CUBA
Cuban economy feels heat of world downturn
Cuba's economy was already in grave condition before the worldwide recession struck. Now, the government is imposing even harsher rationing of electricity and food.
By JUAN O. TAMAYO
jtamayo@MiamiHerald.com
Fernando used to have a cushy job in Havana as a teller in a government bank office with air-conditioning, a nice computer and a bank-provided lunch.
Not anymore.
Amid Cuba's deepest economic crisis in nearly two decades, his office has shut off the AC and his computer constantly crashes because of the heat, exasperating him and his customers. His lunch, Fernando said, has ``shrunk to a snack.''
Driving the bulk of the crisis has been the world recession, which slashed demand and prices for Cuba's few exports, like nickel, and choked off new credits to a government already deeply in debt. Add the island's internal woes, and Raúl Castro's recent description of the problems as ``a matter of national security'' seems like no exaggeration.
After Castro replaced brother Fidel, ``most Cubans hoped for some improvements in the medium term. But now everyone is preparing for worse and worse,'' said one Miamian who recently returned from a visit and asked for anonymity to protect her relatives there.
Castro has adopted Draconian measures to survive the storm in the short term.
To cut electricity consumption by 12 percent -- Cuba imports half its oil needs -- the government has shut down many factories and ordered state office buildings, theaters and other facilities to shut off their ACs. Inspectors also are cracking down on Cubans who steal electricity through illegal hookups with $23 fines -- about five weeks' worth of the average salary.
``Banks are built to keep out robbers, not to let in a breeze,'' said Fernando, who asked that his surname not be published because of fear of government reprisals. ``Without [air conditioning] . . . my office is two bus stops past hell.''
LESS FOOD
Portions for many rationed foodstuffs have been cut -- red beans and chickpeas from 30 to 20 ounces a month, salt by half to about four ounces per month -- while food deliveries to factory, office and school cafeterias have been trimmed, according to official announcements.
Harsh police crackdowns on the food black market -- apparently an attempt to ensure that more items reach the legal outlets -- have driven up prices yet left many of the legitimate sales points with shelves oddly bare, Havana residents say.
Even foreign businesses are suffering, with the government tightly controlling withdrawals from their accounts. Castro also replaced his entire economic Cabinet in March, and just last week the legislature created a comptroller's office to attack official corruption.
Yet many analysts in and out of Cuba argue that those belt-tightening moves are far from what's needed to address the crisis.
``Mercurochrome and Band-Aids for deep wounds with heavy bleeding,'' Miami activist Juan Antonio Blanco wrote in his blog, Cambio de Epoca (Epochal Change). Even the official Granma newspaper called the situation ``grave.''
EARLIER TROUBLE
Cuba was already in deep trouble by the fall of 2008, after four hurricanes caused $10 billion in damage -- equivalent to a whopping 10 percent of its gross domestic product (GDP) for 2007. Imports for 2008 spiked 41 percent to $14.2 billion from the previous year while exports remained flat at $3.7 billion, meaning the island's already huge trade deficit mushroomed by 65 percent.
Food imports alone rose from $1.5 billion in 2007 to $2.2 billion last year as the government tried to replace hurricane-damaged harvests, according to official Cuban figures.
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