Who is the Guilty Party?

Oscar Espinosa Chepe
May 28, 2009

In the middle of May the newspaper Granma, official publication of the Communist Party, began a series of articles about the worsening of the economic situation in the country caused by the international financial crisis. Two articles signed by the director, Lázaro Barredo, and another article in the first page of the newspaper reported the excessive consumption of 40,000 tons of fuels for the production of electrical energy.

At the same time other publications, such as the weekly "Trabajadores" and the Center for the Study of the Cuban Economy have also expressed their concerns about the economy and the possible worsening in the next few months. Those familiar with the government practices in the last 50 years believe that public opinion is being prepared for the adoption of drastic measures to face the worsening tendencies.

Actually, the symptoms of the deterioration of the economy could be seen months ago, caused by 30 years of the Special Period and the consequences of the three hurricanes that pounded the Island in 2008 causing losses of more than 10 billion US dollars. Therefore, the effects of the international crisis are presented in a country that is submerged in a crisis for tens of years and punished by natural phenomena. The problems can be appreciated in the transportation system and the threat of power failures. At the same time, agriculture results remain at very low levels, with a reduction of 7.3% in the first quarter of 2009 in relation to last year, according to official figures.
At the same time, there are serious difficulties with the payment of financial obligations, which has caused several companies established in Cuba to leave, and to refinance the debts with other companies. In this environment everything seems to indicate a possible return to the worse months of the Special Period, which has not ended yet. In addition, we must remember that the country lacks monetary reserves and no measures have been take to face the economic crisis, since the promise made by president Raul Castro of implementing transformations to free the productive forces, remain unfulfilled.
The Center for Studies of the Cuban Economy has indicated that the GDP will show a negative growth of 0.5% in 2009. Regardless, it is expected that the reduction shall be higher than expected, when considering the fall in agricultural production for the first quarter, a determinant period, the obvious decline in public transportation, the financial problems that affects imports and the possibility of more frequent power failures in the near future, according to Granma. We must also consider the possible closing of some of the nickel processing plants; especially the Che Guevara plant and the plant located in Nicaro, due to the fall in the price of nickel worldwide and its high production costs.

The situation in the next few months could be very delicate. When at the beginning of 1990 the subsidies from the Soviet Union disappeared and the Special Period was declared, Cuba had a productive infrastructure, currently nonexistent and whatever is left lacks capital as a result of lack of replacements and maintenance. We must remember that there is no sugar for export.

At the same time, the highest figure, Fidel Castro, is removed from the daily events and the system that he designed shows serious cracks, among others, the abrupt dismissals of Carlos Lage and Felipe Pérez Roque. In addition, there is a new generation without any commitments with the past and who generally consider the current system as an obstacle to their natural dreams of progress and wellbeing. If Raul Castro in his speech of 2007 brought hope for changes and transformation, the paralysis of the government has eliminated the expectations for reform with considerable erosion to his political credibility.
Finally, the Obama Administration does not seem to be inclined to offer excuses and justifications to the Havana government who used them in the past to promote fear from foreign governments, justify repression and blame others for their own faults.

Undoubtedly, the incoming months shall be even more difficult for the Cuban people, although it will be very clear that the increase of penalties and sufferings shall be the fault of those only interested in holding on to absolute power, who have remained blind and deaf to the call of the new era.

Habana, May 20, 2009

Oscar Espinosa Chepe
Economista y Periodista Independiente


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