Category — Food crisis

By Mary Anastasia O’Grady | Wall Street Journal

Hurricane Gustav and Hurricane Ike inflicted misery on millions of Cubans. But when the Castro dictatorship looks at the devastation, it sees opportunity.

Fidel Castro and his brother Raúl, who took over as head of state in February, for years have been calling for an end to the U.S. embargo, which they say is starving Cuba. But Cuba can already buy from U.S. producers all the food and medicine it can pay cash for. What the totalitarian tag-team really wants is an end to the ban on private-sector credit to the Cuban government.

Their demand has gone nowhere in Washington, both because of moral objections to doing business with tyrants, and because the Castro brothers are world-class deadbeats. They have defaulted on billions of dollars in debt to the rest of the world, and want credit from the “empire” (i.e., the U.S.) only because their options for borrowing elsewhere have narrowed significantly.

Now they are using the latest Cuban tragedy to ratchet up the pressure on Washington through the international press. Rather than accept an offer of $5 million in humanitarian assistance from the U.S., the regime is demanding that the credit ban be lifted. [Read more →]

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Aftermath of Hurricanes Gustav and Ike. (Photo: AP)

Via The Economist:

“NEVER in the history of Cuba have we had a case like this,” President Raúl Castro lamented after two powerful hurricanes, barely a week apart, struck the island, severely damaging crops and leaving some 200,000 homeless. Miraculously, Havana, the capital, was left virtually unscathed, as were the main tourist resorts, the oil industry and nickel mining. But with estimated losses of $5 billion, one of the world’s last communist regimes is facing a daunting task.

The enormous damage sustained to the island’s food supplies, housing and electricity grid raises big questions about Cuba’s ability to get by without massive international aid. Two of the island’s most valuable export crops, citrus and tobacco, suffered big losses. Luckily, the tobacco harvest was already in, but some 3,000 curing sheds where the leaves are stored were damaged. Almost half the sugarcane fields were flattened. The coffee harvest in the east has also been badly affected.

The government has admitted that it cannot cope alone. “It is impossible to solve the magnitude of the catastrophe with the resources available,” said Carlos Lezcano, director of the National Institute of State Reserves. “The reserves are being tested. We shall have to prioritise.”

Hurricanes Gustav and Ike could increase pressure on Raúl Castro to accelerate reforms to loosen the island’s centrally-controlled economy, much as his brother, Fidel, was forced to do in the early 1990s after the collapse of Cuba’s subsidised trade with the Soviet Union. Back then, reforms briefly opened the economy up to private enterprise, but Fidel Castro slammed the door shut again once the economy had recovered. [Read more →]

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The New York Sun has an editorial on Freedom House’s study on change in Cuba published this week.

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Via Financial Times:

Like the other residents of the José Martí housing estate in Santiago, Cuba’s second city, Rafael Gonzalez has grown used to the taps running dry.

“Sometimes water arrives only two or three times a month,” says the 46-year-old restaurant worker, who often has to rely on what he collects in the two rusting oil drums parked on the balcony of his second-floor flat.

Now, however, change is in the offing. Fixing Santiago’s defective pipelines and aqueduct is one of a number of projects being given priority as Cuba’s Communist government ploughs billions of dollars into roads, electricity and water infrastructure.

José Martí and other Santiago barrios should benefit, for example, from a multi-million dollar restoration plan and Mr Gonzalez and his neighbours are looking forward to the improvement. “They say next year we will have water,” says Rolando, a 52-year-old retired carpenter. “They are ‘revolutionis ing’ things.”

“Revolutionising”, however, turns out to be a slow process. Cuba’s Communists are anxious to avoid the tumultuous transition experienced by the Soviet Union and – like their Chinese allies – are determined to hold on to political power. Nor, with their traditions of austere egalitarianism, do they have much appetite for the kind of market-based liberalisation that has taken place in China and Vietnam.

Even so, President Raúl Castro, who last month completed his second year at the helm of Cuba’s economy, is determined to press on with changes designed to increase economic efficiency and improve living standards. [Read more →]

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Via Financial Times:

Cuba, one of the world’s last surviving Communist states, is looking at watering down the generous social welfare system that has been a cornerstone of its economy for nearly 50 years, according to a senior government official.

Alfredo Jam, head of macroeconomic analysis in the economy ministry, told the Financial Times that Cubans had been “over-protected” by a system that subsidised food costs and limited the amount people could earn, prompting labour shortages in important industries.

“We can’t give people so much security with their income that it affects their willingness to work,” Mr Jam said. “We can have equality in access to education and health but not in equality of income.” He said the emphasis on equality had helped maintain social cohesion during the 1990s when Cuba’s economy came close to collapse after the withdrawal of Soviet assistance, but “when the economy recovers you realise that there is [a level of] protection that has to change. We can’t have a situation where it is not work that gives access to goods,” he said.

Mr Jam’s remarks represent a rare and unusually frank insight into official thinking on Cuba’s future economic direction in the wake of the resignation of its long-time leader, Fidel Castro, in February.

Under Cuba’s new president, the former leader’s younger brother Raúl, the country has eased restrictions on bonuses that can be paid to workers and lifted bans on products such as mobile phones and DVD players.

Mr Castro also decentralised the country’s agricultural system and said idle land would be offered to co-operatives and private farmers to lower dependency on imported food.

However, the welfare system has remained almost intact. Under it, all Cubans are entitled to basic foods, including bread, eggs, rice, beans and milk, at much cheaper prices than those elsewhere in the world. Rents and utilities are extremely cheap and education and healthcare are free.

Any reform of these universal benefits would be controversial within the governing Communist party and unlikely to happen quickly.

But Mr Jam’s comments reflect growing frustration in official circles about poor performance in agriculture, construction and manufacturing. “There isn’t motivation to work in these sectors,” he said.

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La Razon reports on the creation of a super-ministry charged with overseeing the production of food (a vital national security issue for Cuba):

While rumors of a next government crisis runs insistently throughout Havana, the name of Ulises Rosales del Toro is beginning to be heard with greater impetus among diplomats and journalists.   Rosales del Toro is the current Minister of Sugar, a two star general, 66 years-old with a brilliant service record for the regime.

According to unofficial sources, it seems Rosales del Toro will play a vital role in the restructuring of the Cuban government once Raul Castro sends the plan to parliament (National Assembly) before the end of the year.

“I know what you know,” responded Vice-Minister of Sugar Juan Godefroy to a query made by a US news agency interested in the role of that ministry in the unification of four ministerial posts that are linked to the production of food in the country.

Expected unification

Even though there is speculation without official confirmation point to Rosales del Toro, former chief of the General Staff of the Armed Forces, as the center of the expected unification or reorganization of the Ministries of Agriculture, Sugar, Food and Fishery.

The restructuring of the departments linked to the production of food which is a national security issue in Cuba began with sharing by municipalities of “many decisions that have been up to now made centrally in the Ministry of Agriculture,” opined Cuban economists who asked to remain anonymous.

“Unification of decision making” in the sector will be reached through that path but they declined to advance the names of who will head the new structure.

[H/T: La Nueva Cuba.]

[Photo: BBC.]

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