All posts by Jorge Costa

Nestle, Cuba lay first stone for $55 million coffee and biscuit factory


HAVANA (Reuters) – Cuba and Swiss firm Nestle (NESN.S) on Tuesday laid the first stone of a $55 million coffee and biscuits factory joint venture in the Mariel special development zone, the latest major foreign investment in the Communist-run island.

Nescor is Cuba’s third joint venture with Nestle and reflects President Raul Castro’s drive to attract international capital to help update the Soviet-style command economy and stimulate growth.

Cuba created the zone around the Mariel port just west of Havana four years ago, offering companies significant tax and customs breaks. Its aim to replace imports with Made in Cuba goods has become all the more pressing because aid from socialist ally Venezuela is falling, resulting in a cash crunch.

Nestle Vice President Laurent Freixe said in an interview after the symbolic stone-laying ceremony that negotiations with Cuban partner Coralsa and Mariel authorities had taken just 18 months, a “record speed”.

The factory would be operating at the end of 2019 manufacturing coffee products, said Freixe, head of Nestle’s Americas division. Biscuits and other culinary products would come later. The company exports goods to Cuba and the other two joint ventures are one producing ice cream and the other bottled water and other beverages.

Nescor goods would be destined both for the Cuban market and tourists visiting Cuba, while it could eventually also export Cuban coffee, Freixe said.

Nestle last year already exported Cuban coffee as a limited “Cafecito de Cuba” edition of Nespresso single-use brewer pods, including to the United States.

“It sold at an impressive speed,” said Freixe. “Within a few days that line was sold out, which shows the potential.”

Before being able to export Cuban coffee, Nestle would first need to help Cuba increase its harvest, Freixe said, which has steadily declined since the 1959 revolution.

The new factory could double Nestle’s turnover in the country over the medium term from $135 million currently, he said.

So far, Cuba has approved 31 projects for the Mariel zone including nine with multinationals, Director Ana Teresa Igarza said at the ceremony.

There was no longer the same flurry of business interest in the zone as when it was created but the interest that remained was more serious, she said.

Mariel was on the list of Cuban entities that the administration of U.S. President Donald Trump banned U.S. firms from doing business with.

Just one U.S. company, Rimco, the Puerto Rican dealer for heavy machine maker Caterpillar (CAT.N), has signed a deal with Mariel to open up shop there, getting approval just on time before the new U.S. regulations were issued earlier this month.

Igarza declined comment on whether Mariel continued to negotiate with other U.S. companies but said it would be open to doing so.

Cuba had the lowest election turnout in four decades. Is the government losing its grip?

The Miami Herald

The voter turnout for Cuba’s recent elections would be considered massive most anywhere. But in a country under communist rule for nearly six decades, Sunday’s unprecedented drop in the number of ballots cast shattered the illusion of unanimity at a time when the country faces a complex generational transition of power.

The 85.94 percent turnout for island-wide municipal elections was the lowest participation since the late Fidel Castro imposed a socialist version of elections in 1976.

Another 8.19 percent of the votes were left blank or annulled, according to official numbers made public on Monday by the president of the National Electoral Commission (NEC), Alina Balseiro. That represents more than 20 percent of the population who didn’t care enough to vote or rejected the government-sanctioned candidates.

“The results show that they are losing their grip, that they are not as strong as they used to be,” Cuban opposition activist Ailer González said.

Sunday’s round of balloting was for 12,515 members of 168 municipal People’s Power Assemblies, Cuba’s version of local governments. The process will conclude in February when the newly elected members of the National Assembly of People’s Power select the head of the Councils of Ministers and State.

Election results came in late on Monday and stories on the outcome were quickly buried in the state-controlled press.

But the lower-than-expected turnout was clear by 5 p.m. Sunday. The NEC reported that 82.5 percent of the more than 8.8 million registered voters had cast ballots and extended the voting period for one hour, to 7 p.m., because of “intense rains in central and eastern Cuba,” according to the official Communist Party newspaper Granma.

A turnout of nearly 86 percent would be extremely high for any Western democracy. But in Cuba turnout usually hit 97-98 percent during the 1980s and 90s, and was slightly lower in the 2000s.

Voter turnout started to noticeably drop after 2010, the first elections after Raúl Castro officially succeeded his older brother Fidel, and hit 90 percent in the last election in 2015.

The real numbers this year may be even lower than what was announced, according to opposition activists who have long questioned the official statistics made public by the NEC.

“Their trustworthiness is zero for me. It’s naive to believe that they are going to honorably count the results,” said dissident Antonio Rodiles. Turnout is usually very high, he added, “because even though people know that it’s theater, they also know that they keep track of who votes.”

Among the tactics regularly used to get voters to precincts are home visits during election day to ask people why they have not yet voted, Rodiles added. “They often use children, the so-called Pioneers, who also deliver ballots to the homes” of disabled voters.

Turnout in the island’s second largest city, Santiago de Cuba, was “very low,” José Daniel Ferrer, head of the dissident Cuban Patriotic Union, said in a video posted on the internet Sunday. Communist party militants “were desperately going house to house in the late afternoon looking for voters who refused to go to the polls.”

The weekend elections had been postponed for a month because of disruptions caused by Hurricane Irma. The results indicate that the successor to Raúl Castro, who has promised to retire in February, will inherit a country very different from the one ruled since 1959 by the Castro brothers.

Granma published a photo of Raúl Castro casting his vote Sunday morning, but the official comments to the news media came from Vice President Miguel Díaz-Canel, another hint that he is Castro’s most likely successor.

The future presidents of Cuba “will always defend the Revolution and will rise from among the people. They will be elected by the people,” Díaz-Canel told journalists.

“Are people forced to vote or do they take on a duty, take on an expression of continuity” in the socialist system? he asked. “I believe in continuity and I am certain that we will always have continuity.”

As in past years, Rodiles said, the government launched an intense campaign to get out the vote that included posters, TV announcements and “information linking the balloting to the regime’s continuation.” The state’s news media monopoly highlighted the fact that Sunday came one year and one day after Fidel Castro’s death.

Dissidents reported earlier that authorities had blocked more than 100 opposition activists linked to the #Otro18 campaign from running in the municipal elections.

A group also linked to #Otro18, the Citizen Observers of Electoral Processes, said the balloting was normal but alleged some “incidents” that damaged “the transparency of the process.”

Authorities blocked eight of its members from monitoring the counting of the ballots and kept about 20 voters from casting ballots around the country.

“There’s also a report that in one polling place … in Santiago de Cuba, a group of elderly voters were coerced to vote for one of the two candidates,” the group reported.

The organization said it deployed more than 270 observers in 13 of the 15 provinces — a small number for the more than 24,000 polling centers around the country — and added that its information “came from polling places closely monitored and with verifiable information.”

Cuba does not allow international observers to monitor its elections.

Ferrer said several members of his group were detained Sunday to block their plans to monitor vote counts. Opposition activist Rosa María Payá alleged similar harassment against members of Cuba Decide, a campaign demanding a plebiscite on the island’s political system.

Payá, Ferrer and other activists have been urging voters to deface their ballots or write in “Cuba Decide” or “plebiscite.” Several dissidents turned up at polling stations Sunday to request that blank or annulled votes be tallied as part of the total votes cast. The majority needed for election is now based on the number of valid votes cast. All the requests were denied.

“Today proved the Cuban electoral farce,” Payá said in a video recorded in Havana. “It proved the regime is afraid to count on the support of all Cubans.”

Despite a growing sense of political apathy and discontent in the country, González believes that the results won’t create a crisis for the Castro government. “They’ll use it to create an apparent sense of credibility and that the island is a normal country. In no country do 100 percent of people vote.”

Nicolas Maduro Doesn’t Really Control Venezuela

Article pubished in The Atlantic by Moisés Naím

It’s hard to pick the Venezuelan president’s greatest flaw. Which is more serious: his cruel indifference to the suffering of his people, or his brutal autocratic behavior? Which is more outrageous: his immense ignorance or the fact that he dances on television while his henchmen murder defenseless young protesters in the streets? The list of Nicolas Maduro’s failings is long, and Venezuelans know it; over 80 percent of them oppose him. And it’s not just Venezuelans. The rest of the world has also discovered—at last!—his despotic, corrupt, and inept character.

And yet … Maduro doesn’t really matter. He is simply a useful idiot, the puppet of those who really control Venezuela: the Cubans, the drug traffickers, and Hugo Chavez’s political heirs. Those three groups effectively function as criminal cartels, and have co-opted the armed forces into their service; this is how it is possible that every day we see men in uniform willing to massacre their own people in order to keep Venezuela’s criminal oligarchy in power.

When Nicolas Maduro Was Dictator for a Day

The most important component of this oligarchy is the Cuban regime. Three years ago I wrote: “Venezuelan aid is indispensable to prevent the Cuban economy from collapsing. Having a government in Caracas that maintains such aid is a vital objective of the Cuban State. And Cuba has accumulated decades of experience, knowledge, and contacts that allow it to operate internationally with great efficacy and, when necessary, in a way that is almost invisible.” Havana’s priority remains controlling and plundering Venezuela. The supply of oil from Venezuela to Cuba is no longer as steady as it once was, due to the production troubles of the state-run oil company PDVSA. But the flows, while intermittent, have continued. Moreover, Cuban companies are the intermediaries of choice for many critical imports of foods and medicines to Venezuela.

And Cuba’s leaders know how to keep their Venezuelan allies in power—namely by exporting their own successful military-control strategies to Venezuela. Cubans have perfected the techniques of the police state at home: constant but selective repression, extortion and bribery, espionage, and persecution. Above all, the Cuban regime knows how to protect itself from a military coup: That is the main threat to any dictatorship, so controlling the armed forces is an indispensable requirement for a self-respecting dictator.

The Venezuelan regime has adopted these tactics. The effects are obvious: Officers who do not sympathize with the Maduro regime have been neutralized, while those who support it have gotten rich. It is no coincidence that there are more generals in Venezuela today than in NATO or the United States. Or that many high-ranking officials are exiled, imprisoned, or killed. That is why the hope that a group of patriotic, democratic, and honest officers will defend the nation, and not those who plunder it, has so far been only a hope.

But, in addition, Cuba—in stumbling across Venezuela—happened upon one of the most unprecedented gifts in the annals of geopolitics: Maduro’s predecessor Hugo Chavez, the president of a petro state who happily invited a bankrupt dictatorship to exert enormous influence in some of his country’s vital functions, from elections, economic policy, and politics to, of course, military and citizen surveillance. Cuban “advisers” were deployed at critical government agencies and soon started vetoing the decisions of the Venezuelan officials and in some instances imposing their views. The Venezuelans who resisted them were transferred or fired. The surprising influence that Cuba gained in Venezuela was essentially due to the close political alliance and deep emotional attachment that Chavez developed toward Fidel Castro. But even today, more than four years after Chavez’s death, the Venezuelan government makes few important decisions that are not stealthily influenced by the Cuban regime.

Another important player in today’s Venezuela is the drug traffickers, whose power is also a constraint on Maduro. Venezuela is one of the main drug routes to the U.S. and Europe. This status is worth billions of dollars, and the country is home to a vast network of people and organizations that control the illicit trade and the enormous amount of money it generates. According to U.S. officials, one such person is Vice President Tareck El Aissami, and so are a large number of military officers and other relatives and members of the ruling oligarchy.

This oligarchy, made up of Chavez’s political heirs, is the third major component of the real power in Venezuela. Of course, Maduro; his wife, Cilia Flores; and many of his relatives and associates are part of that oligarchy. In this elite there are different “families,” “cartels,” and groups that compete for influence on government decisions, for political appointments, and for the control of illicit markets—ranging from human trafficking to money laundering. The smuggling and selling of food, medicines, and all kinds of products are just a few of the many other corrupt activities that enrich the Maduro oligarchy as well as the Cubans, the military, and their civilian accomplices.

Getting rid of Maduro is necessary. But it’s not enough as long as three criminal cartels—who are intermingled in business, corruption, and the exercise of power—continue to control Venezuela.

View article at The Atlantic

Trump’s Talk of ‘Military Option’ in Venezuela May Bolster Maduro’s Hand

The thought of military intervention in Venezuela probably took many Americans by surprise when it was floated on Friday by President Trump. But in Venezuela, it was a threat that would have sounded familiar, as if the words had been scripted by the government itself.

For years, Venezuela’s leaders have warned of an impending danger from the United States. They claimed American spy planes were flying close to the border. They said United States diplomats had assassination plans for Venezuelan leaders. And at times of domestic crisis, the country’s top officials have said that Washington is planning to invade.

Few besides the most fervent government loyalists ever saw truth in the plots. But Mr. Trump’s suggestion that he was considering a “military option” to deal with the crisis in Venezuela may well breathe life into some of the government’s more wild claims.

“Maduro’s theory of war will be much more concrete and believable,” said David Smilde, an analyst at the Washington Office on Latin America, referring to Nicolás Maduro, Venezuela’s leftist president. “This will undoubtedly galvanize his coalition.”

Mr. Trump, speaking with reporters on Friday after a meeting with Rex W. Tillerson, the secretary of state, said for the first time that he might use the American military to intervene in Venezuela’s deepening unrest, which has left more than 120 dead this year.

“We are all over the world and we have troops all over the world in places that are very, very far away,” Mr. Trump said. “Venezuela is not very far away and the people are suffering, and they are dying. We have many options for Venezuela, including a possible military option if necessary.”

Venezuela’s defense minister, Vladimir Padrino López, called the statement an “act of madness.”

The foreign ministry said Mr. Trump’s “bellicose” and “reckless” remarks were intended “to drag Latin America and the Caribbean into a conflict that would permanently alter the stability, peace and security in our region.”

The current tensions stem from a plan by Mr. Maduro to consolidate power in the country. On July 30, he held a vote to install a new body, called the Constituent Assembly, that would give his ruling leftist party the right to rule the country unopposed for up to two years while rewriting the Constitution.

As the vote approached, Mr. Trump warned repeatedly that he would not tolerate the move, and he issued sanctions against members of Mr. Maduro’s government. When the vote occurred, the White House imposed sanctions on Mr. Maduro and on Friday refused to take a call Mr. Maduro had wanted to place with Mr. Trump.

Few analysts believe the United States has any real intention of using its military against Venezuela.

And while the president may have intended his remarks as a warning meant to restrain the Venezuelan government, analysts said, they could have the opposite effect, strengthening Mr. Maduro’s hand as he cracks down on dissent and blames Washington for his country’s economic and domestic strife.

“These are empty threats,” said Shannon K. O’Neil, a Latin America analyst at the Council on Foreign Relations. “And since they are empty threats, Maduro faces no new consequences by taking a tough stand, both rhetorically and against the opposition.”
Continue reading at New York Times

We’re not impressed

CubaSaturday, Pope Francis arrives in Cuba. Last Friday, Cuba announced it’s pardoning 3,522 prisoners. Cause and effect in action — and that’s about all this gesture from the Cuban government likely means.

No need to speculate on whether this is a real sign that after 56 years the Castro regime is finally easing its grip on 11 million Cubans — as is the desired result following the U.S. announcement in December of thawing diplomatic ties with the island. That’s just not how dictatorships work.

It’s well known that Cuba empties and fills its jails according to what’s politically expedient — and makes it look like a benevolent government to the outside world, especially just before the international spotlight shines on the island.

Those set to be pardoned are men and women, young and old or infirm who are first-time offenders who committed nonviolent crimes. But none of the regime’s thousands of political prisoners are among them. We hope the pope has something to say about that. After all, recent figures show arrests and detentions on the island continue unabated.

It’s not the first time Cuba has made a show of releasing prisoners — a favorite bargaining tool of the Castro brothers.

In 1978, Fidel Castro released almost 3,800 political prisoners in a deal with President Jimmy Carter’s administration. Before that, of course, there was a deal brokered for the release of the Cubans captured during the failed Bay of Pigs invasion. Cuba got $10 million in medical supplies.

And twice before, in advance of papal visits, the Cuban government has released prisoners, all for show before filling the jails again after the pope’s plane went wheels up.

In 1998, Fidel Castro released 300 prisoners ahead of Pope John Paul II’s visit. And in 2011, Raúl Castro released nearly 3,100 ahead of Pope Benedict XVI’s visit.

A month after the U.S. announced it would reestablish diplomatic ties with the island, Cuba, as a show of good will, released 53 dissidents. Many of the prisoners, it turned out, had nearly served their sentences or been released months earlier. In other words, it was an empty gesture.

But those who know the machinations of the Cuban government think the latest prisoner-release announcement was moved up to distract the international press. Thursday, Castro’s partner in repression, Venezuela, handed renowned democracy leader, Leopoldo López, a 13-year prison sentence — an outrage for a political dissident guilty of no real crime, just that of opposing President Nicolás Maduro’s regime. (see related article)

International headlines Friday should have been about Mr. López’s sentencing, instead they trumpeted how nice Cuba is to be releasing prisoners. Well-played.

What Cuba really wants is economic growth. The regime wants to open its doors to U.S. business, investment and tourism as China and Vietnam have done. What it doesn’t want is its citizens speaking out against the government.

But it’s incumbent upon the United States to make clear that Cuba can’t have the former without eliminating its restrictions on the latter; without freeing its political prisoners, incarcerated on trumped-up charges and tried in kangaroo courts.

U.S. diplomacy hinges on the belief that normalizing diplomatic ties and trade with nations like Cuba will change everything. But that has yet to be seen.

Cuba must do more than these fake gestures of prisoner releases and offer up real, and permanent, human-rights reform.

Editorial – The Miami Herald

What You Should Know About Doing Business With Cuba

At a glance, Cuba may seem like a lucrative opportunity for U.S. small businesses. But is it? Our expert reveals what you should know about the reality vs. dream of trade with Cuba.

You may be wondering whether this is a good time for you to consider the possibility of investing in Cuba. Many analysts have arrived at the conclusion that Cuba represents a lucrative opportunity for U.S. businesses because:

• Cuba is home to more than 11 million consumers with nearly 60 years of pent-up demand for U.S. goods and services,

• The Port of Havana is only 198 nautical miles from the Port of Miami, facilitating trade,

• Millions of U.S. tourists will need travel-related services for their planned vacations to Cuba, and

• European companies have already paved the way for foreign investment and business on the island.On the surface, these factors appear to present a compelling case for doing business in Cuba.

However, a deeper analysis paints a different picture. I have studied the Cuban economy for more than a decade, engaging with Cuban economists, small- business owners, struggling entrepreneurs and other embers of Cuba’s re-emerging and fragile civil society. My family emigrated from Cuba in the 1960s, fleeing Fidel Castro’s communist revolution. This seeded a lifelong interest in all things Cuba, especially on how to effectively and peacefully achieve freedom and self-determination for the Cuban people. Continue reading What You Should Know About Doing Business With Cuba