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    ECONOMY-CUBA:
    Holiday Blues in Times of Crisis
    By Patricia Grogg

    HAVANA, Jun 23 (IPS) – Anxieties about making ends meet in Cuba are
    heightened at the start of the summer holiday season, when there is
    increased demand for food, transport and electricity, all of which are
    affected by restrictions intended to ease the country's economic
    problems, intensified by the global recession.

    "Soon I'll have everyone at home, needing meals, wanting to go to the
    beach, using more electricity. It isn't easy," a woman queuing for eggs
    at a farmers market told IPS.

    "My children are boarders at school, but in a few days they'll come home
    for vacation," she said. Her concern is shared by many in this country
    of 11.2 million people, which in the 1990s suffered the rigours of the
    "special period" – the government's euphemistic term for the severe
    crisis that followed the collapse of the East European socialist bloc
    and the break-up of the Soviet Union.

    Economy and Planning Minister Marino Murillo told the Juventud Rebelde
    newspaper on Sunday that a food "consumption plan" is being designed to
    provide an estimated 3,100 kilocalories per person per day, greater than
    the recommended daily intake of 2,400 kilocalories.

    "Independent of these and other guarantees, restrictions on consumption
    are inevitably going to be felt," but "no one will be left unprotected,"
    he said. Although he did not say so, the calculation is assumed to be
    based on the basic basket of subsidised foods distributed to every
    citizen through the ration book system.

    The rationing system in force since 1962 makes available certain
    quantities of rice, sugar, beans, oil, eggs, some proteins, toothpaste
    and soap, among other products, at subsidised prices. Studies have found
    that the food ration only provides 36 percent of the daily calorie
    requirement per person, covering about 12 days a month.

    Protein-rich foods in the rations – chicken, fish or ground beef mixed
    with soy – last no more than 10 days, and fats last nine days, according
    to research by economists. Additional supplements are provided for
    vulnerable groups with extra needs, such as children, pregnant and
    lactating women and people who for medical reasons need special diets.

    For the rest of their food needs, consumers have to go to the farmers
    markets, where a variety of high quality food is sold, but prices (in
    pesos) are set by supply and demand. The other alternative is the
    government chain of shops that sell food and other products not
    otherwise available, but which only accept hard currency.

    As part of a government austerity plan, extra grain supplies, regularly
    distributed to consumers in the capital and eastern provinces since
    2004, have been cancelled as of this month. An electricity saving plan
    is under way, and some investments and imports have been postponed.

    According to official sources, the global credit crunch due to the
    financial crisis has made it more difficult for Cuba to obtain loans. In
    addition, revenue from tourism and nickel exports alone could drop by
    more than one billion dollars this year.

    "We have had to readjust the national growth plan, which means cutting
    consumption of, for example, electricity and therefore, fuel. The
    country cannot spend more than it takes in," said Deputy Economy and
    Planning Minister Julio Vázquez.

    Experts say it is essential to prioritise strategic investments such as
    those that have the potential to reduce the need for imports, such as
    spending on agriculture, which requires irrigation systems, fertilisers
    and other inputs.

    Cuba imported some 2.5 billion dollars in food in 2008, due in part to
    the low productivity of Cuban farming, and to emergency purchases to
    mitigate the impact of the three hurricanes that devastated the country
    last year, causing losses officially estimated at around 10 billion dollars.

    The country hosted 1.2 million tourists from January to May 2009, 2.1
    percent more than in the same period last year, but the visitors spent
    less money. Official reports indicate that foreign exchange earnings
    from tourism were down by 13.7 percent over the first quarter of the year.

    The collapse of international nickel prices alone, which plunged from
    33,000 dollars a tonne in 2007 to just over 15,000 dollars today, means
    Cuba will take in 720 million dollars less in 2009 than it did in 2008.
    Exports of tobacco, lobster and prawn are also down.

    Approximately 50 percent of the island's fuel imports are used to
    generate electricity, and the government of President Raúl Castro
    imposed drastic electricity savings on the state sector. Officials
    argued that, in the absence of such a measure, the country would be
    unable to afford to buy food and medicines.

    Cuba's farmers, challenged to produce more in order to cut back on food
    imports, had an uneven first four months in 2009. The potato and tomato
    harvests are up on last year's, but production of other food staples
    such as pork and eggs is down.

    In August the authorities hope to set in motion a system to prevent
    losses in agricultural production due to a variety of failures and
    shortcomings in state purchasing from producers, and subsequent sales to
    consumers. These transactions will be reallocated from the Agriculture
    Ministry to the Ministry of Domestic Trade, but the restructuring is
    drawing criticism even before it has been implemented.

    "Seeing is believing, but I don't think they'll get rid of the red tape.
    As for me, if I'm forced to sell my produce to the state instead of
    coming here and selling it directly, I'll quit working. I'm 63, I can
    rest now," a small farmer from the outskirts of Havana who comes to an
    urban market every day with a variety of top-quality fresh vegetables
    that he sells at higher-than-average prices, told IPS.

    Experts fear that the crisis may adversely affect the reforms that need
    to be made in agriculture, from administrative decentralisation and
    strengthening municipal organising and decision-making capabilities, to
    the leasing of idle land to farmers.

    Deputy Agriculture Minister Alcides López estimates that to date,
    100,000 applications for land to farm have been "received and
    processed," and 38 percent of the idle land available has been leased.
    Twenty percent of this is already producing crops or has been sown. The
    question now is whether the resources will be available for these new
    farmers to produce. (END/2009)

    ECONOMY-CUBA: Holiday Blues in Times of Crisis – IPS ipsnews.net (23
    June 2009)
    http://www.ipsnews.net/news.asp?idnews=47341

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