Wednesday, December 30, 2015

Raul Castro prepares Cuba for tough year despite US opening

Raul Castro prepares Cuba for tough year despite US opening
By Michael Weissenstein | AP December 29 at 8:11 PM

HAVANA — President Raul Castro warned Cubans on Tuesday to prepare for
tough economic conditions in 2016 despite warmer relations with the
United States. Castro said that while tourism is booming, low oil prices
have damaged the outlook of an economy that depends on billions of
dollars of subsidized oil and cash from Venezuela.

According to state-controlled media, Cuba's president told the National
Assembly to expect 2 percent growth in gross domestic product next year,
half the rate his government reported in 2015. Foreign media are barred
from the twice-annual meetings of the National Assembly.

Despite the government's assertion that the GDP grew 4 percent this
year, there is widespread dissatisfaction among Cubans over the widening
gap between low salaries and the high price of essential goods, most
particularly food.

Castro appeared to be preparing Cubans for harder times ahead, saying
that "we must cut any unnecessary spending and make use of the resources
that we have with more rationality and with the goal of developing the

He dedicated a lengthy section of his speech to Venezuela, where the
opposition to Cuba-backed socialist President Nicolas Maduro recently
took control of parliament amid widespread shortages and spiraling violence.

Cheap oil "has affected our relationship of mutual aid with various
countries, particularly the Bolivarian Republic of Venezuela, the target
of an economic war aimed at undermining popular support for its
revolution," Castro said.

He urged Cubans to avoid what he labeled "defeatism" in the face of a
drop in Venezuelan aid, saying "the history of our revolution is full of
glorious pages despite difficulties, risks and threats."

More than 3 million tourists visited in 2015, an increase of nearly 20
percent in the wake of President Barack Obama's declaration of detente
with Cuba. The surge in visitors pumped cash into the state-controlled
tourist economy and the growing sector of private bed-and-breakfasts and
restaurants, but it also drove up household inflation. In the absence of
a wholesale market for private businesses in Cuba's state-controlled
economy, entrepreneurs have been forced to compete with cash-strapped
consumers, driving up prices by driving off with cartloads of basic
foodstuffs like eggs and flour.

Salaries for state employees, who make up most of Cuba's workforce,
remain stuck at around $25 a month, leaving hundreds of thousands of
Cubans struggling to feed their families.

Falling oil prices have lowered the cost of the imported goods that Cuba
depends on but have hurt the island's economic relationship with
Venezuela in 2015, Castro said. Cuba has sent thousands of doctors to
Venezuela in recent years in exchange for oil and cash payments at
highly beneficial rates.

Cuba does not regularly release reliable economic statistics that
conform to international standard but its top earners of hard currency
in recent years have been tourism, nickel mining and the export of
government-employed professionals like the doctors sent to Venezuela and
other allied countries. Castro said lower nickel prices also hurt the
country's 2016 outlook.


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Source: Raul Castro prepares Cuba for tough year despite US opening -
The Washington Post -

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