CUBA CENTRAL NEWS BRIEF: Cuentapropismo en Cuba

Yamina Vicente, a former professor of economics at the University of Havana who now owns a party planning and decorations business in Cuba called Decorazón, is this week’s featured contributor to the Cuba Central News Brief.

 Yamina will join other Cuban entrepreneurs next week in meetings with U.S. policymakers, recommending ways for U.S. policy to support the Cuban private sector. In 2013, Yamina traveled to Washington to participate in CDA’s conference on Cuba’s new economy, and in December 2016, she was one of more than 100 signatories on a letter from Cuban entrepreneurs to then-President-elect Donald Trump urging him to continue building U.S.-Cuba ties.

Para leer este ensayo en español, haga click aquí.

Just a few decades ago, Cuba’s private sector was nonexistent. Entrepreneurship had been all but forgotten. Some years back, as a result of the economic crisis of the 1990s, Cuba’s government began to revive a number of self-employment activities that relieved the Cuban economy by generating employment and income sources for the population. However, this space remained concentrated in just a few types of businesses until the last decade, when the range of legalized activities was expanded to include 211 types of business licenses. Consequently, today we have private taxi drivers, stores, beauty salons, restaurants, gyms, designers, event planners, and more.

This change, which some may consider trivial, inspired hopes and dreams. Many young Cubans whose first choice would have been emigration could now choose family projects within Cuba. The growth of this sector expanded creativity and aesthetics, revived the internal economy, built small chains and productive linkages among cuentapropistas (entrepreneurs), produced community and sustainable development projects, and diversified options for both domestic and foreign clients. Many of the small privately owned businesses served as stimuli for state-run centers. The benefits of the establishment of the private sector in Cuba are innumerable.

Many of the successful businesses in the country are directly tied to the reestablishment of U.S.-Cuba relations. The growth of U.S. travel, and the improvement of telecommunications that this process brought with it, have stimulated the development of the incipient private sector.

Today, there are nearly half a million self-employed workers in Cuba, with significant female representation – people who decided to risk what little they had in pursuit of a dream. A major portion of the clientele for large restaurants, galleries, and homes for rent are Americans. A reversal of achievements in relations would be disastrous for them. But they would not be the only ones affected; the businesses that are directed toward domestic clients would also feel a negative impact, though indirectly. Many of the clients who commonly look to buy these products or services are family members of cuentapropistas, and reducing their income would lessen demand. Without a doubt, having less liquidity in the general population would affect small businesses in general.

For the Cuban cuentapropistas and their families who depend on their businesses, a reversal of U.S. policy toward Cuba would not only represent a “stop,” but a “step backward” in the work they dreamed of, and with much effort, built, for their children.

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This week, in Cuba news…

U.S.-Cuba Relations

House Appropriations Committee releases State Department foreign operations bill

On Tuesday, the House Committee on Appropriations released its Fiscal Year 2018 State and Foreign Operations Appropriations Bill to fund the State Department, including the U.S. Agency for International Development (USAID). As in the bill approved by the Committee in FY2017, this bill includes provisions to set funding for the U.S. Embassy in Havana equal to pre-December 17, 2014 levels and to increase funding for so-called “democracy promotion” programs on the island. The bill would provide $30 million for the stated intent of promoting democracy and strengthening civil society in Cuba, an increase of $10 million over current levels.

Neither of these provisions were ultimately included in the final FY2017 Consolidated Appropriations Act that became law in May. In recent years, individual appropriations bills like this one are typically debated in the House, negotiated with Senate counterparts, and then consolidated in a single government-wide spending package.

The White House’s budget proposal did not request funds for USAID Cuba programming and requested a $4.5 million reduction for the Broadcasting Board of Governors’ (BBG) Office of Cuba Broadcasting, which produces Radio and TV Martí. The House version of the FY2018 bill would cut BBG funding by $7 million; it does not specify the allotment for Cuba programs.

Interim chief of mission named for U.S. Embassy in Havana

Deputy Chief of Mission Scott Hamilton is now serving as the chargé d’affaires ad interim of its embassy in Havana following the conclusion of former chargé d’affaires Ambassador Jeffrey DeLaurentis’ three-year term as head of the post, the Miami Herald reports. Mr. Hamilton joined the embassy in 2015 as deputy chief of mission. Ambassadors and foreign service officers traditionally rotate posts every two to three years.

President Obama nominated Amb. DeLaurentis (he retains the title from a previous post) as ambassador to Cuba in September 2016, though the Senate did not consider his nomination.

Attorney General Sessions leads delegation of Trump administration officials to Guantánamo Bay

Attorney General Jeff Sessions, Director of National Intelligence Dan Coats, Deputy Attorney General Rod Rosenstein, and Thomas Bossert, assistant to the President for homeland security and counterterrorism, visited the U.S. detention facility at Guantánamo Bay on July 7, becoming the highest-ranking Trump administration officials to publicly tour the prison, the New York Times reports. Mr. Sessions is the most senior U.S. official to visit the facility since then-Attorney General Eric Holder visited in 2009.

Both President Trump and Mr. Sessions have expressed support for increasing the number of prisoners held at Guantánamo; the Obama administration reduced the number of prisoners from 242 to 41 across its eight years in office. President Obama advocated for closing the detention facility at Guantánamo, and issued an Executive Order mandating as much two days after his inauguration in 2009, though his administration supported maintaining the U.S. naval base. Congress has prohibited a full closure of the detention facility, traditionally through language in the National Defense Authorization Act (NDAA) barring the use of government funds to transfer prisoners. The current text of the NDAA for FY2018, which was passed by the House Armed Services Committee in late June and is being debated on the House floor this week, carries similar stipulations, as did the final FY2017 NDAA. Last year’s bill also prohibited the secretary of defense from holding joint military exercises or security conferences with Cuba unless it met a litany of requirements, including no longer demanding that the U.S. turn over its base at Guantánamo.

Cuba’s government rejects the U.S. presence at Guantánamo, arguing that it violates Cuba’s sovereignty. Cuba’s President Raúl Castro has previously stated that relations cannot be fully normalized until the U.S. returns the property.

Editor’s note: Per President Trump’s National Security Memorandum on Cuba policy, relevant agencies are to begin the process of drafting new regulations by July 16. You can find the Cuba Central Team’s comprehensive overview of what we do and don’t know about the President’s Cuba policy at this link.

In Cuba

UN human rights expert visits Cuba

Virginia Dandan, an independent expert on human rights for the United Nations Human Rights Council (UNHRC), traveled to Cuba Monday for a five-day visit to evaluate the country’s approach to human rights issues and “how it is working for international solidarity,” according to an official UN statement. A statement from Cuba’s Ministry of Foreign Relations stated that Ms. Dandan visited at the invitation of Cuba’s government.

According to the UN statement, the visit served to assess how Cuba “address[es] global challenges and promot[es] human rights,” as well as to examine the country’s “humanitarian responses to disasters” and “work to deliver a human rights-based approach to international cooperation.” Ms. Dandan met with both civil society and government representatives during her trip, including Bruno Rodríguez, Cuba’s Minister of Foreign Affairs, and officials from Cuba’s Union of Writers and Artists, the Federation of Cuban Women, and the University of Havana, reports the Associated Press.

Ms. Dandan delivered preliminary results of her findings in a press conference on July 14. (A full transcript of her remarks was not available at press time.) She will present a full report of her observations and recommendations to the UNHRC in June 2018.

In April, Dr. Maria Grazia Giammarinaro, a United Nations Special Rapporteur on trafficking in persons, visited Cuba to examine human trafficking and prevention efforts on the island. Dr. Giammarinaro presented her initial findings at a press conference in Havana, stating that Cuba’s social welfare system reduces the country’s vulnerability to human trafficking, but that its legal framework for preventing and prosecuting trafficking needs improvement; her complete findings and recommendations will also be featured in an official report to the UNHRC next year.

Cuba expects drop in nickel production in 2017

Cuba expects to produce 54,500 tons of nickel and cobalt sulfides in 2017, down from 56,000 tons in 2016, according to a report on state television, Reuters reports. Production of nickel, one of Cuba’s largest exports, has dropped precipitously in recent years as a result of the high energy costs of operating plants and the global decline in nickel prices. According to data from Cuba’s National Office of Statistics, the country produced over 70,000 tons of nickel as recently as 2011.

As Reuters reported in December, the drop in Cuba’s GDP last year – the first such reduction since 1993 – was partly attributable to decreased revenue from nickel exports.

Cuba’s Foreign Relations

Cuba’s oil imports from Venezuela to Cuba drop 13 percent in first half of 2017

Cuba has imported an average 72,348 barrels per day of crude and refined oil products from Venezuela so far in 2017, 13 percent less than imports in the first half of 2016, and down nearly 30 percent compared with the same period in 2015, Reuters reports.

Cuba’s imports of oil products from Venezuela peaked at 115,000 barrels per day in 2008, but have steadily declined since, as falling oil prices and low production have forced Venezuela to cut back exports. Since 2000, Cuba has depended on an agreement to purchase oil from Venezuela at a subsidized rate in exchange for services such as placing Cuban doctors in underserved areas. The drop in oil shipments has taken a toll on Cuba’s economy. In March, PDVSA, Venezuela’s state oil company, resumed exports of the Mesa 30 light crude oil to Cuba’s Cienfuegos refinery after an eight-month freeze on shipments, but as Reuters reported this week, the current rate is not enough to fully restart the refinery. According to a May 2017 United Nations report, Cuba’s exports of refined oil products have dropped 97 percent since 2013; Cuba’s refineries mostly process Venezuelan light oil. Also in March, Cuba’s state oil company CUPET announced it would restrict the sale of premium gasoline for the month of April due to fuel shortages, allowing sales only “for cash and to tourists, until the inventory is depleted.”

The effects of Venezuela’s economic crisis have caused Cuba to look elsewhere for its energy consumption needs. In May, Cuba received its first shipment of refined oil under a new agreement with Rosneft, Russia’s state oil company, to purchase nearly 1.9 million barrels of oil and diesel fuel. The deal marked the largest agreement between the two countries since the fall of the Soviet Union, prior to which Moscow supplied the majority of Cuba’s energy through subsidized oil sales.

What We’re Reading

A Retreat on Cuba Policy, Vicki Huddleston, New York Times

Vicki Huddleston, former principal officer of the U.S. Interests Section in Havana, writes in the New York Times that President Trump’s new Cuba policy has already served to “stop the momentum toward a better relationship between our countries.”

Has Travel to Cuba Been Trumped? A ‘Nation’ Forum, Peter Kornbluh, The Nation

Four Cuba travel experts speak with Peter Kornbluh, director of the Cuba Documentation Project at the National Security Archive, in The Nation about the chilling effect of President Trump’s policy and rhetoric.

Time to end agricultural trade restrictions with Cuba, Paul Johnson and Arturo Lopez-Levy, The Hill

Paul Johnson, president of Chicago Foods International, and Arturo López-Levy, lecturer in the Department of Political Science at the University of Texas, Rio Grande Valley, write that restrictions on agricultural trade with Cuba are outdated and harmful to U.S. producers.

With materials scarce, Cuban designers master recycling chic, Sarah Marsh, Reuters

Reuters’ Sarah Marsh reports that some Cuban designers have drawn up creative solutions to overcome resource shortages.

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