2.2 Impact on
other sectors of the domestic economy
No sector of the Cuban economy has managed to
escape the hardship caused by the blockade.
Between 2004 and 30 April 2005, the total loss to
the civil aviation sector reached 178 million
61 thousand 459 dollars. The total amount of damage
incurred since 1960 rose to 2 thousand 400 million
dollars.
In this period, the income lost through the non-rendering
of airport services and others, due to the travel
ban imposed on US citizens, totaled 152 million 234
thousand 987 dollars. Between 1960 and April 2005, a
total of 2 thousand 43 million 167 thousand 229
dollars have been lost in this way. Due to the
additional travel bans, in effect since 30 June
2004, the American aircrafts that should have
operated in our airports have not done so, which has
produced economic losses to the extent of 3 million
537 thousand 384 dollars.
In the light industry, damaged caused by
the increase in prices and overspending on
freightage totaled $12. 402 800. With this sum it
would have possible to double the amount of toilet
and household soap given to the population as part
of their quota of household items, as well as a
48.7% increase in the amount of toothpaste.
As a result of the blockade, the Iron and
Steel Industry Group, ACINOX, which imports and
exports products of iron and steel industries
and electrical conductors, looses a yearly sum of 12
million dollars, which could be used to produce 45
thousand tons of corrugated rods. This would make it
possible to build 180 thousand rural dwellings a
year, or more than 30 thousand pre-fabricated houses,
which would benefit 120 thousand people. Likewise,
with the aforementioned amount of corrugated rods,
it would be possible to completely repair, in 10
years, the 200 thousand homes which are currently in
need in Havana, thus benefiting 180 thousand people.
The oil companies with business in Cuba that
invested in the country in 2004, spent 163 million
dollars. Of this amount, 25% came from overspending
on parts and materials that could not be bought on
the American market and on the additional payment of
freightage, all of which totaled an overpayment of
40 million dollars. If it had not been necessary to
make this overpayment, it would have been possible
to reduce the import of oil to the country by 500
thousand tons as a result of the increase in
national production.
The natural market for the sale of Cuban produced
petrol would be the United States. If
the Cienfuegos Refinery were to start production, it
would be possible, if this country were to end the
blockade, to export 600 thousand tons a year, which
at today’s prices is equal to 210 million dollars.
With regard to nickel, the United States
import an average of approximately 130 thousand tons
of this primary metal every year. If there were no
blockade – and taking into account the fact that due
to its proximity to the United States, Cuba would
provide the ideal source of supply of the mineral to
this country-, the Island could sell more than 30
thousand tons of nickel a year to the United States,
which at today’s prices would represent more than
500 million dollars. In respect of cobalt,
the United States imports around 8 thousand tons of
this metal every year. If they were to import just
25% of this cobalt from Cuba – 2 thousand tons a
year – at today’s prices Cuba could make more than
66 million dollars.
The Mechanical Nickel Company had to
acquire welding and CNC (computerised numerical
control machinery) equipment produced by the US
manufacturer MILLER, and a CNC Challenger Thermadyne
machine, also made in the United States, via third
parties. These transactions made through middlemen
cost a total of $363 500 dollars and represent an
additional payment of $54 500.
The Cuban steel company, ‘Antillana de
Acero’, makes 80% of its purchases in the European
markets and pays in euros, thus producing a loss of
more than 25% due the exchange of currency. One
thousand tons of coal are used every month in the
smelting process. This coal is bought in Colombia,
at a cost of $300 per ton; if Antillana could do
business with UCAR, an American company with which
we would transact to buy the best C/G electrode
available, this raw material would not cost a penny,
thanks to the commitments that UCAR makes with its
purchasers.
Taking in to account the fact that in 1958
Cuban sugar represented 58.2% of the total
amount of imports of this product to the United
States, it is estimated that, provided that it had
maintained a similar proportion of the market, the
negative impact for the Cuban economy due to not
being able to place said product on the American
market, rose last year to 154.1 million dollars. The
difference between the average price at which Cuba
had to sell its sugar last year and the price that
it would have got if it had been able to sell it in
the United States was US $249.1 per metric ton.
Between April 2004 and March 2005, losses in the
tourism sector rose to 1043 million dollars.
With 80 million dollars it would have been possible
to build two five-star hotels with 500 rooms each
(25 million dollars for each hotel) and to
reconstruct 3 thousand rooms that have deteriorated
due to the passing of time and insufficient
maintenance attributable to the lack of resources
(30 million dollars, using 10 million per room)
Each year the tourism sector spends almost
500 million dollar on electricity. It is estimated
that the source of between 50% and 60% of this
consumption is the use air conditioning the
facilities. It is also calculated that the most
competitive air-conditioning units from the United
States can produce a saving of at least 10% in
comparison with those from other manufacturing
countries. If it had been possible to invest in the
acquisition of US air-conditioning units, the
electricity saved could have been to the amount of
30 million dollars a year.
As regards housing, one of the country’s
most pressing problems, the fact that it is
impossible to acquire building materials from
American companies or affiliates in the area
increases the cost of construction by an average of
35%.
Because of the blockade interior commerce
transactions incurred additional expenses of 66.8
million dollars, largely due to the cost of
freightage and purchases made through third parties.
Without these additional costs it would have been
possible to buy 90 thousand condenser units for
premises where milk and meat products are sold at
retail prices, which would solve refrigeration
problems in these establishments. It would also have
been possible to buy 500 thousand motor compressors
to be used to repair domestic refrigerators, thus
responding to the needs of the population in this
field.
The limitations in the culture sector
continue. It is difficult for Cuban musicians to
perform in the American market. Because of the high
demand for performances by Cuban artists in the USA,
the Cuban company ARTEX could make a minimum of 9
million dollars a year. At least one million dollars
would have entered the country through the sale of
CDs, DVDs and other products.
It is likewise impossible for Cuban filmmakers to
present their productions to important audiovisual
markets in the United States, thus seriously
affecting the sales that could be made in these
areas. One example of this is the AMERICAN FILM
MARKET, which is considered to be the first or
second most important film market in existence today;
due to the fact that the Cuban film industry cannot
offer its products over there, it has lost out on
500 thousand dollars.
There are American producers and directors who
are interested in filming in Cuba, but who are
unable to do so because of the bans imposed by the
blockade. Well-known examples of this – individuals
who had specific projects linked to our setting and
wished to realise them– are Steven Spielberg, Steven
Soderberg, Randa Haines and Danny Glover. A
conservative estimate of the income that the country
could have received if an average budget American
movie were to be filmed would be to the amount of 2
to 5 million dollars. If at least 2 of these
projects had been realised, the income to the
country would have totaled between 4 and 10 million
dollars, enough to finance the filming of a total of
50 feature-length animations, at an average cost of
200 thousand dollars, or a total of 400 short-length
animations for Cuban children.
The fact that the blockade prohibits Cuban
companies from having recourse to the US dollar in
international business transactions, has meant a
loss for the company EGREM of 57 thousand dollars
due to the exchange of currency, during the period
in question.
Companies from this sector were also
significantly affected in the sense that it was hard
for them to acquire supplies as important as paint,
the complete spectrum of tempera colours, oils and
acrylics, materials used to prepare easels
and other items, because they had to be bought in
Europe. An example of this is the Cuban Fund for
Cultural Assets, which incurred excess
payments of 19 thousand US dollars as a result of
having to buy supplies on the European market. Well
known American companies that produce high quality
goods, such as Windsor & Newton Gallery Acrylics,
offer retail prices for their products that are
usually up to three times lower than what Cuba has
to pay when making this type of purchase in Europe.
At the end of 2004, as a result of a proposal by
American university publishing houses
interested in facilitating the free exchange of
ideas and informative material with Cuba, the OFAC
added a General License for editorial work to
the list of regulations on the control of Cuban
assets. This License would make it possible to
authorise persons and companies from the United
States to take part in editorial work related to
Cuba and in other activities that favour relations
in this field. However, the application of this
measure was subjected to restrictions that
once again evidenced the hostility of the US
authorities towards the Cuban Revolution, in a
blatant act of disdain for the free flow of ideas
and artistic creations.
The aforementioned General License explicitly
prohibits transactions with the ‘Cuban Government’,
and with institutions which, according to the OFAC,
‘belong to the Cuban Government’. The least that can
be expected with regards the application of this
License is a long and complicated process, during
which the punitive mechanisms created by the
blockade which have been applied for decades, will
continue to cause considerable damage to the Cuban
editorial sector.
The following are examples of the ways in which
the activity of the Literary Latin American Agency
has been impeded, and illustrate the facts given
above:
- The Smithsonian Editorial, based in New
York, had prepared a project for the
bilingual and illustrated edition of the
work ‘City of Pillars’, to be
launched in 2004 in tribute to the centenary
of Alejo Carpentier, the Cuban author and
Cervantes Prize laureate. The project was
suspended indefinitely by the OFAC, and as
yet it has not been possible to realize it.
- The edition of the ‘encyclopedia of
Cuban Music’, by the musicologist, Radamés
Giró, planned by the university publishing
house, Temple University Press – one of the
driving forces behind the aforementioned
General License -, has also been interrupted
due to the ban imposed by US authorities.
For these and other reasons, the Latin American
Literary Agency has lost approximately 20 thousand
dollars through cancelled editing projects, while a
similar figure is pending payment and cannot be
received by our country due to the banking
restrictions implemented by the financial siege on
Cuba.
During the period in question, only 11 travel
visas to the United States were issued for cultural
purposes, and were given for 5 exchange programmes,
out of a total of 106 requests made to the US
Interests Section in Havana (USINT) This is a
appreciable decrease in comparison to previous years.
Other important examples of this are the cases of
the artist, Carlos Garaicoa, who was denied a visa
to attend an important exhibition of his work on 4
March in the Contemporary Art Museum in Los Angeles,
and of the creators of the Carpinteros group, who
were unable to be at the opening of their most
important exhibition in the United States on 7 April,
which was to take place at the Contemporary Art
Museum of the University of South Florida, in Tampa.
The fact that the Cuban representatives of the
exhibition fair, the American Book Sellers
Association Convention and Trade Exhibition Book
Expo America, in which we have been represented
without fail since 1994, were prohibited from
attending, is another example of the intensification
of the blockade in the cultural sector. In March
2004, Cuba was prevented from attending the 1st
Congress of Genealogists, when their visa request
was not answered.
The refusal to grant visas to the majority of
Cuban artists who wish to travel to the United
States is the product of a crude and offensive
manipulation of cultural relations between Cuban and
the United States by authorities in Washington. The
pretext for this refusal is the application of
clause 212-F of the US migratory regulations, and
goes as far as to describe the Cuban artists as ‘a
danger to the interests of the United States’.
During the period in question, this clause was
applied against dozens of Cuban artists and
intellectuals such as the prominent filmmakers
Gerardo Chijona Valdés, Fernando Pérez Valdés,
Enrique Colina and Rigoberto López Pego; the
journalist and filmmaker Lisette Villa; the
musicians Carlos Varela and his group as well as the
group Habana Sax, as well as other important
exponents of Cuban culture, who have been unable to
participate in presentations and events in the
United States.
The rules of the blockade affected the investment
made to set up Educational Channel 2 on Cuban
television, which is used for educational purposes
and also to increase the population’s knowledge. The
total loss to the investment totaled 863 thousand
dollars, of which 154 thousand were spent on
additional transportation costs and 709 thousand
represented excess prices that Cuba had to pay in
third party markets.
The exportation of radio and television
programmes suffered losses to the sum of 250
thousand dollars, as our products could not be sold
to a significant part of the Spanish speaking market
which is dominated by US monopolies and interests.
The difficulties that had arisen in previous
years regarding the use of S.W.I.F.T. (The Society
for Worldwide Interbank Financial Telecommunication)
in the communication network persisted for the
Central Bank of Cuba. Due to the changes made to the
SWIFT Net technological infrastructure in 2004, it
was still difficult to import and use the equipment
and encryption software (components of the SWIFT
security system whose sources are in the United
States) which must be employed in order to make use
of the SWIFT Net services.
Between 1 and 7 July, the only possible
alternative was for Cuba to connect its banks
through a Services Bureau in Panama, and acquire the
SWIFT Alliance Access product as a Shared license (for
concurrent use of our banks), still with a
proprietary interface completely redesigned and
implemented in accordance with the IP communication
and PKI security standards.
In order to continue using the services offered
by this system, it was necessary to resort to other
measures that have meant:
Not being able to use the software produced
by the Central Bank of Cuba, which was approved
by SWIFT and used by all Cuban banks for over 12
years.
Having to acquire another type of software
for every bank connected to SWIFT, arriving at a
cost of 181 thousand 926 dollars, which also
makes these banks dependent on the technical
services of another entity through the payment
of an annual license worth 55 thousand 471
dollars.
The need to use the services of a third party
based in another country in order to gain
external connection, which costs an annual total
of 93 thousand 900 dollars.
In short, as a direct economic expense alone, the
banking system, in the field concerned with
communication for different operations and
transactions with countries abroad, suffered losses
between mid 2004 and May 2005 to the amount of 331
thousand 296 dollars.
In the electricity sector, it has been
necessary to accept short-term credit to modernise
the country’s generating plants and electricity
networks, with a view to improving the quality of
the service rendered to the population, due
to the fact that it was impossible to request the
services of the main international credit
institutions. The cost of credit gained rose by 6
million dollars.
(Continued... 1,
2,
3,
4, 5,
6)
