By Fernando Donate*
HAVANA TIMES – Frutas Selectas (Select fruits) is a state-run stand here in Holguin, Cuba. Behind its’ shelves the photos of Camilo Cienfuegos and Ernesto “Che” Guevara, two of the leaders of Cuba’s Revolution, can be seen on the walls. There is also a big poster with this slogan: “Select Fruits: the choicest of the tropics.”
What is missing for sale, though, are the actual fruits or any food products for that matter.
Although the market was short of supplies, on a recent morning, people were already queuing outside. Some were seated on a low wall; others leaned against a countertop holding empty bags in their folded arms.
They waited expectantly for the shop to open to sell something; anything would do.
“We have lined up for two days waiting to see if they would deliver anything,” said Hilda Lobaina, a 72-year old homemaker. The mask covering half of her face did not hide away the frustration one could see in her eyes.
“We are the only country where people wait in line at empty markets for any products to arrive,” said a retiree. He only wanted to identify himself as Antonio, for fear of reprisals.
In the last few months, markets all over Cuba have been empty, some with only one product for sale. Nonetheless, there are usually long lines of people always waiting.
Cubans have suffered food shortages for years. Then the country’s economic situation deteriorated even further due to the Covid-19 crisis.
Suddenly, after years of gradual economic decline, the crisis seems to have accelerated. The main symptom is a severe shortage of food.
Cuba is a country that doesn’t produce anywhere near enough food to feed its population. Instead, it imports food mainly in dollars and euros.
But since a several months ago, the Cuban State finds it harder than ever to access hard currencies.
Cuba does not publish precise and updated economic statistics. However, the information available abroad shows a very precarious situation.
According to official data published by the Bank for International Settlements (BIS), at the end of second quarter, 2020, Cuban companies had the equivalent of US $867 million in bank accounts abroad in euros or dollars.
The figure shown by BIS is the worst for the Cuban economy since the last quarter of 2005.
In the last 15 years, Cuba averaged US$ 2.2 billion available in hard currencies at the end of each quarter, according to BIS’ statistics. Currently, the amount available is less than half.
According to the International Monetary Fund (IMF), Cuba is experiencing a drastic reduction in imports. In the first eight months of 2020, Cuban imports dropped by 34 percent compared to the same period in 2019.
Official data from some nations show that Cuba is buying much less from its leading food suppliers. These include Brazil, the United States and Spain.
In 2020, exports from Brazil to Cuba fell sharply by 23 percent compared to the previous year. Spanish sales to the island fell by 36 percent. Meanwhile, in the case of the United States, sales went down by 45 percent.
With less food available, there is a severe shortage of chicken, oil, rice, corn, and beans. Cubans fear a repeat of the so-called Special Period, the economic crisis of the 90s triggered by the collapse of the Soviet Union, back then Cuba’s most important ally.
“Undoubtedly, this is the most critical situation impacting Cuba since the Special Period,” economist Ernesto Hernández-Catá, a former professor at John Hopkins University, said in an interview.
A new model?
In most countries, the prevailing perception is that the pandemic is to blame for the current economic situation. But in Cuba, economists think that what is happening is much more complicated.
For many analysts, the pandemic is just another factor on a list of even more significant circumstances affecting the Cuban economy. Included in such a list is the collapse of Venezuela, Cuba’s leading commercial partner. Another is the country’s inability to produce food and export goods other countries that would like to buy. The tightening of the US sanctions during the Trump administration is another factor.
In a recent interview, economist Luis R. Luis, one of the directors of the Association for the Study of the Cuban Economy (ASCE), explained that “Cuba is undergoing a chronic currency crisis, due to the decline in exports dating back many years (…). Although the crisis is a byproduct of some short-term events such as the pandemic, the more serious problems affecting the Cuban economy are structural”.
In fact, since the middle of 2019, before Covid-19 spread throughout the world, the government had warned about serious shortages. The authorities even talked about the probability of a new Special Period.
“The seriousness of the moment requires setting clear and well-defined priorities, to avoid repeating the difficult moments of the Special Period,” Cuban President Miguel Diaz-Canel said in a speech in April 2019.
A few days before, Raul Castro, head of the Communist Party, made a similar statement. He warned Cubans that although the country had a more diversified economy than when the Soviet bloc collapsed, they would do better “always preparing for the worst.”
And as 2019 rolled on, that possibility became more real. The statistics gathered by BIS on deposits and loans in international banks show that gradually the country ran out of dollars or euros.
In March 2019, Cuban state companies had the equivalent of US$2.3 billion in hard currencies deposited abroad. In December, the figure went down to US$ 1.3 billion, and in 2020 continued falling. By the end of June, already in the middle of the pandemic, the country’s treasury had US$ 867 million, the worst figure since 2005.
While Cuba has close ties with countries such as Russia or China, the truth is that it imports little food from them. To buy foodstuffs (except rice bought from Vietnam), Cuba needs dollars or euros.
But having run out of hard currency, the country is being left without food.
Queues and absences
For decades, lines and the uneven distribution of certain products have been a cyclical problem in Cuba. However, in recent years, there are shortages of nearly all consumer goods.
According to official statistics, from a selection of 64 commonly used products, the availability of 39 decreased in Cuban shops between 2015 and 2018. As examples, the availability of cooking oil fell by 36 percent, and toothpaste by 30 percent.
Even though data for 2019 is not yet available, most Cubans say the shortages continued, and worsened during the pandemic.
Official data published abroad show that Cuba is importing significantly less food than a year ago.
Last August, imports of frozen chicken from the US were only 25% of the same period in 2019. Between January and September, imports of Brazilian soy to produce cooking oil was half the previous year’s figure.
Shortages are notorious in every city in the country and are evident in the long lines. People wait long hours or days in front of the state shops. The illicit market on the streets flourishes during such times.
In the eastern city of Holguin, there are long lines at the entrance of shops and markets. Especially if there is a rumor that one would sell a product long sought-after or in short supply.
On a recent morning, 67-year old María Eugenia Duran, has been waiting two hours for her turn to buy yucca in the city’s market. It was the only product on sale at the shop.
“There is a shortage of everything. To buy anything, one has to make endless queues. Sometimes, you end up with nothing because the shops run out of products”, Duran said, looking tired and carrying an empty bag.
Economist Luis told us that while hard currencies remain in short supply, the food crisis will continue. “Recent data suggest that to avoid the worst scenario – a nutritional disaster – we will have to pay a high price with a further drastic reduction of imports of medicines, fuel, and other raw materials,” he said.
* with information and copy-editing by IWPR.