Holiday Blues in Times of Crisis

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