A billboard showing a photograph of Fidel Castro stands in front of the oil refinery Camilo Cienfuegos in Cienfuegos Dec. 20, 2007. (Claudia Daut/Reuters)

Cubans face dire formula

With Cuba's economy sinking, the government calls for energy conservation.

By Nick Miroff

Published: June 25, 2009 06:34 ET
Updated: June 25, 2009 17:36 ET

^-A ⁺A

HAVANA — As a general rule with Cuban revolutionary slogans, the second choice is never a good option.

Such is the case with Fidel Castro's famous rallying cries of "Patria o Muerte" ("Homeland or Death") and "Socialismo o Muerte" ("Socialism or Death"). And now, with the island facing its grimmest economic outlook in years, Cubans have been presented with a new mortal ultimatum: "Ahorro o Muerte" ("Conservation or Death").

That phrase, appearing in a recent editorial in the Communist Party newspaper Granma, was meant as a call to arms for the Cuban government's new energy-conservation campaign. But taken more broadly, it also appears to reflect the country's economic strategy under President Raul Castro, who assumed Cuba's leadership more than a year ago. Rather than follow the path of market-based liberalization reforms that China and Vietnam's communist governments have taken, Cuba intends to weather the crisis by slimming its bureaucracy and exhorting citizens to conserve resources and produce more.

Cuba "can't get more out of its pockets than what it puts in," economic planner Julio Vazquez Roque said in a lengthy article on the country's economic woes that appeared June 21 in the communist youth daily Juventud Rebelde.

The effects of the global economic crisis are hitting Cuba at a time when the island is still struggling to recover from three powerful hurricanes that caused an estimated $10 billion in damage last year. And the situation is worsened by five-decades-old U.S. trade sanctions that squeeze Cuba's access to credit and export markets, a policy Cuba likens to a "blockade" in part because the measures attempt to punish foreign companies and governments who do business with Havana.

But government officials increasingly acknowledge that many of Cuba's shortcomings are self-inflicted.

The country's state-run economy is plagued by inefficiency, low worker productivity, and a frighteningly skewed trade imbalance. During the first three months of 2009, imports outpaced exports at a nearly four-to-one clip, according to Granma. Revenues in key Cuban industries like tourism and nickel are slumping with the global recession, and tightening foreign credit markets have produced a cash crunch at government banks. Projections for Cuba's economic growth this year have been revised sharply downward in recent months.

Comments:

2 Comments.

Posted by david wayne osedach on June 28, 2009 10:57 ET

The easiest solution to Cuba's woes is to cozy up to Obama and reopen trade. The US is closer to Cuba than any other major country and would be their number one importer.

Posted by postor1 on June 25, 2009 07:55 ET

The Institute of Cuban-American Studies at the University of Miami, published a report showing the results experienced by all those countries that traded with Castro and his brother on credit.

Venezuela, Cuba's #1 trading partner, is owed $11.4 BILLION DOLLARS!

Spain, is owed $3.2 billion; followed by China $3.17; Japan $2.77; Argentina $1.96 and France $1.85.

The total foreign debt of the Castro brothers is $31.681 BILLION DOLLARS!

And that doesn't take into consideration the non-convertible debt which amounts to another $21 billion.

The US sold $750 million to Cuba last year and is owed $0.0 because we require cash in advance, the only way that you can trade with crooks who never pay their bills.

So you know what we can expect if those who want to sell Castro on credit, succeed.

The Castros will get billions of dollars, and the US taxpayers will get stuck with the bill.