Caribbean & Central America - January 2006 (ISSN 1741-4458)

Firstly, the growth figure needs to be treated with caution. Cuba recently introduced its own measure for calculating GDP growth, based in part on the added value of the subsidised services that the government provides in sectors such as health, education, culture and sport. It is also very difficult to quantify exportation of services, such as doctors and other medical workers hired by countries like Venezuela to provide free care to poor people. All of this leaves considerable latitude for producing healthy-looking figures, although economy and planning minister José Luis Rodrí­guez insists that using the same formula in 2004 the economy had only grown by 5%.*

There are other reasons why the growth figure is, at best, less than useful. Cuba was hit by some serious hurricanes in 2005 and since 2003 it has been ravaged by the worst drought in 100 years. It is also in the midst of a painful restructuring of the once-mighty sugar industry. Major problems with the electricity supply industry mean that most Cubans are affected by daily power cuts, although Castro is again promising action on this front. On 18 January he said he would launch an "energy revolution" that would resolve power shortages by mid-2006.

Payá's claim
There is no question that Cuba's current economic situation is all the better for receiving cheap oil from Venezuela. Oswaldo Payá claimed in early January that "the regime feels supported, with more oil, and is closing the gates to the future." Payá's Movimiento Cristiano de Liberación (MCL) party collected 25,000 signatures under "Proyecto Varela" between 2001 and 2004 in a (failed) attempt to persuade Cuba's national assembly to permit multi-party democracy.

More than two-thirds of the 75 dissidents and journalists rounded up and summarily sentenced to long prison terms in April 2003 belong to the MCL. Payá claims that they have been badly mistreated and many of them are in poor health. He also claims that many of the signatories of Proyecto Varela are visited by the security forces or members of the Communist party on a frequent basis and threatened.

* Using conventional GDP growth criteria, the UN Economic Commission for Latin America and the Caribbean (Eclac) put 2004 GDP growth in Cuba at 3%.

CUBA: ECONOMIC OVERVIEW
President Fidel Castro broke one of the cardinal rules of politics by setting a deadline for the implementation of an ambitious programme. On 18 January Fidel promised that by 1 May 2006, 95% of Cuban households would be enjoying an uninterrupted supply of electricity.

This is ambitious because the country's electricity industry is in a ropey state. Even in cities people are using kerosene cooking gas to run boilers and to cook. The government has been trying to improve the electricity supply industry and is installing 4,000 new generators across he country. Some will use environmentally sustainable fuel such as waste sugar cane.

Fidel said the investment in upgrading the electricity industry would deliver a clear "before" and "after", Officials say that the programme will expand the country's electricity generation capacity by 60% and bring in solar and wind power. The bulk of the country's power stations are oil-fired and have a capacity of 2.94m kilowatts per hour.

Fidel added that the investment in the electricity industry would deliver significant savings. He claimed that the country would be able to cut its oil bill by US$1bn a year. There will also be other savings: battery powered fans are among the biggest selling items in hard currency shops in the summer.

This statement has regional strategic implications. Venezuela is supplying Cuba with about 60,000bpd of cheap oil, most of which is used to generate power. Before the Berlin Wall came down, Russia used to oversupply Cuba with oil which Castro and Co used to sell for hard currency. Cuba may now start doing something similar with Venezuelan oil, if it needs less of it.

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