CUBA: IMPRESSIONS OF ECONOMIC CONDITIONS OUTSIDE

C O N F I D E N T I A L SECTION 01 OF 04 HAVANA 001057

SIPDIS

SIPDIS

DEPT FOR WHA/CCA

E.O. 12958: DECL: 04/16/2017
TAGS: ECON PGOV PINR PREL CU
SUBJECT: CUBA: IMPRESSIONS OF ECONOMIC CONDITIONS OUTSIDE
HAVANA

REF: A. HAVANA 1011

B. HAVANA 1036

Classified By: COM: Michael E. Parmly: For reasons 1.4 b/d


1. (C) SUMMARY: This is the third and final cable of a
series regarding the 10/7-22 visit by a delegation from the
Transportation Security Administration (TSA). Specifically,
this cable conveys general impressions about economic
conditions outside Havana from USINT's Econoff, who, by way
of the TSA visit, traveled throughout Cuba for one week. The
main impressions are: 1) GOC failure to complete the
national highway condemns almost half of the country to
perpetual backwardness; 2) By meeting minimum economic needs,
the GOC propagates poverty, prevents misery, and successfully
dissuades potential unrest; 3) Cuban apartheid constantly
reminds Cubans about the benefits of not being Cuban; 4) The
vast amount of idle land throughout the island is
representative of the wasted potential of Cuban agriculture.
End Summary.

Eyewitness View: Priceless
--------------


2. (U) The purpose of the TSA visit was to assess the
security of Cuban airports where U.S. (OFAC-licensed) charter
flights operate. The itinerary outside Havana was one week
long, with a demanding schedule that included long drives --
(Note: The delegation traveled approximately 2,200 miles
during the week, driving anywhere from 5 to 10 hours daily.
End Note.) -- between hotels and airports in major cities (in
order visited): Havana (largest city in Cuba),Cienfuegos,
Camaguey (3rd largest),Santiago de Cuba (2nd largest),and
Holguin (4th largest). Given the busy nature of the
schedule, opportunities to meet and mix with average Cubans
were few and limited. However, the trip afforded us a
priceless opportunity to further fine tune our impressions of
life outside Havana with unique eyewitness views of
conditions throughout a good portion of the island.

National Highway = National Crime
--------------


3. (U) Travel east from Havana is initially done using the
Autopista Ocho Vias (Eight-Lane Expressway). The highway,
projected as an eight-lane highway all the way to the eastern
tip of the island, is completed only as far as the eastern
side of Sancti Spiritus province. The highway goes from
eight to four lanes shortly after passing the city of Santa
Clara and continues for approximately 90km before it ends
abruptly, just outside the town of Taguasco. With more than
500km left to the eastern city of Santiago de Cuba, all
traffic must make a 20km detour through small towns on a tiny
secondary road in order to link to the Carretera Central (CC;
Central Highway). The CC is nothing more than a two-lane
secondary road, yet it is the main artery that connects most
major cities and towns from Taguasco to the eastern end of
the island. Buses, trucks, tractors, carts, cars, bicycles,
and animals all share the road, presenting a slow but
picturesque parade of life in the countryside.


4. (SBU) The Eight-Lane Expressway project died a quick
death after 1989 with the end of Soviet subsidies. According
to Russian diplomat Aleksey Shults, "Just about all the roads
built after the revolution were built thanks to us, and since
we cut off aid nothing has been built." Indeed, maintenance
of the CC is the only effort the GOC seems able to perform.
Almost all other roads are dirt roads, or asphalt roads that
have not been serviced in decades. The only asphalt roads
that seem to receive occasional maintenance are those
connecting the CC to large towns far from its path.


5. (SBU) The decaying state of Cuba's road network was
apparent as we traversed the countryside. The
vulnerabilities of the road system became even more obvious
as we began to see the effects of unusually strong rainfall
during the month of October in the Oriente region, consisting
of the easternmost -- and poorest -- provinces of Cuba. For
example, flooding and bridge damage on the Las Tunas -
Santiago de Cuba segment forced us -- along with all vehicle

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traffic headed to Santiago -- to add a two-three hour detour
north through the city of Holguin.


6. (U) According to an October 15 article from the weekly
Trabajadores, the GOC estimated it would need about USD 900
million to fix the roads (334 million to repair the roads
considered to be a "national priority" and 600 million to
finish the missing portions of the Expressway). The article,
as well as our trip, took place more than a week before
Tropical Storm Noel caused major flooding and significant --
and still undetermined -- economic losses to the Oriente
region (See Septel). Some areas are still cut off due to the
flooding.

Minimum Economic Needs Met
--------------


7. (SBU) The fact that there was electricity everywhere was
noticeable, even along the off-road and dirt road segments we
were forced to take, away from the CC. On one particular
night, after driving for two hours under intense rain between
Ciego de Avila and Camaguey, one could easily see, at a the
distance from the road, that houses were well lit. Though
the road has no lighting and is therefore dangerous to travel
at night, Cubans had electricity inside their homes, even
after days of heavy rainfall.


8. (SBU) The "grupos electrogenos" (independent
power-generation plants) providing the electricity were quite
visible along our route. The power-generation plants were
installed during the past two years as part the GOC's "energy
revolution" program, are of different makes and models
(bought from different countries),and run on a variety of
fuels. The plants are clearly tailored to the specific
electricity demands of a particular area. Sparsely populated
areas had small plants, while larger urban areas had
proportionately larger plants.


9. (SBU) The vast majority of houses visible to us were made
of cement with a variety of roof types -- corrugated zinc
metal, tiles, or cement. A smaller number of houses were
made of wood and a much smaller portion included thatched
houses which were rarely used as living quarters -- usually
barns or other workspace located immediately adjacent to
proper houses.


10. (SBU) The lack of transportation problem is as bad as
the road network problem across the country. Beyond the
largest cities, horse-drawn carts become more numerous than
cars. To confront the lack of transportation, and a true
example of Cuban -- albeit socialist -- ingenuity, Cubans
have developed a whole public transport system using these
horse-drawn carts. In the absence of a decent road
infrastructure they have created a sort of "horse-buggy"
infrastructure in rural Cuba, complete with routes,
destinations painted on the carts, and designated
"horse-buggy" stops. While this may be picturesque to some
foreigners and functional to Cubans who must make the most of
what little they have, it is nonetheless a stark reminder
that most Cubans have to put up with conditions reminiscent
of a century ago.


11. (SBU) To deal with the transport problem, the GOC has
been phasing in buses it imported, mainly from China. Most
of the buses already in operation have been incorporated into
the network that provides transportation between provinces.
Inter-provincial buses were frequently seen along the CC, and
anecdotal accounts confirm that there are noticeably more now
than a year ago. But while passenger transport was
conspicuous, freight transport was barely seen. Although
many goods are transported by rail, one would have expected a
lot more truck traffic. Likewise, there were quite a few
working-age males "hanging out" in the streets during working
hours, clear signs of underemployment and little economic
activity.


12. (SBU) Even among the poorest villages, one could see
children dressed in pristine red and white school uniforms
making their way to school. In addition, people did not seem
malnourished. Most houses in rural areas had at least a

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small plot of land where they cultivated some form of crop,
providing a way to supplement insufficient GOC rations.

Cuban Apartheid
--------------


13. (SBU) While we could not assess any medical facilities
used by average Cubans, we had the opportunity to experience
the type of medical care that is available to foreign
tourists. The TSA team leader suffered stomach pains during
our stay in Cienfuegos and was directed by the hotel staff to
a 24-hour clinic one block away from the hotel. The clinic
was a converted formerly private (probably expropriated)
house, with waiting room, pharmacy, ambulance car, and
air-conditioned nurse and doctor's offices. The staff was
professional, competent and spoke some English. The nurse
admitted to Econoff that such facilities usually exist close
to tourist hubs -- such as our hotel -- and that although any
Cuban who were to show up suffering an emergency ailment
would undeniably be treated at their facility, they would
quickly be transferred to another facility because average
Cubans do not "normally" attend this type of clinic. The TSA
team leader was examined, diagnosed, prescribed two pills(which we picked up at the clinic's pharmacy for the nominal
fee of USD 40),and subsequently felt better the next day.


14. (SBU) Lodging during the last airport visit was at an
all-inclusive resort in Cuba. Away from most Cubans and the
real Cuban way of life, the resort was the typical "tourist
ghetto" where the GOC prefers to keep foreigners. The resort
provides a "bubble" inside which foreigners can spend needed
hard currency, in a controlled environment, directly into GOC
coffers. Perhaps a sign of the recent tourism decline in
Cuba, the resort was half empty. Possibly as a result, the
service was bad, the food low quality, and the drinks watered
down.

Marabu and Idle Land
--------------


15. (SBU) During his July speech, Raul Castro made reference
to the large quantities of Marabu -- a wild bush which grows
easily and is hard to eradicate -- that have infested fields
all across Cuba. There was a noticeable difference between
provinces with regard to the extent of the spread of Marabu,
perhaps indicating differing levels of commitment or efficacy
among provincial authorities. For example, the provinces of
Las Tunas and Ciego de Avila had many more fields that were
infested, sometimes with Marabu as far as the eye could see.
In contrast, the province of Camaguey had significantly less
infestation, a perceptible difference observed as one crossed
the provincial border. Many of its fields had only a few
patches of Marabu, leaving the vast majority of them in good
condition.

Comments:
--------------


16. (C) National highway equals national crime: Why has the
completion of this highway not been a top GOC priority? It
would arguably be a better investment to complete the highway
than to throw an equivalent amount of money into, say, hotel
ventures. The Cuban economy would gain more in new domestic
economic activity made possible by increased traffic of
people and goods throughout Oriente and between Oriente and
the rest of the country, than from new hotels. We can think
of two potential reasons why the GOC has not finished the
highway, despite the obvious benefits: 1) Tourism revenue
goes directly to and is centrally controlled by the GOC,
while the central highway would empower individual Cubans
with economic freedoms to create new wealth, only part of
which would, and only indirectly, benefit the GOC. 2)
Maintaining almost half of the country physically cut off
from the rest has an obvious attraction to an authoritarian
GOC that may prefer to isolate Oriente, the region where all
of Cuba's revolutions have originated throughout its history.
Whatever the reason, the real crime is that by not finishing
the road the GOC condemns almost half of the country to
perpetual backwardness.


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17. (C) Minimum economic needs met: It became clear to us
how, despite the many wants in Cuba, the GOC has been
successful in establishing a floor under which the vast
majority of Cubans cannot fall. This floor consists of
various services, entitlements, and a social safety net that
ensure that minimum economic needs can be met. The resulting
state is one in which there is widespread poverty but no
misery. This is an important threshold as we analyze "how
bad things have to get" in order for average Cubans to "take
to the streets" in protest. Unlike our courageous dissident
community, most Cubans are likely to protest about economic
wants much sooner than political wants. The GOC, by meeting
minimum economic needs, seeks to avoid a level of economic
desperation where Cuban feel they have nothing to lose if
they protest.


18. (C) Cuban apartheid: While Cubans' minimum economic
needs are met, they are constantly slapped in the face with
the existence of another reality, one in which economic needs
can be met and exceeded. That reality, however, can only be
enjoyed by foreigners.


19. (C) Marabu and idle land: Although there was a lot of
Marabu on Cuban fields -- in some areas more than others --
what was most striking was the large amount of idle land
throughout Cuba. Marabu grows on any field that has not been
put to productive use. There8Q:QQeason
it has less Marabu is because more of its fields are put to
productive use. The vast amount of idle land is
representative of the large and wasted potential of Cuban
agriculture.
PARMLY