Habaguanex audited as part of official periodic control program

Official sources consulted by Cuba Económica deny the existence of any particularity in the audit that government officials are carrying out on Habaguanex. The corporation exploits the resources of the Habana Vieja (Old Havana), and its president is Eusebio Leal, the city's historian. The scrutiny of Habaguanex's books is encompassed within the periodic control carried out by the Oficina Nacional de Auditoría (National Audit office). This coincides with the beginning of the second national accounting review, which will end on October 21st and will affect, as it does every period, over 27,000 business entities.

This explanation contradicts rumors spread in certain circles in Madrid and Havana concerning the Habaguanex audit. Rumors stated that the scrutiny of the corporation's books was due to a possible need for further loans to cover the costs of projects in progress.

Currency in circulation decreased by over 3% in the first semester of the year in course

According to official data, the amount of currency in circulation in Cuba decreased 3.03% during the first semester, from 9.9 billion pesos (95.545 billion pesetas) to 9.6 billion pesos (91.680 billion pesetas). 56% of this amount is deposited in savings accounts.

Though no official data is available, sources from the Banco Central have qualified the launch of the new long-term accounts in pesos as a "complete success". These accounts, implemented in April, offer 7% interest for the 3-year period.

The product has been commercialized by Banco Popular de Ahorro and Banco de Crédito y Comercio. Banco Central participates, with the Government, in the development of an electronic payment platform that will allow citizens to make purchases and companies to make transfers among themselves. According to sources close to the monetary authority, there are already around 330 public companies connected to the system. However, mid-term functioning of the system is not foreseen, as problems caused by the lack of quality in the lines have been detected.


Cuban average salary increased 7.72% in 1999

According to the latest official data, Cuban workers' average salary increased 7.72% in 1999, going from 220 pesos (2,101 pesetas) to 237 pesos (2,263 pesetas). The increase is a result of the policy of linking salary to productivity. These quantities are complemented with other non-salary income relative to basic needs. According to certain observers, the increase is related to the salary raises applied to certain groups, such as doctors, teachers, and police officers, and to the salaries mixed companies pay their workers. The average salary is at 2,263 pesetas .


Increased international interest in Cuba's technology sector

The Cuban technology sector, especially mobile telephone and Internet services, has recently registered the arrival of new international actors. The latest to arrive is Finline Technologies, a Canadian company, which has signed a letter of intent with the Cuban holding Grupo de la Electrónica, a conglomerate of technology companies affiliated to Corporación Copextel, controlled by the Ministerio de Nuevas Tecnologías (Ministry of New Technology).

The new mixed company will engage in the installation of equipment and systems for mobile telephones, data transmission, video, and Internet, and will target the tourist sector and international companies based in Cuba.

Copextel also has an alliance with Stephen Marshall, a British entrepreneur, to develop several e-commerce platforms. Marshall becomes the main competition for Canadian businessman Robet Sajo, who, with Cubaweb, pioneered the development of the first official Cuban Government Web site. Though he has sold his participation in the portal to Cuban Club Resorts, the tour operator, a mixed company led by his countryman Enzo Roberto has new business plans related to complementary electronic services in the island's tourist sector.

Spanish incubator Netjuice is also studying the possibility of financing several projects for Spanish companies related to the sector.


Cuba and Brazil sign agricultural cooperation agreement

For some time Havana and Brasilia have been negotiating the signing of an agricultural cooperation agreement, which may be finalized by the end of the year in course. The text foresees an increase in Brazilian exports to the island for products such as rice, chicken, corn, and soy.

In exchange, Cuba will provide Brazil with technical assistance in certain branches of the sugar cane sector, especially in the cultivation of hybrid products and diversification.

On the other hand, the Chilean Senate has ratified the agreement for the reciprocal protection of investments that this country signed with Cuba at the beginning of this year. The bill was passed with 29 votes in favor and 12 contrary votes from the conservative opposition's members of parliament.


Pressure on the Treasury toward the authorization of bank transfers between Cuba and the USA

A large group of U.S. companies from diverse sectors, mostly pertaining to the chemical, agricultural, and food production industries, is pressuring the U.S. Treasury Department to lift the ban on direct operations between Cuban and U.S. banks.

The Clinton Administration suspended these operations in 1994 after an immigration crisis. Until then, commercial relations between companies in the finance sector of both countries were carried out through the S.W.I.F.T. network, a payment system that includes the participation of 6,700 banks in 189 nations.

At present, exceptions to the ban are that all U.S. companies are allowed to purchase cultural goods on the island, and telephone operators are authorized to pay for network use in direct calls between the two countries. Furthermore, pharmaceutical and medical equipment companies may obtain licenses to sell certain products in Cuba.

The current prohibition on bank transfers between Cuban and U.S. banks forces U.S. companies to use third-country financial institutions that charge between 5% and 15% commission on each operation.

Use of credit cards issued by U.S. companies soon possible on the island

Internet Secure, a Canadian company, has developed a system by which holders of U.S. credit cards will be able to make purchases in Cuba despite the U.S. ban on this kind of operation. The operating mechanism converts one transaction into another for the same cost, made in Canadian dollars through a server located in Canada. Afterwards, Internet Secure liquidates the operations to the Cuban counterpart every two weeks.

For the moment, the service can only be used in the Cámara de Comercio de Cuba [Cuban Chamber of Commerce] Web site consulting the Chamber's database, but according to some sources the system will soon be implemented in the tourist sector thanks to a terminal designed by a Cuban public company, Teledatos GET. This terminal will be able to be used in smaller businesses.


Fuel costs have risen by 170 million dollars since
January 1st.

For Cuba, rises in the price of the barrel of petroleum have meant additional costs amounting to 170 million dollars (29.678 billion pesetas) during the year in course, according to the latest official numbers from the Ministerio de Economía [Ministry of Economy]. Ministry technicians are in favor of maintaining or augmenting the 5% restriction on the sale and supply of gasoline. To some analysts, the cost of petroleum can unbalance the Cuban budget, which was made based on predictions that the price of the barrel would be between 21 and 22 dollars.


Anti-Castro movement divided due to Cuban funds frozen in U.S.

The schisms in radical Anti-Castro movements become accentuated. The new motive of controversy is the probable approval of a law lifting presidential control over Cuban assets in the U.S., which Washington maintains frozen and which amount to 150 million dollars (28.650 billion pesetas).

If the law is approved, this money will be given to the families of the Hermanos al Rescate [Brothers to the Rescue] pilots who died in 1996, shot down by the Cuban airforce. The action would be in accordance with a sentence that granted them compensation and considered the late pilots victims of terrorism.

Holders of claims inscribed in the Helms-Burton registry are opposed to this action as they feel that the granting of the funds to Hermanos al Rescate undermines their rights by completely eliminating the monetary guarantee which would insure the eventual payment of compensation.

The group of legislators that supports Hermanos al Rescate continued with the proceeding once the anti-Castro organization rejected Washington's offer to grant them a third of Cuban protected funds. This quantity, however, would have been sufficient for the payment of compensation to the aforementioned sympathizers of their cause, the holders of claims now pressuring Clinton to veto the law.


Washington maintains grants to promote democracy
on the island

The U.S. Government will maintain and possibly expand USAID grants, established in the Helms-Burton Act to promote democracy in Cuba, after having received a study carried out by Pricewaterhouse.

The consulting firm considers that the program has had no positive effect and recommends its expansion. To date, USAID grants amount to 6.5 million dollars (1.241 billion pesetas), but another 5 million dollars (955 million pesetas) remain to be granted.

Pricewaterhouse further recommends the suspension of the recent law forbidding U.S. government agencies to send money to the island and instead proposes that these investments always be made from within USAID.

For the Cuban Government, these grants finance only opposition and dissidents and are a violation of its sovereignty.




Peñasanta, the Asturian group composed of Central Lechera Asturiana, Caja Asturias, and Caja Rural, has invested 1.096 billion pesetas to open a sterilized milk production plant on the outskirts of Havana.

Compensation payments made by the Empresa del Seguro Estatal Nacional (ESEN) [National State Insurance Company] in 1999 increased 30%, reaching 118 million dollars (20.6 billion pesetas). The main bulk of this amount corresponds to transportation accidents.

According to sources in the Ministerio de la Industria Pesquera [Ministry of the Fishing Industry], the business group that depends directly on this department has built 27 new processing plants on the island's territory over the last five years.

Havana Ron y Licores, the state-owned company with the largest domestic market share, expects sales for the year in course in excess of 23 million dollars (4.016 billion pesetas), 11.11% more than in 1999.

Spanish-Cuban company Alfic, SA plans to set up a distillery in Cienfuegos to produce industrial alcohol, using sugar as the raw material.

Cuba plans to manufacture 1,600 tons of sorbitol this year in the specialized plant in Camaguey, to be used in the pharmaceutical industry. The volume exceeds last year's production by 600 tons.