DECE M B E R 2017 PUBLISHER OF

SINCE 1992
|  VOL. 25, NO. 12

cuba standard
monthly
CUBAN BUSINESS AND ECONOMIC NEWS
www.cubastandard.com

Analysis

In this Issue
April 19, 2018
That's the day the first non-
Castro in more than 50 years
Transparency declines;
doubts about economy rise
will become president.
• page 2

Red hot 2017 || by JOHANNES WERNER

As U.S. visitors smashed the

1m mark, tourism grew 16.5%
• Page 6
8th World Wonder?
A water mega-project enters
the third of six stages
• Page 8
Oil CEO steps down
Struggling oil junior
from Australia loses its boss
C
uba is back to playing bola
escondida.
Here's what the hid-
den-ball baseball trick looks
like, when translated into the
economic realm: In December
2016, one month after Donald
Trump was elected president,
Cuba's National Statistics Office

Graphic: Dawnlands Wiki/Abdial

• Page 15
Short leash
Government sets limits
for private businesses
• Page 18
New financial option
European Investment Bank
eyes Cuba
• Page 20
Adding two-wheelers
Miami car dealer to open
office, sell e-scooters in Cuba
• Page 22
Has the bubble burst?
Cuba lawyers in the U.S.
discuss options under Trump
• Page 27
Raúl's legacy
Long-term view on the
generational shift and beyond
• Page 32
— known by the Spanish acro-
nym ONE — stopped publishing
monthly visitor numbers, a key
measure for tourism. Since then,
at convenient moments, Cuban
officials have dropped select
tourism figures, surprising the
world with better-than expected
figures. However, the picture
leaves many gaps; more than one
year later, the ONE visitor statis-
tics have not reappeared. independent observ-
The hidden-ball tactic has gone be- ers and foreign investors in the fog about
yond just tourism figures: In last year's the performance of the Cuban economy,
annual statistical summary for 2016, both present and recent past.
ONE for the first time in many years
failed to publish key data for GDP, foreign A history of secretismo
trade, money supply, and debt, leaving To be sure, secrecy is noth- 4

Cuba Standard monthly (ISSN 1073-7715) is published by CUBA MEDIA LLC. © 2017  |  All rights reserved. Annual subscription: $398; go to www.cubastandard.com for more
subscription information. For editorial inquiries, call (941) 702-8614, or email johanneswerner@cubastandard.com
Transparency (2)

ing new in the management of the meet self-set economic targets. Most
Cuban economy and government prominently, in 2016 Economy and
affairs in general. Cubanologists Planning Minister Marino Muril-
describe secretismo as the deeply lo was sacked mid-year, half a year
engrained reflex of Cuban author- before his successor Ricardo Cabri-
ities to keep things close to their sas announced that the planners
chest when the perceived threat had missed their growth target by
level rises. Indeed,, there is plenty a whopping 2.9% margin. Not only
of uncertainty right now — from an that, but the economy had actually
economic recession in the middle fallen into a recession — a fact that
of a reform process, to the Trump officials did not announce until the
administration's hostile rhetoric, to the upcoming very end of that year.
handover of the presidency from Raúl Castro to Notwithstanding his predecessor's miscalcula-
the first non-Castro in more than half a century. tion, Cabrisas proposed a growth target of
All this is happening amid blatant failure to 2% for 2017, prompting widespread skepti- 4

POLITICS

New start date for the next president of Cuba: April 19

C iting delays in the electoral
process caused by Hurricane
Irma, the National Assembly
postponed the selection of Cuba’s
next president — the most visible
step in the handover of power to a
younger generation — from Feb. 24
to April 19.
The decision came
after the Council of
State and President
Raúl Castro suggested
a postponement to the
parliament. Citing the
constitution, the Na-
tional Assembly agreed
that a new parliament
won’t be constituted
until April 19, the day
Cuba's (likely) next head of state: Miguel Díaz-Canel, 57
celebrating the defeat
of a U.S.-backed inva-
sion force of exiles at the Bay of Pigs,
known as the Victory of Playa Girón.
The same day, the new assembly will
vote on a new Council of State as well
as the Council’s new president, who is
also the president of the nation.
The process leading to the inves-
titure of the president is very indirect,
with the president being elected by
the Council of State, which in turn is
elected by the National Assembly of
Popular Power, only half of whose
members are directly elected by
Cuban voters.
The political handover is happen-
ing at an economically vulnerable
moment, with Cuba struggling to re-
emerge from recession amid $13 bil-
lion in damages from Hurricane Irma,
worsening relations with the United
States, and deepening troubles in
Venezuela. During his end-of-session
speech, Castro told the parliament
that there has been a “serious and
gradual deterioration in relations
with the United States that cannot be
blamed on our country”.
The delay notwithstanding, Raúl
Castro left no doubt he intends to
step back as president.
“I want to ratify … the advisability
of limiting to two five-year terms the
exercise of the main posts in the na-
tion,” Castro, 86, told the parliament
in his closing speech.
“Consequently, when
the National Assembly
is constituted on April
19 ... my second and
last term as head of
state will have conclud-
ed, and Cuba will have
a new president.”
First Vice President
Miguel Díaz-Canel, 57,
is expected to be the
next president. Castro
is expected to con-
tinue for at least three years as first
secretary of the central committee of
the Communist Party, nominally the
guiding force of politics in Cuba. 
—Johannes Werner
An eight-week delay — what for?
See analysis, Page 10
 Transparency (3)
Cuba Standard Monthly
cism.
Foreign suppliers, who have con-
tinued to experience payment delays,
and the quarterly Cuba Standard
Business Confidence survey, which
has been on the decline throughout
last year, seemed to confirm the
skeptics.
The 2017 growth surprise
3 The official announcement in
December of a below-target but still surprising-
ly good 1.6% GDP growth for 2017 — after the
United Nations' ECLAC, Moody's, the Economist
Intelligence Unit, as well as the Cuba Standard
Economic Trend Report all had anticipated clearly
worse performance — therefore prompted collec-
tive head-scratching among independent analysts.
The suggested acceleration of growth in the
second half of the year — the economy had grown
by 1% during the first half, according to earlier
official reports — is hard to explain, says Omar
Everleny Pérez, a Cuban economist who lives in
the island.
“I don’t know what activities in the second half
could have produced that jump, because produc-
tion has been stagnating,” he said.
The better-than-expected official GDP report
in 2017 is due to three factors, guesses Pavel
Vidal, a former Central Bank economist and lead
The figures used to quantify
interactions with Venezuela
may not reflect reality well.
author of the Cuba Standard Economic Trend
Report. For one, tourism growth has been more
robust than expected, despite the Trump admin-
istration's efforts to slow it down. Second, the
Cuban government's anti-cyclical deficit spending
may have shown results (although that will not
be sustainable much longer). Third — and this
is what causes eyebrow-raising among observers
— the figures used by Cuban officials to quantify
economic interactions with Vene-
zuela — until recently the island's
key trade partner — may not reflect
reality well.
"Cuban medical services in
Venezuela do not generate the kind
of economic benefits anymore they
used to, and that is not being entire-
ly accounted for in the GDP," Vidal
says. "I believe there's an accounting
distortion of those flows, and that
artificially inflates service export data and GDP
growth."
The dual-currency headache
The trade arrangements with Venezuela —
much of them barter — are not the only source of
foggy accounting. The biggest uncertainty factor
in the country's accounting is Cuba's use of two
currencies and half a dozen different exchange
rates.
A recent study for the Interamerican Develop-
ment Bank led by Vidal calculates that the GDP
nosedive during Cuba's Special Period crisis in the
1990s was 50% — 15% steeper than official statis-
tics suggest, and the difference is due to how the
exchange rate to the US dollar is calculated.
Today's per-capita GDP should be less than
half — US$ 3,016 — of the official $7,177 obtained
by using the official exchange rate, Vidal suggests.
This factor of accounting uncertainty will only
disappear when Cuba implements the currency
reform it announced three years ago.
The foreign investment puzzle
Adding to the confusion, Cuban officials have
announced foreign investment figures that seem
to be out of pace with facts on the ground.
During the Havana International Fair in
November — Cuba's marquee annual business
event — Foreign Trade and Investment Minis-
ter Rodrigo Malmierca announced $2 billion in
investments in 2017, with $1 billion more under
negotiation and close to conclusion. He did not
specify what he included in this total.
Cuban authorities have said the economy
needs at least $2 billion of foreign invest- 4
 Transparency (4)
Cuba Standard Monthly

ment per year to produce sustained growth.
While Malmierca's figures may be in the plans
of investors, the actual totals for 2017 are most
likely below $1 billion. The discrepancy may be
due to the inclusion of golf and other tourism-re-
lated real estate developments — the most capital
intensive foreign investment projects — which
will, at best, happen in stages; at worst, they are
pie-in-the-sky projects with little likelihood of
getting funding.
4 So far, after a decade of planning and repeated
announcements, none of the four consortia that
have formed golf real estate joint ventures in Cuba
has broken ground.
Foreign Trade and Investment ministry offi-
cials did not respond to questions.
The lack of data and Cuba's debt
Lack of transparency is a recurring criticism by
the only debt ratings agency that covers Cuba.
Although the country resumed payment of old,
defaulted debt in 2016 under an agreement with
Paris Club lenders, and recently paid its second
annual installment amid a cash crunch, Moody’s
maintains Cuba's sovereign debt at a lowly Caa2
level, with no immediate expectations for im-
provement. The analysts of the New York-based
agency justify the subprime rating with “credit
weaknesses”, due to limited access to external
financing, structural inefficiencies, political tran-
sition risk, and, “importantly, limited data trans-
parency".
“Enhanced data timeliness and transparency
would .. be credit positive,” the latest Moody’s
report points out.
In the meantime, foreign lenders have to make
do with promises: Outgoing President Raúl Castro
keeps repeating that foreign debt service is a top
priority. 

ECONOMY

Construction, tourism expected to drive growth in 2018

M aking yet another 2% GDP
growth prediction — the
third in three consecutive years —
Economy and Planning Minister
Ricardo Cabrisas told the National
Assembly during its year-end session
that he expected construction and
tourism to drive growth in 2018.
Cuba's economic planners failed
to reach their 2% growth targets in
the previous two years, by a wide
2.9% margin in 2016 and 0.4% in 2017.
Despite the growth anticipation
for 2018, Cuba's hard-currency short-
age is expected to continue, Cabrisas
warned.
He painted a picture of mostly
Combining the two fastest-growing segments ot the Cuban economy:
adverse economic trends and tough Construction of the Prado y Malecón hotel in Havana. Photo: Ilonka Amuchastegui

choices for 2017, but said things were

beginning to look up slightly towards
the end of the year.
The non-payment of debt to
suppliers — with difficulties to access
more credit — has had a ripple effect
on exports and imports, which fell
below plan in 2017. The supply with
fuel was “very tense”, according to the
economy minister.
Providing context to the cash
crunch, the economy minister
quantified the damage caused by
Hurricane Irma at a record-setting
$13.185 billion, $4 billion of that just to
agriculture.
The biggest challenge — and
opportunity — is the construction
needed to fix and replace 179,000
damaged or destroyed homes. Repair
of damages from hurricanes ranks at
the top of priorities for 2018, 4
 Growth in 2018 (2)
Cuba Standard Monthly
'Construction, tourism', Continued from page 4
with construction expected to grow
12%.
Priorities within priorities
Beyond construction, setting
“priorities within priorities”, tourism,
renewable energy, electric and other
infrastructure projects, the Mariel
Special Development Zone, stor-
5 age facilities for food and fuel, food
production, anything that generates
hard-currency income, and rail proj-
ects moved up in the to-do list for
next year, according to the economy
minister.
In 2018, the government is con-
tinuing its counter-cyclical deficit
spending. The projected 2018 budget
includes a 17% fiscal deficit, or 11.4%
of GDP.
Commitment to lenders
As Cuban state companies have
fallen behind paying suppliers, Pres-
ident Raúl Castro reiterated to the
National Assembly the government’s
determination to keep up with Cuba’s
foreign debt service.
2018 “will be equally complicated
for the nation’s external finances,”
he told the parliament. “However,
we maintain our firm commitment to
continue the gradual recovery of the
international credibility of our econo-
my. I want to use the opportunity to
reiterate to our lenders our willing-
ness to comply with the commitments
assumed in the different restructuring
processes of the external debt.”
“We will proceed with the effort
to gradually reduce the portfolio of
defaults with our suppliers, whose
support and understanding we
appreciate regarding the temporary
difficulties we are facing.”
Six percent of next year’s budget
— 2.37 billion pesos — is dedicated
to foreign debt service.
Currency reform
As he is passing on the baton of
the presidency, Castro said in his last
year-end speech
Castro, waiting for
to the National his turn to give
Assembly that his last year-end
currency reform speech to the
cannot be delayed National Assembly
any longer. He has
Photo: Cubadebate
held off merging
the Cuban peso
and the convert-
ible peso for three
years during his
last term.
“Although the
elimination of the
dual currency and
exchange system
by itself will not come, Cabrisas said, in addition to
magically resolve all the accumulated growth in transportation, telecommu-
problems of the Cuban economy, it is nications, agriculture, and construc-
the most decisive process to advance tion.
in the actualization process of the He blamed the 0.4% underperfor-
Cuban economy,” he said. “That is mance on the cash crunch, $13 billion
due to the impact it will have on all
in hurricane damage, less-than-de-
economic and social activity in the sired foreign investment, deepening
nation. Without resolving this, it is dif-
troubles in Venezuela, and a slow-
ficult to advance in a correct manner.” down of the travel boom caused by
Some 200 experts — including
restrictions imposed by the Trump
foreign ones — are working “inten- administration in November.
sively” on monetary unification, Mari-
“While this is a result that doesn’t
no Murillo, who heads the permanent satisfy us, it was achieved in a scenar-
commission that oversees the reform
io worsened by financial restrictions,
process, told the Assembly, adding insufficient availability of fuel, to
that this is a “very complex” issue. In
which should be added the in no way
March, the permanent commission negligible impact of a pronounced
will present to the National Assem-
drought for over three years, and the
bly a strategic implementation plan massive damage caused by Hurri-
through 2021, including for monetary
cane Irma”, Castro said in his closing
reform. speech to the National Assembly.
In his speech, Castro seemed to
Although the economy minister
take some responsibility. didn’t mention the private sector’s
“I must recognize that this issue
role in the surprising growth, Finance
has taken too long, and its solution Minister Lina Pedraza provided a
cannot be delayed anymore,” he said
glimpse by announcing that tax col-
to applause. lections from both state companies
and non-state companies exceeded
2017 performance projections by 2.3%. She added that
Surprising most independent tax collections from private-sector
observers, the economy minister businesses were “far from its poten-
announced that the gross domestic tial”, triggering audits. 
product grew 1.6% last year. —Johannes Werner
Tourism is mostly to be credited
for the unexpectedly positive out-
 Tourism
Cuba Standard Monthly
As U.S. travelers smash million mark,
total visitor number rises 16.5% in 2017
|| by JOHANNES WERNER
F
ollowing a red-hot growth pace of 16.5% in
2017 driven by a record-breaking U.S. visitor
boom — and despite efforts by the Trump
administration to end the boom — Cuba's tour-
ism leaders are optimistic they can shred the
5-million visitor mark in 2018.
To cross the 5-million threshold, growth of a
little more than 10% would be needed in 2018.
As of November 2017, there were 4.257 million
visitors, up 19%, Tourism Minister Manuel Mar-
rero told the National Assembly in its year-end
session in December — not including 397,500
cruise passengers, which tripled from a year
earlier. When slower December figures came in,
growth for 2017 ended up at 16.5%.
Visitor numbers declined in September, No-
vember and December compared to last year.
Revenues grew slower than visitor numbers
because of a weakening Canadian dollar, Marrero
Photo: Jorge Royan
said; no further details were reported by official
media. Canada has been Cuba's No. 1 source
market.
Hinting that more openings for foreign inves-
tors may be ahead, investments in tourism proj-
ects — by far most of them by the Cuban state —
did not keep pace with growth, with only 78.1% of
planned projects accomplished in 2017.
"2018 will be the year of 5 million tourists,"
Marrero told an international audience during the
Fitur tourism fair in Madrid, adding that "it will
be a year of major investments" as well.
Cuba's plannersseek to build 224 new hotels by
2030 and expansion of another 32 high-occupan-
cy hotels. The number of hotel rooms would rise
from currently 68,000 to 103,000.
Meliá Hotels International, the market leader
in Cuba, announced during Fitur it is on schedule
to open 11 new hotels in 2018, bringing 4
 Travel (2)
Cuba Standard Monthly
Global travel industry
challenges Trump measures
P
rompting delight by Cuban tourism officials, the
country received the Excelencias award of "safest
destination" at Fitur in Madrid, one of the largest tourism
fairs in the world.
The recognition comes after the Trump administration,
without providing evidence, accused Cuba of attacking
U.S. diplomats who suffered unexplained health symp-
toms, and issued a travel warning that includes two hotels
7 nearly 620,000 non-Cuban U.S. travelers — a
in Havana.
Meanwhile, following a briefing with State Department
officials over measures following unexplained health
symptoms suffered by U.S. diplomats in Cuba, U.S.
travel company executives expressed frustration and
defiance over a Cuba travel warning issued by the State
Department in September.
In January, the State Department reconfirmed a rec-
ommendation that Americans “reconsider” going to the
island.
"There's no evidence about a sonic or any attack.
There have been no travel warnings by any other coun-
try," Bob Guild, vice president of Miami-based Marazul
Tours told Fox News. “We did not accept the original travel
warning.”
On Jan. 29, nearly 30 U.S. travel executives will huddle
with journalists at the Meliá Cohiba hotel in Havana for a
"Cuba Media Day". Organized by Tom Popper, owner of
tour operator Insight Cuba, the event tries to raise aware-
ness that Cuba continues to be a safe destination that is
open for business. 
the total of hotels under Meliá management in
the island to 40. Spanish competitors Globalia
and Iberostar are following a similarly frantic
pace, with Globalia planning to add three Be
Live-branded hotels in Cuba this year, and Ibero-
star assumes four new hotels.
The U.S. engine
The main engine of Cuba's visitor growth is
U.S. demand. Despite the Trump administration’s
efforts to make travel to Cuba harder and an
ensuing slowdown in the last weeks of the year,
U.S. visitors broke the one-million barrier in 2017,
hands down.
A total of 1.173 million U.S. visitors checked
into Cuba, 91% more than in 2016, Cuba’s chief
diplomat for U.S. affairs announced in a Tweet
from her official account in December. That
included close to 454,000 Cuban Americans
— 37.8% more than in the previous year — and
whopping 117.4% increase from 2016, Josefina
Vidal said in repeated tweets.
The crossing of the 1-million mark came ear-
lier than expected by many observers, who have
been blindsided by a blackout of monthly visitor
number reports by the National Statistics Office
(ONE) since December 2016.
Vidal did not say whether the United States
surpassed Canada as Cuba's top source market.
U.S. travelers nearly doubled their numbers
despite new restrictions by the Trump adminis-
tration that have made individual travel harder
since November, and defying a travel warning in
September by the U.S. State Department fol-
lowing allegations of “sonic attacks” against U.S.
diplomats. To be sure, Vidal cautioned about a
“decreasing rate” of visitors in the final months of
the year.
The fast growth also reconfirms the soundness
of U.S. airlines vying for more slots to Havana.
“Success will require unusual — and unortho-
dox — approaches,” said BCG partner Marguerite
Fitzgerald in a press release in May about U.S.
tourism companies engaging with Cuba. “The
demand is strong and growing. Companies that
take a long-term approach can capitalize on this
once-in-a-generation opportunity.”
Early last year — before the Trump measures
— the Boston Consulting Group said it expected
the number of U.S. travelers to Cuba to grow to 2
million by 2025. A survey of 500 U.S. travelers led
BCG to project compound annual growth rates of
20% to 50% in the number of U.S. visitors to Cuba
through 2020.
BCG predicts that the United States will ac-
count for half of Cuba’s tourism by 2025. 
 Infrastructure
Cuba Standard Monthly

Four decades-old water mega project

enters third stage
|| by JOHANNES WERNER AND ARMANDO PORTELA
A military-led project

T
agged as "Cuba's most important water Engineering and construction is entirely in the
project in the 21st century" and the "eighth hands of Cuban state companies.
wonder of the world", the East-West Water Started in the 1980s, the gigantic project was
8 Transfer Project is entering its third and so far interrupted for more than a decade by Cuba's
most expensive of six stages.
Using a system of reser-
voirs, canals, bridges, tun-
nels and pumps, the Trans-
fer Project takes water from
the eastern mountains
to the drought-stricken
northeastern and central
plains and coast, to feed a
planned 12,800 hectares of
See next page

Map by Armando Portela/CS

large-scale agriculture as
well as fast-growing tourist
resorts with tens of thou-
sands of rooms.
Stage Three, begun after
building reservoirs that
can hold 317 million cubic
meters of water, connects
the Melones reservoir
through hundreds of miles
of canals and tunnels with
the Sagua river watershed and ultimately Moa to economic crisis of the 1990s that was triggered
the east, and with the agricultural plains of Las by the fall of the Soviet Union; work restarted in
Tunas and Camagüey provinces to the west. The 2005 under the direction of the armed forces and
stage consists of construction of six reservoirs, Raúl Castro, who in 2009 officially opened the
the Birán-Báguano connector, the Levisa-Melones first phase of the project that connects the city of
tunnel, and the Nipe-Deleite-Cosme-Herrera Holguín with the Nipe reservoir.
canal, as well as of a small hydroelectric power The military has been in charge of the project
plant at the Melones reservoir, and connecting the since restarting it, via state company Empresa
Transfer Project with existing irrigation systems de Servicios Ingenieros DIP-Trasvases, which is
of state farms that produce rice and sugarcane. staffed by members of the armed forces.
Phase One and Two consisted of construc- While the civilian-led reconstruction of the
tion of the Mayarí, Birán and Melones reservoirs water system in the city of Santiago, for example,
and the Mayarí-Birán, Colorado-Naranjo and has been hampered by delays and cost overruns,
Nipe-Gibara connectors. the second phase of the East-West Trans-
fer Project was finished in time. 4
 Water project (2)
Cuba Standard Monthly
While they don't direct the project, foreign
suppliers such as the Mexican subsidiary of a
Swiss specialty chemicals producer still play key
roles. Sika Mexicana S.A. de C.V., a subsidiary
of Sika AG of Baar, Switzerland, is providing the
project with chemicals and structures that opti-
mize load-bearing concrete, as well as equipment.
Just right for climate change, or too big?
Cuban leaders assume that climate change will
9 bring extended drought to the already arid east-
ern half of the island. The east-west water system,
together with a north-south system in Guantána-
mo and a central system in Sancti Spíritus, Ciego
de Ávila and Camagüey provinces that are also
under construction, are expected to provide long-
term relief and water security for cities, tourism
resorts and agriculture.
However, while the idea of transferring water
from the soaked mountains to the thirsty plains
sounds reasonable, it is the sheer size of the
project that concerns some. Some skeptics won-
der whether the Cuban economy will be able to
sustain such a megaproject. Cuba has a history of
neglect and lack of maintenance of infrastructure
— such as existing reservoirs and large-scale ir-
rigation systems in the Los Palacios area of Pinar
del Río, the Isle of Youth, the Cauto river valley,
and the Río Zaza area — during cyclical econom-
ic crises.
Also, the benefits to agriculture are limit-
ed, and there's the potential for environmental
damage by soil salinization through irrigation.
There are only three sugarmills in this region,
and sugarcane surfaces are shrinking; large-scale
state farms are generally ailing, while small-scale
private farming is thriving.
Finally, some argue, the money would be better
spent on the more efficient use of existing re-
sources, by fixing leaking pipes and faucets.
Fixing leaks, accommodating growth
To be sure, Cuban authorities are doing just
that. Aware of the challenge of decaying urban
infrastructure, the government has been spending
hundreds of millions of dollars — mostly fund-
ed with low-interest loans from oil-rich Middle
Eastern governments — to renovate the aging
water systems in the cities of Holguín, Santiago,
Guantánamo and Havana.
Also, the Transfer Project will connect
the near-totally undeveloped Ramón de 4
Map by Armando Portela/CS
 Water project (3)
Cuba Standard Monthly

Antilla Peninsula, north of Nipe Bay, through an are aiming to build a whopping 19,000 rooms
underground main, acommodating the needs of there, with the first hotels opening in 2020. 
an entirely new tourism resort. Tourism planners

Cuba's
'Eighth Wonder of the World'?
Under the direction of armed-forces companies, Cuba is spending hundreds
of millions of dollars on a large-scale water supply system in the eastern part
10 of the island. Dreamed
up by Fidel Castro in
the 1980s, the East-
West Transfer Project
brings water from the
soaked mountains
to the thirsty plains
of central-east Cuba
(bottom).
With the construction
of hundreds of miles
of canals, tunnels and
bridges, the mega-
project is now entering
Phase 3 of six planned
stages.
Construction of the
Melones reservoir
(right), was a key
segment of Phases 1
and 2.
A Swiss supplier is playing a key role in
providing material, equipment and know-
how for tunnel construction (left).

Photos: Top left Pablo Carreras/AIN. Bottom, left middle

and top right Elder Leyva/Ahora
Cuba Standard Monthly

Former Cuban intelligence officer

Domingo Amuchastegui has lived
in Miami since 1994. He writes
regularly on Cuba’s internal politics,
economic reform, and South Florida’s
Cuban community

11
An eight-week delay —
what for?

T
he winter session of Cuba's National Assembly produced a
curious piece of news: The parliament — on recommendation
by the Council of State and Raúl Castro — voted to postpone
the inauguration of the next legislature from Feb. 24, as had been the
custom since 1976, to April 19, arguing that delays in the voting process
prompted by Hurricane Irma made it necessary.

Following this two-month postponement of his
retirement, Raúl Castro dedicated the last remark
of his final end-of-year speech to the National
Assembly to underlining the notion of term limits
for high-ranking Cuban officials, and reiterated he
will step down as head of state and government
on April 19.
The opening of the newly elected parliament is
the much-expected moment in which President
Castro will step down as head of state and gov-
ernment, to be replaced by First Vice President
Miguel Díaz-Canel. As this is a delay of barely
eight weeks, the question is, what really prompted
the move?
Could it be fixing more of the $13 billion worth
of damage caused by Irma? At this stage, eight
weeks make very little difference. It has to be
something else ...
Expectations of a major change in Cuba-U.S.
relations during those eight weeks? Unlikely. At
best, the current uneasy modus vivendi will con-
tinue to shape bilateral relations for the foresee-
able future; if it doesn't and Trump puts the U.S.
on a collision course, the Cuban leadership will
likely take corresponding actions. I don't believe
waiting for changes in U.S. policy has anything to
do with these eight weeks.
Rather, we should expect significant econom-
ic and political steps that are in the making but
need additional debate and approval by the Party
leadership — the Central Committee — prior to
the April 19 session of the National Assembly.
Of course, they can't wait for the 8th Party Con-
gress in 2020 to make crucial readjustments to
the Party guidelines (lineamientos) and set new
priorities. Approved by the 6th Congress in 2012,
their implementation has been shockingly slow,
with some serious questioning of the most im-
portant goals concerning the "non-state" sector
and foreign investment. 4
 National Assembly (2)
Cuba Standard Monthly
Second, there is a need for
changes in the leadership that
simply cannot wait any longer.
Many observers have repeatedly
said that RC will remain first sec-
retary of the Party, at least until There is a need
2020, suggesting that his retire-
ment from state and government for changes in
will have little effective meaning
as he will continue to call the
the leadership
12 shots, the Party being the ruling that simply
political force of Cuban society.
This may or may not be the case.
cannot wait any
But there are also a number longer.
of histórico leaders bound for
retirement who are set to be
replaced by younger Party leaders
from the provinces with excellent
credentials. Appointing a few
of them to replace older leaders may be another
development prior to the April 19 session of the
National Assembly.
All of this will take place at a plenum of the
Central Committee in March, an event of special
importance considering what's coming.
***
A summary of the National As-
sembly session. First of all, a short inventory
of economic shortcomings, blunders, mishaps,
and the protracted legacy of outdated policies and
practices brought up during the year-end session
of the National Assembly:
• Failure to meet planned export figures.
• Failure to meet fuel needs, amid a 38,000-ton
decline of domestic oil production.
• Failure to meet investments planned for 2017
(9.2% shortfall).
• Only 70% of foreign loans and credits ef-
fectively used, indicating mishandling of a key
resource.
• Persistent delays in imports, causing disrup-
tions.
• Considerable delays in unloading cargo in
Cuban ports, resulting in $10.5 million in addi-
tional cost affecting key supplies
such as corn, soy, and wheat, a
problem that has been dragging
on for 50 years. The three most
negligent ministries: Agriculture,
Food Industry, and Domestic
Trade.
• Mismanagement produces
idle inventories totaling $25 bil-
lion in 2016 and $24.7 billion by
late 2017.
• Prevailing impunity amid
large-scale corruption, resulting
from growing lack of government
control, supervision, and account-
ability, especially connected to
fuel and energy sources.
• Tax evasion remains a huge
problem.
• A large number of state enterprises, in plan-
ning their needs for 2018, anticipate raising fuel
consumption by 25% and electrical consumption
by 7%. The top leadership strongly rejected such
demands, calling them “unheard of”.
• After characterizing — once again — foreign
investment as “an essential part of the country's
development strategy,” problems still persisting
were pointed out in the following order: a. De-
lays in negotiation; b. delays in feasibility studies;
c. delays in bureaucratic procedures; and d. lack
of professional preparation among Cuban state
enterprise executives.
• Challenges beyond the control of Cuban
authorities: a. The tightening of the U.S. blockade/
embargo seriously hinders the whole economy;
and b. Mother nature, in the shape of the dev-
astating east-west trajectory of Hurricane Irma,
with an estimated damage of $13 billion.
Economic priorities in 2018
Moving beyond the problems, here are the
economic priorities, as defined at the parliament's
December session:
• At the very top is recovery from the devas-
tation caused by Hurricane Irma, with a special
emphasis on housing.
• Investment priorities are focused on 4
 National Assembly (3)
Cuba Standard Monthly
the development of infrastructure, export pro-
motion, import reduction, implementation of
projects at the Mariel Special Development Zone
(ZEDM), tourism, railways, renewable energy and
its connection to the national grid, storage facili-
ties, food production, and public services such as
healthcare, education, culture, or public transpor-
tation.
• Thanks to the tourism industry, transpor-
tation, and agriculture, the economy was able to
13 grow 1.6%, possibly reaching 2% in 2018.
• Foreign investors committed $2 billion to
tourism, manufacturing, energy, construction,
logistics, and agribusiness projects. In addition,
negotiations for 80 new projects have successfully
concluded, and another 15 projects , adding up to
some $900 million, in areas such as oil, transpor-
tation, banking, and finance, are pending.
• Among policy priorities for foreign invest-
ment: a. simplify existing procedures; b. more
flexibility; c. shorten negotiations; d. a study to
determine the value of land to be leased to foreign
investors as part of current projects.
• Tourism is expected to reach 5 million
visitors in 2018 (as of November 2017, there were
4.257 million visitors, up 19%, not including
397,500 cruise passengers). Revenues grew slower
because of a weakening Canadian dollar. Invest-
ments in tourism projects — by far most of them
by the Cuban state — were not satisfactory, with
only 78.1% of planned projects accomplished.
Short leash for private business
The Lineamientos (guidelines) of reform: Vice
President Marino Murillo, who is in charge of
the implementation, made it clear the "non-state"
sector continues to be held on a short leash.
• Murillo blasted non-agricultural cooperatives
and cuentapropistas with criticism. He empha-
sized the “experimental” nature of the urban
co-ops — currently limited to 429 enterprises —
as he cited the case of a co-op whose president
was earning 37,000 CUP (non-convertible pesos)
compared to the 3,000 CUP of all other members.
“That’s a private enterprise, and that cannot be
allowed,” Murillo said.
Concerning cuentapropistas, he announced
"That's private enterprise,
and that cannot be
allowed."
that the self-employed will be limited to one
activity, being allowed to hold only one license per
person, rather than the two or three many entre-
preneurs have been granted.
Regarding agricultural cooperatives and fin-
queros (who lease land in usufruct), Murillo
announced an end to an initial grace period, with
farmers having to start paying regular taxes and
those sitting on idle land being charged a penalty.
All of a sudden, Murillo acknowledged a great
discovery: “Wages have to meet the needs of
working people and their families, and pensions
the needs of pensioners.” Great, but this serious
anomaly has been damaging the Cuban economy
and society for 25 years.
Questioned by diputados on the introduction
of wholesale outlets for the “non-state sector” —
an important tool to bring down corruption and
theft — Murillo avoided any specific comments,
ending his presentation with yet another great
discovery: “The problems we have faced in the
real world are more complex and deeper than we
ever thought.”
Castro's speech
Highlights of President Raúl Castro’s closing
remarks:
• Financial obligations with foreign suppliers of
Cuban state companies must be met.
• "We must consolidate the beginning of our
foreign investment (…), which is truly insuffi-
cient.”
• I "ratify that we are not renouncing the de-
ployment and development of the various non-
state forms in our economy." 4
 National Assembly (4)
Cuba Standard Monthly
• He urged his successor to eliminate the dual
currency system and multiple exchange rates. “If
we don’t solve this, it’s difficult to advance cor-
rectly,” he said, adding: “Not even the wisest of the
wisest among us could have imagined the high
cost for the state sector of the persistence of the
monetary and exchange rate duality.” His final
remark: “I must admit that this matter has taken
too much time and cannot be delayed anymore.”
I am sure some of you readers now jump to the
14 conclusion that the currency merger is around
the corner. Hold your horses. Unless the Cuban
leadership is prepared to gamble on “shock ther-
apy” — which I strongly doubt — I don’t see this
happening in the immediate future; if we exam-
ine carefully Cuba’s current economic and social
circumstances, we find that the situation is not at
all favorable to implement such a course of action.
Whatever steps may be leading to the currency
merger, they will have to be gradual, seeking to
minimize any negative impact or social turmoil.
• RC again refuted U.S. accusations regarding
the alleged “sonic attacks”, deploring the actions
by the Trump administration while reiterating
Cuba’s readiness to continue working out solu-
tions to every problem between the two countries,
on the basis of equality and respectful dialogue.
• He also extended his support to Venezuelan
authorities, criticizing the international hostility
orchestrated against the government of Nicolás
Maduro. 
 Energy
Cuba Standard Monthly

Australian oil company CEO steps down

|| by JOHANNES WERNER

A
s the company is struggling to raise funds was to fund
for an exploratory onshore drilling cam- 40% of drilling
paign in Cuba, the chief executive of Melba- costs, fell apart
na Energy Ltd. resigned. earlier this year,
Peter Stickland stepped down as managing leaving Melba-
15 director of Melbana “for health reasons”, effective na without a
immediately, the Australian oil junior announced. partner.
He will continue to work part-time and has been Purcell
invited to remain on the board, the company said. said Melbana
“We accept Peter’s resignation with regret, but is seeking a
fully understand his desire to spend more time “farmout” of its
with his family,” Chairman Andrew Purcell said in Cuban project,
a press release. “We are pleased that he will be con- meaning it is Stickland
tinuing to support the company in both a non-ex- looking for a
ecutive director and consulting capacity.” company that would provide drilling services in
He is being replaced by the executive in charge exchange of a percentage of ownership of Melba-
of business development; Robert Zammit, who na’s Cuban lease. In December, the company said
joined the company in 2011 from ExxonMobil, will it was making “good progress” in talks with poten-
receive a salary of $300,000, plus up to 33.3% of tial contractors that could provide a drilling rig,
that as performance bonus. both from within Cuba or abroad. Melbana says it
The company raised eybrows in 2016 when it needs US$4.55 million for drilling one well, about
made, after a short exploration period, optimistic the same amount it said it held in cash at the end
announcements for onshore prospects in Cuba’s of September; it has a bank guarantee for $2.25
Block 9, an area that has been extensively explored million, and a Cuban state company has begun
since the 19th century by U.S., Cuban and Soviet to survey well sites, the company said in a recent
geologists. report to investors.
The company has been struggling to raise funds In December, Melbana also announced, without
for drilling of one or two wells in Block 9 begin- elaborating, in a press release that it will seek “addi-
ning in mid-2018. According to Melbana, it needs tional oil and gas opportunities in Cuba”.
$10 million for the two exploratory wells. A part- The company’s stock dropped below 2 Austra-
nership agreement with Petro Australis Ltd., which lian cents late last year. 
 Real Estate

Spanish tourism group gives high profile

Cuba Standard Monthly

to golf resort project in Cuba

|| by JOHANNES WERNER

M
aría José Hidalgo, heiress of the clan that
controls the Globalia tourism conglom-
erate and CEO of Air Europa, formally
signed an agreement at Fitur in Madrid, establish-
ing a joint venture that plans to build a $1 billion
16 golf resort in the Mariel Special Develpopment
Zone.
Tourism Minister Manuel Marrero witnessed
the ceremony at Cuba's stand at the annual fair, one
of the biggest worldwide.
Hidalgo's company, El Salado Resort S.L., is a
49% partner with state company Cubagolf in the El
Salado joint venture.
Cuba's golf projects have been lingering since
2010, due to political, legal and financial obstacles.
The authorities have been moving slowly to adopt
laws and regulations allowing the sale of condos Marrero, l., and Hidalgo, after the El Salado signing ceremony
and villas to foreign owners. Most importantly, at Fitur. Photo: Mintur

Cuba now concedes surface rights (derechos de su-
perficie) for “99 years or perpetuity” to developers
El Salado CEO Juan Maura said in
October that sales will focus on
the second-residence European
market and, "of course,
the American market"
and real estate buyers.
In the meantime, interest in golf has declined
worldwide.
Although only four golf joint ventures currently
exist, and none has yet broken ground, the engage-
ment of the Hidalgo clan adds weight and credibili-
ty to Cuba's golf future.
Globalia, a €3.5 billion (revenues) conglomerate
that includes Air Europa, Spain's second-largest
airline, tour operator Travelplan, and the Be Live
hotel chain, was founded in the 1970s by María
José Hidalgo's father, Juan José Hidalgo. The family
still controls the company.
El Salado Resort S.L. is presided by Juan Maura,
with María José Hidalgo and Sandro Cristoforetti
as major shareholders. Globalia did not respond to
questions whether El Salado Resort S.L. is a subsid-
iary of the conglomerate.
However, it is far from clear how the $1 billion
plan will get funded. Juan José Hidalgo started a
similar project in the Dominican Republic in 2008,
but postponed it in 2011; a competitor told Cuba
Standard, on condition of anonymity, that the
company is trying to sell that development now.
The project in Cuba covers 207 hectares and 3
kilometers of beach in Sector H of the industrial
and trade zone an hour's drive west of Havana.
The El Salado partners want to design a feasibil-
ity study and master plan with several phases with-
in 30 months, hoping to first build an 18-hole golf
course, then two hotels, and finally apartments, all
within five years. The first phases could include a
250-room golf hotel and a 500-room beach hotel,
as well as hundreds of apartments. Hidalgo said
that the next phases could include a third hotel.
“I am excited to begin this project, the first on
such a scale I am involved in," she said after the
signing. "In two or three years, the com- 4
 Golf project (2)
Cuba Standard Monthly

17

Rendering of the project in Zone H of the Mariel Special Development Zone, an hour's drive west of Havana. Photo ZEDM

plex could be up and running."

Marrero emphasized the location.
"This project has the peculiarity of being located
in the Mariel Special Development Zone," he said.
"It will contribute a lot to the city of Havana and
will help bring foreigners to buy a home in Cuba
and boost golf activities."
El Salado CEO Juan Maura said in October that
sales will be primarily focused on the second-resi-
dence European market and, "of course, the Ameri-
can market”. 
 Politics

Government sets limits

Cuba Standard Monthly

for private businesses, cooperatives

|| by JOHANNES WERNER

T
he good news for Cuba's private entrepre-
neurs: Gradually, the fog of uncertainty is
lifting regarding how far privately owned
businesses and cooperatives are allowed to go. The
bad news: The leash is short.
18 In December, after years of leaving entrepre-
neurs in a limbo of uncertainty, Cuban authorities
made a few clarifications regarding range and size.
Non-agricultural cooperatives, for instance, will
be restricted to operate within just the province
they have been established, Vice President Marino
Murillo Jorge, who heads the permanent com-
mission that oversees the reform process, told the
National Assembly in its year-end session. Coming out of the shadows: Private bars are now explicitly
allowed. Restaurant-Bar Motivos in Havana. Photo: Courtesy

Co-op crackdown
Murillo poured his wrath particularly over
cooperatives, which have been presented by au-
thorities as the collective vehicle of choice for the
gradual privatization of the state-run retail sector,
and an option to boost lagging construction in the
country.
For now, the creation of new non-agricultural
co-ops has been stopped, he said, until the “exper-
iment” with the 429 existing ones has concluded.
“Exceptionally”, authorities recently permitted the
creation of five new fishing cooperatives, Murillo
added.
The restriction to a local market will make it
difficult for co-ops to enter more complex and cap-
ital-intensive activities such as manufacturing.
The Finance Ministry in September ordered
accounting services co-op Scenius to shut down,
saying it had exceeded the scope of services au-
thorized. Scenius had expanded rapidly
in its less than three years of ex-
istence, opening offices in Pinar
del Río, Matanzas and elsewhere,
providing tax advice and consulting
services to its clients, which were
Murillo: One activity, one province
mostly state enterprises and institutions. The 300-
plus members of the Havana-based co-op have
appealed the decision in court.
Reacting to the shutdown, one of the Scenius
founders criticized the finance ministry’s actions as
restricting co-ops to “bonsai” status.
"Is this about creating bonsai, dwarf, short
cooperatives?”, Alfonso Larrea asked in a guest in
independent news site El Toque about official poli-
cy regarding co-ops.
Also, salaries and dividends of co-op leaders can
only exceed those of lowest-paid members by three
times, Murillo said, adding that this doesn’t mean
regulating revenues, but only the distribution of
profits. Finally, people can only be members of one
co-op at a time.
One-act cuentapropistas
Meanwhile, private business own-
ers — generally referred to as cuenta-
propistas — can only obtain licenses
for one activity at the time. Cuban
entrepreneurs, for example, who are
operating restaurants and bed-and-
breakfasts simultaneously will now
have to shed one activity. 4
 Private businesses (2)
Cuba Standard Monthly

Cushioning the blow somewhat, some of the
201 permitted activities for cuentapropistas were
consolidated to 122. For example, the professions
of hair stylist, barber and manicurist now figure
under “beauty services”.
Also, authorities for the first time officially
allowed the operation of bars; many entrepreneurs
have operated de facto bars, under the guise of
“gastronomic services”.
19 Farmers: Lease terms, taxes
Finally, the use of state-owned land under
usufruct by private farmers was extended from 10-
year to 20-year terms. At the same time, the state
is penalizing usufructuarios who don’t farm, by
imposing a tax on fallow land.
Following the short-leash announcements, Raúl
Castro tried to reassure entrepreneurs that they do
have a future.
“We ratify that we won’t renounce the deploy-
ment and development of non-state management
in our economy,” said President Raúl Castro during
his session-closing speech. “We won’t recede, nor
will we stop, but we have to make sure laws are
respected, strengthen positive results, and stern-
ly confront illegalities and violations of existing
policies. In other words, we have to make sure the
changes in this area are being implemented well,
and resolutely rectify any deviation that takes us
away from the chosen path.”. 

Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs
Construction underway MTU 4000-series
on $60m power project genset
State utility Unión Eléctrica
(UNE) has begun installing 40
German-made diesel generator
sets at Cienfuegos, expanding a
distributed-generation concept
begun more than a decade ago.
The cluster of 40 diesel en-
gines made by MTU — going up
next to a refinery at the port city Photo: MTU

— is divided into five batteries

with a total capacity of 84mw. The
estimated total cost of the gener-
ators is $60 million; completion is
expected for November, one year
later than originally planned.
The cluster will cover 60% of
power demand in Cienfuegos,
according to a local newspaper.
»Briefs
million cluster of 16 diesel-fuled
gensets totaling 30mw near a
refinery at Cabaiguán in central
Sancti Spíritus province.
UNE plans to add 200mw in
similar generator clusters through
2023 in Pinar del Río, Matanzas,
Cienfuegos and Villa Clara, to
life span is shorter than that of
thermoelectric power plants, they
require frequent maintenance, fuel
supply is more complex, and fuel
costs are higher.
Algeria to ship more

The generator sets, which will be
supplied with diesel via a pipeline
from the neighboring refinery,
come with silencers and a gas
evacuation system.
MTU referred questions to
Cuban state company Energoim-
port, which did not respond.
UNE is also installing a $14
“substitute old thermoelectric
power plants with more modern
and efficient technology,” a local
newspaper reported last year.
The generator clusters are a
quick, relatively low-cost and flexi-
ble way to respond to rising power
demand, and they add resiliency
after hurricanes. However, their
crude oil to Cuba
Algeria sent 2.1 million barrels
of crude oil to Cuba last year
and will ship the same amount in
2018, an official at state energy
firm Sonatrach said.
The Algerian oil joins Russian
supplies, helping Cuba offset
lower supplies from Venezuela.
 Politics/Finance

European development bank

Cuba Standard Monthly

eyes Cuba
|| by JOHANNES WERNER

A
European Investment Bank official is sched- Szymczak
uled to travel to the island later in Janu-
ary, EU High Commissioner for External tional Havana Fair in 2016. Bank
Affairs Federica Mogherini announced during a officials started talks with their
two-day visit to Havana in December that raised Cuban counterparts about

Photos: EIB
20 the European Union’s profile as a partner of Cuba, lending that year.
just as the Trump administration seems to be In the Latin Ameri-
returning to hostility. ca region, the bank
The technical-level EIB representative will offers €4 billion
participate in “Energías Renovables”, a clean-ener- ($4.45 billion)
gy forum and trade event in Havana Jan. 30-Feb. in loans for en-
1 hosted by a joint venture involving trade event vironmental, cli-
organizer Fira Barcelona. mate-change adaptation, strategic infrastructure,
“The mission will also be an opportunity to energy, transportation, telecommunications, and
understand the potential for cooperation with innovation projects.
the Cuban authorities and the other international The engagement of the Luxembourg-based
financial institutions and European development development bank may also send a signal to Euro-
finance institutions active in Cuba,” an EIB spokes- pean commercial banks, which are fearful of U.S.
man told Cuba Standard. sanctions and the rock-bottom rating of Cuban
The spokesman added he expected discussions debt; funding has been the biggest road block to
with Cuban authorities to develop over the coming European investment projects in Cuba.
months.
Cuba's No. 1 economic partner
Ready to fund $50m of projects Despite these obstacles, “the EU has become
Mogherini said that cooperation agreements for Cuba’s first trade partner and was already the
€49 million ($59.1 million) will be signed “soon”, in- first in investment and development cooperation,”
cluding for renewable-energy projects (€18 million), Mogherini said during a press conference
sustainable agriculture projects (€21 million), and at the end of her visit, which
cultural and expert exchanges (€10 million). She came as EU member
is scheduled to meet with her Cuban counterpart, nations
Foreign Minister Bruno Rodríguez, in Brussels Feb. 4
28, presiding over the first EU-Cuba cooperation
meeting.
She also said that the EU has provided €9 mil-
lion in post-hurricane aid to victims of Irma so far,
with more funding ahead.
The EIB is ready to support the rapproche-
ment between the European Union and Cuba,
funding projects that help “modernize the Cu-
ban economy”, Philippe Szymczak, EIB regional
director for Latin America and the Caribbean,
said during an investors’ forum at the Interna-
 Development bank (2)
Cuba Standard Monthly
are in the process of ratifying a political dialogue
and cooperation agreement.
In 2016, EU member countries exported €2.04
billion worth of goods to Cuba, while importing
€0.41 billion.
“The EU advocates diversification of exports
from Cuba beyond the traditional products, and
cooperates to disseminate the necessary knowledge
among Cuban exporters to improve the access of
goods onto the EU market,” a European External
21 Action Service fact sheet says.
Cuba’s main export goods are agricultural
products, beverages and tobacco, as well as mineral
fuels.
With the cooperation agreement, the EU in-
tends to “create a more predictable and transparent
atmosphere for economic operators and increase
their economic capacity to produce, trade and cre-
ate jobs”, according to the EEAS fact sheet. “It does
not establish a free trade area between the parties
or cover investment protection,” the document
adds.
Talks about trade
In addition to meetings with President Raúl
Castro and Foreign Minister Bruno Rodríguez,
Mogherini held brief talks with Foreign Trade and
Investment Minister Rodrigo Malmierca.
“We discussed concrete options to increase
investments from the European Union, and — in
general terms — economic cooperation,” she said
during the press conference. “There are some
obstacles to this, but … the European Union and
Mogherini, visiting a EU-funded
youth program in Havana.
Photo: EEAS
its member states are already the first investors.
Which means that economic relations are already
very much developed. That has always been the
case, and this can be increased even more now that
we have this new agreement.”
“I know that sometimes the perception could
be that others are on top of the list” of Cuba’s trade
and investment partners, she said. “But the reality
of numbers says that the members of the European
Union are, already now, the first economic, com-
mercial and investment partner of Cuba. Which
means, we are already doing a lot on both sides to
have good economic relations. Which also means
it is possible to build on this basis, to increase the
level of economic relations.”
Side-swiping Trump's policies
Mogherini repeatedly criticized U.S. sanctions,
saying she regretted “that the current U.S. ad-
ministration has apparently changed policy with
Cuba”. The EU push comes as Russia and China
have stepped up their economic involvement in
Cuba recently. Even so, Cuba’s trade relations are
so diversified today that no single country accounts
for more than 20% of the total.
While interest in Cuba has been fairly high
among European investors over the past three
years amid U.S.-Cuba normalization, projects have
been held up by Cuba’s low credit rating and its
inability to pay suppliers in time, by U.S. sanctions
and the reluctance of European banks to fund
projects, and by the Trump administration’s recent
return towards hostility.” 
 Companies
Cuba Standard Monthly

U.S. auto dealer to open office in Havana,

expands to e-bikes and scooters
|| by JOHANNES WERNER

T
he Miami-based auto dealer who has
been offering Nissan Leaf electric ve-
hicles to expats in Cuba, is expand-
22 ing into e-bikes and electric scooters.
Even though John Felder’s Premier
Automotive Export Ltd. — the first U.S.
business in more than half a century that was
granted U.S. approval to export vehicles to the
island in 2017 — has only sold one Nissan Leaf so
far, it recently had its Department of Commerce
license amended to include electric bikes

Photo: Top Gear/Premier

and scooters.
Meanwhile, Felder’s Cayman Auto-
motive Leasing received approval from
Cuban authorities to open an office in
Havana, which will market, sell and service e-bikes Top Gear Rank line of electric scooters

and scooters.
Felder is offering the complete line of Chi-
nese-made Top Rank Gear electric scooters, with
delivery anywhere in Cuba. He says he has already
received the first two orders for e-bikes and scoot-
ers.
Premier Automotive Ex-
port Ltd. is the authorized
Top Rank Gear dealer for the
Caribbean, according to Felder,
and buyers will soon be able to
order and purchase Top Rank
Gear products through his
Felder
company’s website. As to ship-
ping to Cuba, Premier made
an arrangement with CubaPack, a Miami-based
company that offers an online catalog of applianc-
es and other goods typically ordered by people in
Cuba and paid by relatives abroad.
“We have signed an agreement with CubaPack
to clear our merchandise once products arrive in
Cuba,” he said.
Responding to concerns regarding maintenance
and spare parts for the vehicles, Felder says the
e-bikes and scooters will come with a 12-month or
12,000 mile warranty. Also, his company is train-
ing Cuban technicians who will support customers
in Cuba.
“Service support is very crucial to our business
plan,” he said.
E-scooters have been in demand in Cuba re-
cently, with thousands of imports per year. State
company Ciclos Minerva began assembly of Top
Rank Gear-designed LT 1060-model electric scoot-
ers, with 5,600 scooters produced in Villa Clara in
2017 and plans to ramp up to 30,000 per year. The
Cuban-made vehicles are sold through hard-cur-
rency stores in the island at prices between CUC
1,200-1,260 (convertible pesos, parity with the U.S.
dollar).
Even so, Felder says he can compete, with his
scooters being shipped from Hong Kong to Miami,
and on to Cuba.
“This is the best shipping route and less expen-
sive,” he said.
Beyond the actual vehicles, demand for parts
is rising rapidly in Cuba. Already — the 4
 Auto dealer (2)
Cuba Standard Monthly

lead-acid batteries that come with the Cuban-as-

sembled scooters have an average life span of only
two years — buyers of scooters in Cuba are com-
plaining they can’t find replacement batteries at af-
fordable prices. The state company says it has plans
to order $4 million worth of replacement parts,
including batteries, but the country’s cash crunch
has impeded this purchase so far.
Felder’s company will offer longer-lasting lith-
ium-ion batteries as a replacement for depleted
23 lead-acid batteries used in e-bikes and scooters.
“None of the bikes currently on sale offer war-
ranties or lithium-ion batteries, which is serious
issue now in Cuba as no one can get replacement
batteries,” Felder said.
Meanwhile, Premier continues to offer electric
cars to a target market of 124 embassies in Havana
and their expat personnel, which could generate
$1.2 million to $1.5 million in sales, he hopes. 
 Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs Briefs
Cuba Standard Monthly
24
Varadero landmark gets
complete makeover
France’s Bouygues Bâtiment,
in association with state company
Arcos, is half-way through a $156
million makeover and expansion
of the Varadero Hotel Internacio-
nal, a landmark in Cuba’s lon-
gest-standing beach resort and
home to the renowned Cabaret
Continental.
The French company was con-
tracted by state company Empre-
sa Inmobiliaria del Turismo — a
subsidiary of Grupo Gaviota that
is part of the armed forces-con-
trolled GAESA holding — which
owns the building and funds the
»Briefs
project. Bouygues has already
built the Playa Cayo Santa Maria,
Iberostar Ensenachos and the
Meliá Buenavista hotels in Va-
radero.
The management of the Inter-
nacional, closed since 2015, will
be taken over by Spain’s Meliá.
Before and after:
The original
Varadero
Internacional — now
demolished — and
a rendering of the
new, expanded
version (below
right).
Rendering of
the new Cabaret
Continental (below
left).
The hotel, which opened in
1950, is tripling in size to 920
rooms and gets an update using
BREEAM energy efficiency rules,
while — according to official
media reports — maintaining
its mid-20th century style. The
original was demolished, even
though the Association of Cuban
Architects and Engineers had
denounced the plan.
The Continental cabaret —
second only to the Tropicana in
Havana — is in a separate build-
ing on the premises.
The first 500 rooms, as well as
the restaurants, shops and beach
section are expected to be com-
pleted by December.
Sony expands deal with
Cuban state music label
Going against the confron-
tational policy by the Trump
administration, Cuban state music
label EGREM is expanding its
business with U.S.-based enter-
tainment giant Sony.
EGREM, which holds the
rights to works by thousands
of Cuban artists such as Benny
Moré, Chucho Valdés and Omara
Portuondo, signed an agreement
with New York City-based Sony/
ATV, the world’s leading music
publisher. Under the deal, Sony
will license rights to songs in
EGREM’s catalog to clients in the
television and film industry, and
streaming services.
Sony Music signed a 2015
deal to distribute EGREM artists’
albums worldwide.
Cuba expects low sugar
harvest in wake of storm
Concerned about the extent
of damage from Hurricane Irma,
Cuban officials said they don't
expect to meet the plan.
Harvest estimates have yet to
be released. The previ- 4
 »Briefs
Cuba Standard Monthly
ous harvest yielded 1.8 million
tons, 300,000 tons below target.
Domestic consumption accounts
for 600,000 to 700,000 tons, and
some 400,000 tons a year are
earmarked for shipment to China.
The storm felled some
338,000 hectares of sugarcane,
or 45% of the crop. Another
92,000 hectares were flooded.
25 State sugar compant Azcuba
called on farmers "to not waste
even a single chunk of sugarcane
in the fields" and cut the cane
below the ground.
Washington creates
'Cuba Internet Task Force'
The U.S. State Department
has created a Cuba Internet Task
Force to promote “the free and
unregulated flow of information”
in the island.
The group of government and
NGO representatives will first
meet Feb. 7.
“The task force will examine
the technological challenges
and opportunities for expanding
internet access and independent
media in Cuba,” the agency said
in a statement.
Cuba's official media immedi-
ately denounced the measure as
subversive. Communist Party dai-
ly Granma pointed out that some
40% of Cubans connected to the
internet in 2017, most of them
at work or schools, or at one of
many public WiFi hotspots, 37%
more than in 2010.
Cuban officials have said it has
been slow to develop network
infrastructure because of high
costs, attributed partly to the U.S.
trade embargo.
Even so, state telecom ETEC-
SA is expanding its fiberoptics
network and has begun offering
broadband access at home. The
high retail cost of Internet service
remains the biggest obstacle for
Cubans.
U.S. observers criticized the
task force as counterproductive.
“By casting the issue of inter-
net access in an explicitly political
frame, it will only create greater
obstacles for those U.S. tele-
com companies that have made
inroads toward partnerships with
the Cuban side,” said Michael
Bustamante, an assistant profes-
sor of Latin American history at
Florida International University.
Google signed an agreement
with Cuba in 2016 granting inter-
net users there quicker access to
its branded content.
However, Cuba has balked at
allowing U.S. companies to par-
ticipate in wiring the country.
Public WiFi hotspot
in Havana.
Photo: Hemlock
El Corte Inglés label
enters Cuban market
The food label of El Corte
Inglés, Europe's largest depart-
ment store chain, has entered the
Cuban market.
Through an agreement with
Madrid-based El Corte Inglés,
Milan-based Farmavenda is
exporting Aliada and El Corte In-
glés-brand pasta, sauces, canned
vegetables, fish and pickles, as
well as sodas to the island. Sales
will begin first at two supermar-
kets in Havana but will expand to
10 more stores by 2019, Spanish
business publication Expansión
reported.
El Corte Inglés has a similar
arrangement with a third-party
exporter for the Chinese market.
In the China deal, local retail-
ers agreed to create separate
30-150 square-meter "Spanish"
sections in their stores exclusively
for El Corte Inglés products. In
Cuba, the Spanish products will
share shelf space with others, for
now.
Farmavenda, started in 1983,
originally entered the Cuban
market through pharmaceutical
sales. The Italian company is also
active in energy, agricultural and
food sales. The company has sold
food to Cuba for a decade.

»Briefs
Cuba Standard Monthly
26
UNE buys Chinese wind
generators for Herrradura
China's Goldwind and Dong
Fang sold 54 wind generators for
a wind park under development
by state utility Unión Eléctrica.
The Herradura-1 and -2 wind
parks on the northern coast of
Las Tunas province provide 1-1
12 years later, Russian automaker returns to Cuba
A shipload of 320 bright or-
ange Lada Vesta and 24 Largus
Cross arriving at Havana marked
to return of the Russian brand
to Cuba, after an absence of 12
years.
The cars will be used by state-
owned Taxi Cuba. AvtoVaz will
train Cuban mechanics in the
maintenance of the vehicles.
Now a subsidiary of Re-
nault-Nissan, the company has a
history in Cuba going back to the
Soviet era.
bidding for an estimated $800
million worth of wind energy
projects to foreign investors who
would own 100% of the wind
parks, operate them, and sell all
power to UNE. No announce-
ments about takers have been
made.
The 15 wind parks with 617 mw
are all located along the north-
eastern coast and at the eastern
tip of the island.
mw of power, making them the
largest in Cuba.
Goldwind is supplying 43 1.5-
mw generators for La Herradu-
ra-1 and Dong Fang 20 2.5-mw
generators for La Herradura-2.
The deals are backed by Ex-
port-Import Bank of China.
The first generators are ex-
pected to be feeding power into
the grid by December.
Beyond the state-run wind
parks, Cuba in 2016 opened
"Cuba is one
of the priority
export markets
for AvtoVAZ,
and we expect
to continue sup-
plies of Ladas
to the country
in the coming
years, increasing
Lada vehicles
volumes," said being unloaded at
Nicolas Maure, the Port of Havana
the company's
French president.  Photo:: Oliver Zaora/Cubadebate
 Business of Law
Cuba Standard Monthly
Has the Cuba bubble burst for U.S. lawyers?
|| by VITO ECHEVARRÍA
W
ith the Trump administration's reversing
much of Barack Obama’s engagement
policies with Havana, is demand for
27 attorneys with a Cuba practice withering away?
As some U.S. lawyers see it, President Donald J.
Trump’s confrontational tone and style on Cuba,
as articulated during his June 2017 Miami speech
and recent punitive measures, don’t help. But some
business continues — and the punitive measures
actually create demand for more legal advice.
“People said ‘I thought Trump shut everything
down as to Cuba,’” noted Luis Alcalde of Colum-
bus, Ohio-based law firm Kegler Brown Hill + Rit-
ter. “I am still working on a possible
Cuba deal, and we are negotiating
contract language at the moment.”
“There is less Cuba-related legal
work at the moment,” said New
York lawyer Tony Martinez,
an advisor for U.S. firms
interested in the Cuban
market. “The Trump U.S.-
Cuba reversal has thrown
Alcalde
the momentum off for par-
ties looking to do legally permissible transactions
with Cuba. What legal work there is, it’s at the level
of interpretation of regulations and stricter OFAC
compliance.”
Martinez also mentions that Trump’s more re-
cent Cuba-related actions, in particular the scaling
down of both U.S. and Cuban diplomats at their
respective embassies in Havana and Washington,
further complicate U.S. trade initiatives with Cuba.
“Clearly, there is a demand to do business with
Cuba,” said Martinez. “However, the willingness
of the Trump administration to facilitate deals is
not there at the moment, and the resulting frus-
tration and instability on the Cuban side further
complicates the environment. Deals that were
agreed to before the Trump regulations will likely
go forward. Anything new will likely be
stalled for the duration of the
Trump administration, or new
political circumstances change
our relationship with Cuba.”
Cuba specialist Pedro Freyre,
a partner of Miami law firm
Akerman LLP, describes the
now-frigid relations as the
Martínez
“cool war”.
Akerman has been a leading vehicle for U.S.
corporate engagement with Cuba – with Freyre
and other Akerman attorneys like Augusto Max-
well as fixtures in what some wryly called the
“Cuba conference circuit”.
“There are still (U.S.) companies engaged,” says
Freyre. “There’s traction.”
Freyre is referring to deals U.S. firms recent-
ly struck with Cuba, such as John Deere and the
Puerto Rico distributor of Caterpillar. But ob-
servers note that such deals typically take months
to put together, so presumably these companies
started their Cuba initiatives when Obama was still
in office.
Trump barring U.S. deals involving entities
controlled by the Cuban armed forces complicate
any U.S. trade, especially in tourism, where the
military-controlled conglomerate GAESA has a
sizeable footprint. But GAESA’s involve-
ment with the country’s cash-gen-
erating tourist sector has created
due-diligence work for attorneys
who represent companies in the
travel sector.
“Since June 2017, we have
been addressing our clients’
questions regarding the new
presidential policy on Cuba,”
Freyre
said Miami-based lawyer and
trade specialist Ambar Diaz. “We prepared 4
 U.S. lawyers (2)
Cuba Standard Monthly

an advisory for those in the
travel industry, where we have
several clients, and are still
answering questions on a daily
basis. We have also consult-
ed with OFAC regarding
specific issues affecting
our clients. The new regu-
lations do require stricter
compliance, thus the need
28 for specialized legal ad-
vice.”
Travel companies aren’t
the only U.S. entities seek-
ing clarification of Trump’s
policies on visiting Cuba
Díaz – especially in light of a
recent U.S. State Dept. travel advisory against the
island.
“I advised a major college on their educational
trips to Cuba,” said Alcalde of Kegler Brown. “The
college was well aware of the State Department
warning about it being unsafe to travel to Cuba.
But after receiving legal advice and discussing
the trip with all faculty, students and parents, the
college's trip to Cuba will continue under the new
regulations."
"The fact that a State Department warning
about it being not safe to travel to Cuba and that
practically no one is at the U.S. embassy in Havana
to help Americans had to be discussed," Alcalde
added. It "has stopped many other trips.”
Meanwhile, as OFAC is beginning
to provide details of how it will im- 4

LAW
'Support of the Cuban People' travel: Who do I fit in?
W hen Donald Trump eliminated
the "educational" travel
category from options for U.S.
individuals visiting Cuba, one
category remained: “Support for the
Cuban People”.
After the president first an-
nounced his changes in June, Sen.
Marco Rubio (R-Fla.) went on Twitter
to assert that, as long as American
travelers spend their money on stays
at privately owned casas particu-
lares (bed-and-breakfasts) and eat
at privately owned paladares, these
transactions met the new regulatory
requirements.
Of course, that was before the
bureaucrats in charge of enforcing
sanctions weighed in on the issue. On
its Cuba fact sheet dated Nov. 8, 2017,
tbe Office of Foreign Assets Control
(OFAC) insisted that such travelers
must be on full time schedules “that
result in meaningful interaction with
individuals in Cuba.” Beyond trans-
actions with the owners of b&b's and
restaurants, OFAC said that “in order
to meet the requirement of a full-time
schedule, a traveler must engage in
additional authorized Support for the
Cuban People activities” — without
providing examples of what such
activities should be.
When Cuba Standard approached
U.S. attorneys that deal with these
issues, the answers varied.
“The regulations do not provide
an exhaustive list of what does qualify
as approved (Support for the Cu-
ban People) activities,” said Hous-
ton-based attorney Felix Chevalier.
“OFAC is aware of the ambiguity
of the regulation. Travelers should
include all of their activities, have a
documented full agenda and save it
in the event they're ever questioned.”
New York attorney Tony Martinez
was more specific.
“While OFAC did not give specifics
on Support for the Cuban People
activities, the burden is on the trav-
eler to make an arguably persuasive
presentation that their trip to Cuba
utilized the Cuban private sector to
the maximum possible,” he said. “Use
common sense and logical evidence.
This means staying at casas particu-
lares and eating meals at paladares,
which is pretty straightforward. Get or
create receipts and take photos and
make sure that meaningful interac-
tions means you patronized private
Cuban craftsmen and got to know
the people who are working in these
private-sector jobs. Be able to tell
the story and struggles of Cubans
you met and how your visit impacted
them and your own perspective.”
Pedro Freyre, a Miami-based part-
ner of Akerman, suggests that “Sup-
port for the Cuban People” activities
can include helping maintain a private
library, assisting a green cooperative,
or getting involved in a charity, which
can vary from an English language
or basic business course, to donating
equipment to a playground.
Still, the experts admit that it’s up
to OFAC, in the end, to decide which
activities they deem acceptable.
Regardless, the Trump administra-
tion probably understands that few
U.S. travelers will go the extra mile in
meeting such stringent requirements
for individual travel to Cuba, thereby
achieving its goal in scaling down the
flow of U.S. visitors. 
—Vito Echevarría
 U.S. lawyers (3)
Cuba Standard Monthly
plement Trump’s Cuba policy, this
could prompt Cuba trade events in
New York, Miami, or even Havana.
On Jan. 29, for instance, U.S. tour
operators will be gathering at Ha-
vana's Meliá Cohiba, for a one-day
workshop. While the main intent
is sending a signal to the world —
via the newsmedia — that Cuba Chevalier
is still open for U.S. travel, a side
29 benefit will be clarifications about how U.S. sanctions
enforcers will handle individual travel.
“Now that the regulations have been released, U.S.
businesses are understanding that there are still op-
portunities to explore the Cuban market,” said Hous-
ton-based attorney Felix Chevalier. “That being said, I
think having more organized events in Cuba may
be the best way to continue the trend of studying
opportunity on the island."
Chevalier, one of the organizers of the Cuba
Energy Oil and Gas Conference in Havana last fall,
says he is planning to host an event in Havana in
the first quarter of 2018 about the new regulatory
environment. It could include a briefing by Cuban
officials about new business and investment oppor-
tunities, and it may "reunite attendees with some
of the former members of the Cuban diplomatic
corps who no longer reside in the U.S."
"The Cuban Embassy has done tremendous
work of the past few years to establish solid rela-
tionships with businesses, state officials, and indus-
try reps," Chevalier said. 
Cuba Standard Monthly

Former Cuban intelligence officer

Domingo Amuchastegui has lived
in Miami since 1994. He writes
regularly on Cuba’s internal politics,
economic reform, and South Florida’s
Cuban community

30
Trump's Cuba policy:
Collision, truce or modus vivendi?

P
resident Donald J. Trump is seeking to reverse the
normalization process achieved under the Obama
administration. Since he came to Little Havana on June 16 to
make his famous “declaration of war” against the Cuban government,
a wave of threatening statements and hostile actions — some following
allegations of “sonic attack” incidents — has come to replace the
constructive approach that prevailed until late 2016, a policy that was
greeted and supported worldwide, by two-thirds of the U.S. population,
and a vast majority of Cuban Americans.
The collision scenario Everything was pointing to a worst-case scenario.
By early November, everything seemed to The Cuban government strongly criticized
suggest that the Trump administration set the the new policy and rejected the “sonic attack”
United States on a collision course that would allegations, offering every collaboration aimed at
culminate in putting back Cuba on the list clarifying the affair — Foreign Minister Bruno
of terror-sponsoring countries. This was the Rodríguez even met with U.S. Secretary of State
best and most expedient action to undo the Rex Tillerson, as well as with a dozen of U.S.
Obama legacy and the best tool to put pressure lawmakers and scores of U.S. businesspeople.
on international allies. The most aggressive Cuban authorities have reiterated their readiness
exponents of the Miami Cuban American lobby to continue a constructive dialogue based on an
were exuberant with joy, claiming total victory. equal standing and mutual respect, considering
The Trump administration seemed to reverse the possibility that Trump was ill-informed about
course on extension of visas, travel, trade and Cuba. The Trump administration was dismissive
investment projects, diplomatic dialogue and and proceeded with punitive actions.
negotiations seemed to be passé, and intimidation The world community took an opposite course
in the areas of finance and banking, as well as of action. The European Union approved
additional extraterritorial practices were back … the Political Dialogue and Cooperation 4
 Trump's Cuba policy (2)
Cuba Standard Monthly
Accord with Cuba. Not a single Latin American
nation nor Canada supported in any way Trump’s
policy. The most recent CARICOM summit
proclaimed their total support to Cuba. A number
of EU countries as well as Japan and South Korea
are seeking to improve trade and investments,
including visits by top Cuban officials.
At the annual United Nations vote
condemning the U.S. embargo on Cuba, only the
United States and Israel voted against — although
31 the latter has been very active in recent times
seeking to normalize relations with Cuba, as did
Morocco, a close U.S. ally, not long ago.
At the same time, U.S. companies — from
cruise lines, airlines, and major hotel chains, to
Google, John Deere, Caterpillar, a cancer research
institution, and agribusinesses — are not only
continuing their business operations in Cuba, but
seek to expand them while actively lobbying in
Washington. In other words, they are committed
to a pattern of action entirely contradictory to
what Trump is doing. After all, a fast-growing
tourism market and favorable predictions for the
future make Cuba an attractive option.
Obviously, Trump is moving on a collision
course not only with Cuba, but with U.S. business
and the rest of the world. Is this having an impact
on Trump’s policymakers and advisers that could
lead to second thoughts?
Truce
Maybe. For almost two months now, the
Trump administration has ceased hostile actions.
The “sonic incident” has been frozen, and a new
chargé d’affaires at the U.S. embassy in Havana
has been nominated — though not officially
announced as of yet — which would enhance
communications both ways and suggests some
level of normalcy.
Second, regular “technical” meetings to discuss
bilateral issues between the two countries, that
were interrupted after January 2017, are now
taking place regularly again — the most recent
one being a Dec. 12 meeting on human smuggling
and migration fraud — with satisfactory results.
The Cuban side has reiterated its willingness
to continue such talks and limited levels of
cooperation.
Third, those Cuban Americans seeking a
head-on collision have been silent as in a funeral,
cursing sotto voce the apparent truce, which they
blame on “so-called experts” and “bureaucrats in
Washington.
Modus Vivendi
Is this just a temporary truce, or are we
witnessing a basic reconsideration in Washington
that may lead to a certain modus vivendi? We
shouldn’t be thinking along the lines of Tillerson
or Trump walking the streets of Habana Vieja
anytime soon. But indeed, there could be an
agenda of understanding and cooperation on a
host of government issues of mutual interest such
as human smuggling, migration fraud, Coast
Guard cooperation, the Guantánamo Naval Base,
drug trafficking, and natural disasters. It’s not
about a honeymoon or friendly ties; it’s about low-
level, basic understanding and cooperation.
And why not? Such a policy would make things
easier for those U.S. businesses that took early
steps toward the Cuban market and others that
might follow. These special interests are becoming
more and more proactive for a constructive
course of action, a normal relationship in which
businesses can prosper.
A low-level modus vivendi entails another
important perspective. If the new Cuban leaders
who take over in the near future (something the
Trump administration has been overlooking)
operate in a favorable atmosphere —without
tensions and conflicts with the big neighbor —
they will have an easier time to implement and
expand the redesign of the Cuban experience,
including its economic and social foundations.
If, to the contrary, that new leadership is bound
to face a collision course from the Trump
administration, the recurrent pattern of isolation,
of circling the wagons, of staunch defensive
attitudes, will create obstacles and delays for that
redesign of the Cuban experience. 
 Guest column
Cuba Standard Monthly

Rafael Hernández
is a political scientist
and researcher
based in Havana

Analysis:
32

Another socialism?
Raúl Castro's legacy

I
eyasu Tokugawa, founder of the shogun dynasty that governed Japan
during the Edo era until the Meiji Restoration, stepped down in favor
of his son at the age of 64. Suspicious of the daimyōs (“great names”),
the lords who followed his authority but maybe not that of his son, Ieyasu
remained as “retired shogun,” backing his son with his presence and
advice until his death 11 years later. Ieyasu´s main legacy was depicted
in a guiding document, a sort of magna carta that set the course of the
country for the next 250 years.

Even in locations, cultures and histories very disappointing” way.

far from that archipelago, this lesson of political
wisdom by the founder Ieyasu continues to speak
to those who want to read it 400 years later.
Some scholars have described the principal
work of Raúl Castro as that of the architect
of Cuba’s security and defense during more
than half a century; others have characterized
him as promoter of “economic reforms” and of
the institutional renewal of the system. Some
“observers of the Cuban political situation”,
perceive him as a sort of tropical Deng Xiao Ping
to be celebrated for what they consider a well-
intended but stalled liberalization project towards
a market economy model, in a “thoroughly
I lack the space to discuss these visions here,
so I am limiting myself to commenting on his
leadership in the introduction of concepts and
practices aimed at the political transformation
of socialism in the island, particularly, naturalize
reforms, make consultation with the citizens
a regular practice, and developing a dialogue
based on negotiation and no preconditions with
the North, as legitimate and permanent socialist
policies.
Ideas and leadership style
Any of the few million Cubans who
discussed the documents that were 4
 Raúl's legacy (2)
Cuba Standard Monthly
finally approved in the 6th (2011) and 7th (2016)
Congress, and the First Conference (2012) of
the Communist Party of Cuba will corroborate
that these reflect a socialism very different
from the one that had been championed until
then. Whoever makes the effort of reviewing
those documents will hardly be able to interpret
them as a path towards some “Sino-Vietnamese
socialist neo-patrimonial model ” or social
democratic model. In this
33 other socialism under
construction, based
not only on economic
formulas, the new ideas The foundation of this
and political style have
Raúl Castro’s brand. It
transformation is not
is sufficient to read his rooted in the mere
speeches and examine
his decisions to form a modernization of the
precise idea.
Today, some
development strategy.
“observers” keep
repeating that Fidel
was the doctrinaire ideologue, the diehard,
contrasting with Raúl, the realist strategist.
However, when the hand-off happened in summer
2006, these images were exactly the opposite. At
the time, a high-ranking Church leader confessed
to me his fear that the progress achieved with
Fidel will be frozen with Raúl. The space and
visibility the latter eventually conceded to that
Church on certain political topics exceeded all
expectations — which the subsequent Church
hierarchy seems to have forgotten.
Even before taking power, Raúl had declared
that “no one can govern like the founder of a
revolution”, anticipating that the instantaneous
consensus would be extinguished together with
the founder, and that from then on, it would have
to be fostered. His contribution to renewing the
socialist ideology began precisely by naturalizing
disagreement, considering it an organic part of a
new consensus. To prove it, it is enough to point
out how many expressions of dissent identified
as “contra” in the early 1990s today are, on the
level of society, “within” the socialist discourse
— although some pedagogues still refuse to see it
this way.
The foundation of this transformation of the
system is not rooted in the mere modernization of
the development strategy, but in the construction
of a prosperous, sustainable and democratic
socialism, based not only on a new mentality and
practices in the economy, but also in politics. This
shows up repeatedly in Raúl’s discourse, such as
the need to “hold a dialogue with the citizens” (a
more frequent term in
his speech than with “the
people”, and never with
“the masses”), consulting
with them the main
policies , confronting
the bureaucratic layer
resisting change, the
ineptitude of the media,
and the stiff style of
political education
and ideological work
(what he calls “the old
mentality”).
His performance in charge of the unified
command of defense and security of the country
didn’t seem to herald the idea that “our worst
enemy isn’t imperialism” nor its allies in the
island, but rather “our own errors”, and “narrow
and excluding views”. Nor did anticipate his
advocacy for a decentralized system, collegiate
decision-making, or the right to disagree “of
which no one should be deprived”, a “debate
without ties to dogmas and unviable ways of
thinking”, the eradication of “secrecy surrounding
information about all that defines the political
and economic course of the nation”, of the
“psychological barrier formed by resistance
to change, indifference”, which impedes
“transforming erroneous and unsustainable
concepts about socialism”, the bad copying of
“other socialist experiences”, or the need to “not
ignore even the positive ones of capitalists”.
This democratic intention does not recognize
sacred zones. It affirms that in order to continue
having one sole party, “the Party of the Cuban
Nation”, it must be “the most democratic”, “lead
by example in its own ranks”, be able to 4
 Raúl's legacy (3)
Cuba Standard Monthly

“promote the greatest socialist democracy will be assured”.

democracy in our From this background of new visions, a set
society”, which of policies has emerged that foreshadows the
“will contribute to new model — although many are still awaiting
From this overcoming attitudes
of pretention and
legislation to formulate and materialize them.
The agenda of law projects aimed at shaping
background opportunism that
came about under
this new order includes structure and powers of
municipalities, small and midsize enterprises,
of new the cover of false elections, public-sector enterprises, a family law,

34
visions, unanimity and
conventionalism”.
associations, religion, and numerous other topics
that must be debated and approved by a National
a set of It is necessary” for Assembly whose legislative activity will overtake
us to get used to that of the Council of Ministers.
policies has telling the truth to
emerged that each other’s face,
disagree and discuss,
The regeneration of the political class
The renewal of leadership is at the very core
foreshadows even what the bosses of Raúl’s legacy. Raúl himself has put on the
the new say” and “banish lies
and deceit from the
table a rule without precedent (“to limit to a
maximum of two consecutive terms of five years
model. behavior of officials
on every level”.
the holding of principal political and state posts”)
that has to await a constitutional reform for its
Nor are there establishment. However, the application of this
any untouchable rule, in fact, has already begun.
documents or plans. The 17-member Politburo of the PCC that
“The program of the emerged from the 7th Congress is the first whose
revolution must be updated every five years in members occupying professional positions— in
order to always respond to the true interests of defense, economy, foreign policy, public health,
the people”. It must not be read as “a completely science and technology— exceed the number
finished work, nor through a static or dogmatic of career politicians. Among the professional
prism”, but rather as “a guide to continue politicians (eight), five come from leadership
advancing in the reforms of the system”, including positions in the provinces, and three entered the
the conceptualization of socialism itself. “This Politburo under Raúl. This pattern that channels
way, the permanent perfecting and deepening of provincial PCC and assembly leaders to the
highest national level is
also part of his legacy.
Although some
“political observers”
dedicate themselves
to predicting the
“generational change after
Raúl” for April 2018, it
has already occurred in
plain sight. In 2016, the
average age of the PCC
Central Committee was
reduced from 59 to 54,
and the relative 4
 Raúl's legacy (4)
Cuba Standard Monthly

representation of and — to a lesser extent — from education.

women and non- In this new order in progress, where the
The white members rose.
In the institution
replacements are already governing and whose
main parameters are established, Raúl’s legacy
replacements in charge of day-to-
day governing, the
is undergoing its trial by fire. The lessons of
lucidity and determination inscribed in his
are already Council of Ministers, leadership, his presence and backing for the new
governing only four members
are age 80 and
government, are factors difficult to exaggerate, as
well as his contribution to an expected reformed
and the main older, and the age magna carta that may last and be respected by
median is between his inheritors. Even so, the challenges to build
parameters
35
56 and 60 years. this democratic socialism are by no means
are In other words,
more than half of
smaller. To put it in the founding fathers´ terms,
a sense of the historic moment [Fidel, 2015], and
established. the ministries and interpreting the interests and desires of the people
central institutions [Che, 1965] are required.
are run by persons Nothing more, nothing less.
younger than 60, coming in equal parts from the
Party leadership, state economy and armed forces, Havana, Dec. 31, 2017 
 Bookshelf
Cuba Standard Monthly
36
James Clifford Kent
Aesthetics and the
Revolutionary City
Palgrave Macmillan
London
Hardcover
$122.62
 Coming out in July:
This photography-based
book explores alternative
ways of understanding
Havana, providing a vision
of how and why we see the
city as we do and evaluates
the ways in which images
of Havana have been (mis)
constructed in the global
imaginary.
Bringing out interactions
and tensions between real
and imaginary spaces,
it examines the political
implications of unique
spatial and metaphorical
representations of the city
and explores the crucial
role that image-makers
and cultural producers
have played in the global
perception of Havana
through photography,
material culture and
documentary film.
Ramiro Fernández Heidi Hollinger (photog.)
Cuba Then.
300 Reasons to Love
Revised and Expanded
Havana.
Monacelli Press
New York Juniper Publishing
Hardcover, 320 pages Ontario, Cal.
$37 Paperback, 288 pages
$13.89
 Photographer
 ThisHeidiU.S.-
Hollinger
edited bookfirst—travelled
seven ofto
Havana in 1988
its chapter wereand has by
written been
returning often for —
Cuban economists almost
tries 30
years.
In this book, she introduces
you to the peanut vendor,
 Following the first
to Cuban women draped
edition of Cuba Then
in colors and standing in
(2014), this revised
doorways, and to barefoot
and expanded edition
children playing soccer in
introduces dozens of new
public squares. She captures
images of Cuba, past and
the beauty of the Baroque
present.
and Spanish Colonial
architecture, the vibrancy of
With 50 new vintage
Cuban music, the country’s
photographs and pieces
new cuisine, the rooftop
of ephemera from the
terraces, the thrill of getting
collection of Ramiro
around by almendrón, and
Fernández, the most
much more.
extensive archive of Cuban
photography outside the
island, this is a tribute
to the lost eras of style,
glamor, ebullience, intrigue,
and upheaval. The more
than 300 images include
aristocratic race-car
drivers, movie stars and
showgirls, gangsters, spies,
and everyday folk. Much
of Fernández's collection
is little seen and never
published, including unique
prints of Castro riding on
a public bus and of Heinz
Lüning, the Nazi spy who
inspired Graham Greene's
Our Man in Havana. The
book features a foreword
by poet Richard Blanco.

CALENDAR
OF EVENTS
Cuba Standard Monthly
Ja n . 2 9
Cuba Media Day — U.S. travel
industry executives and Cuban
tourism officials try to set the record
straight, amid confusing signals from
Washington and post Hurricane
Irma. Meliã Cohiba, Havana. RSVP via
tom@insightcuba.com
37
Ja n . 3 0 - F e b. 1
Energías Renovables —
Renewable energy fair organized
by Fira Barcelona, Pabexpo Havana,
http://www.firacuba.com/es/energias-
renovables
http://www.firacuba.com/es/
energias-renovables
Ja n . 3 0 - F e b. 1
Securtec Cuba — Security and
emergency technology. Pabexpo
Havana, http://www.firacuba.com/es/
securtec-cuba
F e b. 27- M a r. 3
20th Habanos Festival — The
annual highlight for fans of Cuban
premium cigars. Venues throughout
Havana. (537) 2040513 ext. 565,
ddifurniao@habanos.cu, www.http://
www.festivaldelhabano.com
M a r. 1 9 -2 3
Informática 2018 — Cuba's largest
convention and fair on information
technology. Palacio de Convenciones
and Pabexpo, Havana. (53) 78828504,
informaticahabana@mincom.gob.cu,
www.informaticahabana.cu
April 3-6
Fecons 2018 — Construction
industry fair organized by Fira
Barcelona. Pabexpo, Havana. http://
www.firacuba.com
A p r i l 2 3 -27
Salud Para Todos — Fair and
conference about healthcare and
medical technology. Pabexpo,
If your organization is sponsoring an upcoming
event, please let our readers know!
Send details to Cuba Standard Monthly at
johanneswerner@cubastandard.com
Havana. http://promociondeeventos.
sld.cu/saludparatodos2018
A p r i l 25 -27
HostelCuba — International salon
for hotel management, gastronomy
UPGRADE!
and tourism services in Cuba and the
cuba
Caribbean. Pabexpo, Havana. http://
www.firacuba.com/es/hostelcuba
M a y 2-5
standard
FITCuba 2018 — Cuba's annual
tourism fair. Cayo Santa María, Villa
Economic
Clara. www.fitcuba.com/en Trend Report
M a y 2 2-24 Add it to your
Alimentos 2.0 — International fair subscription
of food, drinks, and food technology. for just $400
Pabexpo, Havana. http://www.
firacuba.com/es/feria-de-alimentos- Go to
cuba www.cubastandard.com
or ask
johanneswerner@cubastandard.com
J u n e 1 8 -2 2 to find out how.
CubaIndustria 2018
— Convention and fair for
manufacturing industries. ExpoCuba,
Havana. http://www.cubaindustria.cu/
index.php/evento-cubaindustria
cuba standard
monthly
O c t 2 9 - N o v.-2
FIHAV 2018 — Cuba's largest
EDITOR
Johannes Werner
annual trade fair, ExpoCuba, Havana. WASHINGTON CORRESPONDENT
http://www.feriahavana.com Ana Radelat
POLITICAL ANALYST
Domingo Amuchastegui
FEATURE WRITERS
Vito Echevarria
Doreen Hemlock
CARTOGRAPHER
Armando H. Portela
Cuba Standard Monthly (ISSN 1073-7715),
founded in 1993, is published by Cuba Media
LLC, PO Box 566346, Miami, FL 33256-6346.
Annual subscription via PDF delivery: $398.
Please visit www.cubastandard.com to learn
more about our other information services.
To order a subscription, call Cuba Standard
at (941) 702-8614, or send an e-mail to
johanneswerner@cubastandard.com.
Contents may not be distributed by any
means without prior written permission of the
publisher. Cuba Media LLC grants authorization
to photocopy items for internal or personal use,
provided the appropriate fee is paid directly to
Copyright Clearance Center, 222 Rosewood
Drive, Danvers, MA 01923. For details, visit
www.copyright.com.