Monthly Archives: January 2016

Venezuela is on the brink of a complete economic collapse


The Washington Post

The only question now is whether Venezuela’s government or economy will completely collapse first.

The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever. Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.

That’s not an easy thing to do when you have the largest oil reserves in the world, but Venezuela has managed it. How? Well, a combination of bad luck and worse policies. The first step was when Hugo Chávez’s socialist government started spending more money on the poor, with everything from two-cent gasoline to free housing. Now, there’s nothing wrong with that — in fact, it’s a good idea in general — but only as long as you actually, well, have the money to spend. And by 2005 or so, Venezuela didn’t.

Why not? The answer is that Chávez turned the state-owned oil company from being professionally run to being barely run. People who knew what they were doing were replaced with people who were loyal to the regime, and profits came out but new investment didn’t go in. That last part was particularly bad, because Venezuela’s extra-heavy crude needs to be blended or refined — neither of which is cheap — before it can be sold. So Venezuela just hasn’t been able to churn out as much oil as it used to without upgraded or even maintained infrastructure. Specifically, oil production fell 25 percent between 1999 and 2013.

The rest is a familiar tale of fiscal woe. Even triple-digit oil prices, as Justin Fox points out, weren’t enough to keep Venezuela out of the red when it was spending more on its people but producing less crude. So it did what all poorly run states do when the money runs out: It printed some more. And by “some,” I mean a lot, a lot more. That, in turn, became more “a lots” than you can count once oil started collapsing in mid-2014. The result of all this money-printing, as you can see below, is that Venezuela’s currency has, by black market rates, lost 93 percent of its value in the past two years.

Now you might have noticed that I talked about Venezuela’s black market exchange rate. There’s a good reason for that. Venezuela’s government has tried to deny economic reality with price and currency controls. The idea was that it could stop inflation without having to stop printing money by telling businesses what they were allowed to charge, and then giving them dollars on cheap enough terms that they could actually afford to sell at those prices. The problem with that idea is that it’s not profitable for unsubsidized companies to stock their shelves, and not profitable enough for subsidized ones to do so either when they can just sell their dollars in the black market instead of using them to import things. That’s left Venezuela’s supermarkets without enough food, its breweries without enough hops to make beer, and its factories without enough pulp to produce toilet paper. The only thing Venezuela is well-supplied with are lines.

Although the government has even started rationing those, kicking people out of line based on the last digit of their national ID card.

And it’s only going to get worse. That’s because Socialist president Nicolás Maduro has changed the law so the opposition-controlled National Assembly can’t remove the central bank governor or appoint a new one. Not only that, but Maduro has picked someone who doesn’t even believe there’s such a thing as inflation to be the country’s economic czar. “When a person goes to a shop and finds that prices have gone up,” the new minister wrote, “they are not in the presence of ‘inflation,’ ” but rather “parasitic” businesses that are trying to push up profits as much as possible. According to this — let me be clear — “theory,” printing too much money never causes inflation. And so Venezuela will continue to do so. If past hyperinflations are any guide, this will keep going until Venezuela can’t even afford to run its printing presses anymore — unless Maduro gets kicked out first.

But for now, at least, a specter is haunting Venezuela — the specter of failed economic policies.

Daisy Penaloza: The U.S. should keep the Cuba embargo in place


Deseret News

Daisy Penaloza left communist Cuba on a U.S.- sponsored Freedom Flight In 1967 and currently resides in Bakersfield, California.

A year has elapsed since normalization talks were divulged between the United States and Cuba, and the prophetic words of Cuba’s dissidents reverberate within the current, grim reality of a nation in shackles. Pro-democracy activists “are totally against the easing of the embargo … the government will

have more access to technology and money that can be used against us,” declared Ángel Moya, a former political prisoner, one year ago.

Sonia Garro, a member of the Ladies in White, having served almost three years in prison at the time of her release, expressed: “A country that violates the human rights of its people shouldn’t have sanctions lifted. Here there is no freedom of speech, there is no freedom of anything. This will give them more leeway to continue operating with the same impunity that they have always operated with.”

On Sept. 25, 2015, Cuba’s foremost dissidents sent a letter to the U.S. Congress: “The lifting of the embargo, as proposed by the [Obama] administration will permit the old ruling elite to transfer their power to their political heirs and families, giving little recourse to the Cuban people in confronting this despotic power.”

Clamors for the embargo’s lifting persist despite the fulfillment of dissident and exile warnings that diplomatic recognition of the Castro regime would strengthen the oppressors and crush popular dissent. The removal of what little trade sanctions remain is legally and morally unjustified.

President Obama’s negotiations with the dictatorship were conducted sans the legitimizing presence of Cuba’s pro-democracy groups and civil society. The darkly covert negotiations were also in direct violation of U.S. law as outlined in the Cuban Liberty and Democratic Solidarity Act of 1996 (Helms-Burton Act). The embargo should not be lifted until the requisite conditions in the Helms-Burton Act are honored by the Castro regime.

Situating the embargo in its proper context, Cuban activist Rosa María Payá wisely observes: “The cruelest embargo, and the one that depends only on Cubans to maintain or eliminate it, is the one maintained by the Havana regime against the rights of our citizens.”

While contravening U.S. laws and basic diplomatic rules of engagement, Obama, for the past year, has been rewarding the intransigent dictatorship with undeserved unilateral concessions. In turn, Castro apparatchiks have indicated their steadfast refusal to concede not one “iota” or “millimeter” in favor of measures leading to true reconciliation.

Continue reading Daisy Penaloza: The U.S. should keep the Cuba embargo in place

Cuba Attacks Christians As Washington Liberalizes Economic Ties



En Español Martí Noticias

The Obama administration has continued its effort to expand contact between the U.S. and Cuba by easing restrictions on travel, exports, and export financing. Commerce Secretary Penny Pritzker spoke of “building a more open and mutually beneficial relationship.”

However, the administration expressed concern over Havana’s dismal human rights practices. Although Raul Castro’s government has continued economic reforms, it has maintained the Communist Party’s political stranglehold. Indeed, despite the warm reception given Pope Francis last fall, the regime has been on the attack against Cubans of faith.

In a new report the group Christian Solidarity Worldwide warned of “an unprecedented crackdown on churches across the denominational spectrum,” which has “fueled a spike in reported violations of freedom of religion or belief.” There were 220 specific violations of religious liberties in 2014, but 2300 last year, many of which “involved entire churches or, in the cases of arrests, dozens of victims.” In contrast, there were only 40 cases in 2011.

Even in the best of times the Castros have never been friends of faith in anything other than themselves. The State Department’s 2014 report on religious liberty reported that it was easier for Cubans to engage in some charitable and educational projects and import Bibles. However, “the government harassed outspoken religious leaders and their followers, including reports of beating, threats, detentions, and restrictions on travel. Religious leaders reported the government tightened controls on financial resources.”

Last year the U.S. Commission on International Religious Freedom was similarly critical. The number of believers is growing, but the regime attempts to closely control religious practices. The Commission explained: “Serious religious freedom violations continue in Cuba, despite improvements for government-approved religious groups.” Never mind the papal visit, “the government continues to detain and harass religious leaders and laity, interfere in religious groups’ internal affairs, and prevent democracy and human rights activists from participating in religious activities.”

Now CSW has issued its own report. There long has been discrimination against Christians in employment, university, and primary/secondary education. Communist Party members who convert and leave the party “face particular discrimination,” including threats made against them and their families.

Continue reading Cuba Attacks Christians As Washington Liberalizes Economic Ties

Rubio: Obama’s Intent Is ‘to Empower the Cuban Government,’ Not the Cuban People


The Blaze

Republican presidential candidate Marco Rubio, a Cuban-American, expressed outrage over the Obama administration’s decision to further relax sanctions on Cuba.

“The Obama administration’s one-sided concessions to Cuba further empower the regime and enable it with an economic windfall,” Rubio, a Florida senator, said in a statement Tuesday. “These regulations are more proof that the Obama administration’s intent has never been to empower the Cuban people but rather to empower the Cuban government’s monopolies and state-run enterprises.”

The Obama administration announced more changes in relations with Cuba Tuesday, including the lifting of additional export, financial and travel sanctions, which is set to happen Wednesday.

“Our U.S. policy toward Cuba should be driven by our national security interests, securing greater political freedoms and defending the human rights of the Cuban people, none of which are advanced through Obama’s latest concessions,” Rubio added.

“By expanding people-to-people ties, business opportunities, and greater access to information, we are promoting the transformation of our relationship in ways that advance U.S. interests and improve the lives of the Cuban people,” White House National Security Council spokesman Ned Price said in a statement. “The President has repeatedly underscored that our Cuba policy has changed, and supports increasing connections between the people of the United States and Cuba.”

Price insisted it would expand human rights.

“Engagement and purposeful steps like those announced today will continue to empower the Cuban people and advance our enduring objectives of supporting human rights, improving the lives of the Cuban people, and promoting closer ties between our peoples,” Price added.

Treasury Secretary Jack Lew said the changes build on the administration’s policies since President Barack Obama normalized relations with the Castro regime in December 2014.

“Today’s amendments to the Cuban Assets Control Regulations build on successive actions over the last year and send a clear message to the world: the United States is committed to empowering and enabling economic advancements for the Cuban people,” Lew said in a statement. “We have been working to enable the free flow of information between Cubans and Americans and will continue to take the steps necessary to help the Cuban people achieve the political and economic freedom that they deserve.”

Mary Anastasia O’Grady: Cuba’s Democrats Need U.S. Support

Mary Anastasia O’Grady, The Wall Street Journal

Obama has helped the dictatorship but ignored the dissidents.


Cuban dissident leader Antonio Rodiles has been harassed, beaten, imprisoned and may have been injected with a foreign substance—more on that in a minute—by Castro goons. Yet he is calm and unwavering: “They are not going to stop us,” Mr. Rodiles recently told me over lunch here with his wife,  Ailer González.

Soviet-style Cuban intelligence is trained to crush the spirit of the nonconformist. Yet the cerebral Mr. Rodiles was cool and analytical as he described the challenges faced by the opposition since President Obama, with support from  Pope Francis, announced a U.S. rapprochement with Castro’s military dictatorship in December 2014.

One of the “worst aspects of the new agenda,” Mr. Rodiles told me matter-of-factly, “is that it sends a signal that the regime is the legitimate political actor” for the country’s future. Foreigners “read that it is better to have a good relationship with the regime—and not with the opposition—because those are the people that are going to have the power—political and economic.”

The Cuban opposition is treated as superfluous in this new reality. U.S. politicians visiting the island used to meet with dissidents. Now, Mr. Rodiles says, “contact is almost zero.” When the U.S. reopened its embassy in Havana last year it refused to invite important dissidents like Mr. Rodiles or even  Berta Soler, the leader of the Ladies in White, to the ceremony.

Mr. Rodiles said the mission of pro-democratic Cubans is critical and urgent: “We need to change the message,” making it clear that the regime is “not the future of Cuba.” And this, he says, is the defining moment.

If the Castros hope to transfer power to the next generation—be it to Raúl’s son Alejandro or a Cuban  Tom Hagen—as Russia’s KGB forced  Boris Yeltsin to yield to KGB veteran  Vladimir Putin, they need to do it soon.

Yet at the same time, Mr. Rodiles says, “if they give the country to their families in the condition it is in right now, it will be like handing them a time bomb” about to go off. That’s why, he tells me, this is a unique opportunity for freedom to emerge: The odds of successfully passing the baton in the current economic meltdown are low.

Or at least they would be if Mr. Obama were not offering the regime legitimacy and U.S. greenbacks while refusing to officially recognize the opposition.

Mr. Rodiles has a master’s degree in physics from Mexico’s Autonomous National University and a master’s degree in mathematics from Florida State University. The 43-year-old returned to Cuba in 2010 and is a founder of Estado de SATS, a project to “create a space for open debate and pluralism of thought.”

The police state views this as dangerous and has come down hard on the couple. Amnesty International was among those that called for his release when he was jailed in 2012 for 19 days. In July a state-security agent punched him in the face while his hands were cuffed behind his back.

On Jan. 10 he and Ms. González, along with other government critics, were again attacked by a rent-a-mob on the streets of Havana. This time they were left with what looks like identical needle marks on their skin.

Those wounds are worrisome. More than once the former leader of the Ladies in White,  Laura Pollán, was left with open wounds after being clawed and scratched by plainclothes government enforcers. After one such incident in 2011 she mysteriously fell ill and died in the hospital. The government immediately cremated her body and the dissident community has long suspected that she was intentionally infected with a fatal virus by the regime.

Under normal circumstances, the Castro family would have reason to fear the future. Totalitarian regimes collapse, Mr. Rodiles reminds me, “when the people inside the system, not just the elite, but the people who are in the middle, the ones who sustain the system, start to go and look for another possibility.” They do this because they recognize the future is elsewhere so they “move or at least they no longer cooperate.”

Today young Cubans are looking for that alternative. The regime’s promise to Mr. Obama of economic opportunity and growth through small-business startups is a farce because the Castro family operates like a mafia, “and always has,” says Mr. Rodiles. To do well in the current environment the young have to join the system, or else they flee.

Those who join are not ideological but only seek power. “If we can show that we are the ones with the power to transform the country, then these people for sure are going to prefer to be with us.”

Failure is unthinkable for Mr. Rodiles. “We cannot allow the transfer of power because if they transfer the power, we can have these people for the next 20 or 30 years.”

Another vacation from hell: Overbooked resorts, bad food, no toilet seat, rats in the ceiling, delayed flight


Winnipeg Free Press

Exhausted, relieved and frustrated, a group of bedraggled Manitoban tourists on a Cuban holiday touched down in Winnipeg Saturday evening, 36 hours after they’d seen a bed, a toothbrush or a decent meal.

Passengers stopped outside the international arrivals gate at Richardson International Airport to describe a charter that couldn’t get a plane to them or even explain to them what had gone wrong.

Some said they’d surfed the Internet waiting in a small Cuban airport overnight before an airline agent arrived at dawn to tell them what they’d already found out on their own: Sunwing Flight 261 from Winnipeg to Holguin had taken off, only to turn back over North Dakota, causing the plane to be 13 hours late picking up passengers in Cuba for the return trip.

The charter was part of an all-inclusive weeklong resort holiday near Holguin, a city in the eastern part of Cuba most known for being the place Christopher Columbus landed in 1492.

The passengers had booked with the charter carrier, Sunwing, which merged with Signature Vacations in 2011.

In total, the flight carried 146 passengers and crew. Most were on holiday from Brandon and small towns in western Manitoba.

They included a wedding party of 17, elderly couples, parents with young families as well as one passenger suffering through a bout of food poisoning picked up on the island and a man who had to do without medication that was checked into his luggage.

“It was a rough trip with these guys,” said Fred Copeland, the man who needed his medication. “With three kids,” he added.

The Copelands live in Cowan, a small town 440 kilometres northwest of Winnipeg, and planned to stay with family in Winnipeg overnight, deciding against the long drive home.

“It’s just not right. It shouldn’t have happened to us, and it shouldn’t happen to anyone else,” fumed a Killarney nurse the moment she cleared customs.

Carolyn Tallack said a series of delays in the return Sunwing flight from Holguin, plus a bizarre set of glitches in communications, left passengers frustrated. Saturday morning, she was on her phone to her son in Brandon, who called the Free Press.

“We’ve been awake 36 hours. What are they doing to people? Everybody understands that things happen.

“The thing is, they didn’t keep us informed. People want to know they’re treated with some dignity,” Tallack said.

Things started to go wrong as soon as the air carrier touched down in Cuba a week ago, at the beginning of the weeklong holiday. Resorts scheduled to take the tourists were overbooked, and Tallack said she spent two nights in another resort where the food was poor, her room had no toilet seat and no safe for belongings. Worse, she was convinced there were rodents scuttling in the ceiling above her.

The final straw was the flight home, she said.
Continue reading Another vacation from hell: Overbooked resorts, bad food, no toilet seat, rats in the ceiling, delayed flight

Another sick Canadian returning from Cuba: “This was probably the worst food we we have ever had”


Global News

En Español Noticias Martí

B.C. residents like Ashlee Hanefeld are speaking out after falling ill on trips booked with Sunwing Vacations. Hanefeld and her husband spent over $5,000 and booked a family holiday to Cuba. They stayed at the Grand Memories Varadero between December 26 and January 3 of this year.

It’s rated as a four-and-a-half star resort, but 48 hours into the vacation, Hanefeld says her six-year-old daughter became ill and then her entire family. Her husband later tested positive for salmonella, a bacteria that lives in the intestine often caused by eating contaminated food.

“This was probably the worst food we we have ever had. We knew going to Cuba that the food was going to be bland, but we did still expect to get cooked food. The chicken was routinely undercooked,” Hanefeld said.

Hanefeld also says the public washrooms and hotel rooms were well below standard.

“There was mold in the bathroom and on the wall just under the air conditioner vent, and they tried to paint it over.”

It was a similar nightmare for Vancouver Island resident Kris Schill, who fell ill at another Cuban hot spot, the Memories Varadero Beach resort. Schill also booked her January vacation through Sunwing and says the trip went downhill the moment she arrived.

“I went to the buffet and within five to six hours after that, I was throwing up and I had pains in my stomach. The next day there was a time when I was on the floor and I was wishing I was back home,” Schill said.

A growing number of Canadian Sunwing Vacations customers are sharing similar stories after travelling recently to Cuba and the Dominican Republic. Memories resorts in Cuba are managed by Blue Diamond Resorts, a company affiliated with the Sunwing Travel Group.

Sunwing Vacations would only provide a statement to Global BC that said, “We cannot comment on individual cases, as each situation is different, however we can confirm that should an issue be identified, we are swift to take corrective action. We also negotiate appropriate compensation on behalf of our customers.”

When it comes to compensation, however, it may be an uphill battle. Travel expert Claire Newell says travellers need to make sure they have proper documentation to support their case.

“If you have the ammunition to show in pictures — what your room looked like or what the food looked like —  it’s going to go a lot further than a he said/she said.”

Newell also says you can limit your risk of having a bad vacation by reading reviews.

“Read a lot of reviews. If you consistently see a destination or specific resort where people are getting sick…red flag. You don’t want to be there.”

So far, Hanefeld has not received any compensation from Sunwing Vacations and she worries about others planning a similar holiday.

“Clearly Sunwing is aware what is happening because they obviously watch these reports. For them to keep sending people back, it’s not good customer service,” she said…

Venezuela Default Imminent, Chavez Legacy Rests In Pieces



Venezuela has been on default watch for months. Its credit rating is already in the gutter, at CCC at Standard & Poor’s. With oil now $20 lower thant it was when the S&P made that call, a default is no longer a question of if, but when.

A recent emergency economic decree is likely too late to save anyone but president Nicolas Maduro. After two years of inaction and the recent decline in oil prices, Barclays  Capital analyst Alejandro Arreazaa said a ” credit event”  in 2016 is ” increasingly difficult to avoid.” In other words, oil major PDVSA and the government it bankrolls is going bankrupt.

With oil under $30, Venezuela would need to use 90% of PDVSA’s oil export revenue to meet debt obligations to local and foreign creditors.

Figures released Wednesday by the Central Bank of Venezuela show that foreign currency reserves were just around $20 billion in the third quarter, but by the end of November they hit just $14 billion, the lowest ever. Net assets are also seen shrinking to around $24 billion, roughly $10 billion less than  a year ago. Considering current oil prices, any reasonable additional import cuts may be insufficient to cover the financing gap.

Maduro keeps reiterating his government’s willingness to pay its debts, but his anti-Yankee rhetoric and is hardline against multinationals there makes him hard to believe. The official position shows a lack of understanding of the magnitude and roots of the crisis, making for this default to be the biggest Latin America has seen since Argentina’s in 2001 and its more strategic default on the same debt in 2014.

Venezuela has about four weeks to figure this out or the first sovereign default of 2016 will come from the radical socialist government of Hugo Chavez and his successor Maduro.

Continue reading Venezuela Default Imminent, Chavez Legacy Rests In Pieces

Miami-Dade to Obama: We don’t want a Castro consulate



South Florida, long the unofficial US capital of Cuban anti-Communist exiles, has a request now that relations with the regime on the island are thawing: no Cuban consulate in our backyard.

Miami-Dade County on Wednesday approved a resolution urging President Barack Obama “to refrain from establishing a Cuban consulate” in the area.

The county has the largest Cuban-American population in the US, but many of them came to the area “fleeing oppression and injustice at the hands of the Cuban government,” the resolution said.

A Cuban consulate in Miami-Dade county “could inflame passions and create security risks,” the resolution says.

Commissioner Esteban Bovo, son of a veteran of the failed anti-Castro 1961 Bay of Pigs invasion, introduced the symbolic resolution.

However, it is up to the federal government to determine where foreign legations are placed.

Miami Mayor Tomas Regalado, who was born in Cuba and whose father was a political prisoner on the island, also opposes a Cuban consulate.

“I’m going to go to federal court if the State Department grants a license to Cuba to establish a consulate here,” he told the Miami Herald newspaper. He fears a consulate would be a magnet for protests.

Cuba and the United States in late 2014 began a rapprochement after a half-century of rivalry, and in July 2015 formally reestablished diplomatic ties.