Global Crisis Clobbers Cuba Too

HAVANA TIMES, June 17 (IPS) – On a daily basis and in primetime spots, Cuban television has begun featuring the consequences of the economic crisis that is shaking up the world.

“Huge unemployment figures in Spain”, “US crisis symbolized by the collapse of General Motors”, “Thousands of empty homes in the United States as owners fail to pay their mortgages,” were some of the most recent stories.

However, on the island itself, there has begun discreet talk about how the effects of that downturn – which began in the American real estate sector – is beginning to be felt in an increasingly noticeable way here in a country very dependent on the international context.

Last December in the National Assembly, President Raul Castro noted that 2009 would be a year of great uncertainty in the world economy; jolted by a financial crisis born in the United States, and that this crisis was generating severe world economic problems. “We should be prepared to face that serious challenge that is now affecting us in an appreciable way,” he said then.

Currently, officials and administrative leaders are emphasizing to workers the gravity of the situation, though no one on the island has been left without employment, and the government continues to guarantee key sectors such as education and health care. However, it is recognized that the financial limitations are holding back some programs, including those prioritized for their social importance, such as housing construction.

The La Tribuna de La Habana newspaper reported that only 2,753 dwellings will be completed by the end of December far below the 4,758 projected earlier. “That quantity responds to a recent readjustment, based on the new economic circumstances that the country faces,” stated the weekly.

Likewise, sources close to the medical-pharmaceutical industry point out that the economic difficulties that the country faces – caused basically by the fall in nickel prices and the slowdown in tourism – have impeded the purchase of raw materials for the production of some of the more than 300 medications that the island produces to cover its needs.

Analysts indicate that with the plummeting price of nickel, income for the island from the sale of that mineral will decrease by about $720 million compared to 2008, even if last year’s production level and current prices are maintained. On the other hand, although tourism is up slightly this year in terms of the number of visitors, revenues have fallen by 13.7 percent in the first trimester.

According to the latest report from the National Statistics Office (ONE), the figure for tourists coming to the country grew, between January and April, by 1.5 percent, with a strong presence of Spaniards and increases in the number of travelers from Argentina, Canada, Colombia and the Czech Republic. Notwithstanding, traditional tourist flows from other countries dropped: England (a nosedive of 30 percent), Germany (11.3 percent) and Italy (7.8 percent).

Observers believe that over the course of the year there will be noticeably sharper daily shortages in a country that had lived through – starting in the early 1990s – a powerful crisis that has not only put back development, but has also represented setbacks in economic growth, the production of goods and services, as well as consumption.

This has had a social repercussion that cannot be reversed, not even with the recovery that was taking place before the current global crisis.

“For all our lives we have been in crisis, different from other countries, but a crisis none the less. Now, the shortages are combining with the deficiencies of various products on the black market, where one used to be able to get things at a lower price,” said Roxana Canizo, a 40-year-old homemaker.

*Havana Times translation of the original article published in Spanish by IPS.