Geography
Area: 110,860 sq. km. (44,200 sq. mi.);
about the size of Pennsylvania.
Cities: Capital--Havana (pop. 2 million).
Other major cities--Santiago de Cuba, Camaguey,
Santa Clara, Holguin, Guantanamo, Matanzas,
Cienfuegos, Pinar del Rio.
Terrain: Flat or gently rolling plains, hills;
mountains up to 2,000 meters (6,000 ft.) in the
southeast.
Climate: Tropical, moderated by trade winds; dry
season (November-April); rainy season (May-October).
People
Population: 11 million; 70% urban, 30% rural.
Ethnic groups: 51% mulatto, 37% white, 11% black, 1%
Chinese (according to Cuban census data).
Language: Spanish. Literacy--97% (according
to Cuban government sources).
Work force (4.6 million): Government and services--30%;
industry--22%; agriculture--24%;
commerce--11%; construction--11%;
transportation and communications--6%.
Government
Type: Totalitarian Communist state; current
government assumed power by force January 1, 1959.
Independence: May 20, 1902.
Political party: Cuban Communist Party (PCC); only
one party allowed.
Administrative subdivisions: 14 provinces, including
the city of Havana, and one special municipality
(Isle of Youth).
Economy
GDP (2005 est.): Purchasing power parity--$37.24
billion.
Real annual growth rate; 3.0% (2001); 1.1% (2002);
1.3% (2003); 3.0% (2004 est.); 5.0% (2005 est.).
GDP per capita income (based on purchasing power
parity): $3,300 (2005 est.).
Natural resources: Nickel, cobalt, iron ore, copper,
manganese, salt, timber, oil, natural gas.
Agriculture: Products--sugar, citrus and
tropical fruits, tobacco, coffee, rice, beans, meat,
vegetables.
Industry: Types--sugar and food processing,
oil refining, cement, electric power, light consumer
and industrial products, pharmaceutical and biotech
products.
Trade: Exports--$1.999 billion f.o.b. (2005):
nickel/cobalt, pharmaceutical and biotech products,
sugar and its byproducts, tobacco, seafood, citrus,
tropical fruits, coffee. Major markets
(2005)--Netherlands $599.7 million (30%); Canada
$437.9 (22%); Venezuela $241 million (12%); Spain
$161.2 million (8%); China $99.6 million (5%);
Russia $57.6 million (3%); France $49.3 million
(2%); others $352.5 million (18%). Imports
--$7.528 billion f.o.b. (2005): petroleum, food,
machinery, chemicals. Major suppliers
(2005)--Venezuela $1.859 billion (25%); China $885.4
million (12%); Spain $653.3 (9%); United States
$470.3 (9%); Canada $327.9 million (4%); Brazil
$312.4 million (4%); Germany $309.3 million (4%);
Italy $292 million (4%); Mexico (4%); Vietnam $251.8
(3%); others (25%).
Official exchange rate: Convertible pesos per
U.S.$1 = 0.93.
Cuba has two currencies in circulation: the Cuban
peso (CUP), and the convertible peso (CUC). In April
2005, the official exchange rate changed from $1 per
CUC to $1.08 per CUC (0.93 CUC per $1), both for
individuals and enterprises. Individuals can buy 24
Cuban pesos (CUP) for each CUC sold, or sell 25
Cuban pesos for each CUC bought; enterprises,
however, must exchange CUP and CUC at a 1:1 ratio.
It is also important to note that the Cuban regime
taxes and receives approximately 10% of each
conversion of U.S. dollars into CUCs.
PEOPLE AND RELIGION
Cuba is a multiracial society with a population of
mainly Spanish and African origins. The largest
organized religion is the Roman Catholic Church, but
evangelical protestant denominations continue to
grow rapidly. Afro-Cuban religions, a blend of
native African religions and Roman Catholicism, are
widely practiced in Cuba. Officially, Cuba has been
an atheist state for most of the Castro era. In
1962, the government of Fidel Castro seized and shut
down more than 400 Catholic schools, charging that
they spread dangerous beliefs among the people. In
1991, however, the Communist Party lifted its
prohibition against religious believers seeking
membership, and a year later the constitution was
amended to characterize the state as secular instead
of atheist.
While the Cuban constitution recognizes the right
of citizens to freedom of religion, the government
de facto restricts that freedom. Twenty-two
denominations, including Presbyterians,
Episcopalians, and Methodists, are members of the
Cuban Council of Churches (CCC). Most CCC members
are officially recognized by the State, though
several, including the Evangelical Lutheran Church,
are not registered and are recognized only through
their membership in the CCC. Another 31 officially
recognized denominations, including Jehovah's
Witnesses and the small Jewish community, do not
belong to the CCC. The government does not favor any
one particular religion or church; however, the
government appears to be most tolerant of those
churches that maintain close relations to the State
through the CCC. Unregistered religious groups
experience various degrees of official interference,
harassment, and repression. The Ministry of Interior
engages in active efforts to control and monitor the
country's religious institutions, including through
surveillance, infiltration and harassment of
religious professionals and practitioners. The most
independent religious organizations--including the
Catholic Church, the largest independent institution
in Cuba today--continue to operate under significant
restrictions and pressure imposed on them by the
Cuban regime. The Cuban Government continues to
refuse to allow the church to have independent
printing press capabilities; full access to the
media; to train enough priests for its needs or
allow adequate numbers of foreign priests to work in
the country; or to establish socially useful
institutions, including schools and universities,
hospitals and clinics, and nursing homes. All
registered denominations must report to the Ministry
of Interior's Office of Religious Affairs.
The visit of Pope John Paul II in January 1998
was seen as an important, positive event for
bringing a message of hope and the need for respect
of human rights. Unfortunately, these improvements
did not continue once the Pope left the island.
While some visas were issued for additional priests
to enter Cuba around the time of the visit, the
regime has again sharply restricted issuance of
visas. Moreover, despite explicit regime guarantees
and repeated follow-up requests, the regime has
refused to permit the Catholic Church to establish
Internet connections or an intranet among dioceses
on the Island. In a pastoral letter entitled "There
is No Country Without Virtue" ("No Hay Patria Sin
Virtud"), the Cuban Conference of Catholic Bishops
in February 2003 openly criticized the government's
strict control over the activities of the Catholic
Church, especially state restrictions on religious
education and Church access to mass media, as well
as the increasingly amoral and irreligious character
of Cuban society under Communist rule.
Other Cuban religious groups--including
evangelical Christians, whose numbers continue to
grow rapidly--also have benefited from the relative
relaxation of official restrictions on religious
organizations and activities. Although particularly
hard hit by emigration, Cuba's small Jewish
community continues to hold services in Havana and
has members in Santiago, Camaguey, and other parts
of the island. See also the Department's
report
on international religious freedom for further
information.
HISTORY
Spanish settlers established the raising of cattle,
sugarcane, and tobacco as Cuba's primary economic
pursuits. As the native Indian population died out,
African slaves were imported to work the ranches and
plantations. Slavery was abolished in 1886.
Cuba was the last major Spanish colony to gain
independence, following a lengthy struggle begun in
1868. Jose Marti, Cuba's national hero, helped
initiate the final push for independence in 1895. In
1898, the United States entered the conflict after
the USS Maine sank in Havana Harbor on February 15
due to an explosion of undetermined origin. In
December of that year, Spain relinquished control of
Cuba to the United States with the Treaty of Paris.
On May 20, 1902, the United States granted Cuba its
independence but retained the right to intervene to
preserve Cuban independence and stability in
accordance with the Platt Amendment. In 1934, the
Platt Amendment was repealed. The United States and
Cuba concluded a Treaty of Relations in 1934 which,
among other things, continued the 1903 agreements
that leased the Guantanamo Bay naval base to the
United States.
Independent Cuba was often ruled by authoritarian
political and military figures who either obtained
or remained in power by force. Fulgencio Batista, an
army sergeant, organized a non-commissioned officer
revolt in September 1933 and wielded significant
power behind the scenes until he was elected
president in 1940. Batista was voted out of office
in 1944 and did not run in 1948. Both those
elections were won by civilian political figures
with the support of party organizations. Running for
president again in 1952, Batista seized power in a
bloodless coup 3 months before the election was to
take place, suspended the balloting, and began
ruling by decree. Many political figures and
movements that wanted a return to the government
according to the Constitution of 1940 disputed
Batista's undemocratic rule.
On July 26, 1953, Fidel Castro, who had been
involved in increasingly violent political activity
before Batista's coup, led a failed attack on the
Moncada army barracks in Santiago de Cuba in which
more than 100 died. After defending himself in a
trial open to national and international media, he
was convicted and jailed, and subsequently was freed
in an act of clemency, before going into exile in
Mexico. There he organized the "26th of July
Movement" with the goal of overthrowing Batista, and
the group sailed to Cuba on board the yacht Granma,
landing in the eastern part of the island in
December 1956.
Batista's dictatorial rule fueled increasing
popular discontent and the rise of many active urban
and rural resistance groups, a fertile political
environment for Castro's 26th of July Movement.
Faced with a corrupt and ineffective
military--itself dispirited by a U.S. Government
embargo on weapons sales to Cuba--and public
indignation and revulsion at his brutality toward
opponents, Batista fled on January 1, 1959. Although
he had promised a return to constitutional rule and
democratic elections along with social reforms,
Castro used his control of the military to
consolidate his power by repressing all dissent from
his decisions, marginalizing other resistance
figures, and imprisoning or executing thousands of
opponents. An estimated 3,200 people were executed
by the Castro regime between 1959-62 alone. As the
revolution became more radical, hundreds of
thousands of Cubans fled the island.
Castro declared Cuba a socialist state on April
16, 1961. For the next 30 years, Castro pursued
close relations with the Soviet Union and worked in
concert with the geopolitical goals of Soviet
communism, funding and fomenting violent subversive
and insurrectional activities, as well as military
adventurism, until the demise of the U.S.S.R. in
1991.
Relations between the United States and Cuba
deteriorated rapidly as the Cuban regime
expropriated U.S. properties and moved toward
adoption of a one-party communist system. In
response, the United States imposed an embargo on
Cuba in October 1960, and, in response to Castro's
provocations, broke diplomatic relations on January
3, 1961. Tensions between the two governments peaked
during the October 1962 missile crisis.
GOVERNMENT
Cuba is a totalitarian state controlled by Fidel
Castro, who is chief of state, head of government,
First Secretary of the PCC, and commander in chief
of the armed forces. Castro seeks to control most
aspects of Cuban life through the Communist Party
and its affiliated mass organizations, the
government bureaucracy, and the state security
apparatus. In March 2003, Castro announced his
intention to remain in power for life. The Ministry
of Interior is the principal organ of state security
and control.
According to the Soviet-style Cuban constitution
of 1976, the National Assembly of People's Power,
and its Council of State when the body is not in
session, has supreme authority in the Cuban system.
Since the National Assembly meets only twice a year
for a few days each time, the 31-member Council of
State wields power. The Council of Ministers,
through its 9-member executive committee, handles
the administration of the economy, which is
state-controlled except for a tiny and shriveling
open-market sector. Fidel Castro is President of the
Council of State and Council of Ministers and his
brother Raul serves as First Vice President of both
bodies as well as Minister of Defense.
Although the constitution theoretically provides
for independent courts, it explicitly subordinates
them to the National Assembly and to the Council of
State. The People's Supreme Court is the highest
judicial body. Due process is routinely denied to
Cuban citizens, particularly in cases involving
political offenses. The constitution states that all
legally recognized civil liberties can be denied to
anyone who opposes the "decision of the Cuban people
to build socialism." Citizens can be and are jailed
for terms of 3 years or more for simply criticizing
the communist system or Fidel Castro.
The Communist Party is constitutionally
recognized as Cuba's only legal political party. The
party monopolizes all government positions,
including judicial offices. Though not a formal
requirement, party membership is a de facto
prerequisite for high-level official positions and
professional advancement in most areas, although a
tiny number of non-party members have on extremely
rare occasions been permitted by the controlling
Communist authorities to serve in the National
Assembly. The Communist Party or one of its front
organizations approves candidates for any elected
office. Citizens do not have the right to change
their government. In March 2003, the government
carried out one of the most brutal crackdowns on
peaceful opposition in the history of Cuba when it
arrested 75 human rights activists, independent
journalists and opposition figures on various
charges, including aiding a foreign power and
violating national security laws. Authorities
subjected the detainees to summary trials and
sentenced them to prison terms ranging from 6 to 28
years. Amnesty International identified all 75 as
"prisoners of conscience." The European Union (EU)
condemned their arrests and in June 2003, it
announced its decision to implement the following
actions: limit bilateral high-level governmental
visits, reduce the profile of member states'
participation in cultural events, reduce economic
assistance and invite Cuban dissidents to
national-day celebrations. See also the Department's
Country Report on Human Rights Practices for
Cuba.
Although the constitution allows legislative
proposals backed by at least 10,000 citizens to be
submitted directly to the National Assembly, in 2002
the government rejected a petition known as the
Varela Project, supporters of which submitted 11,000
signatures calling for a national referendum on
political and economic reforms. Many of the 75
activists arrested in March 2003 participated in the
Varela Project. In October 2003, Project Varela
organizers submitted a second petition to the
National Assembly with an additional 14,000
signatures. Since April 2004, some prisoners of
conscience have been released, seven of whom were in
the group of 75; all suffered from moderate to
severe medical conditions and many of them continue
to be harassed by state security even after their
release from prison. Moreover, in response to a
planned protest by activists at the French Embassy
in Havana in late July 2005, Cuban security forces
detained 33 opposition members, three of whom had
been released on medical grounds. At least 16 other
activists were either arrested or sentenced to
prison since 2004 for opposing the Cuban Government.
There has also been a resurgence of harassment of
various activist groups, most notably the "Damas en
Blanca," a group of wives of political prisoners.
On July 31, 2006 the Castro regime announced a
"temporary" transfer of power from Fidel Castro to
his brother Raul, who until that time served as head
of the Cuban armed forces and second-in-command of
the government and the Communist Party. It was the
first time in the 47 years of Fidel Castro’s rule
that power had been transferred. The transfer took
place due to intestinal surgery of an undetermined
nature.
NATIONAL SECURITY
Under Castro, Cuba is a highly militarized society.
From 1975 until the late 1980s, massive Soviet
military assistance enabled Cuba to upgrade its
military capabilities and project power abroad. The
tonnage of Soviet military deliveries to Cuba
throughout most of the 1980s exceeded deliveries in
any year since the military build-up during the 1962
missile crisis.
With the loss of Soviet-era subsidies in the
early 1990s, Cuba's armed forces have shrunk
considerably, both in terms of numbers and assets.
Combined active duty troop strength for all three
services is estimated at 50,000 to 55,000 personnel
(compared to some 235,000 on active duty 10 years
ago) and much of Cuba's weaponry appears to be in
storage. Cuba's air force, once considered among the
best equipped in Latin America, no longer merits
that distinction, though it still possesses advanced
aircraft and weapons systems; the navy has become
primarily a coastal defense force with no blue water
capability. The Cuban army is still one of the
region's more formidable, but it also is much
reduced and no longer has the considerable resources
necessary to project power abroad.
The military plays a growing role in the economy
and manages a number of hotels in the tourist
sector. The country's two paramilitary
organizations, the Territorial Militia Troops and
the Youth Labor Army, have a reduced training
capability. Cuba also adopted a "war of the people"
strategy that highlights the defensive nature of its
capabilities. The government continues to maintain a
large state security apparatus under the Ministry of
Interior to repress dissent within Cuba, and in the
last decade has formed special forces units to
confront indications of popular unrest.
ECONOMY
The Cuban Government continues to adhere to
socialist principles in organizing its
state-controlled economy. Most of the means of
production are owned and run by the government and,
according to Cuban Government statistics, about 75%
of the labor force is employed by the state. The
actual figure is closer to 93%, with some 150,000
small farmers and another 150,000 "cuentapropistas,"
or holders of licenses for self-employment,
representing a mere 2.1% of the nearly 4.7
million-person workforce.
The Cuban economy is still recovering from a
decline in gross domestic product of at least 35%
between 1989 and 1993 as the loss of Soviet
subsidies laid bare the economy's fundamental
weaknesses. To alleviate the economic crisis, in
1993 and 1994 the government introduced a few
market-oriented reforms, including opening to
tourism, allowing foreign investment, legalizing the
dollar, and authorizing self-employment for some 150
occupations. These measures resulted in modest
economic growth; the official statistics, however,
are deficient and as a result provide an incomplete
measure of Cuba's real economic situation. Living
conditions at the end of the decade remained well
below the 1989 level. Lower sugar and nickel prices,
increases in petroleum costs, a post-September 11,
2001 decline in tourism, devastating hurricanes in
November 2001 and August 2004, and a major drought
in the eastern half of the island caused severe
economic disruptions. Growth rates continued to
stagnate in 2002 and 2003, while 2004 and 2005
showed some renewed growth. Moreover, the gap in the
standard of living has widened between those with
access to dollars and those without. Jobs that can
earn dollar salaries or tips from foreign businesses
and tourists have become highly desirable. It is not
uncommon to see doctors, engineers, scientists, and
other professionals working in restaurants or as
taxi drivers.
Castro’s regime has pulled back on earlier market
reforms and is seeking tighter state control over
the economy. The Cuban Government is aggressively
pursuing a policy of recentralization, making it
increasingly difficult for foreigners to conduct
business on the island. Likewise, Cuban citizens are
adversely affected by reversion to a peso economy.
Prolonged austerity and the state-controlled
economy's inefficiency in providing adequate goods
and services have created conditions for a
flourishing informal economy in Cuba. As the variety
and amount of goods available in state-run peso
stores has declined, Cubans have turned increasingly
to the black market to obtain needed food, clothing,
and household items. Pilferage of items from the
work place to sell on the black market or illegally
offering services on the sidelines of official
employment is common, and Cuban companies regularly
figure 15% in losses into their production plans to
cover this. Recognizing that Cubans must engage in
such activity to make ends meet and that attempts to
shut the informal economy down would be futile, the
government concentrates its control efforts on
ideological appeals against theft and shutting down
large organized operations. A report by an
independent economist and opposition leader
speculates that more than 40% of the Cuban economy
operates in the informal sector. Since 2005, the
government has carried out a large anti-corruption
campaign as it continues efforts to recentralize
much of the economy under the regime's control.
Sugar, which has been the mainstay of the
island's economy for most of its history, has fallen
upon troubled times. In 1989, production was more
than 8 million tons, but by the mid-1990s, it had
fallen to around 3.5 million tons. Inefficient
planting and cultivation methods, poor management,
shortages of spare parts, and poor transportation
infrastructure combined to deter the recovery of the
sector. In June 2002, the government announced its
intention to implement a "comprehensive
transformation" of this declining sector. Almost
half the existing sugar mills were closed, and more
than 100,000 workers were laid off. The government
has promised that these workers will be "retrained"
in other fields, though it is unlikely they will
find new jobs in Cuba's stagnant economy. Moreover,
despite such efforts, the sugar harvest continued to
decline, falling to 2.1 million tons in 2003, the
smallest since 1933. The harvest was not much better
in 2004, with 2.3 million tons, and even worse in
2005, with 1.3 million tons.
In the mid-1990s, tourism surpassed sugar as the
primary source of foreign exchange. Tourism figures
prominently in the Cuban Government's plans for
development, and a top official cast it as at the
"heart of the economy." Havana devotes significant
resources to building new tourist facilities and
renovating historic structures for use in the
tourism sector. Roughly 1.7 million tourists visited
Cuba in 2001, generating about $1.85 billion in
gross revenues; in 2003, the number rose to 1.9
million tourists, predominantly from Canada and the
European Union, generating revenue of $2.1 billion.
The number of tourists to Cuba in 2004 crossed the 2
million mark (2.05 million), including the so-called
"medical tourists" from other Latin American
countries seeking free medical treatment at Cuban
facilities. In 2005 the number of tourists increased
to 2.32 million.
Nickel is now the biggest earner among Cuba's
goods exports. The nickel industry has been
operating close to full capacity and therefore
currently stagnant, but it is benefiting from
unprecedented increases in world market prices.
Revenues have more than doubled from $450 million in
2001 to $1 billion in 2005. The government is making
attempts to increase extraction capacity.
Remittances also play a large role in Cuba's
economy. Cuba does not publish accurate economic
statistics, but academic sources estimate that
remittances total from $600 million to $1 billion
per year, with most coming from families in the
United States. U.S. regulation changes announced in
June 2004 allow remittances to be sent only to the
remitter's immediate family; they cannot be remitted
to certain Cuban Government officials and members of
the Cuban Communist party; and the total amount of
family remittances that an authorized traveler may
carry to Cuba is now $300, reduced from $3,000. (See
also the Commission on Assistance to a Free Cuba
report at www.cafc.gov, cited below.) The Cuban
Government captures these dollar remittances by
allowing Cuban citizens to shop in state-run "dollar
stores," which sell food, household, and clothing
items at a high mark-up averaging over 240% of face
value.
Beginning in November 2004, Castro mandated that
U.S. dollars be exchanged for "convertible pesos"--a
local currency that can be used in special shops on
the island but has no value internationally--for a
10% charge. The 10% conversion fee
disproportionately affects Cubans who receive
remittances from relatives in the U.S.
To help keep the economy afloat, Cuba has
actively courted foreign investment, which often
takes the form of joint ventures with the Cuban
Government holding half of the equity, management
contracts for tourism facilities, or financing for
the sugar harvest. A new legal framework laid out in
1995 allowed for majority foreign ownership in joint
ventures with the Cuban Government. In practice,
majority ownership by the foreign partner is
nonexistent. Of the 540 joint ventures formed since
the Cuban Government issued the first legislation on
foreign investment in 1982, 397 remained at the end
of 2002, and 287 at the close of 2005. Due in large
part to Castro’s recentralization efforts, it is
estimated that one joint venture and two small
cooperative production ventures have closed each
week since 2000. Responding to this decline in the
number of joint ventures, a spokesperson for the
Ministry of Foreign Investment explained that
foreign investment is not a pillar of development in
and of itself. Moreover, the hostile investment
climate, characterized by inefficient and overpriced
labor imposed by the communist government, dense
regulations, and an impenetrable bureaucracy,
continue to deter foreign investment. Foreign direct
investment flows decreased from $448 million in 2000
to $39 million in 2001 and were at zero in 2002. In
July 2002, the European Union, through its embassies
in Havana, transmitted to the Cuban Government a
document that outlined the problems encountered in
operating joint ventures in Cuba. Titled "The Legal
and Administrative Framework for Foreign Trade and
Investment by European Companies in Cuba," the paper
noted the difficulty in obtaining such basic
necessities as work and residence permits for
foreign employees--even exit visas and drivers
licenses. It complained that the Government of Cuba
gave EU joint venture partners little or no say in
hiring Cuban staff, often forced the joint venture
to contract employees who were not professionally
suitable, and yet reserved to itself the right to
fire any worker at any time without cause. It noted
administrative difficulties in securing financing
and warned that "the difficulties of state firms in
meeting their payment obligations are seriously
threatening some firms and increasing the risk
premium which all operators have to pay for their
operations with Cuba." The Cuban Government offered
no response.
Investors are also constrained by the U.S.-Cuban
Liberty and Democratic Solidarity (Libertad) Act
that provides sanctions for those who "traffic" in
property expropriated from U.S. citizens. More than
a dozen companies have pulled out of Cuba or altered
their plans to invest there due to the threat of
action under the Libertad Act.
In an attempt to provide jobs for workers laid
off due to the economic crisis and bring some forms
of black market activity into more controllable
channels, the Cuban Government in 1993 legalized
self-employment for some 150 occupations. This small
private sector is tightly controlled and regulated.
Set monthly fees must be paid regardless of income
earned, and frequent inspections yield stiff fines
when any of the many self-employment regulations are
violated. Rather than expanding private sector
opportunities, in recent years, the government has
been attempting to squeeze more of these private
sector entrepreneurs out of business and back to the
public sector. Many have opted to enter the informal
economy or black market, and others have closed.
These measures have reduced private sector
employment from a peak of 209,000 to less than
100,000 now. Moreover, a large number of those
people who nominally are self-employed in reality
are well-connected fronts for military officials. No
recent figures have been made available, but the
Government of Cuba reported at the end of 2001 that
tax receipts from the self-employed fell 8.1% due to
the decrease in the number of these taxpayers. Since
October 1, 2004, the Cuban Government no longer
issues new licenses for 40 of the approximately 150
categories of self-employment, including for the
most popular ones, such as private restaurants.
In June 2005, 2,000 more licenses were revoked
from self-employed workers as a means to reassert
government control over the economy and to stem
growing inequalities associated with
self-employment. The licenses for self-employed
workers were typically for service-oriented work,
allowing the Cuban people to eke out a small living
in an otherwise impoverished state. Moreover,
workers in Cuba’s tourist sector--at resorts where
native Cubans are prohibited unless they are on the
job--have been prohibited by a Ministry of Tourism
regulation from accepting gifts, tips, or even food
from foreigners, in a further attempt at increasing
the tourist apartheid that exists on the island.
A 2004 UN Economic Commission on Latin America
and the Caribbean (ECLAC) report recommends that
Cuba "redesign the parameters of competition in the
public, private and cooperative sectors [and]
redefine the role of the state in the economy." It
recommends more flexibility in self-employment
regulations, property diversification, economic
decentralization, and a role for the market. The
Cuban Government, however, is today reversing the
economic liberalization of the 90s and
re-centralizing its economy. Evidence of this is
found in the decline in the number of firms
participating in the perfeccionamiento
empresarial, or entrepreneurial improvement (EI),
program, which is based on capitalist management
techniques. EI was instituted in the 1980s as a
military-led pilot project, and in 1998, the Cuban
Government extended it from military to civilian "parastatals,"
reportedly to foster capitalist competitiveness. At
first, the government highlighted participating
companies' achievements in cutting costs and
boosting profitability and quality and suggested
that the increased autonomy of state managers under
EI was producing an efficient form of socialism with
a strong link between pay and performance. However,
many in the Communist Party, even Castro himself,
resisted EI. Many of the original participants have
since left the program and participating firms have
seen little growth in revenue. The EI program has
fallen far short of expectations and the Cuban
Government no longer heralds its successes or its
future prospects. In 2003 the Cuban Government also
tightened foreign exchange controls, requiring that
state companies hold money in convertible pesos and
obtain special authorization from the central bank
before making hard currency transactions.
Practically speaking, this restricted companies from
using the dollar for internal trade. Following this,
in 2004 the government announced that all state
entities must stop charging in U.S. dollars and
charge only in pesos for any products and services
not considered a part of a company’s "fundamental
social objective." It also recently implemented new
requirements to channel imports through monopolistic
Soviet-style wholesale distribution companies.
Cuba's precarious economic position is
complicated by the high price it must pay for
foreign financing. The Cuban Government defaulted on
most of its international debt in 1986 and does not
have access to credit from international financial
institutions like the World Bank, which means Havana
must rely heavily on short-term loans to finance
imports, chiefly food and fuel. Because of its poor
credit rating, an $11 billion hard currency debt,
and the risks associated with Cuban investment,
interest rates have reportedly been as high as 22%.
In 2002, citing chronic delinquencies and mounting
short-term debts, Moody's lowered Cuba's credit
rating to Caa1 -- "speculative grade, very poor."
Dunn and Bradstreet rate Cuba as one of the riskiest
economies in the world.
HUMAN RIGHTS
Cuba’s totalitarian regime controls all aspects of
life through the Communist Party (CP) and its
affiliated mass organizations, the government
bureaucracy and the Department of State Security.
The latter is tasked with monitoring, infiltrating
and tormenting the country’s beleaguered human
rights community. The government continues to commit
serious abuses, and denies citizens the right to
change their government.
The government incarcerates people for their
peaceful political beliefs or activities. The total
number of political prisoners and detainees is
unknown, because the government does not disclose
such information and keeps its prisons off-limits to
human rights organizations. As of July 1, 2006, at
least 316 Cubans were being held behind bars for
political crimes, according to the independent Cuban
Commission for Human Rights and National
Reconciliation.
The government places severe limitations on
freedom of speech and press. Reporters Without
Borders calls Cuba the world’s second biggest jailer
of journalists. The constitution provides for
freedom of speech and press insofar as they "conform
to the aims of a socialist society." The government
considers the Universal Declaration of Human Rights
and foreign mainstream magazines and newspapers to
be enemy propaganda. Access to the Internet is
strictly controlled and given only to those deemed
ideologically trustworthy.
Freedom of assembly is not a right in today’s
Cuba. The law punishes any unauthorized assembly of
more than three persons. The government also
restricts freedom of movement and prevents some
citizens from emigrating because of their political
views. Cubans need explicit "exit permission" from
their government to leave their country, and many
people are effectively held hostage by the Cuban
government, despite the fact that they have received
travel documents issued by other countries.
The government does not tolerate dissent. It
targets dissenters by directing militants from the
CP, the Communist Youth League, Committees for the
Defense of the Revolution, the Federation of Cuban
Women, the Association of Veterans of the Cuban
Revolution, and other groups to stage a public
protest against the dissenter, usually in front of
his/her house. These protests, called "acts of
repudiation," involve the shouting of insults and
the occasional use of violence. The events generate
intense fear and are aimed at ostracizing and
intimidating those who question the government’s
policies.
Prison conditions are harsh and life-threatening.
Although physical torture is rare, cruel treatment
of prisoners – particularly political prisoners and
detainees – is common. Prison authorities frequently
beat, neglect, isolate and deny medical treatment to
inmates. Authorities often deny family visits,
adequate nutrition, exposure to sunshine, and pay
for work. Overcrowding is rife. Inmates friendly
with prison guards often receive preferential
treatment. This leads to abuse, whereby connected
inmates assault others with impunity. Desperation
inside the country’s estimated 200 prisons and work
camps is at high levels and suicides and acts of
self-mutilation occur. Thousands of Cubans are
currently imprisoned for "dangerousness," in the
absence of any crime.
Worker rights are largely denied. The law does
not allow Cuban workers to form and join unions of
their choice. The government-approved unions do not
act as trade unions, promote worker rights or
protect the right to strike; rather, they are geared
toward ensuring that production goals are met. Some
workers lose their jobs because of their political
beliefs. Salaries are not high enough to meet food
and clothing costs; consequently, many Cubans are
forced into small-scale embezzlement or pilfering
from their employers.
FOREIGN RELATIONS
Cuba's once-ambitious foreign policy has been
scaled back and redirected as a result of economic
hardship and the end of the Cold War. Cuba aims to
find new sources of trade, aid, and foreign
investment and to promote opposition to U.S. policy,
especially the trade embargo and the 1996 Libertad
Act. Cuba has relations with over 160 countries and
has civilian assistance workers--principally
physicians and nurses--in more than 20 nations.
Since the end of Soviet backing, Cuba appears to
have largely abandoned monetary support for
guerrilla movements that typified its involvement in
regional politics in Latin America and Africa,
though it maintains relations with several guerrilla
and terrorist groups and provides refuge for some of
their members in Cuba. Cuba's support for Latin
guerrilla movements, its Marxist-Leninist
government, and its alignment with the U.S.S.R. led
to its isolation in the hemisphere. Cuba is a member
of the Organization of American States (OAS),
although its present government has been excluded
from participation since 1962 for incompatibility
with the principles of the inter-American system.
Cuba hosted the Non-Aligned Movement (NAM) summit in
September 2006 and will hold the NAM presidency
until 2009. In the context of the NAM and its
ordinary diplomacy, Cuba has developed friendly
relations with Iran, North Korea and other rogue
states.
Throughout the 1970s and 1980s, Cuba expanded its
military presence abroad, spending millions of
dollars in exporting revolutions; deployments
reached 50,000 troops in Angola, 24,000 in Ethiopia,
1,500 in Nicaragua, and hundreds more elsewhere. In
Angola, Cuban troops, supported logistically by the
U.S.S.R., backed the Popular Movement for the
Liberation of Angola (MPLA) in its effort to take
power after Portugal granted Angola its
independence. Cuban forces played a key role in
Ethiopia's war against Somalia and remained there in
substantial numbers as a garrison force for a
decade. Cubans served in a non-combat advisory role
in Mozambique and the Congo. Cuba also used the
Congo as a logistical support center for Cuba's
Angola mission. In the late 1980s, Cuba began to
pull back militarily. Cuba unilaterally removed its
forces from Ethiopia, met the timetable of the 1988
Angola-Namibia accords by completing the withdrawal
of its forces from Angola before July 1991, and
ended military assistance to Nicaragua following the
Sandinistas' 1990 electoral defeat.
EU-Cuban diplomatic relations have suffered as a
result of the March 2003 crackdown on dissidents. In
June 2004, EU members imposed restrictive measures
on Cuba including inviting dissidents to national
day celebrations and suspending high-level meetings
between EU members and the Cuban Government. In
January 2005, though, the restrictions were
suspended in an effort to re-engage the regime as a
means of advancing the EU’s policy of encouraging
reform while preparing for the transition.
Spain is among the most important foreign
investors in Cuba. The ruling Zapatero government
continues Spain’s longstanding policy of encouraging
further investment and trade with Cuba. Cuba imports
more goods from Spain (almost 13% of total imports)
than from any other country. Spanish economic
involvement with Cuba is exclusively centered on
joint venture enterprises that provide financial
benefit to the Cuban Government through state-owned
firms. Spain’s desire to provide support to its
business community often impedes its willingness to
pressure the Cuban Government on political reform
and human rights issues.
Cuba’s bilateral relationship with Venezuela has
helped keep the Cuban economy afloat. The "Integral
Cooperation Accord" signed by Fidel Castro and
Venezuelan President Hugo Chavez in October 2000
laid the groundwork for a quasi-barter exchange of
Venezuelan oil for Cuban goods and services that has
since become a lifeline for Cuba. For Cuba, the
benefits of the cooperation accord are subsidized
petroleum and increased hard currency flows. The
original agreement allowed for the sale, at market
prices, of up to 53,000 barrels per day of crude oil
and derivatives (diesel, gasoline, jet fuel, etc.)
by PDVSA, Venezuela's state-owned petroleum company,
to its Cuban counterpart, CUPET. The number of
barrels of oil Venezuela began selling to Cuba has
risen to over 90,000 barrels daily. Under the
accord, PDVSA extended preferential payment terms to
CUPET, including 90-day short-term financing instead
of the 30 days offered to its other customers and,
in lieu of a standard letter of credit backed by an
international bank, PDVSA accepted IOUs from Cuba's
Banco Nacional, the central banking entity
responsible for servicing Havana's foreign debt. In
August 2001, Venezuelan President Hugo Chavez
amended the 2000 accord to allow Venezuela to
compensate the Cuban Government in hard currency for
any and all Cuban products and services originally
intended as in-kind payment for Venezuelan oil. As a
result, Cuban exports of goods and services to
Venezuela climbed from $34 million in 2001 to more
than $150 million in 2003. Venezuelan ministries are
contracting with Cuba for everything from generic
pharmaceuticals to pre-fabricated housing and
dismantled sugar mill equipment. On April 28, 2005,
Chavez and Castro signed 49 economic agreements in
Havana, covering areas as diverse as oil, nickel,
agriculture, furniture, shoes, textiles, toys,
lingerie, tires, construction materials,
electricity, transportation, health, and education.
Venezuela is also committed to sending more than
$400 million in various products duty free to Cuba
and plans to open an office of state-owned
commercial Venezuelan Industrial Bank (BIV) in
Havana to finance imports and exports between the
two countries, while Cuba will open an official
Banco Exterior de Cuba in Caracas. Increased
economic engagement along with the rapid growth in
Cuban sales to Caracas has established Venezuela as
one of the island's largest export markets.
A series of recent economic agreements between
Cuba and China have strengthened trade between the
two countries. Sino-Cuban trade totaled more than
$525 million in 2004, according to China Customs
statistics. This represents an increase of more than
47% over 2003. Most of China’s aid involves in-kind
supply of goods or technical assistance. During
President Hu-Jintao’s visit to Cuba in November
2004, China signed investment-related memorandums of
understanding (MOUs) estimated at more than $500
million, according to press reports. If these MOUs
are fully realized, they would represent a sharp
increase in known Chinese investments in Cuba. In
addition to these MOUs, a number of commercial
accords were signed at the first-ever Cuba-China
Investment and Trade Forum. China also plans to
invest approximately $500 million in a nickel
operation in Moa in the eastern province of Holguin.
According to the MOU, Cuba will own 51% of the
enterprise and Chinese-owned Minmetals the remaining
49%. Chinese and Venezuelan economic support,
including investment and direct aid, have given Cuba
the space to eliminate many of the tentative open
market reforms Cuba put in place during the depth of
its mid-1990s economic crisis.
The Russian prime minister visited Cuba in October
2006, signaling a new effort to expand trade and
investment, albeit financed by Russian credit.
Russia set aside, for the moment, more than USD 20
billion in Soviet-era debt, restructured post-1991
debt, and extended a new credit line to Cuba. The
new credit line is for USD 355 million repayable
over 10 years at an interest rate of five percent.
The new credit is conditioned in that it must be
used to purchase Russian cars, trucks, planes, as
well as to finance Cuban energy and transport
infrastructure projects, including air navigation
systems. Russia further agreed to restructure USD
166 million in debt accumulated since 1993. Both
nations also signed an agreement on military
equipment and technical services.
U.S.-CUBAN RELATIONS
On May 20, 2002, President Bush announced the
Initiative for a New Cuba that called on the
Cuban Government to undertake political and economic
reforms and conduct free and fair elections for the
National Assembly. The Initiative challenged the
Cuban Government to open its economy, allow
independent trade unions, and end discriminatory
practices against Cuban workers. President Bush made
clear that his response to such concrete reforms
would be to work with the U.S. Congress to ease the
restrictions on trade and travel between the United
States and Cuba. The Cuban Government did not enact
any such reforms. Instead, elections for the
National Assembly were held in January 2003, with
609 government-approved candidates running for 609
seats. That was followed by the March crackdown on
members of civil society.
In October 2003, President Bush then created the
Commission for Assistance to a Free Cuba to help
the Cuban people achieve the goal of a rapid,
peaceful transition to democracy that is strongly
supportive of fundamental political and economic
freedoms. Its mandate is to identify additional
measures to help bring an end to the dictatorship
and to lay out a plan for effective and decisive
U.S. assistance to a post-dictatorship Cuba, should
such be requested by a free Cuba. The commission
report outlines how the United States would be
prepared to help a free Cuba improve infrastructure
and the environment; consolidate the transition and
help build democracy; meet the basic needs of the
Cuban people in health, education, housing, and
social services; and create the core institutions of
a free economy. These recommendations are not a
prescription for Cuba’s future, but an indication of
the kind of assistance the United States and the
international community should be prepared to offer
a free Cuba.
The commission also sought a more proactive,
integrated, and disciplined approach to undermine
the survival strategies of the Castro regime and
contribute to conditions that will help the Cuban
people hasten the dictatorship’s end. The
recommendations focus on actions available to the
United States Government, allowing it to establish a
strong foundation on which to build supportive
international efforts. This comprehensive framework
is composed of six interrelated tasks considered
central to hastening change: empowering Cuban civil
society; breaking the Cuban Government’s information
blockade on the Cuban people; denying resources to
the regime; illuminating the reality of Castro’s
Cuba to the rest of the world; encouraging
international diplomatic efforts to support Cuban
civil society and challenge the Castro regime; and
finally, undermining the regime’s "succession
strategy."
The Commission released its latest report in July
2006 (www.cafc.gov)
as well as the "Compact with the Cuban People." The
Compact with the Cuban People is a message of hope
from the United States to the people of Cuba and a
clear statement of principles to reassure Cubans
that the U.S. stands with them in their desire for
freedom.
The Second Report of the Commission for
Assistance to a Free Cuba (CAFC II) sets forth
specific assistance and programs the United States
can offer to advance freedom and democracy in Cuba.
The recommendations include $80 million over the
next two fiscal years, to support these activities.
Over the past decade, the regime has built an
apparatus designed to exploit humanitarian aspects
of U.S. policy, specifically to siphon off hundreds
of millions of dollars for itself. To deny resources
to the regime, U.S. law enforcement authorities have
been directed to conduct "sting" operations against
"mule" networks and others who illegally carry money
and to offer rewards to those who report on illegal
remittances that lead to enforcement actions; family
visits to Cuba have been limited to one trip every 3
years under a specific license (individuals are
eligible to apply for a specific license 3 years
after their last visit to Cuba); and the current
authorized per diem amount (the authorized amount
allowed for food and lodging expenses for travel in
Cuba) has been reduced from $164 per day to $50 per
day (i.e., approximately eight times what a Cuban
national would expect to earn during a 14-day visit)
for all family visits to Cuba, based on the
presumption that travelers will stay with family in
Cuba.
U.S. policy also pursues a multilateral effort to
press for democratic change by urging its friends
and allies to actively promote a democratic
transition and respect for human rights. The United
States opposes consideration of Cuba's return to the
OAS or inclusion in the Summit of the Americas
process until there is a democratic Cuban
Government. The United States has repeatedly made
clear, however, that it is prepared to respond
reciprocally if the Cuban Government initiates
fundamental, systematic, democratic change and
respect for human rights.
All U.S. travel to Cuba must be licensed by
the Department of Treasury’s Office of Foreign Asset
Control (OFAC), and must fall into one of ten
categories. Further information on the licensing
process can be obtained from OFAC or at their
website. All exports to Cuba must also be
licensed by the Commerce Department’s Bureau of
Industry and Security (BIS). Further information on
exports to Cuba can be found at the BIS
website.
Principal U.S. Interests Section Officials
Chief of Mission--Michael
E. Parmly
Deputy Chief of Mission--Buddy Williams
Political/Economic Counselor--Robert Blau
Consul General--Carl Cockburn
Public Affairs Officer--David McCawley (acting)
Management Officer--William Rada
The
U.S.
Interests Section is located at Calzada between
L & M Streets, Vedado, Havana, switchboard: (53-7)
33-3551-3559, fax/general: 33-3700. U.S. Information
Service: 33-3967 fax: 33-3869, hours: 8:30 a.m. to
5:00 p.m. Emergencies/after hours: 33-3026.
