Via The Miami Herald:

The top U.S. diplomat in Cuba, Michael Parmly, will be leaving his post and will be replaced by a top official at the State Department’s Bureau of Democracy, Human Rights and Labor, the Department confirmed Thursday.

Jonathan D. Farrar, now acting assistant secretary at the bureau, has broad experience in Latin America, with previous postings at the U.S. embassies in Mexico, Belize, Paraguay and Uruguay.

State Department spokeswoman Heidi Bronke confirmed Farrar will succeed Parmly this summer. There was no immediate word on Parmly’s next assignment after completing a normal three-year posting in Havana.

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Via ACN:

Cuban Foreign Investment and Economic Collaboration Minister Marta Lomas and Honduran Technical Cooperation Secretariat representative Karen Zelaya lead the meeting of the First Bi-national Joint Commission being held in Havana today and tomorrow. The aim of the meeting is to coordinate bilateral relations between nations and fulfillment of the work program agreed between Havana and Tegucigalpa in 2007.

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Via Reuters:

Iran is making allies in Latin America to counter Washington’s traditional influence in the region and could use them to threaten U.S. security, a top U.S. diplomat said on Wednesday.

“We are worried that in the event of a conflict with Iran, that it would attempt to use its presence in the region to conduct such activities against us,” Thomas Shannon, the U.S. assistant secretary of state for the Western Hemisphere, told Reuters.

Left-wing governments in Venezuela, Cuba, Nicaragua and Bolivia have all become allies of Iran in recent years, and other countries in Latin America have diplomatic ties with the Islamic republic.

Shannon said Iran wants to ease its international isolation by showing it is able to win friends in Latin America, which has been historically in the United States’ “sphere of influence.”

Washington accuses Iran of supporting terrorist groups and secretly trying to produce nuclear bombs, and is concerned by its courting of allies in Latin America.

Shannon urged the region’s governments to respect U.N.-backed sanctions against Iran over its nuclear program and recalled accusations that Iran was involved in attacks on the Israeli embassy and a Jewish community center in Argentina’s capital Buenos Aires during the 1990s.

“We urge our friends and partners in the region to be vigilant,” he said, adding that those attacks show Iran is able “to conduct terrorist operations within the Americas.”

Iran has denied any involvement in the Buenos Aires attacks, which killed well over 100 people.

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Political structure
May 6th 2008
From the Economist Intelligence Unit
Source: Country Report

Official name

Republic of Cuba

Form of government

Centralised political system, with close identification between the PCC and the state

Head of state

The president, Raul Castro, took over from his brother, Fidel, on February 24th 2008

The executive

The Council of Ministers is the highest executive body; its Executive Committee is composed of the president, the first vice-president and the vice-presidents of the Council of Ministers

National legislature

National Assembly of People’s Power; 614 members elected by direct ballot; the Assembly meets twice a year, and extraordinary sessions can be called

Legal system

A People’s Supreme Court oversees a system of regional tribunals; the Supreme Court is accountable to the National Assembly

National elections

Provincial and national assemblies: last elections January 20th 2008; next elections due in January 2012. Municipal elections: last held October 2007; next due in April 2010

National government

The organs of the state and the PCC are closely entwined, and power devolves principally from the Executive Committee of the Council of Ministers

Main political organisation

The Partido Comunista de Cuba (PCC) is the only legal political party

President of the councils of state & ministers: Raul Castro Ruz

First vice-president: Jose Ramon Machado Ventura

Vice-president: Carlos Lage Davila

President of the National Assembly: Ricardo Alarcon de Quesada

Key ministers

Agriculture: Maria del Carmen Perez

Armed forces: General Julio Casas Regueiro

Audit & control: Gladys Maria Bejerano Portela

Basic industry: Yadira Garcia Vera

Communications & informatics: Ramiro Valdes Menendez

Culture: Abel Prieto Jimenez

Economy & planning: Jose Luis Rodriguez Garcia

Education: Ana Elsa Velazquez

Finance & prices: Georgina Barreiro Fajardo

Foreign investment & economic co-operation: Marta Lomas Morales

Foreign relations: Felipe Perez Roque

Foreign trade: Raul de la Nuez Ramirez

Government: Ricardo Cabrisas Ruiz

Justice: Maria Esther Reus Gonzalez

Labour & social security: Alfredo Morales Cartaya

Light industry: Estela Dominguez Ariosa

Public health: Jose Ramon Balaguer

Science, technology & the environment: Fernando Gonzalez Bermudez

Sugar: Ulises Rosales del Toro

Tourism: Manuel Marrero Cruz

Transport: Jorge Luis Sierra Cruz

Central Bank president

Francisco Soberon Valdes

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Americas Quarterly published by the Americas Society offers a preview of its Spring edition, and presents summaries of two articles on Cuba.

Cuba No Libre by Gary Marx and Cecilia Vaisman

On February 19th, Fidel Castro made it official: he was resigning the presidency and ending his 50-year reign over Cuba. Many exiles, U.S. officials and Cubans on the island had been waiting for this historic day, confident that it would not only mark a new beginning but signal that fundamental change was coming to the hemisphere’s only communist nation. Some experts predicted that Cubans, fed up with shortages and hardship, would rise up and demand freedom. Others suggested change would come from within the government—that a younger generation of leaders would ascend to the top and recognize that Cuba’s economic and political system was bankrupt and needed radical reform.

But what happened following Fidel’s announcement was the opposite. Rather than taking to the streets demanding change, Cubans are going about their daily lives—queuing for hours at bus stops, collecting monthly food rations at neighborhood bodegas, and showing up at government jobs—as if nothing unusual has happened. Rather than a new generation of leaders taking over, Raúl Castro, Fidel’s younger brother, was named Cuba’s new president, and a cadre of aging communist loyalists continue to dominate the leadership structure in the newly named Council of State, the nation’s top policy-making body.

U.S. Secretary of State Condoleezza Rice once again urged the Cuban…

Frustration Mounts by Orlando Gutierrez-Boronat

If the new Cuban government has a remarkable resemblance to the old, that’s because they are one and the same. No real change has taken place in Cuba. Yet. The same group that accompanied Fidel and Raúl Castro since their days in the Sierra Maestra—all now senior citizens—remains firmly at the helm of government. They represent the quintessence of the Cuban military-industrial complex. Below them, however, lies an entity often observed but not very well understood: the Cuban people.

Recent polls by Gallup (2006) and the International Republican Institute (2007) indicate that a majority of Cubans are unhappy with their level of personal and economic freedom. Cubans increasingly cry out for greater personal autonomy, and that also includes questioning of the political structure. That unhappiness has largely been expressed in a withdrawal from the political involvement that has been crucial to the government’s ability to keep the population in check. According to the government’s own figures, over 1.4 million Cubans did not participate in the one-party, single-candidate electoral process that culminated with the selection of Raúl Castro as president this year. That’s a noteworthy decline from the 823,171 who absented themselves from the previous “elections” held in 2003. Considering that the Cuban government uses a wide array of persuasive and coercive measures to pressure citizens to participate, it is a highly significant figure.

But passive discontent is already changing into a more active mode…

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Via the Los Angeles Times:

 Cuba uses the dominant convertible peso known as the CUC — introduced four years ago to replace the U.S. dollar, which had been circulating for more than a decade — and the Cuban peso known as moneda nacional.  Those with jobs in hotels, airlines and shops and on the thriving black market earn CUCs, referred to as “the dollar” and worth about 25 times the peso. The peso is the currency given to all state workers and pensioners, which must be converted to CUCs to purchase most goods. The Cuban government retains the peso because it lacks sufficient foreign reserves to back and circulate only CUCs.  The U.S. dollar, which circulated in Cuba from the mid-1990s to late 2004, was removed by then-President Fidel Castro and now is subject to a 10% tax whenever it is converted to CUCs — in effect a devaluation by the state. The tax is felt most by tourists and the estimated 10% of Cuban households receiving money from relatives abroad.

[…]

The government of Raul Castro, the 76-year-old younger brother of the ailing Fidel Castro, has acknowledged since Raul was named president in February that the two-currency economy has produced social strains and a class divide. He has pledged to restore equality by reunifying Cuba’s monetary system. Many foreign economists, however, deem that impossible unless everyone is forced back to the dysfunctional system in which prices are arbitrarily fixed by the state and goods disappear from stores when their production cost exceeds what they can sell for.

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Economic data
May 6th 2008
From the Economist Intelligence Unit
Source: Country Data

• The Economist Intelligence Unit’s central forecast assumes that there will be no sudden rupture in the political system. The new president, Raul Castro, is under no immediate threat from the outlawed domestic opposition or from the US; there are no signs of ruptures within the government; and the population’s frustrations are focused mainly on economic hardships, which are slowly being relieved. Nevertheless, the departure of Fidel Castro has opened the way for a gradual shift in the political structure. Under Raul, authority will be less centralised, but we assume that the one-party system will remain.
• Relations with the current US administration will remain hostile, and US sanctions will remain intact. However, a gradual re-engagement is possible under the next US administration, which will take office in January 2009. This would require strong political will on both sides to overcome resistance based on ideology and vested interests, but if it occurred would herald new possibilities for both political and economic liberalisation. Even without full normalisation of relations, a relaxation of sanctions could result in an increase in bilateral economic relations by 2012.
• Economic policy is under review, and a reform process has begun that is likely to bring major changes in the coming year. Our forecast assumes that the state will continue to exercise substantial direct control, but reforms will expand the role of the market. The Banco Central de Cuba (BCC, the Central Bank) will play a pivotal role in a realignment of prices, wages and exchange rates, using a broad range of direct and indirect instruments. We forecast an increase in real wages in 2008 and a revaluation of the unofficial value of the Cuban peso in 2009. Both adjustments will serve to increase real consumer spending. The fiscal deficit (which is monetised) will widen in 2008 before moderating to 4% of GDP by 2012.
• We expect annual GDP growth (using the standard definition, not the Cuban accounting method) to decelerate after a surge since 2004 driven by new export markets and sources of external finance. With a stable population, an average GDP growth rate of around 5% in the forecast period will bring significant improvements in living standards. Higher consumer spending and state investment will provide momentum in the medium term. Close ties with China and Venezuela leave Cuba vulnerable to any reversal of fortune in those countries.

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Forecast
May 6th 2008
From the Economist Intelligence Unit
Source: Country Forecast

Outlook for 2008-09

• Although the new president, Raul Castro, is introducing a number of reforms, the Economist Intelligence Unit expects gradual, rather than sudden, political (and economic) transformation.
• There will be no easing of tensions with the US in 2008, but some rapprochement is possible from 2009, depending on the outcome of the US presidential election in November 2008.
• The government has started to introduce a series of reforms to improve economic management, but progress will be constrained by conservatism and its commitment to full employment.
• A strategy for moving towards a single currency and single exchange rate is under way, but until this objective is achieved, the economy will continue to be plagued by dislocation and perverse incentives.
• We expect growth to moderate in 2008-09, and it will remain below potential as a result of continued US sanctions and restrictions on private investment.
• A small current-account deficit is forecast, as a widening goods trade deficit is partly offset by larger services and current-transfers surpluses.

Monthly review

• Some resented restrictions have been lifted, allowing Cubans to use facilities previously been reserved for tourists and to buy mobile phones; these reforms will make real income differences more conspicuous.
• Government officials and representatives of the intellectual community have stressed the need not only to improve economic efficiency but also to air disagreements.
• Diplomatic hostilities between Cuba and the US have flared up over US support to dissident groups.
• Cuba’s relations with the EU have remained overshadowed by differences over the application of conditions on the removal of diplomatic sanctions, while relations with Russia have strengthened.
• Reform measures have been introduced to expand opportunities for consumption and improve incentives, and more have been promised.
• The authorities’ anti-corruption drive has continued.
• No data have been published on economic performance in the first quarter, but the available information suggests that the economy has continued to grow.

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