Author: 14ymedio

To do this, I will present a theoretical situation in which Pepe Perez is confronting and solving each of these problems only to fall into the next trap. I regret that my presentation is a bit long but the competition rules do not stipulate limits on length. Therefore, I assume that that this should not cause any inconvenience. Any resemblance to the current reality of Cuba is purely intentional.

Let me begin by noting that Pepe Perez cannot under any circumstances fulfill his desire to buy a farm in Cuba. According to the Agrarian Reform laws of 1959 and 1960, land in Cuba is not an alienable asset. Therefore, it cannot be bought or sold. Only the state, state-owned companies, agricultural cooperatives (which are essentially a form of state property in disguise) and individual owners who acquired it as a result of the Agrarian Reform laws or inherited it from their parents can own land in Cuba.

Individual owners may only retain ownership of their land if they continue to use it for agricultural production. When they get old and are no longer in a position to continue working their land, they must hand it over to their children to continue working on it. If they have no children, or if their children are unwilling to engage in full-time agricultural work, the state simply confiscates the land.

They may not sell their lands to another farmer who is interested in acquiring them, only to the state, and at a price determined by government officials. They can also hand over the property to the state in exchange for a lifetime pension. This pension protects the owner, his widow and his minor children, if any. It ends upon the death of the owner and his wife, and when his children reach adulthood.

It is clear, therefore, that Pepe Perez cannot buy a farm in Cuba. He cannot hold land in trust because he does not reside in the country. He can only try to reach some sort of agreement with the state to rent the farm he wants. And that was not even possible until a few years ago when only foreign investors, not Cuban emigrants, were allowed to do this. The economic crisis in Cuba and the urgency to find investors, however, led the government to do away with this restriction. Pepe Perez can currently propose an investment project to the state.

I should point out that Cuban law does not allow for, except in rare instances when it is in the state’s overriding interest, the existence of wholly foreign-owned companies. In other words, in the event his investment proposal is accepted, Pepe Perez will be forced to enter into a public-private partnership in which the Cuban state will own at least 51% of the value of the company. The state will retain the right to make adjustments to production plans as it sees fit. It could also decide at any given moment to switch from producing “meat, milk, cheese, fruit and vegetables,” as Pepe Perez wants to do, to producing something else that better suits the interests of the state.

But let us suppose that Pepe Perez is so eager to invest his savings in his native country that he is willing to accept these draconian conditions. The state will then offer properties for our investor to lease so that Pepe Pérez can choose the one that best suits his purposes. It is at this point that our hero could become entangled in the web that is the U.S. embargo against Cuba.

I should point out that he is not a U.S. citizen but rather a Canadian citizen and, therefore, is not required to apply for a license from the Treasury Department in order to invest in Cuba. Nevertheless, according to the Cuban constitution, as long as he is on Cuban soil, he does not enjoy the protections of another country’s citizenship. This means that, in the event of a legal dispute with the Cuban state, he will not be entitled to consular assistance or legal representation by a foreign law firm. He will only be able to contract the services of a lawyer from a Cuban Collective Cuban Law Firm.

How then could U.S. law affect him? It is very simple. If the farm that he decides to rent from the Cuban state is under litigation because it was illegally confiscated from a Cuban national living in the United States as a result of the Agrarian Reform laws, then Pepe Perez’s company could be subject to a lawsuit under Title III of the Helms-Burton Act, which protects the property rights of U.S. nationals.

However, if Pepe Perez has received good legal advice, he should not face major problems over a possible claim. Once the Cuban Ministry for Foreign Investment has provided a list of lands available for lease, he would go to the Interior Ministry’s Land Registry office to inquire about the legal status of the land he wishes to lease.

He has just fallen into the swampy terrain of the Cuban bureaucracy. Assuming that the applicant has all his legal documentation in order, he is still dependent on the goodwill of the officials who will handle to it. Most likely, he will have to pay a hefty bribe to these officials to do their job.

Legal actions in Cuba, as in any country, are subject to deadlines. Junior-level officials at every institution know this and deliberately slow down the approval of applications to force the interested party to offer them incentives to process the paperwork quickly.

Pepe Perez would have an alternative. He can publicize what he wants to do. I would recommend that he take out a classified ad in Spanish and English in a national newspaper in the United States such as the New York Times. I would recommend that he also publish it in a newspaper with circulation in the state of Florida such as El Nuevo Herald. The ad should indicate that he intends to lease these lands in Cuba in case anyone has property rights to them.

He would post the ad once a week for four weeks, indicating how someone can contact his lawyers. This way, should someone come forward with a claim to the property he wants to lease, he can decide not to invest. In the event that there is no response, this announcement will give his attorneys a good legal argument for any claims he might face in the future. Except in unusual cases, Pepe Perez, a Cuban-Canadian citizen, should not face major problems due to the embargo.

Now let us suppose that he has managed successfully overcome all these obstacles. Cuban authorities have approved his investment proposal, the land that he wants to rent is not subject to any kind of legal claim and Pepe Perez is on the road to setting up a joint venture. Does this mean that everything is going smoothly? Not at all! In Cuba nothing is that simple. First of all, our investor expressed his desire to share the ownership of the company with his cousin in Cuba, or at least to make him manager of the business. However, he probably can’t even hire him as a salaried employee.

Joint ventures in Cuba are not allowed hire their staffs directly. They must select them from available candidates at a “job bank.” In other words, from a state-owned employment company that provides qualified labor to foreign entrepreneurs. The employment company demands high wages in foreign currency for the employees it hires, acts as an intermediary between them and the entrepreneur, and then pays them what it considers appropriate in the national currency, which is the very devalued Cuban peso. In short, workers receive only a tiny portion of the salaries they earn from their work, obviously a very clear form of exploitation.

Because Pepe Perez has only a 49% share of his company, he will be forced to accept the administrator whom the state, as the majority stakeholder, appoints. If he wants to hire his cousin anyway, he probably will have pay a substantial bribe to someone at the “job bank” to add his cousin to the workforce. Suppose he has already made it and his cousin is just another employee of his farm.

Let us suppose that he has managed to do that and his cousin is now an employee at the farm. He is not the manager but he is the person trusted to look after his interests. Even so, he cannot pay him what he wants because the job bank takes care of that. So, in addition to the money he pays to the state employment agency, he must shell out an additional amount each month as incentive pay for his cousin and the other workers he has hired.

Finally, Pepe Pérez has managed to weather the storm. He has obtained permission from the General Directorate of Immigration to repatriate to Cuba and permission from the Ministry for Foreign Investment to create his joint venture. After encountering some difficulties, he has obtained a lease to the farm and must now begin importing the supplies he needs.

He has to charter a boat, buy “a hundred cows, a truck, a tractor and a lot of work tools,” and import them. He must then obtain permission from port authorities to dock the ship. And, of course, he must also obtain approval from the Customs Service of the Republic of Cuba to bring these items into the country, for which he will first need a wholesale commercial import license. Our investor would also do well to budget for all the illicit payments he will have to make.

On top of all this, he needs a special permit from the Transportation Ministry to bring a truck and tractor into Cuba. He must then go to the General Directorate of Traffic to apply for a permit to operate each vehicle. Cows, for their part, must be certified by an inspector from the Institute of Veterinary Medicine to ensure that they do not bring any animal diseases into the country. If he wants all these procedures to go smoothly, it would help to make some payments to all these institutions.

In the future he will need other imports, such as seeds, fertilizers, milking machines, pasteurizers, milk cartons and other items. Each time he will have to go through the same process, including the bribes. It is also quite possible that the Cuban government will not allow him to import these things directly, that he will have to use the services of an import business run by the Ministry of Foreign Commerce.

This will increase his operating costs. It will also make it impossible for him to import supplies from the United States, where products are of higher quality and prices are lower. As a private citizen, he could acquire all of this without restrictions but, being forced to use the services of a state-owned import company, makes it unlikely he will be able to conduct commercial sales operations in the United States.

Finally, Pepe Perez manages to successfully navigate these turbulent waters and his business has been set up the way he wants. There remains one small problem: the state can impose production targets on agricultural businesses in Cuba that they must fulfill. In other words, the joint venture must turn over a large portion of its output to a company operated by the Ministry of Agriculture at the prices set by the state.The joint venture will only be able to sell the remaining surplus after fulfilling the demands previously established by company officials.

This means that Pepe Perez must first deliver to the state the milk it demands before being able to use the surplus to produce cheese. To be able to slaughter some of his cows for meat production, he must first apply for the required permits. Pepe Pérez will also be impacted by pilfering on the part of his workers, who will probably subtract part of the company’s output to meet their needs.

Nevertheless, Pepe Perez is a brilliant businessman and so he works things out and makes money. He must deposit the income in an account at a bank owned by the Cuban state, from which he makes deductions to cover taxes, salaries, services, supplies and any other expenses he might incur. This should not present a problem so long as his deductions are in Cuban pesos (CUP) or convertible pesos* (CUC).

The problem will be when he wants to withdraw funds in hard currency to purchase supplies in another country or when he simply wants to transfer funds to an overseas account. Cuban banks usually claim they do not have enough currency available in the vault so the applicant must be placed on a waiting list for the currency to appear. Additionally, if someone wants to take more than $5,000 in cash out of the country, he or she will need a special license from the National Bank of Cuba.

Finally, if Pepe Perez’s business fails and he wants to liquidate its assets, his only option is to sell it to the Cuban state for a price that the state determines. And it would behoove him be patient because the Cuban state is usually extremely slow at paying off its debts.

Considering all the project’s many challenges, the only advice I would give Pepe Perez is that, if he wants to invest his savings in a farm, it would be better to do so in any other country in the world, where his capital is not subject to so much risk and where his rights as a property owner and investor are guaranteed by law. I trust Pepe Perez to be prudent and not expose himself to the risks of failure and loss of his savings, which have cost him years of sacrifice and hard work. Good luck, my friend!

Note: The prize for this winning entry was $1,000.

*Translator’s note: Since this contest submission, the Cuban convertible peso (CUC) has been withdrawn from circulation. Cubans have until June to convert whatever remaining CUCs they possess. 

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

What we have seen is with the list of available products that comes to the newsroom from all the provinces, the number of available products has decreased extremely, especially in recent weeks.

The resolution, published by Tribuna de La Habana, is accompanied by a PDF of a price list, divided into sections, on which the notable ones include bananas (most at between 2 and 4 pesos per pound), garlic at 47, and onions at between 10 and 28 depending on the type, beans, 14 for black and 16 for red, and chickpeas, 35 pesos per pound.

Citrus fruits also appear, such as oranges at 10, lemons at 13, beans at 8, and sweet peppers at 11, among many others.

“In the case of covered and packaged products, up to 20% above the approved retail sale price will be applied and when the covered products are cut and packed, up to 50% above the approved retail price will be applied,” said the official media Tribuna de La Habana.

The complaints have not taken long to appear among the readers of the official newspaper. “The dollar is at 24 (pesos) but there is no availability in the banks… at those prices, after the workers collect their salary increases, there needs to be availability of the products in the markets,” said one, knowing that for months the shops have been more bare than usual.

Others advocate openly for the free market and point out that prices regulate themselves with free competition. “They say that man is the only animal that stumbles twice on the same stone, but here they stumble 100 times and they have not learned that capping the prices is what causes greater scarcity.”

“Prices are very far from reality, the black market will continue to impose its statutes and the pockets of ordinary Cubans will continue to pay times above the prices published here”, considers another reader.

“Now they hide the products and sell them for higher prices, whoever wants to buy a lemon, for example, must go and look for the seller who is hiding it. Because it is a chain from the field, where oil and other materials make the things they have look for more expensive, under the table, like a welding rod, an angle to repair machines etc. to the producer pays dearly for everything and must sell dearly to the retailer and the carrier. It is a chain that multiplies the price at each link.”

Despite the criticism, the majority of readers of the state newspaper are in favor of the intervention, but their concerns are in the usual failure to act that occurs with these types of measures and they ask for greater control and penalties.

“Who will control this? Today the carts are selling a head of garlic for 10 pesos, nothing is by the pound, but they are not afraid, they do what they want. Come to Alturas de Belén, Marianao, and you will see. If severe measures aren’t taken, respect for the laws, the rules, will never be achieved,” writes a user in this regard.

Others even detail the most common tricks to circumvent a law that until now has shown to stimulate very little supply in the market. “Sounds good to me, I just hope that surnames do not start to appear on the products, for example Creole lemon from ’My Grandmother’s Farm’, 100 pesos per pound. As with the ham that was Viking ham its whole life and now there are 25 specials of every kind: sausages, meatloaf and I don’t know how many other things. And, of course, all are more expensive than the old famous Viking”

“I congratulate your reasoning because it is what happens in the long run: Class A carrot, 20 pesos per pound; black cassava with white rind, 10 pesos per pound; black Narnian beans, 25 pesos per pound; Macondo tomato, 20 pesos the pound; … and so on,” jokes another reader.

Many others ask that the measure taken in the capital be extended to the rest of the provinces and some even take advantage of the occasion to demonstrate against Havanacentralism. “Will Havana be Cuba? The measures that are taken only for the capital are always pronounced and, in the other provinces, everyone roaming around without respect. Please, where there are fewer things is in the provinces and the prices are sky high. Take measures for the country, not just for Havana,” protests a reader.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Panama is one of the most popular destinations for Cubans who shop abroad. In 2018, the manager of the Colon Free Zone, Manuel Grimaldo, acknowledged that more than 15,000 Cubans were arriving annually at that time and spending about 100 million dollars. In view of the success, the Panamanian Government authorized a five-year visa and multiple entries for residents of the island.

“I had already bought another ticket to go in the middle of this month, but I don’t know how my situation will turn out now,” he laments. “On the airline’s website they tell me that I won’t lose my money and that I can reschedule my flight until December 31 of this year, but my urgency was to go now because I left merchandise I bought there and they were orders from people who already paid me.”

Offers for many products that had returned to the classifieds pages with the reinstatement of flights are now sold out and advertisers are quick to warn interested parties that, until further notice or until travel is normalized, the situation will remain the same.

The eight months with Cuban airspace closed hit the informal traders hard in 2020. Many of them had to reconvert themselves into resellers of products bought in national stores, or into coleros (people who stand in line for others for pay), or messengers for food delivery businesses, using electric motorcycles imported from abroad.

The reopening of the country’s main international airport, which began on November 15 in Havana, was a brief relief for them. The rise in the number of cases of Covid-19, many of them caught from people who came from abroad, forced the authorities to make decisions. But this time, they chose not to cancel all commercial flights as they had in April, but to reduce the flow of travelers from the countries believed to be the main importers of the virus to the Island.

The Panamanian Embassy in Havana posted on its Facebook page, “The Government of Cuba reported that, given the current national epidemiological situation, the frequency of flights from certain countries, including Panama, will be reduced. As of January 1, 2021, the number of flights to and from Panama will be reduced, by virtue of a decision of the Government of Cuba. The frequency of flights will gradually resume when the Cuban health authorities determine it.”

In the list of countries that are most affected by reductions in the number of flights are the shopping destinations most visited by Cubans: the United States, Mexico, Panama, Bahamas, Haiti and the Dominican Republic. There are no restrictions for other nations that have appeared frequently in the statistics of imported cases of Covid-19 such as Russia. The United Kingdom and South Africa are countries with a new strain of Covid-19 on which there are strong international restrictions, and which is not in Cuba. The first is one of the main sources of European tourism to the Island.

Some airlines have done worse, such as Air Century, which has had to indefinitely suspend all the flights it made every Tuesday between Santo Domingo and Havana. “We deeply regret the inconvenience that this measure, beyond the control of the company, may cause in their plans. Affected passengers may reschedule their flight dates,” explained the company, which made several telephone numbers available to customers.

“My sister bought me the ticket from there to spend her birthday together and, incidentally, bring some merchandise, but she has been calling the numbers provided by Air Century for days and there is no way to communicate,” Lisandra, a woman from Matanzas, told this newspaper. She travels up to five times a year to the Dominican Republic to bring products. “I was left with a packed suitcase and no hope of traveling soon.”

With their luggage packed, the customers of the 20 weekly flights that the Mexican company Viva Aerobús has suspended have also stayed. “Passengers who have a ticket purchased on any of the suspended flights should contact the travel agency with which they made their purchase to be rescheduled to the closest flight and route with availability,” the company detailed on its Facebook account.

Mexico’s Viva Aerobús has substantially reduced its flights but maintains the connection between Havana and Cancun. The itinerary between Cancun and Camagüey will be flown only on Wednesdays, between Cancun and Holguín, on Tuesdays, and between Mexico City and Havana, on Saturdays.

“I had already booked the apartment where I was going to stay and everything,” explains a Cuban clothing and footwear supplier who, before the pandemic, made the itinerary between Havana and Cancun up to three times a week to supply his goods to the informal market. “Now I will have to wait, but the hardest part is all the dreams I had for myself. Go to the stores, eat a whole chicken or a good beef steak without lining up.”

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

It also emphasizes that the Government continues to harass the participants in the San Isidro headquarters in November, with the aim of “prohibiting them from leaving” their homes, including Luis Manuel Otero Alcántara, Ileana Hernández, Esteban Rodríguez, Maykel Castillo, Omara Ruiz Urquiola, Anamelys Ramos, Zuleydis Gómez Cepero and Héctor Luis Valdés Corcho.

Mention is also made of the return to acts of repudiation in a generalized manner “to try to demoralize citizens who disagree within the country.”

Apart from reproducing the list of 138 political prisoners compiled by Prisoners Defenders, CCDH includes 103 arbitrary arrests carried out by State Security in December (slightly less than the 119 in November) and 144 acts of harassment. Among those arrested was the chief editor of 14ymedio, Reinaldo Escobar, detained for more than five hours on December 11.

The report covers the so-called ’Ordering Task,’ the measures that came into force on January 1 to, according to the Government, face the crisis, including the elimination of the double currency, and whose first consequence has been an increase in the prices of telecommunications, transport and some foods.

Regarding the economic and social situation, the CCDH echoes various unpublished citizen complaints, for example the one made by Liudmila Maya about the theft of luggage from travelers who have just arrived in Cuba through the José Martí International Airport.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.