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Cuba fast becomes a hotbed for IT outsourcing

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  • Walter Lippmann
    When the Soviet Union fell, imploded or was pushed into failure, whichever one or combination of these makes sense to the reader, the island found iself
    Message 1 of 1 , Dec 10, 2005
      When the Soviet Union fell, imploded or was pushed into failure,
      whichever one or combination of these makes sense to the reader,
      the island found iself compelled to reorder its priorities and to
      find other ways to secure its independence. Tourism was one option.

      Dollar legalization was another. Each were steps taken at specific
      moments for deliberate purposes. Each had a mixture of positive as
      well as negative consequences. In his recent discussions, Fidel has
      reviewed some of these changes, and new ones which are either being
      implemented or planned. All of these combined are part of projects
      to bring about what Jose Marti referred to as a "society of all and
      for the benefit of all", and in a changing world context in which
      globalization and internationalism are interlinked. The ideas Cuba
      projects about "globalizing solidarity" and Marti's conception also
      that "Patria es humanidad" ("Homeland is humanity")indicate what the
      island's direction of motion is today. While in the sixties armed
      guerrilla struggle was a vital part of Cuban strategy, through the
      seventies and eighties Cuba's military activities took another turn,
      with a large Cuban army playing a vital role defending Angola from
      the assault by South Africa's apartheid regime, backed by the U.S.

      Here in Cuba we've been marking the 30th anniversary of Cuba's big
      military participation in Angola's successful defense. At the same
      time, Cuba's internationalism today takes such forms as the medical
      aid teams working in Latin America, Asia and Africa, now under the
      name "Henry Reeve Contingent", named after a U.S. citizen who fought
      and died in the struggle for Cuban independence. Washington, in its
      foolish pride, declined Cuba's offer to send these doctors to work
      in Louisiana and Mississippi following Hurricane Katrina, but these
      doctors have plenty of other work to do. CubaNews has given emphasis
      to the contingent's work in Pakistan in recent weeks. Through this
      Cuba has made many new friends in that part of the world. We've also
      found new outlets for CubaNews through several new outlets there to
      post reports on the Cuban doctors.

      Here are two additional dimensions to Cuba's projects which might be
      roughly called national reconfiguration. Most outside observers, and
      among them many on the political left, were either dubious of or else
      downright hostile toward the earlier steps Cuba took to secure its
      independence. Tourism, some sneered, "bad, bad, bad", brings so many
      bad values into the country. Dollarization, they said, would bring a
      process of social differentiation to the country, which it certainly
      did. Yet by careful management, and ABOVE ALL by not operating with
      a pre-conceived plan for national development in a changing world,
      this country has been able to both survive and to begin to proper
      these most challenging times.

      This opposition to preceived schemes was one of the themes which
      Fidel emphasized in his November 17th Aula Magna discussion:

      "Here is a conclusion I've come to after many years: among all the
      errors we may have committed, the greatest of them all was that we
      believed that someone really knew something about socialism, or that
      someone actually knew how to build socialism. It seemed to be a sure
      fact, as well-known as the electrical system conceived by those who
      thought they were experts in electrical systems. Whenever they said:
      "That's the formula", we thought they knew.
      "But we must be idiots if we think, for example, that economy is an
      exact and eternal science and that it existed since the days of Adam
      and Eve, and I offer my apologies to the thousands of economists in
      our country.

      "All sense of dialectics is lost when someone believes that today's
      economy is identical to the economy 50 or 100 or 150 years ago, or
      that it is identical to the one in Lenin's day or to the time when
      Karl Marx lived. Revisionism is a thousand miles away from my mind
      and I truly revere Marx, Engels and Lenin.
      "In our real world, which must be changed, every revolutionary
      tactician and strategist has the obligation to conceive of a strategy
      and a tactic that will lead to the fundamental objective, to change
      the real world. No divisive tactic or strategy can be a good one."

      Read Fidel's full comments here:

      Cuban gov't website (one column):

      Word Format, 33 pp. (two-column)

      Beneath this article on Cuba's role as an IT outsourcing option for
      Canadian are two more short articles from TRABAJADORES, the weekly
      paper of the CTC, the Cuban national trade union confederation with
      additional points on the steps the island is taking to transform its
      economy. The trends toward a service economy and greater integration
      into the broader world economy aren't new, but the clarity with which
      they are being carried out and explained here are new. They help us
      to see the developing situation in a more complete manner as we keep
      in mind the economic successes Cuba's expanding ties to Venezuela,
      China and Vietnam help secure.

      Walter Lippmann, CubaNews


      Cuba fast becomes a hotbed for IT outsourcing
      By DAVID PYE

      Thursday, December 8, 2005 Posted at 8:43 AM EST

      Special to The Globe and Mail

      HAVANA - Despite being one of the world's last standing communist
      regimes, Cuba has proved masterful at reinventing its economic
      priorities in troubled times.

      The latest transformation is an IT revolution that is positioning the
      country as an attractive outsourcing option for Canadian companies,
      and as a natural gateway to the Latin American market.

      Since 1991, Cuba's information technology sector has been developing
      at warp speed and now consists of about 45,000 highly skilled
      workers, 38 per cent of whom have specialized degrees. More than 85
      per cent of the country's IT industry is concentrated in technical
      services and software development.

      "We've been investing in this sector for the last 14 years and we now
      have highly skilled IT workers at every level," says Luis Marin,
      general manager of Avante, the marketing arm of Cuba's Ministry of
      Information Technology and Communications. "IT doesn't require a lot
      of investment . . . except in human resources."

      Canada is Cuba's third-largest trading partner and fourth-largest
      foreign investor, with more than $750-million tied up in the island
      nation. Cuban officials and the Canadian Trade Commissioner Service
      won't say how much of that investment is tied directly to technology,
      but government authorities are actively seeking Canadian investment
      in the form of outsourcing projects and joint venture opportunities.

      Cuba is particularly interested in joint ventures that will enhance
      the local infrastructure, while transferring skills to citizens. It
      wants to attract Western partners who can teach more about the
      standards and demands of the international market.

      Cuba's Centresoft Corp. and Cimex Corp., for example, have partnered
      with Sentai Software Corp. of Edmonton and Indcom Trading Co. of
      Orleans, Ont., to create an international software consortium called
      CubaSoft Solutions Inc. CubaSoft is recruiting Cuban IT talent to
      work on projects for the Canadian companies and is also developing
      domestic IT projects.

      "IT is among the main investment opportunities in Cuba for Canadian
      companies right now," says Raciel Proenza, economic counsellor with
      the Cuban embassy in Ottawa. "It's a high-priority sector because it
      also contributes to the development of our country."

      The catalyst for bolstering the sector has been Cuba's commitment to
      education. An hour north of Havana, the University of Information
      Sciences boasts 6,000 students on a high-tech campus ringed by fibre
      optics. The institution produces 2,000 graduates annually who, along
      with computer science grads from the mathematics faculty of the
      University of Havana, are leading Cuba's IT revolution.

      "These people are very well educated and offer an outsourcing option
      that I think we need to take a look at," one Canadian insider says.
      "I can go down there and say I want this done, here's the project and
      here's what we'll pay."

      He spoke on condition of anonymity out of fear of U.S. reprisals
      under the Helms-Burton Act and other pressures that prevent U.S.
      companies and affiliates from doing business with Cuba.

      While baby steps are a necessary part of the learning process,
      industry insiders are confident that Cuba has what it takes to
      develop a critical mass and knowledge base that will position the
      island as an attractive option for IT outsourcing contracts --
      particularly for software development in the medical, financial,
      biotech and education fields.

      Cuba is also poised to become a gateway to the lucrative Latin
      American market by providing software adaptation and localization
      services, offering the added benefit of regional economic
      associations within the Caribbean and Latin American economies.

      "Latin America is starting to roll and they won't be far behind in
      technology down the road," the Canadian insider says. "Cuba offers a
      front row seat to one of the world's fastest emerging markets, just a
      three hour flight from Canada."

      As the fifth-largest buyer of Canadian goods in Latin America, Cuba's
      IT revolution is two-way. The country is also moving at a rapid pace
      to develop its own infrastructure, concentrating on networking all of
      its science and technology institutions the way the University of
      Havana has been.

      The project eventually will link more than 6,000 primary and middle
      school libraries, 300 university libraries and more than 200
      scientific institutions. Those numbers represent a significant
      opportunity for Canadian companies, based on Cuba's inability to buy
      U.S. goods and services.

      "It's a huge undertaking that will require hardware, software and
      everything in between," says Eduardo Orozco, director-general of the
      Institute for Scientific and Technological Information. "Canadian
      companies with good products at attractive price points have an
      excellent opportunity."

      While sources admit that Cuba still needs experience at competing in
      a global business environment, they are encouraged by the direction
      that the country is taking.

      "If they can bring their people up to speed in terms of international
      standards and regulations, they will be a serious contender in
      software outsourcing in the years to come," says one Canadian IT
      consultant who did not want to be named because of the Helms-Burton
      issue. "What I see is really encouraging, and we would be remiss not
      to take a look at what they are doing there."

      Latest Comments in the Conversation

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      1. jiri z from Canada writes:

      Three cheers for Cuba. A communist country? Only old horses with
      blinkers on believe that.

      Been there many times. Love the country, love the people, love the
      music. Oh, and the beaches are also nice.

      In terms of providing for its people (not for the rich Hollywood
      folk) Cuba is number one among the Caribbean countries.

      Cuba Moving Towards a Service Economy
      November 26

      The transformation of Cuba towards a service economy with an
      increasing focus on value-added industry and a restructuring of
      external finances were highlighted today at the inaugural session of
      the 6th National Congress of Economists and Accountants of Cuba

      The Cuban Minister of Economy and Planning, Jose Luis Rodriguez,
      emphasized the importance of a structural change in the tourism,
      healthcare services, high-tech and software industries, which are
      increasingly playing a larger role in the Cuban economy.

      The minister also said that international monetary institutions are
      showing greater interest in authorizing credits to Cuba, thanks to
      responsible government economic policy in terms of foreign
      commitments and to a strict observation of its financial obligations.

      Between 1995 and 2004, Cuba's GDP has showed an average growth of
      four percent, despite a drop between 2001 and 2003, due to diverse
      factors such as the 9/11 terrorist attacks, a tightening of the US
      blockade by the Bush administration and adverse natural phenomenon
      such as drought and hurricanes.

      This negative swing reversed as of last year when Cuba's GDP grew
      five percent, a trend which continues this year which, according to
      indications, will end with a nine percent growth in GDP. This
      economic recovery has been, in large part, due to a return to a
      socialist central planning system and a recent surge in solidarity
      and cooperation efforts with such nations as Venezuela and China.

      Among the most important economic results this year, is the
      revaluation of the Cuban peso and convertible peso in relation to the
      US dollar, which Cuba withdrew from circulation; growth in the food
      industry; the renewal of a comprehensive housing project; the
      restructuring of the transportation system; and a new project aimed
      at more efficient ways to generate electricity.

      During the opening ceremony, the president of ANEC, Roberto Verrier
      Castro, read a letter addressed to Cuban President Fidel Castro
      reiterating the support of Cuban economists, accountants and auditors
      of the Revolution and the new changes to the economy and social

      Some 250 delegates and 200 guests, representing the more than 67,000
      professionals in the economic sciences sector nationwide, are
      participating in the congress that will end this Saturday.

      Cuba Accounting to Conform With International Standards
      November 26

      Beginning January 1, 2006, new financial standards will go into
      effect in Cuba that conform with international practices, according
      to announcements made at the sixth congress of the National
      Association of Economists and Accountants of Cuba (ANEC).

      At the congress taking place at the Havana Convention Center, Dr.
      Jose Carlos del Toro, secretary of the Committee of Cuban Accounting
      Standards, reported that the new legal requirement of the Ministry of
      Finances and Pricing will apply to all economic establishments on the
      island; these include public and private entities, international
      economic associations, as well as the cooperative and independent
      farming sectors.

      The Cuban Standards for Financial Information (NCIF) have, as points
      of reference, two international systems and UNCTAD accounting
      guidelines. These require entities on the island to be registered and
      possess certain economic documentation -in Spanish- and to present
      their financial status in Cuban pesos.

      The NCIF includes Cuban standards of accounting, interpretation and
      other instruments of the accounting office. Its eight sessions will
      cover conceptual frameworks, general standards and those specific to
      Cuba, budgeting activity, government cost accounting, as well as the
      respective nomenclature and classification of accounts and a glossary
      of terms.

      ANEC, a professional organization that includes more than 67,000
      professional members across the entire country, will assume as part
      of its immediate tasks the preparation of accountants in the
      administration of the NCIF, consultation for legislative processes
      related to the new system and the design of a system of continuous
      upgrading that will allow it to begin the certification of the Cuban
      accountants according to the international standards by 2007.

      This Friday, 251 delegates and more than 200 companies to the ANEC
      congress will analyze topics such as planning in Cuba, the
      installation of systems of internal control, the production of foods
      on the island, the program for the redevelopment of transportation,
      tourism, healthcare services, the state budget and central and
      commercial banking.
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