Thursday, January 29, 2009

Dime con quien andas

The saga involving Sherritt International and their long-standing relationships with those lovable Castro brothers continues to get more bizarre by the day.

You may recall that the large Canadian conglomerate and one of its partners, Pebercan, announced over the weekend that the Castro regime was "revoking" a 16-year-old petrol production agreement with the companies. No explanation was given for the unexpected decision to break a contract that had another 10 years or so to run.

However, the Cubans did promise to pay the Canadian companies USD140 million in compensation for breaking the contract.

So, it’s all OK, right? Well, no. It’s now come to light that the severing of ties followed months of efforts by Pebercan to have the Cubans “catch up on missed payments”, which are apparently worth more than US118 million.

But there is more.

The chief executive of Sherritt, Ian Delaney, has confirmed to Canadian media that Sherritt has also faced “missed payments” from the Cubans. In fact, they are owed nearly US400 million, which is a lot of money in anyone’s language – and especially so if you are a Sherritt shareholder.

Not that Mr Delaney is worried, mind you.

"Like every developing country in the world, particularly one with the enormous social objectives of Cuba, they never have enough money, so we're always depending on the cycle,” he told the media. “We're always running big receivables with these people.”

He said he’d been working with the Castro regime for 18 years and would use those “ high-level relationships” to find a “solution” to the scrapped production-sharing agreement, adding: "This is a country that has always been very good to us.”

Wish him luck. Or perhaps not.

Ah, the good old days ...

Wearing a heavy woollen coat and leather gloves, Raul Castro has landed in Moscow for a much-anticipated week-long official visit to Russia.
It’s the first visit to Moscow by a Cuban leader since 1986, when Fidel Castro joined leaders from other communist satellites (hello, Erich Honecker!), to attend a congress of the Soviet Communist Party.
Those old-fashioned, carefully-choreographed extravaganzas were a chance for leaders such as Castro to dress up and pay public homage to the great Soviet state while at the same time begging his paymasters to provide more and more economic subsidies to keep afloat what passed for the Cuban “socialist” economy.
Back then, of course, Soviet imperialism seemed unshakeable – at least from the outside. Few experts would have predicted then that the whole, shaky structure would collapse spectacularly just three years later, leading to the demise of communism in Eastern Europe and eventually, the demise of the Soviet Union itself.
So, for the record, here are a couple of figures from the days when Havana was the most demanding of all Soviet client states:

· The Soviets accounted for about 80 percent of Cuba's international trade, with trade increasing at a rate of about 10 per cent a year.

· Moscow was the principal supplier to the Castro brothers of oil, food, machinery, spare parts, chemicals and other vital materials.

· Soviet subsidies – primarily through the supply of low-cost oil and purchase of Cuban sugar at hugely inflated prices – were estimated at about USD 5 billion a year.

This time around, Castro II won’t be paying homage to the old Soviet dream which was never much of a dream, at least not for ordinary Russians. Instead, he will have to cope with the new capitalist realities of Moscow and its new money-hungry rulers.
One thing that hasn’t changed all that much, however, is the nature of the relationship: the slightly younger Castro will still be begging for subsidies (now called “loans”) to keep afloat what passes for the Cuban “socialist” economy.

Wednesday, January 28, 2009

Quote of the day

“It is not clear why [the Castro regime] took this action, although it does highlight the political risks associated with doing business in Cuba.”

Lawrence Smith, an analyst at Scotia Capital, explaining in a note to clients the potential consequences of investors such as Sherritt International getting into bed with the Castro brothers.

Tuesday, January 27, 2009

Business news

As anyone who understands the true nature of the Castro regime can confirm, doing business with the boys in Havana can be anything but predictable.

As Sherritt International, the Canadian conglomerate that has been a close business partner of the Castro brothers for many years, has just discovered.

The publicly-listed Sherritt has confirmed that it received news on Friday that Cuba is "revoking" a 16-year-old agreement with the company and another Canadian partner relating to petrol exploration and production in waters off Cuba’s north coast.

The news has been received badly by the market, with millions of dollars worth of value in Sherritt wiped out over the past 24 hours.

And as usual, the Cubans have not explained why they are suddenly breaking their contract, which was not due to expire until 2018.

In fact, the only good news for the Canadians is a promise by the Castro brothers to pay USD140 million in compensation.

Well, that's the promise, anyway ...

Friday, January 23, 2009

Quote of the Day

"For many Canadians, Cuba is a ray of sunshine during our bleak northern winters. After a morning of digging out from a snowstorm, who wouldn't dream of lounging on Varadero's white sands, frosty Cuba Libre in hand, or sipping a mojito in Havana at Ernest Hemingway's favourite bar, La Bodeguita del Medio?"

Travel writer Liz Brown of The Calgary Herald, confirming yet again that sometimes, Cuba is not so much an island as a state of mind.

You say embargo, I say ..

You know all that talk about the US commercial embargo?

Well, regardless of whether you think the decades-long embargo is silly or not, here are some figures that may be of interest.

A report today in The Moscow Times reveals that Russian exports to Cuba during the first 11 months of last year were worth “a mere” USD157 million, comprising mainly of cars, trucks, buses and parts for them, as well as equipment for nickel production.

By contrast, official figures released a couple of weeks ago confirmed that US exports to Cuba exceeded USD600 million during 2008. Not only was this a substantial increase over exports over the previous 12 months but it means that those dreadful imperialists have now become the Castro regime’s fifth largest trading partners.

Thursday, January 22, 2009

Headline of the Day

"Cuba libre is just a drink"

Headline in the San Antonio Current, in Texas, over a review of Steven G Kellmann of Steven Soderbergh's film, Che. And yes, just like most other reviewers, Mr Kellmann is not all that impressed.

Visitors and messages

All those rumours about Fidel Castro being dead or very close to death appear to have been … well, rumours.

According to a raft of rather breathless media reports from Havana this morning, the visiting president of Argentina, Cristina Fernandez de Kirchner, has met with Castro I on the last day of her three-day visit to the island. And wouldn’t you know it? She says she found the semi-retired dictator “looking well” and keen to discuss the inauguration of Barack Obama.

"I was with Fidel about an hour,” the ever-helpful Mrs Fernandez de Kirchner told reporters. “We talked a lot about Obama. He had a very good impression of Obama.”

Thanks, Cristina.

Which reminds me … all this talk about how an Obama administration is likely to “normalise” relations in a hurry with the Castro brothers was put into perspective yesterday by the newly-inaugurated president during his speech in Washington.

After making clear references to communism and fascism, Mr Obama added: "To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist."

Corruption? Deceit? The silencing of dissent? Sounds like Havana to you?

As for offering to “extend a hand” if such regimes “unclench your fist”, the message is pretty clear, too: yes, we will meet you half way but first you will have to make serious political concessions. In other words, it's not all that different to similar messages to Cuba by past US presidents going back 50 years.

We shall see.

Wednesday, January 21, 2009

Gracias, Cristina ...

Another day, another visit to Havana by a democratically-elected leader who should know better.
Then again ... Say hello to the perfectly groomed Cristina Fernandez de Kirchner, who is currently in Cuba on a much-hyped, three-day visit - the first by an head of state from Argentina in more than two decades.
And true to form, Ms Fernandez de Kirchner and her entourage have gone out of their way to ingratiate themselves with those lovable Castro brothers.
During a meeting with the president of the rubberstamp Cuban parliament, Ricardo Alarcon, the visitor “stressed the technological and scientific development reached by Cuba despite the US blockade of Cuba”.
At least that’s how the official Cuban media reported her comments, as you can see here.
Needless to say, Ms Fernandez de Kirchner has declined to meet dissidents.

Quote of the day

"We have read about democracy but we have never lived it. We have to watch it on TV like this."

Yuri Perez, described as a university student and "opposition activist", tells Associated Press his reaction to the Obama inauguration ... while watching the ceremony on television at a function hosted by the US Interest Section in Havana.

Tuesday, January 20, 2009

Like the good old days

The rekindled love affair between Moscow and the Castro brothers continues apace.

Just weeks after a visit to Havana by the Russian president, Dmitry Medvedev , there is news today that Raul Castro will visit Russia sometime in the near future, although so far there are no firm details.

If it comes off, it will be the first visit by a Cuban leader to Moscow since the collapse of the old Soviet Union and its Communist allies in Eastern Europe in the late 1980s and early 1990s.

At the same time, the Russians have confirmed that they looking at lending Havana a further USD20 million, which the Cubans would then spend on Russian goods.

Thursday, January 15, 2009

More rumours

Speculation is rife -again! - that Fidel Castro may be near death. Or dead already.

The evidence? Well, there isn't any. However, as The New York Times points out, the old dictator has not made a public appearance in two years, has not had a photograph released of him in two months., and has failed to write his newspaper "column" in a month.

We will have to wait and see ...

Wednesday, January 14, 2009

Quote of the Day

"Some tourists complain of poor service, spotty infrastructure and lousy food, indicative of a communist system where shortages are common and State employees feel little motivation to excel at their jobs."

A report by Associated Press has a pretty good go at explaining why few Canadian and European tourists return to Fidel Castro's island paradise for a second holiday.

Our friends in Latin America

It’s not a new phenomenon, of course, but it’s still galling to see democratically-elected leaders who should know better travelling to Havana to effectively pay homage to those lovable Castro brothers and their repressive regime.

Take Michelle Bachelet.

The otherwise very sensible Chilean president is due in Havana next month for a much-anticipated visit that will include talks with Raul Castro and other senior Cuban officials, as well as a possible meeting with Fidel Castro … assuming the old dictator is well enough to receive visitors.

But it seems Ms Bachelet will decline an invitation to meet with a small group of dissidents and former political prisoners, with officials arguing that such a meeting would not be appropriate during an official presidential visit.

In other words, nothing will be done during the visit that in any way upsets the Castro brothers.

Given Ms Bachelet’s experiences under the Pinochet dictatorship and her long-held commitment to democratic values in Latin America, the decision to travel to Cuba is of concern, and her decision to snub the dissidents is well, disappointing, to say the least.

Still, it merely confirms that when it comes to the Castro regime, most Latin American leaders will continue to bend over backwards to please Havana.

Tuesday, January 13, 2009

Quote of the Day

"The engagement comes first and the negotiation comes later. I think we can talk without preconditions."

Jake Colvin, from the National Foreign Trade Council, a Washington-based business lobby group that wants the US trade embargo on the Castro regime to be lifted immediately. Needless to say, the Cubans don't think there is anything to "negotiate".

Private enterprise

Meanwhile, the other Castro, Raul, has apparently agreed to allow Cubans lucky enough to own a car to turn their motor vehicles into “private” taxis – and set their own fares.

This is the first time in a decade the rules have been relaxed by the regime, which is under renewed pressure to fix Cuba’s woeful public transport, which, truth be told, has been in a state of crisis for … well, for the past 50 years.

Of course, few Cubans will be able to take advantage of the new rules, as the vast majority of motor vehicles on the island belong to the regime.

But as you can read from some of the coverage, the decision has been interpreted as a break from the policies of Fidel Castro, who not so long ago railed against “private” taxi drivers, describing them as nasty profiteers, etc, etc.

Back to the future

Back to the keyboard … and back to those rumours about Fidel Castro. Again.

There is renewed speculation that the health of the semi-retired dictator may have taken a turn for the worse over the past few days.

How do we know this? Well, we don’t for sure, but newspapers in Mexico and in Spain have pointed out that it’s been close to a month since Castro I wrote the last of his lengthy (and very, very dull), “editorials” for the Cuban media.

The papers also point out that the most the old man could manage on January 1 was a brief sentence "congratulating" the Cuban people on the 50th anniversary of the regime.

It’s all speculation, of course. But heck, we wouldn’t have it any other way.