Mon, 23 Sep 2019

Shortages Hit Cuba, Raising Fears of New Economic Crisis

Voice of America
19 Apr 2019, 06:38 GMT+10

BAUTA, CUBA - After two decades of relative stability fueled by cheap Venezuelan oil, shortages of food and medicine have once again become a serious daily problem for millions of Cubans

Just after 8 a.m., Pura Castell got in line behind about 100 other people waiting for a chance to buy frozen chicken legs. For two hours she leaned on her cane watching people leave the state-run market with their 5-pound limit.

The chicken ran out at 10 a.m. while the 80-year-old Castell still had 20 people in front of her. She returned the next morning, but no chicken. Then, relief. A neighbor told her that chicken had arrived at the government store that distributes heavily subsidized monthly food rations. Her household of three was due three pieces, either thighs or drumsticks.

Ive taken care of myself my whole life, said Castell, a retired janitor. I don't just sit on my hands. I'm worn out but I walk all over town.

Shortages of food, medicine

After two decades of relative stability fueled by cheap Venezuelan oil, shortages of food and medicine have once again become a serious daily problem for millions of Cubans. A plunge in aid from Venezuela, the end of a medical services deal with Brazil and poor performances in sectors including nickel mining, sugar and tourism have left the communist state $1.5 billion in debt to the vendors that supply products ranging from frozen chicken to equipment for grinding grain into flour, according to former Economy Minister Jose Luis Rodriguez.

Stores no longer routinely stock eggs, flour, chicken, cooking oil, rice, powdered milk and ground turkey, among other products. These basics disappear for days or weeks. Hours-long lines appear within minutes of trucks showing up with new supplies. Shelves are empty again within hours.

No one is starving in Cuba, but the shortages are so severe that ordinary Cubans and the country's leaders are openly referring to the special period, the years of economic devastation and deep suffering that followed the collapse of the Soviet Union, Cuba's Cold War patron.

It's not about returning to the harshest phase of the special period of the `90s, Communist Party head Raul Castro said last week. But we always have to be ready for the worst.

Cutbacks necessary

Two days later, President Miguel Diaz-Canel said cutbacks were necessary because: This harsh moment demands we set clearly defined priorities in order to not return to the worst moments of the special period.

The Trump administration is working hard to push Cuba toward economic crisis. Washington has sanctioned Venezuela's oil industry and the shipping companies that move Venezuelan oil to Cuba.

On Wednesday, U.S. National Security Adviser John Bolton announced further measures against Cuba and its allies, including a new cap on the amount of money that families in the United States can send their relatives on the island and new restrictions on travel to Cuba. The troika of tyranny Cuba, Venezuela and Nicaragua is beginning to crumble, he said.

The move followed the announcement a day earlier that lawsuits would now be permitted against foreign companies doing business in properties seized from Americans after the island's 1959 revolution. The policy could deal a severe blow to Cuba's efforts to draw foreign investment.

Soldiers and spies

A senior Trump administration official said the economic pressure on Cuba was aimed at forcing the socialist government to stop helping its allies in Venezuela and Nicaragua. The U.S. has accused Cuba of sending soldiers and spies to both countries to strengthen their leaders against protests and potential defection. Cuba denies that.

We're going to make sure they cannot afford subsidized adventurism, subsidized subversion of democracy outside of their borders, said the official, who spoke on condition of anonymity because he was not authorized to speak publicly about U.S. policy toward Cuba. At an extraordinarily vulnerable time in their history, they're going to have to refocus on the domestic needs, their domestic pressures.

Despite some market-oriented reforms over the last decade, Cuba is one of the last countries on Earth to maintain a Soviet-style economy, with most business run by the state.

That economy is afflicted by deep inefficiency and corruption. Many state employees demand bribes to provide services to the public. Others spend only a few hours a day at their jobs, spending the rest of their time doing informal private work or selling supplies stolen from their office, warehouse or factory.

Despite a highly educated and generally well-qualified workforce, Cuba's industrial sector is dilapidated after decades of underinvestment. The country produces little of value on the global market besides rum, tobacco and the professionals who earn billions for the government working as doctors, teachers or engineers in friendly third countries.

The agricultural sector is in shambles, requiring the country to import most of its food. Economy Minister Alejandro Gil said Saturday that Cuba would spend $5 billion on food and petroleum products this year.

Over the last 20 years, many of those billions came from Venezuela's socialist government, which has deep ties to Cuba's and sent nearly 100,000 barrels of oil daily for years.

With Venezuela's economic collapse, that has roughly halved, along with deep cutbacks in the economic relationship across the board. And the news has been bad in virtually every other sector of the Cuban economy.

Nickel production has dropped from 72,530 metric tons in 2011 to 50,000 last year, according to Rodriguez, the former economics minister. The sugar harvest dropped nearly 44%, to a million tons. The number of tourists grew only 1%, with many coming on cruise ships, a relatively unprofitable type of visitor. Overall GDP growth has been stuck at 1% for the last three years.

Meanwhile, under agreements Castro struck to rehabilitate Cuba's creditworthiness, the country is paying $2 billion in debt service to creditors such as Russia, Japan and the Paris Club.

State-run stores that sell low-quality Chinese household goods at double or triple their price outside the country are facing competition from vendors in Panama, Guyana, Mexico, Haiti and even Russia, where Cubans fly in, fill suitcases with goods, and return to sell them at a profit.

Overseas shopping

That overseas shopping has become a vacuum sucking precious hard currency out of Cuba. Economist Omar Everleny Perez said he estimated that Cubans spent more than $2 billion a year buying products overseas.

With less cash on hand, there's been even less in the state-run stores.

The manager of the butcher shop where Castell waited for chicken last week said she needed 80 boxes of chicken to fill that day's demand and only 40 arrived.

Fears of a return to darker times are growing.

During the special period we had it bad, like everyone. Even when we had money we couldn't buy anything,'' said Castell, a mother of six.

It was really rough, blackouts, no food at all, I don't want to go back to that, said Ariadne Medina, a 47-year-old worker in a private restaurant who was waiting to buy chicken behind Castell.

Independent experts say a return to the depths of the special period is unlikely. Cuba does business with dozens of nations, hosts nearly 5 million tourists a year and Cubans can travel freely to dozens of countries on direct flights to the U.S., Europe and Latin America. Expatriates send billions home in annual remittances.

The new government is trying to halt the deterioration, but it's a tough assignment, Perez said. It's going to take resources and time.''

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