Cubans fear hard times ahead, impatient for change

HAVANA (Reuters) – Cubans are bracing for hard  times in 2010 as President Raul Castro slashes imports and cuts  government spending to get Cuba out of crisis — and they are  growing impatient with the slow pace of economic reform.

Hurricanes, the global recession, US sanctions and the  inability of the communist-run island’s command economy to  manoeuvre have put an end to recovery from the 1990s crisis that  followed the Soviet Union’s demise.

Local economists agree there will be little if any growth  this year for the first time in more than a decade as Cuba  battles a cash crunch that has forced it to stop paying bills  and freeze bank accounts of some foreign companies in Cuba.

Castro, trying to balance books overflowing with red ink,  has reduced imports this year by a third, or some $5 billion,  and cut local budgets and energy consumption.

Cuba is dependent on imports, including food and fuel, of  which about 70 per cent of what it consumes comes from abroad.

The communist government gets moral and economic support  from Venezuelan President Hugo Chávez and other leftist leaders  in Latin America, as well as China, but Cuba’s income from  tourism and exports of nickel, petroleum derivatives, cigars  and shellfish has fallen sharply this year.

The austerity moves were necessary after Cuba’s trade  deficit soared 65 per cent and its current account, which  measures the inflow and outflow of foreign exchange, went from  a $500 million surplus in 2007 to an estimated shortfall of  nearly $2 billion last year, said the economists, who requested  anonymity due to restrictions on talking to foreign media.

Castro’s budget-cutting will put the current account into  the black this year and “he intends to keep it that way in  2010,” said one economist, indicating the belt-tightening will  not end soon.

Castro, who took over as president from his ailing brother  Fidel in 2008, makes no bones about dismantling the  paternalistic economic and social model he inherited.
“Let’s not deceive ourselves,” he told the National  Assembly a year ago. “If there is no pressure, if the people do  not need to work in order to cover their necessities, and if we  continue to give things for free here and there, we shall lose  our voice calling people to work.”

Bureaucracy
under fire

Castro, who served as defence minister for decades, in  March replaced most of the economic cabinet he inherited,  filling key posts with former and active military officers.

He has implemented reforms in agriculture, wage structures  and some other areas but the changes have so far been small and  reached few of the island’s 11 million people.

Cubans say that if Castro wants to do away with things like  their monthly food ration and free workplace lunches, he will  need to give them some way to raise incomes that now average  less than $20 a month.

There has been speculation he would take measures such as  allowing small businesses to operate and putting some of the  retail sector in the hands of semi-private cooperatives but, so  far, nothing like that has materialized.

Recent grassroots discussions conducted by the ruling  Communist Party revealed growing impatience with the  government’s inability to propose concrete alternatives and get  its own house in order, participants said.

“I realize the food ration has to go but first we have to  know how they plan to do it and what will come after,” said  Pedro, a Havana pensioner.

“I agree with the changes Raul has made so far but it seems  to me there are a lot more things that need fixing,” Renaldo, a  Communist Party activist who helped organize the discussions in  central Cuba, said in a telephone interview.

People involved in the meetings said the state bureaucracy  came under withering fire.

While farmers applauded Castro’s decentralization of the  sector, higher prices for their produce and grants of fallow  state land to 100,000 new tillers, they questioned the  government’s continued stranglehold on the supplies they need  and the sale of their products.

“Farmers have never wanted the state to give them anything.  What we want is that they sell us what we need to work and  produce,” Evelio, a farmer in central Cuba, said in a telephone  interview.

Factory workers complained Castro is urging them to produce  more but that the state system is not providing the needed  supplies.

“I cannot plan anything because it depends on what they  give me, on planning above,” said Carlos, a factory worker.  “And there the problems continue.”