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Tags: cuba | economy | politics

Cuba Examines Weak Economy, Seeks 'Socialist Development'

Sunday, 06 July 2014 08:42 AM

HAVANA — Cuba's National Assembly opened its biannual session with the communist island's faltering economy topping the agenda, but no plans unveiled for change.

President Raul Castro, 83, addressed the assembly Saturday, which discussed why one of the world's last command economies has not grown faster, after six years of very tentative reforms.

"Our growth rate is not something we are pleased with, but it does not discourage us in the least," the president said.

Castro urged Cuban workers, who earn the equivalent of $20 a month, to work "hard and optimistically, to turn this around and guarantee growth rates that will make socialist development possible."

But he failed to unveil new strategies at the day-long meeting of 612 legislators and other senior officials.

The government has said it plans to end an unpopular dual currency system, but has not given a time frame for doing so.

The dual currency system is blamed for aggravating social inequality, which also worries the government.

"We don't want shock methods to be imposed, or for the (change) to be traumatic for people, which also adds to the degree of complication" of the change, said Marino Murillo, the government official in charge of the slow, limited reforms.

Many Cubans fret that they might lose saving in pesos if the traditional peso is eliminated in favor of the CUC, a second local currency equal to the dollar and accepted where only hard currency is accepted.

The government does not want to trigger a run on banks.

Castro, however, stressed to the assembly that "it is appropriate to underscore that (Cuban) bank deposits will be guaranteed" in hard currencies and local ones.

And he blamed U.S. sanctions for Cuba's economic hardship.

Yet however keen for growth, Cuba — the only communist-run one-party state in the Americas — has refused to adopt market economics as have allies China or Vietnam. It fears such reforms would cause social strife.

The government has pared state payrolls, and allowed more Cubans to be self-employed.

But it produces little outside the mining sector. One of its key exports are government health workers on state contracts.

Havana depends massively on ally Venezuela for cut-rate oil and other cooperation.

In a country with ample farmland for its population of 11 million, Cuba still imports most of its food.

Agriculture Minister Gustavo Rodriguez told a farm committee that the industry is experiencing "problems in all spheres" on the island, which will spend some $2 billion in precious hard currency on imported food.

Cuba's economy in 2013 grew by 2.7 percent, below the official target of 3.6 percent.

Havana last month lowered its growth forecast from 2.2 percent to 1.4 percent, blaming "adverse" economic conditions, including fewer than expected funds sent to its citizens from their relatives overseas.

Economy Minister Adel Yzquierdo said at a recent Council of Ministers meeting that growth in Cuba was just 0.6 percent for the first half of the year.

While the government has legalized such activities as buying and selling cars and homes, few Cubans have the resources to make big purchases.


© AFP 2022

Cuba's National Assembly opened its biannual session with the communist island's faltering economy topping the agenda, but no plans unveiled for change.
cuba, economy, politics
Sunday, 06 July 2014 08:42 AM
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