October 2010

The Taxman comes to Cuba (Part I)

Let me tell you how it will be,
There’s one for you, nineteen for me,
‘Cause I’m the Taxman,
Yeah, I’m the Taxman.
 


Should five per cent appear too small,
Be thankful I don’t take it all.
‘Cos I’m the Taxman,
Yeah, I’m the Taxman.

We all like to complain about taxes and none of us likes to pay them.  We also constantly search for ways of reducing our tax burden by enumerating deductions and listing expenses.  So, I extend a warm welcome to our Cuban brothers and sisters to the wonderful world of paying taxes. 

Hopefully, the requirement that they now pay taxes will be combined with real opportunities for them to set up micro-enterprises and small businesses that can actually be free to earn profits, provide employment, and offer better goods and services to their brethern at lower prices than in the past.  Vamos a ver.

As readers will already know, last Friday Granma published a somewhat confusing and contradoctory article outlining the new tax system for Cuba's self-employed workers (see here and here for links to international news coverage).

Then, this Monday the government released two important additional legal documents (together numbering over 100 pages!).  These numbers 11 and 12 of La Gaceta Oficial further detail the "New Rules" that will govern (1) the layoff of state workers, (2) self-employment, and (3) the tax regime.

While I am still working my way through the new tax code as described in La Gaceta, below in Part I of this post, I will offer my preliminary assessment of these recent developments.  Next week in a follow-up post (Part II), I will give my take on the detailed regulations as contained in La Gaceta.

Dispatch from Havana: The UN, EU and New Cuban Regs

Hallelujah...I'm online in Havana.  I've spent the last week here, and what an interesting week it's been.  With a crowded schedule and unreliable access to the internet - the more people online at the hotel the worse the connection - I've had to try to stow away lessons big and small and hope I remember them well enough to share.

A few observations:

While most of us focus on subjects like travel and exchange, food sales and telecommunications, the most damaging aspect of the U.S. embargo has come into clearer focus for me, and that is the increasing frequency with which U.S. sanctions are driving away international banks that might otherwise be willing to handle Cuban financial transactions.  I spoke with a U.S.-based news network representative here in Havana earlier this week who is, literally, unable to pay the network's operating expenses because the bank that should have wired their funds from abroad more than a month ago, sat on the transfer - fearful of U.S. sanctions.  Apparently the U.S. has international agreements in place with foreign banks to agree not to deal with transactions to or from countries subject to U.S. sanctions. 

Obama Fumbles on Cuba



Like many Cuba policy watchers, I've been deeply disappointed by the Obama administration's total lack of awareness of what's going on in Cuba in recent months, along with its apparent total lack of memory of the very conditions it set forth - repeatedly - for further engagement with the island.  In a commentary I wrote for Foreign Policy Magazine, I recalled the message the President himself sent via the Spanish government to Raul Castro last year.  It went something like this:

It was nearly one year ago that President Barack Obama delivered a message to President Raúl Castro via Spain's prime minister, José Luis Rodríguez Zapatero: "We understand that change can't happen overnight, but down the road, when we look back at this time, it should be clear that now is when those changes began," Obama said. "We're taking steps, but if they don't take steps too, it's going to be very hard for us to continue." If Cuba proved willing to improve relations with the United States, Obama seemed willing to reciprocate.

One year later, a lot has happened - most of it in the last several months, as crickets chirped in Washington.  More than forty political prisoners are out of their cells and headed to the United States thanks to the efforts of the Cuban Catholic Church and the Spanish government, and big, truly big changes in the economy are finally underway.  How does our president respond?

Rather than greet the changes, Obama has replied with mild skepticism. "I think that any release of political prisoners, any economic liberalization that takes place in Cuba is positive, positive for Cuban people, but we've not yet seen the full results of these promises," Obama told Hispanic media at the White House Tuesday.

It's hard to imagine a more clumsy response coming at a more critical moment than this one.  

Terrorist on the Dais at University of Miami's ICCAS

This morning, a congressional staffer forwarded the latest "Cuba Facts" received from the University of Miami's Institute for Cuban and Cuban American Studies (ICCAS).  The Institute regularly produces briefing papers and shares them with interested colleagues in the academic and policy community, and, of course, with staff on Capitol Hill.  The Institute isn't afraid to take a policy position when it comes to Cuba and U.S. sanctions, or - in this blogger's opinion - to sacrifice an honest representation of the facts in order to convey a particular point of view.  (And, let's not forget that until this year, the University of Miami's ICCAS received millions in taxpayer-funded support from USAID.)

But the latest Cuba Facts memo isn't what interests me.  I'm more stunned by the quaint little event the Institute hosted last week to celebrate the "50th Anniversary of the Guerilla Struggle Against Totalitarianism."  But what does it meant to honor the "guerrilla struggle" anyway?  Perhaps taking a look at the honorees might give us a clue?

Expanding Cuba's Private Sector: Help Wanted?



Cuba watchers note with great interest the series of reforms announced in recent weeks designed to make the people of Cuba less dependent on the state for their needs, and, in the process to unleash the productive energies of hundreds of thousands of Cubans who will now be encouraged to become private entrepreneurs, or go to work for small private businesses. 

Growing a private small business sector where there was almost none before is no easy task.  Cuba’s new entrepreneurs will need a more reliable supply chain to draw on than they currently have, and even the smallest businesses need access to start-up funds. Considering the worsening economy before these reforms came about, these are all good problems to have. 

Reuters reports this week that the Cuban government is green-lighting Spanish aid to establish micro loans for private farmers.  Certainly U.S. citizens and businesses, non-governmental organizations and regulatory institutions all have a great deal of expertise and support they could offer as the Cuban government encourages more Cubans to work in the private sector, but, unsurprisingly, U.S. policy remains an obstacle in two important ways.

First, we simply aren’t set up to offer such advice and support.  U.S. laws and regulations would need to be changed.  But even if we navigate around these technicalities, there is little chance that the Cuban government would welcome any robust U.S. engagement in the private sector.  That is because Havana views current U.S. policy as the continuation of “regime change” policies pursued by President Bush vis-à-vis Cuba.

New Phase in Cuban Political Prisoner Releases Begins

AP reporter Will Weissert reports from Havana that Cuban authorities have released 3 Cuban prisoners who are not part of the 52 agreed upon with the Catholic Church earlier this summer.  This latest development seems to indicate that the government may well be planning to release all political prisoners on the island, with the exception of prisoners who committed violent crimes. 

The news reminded me of comments made back in July by National Assembly President Ricardo Alarcon, that pointed to this outcome:

Paul Chiassen/Canadian Press Photo; http://www.cbc.ca/news/background/cuba/possible-successors.html"It was very clear from the discussions that the government's wish is to free all the people" on condition they had not been accused of murder, he said on the sidelines of a conference in Geneva.

Of course, the question is, who are "all the people"?  With this weekend's release of three prisoners, and the completion of the release of the 52 prisoners (the remaining dozen or so who have not yet been released have rejected the offer to move to Spain, and wish to stay in Cuba), Amnesty International would consider Cuba to have released all of its political prisoners.  Elizardo Sanchez of the island-based Cuban Commission on Human Rights and National Reconciliation counts close to 40 additional prisoners serving sentences for non-violent political reasons.

Twitter, Terrorism and Tightropes Over Cuba

Where’s a good ombudsman when you need one?  Over the last couple of weeks, I’ve received comments from readers on two very sensitive topics that remind me just how hard it is to find middle ground when it comes to Cuba.

Two days ago, a contributor for THN passed on what seemed - to him - plausible news.  A group of Cuban bloggers, especially prominent abroad for their criticism of their government and prolific use of social media, were unable to send their 140 character messages to Twitter.  One of them, the much-admired and maligned Yoani Sanchez, made instant headlines for publicly wondering if the Cuban government had blocked their access.  After all, her blog is blocked in Cuba, so maybe it wasn’t a leap too far?

“Bloquearon la publicacion desde moviles cubanos a twitter. Parece que pusieron el filtro aqui dentro.1 amigo publica por mi este tweet”

Sanchez then went on to wonder – via friends to whom she dictated her tweets – whether Twitter had been the one to block access.  That too had (an even more) plausible precedent.  In May 2009, to avoid getting in trouble with U.S. authorities, Microsoft blocked access to its instant messaging software for countries subject to U.S. sanctions, including Cuba.  And that, observed Sarah Stephens of the Center for Democracy in the Americas, was, ironically, just weeks after the Obama administration announced it would issue new regulations to increase telecommunications access for the Cuban people. 

As it turned out, nobody was censoring anybody.  Tomas Bilbao, who originally posted Sanchez' s concerns, did some investigating.  And, as he reported here yesterday, Twitter simply made a change to how customers must dial in.  That broke the Twitter link to which Yoani Sanchez and others in Cuban had become accustomed.  Bilbao admitted that he jumped the gun without all the facts in hand, and I hope that Sanchez will do the same.  If she doesn’t, she’ll only prove her critics right, who accuse her of being more interested in building the momentum her creativity and criticism have won her, than in building a constructive dialogue.  And that’s where the real damage is done.  Unfortunately, both sides are too quick to judge, take names and call the press.

Technical Glitch Responsible for Loss of SMS Twitter Service from Cuba

Social media giant Twitter has confirmed that the loss of service experienced by Cuban bloggers posting messages using SMS technology from the island was the result of a technical issue and not the result of censorship by the Cuban government. A statement issued by the company via its Twitter account @twitter_es today, stated that:

“We have disabled “long” coding for sending tweets via SMS”

This technical jargon basically explains that when twitter changed the numbers to which users send their SMS messages from "long coding," meaning real phone numbers, to "short coding," meaning 5 digit codes, it interrupted any SMS messages sent to the original long telephone numbers from being posted on twitter. They are working to correct this issue. In this tweet, Cuban blogger Yoani Sanchez explains how Cuban bloggers send messages via SMS.

Yoani Sanchez reported to the Spanish news agency EFE last night that: “we’ve been left without a voice in the world of 140 characters.” Sanchez learned that messages she had been sending via SMS were not reaching her twitter account after followers alerted her that no activity had posted to her profile since Friday. Ms. Sanchez called on Twitter to clarify whether a service interruption was to blame:

@yoanisanchez #twitter must clarify if its service has censured us from publishing tweets by SMS or if the government of #Cuba has blocked us.

Cuban Government May Have Blocked SMS Access to Twitter

Cuban blogger Yoani Sanchez, who operates under the Twitter account @yoanisanchez, reported from Cuba tonight that Cuban citizens have been unable to publish to the social media site using SMS text messages since last Friday. The Maria Moors Cabot and Ortega y Gasset award recipient explains that it was only today that she and other bloggers realized the tweets they had been sending via SMS since Friday had not been published after followers noticed the three-day silence from Havana. Cuban bloggers regularly post updates to Twitter using their cell phones by sending an SMS text message, but are unable to see whether their tweets have been posted, nor read anyone else’s updates. As of Tuesday night, Cuban bloggers had not been able to confirm whether Twitter was experiencing a technical glitch or other problem that could explain the service interruption.

@yoanisanchez #twitter debe aclarar si su servicio nos ha censurado publicacion de tweets por sms o si ha sido el gobierno de #cuba que nos ha bloqueado

A New Release of Political Prisoners in Cuba?

Ladies in White marching on October 3, 2010

The announcement this weekend by dissidents inside the island that the Cuban government may be preparing to release additional political prisoners beyond the initial group of 52 announced a few months ago is encouraging on at least two fronts. According to news reports, Laura Pollan of the Ladies in White and Elizardo Sanchez of the Cuban Commission for Human Rights and National Reconciliation (CCDHRN) stated that their organizations have been asked by Church and European authorities to help identify political prisoners for potential release. If the Cuban government moves forward with the anticipated release of additional political prisoners, it would represent the largest release of political prisoners since 1979. While the release itself represents a significant, positive step by the Cuban government, the acknowledgement by the Cuban government of the role of independent civil society organizations in this process is an unprecedented step.

Opinion Leaders Hold Forth While Dodd Visits Cuba

Breaking news:  Senator Christopher Dodd is in Cuba.  Is this a pre-retirement last hurrah as chair of the Western Hemisphere subcommittee of the Senate Foreign Relations Committee?   Might he be laying the groundwork for a valedictory lame-duck initiative to end travel restrictions?

Radio Marti speculated his visit was connected to resolving the Alan Gross problem.  That's nice to imagine, but seems unlikely unless the US somehow acknowledges that Gross violated Cuban law on three counts (a democracy project funded by USAID, inappropriate use of a tourist visa, providing illegal satellite transmission equipment).

 

Julia Sweig of the Council on Foreign Relations has an excellent op ed published in the International Herald Tribune and on the New York Times web page contrasting change in Cuba with inertia in Washington.  Here is part of it:

In one example, senior political advisers in the White House recently shut down the revival of a Clinton administration “people-to-people” program ­ one approved over the summer by President Obama, his secretary of state and sub-cabinet deputies from throughout the executive branch ­ to allow Americans tied to educational, cultural, religious and other nongovernmental organizations to travel to Cuba. Senate and House Democrats from Florida and New Jersey persuaded President Obama’s political hands to stop the modest opening lest they inflame Cuban-American voters and jeopardize campaign contributions.

Such legislators also fear that by allowing some Americans to travel to Cuba, the White House could strengthen supporters of legislation to lift the entire travel ban, scheduled for a politically decisive vote in the House Foreign Affairs Committee during the lame duck session of Congress. As with the White House, these legislators have lobbied their colleagues in the Congress that such a move will backfire against Democrats in 2010 and 2012 elections.

But their argument is out of date. Cuban-American majorities now support extending their right to travel to all Americans. They are eagerly investing in their families’ small businesses and with all manner of goods they ship down on 30 weekly flights from Miami.

Furthermore, most Cuban-Americans still vote Republican in presidential elections ­ as they did in 2008. And if they vote for the one Cuban-American candidate running for the Senate this fall, it will be on bread and butter issues, not Cuba policy. The perverse and decidedly un-American effect of the administration’s political timidity is that only Cuban-Americans, most of whom don’t even vote for Democrats, can now participate in the changes afoot in Cuba.