Cuba’s new financial policy — accelerating the economy
Analysis: Cuba's new financial policy — accelerating the economyBy Pavel Vidal Alejandro
In the Gaceta Oficial No. 40 the government published the new framework in which the self-employed, micro businesses and private farmers, starting Dec. 20, will be able to be financially active. This new legal framework puts them practically on equal footing to the financial services and credit a state enterprise can access.
The new financial regulations equally apply to the soon-to-be-coming non-agricultural cooperatives and other non-state entities that may be allowed in the future. The regulations also leave the door open to loans for consumer good, automobile and home purchases, even though they state that this won't be a priority for now.
Three state banks, Banco Metropolitano, Banco de Crédito y Comercio, and Banco Popular de Ahorro, will be in charge of responding to the new loans and financial services. The self-employed and micro entrepreneurs may apply for loans starting at 3,000 non-convertible pesos (CUP) — US$125 at current exchange rates — while loans for private farmers start at 500 pesos CUP, or $21. These loans can be used both for working capital or investment purposes. There is no upper limit for the loan amounts. The Central Bank will set minimum and maximum interest rate ranges.
Loan applicants must specify the viability of the business and guarantees. In case of repeated non-compliance, the financial institution will take legal steps, according to the guarantees defined in the contract. As collateral, applicants may use their own bank deposits or those of third persons, movable goods, mortgages of vacation homes, or unimproved lots, among others. All these guarantees could be subject to seizure. The regulations establish that the debtor's permanent home may not be put up as collateral.
The banks may, furthermore, open checking accounts in CUP or convertible pesos (CUC) for non-state sector clients. The opening of a checking account is obligatory for businesses with gross annual revenues exceeding 50,000 pesos CUP (US$2,083).
Another new financial measure is that the entire non-state sector may use, in addition to cash, the following payment instruments: a) bank transfers, b) checks, c) payment order, d) debit or credit card, e) local letter of credit, f) demand bill, g) promissory note, and h) others that are used in banking.
It's difficult to make an evaluation of the new measures before they have been put to practice. Even so, some general traits about potential and challenges can be anticipated.
The opening of credit by state banks will allow to add new resources to the disposition of private undertakings. In principle, the banks would be better qualified to select projects with higher profitability and lower risk, which in turn would increase efficiency in the allocation of temporarily free resources in the economy.
This way, a proliferation of informal finance would be avoided. Until now, capital for private businesses has originated from savings of the entrepreneurs, remittances from abroad, and informal finance resources (loan from a family member, friend or other person).
A foreseeable challenge is that, effectively, these three banks — whose basic experience and knowledge was formed under the logic of credit for medium-size and large enterprises — will be able to speedily assume the principles that govern microfinance. An alternative, more attuned with international practices, would have been to create microcredit banks or other financial institutions that solely specialize on serving this market segment. The formation of mixed-capital microcredit institutions (for example with some Latin American microcredit bank) would multiply the financial, logistical and know-how potential of Cuban banks facing the opening of a non-state small-business sector.
The possibility of non-state sector companies opening checking accounts and using all payment instruments has the following positive effects:
•Their operational costs will shrink. By way of banks, they would be able to pay their taxes, Social Security contributions, utility bills, and more. This would reduce the risk and cost of handling and accumulating excessive amounts of cash.
•Their links with state companies and institutions would begin to be financially viable.
•It would facilitate legal control, particularly it would contribute to reducing fiscal evasion.
For monetary policy, the opening of banking for the non-state sector has also implications. It can bring about considerable changes to the composition of demand for money. Once credit expands to the non-state sector, new financial transmission mechanisms will appear, and it will increase the ability for monetary policy action to influence economic activity in the short term, and to control inflation.
The new financial services also represent challenges for the Cuban banks, which seem to have already reached capacity in serving their existing clientele. That clientele, moreover, has little access to alternatives such as online or telephone banking, magnetic cards and automatic teller machines. Therefore, bottlenecks in providing financial services to the private sector will likely be forming.
The banks and the non-state sector will face another type of challenge to advance within the new financial framework, due to the very economic environment in which they must function. Dual currencies and exchange rates, lack of access to a wholesale supplies market, import restrictions, domestic financial crises, limited convertibility of the currencies, deficiencies in the incentives system of state companies would be among the most significant obstacles.
Even so, the new measures still seem very positive, because they signal the real acceptance of new actors within the Cuban economic model, because of the positive impact they must have due to their performance, and because of the potential (and challenges) of an economy that will be more accelerated by banks and credit.
Pavel Vidal is an economist with the University of Havana's Centro de Estudios de la Economía Cubana (CEEC).
On Cuba’s Farmers, Lettuce and Hotels
On Cuba's Farmers, Lettuce and HotelsDecember 1, 2011Haroldo Dilla Alfonso
HAVANA TIMES, Dec 1 — The recent authorization given to different types of cooperatives to sell products directly to the tourism industry is positive and significant for two reasons.
Firstly, this is a measure that introduces a note of rationality to the Cuban economic system – after five decades of its having been incredibly mediocre and bureaucratic.
Farming and livestock products of whatever kind has been only recognized as payable merchandise after they're recorded by bureaucracies designed for that purpose, with all the waste entailed. Even though this rigidity has weakened somewhat in the heat of the unending crisis, in essence, it continues in this vein.
I remember one case that I observed directly in the small town of Chambas (in Ciego de Avila Province) while conducting sociological research in the late 80's. There's no doubt that it would have inspired the great dramatist Eugne Ionesco, as well as his theater of the absurd.
Though in Chambas there was a port close to the Punta Alegre fishing operation, which supplied fish to a cooperative, those same fish had to be transported many miles to the provincial capital, where they then had to be registered as payables, thereby becoming "real." Subsequently they had to be transported back that same distance to Chambas.
However, since the trucks' cooling systems were poor, the freight would often return spoiled. This meant that the locals couldn't eat fish, not unless they turned to the black market. It was here that the fishermen of Punta Alegre (many of whom lived in Chambas) became responsible for shortening the path of those unfortunate denizens of the sea.
Fast forwarding to the 90's – amidst the terrible crisis that Cuban authorities euphoniously refer to as the "special period in a time of peace," I had the opportunity to learn a little about the issue of foreign investment in hotels in Varadero.At one of them I talked at length with a young Spanish manager, a Taylorist technocrat who had decided to siphon off as much surplus value possible from each of his Cuban employees in the shortest amount of time possible.
I remember that the person in charge at the front desk was a former head of the philology department of a university in the middle of the island. This was someone who not only knew English and French, but who had read Racine and could recite Walt Whitman by heart. Nonetheless, her legs were always swollen because of having to stand up all day.
Then too there was this manager of a jewelry store (also a former university professor), so refined and intelligent, capable of selling a wedding band to an 80-year-old priest. This woman would complain and carp daily about her frustration with a job that only allowed her to survive with some low level of comfort while others fell victim to poverty and deprivation.
The young Spanish manager was delighted with his situation, except with the purchasing of the hotel's fresh fruits and vegetables. He had to buy them from an intermediary who lived in nearby Cardenas, though this person was usually short on produce and could only offer wilted lettuce and overly ripened mangoes. The challenge wasn't about what this junior manager wanted, but what he could get.
With a mischievous smile, he confided in me that he found out a way to obtain many products directly from places like the Bahamas, Cancun and Florida (a fact that I hope won't be taken into account as circumstantial by US congress member Ileana Ros-Lenthinen).
The new measure allowing direct sales should have had a positive effect on reducing costs and on the formation of a chain of products and services vital for local development. This is a way to boost tourism as an engine for economic growth – and for that reason alone I think it's important and beneficial. I also believe that steps of this nature should occur in all directions, not just in relation to agriculture.
But there's a second point that I think is even more important: its systemic impact.
The Cuban system — economically and politically — has always been based on the existence of a severely centralized vertex and a fragmented and isolated base. In this centralization has resided the capacity to control and prevent critical disruptions.
As such, if we review the history of the system, we'll see that preventive banning and prohibitions have been more frequent and effective than the direct repression of dissent.
In politics this has been very clear: Each institution is a vertical structure which in turn feeds into the political center. There are no horizontal relationships or communications. Everything ultimately issues into a very small cupola of power occupied by a leader (for whom we parade in front of every May Day) surrounded by a narrow circle of subordinate collaborators (who vary according to circumstances).
For decades this leader and his inner circle were the only legitimate producers of politics and ideology. The rest of us have been nothing more than consumers.
The economy evolved in the same manner. Everything began with a bureaucratic and centralized plan, which was constantly violated by that same bureaucratic and centralized structure.
Operating exactly like the regimented political system, the market was fragmented to avoid free contact with its agents. Moreover, starting in the 90s, the economy was also marked by two different currencies. This opened the door to the promising field of currency exchange profiteering, which was actively taken advantage by officials metamorphosing into the new bourgeoisie.
All of this explained the Spanish manager's anxiety and his final decision to seek overseas vegetables, despite having excellent agricultural fields only a few miles away from his tourist ghetto. All around was land teaming with farmers ready and willing to produce, but they were hamstrung by inspectors and police officers intervening to commandeer the produce into state warehouses.
With this recent measure, another step forward has been taken in the defragmentation of markets. This is moving in the same direction as the new law that will deregulate the housing market. Therefore, this represents another serious step in that other process — which will be long and painful — of the construction of capitalism in the country.
But let me reiterate: It's a positive step. It will help boost the economy and food production, all of which is extremely important for a society which, because of mismanagement, has been reduced to poverty and an alarming degree of vulnerability.
If there ends up being more food produced in Cuba and most Cubans eat better, this is a positive. If there will be more autonomous actors — even if only in this limited area of ??the economy — this too will be positive. And if these actors engaged in production and accumulation wind up employing workers and paying them better than what the state does, then it's so much the better.
In addition, all of this creates a less rarefied atmosphere for advancing an agenda of national reconstruction, one of a democratic republic of justice and solidarity.
Yet obviously this is not what is suggested by the reforms of the general/president, whose anti-democratic pedigree no one has the right to doubt. His agenda is not that of democracy. This is because the expected autonomy will be in the market, not in politics. And it's not certain that a commercial invigoration of the economy will lead in a linear direction to a democratic opening.
There will be production, yes; and liberalization (meaning more liberalism), but not more democracy.
In fact, I would dare to argue that the production of democracy would be dysfunctional, because the opening taking place in Cuba, one aimed at achieving optimum performance, must coexist with a working class and a citizenry without rights and without the organizational infrastructure or experience to raise demands.
Borrowing from the infamous anti-Cuban metaphor posited by Granma editor Lazaro Barredo, the public is like insistent wide-mouthed nestlings, but in this case they would find themselves with their mouths closed shut.
In politics, the Cuban government will only concede what's necessary to assure that its economic model functions in its behalf. Hence we saw the agreement with the Catholic hierarchy, the release of prisoners and the recent relaxation of internal migration – all of which is ultimately a better scenario for the housing market to work, the laundering of fortunes and converting treasures into capital.
Soon we will see a few liberalizing steps with regard to emigration. These are necessary to attract "foreign savings," which represents the money of emigrants, arriving in the form of remittances or investments.
But that's it. The Cuban authorities, their intellectuals and their subservient underpaid bloggers have been very clear in that the opening of democracy and the rebellion of the island's "indignant" already took place in 1959 – way back 52 years ago.
Cuba says economy up 2.7 percent in 2011
Cuba says economy up 2.7 percent in 2011Fri Dec 2, 2011 11:07am EST* Economic growth just short of forecast* Trade surplus seen for third consecutive year* Government adopts measures to boost food output
HAVANA, Dec 2 (Reuters) – Cuba's economy will end the year up 2.7 percent, state media reported on Friday, an improvement over the 2.1 percent increase registered in 2010 but a bit less than the 2.9 percent forecast by the government.
Granma, the Communist party newspaper, blamed investment-related construction problems for the less than expected performance. It cited a recently concluded meeting of the Council of Ministers which adopted economic plans and a budget for 2012, without providing further details.
The newspaper said budget deficit reduction would also fall short of plans this year, due mainly to lower than expected revenue from sales taxes, indicating internal trade did not perform as anticipated.
Cuban President Raul Castro has been leading an effort to reform the communist-run country's Soviet-style economy as it struggles with heavy debt and stagnation.
Castro, since taking over for his ailing brother Fidel in 2008, has drastically cut imports while promoting domestic production and exports.
Cuban Foreign Trade Minister Rodrigo Malmierca said a month ago that trade was up 27 percent through September, compared with the same period in 2010, and on track toward a third consecutive surplus.
Reserves at the Bank for International Settlements stood at $5.649 billion in June, double what they were three years ago.
Granma reported on Friday that the government meeting concluded that efforts to improve domestic food production, through a series of reforms, had not gone far enough. Combined with higher international prices, that was undermining efforts to cut imports that cover 60 percent to 70 percent of domestic consumption.
Granma said the government meeting, chaired by Castro, adopted "a group of measures to eliminate immediately problems affecting Basic Units of Cooperative Production," a form of farming cooperatives established on state-owned lands.
The paper said measures were also approved modifying a land-lease program, which grants small plots of land to new farmers for 10 years, in order "to encourage the incorporation, permanence and stability of the labor force and guarantee the permanent settlements of the farmers' families."
Farmers have complained the leases are too short, the acreage is too small and that a ban on building permanent structures on the land works against increasing production.
http://www.reuters.com/article/2011/12/02/cuba-economy-idUSN1E7B10C320111202
Cuba Reforms Its Educational System
Cuba Reforms Its Educational SystemNovember 23, 2011by Fernando Ravsberg
HAVANA TIMES, Nov 23 — The changes being made in the Cuban educational system are far-reaching reforms with enormous long-term implications. They involve reducing the number of university students, increasing the slots for technicians, creating schools to train skilled workers and gearing the entire system to the needs of society.
The deputy minister of Higher Education of Cuba, Rodolfo Alarcon, explained to us where these reforms are heading.
What are the main steps of this readjustment? Has university enrollment been reduced?
Rodolfo Alarcon: Well, actually there has been no adjustment in available university enrollment. The whole movement of change that's generally occurring in education in Cuba is based on achieving the optimum quality in the development of students. One measure that was implemented was the requirement of entrance examinations into higher education. These include math, Spanish and the history of Cuba, which are tests that must be taken and passed independently.
That has limited access, but it's not that enrollment slots have decreased. This is something that must be resolved in the same measure that the pre-university education increases its quality and efficiency, and therefore more students pass the entrance exams.
Nevertheless, a youth who doesn't pass still has the option to keep re-applying until they turn 25 and get one of the slots. What characterizes this movement is the achievement of the maximum possible quality of professional training in Cuba.
Does this encouraging of young people to go into mid-level technical careers and to become skilled workers have the intention of redressing the distribution of the labor force?
Rodolfo Alarcon: One of the distortions caused by that situation was that virtually everyone in high school was studying to go on to the university when in fact there was a tremendous need for mid-level technicians, people who could solve concrete problems. There's a lack of them.
With the new system they can go back and do their university studies later, after working as a technician. That's the way a young person who enrolls in technical level studies can help resolve the shortage that we have at this level. They're being encouraged to go back to college later, after first working.
Cuba is one of the few Latin American countries that have guaranteed college access for all social sectors. So how is it going to ensure this now that access becomes more difficult?
Rodolfo Alarcon: That's an interesting question. Cuba spends a significant amount of its meager resources on general education and on higher education in particular. We have various types of courses. The ones that are very resource demanding are the day courses, but we also have courses for workers who can't attend as often and are therefore less expensive.
We have "distance education" programs that are going to be expanded and are even less expensive, though the initial investment is high. This allows everyone who wants to study in higher education to be able to do so, that's the aim and what we're working on.
It's also being proposed that the university relate better to the needs of the economy. Is this similar to the European reforms?
Rodolfo Alarcon: Well, it's not only the economy; it's also society as a whole. Joining society to the market would be sounding the death knell for the university. The university must have a commitment to its society, which isn't solely the market; there are also social needs. It has to anticipate the needs of society, that's its role.
So part of its mission is to meet the needs of the economy, though that's not the whole mission. It happens that to the extent that the Cuban economy, or the economy of any country, needs to expand, it's logical that the university should work to help solve the problems of the economy; that's part of its social commitment. The university should contribute to the economy with its actions, and that too is what we're trying to do.
We have always tried to make the work of the university relevant, meaning that it meets the needs of society, though it must also be a source of suggestions and ideas that might be beyond what is generally thought in society at that time.
The new policy is directing young people towards technical training for Cuba's development. Photo: Raquel Perez
The work of Cuban professionals is the country's main source of income. Will this remain the same or will the university be directed towards other sectors more productive than the services?
Rodolfo Alarcon: No, we're putting a great deal of emphasis on technical and agricultural fields. Those are the main needs of Cuba at the moment. That's why we're trying to direct students toward these areas and creating opportunities so that they study these fields. The historical level of preparation of teachers, doctors, etc. is being maintained, but the priority is in other areas. Studies in the agricultural fields are what the country needs.
Are you saying that we're going to see a Cuba that's more production-oriented and less service-oriented?
Rodolfo Alarcon: We're creating a Cuba that won't rely on imported food or importing things we can create right here in Cuba; and in that sense, the university has an important role.
Granma publishes details about new sugar company
Granma publishes details about new sugar company
Announcing another round of layoffs in the sugar industry, Communist Party daily Granma in a two-page spread laid out the structure of a new state sugar company.
With the goal of cutting administrative cost by 55 percent and reaching productivity goals that were not met after a first wave of changes and cutbacks since 2002, the government dissolved the once-powerful Sugar Ministry (MINAZ) and created a new state company that reports directly to the Council of Ministers and whose success will be measured in profits.
The new company, called Grupo Azucarero, consists of 13 provincial enterprises with 56 sugarmills; five aging mills will be completely shut down, the newspaper said. Grupo Azucarero will manage a total of 814 production units, down from 932 in 2010, when the industry still was directly operated by the Sugar Ministry. While the remaining sugarmills will not be independent, they will enjoy more autonomy.
The company will pay sugarcane producers a price that adapts to world sugar prices. In what is a novel move during the current harvest, producer prices were raised from 50.90 pesos per ton to first 95 pesos, and then to 104 pesos. Grupo Azucarero must liquidate existing debt with producers within 20 years; sugarcane producers now pay a 5-percent sales tax.
The government expects Grupo Azucarero to yield a profit of 120 million non-convertible pesos in 2012, Granma said.
The Foreign Trade and Investment Ministry (MINCEX) is now working with Grupo Azucarero to develop sugar export strategies. MINCEX also oversees foreign investments in the sugar sector.
"A vital question in this reordering is decentralization, as a way to lighten structures and eliminate red tape," Granma said. "In addition to using resources more efficiently, this measure allows shortening administrative distances and facilitating management. The new structure will allow reinforcing contractual responsibility between entrepreneurs."
The sugar company is part of a new generation of state companies — called Organizaciones Superior de Dirección Empresarial (OSDE) — that enjoy a higher degree of budget autonomy.
http://www.cubastandard.com/2011/11/19/granma-publishes-details-about-new-sugar-company/
Latin America keeps a watchful eye on Spain’s incoming government
Latin America keeps a watchful eye on Spain's incoming governmentCuba and financial investment in the region are the two biggest issues
SOLEDAD GALLEGO-DÍAZ – Buenos Aires – 18/11/2011
Latin American leaders are paying close attention to see what changes, if any, Spain's new government will make regarding its policy toward Cuba.
The Communist island's relations with Madrid and the rest of the European Union have been an important focus of bilateral relations, and Latin American presidents know that a conservative Popular Party (PP) government won't be so keen to try to foment a friendly approach toward the Castro regime.
During the past two decades, the majority of Latin American nations have been governed by left-leaning presidents, who have identified themselves more closely with Spain's Socialist Party. All of them recall the hardline position the past PP government of José María Aznar took with respect to Cuba, when the prime minister successfully campaigned at the EU level to cool relations with Havana.
The PP has also not done much to improve its own image in certain countries. After President Cristina Fernández de Kirchner won her first term in 2007 ? taking over the Casa Rosada from her husband Néstor Kirchner ? Spain's conservatives were very vocal in their opposition to the idea of keeping the Argentinean presidency "within the family."
Nevertheless, even though Mariano Rajoy and Fernández de Kirchner are on opposite ends of the political spectrum, bilateral relations between Spain and Argentina are not thought to be in jeopardy should the PP leader win the race on Sunday ? just in the same way Chilean-Spanish relations didn't suffer when conservative Sebastán Piñera was elected two years ago. Buenos Aires never cared for Colombia's former President Álvaro Uribe, but now has a wonderful relationship with his predecessor, Juan Manuel Santos, who is also a conservative.
Spain's relations with Brazil should the PP win are also expected to remain on an excellent level. The Socialists have always had more historic ties and contact with the Social Democratic Party of former President Fernando Henrique Cardoso, than the Brazilian Workers Party (PT), which is the governing party of President Dilma Rousseff.
Venezuela could be a different matter. But given that Venezuelans are caught up with their internal problems, such as high crime and inflation, as well as with the illness of their president, Hugo Chávez, who is undergoing cancer treatment, they are unlikely to be overly concerned about a change to a conservative government in Spain.
The majority of Latin American governments are paying close attention to the economic crisis unfolding in Spain, which could have political as well as financial repercussions for them. Between 1990-2010, Spanish business deals flourished in the region, transforming Spain into the second-largest investor in the region, after the United States.
Many Spanish companies now see their Latin American affiliates as being essential to their survival. For example, more than 35 percent of Banco Santander's operations are located in Brazil and more than 50 percent of BBVA's holdings are located throughout the region. Repsol's Argentinean affiliate, YPF, is responsible for 40 percent of the oil giant's profits.
Managers at some of Spain's transnational companies say they want the new government to keep these figures in mind, as well as the importance of the investments already made in Latin America because, as they say, it is not about the region but rather helping the Spanish economy to grow.
Cuba Takes Steps To Recover Sugar Industry
November 14, 2011 13:40 PM
Cuba Takes Steps To Recover Sugar Industry
HAVANA, Cuba, Nov 14 (Bernama) — The Cuban government is currently engaged in the process of reorganising the country's declining sugar industry to restore its status as an important pillar of the national economy, reports Xinhua news agency.
With the collapse of the Soviet Union, Cuba's main trade partner, raw sugar production in the Caribbean country plummeted from 8 million tonnes in 1990 to only 1.1 million tons in 2009, the lowest level in a century.
This situation has forced the Cuban government to take new steps to revive the island's once most productive sector.
According to the Official Gazette this week, President Raul Castro has signed a decree to create a new government office, Azcuba, to replace the Ministry of Sugar to oversee the country's sugar production.
Azcuba comprises 25 provincial and service companies, including two research institutes on sugarcane and its derivatives and a national training centre.
The decision to abolish the ministry, which failed to meet any state function, was taken in September during a meeting of the Council of Ministers headed by Castro, the official Granma daily said.
According to the special provisions, functions such as the control, protection and development of the land fund for sugarcane production were transferred to the Ministry of Agriculture.
The guidance and control of distributing sugarcane products and its derivatives were passed to the Ministry of Economy and Planning, while the Ministry of Foreign Trade and Foreign Investment received the order to direct and control the sector's policy and marketing strategy.
The government also promoted a programme to modernise the century-old sugar industry, including replacing the ancient KTP combine harvesters of Soviet technology with more efficient Brazilian machines.
During a parliamentary session in August which analysed the country's economic situation in the first half of 2011, Castro said his government managed to stop the decline in sugar production.
According to the government, it aims to increase sugar production by 20 percent to 1.4 million tonnes in the coming harvest, during which sugar mills nationwide will go into production throughout December 2011 to January 2012.
The country currently has 56 sugar refineries, 46 of which will grind during the next season, compared with 39 in the previous one.
According to experts, despite the dismantling of half of its sugar refineries, Cuba still has the capability to produce 4 million tonnes of sugar annually.
Cuba fumes over tobacco packaging laws
Cuba fumes over tobacco packaging lawsby: Christian Kerr and Leo ShanahanFrom: The AustralianNovember 14, 2011 12:00AM
COMMUNIST Cuba and democratic Ukraine, once part of the Soviet Union, have challenged the free-trade credentials of the Labor government, becoming the first countries to foreshadow action in global trade forums against its tobacco plain-packaging laws.
The Cuban government and state-owned cigar company Habanos have warned the federal government that forcing it to comply with the new laws, which would apply to its famous cigars, could violate Australia's obligations under the World Trade Organisation.
And Ukrainian ambassador to the WTO Valeriy Pyatnytskiy warned that the legislation as it stood violated key international intellectual property agreements.
The protests came as representatives of American business groups tackled Julia Gillard at the APEC meeting in Hawaii on the plan, cautioning that its impacts would be felt far beyond tobacco by threatening trademark protection for other industries.
Local tobacco companies have already vowed to challenge the move in the High Court of Australia once it becomes law, saying it strips them of their trademarks, trade dress and other intellectual property rights.Free trial
Trade Minister Craig Emerson said the government was firmly committed to implementing measures to require plain packaging of tobacco products.
"These measures will be implemented in a way that is consistent with our intellectual property, trade and investment obligations," he said.
But Mr Pyatnytskiy told The Australian his country, only free from Soviet shackles and central planning for two decades, "has a significant interest in maintaining full protection of trademark rights because they are directly related to the value and volume of exports from Ukraine in several sectors of our economy".
He cited alcohol and food as well as tobacco products.
He has legal advice that finds plain packaging violates the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS, the cornerstone of the international intellectual property regime, and the WTO Agreement on Technical Barriers to Trade. Mr Pyatnytskiy warned that his government "will have no choice but to review carefully its legal options under WTO rules and to take whatever actions it deems appropriate in exercise of its WTO rights" if the plain packing bills were not amended before they became law.
Cuba says plain packaging will destroy its cigar market in Australia. "The government of Cuba
wishes to express its concern over the latest developments on the proposed Tobacco Plain Packaging Bill 2011 and its adverse impact on trade in non-cigarette products such as cigars," ambassador Pedro Monzon said in a submission to the Department of Health.
Under the legislation, which will be finalised by the end of the year, only the brand name and type of cigar will be allowed to appear on the cigar box. Bands on the cigars will have to be removed or replaced by brown ones, and cigars in tubes will have to be repacked in plain green tubes.
Enjoying a cigar at Cohibar, in Sydney's Darling Harbour yesterday, New Yorker Jim Vanleenen said he appreciated the government's objective of reducing smoking but did not think plain packaging would have the effect intended. "I travel constantly in my job, and I haven't heard of any other country implementing a scheme like this," he said.
Representatives of American business groups tackled the Prime Minister at the APEC meeting in Hawaii on the plan, cautioning its impacts would go beyond tobacco to threaten trademark protection for other industries.
Cal Cohen of the Emergency Committee for American Trade said the laws "would set off a major, major problem for the global trading system".
The committee is one of a range of US business groups — including the US Chamber of Commerce, the National Association of Manufacturers, the US Council for International Business and the National Foreign Trade Council — which issued a statement yesterday after representatives met Ms Gillard.
Mr Cohen stressed the organisations were speaking for business generally, not the tobacco industry.
"This has nothing to do with regulating tobacco and everything to do with the precedent that would be set by Australia violating its international treaty obligations," he said.
Mr Cohen said he told Ms Gillard that Australia and the US had worked strongly in international forums to protect intellectual property against counterfeiting. "What is going forward is going 180 degrees in the opposite direction," he told The Australian.
Additional reporting: Mitchell Nadin
Cuban official says corruption crackdown to go on
Cuban official says corruption crackdown to go onBy Nelson AcostaHAVANA | Wed Nov 9, 2011 6:29pm EST
(Reuters) – Cuba's top law enforcement official said Wednesday a crackdown on corruption that has given Cuba's international business community the jitters will continue and warned that no one was immune from prosecution.
Attorney General Dario Delgado, speaking at a conference on corruption, said the anti-corruption drive now underway in Cuba is "systematic, permanent" and necessary to strengthen the communist country's economy.
"We will continue fighting until exhaustion, mercilessly, against all manifestations of corruption in the country, committed by foreigners or nationals," he said.
The crackdown began when President Raul Castro succeeded older brother Fidel Castro at the country's helm in 2008 and said widespread theft and graft had to be eliminated because it contributed to the Caribbean island's chronic economic woes.
It coincided with reforms to strengthen Cuba's socialist system. Dozens of Cubans have been jailed, including former government officials and top executives of state companies.
In recent months, executives of two Canadian trading companies and a British investment firm have been detained while investigators probe their finances, diplomatic and business sources said.
Last year, a Cuban joint venture with a Chilean firm was shut down and its Chilean executive Max Marambio sentenced in absentia to a long prison term for graft. Marambio, once a close friend of Fidel Castro's, stayed in Chile and denied the charges.
The legal actions have created unease among foreign businessmen, many of whom say they fear being unjustly accused of illicit acts. Those worries discourage foreign investment in Cuba at a time when the island needs it, they said.
Delgado, speaking to reporters after his speech, said the government had no problem with foreign businesses nor had the foreigners complained about the crackdown.
"They have understood that (corruption) has to be eliminated. It is a very noxious practice," he said.
"We will never stop defending the flags of honesty and dignity. It is our duty," Delgado said.
(Reporting by Nelson Acosta; Writing by Jeff Franks; Editing by Kevin Gray and Anthony Boadle)
http://www.reuters.com/article/2011/11/09/us-cuba-corruption-idUSTRE7A88F820111109
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