Cuba Leaves Behind another Tense Economic Year

During 2019, Washington increased financial and commercial restrictions to prevent monetary income and the transfer of imported oil to the Caribbean island.

By Patricia Grogg (IPS)

During a public demonstration in Havana, a female, primary education student holds a sign which reads: “We the Cuban children are against the blockade,” in reference to the new economic and financial sanctions imposed by the Trump administration on Cuba this year. Photo: Jorge Luis Baños / IPS.

HAVANA TIMES – Cuba bids farewell to a year, which commenced with a tornado reminding Havana residents of the destruction that a passing hurricane would cause in the capital, while undergoing a hardened US embargo and ending with the disappointing economic growth of just 0.5 percent.

The information from the Economic Commission for Latin America and The Caribbean (CEPAL) includes the Preliminary Data for 2019, according to which the region grew only 0.1 percent on average and the projections for 2020 will remain at around 1.3 percent.

On confirming the low growth of the economy, during a work meeting before the last annual session of the Cuban National Assembly on the 20th and 21st December, the Cuban authorities blamed the poor results on the strengthening of the US blockade and other adverse factors.

“Any growth in the midst of this situation is more meritorious,” stated President Miguel Diaz-Canel. He noted, “After such a tense year, in which despite the threats and limitations, the US empire’s plans were defeated – confidence, optimism, security, decision and commitment grow.”

Economic tensions sharpened in 2016 after the reduction of oil shipments from Venezuela; the main energy provider of Cuba and whose economy closed 2019 with a contraction of -25.5 percent, followed by Nicaragua (-5.3 percent) – according to CEPAL.

Members of The Cuban medical brigade that provided health services to Bolivia chant the notes of the Cuban national anthem after their arrival at the Jose Marti International Airport in Havana, on November 16th.  Photo: Jorge Luis Baños / IPS.

Cuba ended 2018 with a growth of just 1.2 percent and started the new year with strong financial tensions over the reduction of expected income due to the fall in exports, tourism and sugar production.

These poor results obligated a reduction in imports, resulting in food shortages and shortages of medicines, which at the end of 2019 still manifests itself in unstable and reduced offers even in hard-currency stores. However, the basic food rations were maintained at prices subsidized by the State.

A salary increase decreed in July benefited more than a million workers and pensioners from the State sector, which covers courts, education and public health, government organs, media, culture and sports – among others. The minimum wage that was the equivalent of nine US dollars, rose to sixteen dollars for a month’s work.

During the year, Washington increased its financial and commercial sanctions to prevent monetary income and the transfer of imported oil to the Caribbean island. With measures of savings and a forced reduction of fuel in the public sector, the government managed to avoid the dreaded blackouts scheduled in the residential sector.

The list of US measures, includes the activation of the Helms-Burton embargo law (since May) that confers US citizens – including those of nationalized Cuban origin, the right to sue those who are “trafficking” with properties confiscated in the 1960s.

A reduction to a maximum of 1000 dollars to be sent quarterly in family remittances from the USA, the prohibition of flights to Cuban provinces on US airlines, the cancellation of travel permission to the Caribbean island by boat (including cruise ships) – have all occurred.

Among the biggest losers is tourism; the main source of monetary resources in the country, which expects to receive 4.3 million visitors at the end of the year, 700,000 less than projected.

The self-employed sector – taxi owners, restaurateurs, hostel owners and their employees – also suffered the impact of the US aggression.

The plan is “harm even more, the quality of life of the population, its progress and even its hopes, with the objective of hurting the Cuban family in their everyday, in their basic needs, while at the same time jointly accusing the Cuban government of inefficiency, trying to provoke an uprising,” warned the Cuban government in July.

Cuban legislators in a session of the National Assembly (parliament).  Photo: Jorge Luis Baños / IP

The US campaign against the export of medical services and the return of conservative governments in Latin American countries deprived Cuba of important financial resources collected from some of them.

In November 2018, Havana retired more than 8,500 doctors from Brazil that had been integrated in that country´s Mais Médicos program.

The Cuban government accused the ultra-right president Jair Bolsonaro of maintaining a “hostil, disrespectful and offensive” position towards those professionals who worked in poor and remote regions of the South American giant, via an agreement in effect since 2013.

Ecuador decided to conclude in November, claiming economic reasons, six agreements for scientific cooperation and technical assistance, established with Cuba since 2009.

In that period, 3,565 Cuban doctors worked in this South American nation conducted 212,360 surgical interventions, assisted 3,548 births and applied more than 100,000 vaccinations.

In a recent article published by the government website Cubadebate, the former minister of economy Jose Luis Rodriguez calculated that the medical services contributed to Cuba “an estimated 11.543 billion dollars as an annual average” between 2011 and 2015.

Cuba also offers free services through the so called “Integral Health Program”, destined for 27 countries with less resources including Haiti, Bolivia, El Salvador, Guatemala, Nicaragua, Honduras, Ethiopia, Congo, Tanzania and Zimbabwe.

For security reasons, on November 15, Cuba ordered the withdrawal from Bolivia of its contingent of more than 700 collaborators, mostly doctors, after the institutional crisis that forced the resignation of President Evo Morales. Since 2006, when Morales came to power, 17, 684 health professionals worked in that country.

On an international level, President Díaz-Canel received a visit from Prince Charles of Wales in March, (heir to the British crown) and his wife – the Duchess of Cornwall, and in November – the King and Queen of Spain, Felipe VI and Letizia, in the first official trip to Cuba of a Spanish monarch.

During their stay, Felipe VI and Letizia attended – together with Diaz-Canel, the signing of an agreement for the framework of ‘Association Country Cuba Spain 2019-2022’, in matters of international development cooperation. Spain is among the top three trading partners of Cuba, alongside China and Venezuela.

Around 300 Spanish companies have a presence on the island, and in the tourism sector Spanish firms dominate the market, with more than 70 percent of the hotel industry run by corporations such as Melia, Iberostar and Barcelo, threatened with sanctions by Washington.

Among the corporate travel objectives of the Royals was to support for Spanish companies with investments in Cuba.

In mid-October, the then Spanish Minister of Foreign Affairs, Josep Borrell, current senior representative of the European Union (EU) for Foreign Affairs and Security Policy and vice president of the European Commission, left the message that the community bloc will work to prevent extraterritorial application of the Helms Burton Act.

Around 35 percent of the Cuban trade is carried out with the EU, whose exports to this country between January and September 2019 amounted to 1.570 billion euros (1.739 billion dollars), with a growth of 3.12 per percent in relation to the same period from the previous year.

In climate matters, when the end of the cyclonic season arrived, which stretches from June to November, many Havana residents celebrated a year without hurricanes, especially given the memory of the tornado that on January 27th left a trail of destruction in its trajectory of about 20 kilometers through five densely populated municipalities of the capital.

Hurricane Irma, hit several Cuban provinces from September 8 to 10, 2017, causing the deaths of 10 people and material damages officially estimated at 13 billion dollars – an expense which still weighs on the Cuban economy.

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One thought on “Cuba Leaves Behind another Tense Economic Year

  • Readers should take all growth estimates of the Cuban economy for 2019 and projections for 2020 with a grain of salt. Both intentionally and unintentionally, economic numbers in Cuba are known to be overly positive and optimistic. Self-reported economic information is the best available as Cuba does not permit outsiders to audit Cuba’s books. One thing is for sure, economic news in Cuba is bad and promises to get worse.

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