Cuba (08/04)

For the most current version of this Note, see Background Notes A-Z.

PROFILE

OFFICIAL NAME:
Republic of Cuba

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--95%.
Work force (4.5 million): Government and services--30%; industry--22%; agriculture--20%; 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  (Statistics drawn from the CIA World Fact Book)
GDP ( 2003 est.): Purchasing power parity--$31.59 billion.
Real annual growth rate: 6.2% (1999); 3.0% (2001); 1.1% (2002); 1.3% (2003 est.).
GDP per capita income (based on purchasing power parity): $2,800 (2003 est.).
Natural resources: Nickel, cobalt, iron ore, copper, manganese, salt, timber.
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.
Trade: Exports--$1.467 billion (2003 est.): nickel/cobalt, sugar and its byproducts, tobacco, seafood, pharmaceuticals, citrus, tropical fruits, coffee. Major markets--Netherlands $480 million (this figure includes goods shipped to the Netherlands for onward shipment to EU countries);  Canada $265 million; Russia $185 million; Venezuela $150 million (est.); Spain $125 million. Imports--$4.531 billion:  petroleum, food, machinery, chemicals.  Major suppliers--Venezuela $900 million; Spain $700 million; Italy $375 million; China $340 million; United States $295 million.
Official exchange rate: 1 Cuban peso=U.S.$1 (official rate). 27 Cuban pesos=U.S.$1 (internal exchange rate)

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 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 an explosion of undetermined origin caused the USS Maine to sink in Havana Harbor on February 15. In December of that year, under the Treaty of Paris, Spain relinquished control of Cuba to the United States. 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, then went 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 Castro had promised a return to constitutional rule and democratic elections along with social reforms, Castro used his control of the military to consolidate 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 Reports 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, at least 16 other activists were either arrested or sentenced to prison during that period for opposing the Cuban Government.    

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.

Since the loss of Soviet-era subsidies in the early 1990s, Cuba's armed forces have shrunk considerably, both in number 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, too, 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 108,000 "cuentapropistas," or holders of licenses for self-employment, out of a total workforce of about 4.7 million people.

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 promises to be little better.  Moreover, t he 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.

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.

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. 

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.

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, 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 more than 240% of face value. 

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 342 at the close of 2003. 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 premia 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. As of August 2004, 18 executives of foreign companies remain excluded from entry into the United States under Title IV of the Act, while 28 other cases are under active review. 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 to 100,000 from a peak of 209,000. 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.  As of October 1, 2004, the Cuban Government  will no longer issue new licenses for 40 of the approximately 150 categories of self-employment, including the most popular ones, such as private restaurants.  

A 2004 report by the UN Economic Commission on Latin America and the Caribbean 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 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 such as 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.

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 more than 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.

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.

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.  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. The rapid growth in Cuban sales to Caracas has established Venezuela as one of the island's largest export markets.

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.

Then, in October 2003, President Bush 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.  The commission has the mandate 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 assistance be requested by a free Cuba.  The commission report outlines how the United States would be prepared to help a free Cuba improve its 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 recommended 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."    

To these ends, President Bush has directed that up to $59 million be committed over the next 2 years to carry out democracy-building activities in Cuba and to improve access to news and information through improved broadcasts of Radio and Television Martí into Cuba.  Funding will support efforts by youth, women, and Afro-Cubans to take greater action in support of democracy and human rights in Cuba and efforts by NGOs in selected third countries to highlight human rights abuses in Cuba, as part of a broader effort to discourage tourist travel and reinforce international attention on the plight of the Cuban people, including political prisoners and civil society.

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 to Cuba and to offer rewards to those whose reports on illegal remittances 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.

Principal U.S. Interests Section Officials
Chief of Mission--James Cason
Deputy Chief of Mission--E. Alex Lee
Political/Economic Chief--Francisco D. Sainz
Consul General--Richard Beer
Public Affairs Officer--Kelly Keiderling

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.