Posts from — June 2008

According to Juventud Rebelde, Cuba continues to face a mass internal migration from the provinces to the capital of Havana.

City of Havana continues to be the primary point of attraction for a great majority of Cubans who decide to move.  And as so it happens in the rest of the world, the grand metropolis offers wonders — at times to great for popular thought — which seduces and traps people, even though they have to traverse multiple hardships.

The numbers of the last Population and Housing Census, which took place in 2002, demonstrates that the capital absorbed 40.8 % of the total immigrants from the rest of the country.

Historically, the population of the island has moved from the East towards the West.  The principal migratory waves that have established themselves are five and are from Santiago de Cuba, Granma, Villa Clara, Holguín y Pinar del Río, with its sole destination: City of Havana.

[...]

But the economic crisis detained development strategies that the country carried.  In the middle of those difficult circumstances, in the 90s, a great demographic explosion took place in the capital caused by a spontaneous and excessive exodus from other territories.

[Graphic: Juventud Rebelde]

[H/T: Penultimos Dias]

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Via Stratfor:

Intelligence Guidance: Week of June 29, 2008

Chavez under fire: Venezuelan President Hugo Chavez is acting like a man under pressure. That’s not exactly a shocker because he is under a great deal of pressure. Cuba’s steady shift away from Castroism is robbing him of his ideological ally, and the slide of Argentina (a state Venezuela has kept on life support) into economic dysfunction robs Venezuela of its most credible claim to being a regional power. His system is crumbling around him, but so long as oil is strong Chavez is ok. Or is he?

LATIN AMERICA

June 30-July 1: The Common Market of the South will meet in Tucuman, Argentina. Participating countries include Brazil, Argentina, Paraguay, Uruguay, Venezuela, Chile, Colombia, Ecuador, Peru and Bolivia

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La Nacion informs on the relations between Costa Rica and Cuba:

The months of tension between the governments of Oscar Arias and Raul Castro seem to have come to an end. There is frequent and growing dialogue between the ministries of Foreign Affairs of the two nations, even though the absence of diplomatic relations remains. Minister Bruno Stagno has met several times with his Cuban peer Felipe Perez. The Costa Rican official discarded any formality in those meetings, even though he admitted that the Ministry keeps open dialogue with Cuba and permanently watches over what is going on in the Island. Dr. Arias, who is for democracy and trade opening, endured attacks from Cuba early in his current term. He was called “a lackey of Yankee imperialism” by Havana. According to analysts, the changing trend is due to an apparent new order of things in Cuba, where Raul Castro took over his brother Fidel at the helm.

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Via Stratfor:

Russian oil firm LUKoil’s plans to purchase a refinery in Cuba are on hold because of the difficulty of investing in crude production in Venezuela. LUKoil founder and CEO Vagit Alekperov said June 26 that without a crude supply for the refinery, the planned purchase would not make sense. Venezuelan President Hugo Chavez might change his mind on his country’s prohibitive attitude toward foreign investment in crude production; with various pressures on his regime, Chavez has recently shown the capacity to reconsider past decisions. Otherwise, he will have to count Alekperov among his enemies.

Russian oil firm LUKoil’s plans to expand into Cuba have been put on hold. LUKoil wanted to buy a refinery in Cuba, supply it with crude oil produced in Venezuela and wait for the U.S. embargo on trade with Cuba eventually to end. This would give LUKoil the chance to squeeze into the highly competitive U.S. market.

However, this long-term project faces a major roadblock. Venezuelan President Hugo Chavez’s burdensome and investment-unfriendly tax laws make investing in Venezuelan crude production extremely difficult for foreign companies. The U.S. firms have all left Venezuela, but even the companies that came in to fill that void — such as LUKoil — are not finding investment conditions favorable. This means that LUKoil’s plan to ship crude from Venezuela to Cuba for refinement is not going to be feasible under current conditions — not even at $130-per-barrel cost of oil. LUKoil founder and CEO Vagit Alekperov said June 26 that the firm “cannot afford to take the risk of viewing these [Venezuelan] projects as a source of supply of the Cuban refinery. And to buy a refinery without having crude supply logistics does not make sense.”

In other words, Venezuela’s current investment environment is leaving LUKoil with no way to control both the upstream and the downstream assets for petroleum product exports to the United States. Thus, Chavez might have just made a new enemy: Alekperov.

LUKoil, Russia’s most efficient privately owned energy company, has been on a serious campaign of global expansion for quite some time. It moved into the Northeastern U.S. gasoline-station market by acquiring Getty Petroleum in November 2000 and then bought Mobil-branded gasoline stations from ConocoPhillips in January 2004. In total, Lukoil has more than 2,000 U.S.-based gasoline stations, mostly in the Northeast. The idea behind the global expansion is to make a completely separate international arm of LUKoil that would be beyond the Kremlin’s reach. This is Alekperov’s way to insure that he could maintain a major presence in the global energy trade if Moscow nationalized his business in Russia.

A major part of Alekperov’s global strategy consists of expansion into the U.S. market. Considering that LUKoil already has a well-developed gasoline-station network in the Northeastern U.S., it also makes sense to acquire refining capacity nearby. Cuba is a great partner for LUKoil because of its location directly in the shipping path for potential crude production in Venezuela. LUKoil can also get into Cuba’s refining sector before others, because it has the advantage of Russo-Cuban political connections. The deal to buy a refinery possibly follows from reforms under Raul Castro’s leadership that have made Cuba more investor-friendly. Cuba has allowed partnerships with foreign companies as well as private acquisitions of some industrial enterprises. More specifically, one of Cuba’s economic goals is to become a refining hub.

But without Venezuelan crude production, LUKoil is left with few upstream options for crude in the Western Hemisphere. LUKoil could get oil from the spot market or even from Mexico, which is near enough to Cuba to make it work logistically, but in order to compete in the world’s richest and most competitive energy market — the United States — LUKoil needs to find other ways to lower costs, and it needs to be in charge of both upstream and downstream deals in order to make a long-term commitment to the Western Hemisphere. Aside from the Venezuelan crude, there simply are no other real alternatives.

There may still be a sliver of hope for LUKoil: Chavez could always change his mind, particularly ahead of his summit with Russian President Dmitri Medvedev in late July. On the agenda for that summit, announced on June 26 , is a proposed agreement on mutual protection of investments, which could signal that LUKoil has managed to lobby both Caracas and Moscow enough to get a break on the taxes it needs to pay. Chavez is also feeling a lot of domestic economic pressure that could make him rethink his policy toward foreign investors.

That said, if the investment situation does not improve, Chavez will have to deal with Alekperov as an enemy. A powerful Russian oligarch who has managed to steer a private energy company from Russia into a position of considerable global success despite the predations of Gazprom and Rosneft, Alekperov has many reasons to hope that Chavez is ousted. And Chavez should keep in mind that Russian oligarchs usually do not sit around hoping that things happen — they usually make sure things happen.

[Photo: LUKoil founder and CEO Vagit Alekperov - AFP/Getty Images.]

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From Xinhua:

The new leadership of the Communist Party of China (CPC) is ready to work with Cuba to promote further development of relations between the two parties and the two countries, a senior CPC official said.

He Guoqiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee, made the remarks in his talks with Jose R. Machado Ventura, member of the Political Bureau of the Central Committee of the Communist Party of Cuba.

He, also secretary of the CPC’s Central Commission for Discipline Inspection, said the new CPC leadership attaches great importance to and treasures the traditional friendship between China and Cuba.

Since China and Cuba established diplomatic relations 48 years ago, the two countries have witnessed steady growth of friendly cooperation, frequent exchanges of high-level visits, growing economic and trade exchanges as well as fruitful results of bilateral reciprocal cooperation, He said.

He arrived in Havana Sunday evening on a four-day goodwill visit to Cuba, the first leg of his four-country visit that will also take him to Trinidad and Tobago, Brazil and Angola.

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