Cuba Faces Hard Times but Not Collapse, says Raul Castro

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.