban economy this year, Economy Minister

Ricardo Cabrisas recently told the

National Assembly. With better weather

and new machinery helping boost sugar

production, output could rise as much as

12 percent this harvest season, when 54

mills are set to grind. That's up from 50

mills last season, said Liobel Perez, spokeman

for state sugar company Azcuba.

The result could be a boon for the

overall economy. Expansion in sugar could

help Cuba’s economy grow about 2 percent

this year, reversing a 0.9 percent drop

in 2016, according to Cabrisas––although

some economists predict a continuing

slide in the economy.

The timing is good, because sugar

ranked among the best-performing commodities

worldwide in 2016. Prices rose

on growing demand, including a shift by

Hershey and some other producers from


genetically-modified sugar beets to cane as

a source for sweeteners in their candy. In

mid-January, world sugar prices topped 20

cents per pound, up by more than 5 cents

from a year earlier, according to futures

markets.

This is positive news for Cuba’s quest

to increase export earnings, now that

Venezuela has cut back on oil shipments,

loans, and other support to its socialist ally.

“Cuba has to gain foreign exchange

somehow, and sugar is one of the few exports

not controlled 49 percent by foreign

companies, unlike tobacco, rum, nickel

and cobalt,” said Jorge Salazar-Carrillo, a

professor of economics at Florida International

University.

To be sure, the growth comes off

a relatively small base. A century ago,

after World War I decimated European

production, Cuba ranked as the world’s

largest sugar producer. During the Soviet

era, Cuba became a top sugar supplier for

the USSR and Eastern Europe, producing

more than 8 million tons in its peak year.

But in recent decades, production has

plunged. Cuba’s share of world exports

dropped from roughly 23 percent in 1989

during the Soviet heyday to 8 percent in

2002 and less than 1 percent now, said

Salazar-Carrillo. Cuba’s annual sugar

output has been running below 2 million

tons for years and even fell to 1.1 million

2000

1000

Cuba Sugar Production 2010-2017 (thousands of tons)

1,150

1,400

1,600

Source: USDA

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

tons earlier this decade, its smallest output

in about half a century.

Many factors limit production. The

invasive marabú weed has taken over much

of the island’s farm land. Railroads are old,

as are many mills. And even the quality of

Cuban cane is waning. “In other countries,

they take out the old cane and plant new

cane that has better quality yields,” said

Salazar-Carrillo.

During Soviet times, Cuba’s sugar

harvest had become highly mechanized.

The USSR provided machinery, fertilizer,

fuel, and other supplies, and it bought

Cuban sugar at inflated prices. When that

support ended, Cuba lacked the funds to

buy supplies at market rates. By 2002, with

production costs high and output waning,

Cuba decided it no longer made sense to

keep so many old mills open and closed

A sugarcane harvester cutting cane in Eastern Cuba

1,650

1,850

1,625

1,950

dozens. The only celebrated upgrade was a

mill in Cienfuegos under management by

Brazilian company Odebrecht SA.

Today, Cuba no longer ranks among

the world’s 10 largest sugar producers;

Brazil and India are on top. And sugar’s

not even one of Cuba’s top five exports; it

trails far behind medical services provided

by doctors and other professionals overseas.

The island now consumes 600,000 tons

of its own sugar per year––more than the

400,000 tons it’s contracted to sell China

annually.

But union leader Pupo doesn’t fret

that sugar is no longer center-stage for

Cuban agriculture. She’s keen on Cuba

building a diverse economy, with sugar as

just one of its pillars. “We have great potential

in tourism,” she said. “Nowadays,

we’re into tourism 100 percent.” H

MARCH 2017

CUBATRADE

49


CONGRESS

AND CUBA

Executive orders may come and

go, but only movement in the U.S.

Congress can end the half-century

economic embargo against the

island nation 90 miles from Florida

By J.P. Faber

It is an old joke, but it’s one that senators and

congressmen who oppose the embargo like to

use. “What’s the definition of insanity?” asks Rep.

Tom Emmer of Minnesota. “It’s when something

doesn’t work but you try it again and again.”

For the growing cadre of national legislators

who want to see an end to what they call “our failed

Cuba policy,” this is the first and most irrefutable

argument for ending the 55 years of U.S. economic

sanctions against the island nation. The policy simply

hasn’t worked, they say. If anything, it has backfired.

“The embargo did exactly the opposite of what

it was intended to do,” says Emmer. “The embargo

was enacted with the stated purpose of undermining

I think we should lift [the

embargo] over a period of

time. I think that would be

best for the Cuban people

themselves… A gradual

change will be in the best

interest of all parties.

John Boozman, Arkansas Senator

50 CUBATRADE MARCH 2017


Cutting off trade with people so close to our shores only

meant that people there dug in with their positons. It

hasn’t given the average Cuban a say in moving toward

a more entrepreneurial system. I think it has failed.

Amy Klobuchar, Minnesota Senator

Photo by Mark Finkenstaedt


Rep. Tom Emmer (third from right) meeting with MINCEX, the Ministry of Foreign Trade and Investment

the Castro regime. [But] the embargo has only empowered the

Castro regime. Common sense tells you that the embargo is the

definition of insanity.”

With this conviction in mind, Emmer introduced H.R.

442, the Cuba Trade Act, in the House of Representatives in

January. Emmer, a Republican, co-sponsored the bill along with

Rep. Kathy Castor, a Democrat from Tampa. The bill repeals or

amends all embargo legislation, from the Foreign Assistance Act

of 1961, to the Cuban Democracy Act of 1992, to the Cuban

Liberty and Democratic Solidarity Act of 1996.

“The embargo will be lifted.” says Emmer. “Its time is past.”

Emmer’s fight to abolish the embargo outright is shared by

his legislative colleague from Minnesota, Sen. Amy Klobuchar.

Two years ago, she introduced the Freedom to Export to Cuba

Act of 2015 (S.491), which advocated the same repeals as Emmer’s

bill.

“Cutting off trade with people so close to our shores only

meant that people there dug in with their positions. It hasn’t given

the average Cuban a say in moving toward a more entrepreneurial

system. I think it has failed,” says Klobuchar, who plans to

reintroduce the bill again this year.

Klobuchar says her decision to push for an end to the embargo

was driven by her constituency as much by as any personal

conviction.

“This wasn’t just my idea. People in my state came to me.

They were in a few different categories. One was agriculture

and farm people, who wanted to do business there. Another was

Catholic Church people who are trying to improve the human

rights situation there. Fifty years of the embargo has not helped.”

Besides concern for the Cuban people who are hurt by the

embargo, Klobuchar—who is on the Senate Commerce Committee—is

unabashed in her advocacy of U.S. commercial interests.

“We want to lift the embargo from a commercial standpoint.

We went to [the Cuban port of ] Mariel. We want to see American

ships there with American goods going in. The fact that it

has a Chinese computer system just cries out, when most ports

[in the world] use U.S. software,” she says. And, noting the anticipated

explosion of U.S. tourists heading to Cuba, “If we don’t lift

the embargo those people will be sleeping in Spanish hotels and

eating Chinese food.”

The embargo will be

lifted. Its time is past.

Rep. Tom Emmer of Minnesota

The question, of course, is when—and how—the embargo

gets lifted. Many of the lawmakers who want to see more

engagement with Cuba advocate a slow approach, taking the

embargo apart one piece at a time.

A leading voice for this path is Sen. John Boozman, an

Arkansas Republican who is a stalwart supporter of U.S. agriculture

interests. His state was the leading exporter of rice to Cuba

before the Revolution, and the opportunity for those farmers

to get a piece of Cuba’s $2 billion annual food import market is

paramount.

Together with Sen. Heidi Heitkamp (D-N.D.), Boozman

reintroduced the Agricultural Export Expansion Act of 2017 in

February. Its aim is to lift the ban on private banks and companies

offering credit for agricultural exports to Cuba, a move that

will level the playing field for U.S. farmers and exporters. Cur-

52 CUBATRADE MARCH 2017


An anti-embargo demonstration outside

the Cuban Embassy in Washington, D.C.


Bipartisan support: Sens. Jeff Flake (R-Ariz.), Patrick Leahy (D-Vt.), John Boozman (R-Ark.) and Richard Durbin (D-Ill.)

in a 2015 press conference to lift the travel ban

rently, Cuba must pay cash in advance, something that is unheard

of in trade finance.

“I think we should lift [the embargo] over a period of time. I

think that would be best for the Cuban people themselves,” says

Boozman. “They do not have the infrastructure or everything in

place [to deal with full, immediate commercial reengagement

with the U.S.]. A gradual change will be in the best interest of all

parties.”

While advocating a slow landing, Boozman also believes that

demands for political change in Cuba as a condition for lifting

the embargo are useless and hypocritical.

“I have to be consistent. We deal with a lot worse actors than

the Cubans on human rights [such as] the Saudis, the Vietnamese,

the Chinese—the list goes on and on,” says Boozman. “If

they are going to sponsor terrorism, that’s another matter. But

in terms of their running their own country, if we demanded

free elections first, then we wouldn’t be trading with a lot of the

world.”

Another Arkansas Republican, Rep. Rick Crawford, reintroduced

the same bill to the House in January. A long-time advocate

of opening Cuban markets to U.S. agriculture products, last

year Crawford attached a similar bill (H.R. 525) to the House

appropriations bill—the mechanism by which the government is

funded—but withdrew it after he said Cuban-American congressmen

told him they would allow a similar bill to come up for

a vote this year.

“I think there is good chance we can make this move [this

year]. I’ve done a lot of back channel work with the people who

are concerned,” says Crawford. “The difference is that this time

we went to them [South Florida politicians who favor the embargo],

to ask, ‘What do we have to do to write a bill that you will

support, that will be sensitive to your Cuban-American constituency?’”

Crawford emphasizes that his bill does not represent an endorsement

of President Obama’s policy of re-engaging Cuba, but

is strictly humanitarian, a way to help the Cuban people.

“A law that says you need cash up front is not consistent

with how we deal with other areas of the world,” says Crawford,

whose bill also puts the risk in private hands, with no bailouts

from U.S. taxpayers. “If some farmer wants to sell 10,000 tons of

soy to Cuba, he is on his own, and if he takes a bath, that is his

risk. This bill simply gives him the opportunity to the make the

deal.”

THE PUSH BACK

When John F. Kennedy put in place the full embargo against

Cuba in 1962, he did so by executive order. Jimmy Carter lifted

some travel and remittance restrictions during his term, but most

54 CUBATRADE MARCH 2017


Until the conditions are

met, the sanctions remain

Rep. Diaz-Balart

Rep. Díaz-Balart, Republican House member from South Florida

were re-imposed by Ronald Reagan. It was not until the 1990s

that Congress passed laws that made the embargo permanent. So,

while President Obama used executive orders to punch holes in

it, only Congress can truly lift the embargo.

Members of Congress have been pushing to do just that for

more than 17 years, with little to show for it. In 2000, Congress

passed the Trade Sanctions and Export Enhancement Reform

Act (TSRA), which allowed for the sale of U.S. food and

medicine to Cuba for humanitarian reasons. But even that was

strangled by additional Bush administration regulations, which

made it impossible to finance those goods.

In 2015, the year Washington re-established diplomatic

relations with Havana, lawmakers introduced a new flurry of

anti-embargo bills in Congress. At the time, Pew Research polls

showed that nearly three-quarters of Americans favored lifting

trade sanctions against Cuba. Regardless, those bills never saw

the light of day, thanks to the efforts of a group of Cuban-American

lawmakers and their powerful allies in Congress. Among

them were Sens. Marco Rubio (R-Fla.) and Robert Menendez

(D-N.J.), and a trio of Republican House members from South

Florida, Reps. Mario Díaz-Balart, Iliana Ros-Lehtinen, and

Carlos Curbelo.

While Curbelo is new to the game, the rest have been in office

long enough to have earned key positions on committees that

control the flow of legislation to the floor of the Senate and the

House. For years, they have traded their support for other issues

in exchange for support of their embargo truculence.

These lawmakers argue that the embargo has stopped the

Castro regime from “exporting its violent and repressive ideology

throughout the region,” in the words of Menendez. Embargo

proponents also argue that sanctions have weakened the regime’s

ability to repress the Cuban population. “Our sanctions have

worked,” says Curbelo.

When asked, Díaz-Balart will list the conditions for lifting

the embargo, which were largely codified by the Helms-Burton

Act of 1996. They include freeing all political prisoners, abolishing

press restrictions, and beginning the process of free elections—as

well as removing Raúl Castro from power. “Until the

conditions are met, the sanctions remain,” he says..

Díaz-Balart doesn’t appear worried by his colleagues’ efforts

on Capitol Hill to lift the embargo because “we have the votes” to

block those bills. Indeed, through control of key positions in various

committees, the Cuban-American delegation has prevented

embargo-lifting bills from reaching the floor of either the House

or the Senate for a vote.

“There is a handful of Cuban-American members of Congress

who, largely for family reasons or domestic political reasons,

continue to defend the embargo,” says Sen. Patrick Leahy, (D-

Vt.). “I don’t question the motives of those who remain wedded

to the embargo, but their numbers have sharply diminished and

MARCH 2017

CUBATRADE

55


A CHRONOLOGY OF THE U.S. EMBARGO AGAINST CUBA

1960 US President Eisenhower places an embargo on exports to Cuba, except

for food and medicine

1961 Eisenhower severs diplomatic ties with Cuba

1961 Congress passes the Foreign Assistance Act, prohibiting aid to Cuba and

authorizing the President to impose a complete trade embargo

1962 By executive order, President Kennedy extends the embargo to include

all imports of goods from Cuba, even if assembled outside of Cuba

1962 The Foreign Assistance Act is expanded to prohibit aid to any country

that assists Cuba

1963 Kennedy expands the embargo to include travel restrictions

1963 Kennedy issues the Cuban Assets Control Regulations, freezing all Cu

ban assets in the U.S. and giving the Treasury Department the power to

enforce the embargo via the Office of Foreign Assets Control (OFAC)

1977 President Carter lifts restrictions on U.S. citizens travelling to Cuba and

spending money there

1982 President Reagan re-imposes the travel restrictions for business and

tourism, allowing travel only for journalists, professional researchers,

and family visiting relatives

1992 The embargo is strengthened by the Cuba Democracy Act, aka the

Torricelli Law, which prevents foreign-based subsidiaries of U.S.

companies from trading with Cuba. It also bans travel to Cuba by U.S.

citizens, family remittances to Cuba, and any vessel that trades with

Cuba from entering a U.S. port for 180 days.

1996 Congress passes the Cuban Liberty and Democracy Solidarity Act, aka

the Helms-Burton Act, which extends the embargo to include foreign

companies trading with Cuba, and penalizes foreign companies that

use property formerly owned by the U.S. (or by Cubans who have since

become U.S. citizens) confiscated after the Cuban Revolution.

2000 Congress passes the Trade Sanctions Reform and Export Enhancement

Act, which allows the sale of agricultural goods and medicine to Cuba

for humanitarian reasons

2005 President Bush imposes restrictions on the sale of agricultural goods to

Cuba, requiring cash in advance prior to leaving U.S. ports

2009 President Obama allows Cuban Americans to travel freely to Cuba and

permits families to send $500 a month home to Cuba

2010 President Obama eliminates the Bush restriction on agriculture finance.

Cash is still required, but not before the product is loaded

2014 President Obama announces his intentions to re-establish relations with

Cuba

2015 President Obama lightens restrictions on U.S. citizens traveling to Cuba,

and lifts the restrictions on the amounts of remittances Cubans can

send or carry home. The Commerce Department begins to issue license

exemptions for the sale of some goods to Cuba.

2016 President Obama issues a series of regulatory reliefs for Cuba, including

allowing the import of Cuban biomedical drugs approved by the FDA,

loosening restrictions on U.S. citizens bringing rum and cigars home,

and permitting imports of some goods produced by private Cuban

citizens

the Cuban and American people are fed up with a failed, discriminatory

policy. They want change.”

BEING THERE

Leahy advocates lifting all travel restrictions, and two years

ago introduced, along with Sen. Jeff Flake (R-Ariz.), the Freedom

to Travel to Cuba Act (S. 299). “It is unconscionable that an

antiquated U.S. law prevents American citizens from traveling

to an island nation just 90 miles away that poses no threat to

the United States,” says Leahy. “Do we have profound differences

with the Cuban government? Of course. But there is no

other country in the world—not Iran, not Syria, not Russia, not

Vietnam, not China, not Sudan—where Americans can’t travel

because of a ban by their own government.”

Interestingly enough, none of the Cuban-American members

of Congress have been to Cuba except for Ros-Lehtinen,

who was born there and fled as a child. This is important, say

critics of the embargo. If you haven’t visited Cuba, you cannot

understand the failure of the policy.

“I took a trip down there, and what was talked about conceptually

in Helms-Burton was a long way away from what it was

doing. I began to shift,” said Rep. Mark Sanford (R-S.C.), who

along with Rep. Jim McGovern (D-Mass.) reintroduced a Freedom

to Travel to Cuba Act (H.R. 351) to the House in January.

“All that went wrong in the island was blamed on the embargo.

It was an excuse. It perpetuated power, not eliminated it,”

said Sanford. “The embargo has not worked. It has exacted real

pain on the 11 million people who make up the island of Cuba.

Those in power are able to exempt themselves from the pain of

daily life experienced by regular people.”

The economic damage wrought by the embargo has not been

one-way, either. While the Cuban government estimates that the

embargo has caused Cuba $753.69 billion in damages, the U.S.

Chamber of Commerce says it has cost the U.S. economy $1.2

billion per year in lost sales and exports. In 2014, the Peterson Institute

estimated that U.S. exports of goods and services to Cuba

could reach $5.9 billion per year if the embargo is lifted.

THE OTHER CUBAN FORCE

Largely motivated by the damage they see inflicted on

Cuba’s populace by the embargo, Cuban-Americans increasingly

oppose the policy in South Florida, the traditional stronghold of

pro-embargo sentiment.

A leading embargo opponent is Carlos Salidrigas. Among

the most successful Cuban-American businessmen in the country,

and a staunch Catholic, Salidrigas has for the last decade

56 CUBATRADE MARCH 2017


Photo by Matias J. Ocner

Photo byTina-Jane Krohn

Anti-embargo donor Mike Fernández: Economic rights come first

and a half devoted himself to solving the Cuban dilemma. His

renowned Cuba Study Group, a think tank comprised of many

influential Cubans, took 10 years to conclude that the embargo

was useless at best and counterproductive at worst. He now considers

it “very unethical.”

“The [advocates for embargo] in the Cuban-American

community believe in pushing Cuba to the brink and causing

collapse, and using the people of Cuba as a weapon of mass

destruction… by starving the people so that they eventually rebel

against their own government,” he says.

Even if brutal economic pressure could lead to bloody revolt,

says Saladrigas, that is not the way to achieve democratic reform.

“There is plenty of evidence to suggest that good democratic

transitions require at least a significant amount of economic

development to go along with it. So, Haiti, for instance, had the

worst time transitioning to democracy… Poor counties don’t

transition well.”

Saladrigas says he believes South Florida’s Cuban-American

members of Congress are self-serving relatives of wealthy and

politically powerful Cubans ousted during the Revolution. “There

are political agendas here. There are families here that believe

they are determined by destiny to rule Cuba in the future. For

them only an outcome where there is a sudden collapse of Cuban

society and law and order—that is the only option they have to

see those dreams realized.”

Engage Cuba President James Williams: Congress must heed voters

Another leading South Florida Cuban-American against

the embargo is billionaire Mike Fernández, whose family’s

small business was nationalized by the Castro regime. Fernández

caused a stir in 2015 when he penned an open letter to the

Cuban community in the Miami Herald, declaring his choice to

rebuild Cuba. For Fernández, economic rights are more fundamental

than political rights.

“Almost nothing happens until you have secured a better

way of life for your family. The process [of change in Cuba] has

to start with economic freedom. Everything else will follow

that,” he says. “I have experienced this personally. You find a

group of Cubans on a street corner in Havana and you ask them

this question: ‘Which would you prefer of the following—300

newspapers to choose from, 500 TV stations to go through, 15

political parties from which to elect your representatives, or a

better quality of life for you and your family? And every time

they chose the last one.”

“The idea that we will somehow bully the self-protective and

sometimes abusive Castro regime into capitulating is absurd,”

says Fernández. “As much as I dislike their system of government,

you’re not going to threaten the Cubans into actions. It’s bred into

the Cuban mindset to rebel … If the failure of the Soviet Union

[in the 1990s] did not get them on their knees to ask the U.S. to

help them, then I hate to tell you, it’s not going to happen now.”

The reason a small clutch of Cuban-American congressmen

MARCH 2017

CUBATRADE

57


THE 16 STATES

These are the states that have set up Engage Cuba Councils

so far, that the dates their councils went live

Idaho July 2016

Minnesota Mar. 2016

Iowa May 2016

Ohio Feb. 2016

Aug. 2016 Colorado

Aug. 2016 New Mexico

Virginia Jan. 2017

Tennessee Dec. 2015

Georgia May 2016

Alabama May 2016

Mississippi May 2016

Sep. 2016 Kansas

June 2016 Texas

Louisiana Feb. 2016

Arkansas Apr. 2016

Missouri Sep. 2016

can prevent the embargo from being lifted, says Fernández, is

because the issue is not as important to their colleagues, who are

willing to trade their votes for something else they care about.

He cites the flip-flop of House Majority Leader Rep. Paul Ryan

(R-Wis.), who formerly pledged to lift the embargo, but now

supports it. Fernández believes Ryan’s support for the embargo

is a tradeoff for Cuban-American support on issues important

to him—and because Florida is such a critical swing state in the

general election. Ryan says his thinking has simply “evolved”

under the tutelage of Díaz-Balart and Ros-Lehtinen.

To bring the issue to mind for more lawmakers, Fernández

and others (he is the largest single contributor) funded

a lobbying group called Engage Cuba. Their conclusion:

congressmen won’t change their opinion on the embargo until

their constituents make them.

Engage Cuba began a grassroots campaign in 2015 to create

state councils that gave voice to voters who want new policies for

Cuba. It’s now up to 16 states, with more expected to follow.

“This is one of those issues where there is just a massive

divide and disconnect between the halls of congress and the

American people,” says James Williams, president of Engage

Cuba. “The feedback we got from members of Congress when

we went to go see them and talk about the issues, about the

polling, about the economic interests, was, ‘You know, it sounds

okay, but to be honest I’m not really hearing much about this

back home.’ So we started the idea of the state council.”

The first Engage Cuba state council was set up in Tennessee,

quickly followed by Ohio, Louisiana, Minnesota, and Arkansas.

“Our goal wasn't to change people's opinions in Tennessee.

This is one of those issues where there

is just a massive divide and disconnect

between the halls of Congress

and the American people

James Williams, president of Engage Cuba.

It was to work with the people there we knew who already

supported it [lifting the embargo] and just get them to make

sure they communicated that to their members of Congress,”

says Williams. “You know, sometimes you think that stuff just

happens, but shockingly it does not.”

Addie Bryant, Engage Cuba’s chief of staff, says they were

initially encouraged by a “heartland poll” they took of voters in

Tennessee, Ohio, Iowa, and Indiana, showing popular support

for trade with Cuba. Using these numbers and similar polls, they

began working with state legislators, agriculture commissioners,

prominent corporate citizens, and governors to lobby their

representatives in Washington.

Bryant says Engage Cuba is getting very close to assembling

the needed votes to lift the travel ban in the Senate, and to lift

agriculture finance restrictions in the House. “In the house we

feel very confident on the agriculture bill,” thanks in part to the

addition of new congressmen elected in the last election. “New

members haven’t been hit up by Mario Díaz Balart yet. They are

still listening to their constituents.”

58 CUBATRADE MARCH 2017


BEYOND THE PAROCHIAL

One of the most encouraging signs about the effort to lift

the embargo is the fact that it is truly bipartisan. Virtually every

bill introduced this year has, or will be, introduced and cosponsored

by a balanced team of Republican and Democratic

lawmakers.

“Within the last four or five years it’s been impossible for the

Congress to agree on anything,” say Luke Albee, a senior advisor

to Engage Cuba and the former chief of staff for Sens. Mark

Warner (D-Va.) and Leahy. “What’s been heartening about this

is that the legislative process appears to be working as it should.

Not only is there bipartisan support, suddenly the discussion is

going beyond a couple of zip codes in South Florida.”

As Albee notes, supporters for lifting economic sanctions

hail from a broad swath of the country’s agricultural hinterland.

“The key thing on this issue is that it is geographic, not partisan.

Any time there is a farm bill it doesn’t matter if you are Democrat

or Republican, it only matters what you grow.” Albee believes

that, had the agriculture bill gone to the floor for a vote last year,

it would have passed.

But therein lies the problem. Because of key positions they

hold and their ability to horse-trade votes, Cuban-American

congressmen have been able to stop that from happening.

One element that may change the scales in favor of the proengagement

faction is the question of national security. That issue

transcends any parochial interests—the idea that another power

might become so engaged with Cuba that it starts to use it as a

military base.

“We talk about this from an economic point of view, and I

come from an agricultural and manufacturing state,” says Emmer.

“But the conclusion I came to is that it’s really more about

national security for the Western Hemisphere.”

Crawford feels the same way. “We do need to take a long

view and we do know that Iran, Russia, and China are very

aggressive about filling the [economic] void in Cuba,” says

Crawford. “If we truly want to be an agent of change in Cuba we

need to change our posture. If that void is filled by bad actors it

will have a bad outcome.”

The worst thing we can do, say the congressmen who are

pushing for change, is to go back to a Cold War mentality of

estrangement rather than engagement.

“I think that when you trade goods and services you are

trading ideas and ideals, and that will make a big difference in

other counties,” says Boozman. “You change the world through

relationships, and you develop those with interactions and with

business. That’s how you make an impact on societies for the

good.”

Regardless of any vote in Congress, however, for legislation

to become law requires approval from the man in the White

House—unless Congress musters a veto-proof majority. Whether

the pro-engagement forces have the muscle for that, and which

direction President Trump ultimately decides to move, remains

the real enigma for the embargo. H

PENDING PRO-ENGAGEMENT LEGISLATION

UNDERWAY IN CONGRESS

There are four initiatives underway in Congress to dismantle—

or scale back—the embargo against Cuba. The first is intended

to lift the restrictions on financing agricultural exports into

Cuba; the second eliminates travel restrictions to the island; the

third codifies the telecom opening initiated by Obama; and the

fourth advocates for full repeal.

AGRICULTURAL EXPORTS TO CUBA

House bill H.R.525, the Cuba Agricultural Exports Act, was introduced

by Rep. Rick Crawford (R-Ark.) in January. The similar

Senate bill S.275, the Agricultural Export Expansion Act, was introduced

by Sens. John Boozman (R-Ark.) and Heidi Heitkamp

(D-N.D.) in in February. Both bills are designed to lift the restrictions

on trade finance for agricultural products exported to Cuba.

FREEDOM TO TRAVEL TO CUBA

House bill H.R.351, the Freedom to Travel to Cuba Act, was introduced

by Reps. Mark Sanford (R-S.C.) and Jim McGovern

(D-Mass.) in January. The Senate version was introduced by

Sens. Jeff Flake (R-Ariz.) and Patrick Leahy (D-Vt.). Both remove

the restrictions for U.S. tourists traveling to Cuba.

TELECOM INVESTMENTS

House bill HR.498, the Cuba DATA Act, was introduced i by Rep.

Kevin Cramer (R-N.D.) in January. The Senate version (S.1389)

was introduced in 2015 by Sen. Tom Udall (D-N.M.). Both bills

codify the regulatory changes made by Obama that permit U.S.

telecom companies to invest in Cuba.

LIFTING THE EMBARGO

The biggest bill of all, and the one with the least support in terms

of co-sponsors, is the Cuba Trade Act, which would basically end

the embargo. It was first introduced to the Senate in 2015 (S.1543)

by Sen. Jerry Moran (R-Kan.) and co-sponsored by Sens. John

Boozman (R-Ark.) and Angus King (I-Maine). A more recent version

(HR.442) was introduced to the House in January by Reps.

Tom Emmer (R-Minn.) and Kathy Castor (D-Fla).

MARCH 2017

CUBATRADE

59


The Smell

The Cuban Mountain Coffee company

looks forward to new foreign markets—

including the U.S.—as it moves forward

with a deal to revive production in

Eastern Cuba.

By Victoria Mckenzie

Photos by Phillip Oppenheim

Long before the name evoked an infamous detention

center, the southeastern province of Guantánamo was

known for its beautiful mountain ranges and coffee

plantations, which produced most of the island’s high-quality

arabica beans. This was Cuban coffee at its finest, with a

worldwide reputation for excellence.

Some 90 percent of Cuba's coffee comes from Eastern

Cuba, another 8 percent from the central provinces, and the

remaining 2 percent from the western province of Pinar del

Río. Coffee no longer grows in the deforested and exhausted

soils in the plains and hills around Havana.

Cuba’s efforts to replenish its coffee exports, in partnership

with foreign investors and marketing companies, could

help resurrect its once-proud global image. One company in

particular is already beginning to make a difference. Cuba

Mountain Coffee (CMC), owned by former British Conservative

MP Phillip Oppenheim, is investing in the revival of

Guantánamo’s coffee crop and will reintroduce the beans on

the world market.

60 CUBATRADE MARCH 2017


of Success

A small private coffee plantation in

San Antonio de Sur


Drying coffee in a secador at the beneficio

in the San Antonio microregion


In the high mountain ranges of Guantánamo province, conditions

are particularly favorable for cultivating specialty grade coffee.

Aided in part by winds coming off the Caribbean sea, the beans

are able to slow-ripen at much lower altitudes than in hotter

countries such as Brazil, Panama, and Colombia, resulting in a

higher complexity of flavor.

In a deal that’s been nearly five years in the making, CMC

announced in January that it had finalized terms for partnering

with Empresa Procesadora de Café Asdrúbal López Vazquez

(AL), a Cuban processing company, to market and sell arabica

beans grown by private farmers in 17 microregions throughout

Guantánamo. Those terms were expected to win final approval

this month from various Cuban government ministries, including

the Ministry of Agriculture.

CMC first announced the pending deal in August, at the

same time reporting an agreement between CMC and Nespresso

to supply the company with green coffee beans. Nespresso, a

division of Swiss food giant Nestlé, caused a flurry of excitement

across the United States in August when it began exporting the

first Cuban coffee to the U.S. market in half a century. Under

new U.S. regulations that permitted the import of some products

from the private sector, debut supplies of Cafecito de Cuba

capsules to sold out almost immediately, thanks to limited sources

in Cuba.

CMC aims to change that. Over the next five years, it plans

to invest $5.5 million in local production, including the purchase

of equipment, plants, and nurseries. While AL provides technical

agricultural support to 2,000 farmers and manages the local processing

plants, CMC will advertise and sell the green beans, splitting

the proceeds. For Oppenheim, this involves distinguishing

Guantánamo’s coffee by each microregion, altitude, and variety,

characteristics that don’t presently exist for the global consumer.

“At the moment, the state export agency (Cubaexport),

which exports all Cuban coffee, tends to bulk the coffee up,”

Oppenheim told Cuba Trade. “It only has about four grades. It’s

really a bulk product only sold by the container.”

Revitalizing a Niche Industry

In the high mountain ranges of Guantánamo province, conditions

are particularly favorable for cultivating specialty grade

coffee. Aided in part by winds coming off the Caribbean sea,

the beans are able to slow-ripen at much lower altitudes than in

hotter countries such as Brazil, Panama, and Colombia, resulting

in a higher complexity of flavor.

“Consumers don’t really care where [sugar] comes from,” says

William Messina, an agricultural economist at the University of

Florida, “whereas Cuban coffee could command a real niche in

global markets with the help of foreign investment.”

UNESCO recognized the historic significance of Cuba’s

southeastern coffee region in 2000, when it designated the

remains of 171 coffee plantations as a World Heritage Site.

Strewn throughout the provinces of Guantánamo and Santiago

de Cuba, and occupying some 200,000 acres, these decaying 19th

century plantations are monuments to an era when Cuba’s coffee

economy flourished. They owed their success in large part to new

agricultural methods imported by French exiles from present-day

Haiti (then known as Saint-Domingue) after its revolution broke

out in 1791. Aided by an increasing supply of slave labor, Cuban

coffee production eventually surpassed sugar production. While

sugar later became Cuba’s preeminent export, in the years leading

up to the 1959 Revolution the country was exporting more than

20,000 metric tons of coffee a year––most of which was grown in

the southeastern provinces. These days, however, coffee production

lies in the hands of small family farmers, and has fallen to 24

percent of its pre-revolutionary volume.

“One of the reasons is the farmers haven’t been incentivized

with price support, or with inputs, and it has not been worth

their while growing coffee,” explained Philip Oppenheim. “You

go up into the Guantánamo mountains and there are thousands

of farmers. Mostly, they’ve got a pig, they’ve got a mango tree,

and if they grow coffee at all, they’re no longer specialist farmers

like they used to be. They’re subsistence farmers, and the coffee’s

their cash crop. So, two kilos of coffee a year to the [government]

buying authority, and that’s it.”

In recent years, the Cuban government has raised the price

of coffee in an attempt to stimulate production, and farmers now

get slightly more than the average world price, depending on the

grade. As part of the deal with CMC, AL is authorized to pay

out quality bonuses to farmers; Oppenheim says his company is

pushing for its Cuban counterpart to be given complete flexibility

over what they pay farmers in the future.

Political Sensitivities

The agreement for CMC’s Guantánamo project—which

is not a joint venture, but a ‘contract of administration’ allegedly

designed to make it easier for foreign businesses to work in

Cuba—took nearly five years of negotiating and numerous trips

to the island. The contract falls under a new category introduced

in Cuba’s 2014 Foreign Investment Act (Law 118) that makes it

easier to set up than a joint venture. In exchange for the invest-

MARCH 2017

CUBATRADE

63


Coffee workers in the microregion of Yateras

ment and product marketing, CMC gets rights to the coffee from

these micro-regions for up to ten years.

Despite the success of the venture so far, Oppenheim warns

that businesses with a romantic view of Cuba can easily come to

grief. “I know people think it’s the promised land, but it’s quite a

difficult place to do business,” he says. “The Cubans have got to

get to know you very well before they’ll do anything with you.

It’s very personally based. They want to be sure they can trust you

and work with you.”

Another factor that make deals so time-consuming is the

still-sensitive nature of foreign agricultural investment in Cuba,

and the fact that CMC is operating in such a politically charged

region—demonstrated by the recent rejection of TechnoServe, the

U.S. NGO that had originally planned to work on the project.

Washington-based TechnoServe was the first to approach

CMC about working with Nespresso, announcing in July that

the NGO would be working alongside its long-time partner to

provide on-the-ground support to Guantánamo coffee farmers.

But as Cuban officials became aware of TechnoServe’s involvement

later in the year, “the guys in Guantánamo made very clear

to us they did not want an American NGO” in their backyard,

said Oppenheim. “They like Nespresso, no problem, but they

won’t work with an American NGO.”

Nespresso told Cuba Trade that it is moving forward with

discussions on how to best work with Cuban farmers, adding that

“as a global partner among others, TechnoServe is a valued member

of our team and will continue to play a role in this endeavor.”

A Long Term Investment

Because it takes three years for coffee plants to begin

producing––not to mention the need for continual replanting––

coffee is not a short-term investment. Still, thanks to a recent increase

in production, CMC will be selling Guantánamo’s arabica

beans on the world market as soon as this year, Oppenheim told

Cuba Trade. Now that negotiations with the Cuban government

have concluded, the project should take off by late 2017. CMC’s

next task will be to raise additional capital—either through

crowdfunding or concessional loans from Finnish, Danish, or

Canadian banks.

“The banks are still very difficult,” said Oppenheim, referring

to U.S. regulations that prohibit American financial institutions

from corresponding with Cuban banks. “There is no perceptible

change yet in the banking system in response to Obama. A lot of

people now use Canadian or Estonian banks.” Even so, the long

arm of the U.S. Treasury can block transfers, even if not in dollars

and outside the United States, for many months.

With so much U.S and worldwide demand, however, the

long wait to export coveted Cuban coffee is apparently beginning

to come to an end. H

64 CUBATRADE MARCH 2017


A Special Report By Cuba Trade Magazine

THE TAMPA-CUBA

CONNECTION


Tampa to Havana!

We are proud to annouce new cruise itineraries including

Havana, Cuba.

1101 Channelside drive, tampa, Florida 33602

www.porttb.C om | 800-741-2297


eginning

April 30, 2017!


THE TAMPA-CUBA

For more than a century, Tampa—Florida’s “Cigar City”—has been

intimately linked to Cuba. It was here that José Martí planned Cuba’s

war of independence from Spain. Even the famous Cuban Sandwich

was invented here. Today, the connection lives on in historic Ybor City,

Tampa’s Cigar industry and a mutli-generational Cuban population.

68 CUBATRADE MARCH 2017


CONNECTION

By Doreen Hemlock

Tampa cigar workers at the turn of the

century, listening to their "lector" reading

from newspapers and books.

MARCH 2017

CUBATRADE

69


WITH U.S.–CUBA TRADE

LOOMING, GREATER

TAMPA IS LEVERAGING ITS

DEEP HISTORIC LINK TO

THE ISLAND NATION

As U.S. regions jockey for business and other links with

Cuba, the Tampa Bay region has one big advantage on its

side: history. No place in the United States shares as long

and rich a historical connection to the island as Tampa Bay.

The western Florida region is where, nearly 500 years ago,

the first Spanish explorer from Cuba came ashore to check out

North America. It’s where cigarmakers from Cuba started setting

up factories in the 1880s, attracting Cuban workers and earning

Tampa the nickname “Cigar Capital of the World.”

It’s where Cuban independence leader José Martí repeatedly

visited in the 1890s seeking funds and support to liberate his

homeland from Spain. And it’s where Teddy Roosevelt and his

Rough Riders cavalry kept their headquarters before heading off

to Cuba during the Spanish-American War of 1898.

Many in Tampa Bay want to build on that legacy now that

the United States and Cuba have restored diplomatic ties after

a 54-year break. With the U.S. embargo limiting most business

with the island, they’re forging wide-ranging links, from marine

70 CUBATRADE MARCH 2017


IN MARTÍ'S FOOTSTEPS

Cuba’s Icon of Independence Lives

on in Tampa

To trace the steps of Cuban independence leader Jose Marti

in Tampa, start by downloading an app.

A smartphone app called Florida Stories features a guide

that takes Tampa visitors along the José Martí Trail. The tour

makes an initial nine stops in Ybor City that the Cuban patriot

visited in the 1890s, including former cigar factories where he

gave rousing speeches to Cuban workers to raise money for

the war of independence from Spain. It also highlights the spot

where Marti recovered after Spanish agents poisoned his drink,

trying to kill him.

The guide to the José Martí Trail was developed as a joint

project between the Florida Humanities Council, the Ybor City

Chamber of Commerce, and the Visit Tampa Bay tourism group.

It’s part of the Humanities Council’s “Florida Stories” app that

also offers interactive walking tours in other areas of the state.

The idea for Tampa is to drive cultural tourism, encouraging

longer stays for both visiting Cubans and for Americans before

or after a visit to the island nation.

The tour notes that Martí “combined the intellectual,

organizational and oratorical talents of George Washington,

Thomas Jefferson and Abraham Lincoln.” The writer and activist

died in battle in eastern Cuba in 1895, fighting Spanish

troops in the independence war. He was only 42.

Scholars say Martí gave instructions on when to start that

war. The message came in a cigar rolled in west Tampa. In all,

Martí he spent more than 50 days in Tampa Bay on at least 20

visits between 1891 and 1894.

José Martí park

Trolleys of The Teco Line Streetcar System in historic Ybor City

science to the arts and sports. Indeed, it was a Tampa Bay Rays

game against Cuba’s national baseball team that Presidents Barack

Obama and Raúl Castro watched in Havana last spring during

the first visit to Cuba by a sitting U.S. president in 88 years.

Tampa Bay has much to offer Cuba. The four-county region

has the second-highest economic output of any metro area in

Florida, trailing only after Greater Miami. Much of its activity

comes from Hillsborough County, home to the city of Tampa

and about half of the region’s three million residents.

In addition, Tampa hosts Florida’s second largest Cuban-

American community, about 100,000 people. It's older than

Miami’s one million-strong group, with many residents descended

from cigarworkers who arrived a century ago. Tampa’s

Cubans tend to be more open to engagement than Miami’s, with

ideologues considered less of an obstacle to building ties with the

nearby island.

“Miami is Cuba. Here, we’re Tampa,” joked Roberto Galban,

32, serving a Cuban-style coffee at a cigar shop in Tampa’s

Florida Stories is a free download on the App Store and Google Play.

Users must install the “José Martí Trail” within the app.

MARCH 2017

CUBATRADE

71


DEEP SEA COOPERATION

How scientists from Tampa and Cuba

are working together to save the reefs

When it comes to the ocean, coral reefs, sea turtles, and

other marine life know no borders.

That’s why the Florida Aquarium in Tampa and the National

Aquarium of Cuba have agreed to cooperate on research affecting

their shared marine environment.

The two groups signed a memorandum of understanding

for collaboration in August 2015 and have been focusing since

then on corals—from different angles.

Florida has been suffering major losses of its coral reefs,

partly from runoff of chemicals and other pollutants from developed

land. Cuba in contrast has some of the world’s most

pristine reefs.

From Tampa, scientists have been working on ways to help

patchy and distant corals reproduce in the ocean. They’ve also

been creating on-land sites to grow genetically diverse adults

from small fragments of coral and, ultimately, restore coral

populations in protected environments. The coral team at

Florida Aquarium shares that research with their Cuban counterparts,

even starting an underwater nursery off Cuba’s west

coast at Guanahacabibes National Park, one of Cuba’s many

marine protected areas.

“We get to help them, but we learn from them what a

healthy reef looks like, so we can build toward that,” said Margo

McKnight, Florida Aquarium’s senior vice president of conservation,

science and research. She also arranged for Cuban scientists

to come to Florida to work on coral projects.

The Florida Aquarium operates with an annual budget of

about $20 million. It now is planning a three-year, $500,000

program with Cuba, McKnight said, including building a coral

greenhouse in Havana similar to one operating south of Tampa,

the "ark" in Apollo Beach.

Cuban and Florida Aquarium scientists

historic Ybor City neighborhood. He left Cuba 20 years ago and

grew up in Tampa Bay, learning English and ignoring Cuban

politics. “When I got here, no one really spoke Spanish.”

Largely because of its Cuban-American community, Tampa

was among the first U.S. cities outside Miami to get charter

flights to Cuba. Charters from Tampa International Airport

began in 2011, and when U.S. airlines were allowed scheduled

service last year, Southwest Airlines began flying Tampa-Havana

daily in December. Havana Air also started a new route to Cuba

from Tampa last year.

“Scheduled service is a big deal, because it’s cheaper, easier to

buy tickets, and easier to plan around than charters,” said airport

spokeswoman Emily Nipps. “We’re hoping Southwest’s service

will be the start of a successful route that can grow over time.”

For now, with U.S. tourism to Cuba banned under the embargo,

Tampa-Cuba air traffic remains small, with some 22,000

passengers in 2012 rising to 34,000-plus in the first 10 months of

2016. But its potential is big. Cuba business already brings more

than $1 million in annual revenue to the airport, said Nipps.

Port Tampa Bay also sees opportunity in travel. The port’s

first cruises to Cuba in more than half a century are set to launch

this spring. Royal Caribbean will begin sailing to Havana in April

with its 1,840-passenger Empress of the Seas vessel. The Empress

is offering four-, five- and six-night trips that also include stops

in Key West or on Mexico’s Caribbean coast, providing Americans

a chance to learn about Cuba and share with its residents in

people-to-people exchanges. Carnival also begins sailing out of

Tampa starting in June.

In a free-trade, post-embargo scenario,

Tampa is Cuba-ready

Raul Alfonso,

Chief commercial officer, Port of Tampa

The Tampa seaport, Florida’s largest by acreage, already

handles cargo bound for Cuba under waivers to the embargo

that allow sales of U.S. agricultural products. Volume is still

relatively small, however. In the past five years, the seaport has

sent about 70,000 tons of freight to Cuba, mostly fertilizer—not

even 1 percent of its total cargo volume, said Raul Alfonso, the

port’s Cuba-born chief commercial officer who grew up in South

Florida.

“In a free-trade, post-embargo scenario, Tampa is Cubaready,”

said Alfonso, touting the port as Florida’s closest in

nautical miles to the Cuban mega-port of Mariel (17-hours away

in transit time). He sees potential to export to Cuba everything

from fresh foods to cement—and to import goods transshipped

through Mariel and destined for Central Florida’s fast-growing

Interstate 4 corridor region. While South Florida ports focus

more on containerized cargo and likely will lure more of that

Cuban business, “no one single port is going to do it all,” Alfonso

told Cuba Trade. “We’re all trying to prepare for post-embargo

72 CUBATRADE MARCH 2017


Departures from Miami, Tampa and Key West.

Operated by

Phone: 305-615-4151


Above: Santiago Corrada, president and CEO of Visit Tampa

Right: Statue of Vicente Marinez Ybor

Cuba.” In tourism, Tampa sees opportunity now in attracting

visitors before and after their Cuba trips, “building on the historic

and cultural ties between Cuba and Tampa,” said Santiago

Corrada, president and CEO of Visit Tampa Bay, the destination

marketer for Hillsborough County. Tampa Bay has been breaking

tourism records for the past four years. In 2016, it hosted

almost 22 million overnight visitors, nearly 19 million airport

passengers, and 814,000 cruise passengers, said Corrada, also a

Cuban-American.

As flights and cruises to Cuba expand, Tampa can lure more

visitors to its Cuba-related locales—especially Ybor City, the area

developed by Vicente Martinez-Ybor and fellow cigarmakers

from Cuba. Today the neighborhood is designated a National

Historic Landmark District, featuring century-old brick factories

and shops, restored wooden worker homes, and a captivating

local history museum.

In Ybor City, travelers can visit Cuba without a passport.

That’s because the park honoring Cuban independence leader

José Martí has been deeded to Cuba since the 1950s. It is the

rarest of places: property in the United States owned by a foreign

government that does not have an embassy or consulate on it. The

park sits on land where Martí often stayed in the 1890s at the

home of his friends, the Pedrosos.

Short-term, some Tampa entrepreneurs have specific busi-

74 CUBATRADE MARCH 2017


CONGRATULATIONS

CUBA TRADE

MAGAZINE

Your vision will serve you well

as you continue to forge ahead

in this worthwhile endeavor.

Our Cuba Task Force attorneys are uniquely

positioned to assist clients with the legal

and business opportunities following the

changes in U.S. public policy toward Cuba.

Established in 1910, Shutts & Bowen has witnessed

and participated in almost every major event in

Cuba’s history since the beginning of the 20th century.

No other law firm in South Florida has this experience.

“U.S. business owners need to understand

the process and meet the requirements of

U.S. and Cuban laws. We are happy to help

them navigate through these new waters.”

—Aliette DelPozo Rodz, Cuba Task Force Chair

Shutts & Bowen LLP

200 South Biscayne Boulevard | Suite 4100

Miami, Florida 33131

305.358.6300

www.shutts.com

FORT LAUDERDALE | MIAMI | ORLANDO | SARASOTA | TALLAHASSEE | TAMPA | WEST PALM BEACH


THE ICONIC 'SANDWICH CUBANA'

One of Tampa’s contributions to

Cuban lore is gustatory

Odelma Matos, master cigar roller at La Faraona Cigars

ness plans for Cuba, including agro-businessman Mike Mauricio.

The grandson of Cubans who came to work in Tampa’s cigar

industry a century ago, Mauricio began visiting Cuba in the

early 1990s. After Washington allowed food sales to the island

in 2000, his Florida Produce company was among the first U.S.

businesses authorized to sell there, exporting items from raisins

to fresh pears and dehydrated coconut.

Now, Mauricio wants to open a food distribution center

in Cuba, either in the Havana area or at the Port of Mariel. He

envisions a warehouse spanning at least 50,000 square feet that

would store dry goods and refrigerated foods from the United

States and beyond. The warehouse could be a joint-venture with

the Cuban government. He’s awaiting word from Cuban authorities

on the proposal.

“I’ve never agreed with the U.S. embargo, because it’s

devastated the Cuban people,” said Mauricio, who dreams of a

time when Tampa will be a key trading partner with the land of

his ancestors, as it had been before Cuba’s 1959 Revolution and

before Washington’s 1960s embargo.

Of course, open trade with Cuba could bring competition

for Tampa, especially for its cigarmakers. But Odelma Matos,

a master cigar-roller who left Cuba in 2010 and now owns the

small Ybor City shop La Faraona Cigars or Pharaoh Cigars, is

not worried.

In Cuba, folks love ham and cheese sandwiches. But the ‘Cuban

Sandwich’ popular across the United States—the one filled with

roast pork, ham, cheese, pickles, and other fixings—that one

comes from Tampa. It reflects the immigrant groups that settled

in cigar-producing Ybor City more than a century ago.

The Tampa City Council is so proud of the local creation

that in 2012 it designated the “Historic Tampa Cuban” as the

city’s signature sandwich. The historic version uses Cuban

bread scored with the leaf of a palm frond.

The story goes that the sandwich, first called the “Mixto,”

emerged in the 1890s as lunch fare for cigar workers. It was

filling enough to keep workers satisfied but not too heavy to

make them drowsy. And it needed no refrigeration. Its ingredients

evolved as different nationalities came to Ybor City.

“The Spanish brought the fine ham, the Sicilians the Genoa

salami, the Cubans the Mojo marinated roast pork, the Germans

and Jews the swiss cheese, pickle and mustard. Put it all

together in between sliced freshly baked Tampa Cuban bread

from La Segunda Central Bakery, and life is great,” according to

Ybor’s Columbia Restaurant, billed as the oldest continuously-operated

eatery in Florida and open since 1905.

The Columbia uses the 1915 sandwich recipe from Casimiro

Hernandez Sr., the Cuban immigrant who helped develop

the Ybor City eatery that now seats 1,700 people in 15 dining

rooms. Its recipe keeps the same proportions of meat and the

same layering of ingredients “on Cuban bread brushed with

butter on top and pressed to a crispy finish,” according to the

Hernandez/Gonzmart family, which still owns the iconic Ybor

restaurant and five smaller Columbia locales serving Cuban

and Spanish cuisine in Florida.

Outside Tampa, many Cuban sandwiches come without

the salami, but Tampa locals call that version incomplete: Why,

they ask, would you leave out the contribution of Italian immigrants

in the mix?

Tampa's version of the Cuban sandwich

76 CUBATRADE MARCH 2017


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“When Cuban cigars become available, there’ll be demand.

It’s something you weren’t able to get, so you’ll want it,” said

Matos from her popular storefront. “If I could sell cigars from

Cuba, I would.”

READY TO COMPETE

Many Ybor City leaders figure the cigar market is big enough

for Tampa’s limited production to thrive alongside new imports

from the island. “Initially, it might hurt—but not that bad or for

that long,” said Larry Wilder, former chairman of the Ybor City

Chamber of Commerce, who helped organize a Chamber trip

to Cuba in 2015. “The novelty will wear off fast, because people

will realize, ‘Hey, they have good cigars, but we have good cigars

as well.”

Tampa Bay also expects to compete with other U.S. areas for

a future Cuban consulate, and St. Petersburg hopes to host that

office. St. Petersburg Mayor Rick Kriseman visited Cuba in August

2015 to build relations and returned there in March 2016 to

attend the game by the Rays, who hail from St. Pete. He recently

welcomed a Cuban cultural delegation and a Cuban art exhibit

to his Pinellas County city, which is known for its Salvador Dalí

museum and vibrant art scene.

Part of Kriseman’s pitch for a Cuban consulate is that the

first Spaniard to explore North America from Cuba, Panfilo de

Narvaez, landed in what is now St. Pete nearly five centuries

ago in 1528. Kriseman also sees potential to work with Cuba’s

highly educated workforce in areas including the life sciences, an

economic driver in St. Pete and one of the island’s most promising

industries. “We share a lot in common––whether it’s arts and

culture, medicine, or the fact that we’re both coastal communities

and as such, have to deal with climate change, sea-level rise and

the risk of oil spills in the Gulf of Mexico,” said Kriseman. For

now, he hopes St. Pete can help restore a Martin Luther King

monument in Havana.

Art is also forging Cuba links at the downtown Tampa Museum

of Art, housed in a new $33 million, award-winning building

since 2010. The riverfront museum this winter season hosted

its first exhibit of contemporary Cuban art, displaying some 40

works by two dozen artists. It dedicated its annual gala held last

November to a Havana-Tampa theme for the first time.

The educational community has also been forging links with

Cuba. The University of Tampa was selected as one of 12 U.S.

schools to participate in the 2015 International Academic Partnership

Program with Cuba, and now offers several Education

Abroad programs in Havana. Stetson University’s College of Law

offers a Spring Break study abroad program in Cuba.

Driving his gleaming 1929 Model A Ford through Ybor

City on a history tour, professor Wallace Reyes takes heart in the

renewed ties with Cuba. He notes Tampa even came up in talks

restoring U.S.-Cuba diplomatic ties. That’s because Cuba owed

money for maintenance of the Martí park during the Cold War

years. Havana is now making payments to maintain its land in

the Tampa area once dubbed Cuba Town—yet another symbol of

Greater Tampa’s deep ties with the island nation. H

The novelty will wear off fast, because

people will realize, ‘Hey, they [Cuba]

have good cigars, but we have good

cigars as well

Larry Wilder,

Former chairman of the Ybor

City Chamber of Commerce

78 CUBATRADE MARCH 2017


The historic Colombia restaurant in Ybor City


GO.

GLOBAL.

NOW.

Looking to expand to international markets? Whether your company is in the

Tampa Bay region and interested in exporting or abroad and looking to expand to the U.S. market,

the Tampa Hillsborough EDC is your one-stop resource connection. From developing an export

strategy to finding international customers to understanding Foreign Trade Zones or accessing

grants, our team will link you to the tools needed to grow your business globally. Home to the

largest port in Florida and one of America’s most loved airports, Tampa Bay is the perfect place to

locate or grow your international business. Ready to get started? Give us a call.

> Lorrie Belovich,

Director of International Business

Development, at 813-518-2654

or send an email to:

lbelovich@tampaedc.com

tampaedc.com


investment report

NICKEL, OIL, AND

SUSTAINABLE ENERGY

A REPORT ON THE MAIN SECTORS

FOR INVESTMENT IN CUBA

By Emilio Morales

Oil refinery in Havana, Cuba

Of all the sectors of the Cuban economy in search of foreign

direct investment, none surpass energy and mining.

Cuba’s foreign investment portfolio for 2016-17, presented

at last fall’s Havana International Fair by Cuban Foreign

Trade Minister Rodrigo Malmierca, contained 123 investment

projects in energy and mining. This represented nearly a third

of the total, followed closely by tourism (114 projects) and way

ahead of food (76), biotechnology and health (18), industry (16),

construction (10), and transportation (10).

Unquestionably, Cuba’s economic development depends


Source: Portfolio of foreign investment opportunities of the Ministry of Foreign

Trade and Foreign Investment 2016-2017.

Unión Cuba-Petróleo (CUPET). CUPET is the state organization

responsible for supplying the domestic market with fuels and lubricants,

maximizing the use of domestic fuels, advanced technologies, and highly

qualified human resources. CUPET is a vertically integrated entity,

comprised of 41 enterprises, 36 domestic and 5 mixed. It is authorized

to conduct all upstream as well as downstream operations using its own

resources or in association with foreign enterprises.

UNION ELECTRICA (UNE). The Electric Union is responsible

for meeting the electricity needs of its clients. To do this it generates,

transmits, distributes, and commercializes electricity to about 2.6 million

clients. About 95% of the nation has access to electricity. UNE controls

3,267 MW of installed generating capacity from 17 thermoelectric

plants situated throughout the country. It also controls the generation

and distribution grids from power plants to consumers.

CUBANIQUEL. CUBANIQUEL is responsible for the extraction and

processing of nickel and cobalt. This managerial group has more than 50

years of experience in nickel mining and processing. It has production

capacity of 70,000 tons per annum of nickel metal in three plants. Cuba

has the second largest nickel and cobalt reserves in the world (about

26%), located in the Eastern region of the country, with proven reserves

of 800 million tons and probable reserves of 2,000 million tons.

heavily on investment in the energy sector. Without a modern

and efficient energy system, all other strategic sectors of the

island’s economy will suffer—which is why the Ministry of Energy

and Mines has more projects in the latest investment plan

than any other Cuban state entity.

That ministry controls three strategic entities: The Electrical

Union (UNE); Cubaniquel; and the Cuban Petroleum

Union (CUPET). All three hope to attract the right partners to

develop the 123 projects identified by the Cuban government

for generating electricity, producing nickel, and extracting and

processing oil and gas.

Yet bringing such ambitious plans to fruition is a real

challenge, given the current difficult scenario: rapidly shrinking

shipments from Venezuela; falling world oil prices; declining

nickel production and the abrupt collapse in world nickel prices;

and rapidly growing consumption of electricity, prompted by an

expanding private sector and tourism.

All this has taxed Cuba’s antiquated energy grid, which

must be upgraded and dramatically expanded to increase power

generating capacity. Here’s a look at key projects now underway:

NICKEL

The nickel industry is going through a tough period. In the face

of falling world nickel prices, investment has shriveled up at Moa

Nickel SA, a 50-50 venture between Canada’s Sherritt International

and Cubaniquel that’s been a financial bonanza since its

establishment in 1994. It now owns the Moa extraction, processing

and smelting operation, a refinery located in the Canadian

province of Alberta, and an international marketing company.

Statistics on nickel production and export reflect current

difficulties. Beginning in 2000, nickel production began climbing

steadily, exceeding 75,000 tons in 2005.

In 2007, nickel export revenues surged past $2 billion.

With world prices at $50,000 a ton, the nickel industry became

Cuba’s main source of export revenue, surpassing both sugar

and tourism. This led to plans for two new nickel refineries—one

in partnership with Venezuela (worth $700 million) and another

with China (worth $500 million).

However, by 2010 both production and prices had fallen,

sharply cutting into Cuba’s nickel export revenues. Consequently,

neither investment materialized. In 2015, Cuban nickel

exports came to only $521 million, a 75 percent drop from 2007

levels.

Cuba remains one of the world’s largest nickel producers

and exporters. It also supplies 10 percent of the world’s cobalt.

Nickel is essential in the production of stainless steel and other

corrosion-resistant alloys, such as those used in mobile phones,

batteries, automobiles, engines, and aircraft turbines.

Currently, Cuba has two refineries which must be upgraded

in order to reduce production costs to compensate for the decline

in nickel prices. Sherritt recently invested in a plant to produce

sulfuric acid—a key input in nickel processing—with the aim of

reducing production costs by 12 to 15 percent.

Nickel prices have fallen mainly because of lower demand

from China, the world’s top nickel consumer, and rising use of

82 CUBATRADE MARCH 2017


Cuban nickel production, 1975-2015

Cuban nickel production, 1975-2015

Cuban nickel production, (thousand 1975-2015 tons) (thousand tons)

(thousand tons)

Pedro Soto Alba nickel refinery in Moa is 50% owned by Sherritt International

cheaper materials in steel alloys. Given this scenario, no major investments

will materialize in this sector until world nickel prices

recover enough to justify them. If nickel prices remain low, Cuba

should try to reduce costs rather than boost production.

OIL AND GAS PRODUCTION

Value Value of Cuban of Cuban exports of nickel (millions usd), usd), 2004-2015 2004-2015

Value of Cuban exports of nickel (millions usd), 2004-2015

2,200.0

2081

2,200.0

2081

1,650.0

1,650.0

1434

1419

1347 1434

1419

1347

1151

1068 1151

1,100.0 1068 994 1011

1,100.0 994 1011

839

839

711

711 742 742 521

550.0

521

550.0

0.0

0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: Oficina Nacional de Estadística e Información (ONEI).

Source: Oficina Nacional de Estadística Información (ONEI).

Oil and gas account for 87 of the 123 energy and mining projects

in Cuba’s current investment portfolio. In the last six years,

Cuba’s annual oil production has remained constant at around

2.97 million metric tons. During this same period, gas extraction

has risen by 16 percent; the Energas joint venture uses this gas

to generate more than 1,875 GWh of electricity.

Cuba extracts only 5 percent of its oil, according to government

authorities, because CUPET lacks the technology for

secondary recovery, which requires substantial investment. At

present, CUPET extracts about 80 percent of Cuba’s oil production;

Sherritt extracts the remaining 20 percent. Production

comes mostly from the offshore fields of Puerto Escondido

and Boca Jaruco, using directional drilling from onshore in the

vicinity of Matanzas.

Geologically, Cuba is framed on the south by the Caribbean

volcanic arc and on the north by the North American platform.

Cuba’s oil fields are located in an area between Havana and

Matanzas, where the largest oil reservoir has been found, with

reserves estimated at six billion barrels. According to Cuban

government sources, nearly all of Cuba’s land mass has potential

for oil production, as do offshore and deepwater areas.

Cuba has dozens of petroleum deposits, most of them

consisting of very heavy oil, although some medium, light, and

extra-light deposits have also been discovered. Most are offshore,

Natural gas extraction (MM m 3 ), 2004-2015

Natural gas extraction (MM m 3 ), 2004-2015

MARCH 2017

CUBATRADE

83


!

!

3,300.0 3252.97

3,300.0 3252.97

Natural gas extraction (MM m3), 2004-2015

Oil Oil extraction (Mt), 2004-2014

Oil extraction (Mt), 2004-2014

3,150.0

3,150.0

3024.8

3003.1

3011.72998.9

3,000.0

3024.8

3003.1

3011.72998.9

2935.06

3,000.0

2900.04 2905.01

2897.12905.3

2935.06

2900.04 2905.01

2897.12905.3

2,850.0

2,850.0

2731.29

2,700.0

2731.29

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2,700.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: Oficina Nacional de Estadística e Información (ONE

Source: Oficina Nacional de Estadística e Información (ONEI).

Source: Oficina Nacional de Estadística e Información (ONE

in coastal areas, and are exploited using directional drilling. A

2004 study by the U.S. Geological Service estimated the potential

of Cuba’s northern basin at 4.6 billion barrels of oil and

9.8 billion cubic feet of natural gas. Cuban scientists have made

higher, but perhaps less reliable, estimates of up to 20 billion

barrels of oil.

In January 2012, Spain’s Repsol-YPF became the first multinational

oil company to explore in deepwater north of Havana,

leasing the Chinese-built Scarabeo 9 drilling platform from Italy’s

ENI. Yet the results were not encouraging, and Repsol-YPF

soon ended drilling operations.

Subsequently, Scarabeo 9 made two other drilling efforts on

behalf of Malaysia’s Petronas and Venezuela’s PDVSA, but the

platform left Cuba without finding the hoped-for oil deposits.

Russia’s Zarubezhneft drilled a fourth exploratory well using the

semi-submersible drilling platform Songa Mercur—owned by

Norway’s Songa Offshore—but this effort also came up dry.

RENEWABLE ENERGY

In recent years, Cuba has seen significant activity in renewable

energy, driven above all by its need to phase out the island’s

dependence on fossil fuels to generate electricity.

Although Cuba produces some four million tons of oil and

gas per year—mostly used for power generation—this only covers

half the country’s consumption. That’s why the electric grid still

depends on subsidized Venezuelan crude. These supplies, which

peaked at 125,000 barrels a day, fell to 45,000-50,000 barrels a

84 CUBATRADE MARCH 2017


Solar panels installed at a Cuban farmstead

day last year, prompting the Cienfuegos refinery to close.

Given this new reality, the government has accelerated investments

in renewable energy. Its goal: to produce 24 percent of

Cuba’s electricity from “clean” sources by 2030. To this end, the

government has included $3 billion worth of renewable energy

projects in its investment portfolio. Together, these would add

2.1 gigawatts of capacity from wind, solar, biogas, and biomass

plants.

Unión Eléctrica alone plans 23 renewable energy projects;

the most important are in wind energy and solar parks. The government

recently contracted Spain’s Gamesa to build seven wind

farms in eastern Cuba with total generating power of 750 MW.

That’s in addition to Cuba’s four existing wind parks: two in

Gibara (Holguín province, in the east); one in Turiguanó (Ciego

de Avila province, in central Cuba) and one at Los Canarreos

(on Isla de la Juventud, in the west).

Solar energy is another government priority. In Cuba, solar

radiation averages about 5 kWh per square meter per day (1,825

kWh per square meter per year)—much higher than in European

countries that rely on solar energy.

According to Cuban experts, 100 square kilometers of networked

photovoltaic systems could generate 15,000 GWh/year

of electricity—an amount now generated by conventional fuels.

Other studies suggest that the solar radiation Cuba receives in

one day is equivalent to the oil Cuba consumes in five years.

Cuba’s strategy is to have solar provide 400 MW of power

by 2020. The country currently has 21 solar generating plants

connected to the national grid; together they generate 34.8

MW. Another 2.4 MW plant is in the process of synchronization,

and eight more facilities with a combined generating

capacity of 15 MW are under construction.

Recently, the Abu Dhabi Development Fund (ADFD)

loaned Cuba $15 million under favorable terms to develop four

10-MW solar power plants using photovoltaic silicon panels.

The plants are slated for the provinces of Matanzas, Santa Clara,

Camagüey and Sancti Spíritus.

CONCLUSIONS

Of the three investment areas under the jurisdiction of the Ministry

of Energy and Mines, the most attractive are clearly oil and

gas production, and electricity generated from renewables.

For these sectors to expand, however, foreign investment

is essential. To facilitate that, the Cuban government will

allow investments in the energy sector to be 100 percent foreign-owned—a

development that would have been unthinkable

20 years ago.

Regarding oil and gas, projects related to secondary

extraction methods are especially attractive. Similarly lucrative

are facilities that use co-produced gas to generate electricity,

given their low production costs and high efficiency in power

generation. With respect to renewable energy, solar seems to be

the most promising, given the high levels of solar radiation that

blanket Cuba uniformly and throughout the year. H

Emilio Morales is CEO of the Havana Consulting Group.

MARCH 2017

CUBATRADE

85


ART

A Talk with

Cuban Sculptor

Alberto Lescay

Interview by Michael Deibert

Photos by Bahare Khodabande

Born in Santiago de Cuba in 1950, 66-year-old sculptor Alberto

Lescay graduated from Cuba’s renowned Escuela Nacional

de Arte (now known as the Instituto Superior de Arte)

in Havana. As part of the first generation of Cuban artists

to grow into adulthood after the 1959 Revolution, Lescay’s

career has, in many ways, mirrored the successes and struggles

of Cuba’s creative community. A leader of the team that created

the iconic monument of Cuban independence hero Antonio

Maceo Grajales (the so-called ‘Bronze Titan’) that dominates

Santiago’s Plaza de la Revolución, Lescay famously

declined the prize money for winning that project. Instead

he asked then-Cuban leader Fidel Castro to help him found

an arts foundation in his native city. That led to the creation

of the Caguayo Fundación para las Artes Monumentales y

Aplicadas, a non-governmental, non-profit cultural institution

consisting of both an exhibition space in Santiago (the

Galería René Valdés Cedeño) and a workshop dedicated to

creating large sculptural projects. During a recent visit to

Santiago de Cuba, Cuba Trade talked with Lescay about

his life, his work, and the rewards and challenges of being a

working artist in Cuba.

Continued on page 89

86 CUBATRADE MARCH 2017


From a point of view of the conditions, of the environment,

the spiritual environment––which is the motivation, which

is the fundamental thing that an artist has to have––here

[in Cuba] is the best place to be an artist.


CT: Can you explain a little about your

work here?

AL: I was nine years old when the Revolution

occurred. When I opened my eyes

to think and to know that I was a human

being, a new life had begun in Cuba. And

one of the new things that happened to

me was that I knew that I had an aptitude

for the arts. I was able to enter a professional

art school for thirteen years and I

discovered the art world…[And] I never

left, because I realized that it was a paradise,

with all its intricacies. That’s where I

can feel, studying painting and sculpting.

CT: Was this in Havana or in Santiago

de Cuba?

AL: I graduated from the art academy

here in Santiago, and then I worked a few

months before I went on to graduate from

the Escuela Nacional de Arte in Havana.

I was then selected to go to study in the

Soviet Union and spent six years in the

Academy of Leningrad [present-day St.

Petersburg].

CT: When exactly?

AL: From 1973 to 1979, and upon my

return, I decided to live in Santiago. The

most important project for me in that

era, in 1982, was the competition for the

Antonio Maceo monument. [Note: Maceo

was born in Santiago and was killed near

Havana in 1896 during Cuba’s War of

Independence from Spain.] We built an

interdisciplinary team from sectors of engineering,

architecture, and design and we

won the contest. We had the honor and

the right to conduct that work for over 9

years… It was a very complicated work,

very large in theory, almost unrealizable.

But Antonio Maceo was the Bronze Titan

and he had to be cast in bronze.

CT: And how did the project unfold?

AL: The first thing I did was to investigate

the history of the attempts to make

a Maceo monument, and it was very

interesting. [They started] practically as

soon as he died, since he was killed in the

war… It was a debt, really, that Santiago

de Cuba had with Maceo. And that debt

was resolved by Fidel and Raúl [Castro]

on the occasion of the Fourth Communist

Party Congress in Santiago. I remember

explaining to Fidel that by holding the

Congress here it was a pretext for Santiago

to have some of the things it lacked as

a city: A theater, an airport with the possibility

of receiving international flights,

and a hotel—a three-star hotel—that Santiago

did not have. And it lacked a great

monument to Antonio Maceo, made by a

Cuban.

CT: And how about the sculpture

institute?

AL: When I came up with the idea of ​

creating an institution to develop the

applied arts, the monumental arts, with

the resources that remained from the

experience (of creating the monument), I

wrote a letter (to Fidel Castro) saying that

I wanted to develop this foundation. And

he approved it. The commitment was that

I was going to contribute knowledge and

provide solutions to the country, and I was

not going to ask for anything material…

This institution is celebrating its 20th

anniversary, and the workshop itself, where

the work is done, is almost thirty years old

and is working as a unique, professional

foundry in Cuba. We do work not only for

Cuba, but for other countries as well. Even

in the United States our works are there.

CT: Is it possible to talk a little about

changes with Cuban artists now that we

have this opening between the U.S. and

Cuba?

AL: The situation is the same… The

professional artists in Cuba often live and

paint with the materials we bring back

when we travel, and that comes with all

the inconvenience that you know: The

weight, the payment, everything. The

drawbacks in this regard are very large.

88 CUBATRADE MARCH 2017


There is a Cuban entity that is an importer

[of these materials] and can do it, but

imagine, they are materials brought from

China, and from other places, not with

efficiency or the proper quality. Lack of

materials is a problem, really.

CT: What do you think the future is for

artists here in Cuba?

AL: I believe that the artist, wherever he

is, has to do his work. What is needed here

are the materials. From the point of view

of the conditions, of the environment, of

the spiritual environment—which is the

motivation and fundamental thing one

must have as an artist—here [in Cuba]

is the best place to be. Though there are

sometimes hardships, I have never accepted

the idea of not working one day because

I do not have the right color of paint, or

because I do not have a specific material.

I have always said to my son “never

justify the idea of ​not working for lack of

material,” because we are surrounded by

materials. I think, in sum, that it has been

more positive than negative. Because the

creativity one sees in Cuban art is rare. It

has been very varied and very inventive,

producing many different results. H

Cuban independence hero Antonio Maceo Grajales

(the so-called ‘Bronze Titan’)

MARCH 2017

CUBATRADE

89


REPORTER'S NOTEBOOK

GIBARA

90 CUBATRADE MARCH 2017


Though Hurricane Ike battered Gibara nearly a decade ago,

the town—founded in 1817—has recovered splendidly and

much of its old colonial core remains intact.

A VISIT TO CUBA'S VILLA BLANCA

by Michael Deibert

Photos by Bahare Khodabande

MARCH 2017

CUBATRADE

91


Just outside of the Sol y Mar is a statue of rebel leader Camilo Cienfuegos

Nestled into the corner of a picturesque bay in the

northern extreme of Cuba’s Holguín province, the town

of Gibara seduces visitors in a way that only certain

out-of-the-way Caribbean gems can. Isolated and bubbling with

a unique cultural mix—often a point of reference in Cuba’s music

for a sort of idealized past—Gibara is accessible via a quick jaunt

of just under an hour from Holguín’s Frank País Airport (which

largely caters to the hedonistic resorts in nearby Guardalavaca).

As visitors ride in battered taxis along the undulating farmland

of northeastern Cuba—the sometimes smiling, sometimes

somber visages of revolutionary “martyrs” displayed on billboards

along the road—the glistening Caribbean eventually comes

into view, its surface criss-crossed by small fishing vessels. A

huge bandshell marked by the outline of a swordfish serves as

a greeting to Gibara, a sign that fishing looms large in the local

economy.

Seafaring alone, though, cannot account for Gibara’s distinctive

culture and the effect it has on those who visit. From time

to time these have included itinerant celebrity travelers such as

the famous American dancer Isadora Duncan, said to have spent

time here in 1916.

Duncan’s visit, as a dancer, would be apt today; the sound

of music—sinuous, ebullient and profoundly Cuban—echoes

through Gibara’s narrow winding streets. In a semi-derelict building,

the band Villa Blanca is practicing, attracting a small group of

locals and, on a nearby wall, a pair of seemingly interested cats.

“We play traditional Cuban music,” says René Serrano, 32,

the guitarist and leader of Villa Blanca whose name—White

Town—refers to Gibara’s nickname. “I like the cultural life here. I

like the idiosyncrasies of the place.”

At the Hostal Sol y Mar, which abuts Gibara’s modest

malecón (seaside promenade) and boasts a friendly, multilingual

staff, visitors can sit on a front porch cooled by the sea breeze. The

visible blades of windmills for wind-energy farms turn lazily just

outside of town, along a rocky shoreline. Gibara’s nearest tourist

beach—the somewhat stark, mostly treeless Playa Caletones—

awaits a rough 45-minute drive down the coast. [A fancier option

for accommodations nearer to the center of town is the refurbished,

turn-of-the-century 27-room Hotel Ordoño.]

Just outside of the Sol y Mar is a commanding statue of the

celebrated Cuban rebel leader Camilo Cienfuegos, looking much

as he did in life: Bewhiskered, a guajiro (peasant) hat pulled down

over his head, and a machine gun clutched in one hand. [Cienfuegos’

plane disappeared mysteriously over the Straits of Florida

less than a year after the Revolution’s triumph in 1959.] As the

statue of Cienfuegos hints, Gibara’s current placid vibe belies a

sometimes-violent past.

“Historically, this region was always the rebellious province

against Havana, so many movements started in Oriente,” says

Jaime Suchlicki, director of the University of Miami's Institute

92 CUBATRADE MARCH 2017


Locals get around town easily by bicycle

A swordfish adorns the bandstand on the seaside promenade

for Cuban and Cuban-American Studies, referring to the wider

region by the name it was known until 1976. “This was the port

where boats from Key West and elsewhere in the United States

landed in Cuba on expeditions against [dictator] Gerardo Machado

in the 1930s.”

Though Hurricane Ike battered Gibara nearly a decade ago,

the town––founded in 1817––has recovered splendidly, with

much of its old colonial core intact. Excellent seafood restaurants—some

with rooftop views—dot Gibara, and residents are

friendly and welcoming to visitors. In the evening, visitors can

sit and enjoy a drink at the Centro Cultural Recreativo that abuts

the Parque Calixto García, listening to the songs of birds as they

return to the surrounding robles africanos (a kind of African oak).

For a more raucous experience, head to the Plaza de la Cultura,

with grand, late 19th century buildings gazing down on its

square, and various establishments such as Bar La Loja hosting

nightly music ranging from reggaetón DJs to full-on floor shows.

In addition to the spontaneous examples of the region’s

artistic temperament, every April the town hosts the Festival

Internacional del Cine Pobre de Gibara, founded in 2003 by the late

Cuban filmmaker Humberto Solás (director of the famous 1968

film "Lucía"). Dedicated to self-described “low budget” cinema,

the festival attracts hundreds of visitors to the town every year

(Solas himself passed away in 2008).

Some of the town’s festivals have more religious roots, such

as the Fiesta de San Fulgencio Esta and the Fiesta del Gibareño

Ausente. Suppressed during the anti-Catholic tide immediately

following the 1959 Revolution, these have begun to gingerly

return.

Gibara is a place to visit more for its ambiance than for any

specific site. In a country whose iconic images—old cars, the

distinctive lilt of well-known Cuban son tunes—have become a

bit too-familiar, Gibara offers visitors a unique opportunity: The

chance to discover a new place off the beaten path. H

MARCH 2017

CUBATRADE

93


BOOK REVIEW

Open for Business: BUILDING

THE NEW CUBAN ECONOMY

Richard E. Feinberg’s guide to the Cuban economy

is nothing less than a handbook on how to fix what’s

broken and make the engine hum

By J.P. Faber

One of the most refreshing aspects of

Richard Feinberg’s overview of the Cuban

economy—and what it needs to thrive—is

the book’s distinct freedom from any political

agenda. Feinberg, befitting his training

as an economist, addresses the subject

without judgment or the baggage of opinion.

The result may be the most objective

treatise on Cuba’s economic challenges

and opportunities in print today.

Among other virtues, the book is

based on impressive amounts of research.

Feinberg, who is both a professor at the

University of California–San Diego and

part of the Brookings Institution brain

trust, brings to bear an arsenal of details

from both inside and outside Cuba. “I did

a lot of legwork,” he says when asked how

he garnered his information.

Feinberg manages the gymnastics

of big picture-little picture discourse

with dexterity, from inside the corporate

and political channels where decisions

are made at 20,000 feet, to on the

street with individual entrepreneurs.

He moves from macro insights in trade

relationships, foreign direct investment,

legal frameworks, and savings patterns to

laser–specific examples of the challenges

foreign companies face.

Feinberg also shines with his wellcrafted

models of what could have been,

should have been, and still can be done to

rocket the Cuban economy. He traces the

past economic experiments of the Cuban

government with equanimity, offering

kudos for accomplishments and criticisms

for failings. It is as much a book about

lost opportunities as it is a blueprint of

the possibilities that still lie ahead for

Cuba’s potentially wealth-creating

industries.

Particularly interesting for U.S.

readers are Feinberg’s case studies, both

of foreign corporations doing business in

Cuba and of local entrepreneurs trying to

gain traction. Among the deals he probes

are Canada’s Sherritt International and

its mining operations, Spain’s Meliá and

its hotel operations, and BrasCuba, the

Brazilian cigarette-making joint venture,

the oldest of its kind in the country. All

had to wend their way through a maze of

regulations, but all have done well.

Feinberg looks at small businesses

as well, via interviews with a panoply of

young entrepreneurs––people who are

setting up private B&Bs, cafés, catering

firms, electronics repair shops, car rental

services, construction companies, and

the like, with honest reflections on their

challenges and progress.

Unlike most books about Cuba,

Open for Business also looks to the future.

Feinberg presents readers with three likely

scenarios—Decay, Inertia, or a Sunny

2030—a sort of economic version of the

Good, the Bad and the Ugly. Showing

his optimism, Feinberg leans toward the

most hopeful of the possible paths, the

one where the centrally planned economy

transitions to one that is instead “smartly

regulated.”

Getting there will be the challenge.

It will take some aggressive tinkering,

which is what this book is ultimately

about: How to fix the broken clock that

is the Cuban economy, how to tighten

its gears and replace its missing parts,

so that the whole thing will hum along

beautifully. H

94 CUBATRADE MARCH 2017


EDITORIAL

CALENDAR 2017

JANUARY/ FEBRUARY

Economic Predictions

Top Economic thinkers from

US Universities and Think

Tanks

MARCH

The Embargo Issue

Where US Congressmen

and Senators line up on

the question

APRIL

Economic Report Card

Our annual look at the Cuban

economy, what’s working and

what’s not

MAY

The Logistics Issue

How to get in and out of Cuba;

the top transport providers

JUNE

High Tech Cuba

Software, telecom, biomed,

pharmaceuticals, plastics,

industrial parks

JULY/ AUGUST

The Cuba Advisors

A survey of the top

consultants and lawyers

for business in Cuba

SEPTEMBER

The Energy Issue

Economic sectors emerging

in the near future

OCTOBER

The Cuba 100

The top multinational corps

doing business in Cuba

NOVEMBER

The Agriculture Issue

From US exports of rice,

wheat and corn, to Cuba

exports of organics

DECEMBER

CEO of the Year

The most impactful CEO

operating in Cuba

Subscribe online at

cubatrademagazine.com


in closing

DON'T STOP NOW

Soy Growers Hope for

Continued Opening of

Cuba to U.S. Soy

By Ron Moore

Ron Moore farms in Roseville, Ill., and serves as

president of the American Soybean Association

Trade is the lifeblood of the American soybean industry, and as

we move into 2017, soybean farmers face both opportunities and

barriers to enhancing global trade.

While the major foreign markets for U.S. soy—China,

Mexico, Japan, Germany—remain unchanged, one emerging

market that has shown a great deal of potential is Cuba. Given

its close proximity to major U.S. ports, its importation of more

than 80 percent of its food, and its emerging economic potential,

Cuba represents a growth market for American soybeans––if we

can get the policy right. That process begins with continuing the

progress on removing the economic embargo that stands in the

way of trade between our two countries. The American Soybean

Association supports that progress, and at the regional level, my

home-state Illinois Soybean Growers has been a leading voice in

the dialogue over normalization of trade with Cuba.

Cuba is a missed opportunity for American soy. As recently

as 2008, U.S. farm exports to Cuba totaled almost $700 million.

However, those sales totaled less than $200 million just

two years ago and have since slipped to less than 10 percent of

the nearly $2 billion market that Cuba represents. This loss is

due almost entirely to the continued trade embargo, and while

American companies have been able to export to Cuba since

2001, several key conditions exist that prevent those sales from

reaching their full potential. These barriers require congressional

action to overcome.

Chief among these roadblocks is Cuba's access to credit. As

long as the U.S. maintains its provision requiring Cuban purchasers

to pay cash in advance or use a third-party institution,

our farmers are placed at a serious disadvantage behind foreign

competitors that can extend credit.

Both chambers of Congress now have efforts ongoing to ease

trade between the U.S. and Cuba by addressing those remaining

barriers. ASA supports a bill sponsored by Rep. Rick Crawford

and Sens. John Boozman and Heidi Heitkamp to remove the

cash-in-advance provision.

While Cuba will not provide nearly as large a market for

U.S. soy as China or Mexico, we support the expansion of trade

between our countries because the island nation nonetheless represents

a valuable market for our products. In a time of distressed

markets and lower prices, we need to explore more trade, not less.

This expansion of trade makes for strong rural economies.

At the executive level, the Obama Administration took

significant strides to normalize relations between our two nations.

This included the reopening of the U.S. Embassy in Havana and

the removal of restrictions on the use of checkoff funds to market

American products in Cuba.

It is our sincere hope that President Trump and Congress

will continue our progress toward opening the Cuban marketplace

to American soy, and we look forward to working together

with both to see that happen. H

96 CUBATRADE MARCH 2017


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