Cuba Faces Hard Times but Not Collapse, says Raul Castro

July 8, 2016 | Print Print |

Raul Castro and his Economy Minister, Marino Murillo. File Photo: Estudios Revolucion.

HAVANA TIMES – Cuban President Raul Castro recognized today the “economic difficulties” in the country, but rejected “speculation and predictions of an imminent collapse” of the national economy, reported dpa news.

Raul Castro ruled out that the current situation could mean a return to the “Special Period”, the term used by Fidel Castro for the crisis of the 1990s after the disintegration of the Soviet Union, at the time Cuba’s main trade partner and benefactor.

“We do not deny there might be some difficulties, even more than the current ones, but we are prepared and under better conditions [than in the ’90s] to reverse them,” Castro told a meeting of the National Assembly.

The gross domestic product of the island grew by one percent during the first half of 2016, an indicator that is half the projected figure during the last plenary session of the legislature held in December 2015. (In most years, the Cuban parliament only meets twice during a week each of commission meetings and plenary sessions.)

The causes of the slowdown were the failure to achieve the expected export earnings and “a certain contraction in the fuel supplies agreed upon with Venezuela,” among other factors, Castro told the deputies.

The president assured that the Council of Ministers adopted a set of measures to address the situation and ensure the functioning of the main activities of the national economy “minimizing the effects [of the downturn] on the population.”

The Cuban State will apply savings measures such as reducing “expenditures of all non-essentials” and promote “saving and the efficient use of available resources”, Castro added.

Among the steps to be taken are to concentrate investments in income generating activities both to bring in hard currency from exports and to reduce imports of products that can be produced in the country.

Castro said that despite the economic problems social spending is guaranteed. During the first half of 2016, the Cuban government says it spent 54 percent of expenses to cover basic social services to the population free of charge as public health and education.

[However the government’s annual budget and expenditures are not of public information in Cuba. The same goes for the revenues from taxes or profits from companies owned by the Cuban State including the Armed Forces, business groups and joint ventures with foreign capital.]

Earlier in the plenary session of the parliament, Economy Minister, Marino Murillo, said that in the second half of 2016 energy savings measures were necessary as the power supply will be cut by 25 percent.

The restrictions will focus on state enterprises and public administration and will not affect the residential sector, which Murillo said consumes 60 percent of the electricity produced in the country.

Cuba receives 90,000 barrels of oil per day from Venezuela on advantageous terms and in exchange for Cuban doctors and educators providing services in the South American country. An undisclosed percentage of the oil is resold by Cuba to other countries to earn hard currency.

“We will continue providing Venezuela, to the best of our ability, the collaboration agreed upon to help sustain the achievements in social services that benefit its population,” Castro told the legislators who have little if any decision making power.


What's your opinion?

  • Carlyle MacDuff

    The chickens are coming home to roost!
    The phrase: “reduce imports of products that can be produced in the country.” would appear to indicate some expectation that agriculture in particular will increase production. It will be difficult to achieve any growth in other sectors when: “the power supply will be cut by 25%” coupled with: “a certain contraction of fuel supplies agreed upon with Venezuela.” and: “minimizing the effects upon the poulation.”
    After fifty seven years further hard times will not be unexpected by Cubans.
    One is reminded of an oft quoted expression in these pages: “Forward ever, backward never.” This article reports upon the undeniable reality of the effects of “socialismo” in practice.

    • CErmle

      WHY are still in Cuba?

      • Carlyle MacDuff

        Forward ever, backward never!

        • CErmle

          Please do not insult the memory of those who paid the price to have a more just and humane society. Forward Ever! Backward Never! With pride and dignity they press forward to an even more humane and just society. Counter-revolutionaries are always determined to smear and ultimately destroy the People’s Revolution, but they speak for nobody but themselves. I suppose you know something about that. The worst kind of hypocrite is the one who enjoys the fruit of the Revolution, but works to destroy it from within. You know what I mean. As the late Bob Marley declared, “If cap fit, wear it!”

          • Olgasintamales

            People’s Revolution? Hahaha, that is why they don’t have free press, access to the Internet, multiples political parties, not free association, and free elections? And a lot of repression. Wow I didn’t know Revolution last 57 years.

          • Carlyle MacDuff

            I note that in your first sentence you exclude the Castros, who have thrived both in terms of power and wealth by denying the people of Cuba “a more just and humane society”.
            When the people of Czechoslovakia had their revolution in 1968, the loudest voice of a counter-revolutionary was that of Fidel Castro
            To associate the Castros who have continuosly sought increased power and control, with “pride and dignity” is of joke value.
            You blabber about “the fruit of the Revolution” although you know naught of the reality, because you don’t know Cuba. You should go for a few months!
            The phrase you credit to Mr. Marley was in common use long prior to his birth!

          • Moses Patterson

            So it’s okay for you to use a Bob Marley quote (not his originally) to fit a completely unrelated issue but when I similarly quoted Fannie Lou Hamer, a family friend, you bust a blood vessel? A little hypocritical maybe?

      • Moses Patterson

        If you have access to wealth or income from anywhere other than Cuba and the opportunity to travel abroad and bring back with you those material possessions otherwise not available in Cuba, life in Cuba with loved ones around you can be pleasant. Lacking either one of these, living in Cuba, amid the rubble, blackouts and political oppression can be a living hell.

        • Dan

          Moses, c’mon. Living hell ? I know plenty of Guajiros, from places like Tacajo, El Fusil, Puerta de Golpe… who have never been out of their municipios. I guarentee you, they would not characterize themselves as living in hell. On the other hand, I could connect you with a Honduran client, repeatedly raped by Mareros in front of her children, or a Guatemalan teenager working as a semi-slave in the fields. If Cuba is hell, where did they live ?

          • Moses Patterson

            I take your point. From your comfortable perspective, it is easy to pass judgment when comparing life in the Honduran jungle to eastern Cuba. But to the Cuban who is self-aware and conscious of the possibilities that would exist but for the Castros government, life in Cuba can be Hell. Were it not so, the record number of Cubans leaving Cuba would not be a fact. One more point: we know most of the worst that takes place in Honduras and El Salvador and other similar places because of their relative ineptitude in controlling bad press. However in Cuba, the Castros are masters at managing the flow of information going in and out of Cuba. Not knowing about similar crimes taking place in Cuba does not mean that they don’t occur.

          • Dan

            There is no comparison between life in Central America vs. Cuba. Have you been there ? Believe me.

          • Moses Patterson

            Yes, I have. The other difference is the Honduran have never known better times. Therefore most of them are relatively content. Cuba once has a standard of living that exceeded that of Italy. Cubans know that things could be a lot better.

          • Dan

            Do you realize how poor Italy was when that was the case? People lived on polenta. Pasta was practically unknown to most contadini . Do you realize how tremendously skewed the wealth was distributed in Cuba at the time ? Where and when were you ever in Central America ?

          • Moses Patterson

            Rather than share my travel calendar with you, please just accept my word that I am well traveled throughout most of Latin America. You seem to agree with me that Cubans were generally better off that Italians and a few other European countries. Wealth inequality did indeed exist but that was not the point, was it?

  • N.J. Marti

    An area of hard currency contribution is tourism. This growing sector has been taking a higher percentage of resources and will continue to do so. The varies vanity state enterprises with negative contribution, they will be getting less. Good transition step to when currency unification kicks the unproductive enterprises to the curb even harder. Collectivism has it’s useful limits, many managers of unproductive state companies are about to find out.

    • Vahe Demirjian

      You bring up a good point. When the USSR collapsed, Cuba’s economy wasn’t yet predominantly services-based (I took a class on Cuba at University of California Irvine and I do have to say that supporters of la revolucion say that Fidel Castro finally succeeded in breaking Cuba’s dependence on sugar in the 1990s because Castro’s history will absolve me speech criticized the island’s overdependence on sugar). And there is no real talk in Miami about regime collapse in Cuba unlike in the early 1990s, when Cuban exiles thought Fidel Castro would go the way of Eastern Europe and the USSR. We shouldn’t rule out the possibility of Raul Castro prematurely handing over power to Miguel Diaz-Canel if Nicolas Maduro is ousted in a parliamentary coup.

      • Carlyle MacDuff

        “Fidel Castro finally succeeded in breaking Cuba’s dependence on sugar.” He just reduced the production by 85% and let the land previously used for production to revert to bush.

        There were alternatives – Fidel could for example have utilized the sugar previously sold to the real Cuban ‘sugar daddy’ – Russia, to manufacture ethanol – as increasingly practiced in Brazil. Fidel Castro could have utilized the released arable land to produce much needed alternative crops instead of ever-increasing dependence for food upon imports.

        My own analysis of the potential for change is explained in “Cuba Lifting the Veil”. As it takes several pages, I shall not repeat it here (I await the usual irrelevant sarcasm from Lawyer Dan and CErmle) but think that your view Vahe, does not encompass the probability of a power struggle in late 2018.

        Talk in Miami tends to be based upon a combination of wishful thinking and detestation of the Castro regime, rather than analysis of the reality. Because of that, exiled Cubans have not proven to be logical or consistent in their opinions.

      • Moses Patterson

        There’s a snowball’s chance in Hell that Raul Castro leaves prematurely. I can’t think of even one dictator who has ever done such a thing EVER! Can you?

  • Moses Patterson

    The Castros always overstate anything positive and understate as any bad news. Of he says 25% cuts in energy production, expect 30%. For the nation as a whole, the Special Period will no repeated. But for the majority of poor Cubans with no family abroad to send money, or lacking diet access to tourists, the special period II is highly likely.