A tube of toothpaste every three months, ‘meaty mass’ to eat: Cuba’s economy is this bad
A woman has been waking up early three days in a row to keep her position in the line to buy chicken at a store in La Timba, a rundown neighborhood in Havana. She has ticket number 40. The promised food has not arrived yet, but she will keep trying.
Another woman attempted purchasing groceries last week in one of the online stores the government set up in the middle of the coronavirus pandemic. The concept of online commerce is almost new in Cuba, and the internet service is poor and expensive. But that was not what bothered her the most. What triggered her anger is the website has little to offer, even for those with Cuba’s hard currency, the CUC.
“It is a shame, there is nothing to buy online,” said the woman, who lives in Havana and asked not to be identified for fear of government retaliation. “There are only chicken soup cubes, rum, spaghetti, peas. There is no meat or toiletries, only Rexona deodorant, and there is no detergent.”
Cubans have been posting photos on social media of their offerings in online stores as if they were trophies. But the online service is so bad that CIMEX, Cuba’s largest state commercial corporation, had to shut it down last week to update the payment system.
The failed online experiment has just added to the woes of the long lines forming in front of markets and grocery stores. Fights break out frequently, and some entrepreneurial endeavors — like reselling ticket numbers to those stuck in the back of the line — have reemerged.
With its long experience in rationing, the government is now devising another system so people can shop only in the areas where they live. A shutdown in public transportation has not deterred Cubans from walking or riding or biking long distances to go wherever they can find food.
Just a few years ago, Cubans with dollars sent by family abroad or earned in private businesses could buy groceries at government stores. But shortages have been gripping the country as Raúl Castro’s economic reforms failed to improve the island’s inefficient economy.
Recent efforts to deliver food to older residents, pregnant women and healthcare workers have highlighted how little the socialist government can provide in a moment of crisis. And long gone are the days the aid was free.
State media reported the government started selling “food packages” to Havana residents over 65. The packages, called “modules,” include one protein, 1 kilogram of corn flour, 1 kilo of pasta and 7 pounds of root vegetables and produce.
Lucky residents in Playa, a Havana neighborhood where many government officials live, can get four eggs as “protein.” In other municipalities, people can get either 10 croquetas or a kilo of what the government calls masa cárnica — “meaty mass” — which despite sounding like a clinical condition is actually a grayish paste of unspecified ingredients that first showed up on Cubans’ dining tables during the Special Period, the crisis that followed the collapse of the Soviet Union.
In Santiago de Cuba, the Cuban Health Ministry is also selling “food packages” to vulnerable people like pregnant women or senior residents living alone.
“The modules include five bottles of malta [a malt-flavored soft drink] a package of spaghetti, croqueta dough, ground meat, croquetas, powdered soft drink, chocolate, biscuits, custard, and other products,” the local newspaper Sierra Maestra reported.
For seniors living alone, the aid comes with a hefty tag price, 153 Cuban pesos, more than half of the minimum state pension of 250 Cuban pesos, equivalent to about $10 U.S.
The government has not said if it will continue selling these food rations in the future. Right now, these are one-time purchases, with only one “module” available per person.
While food is the No. 1 concern for many Cubans, it’s not the only shortage they are struggling with during the coronavirus pandemic. They also don’t have soap to wash their hands, a crucial measure to prevent contracting COVID-19.
The government recently announced it wouldn’t be selling soap at the stores but distribute its current stock through the ration cards all Cuban households have had since 1962. Toothpaste and liquid detergent will be distributed every three months. A family of four would receive one tube of toothpaste.
Cuba’s economy before the pandemic
The coronavirus pandemic has proved a challenge for every government, but why are things so bad in Cuba?
The island’s six-decade failed experiment in central planning accounts for much, economists say.
Almost every economic indicator— including agricultural production, mining, investments, imports and exports — has been lagging in the last decade and continues to do so in the present, Carmelo Mesa-Lago, an emeritus professor of economics at the University of Pittsburgh who has studied Cuba’s economy for decades, said in a recent Harvard University webinar.
Agriculture has been particularly hit. Agricultural exports declined 48 percent since 2012, forcing Cuba to import around $2 billion in food annually, 60 percent of which could be produced on the island, the retired professor said.
When the pandemic hit the island, the shrinking aid from Venezuela and U.S. President Donald Trump’s tightening of the embargo already meant Cuba was heavily indebted and low on hard currency due to added restrictions to remittances and travel.
The state budget was so tight that the country did not pay $80 million of its restructured debt with the Paris Club in 2019. And Economy Minister Alejandro Gil warned in April last year that the country was not able to pay foreign providers of food and other imports, as widespread shortages of chicken, eggs, toilet paper and medicines had already made clear.
At the height of the relationship with Venezuela, Cuba’s trade with Caracas, which includes an agreement to exchange medical services for oil at subsidized prices, made up almost 22 percent of the island’s gross domestic product. That figure fell to 8 percent in 2017, Mesa-Lago said.
Further reduction in shipments of Venezuelan oil to Cuba due to U.S. sanctions has recently caused fuel and liquid gas shortages, cuts in production at factories and other state enterprises, and a freeze in many construction projects.
Tourism, Cuba’s third most important source of foreign currency — after the exports of medical services and remittances from abroad — was also hit hard after Trump banned cruise travel and cut flights to the island last year.
Then an unknown virus became a global pandemic.
After resisting strict measures for several weeks, Cuban authorities finally shut down tourism on March 20, when official health data showed a marked spike in cases of acute respiratory diseases.
Cuba has little ability to borrow the money it needs, because it is not a member of most international financial organizations, so the government is pushing hard to sell the services of its medical workers. It is also aggressively marketing biotech products such as interferon, which have been used with mixed results to treat COVID-19.
But that might not be enough to counterbalance the losses affecting almost every sector of the economy, Mesa-Lago told the Herald. He believes the economic contraction this year will be larger than the 3.7 percent estimated for Cuba by the United Nation’s Economic Commission for Latin America and the Caribbean.
Despite the gloomy predictions, Mesa-Lago believes significant economic reforms are unlikely.
Even if government officials have said that food production is a “national security issue,” no significant steps have been taken to allow farmers to produce and sell freely in markets or import what they need for the harvest. Speaking on live television last week, Agriculture Minister Gustavo Rodriguez said the government was encouraging the use of “animal traction,” referring to the use of oxen for transportation and plowing.
Economist Pavel Vidal, who teaches at the Javeriana University in Colombia, believes Cuba’s health system and government efforts to concentrate the resources left in agricultural production and other vital areas might somewhat reduce the impact of the coronavirus pandemic. But they won’t prevent an economic collapse.
“What affects them the most is the vulnerability of the economy to the suspension of international tourism and the collapse of remittances,” Vidal said. “I believe that the economy is already close to a Special Period — minus the [electricity] blackouts.”
The government has not released any economic figures yet, but tension within the leadership — rarely shown in public — briefly spilled onto the pages of the Communist Party’s newspaper, Granma.
A report of an emergency meeting of the Council of Ministers earlier this month, in which Gil said that there would be no investments in new economic projects this year, was taken down from the paper’s website and republished without that comment and other statements from the economy minister.
In another meeting, Cuban leader Miguel Díaz-Canel made the point that some timid economic reforms agreed on in the Communist Party Congress in 2016 should be implemented without delay to “definitively free up the country’s productive forces,” Granma reported.
The message seems intended for the old guard at the top of the party, which is advocating for more central planning to respond to the coronavirus crisis.
“We have to have the courage, and we have to do things differently,” Díaz-Canel said. “By doing the same thing we are not going to solve the problem, nor are we going to make any progress.”
Follow Nora Gámez on Twitter: @ngameztorres
This story was originally published May 15, 2020 at 12:44 PM.