Weekly Report - 24 February 2004

CUBA | `Black' economy spreads. The audit & control ministry reports that more than a third of the 5,917 inspections of state companies conducted last year revealed some kind of irregularity -- the most frequent being the diversion of `sensitive' goods to the black market. This, said minister Lina Pedraza, had been encouraged by sloppy identification of the origin or destiny of goods and inefficient internal auditing.

The 316,000 inspections of sales outlets conducted by the finance ministry showed up 35% of them (mainly in catering and the markets for farm produce) engaging in `price violations'. The most frequent offence was the imposition of a surcharge (which the public calls a multa, or fine), but there was also a high incidence of cheating on weights and measures. An interesting detail: violations were just as frequent in the dollar shops as in those conducting their business in pesos.

CUBA | Putting nickel back on its feet. Last year nickel exports brought in about US$100m, confirming it as one of the leading sources of hard currency — but this was largely the result of improved world prices, since the lack of proper upkeep meant that one of the three main plants was producing well below capacity. This translated into a 4.7% fall in overall output, to about 71,000 tonnes. Following rehabilitation work at the René Ramos Latour plant, the government is now predicting for this year a return to about 76,000t.

GUATEMALA | Concern about `China factor'. The Guatemalan authorities are concerned about China, not only because it has become a powerful competitor abroad, but because its products are `flooding' the domestic market, harming local industries. Imports from China have increased over the past eight years from US$5m to US$276m, and Guatemala has been unable to offset this with exports of its own to China. The bilateral trade balance last year showed a deficit of US$196m for Guatemala. 

The sectors most affected by competition from Chinese imports are footwear, plastics and apparel. In the footwear sector a large number of closures, mainly among artisan shops, have been reported.