CUBA-ECONOMY: Inching Back From Crisis

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, Jan 16 1996 (IPS) - Two weeks into 1996 and Cubans have found it hard going to make ends meet with hope – food for the spirit – once again the only “product” available that is cheap, and free from rationing.

Government officials and the media are stressing discreet improvements in economic indicators but these developments are not being felt in the everyday life of the ordinary citizen.

“We must wait for our dreams and substantial improvements to come true,” said Minister of Economy and Planning Jose Luis Rodriguez, late last year. Cubans are still waiting.

Like other high officials in the island’s government, Rodriguez stressed that the advances registered are not enough to mean an improved standard of living for the islands 10.9 million people.

After three years of rapid decline, the Cuban economy first showed signs of recovery two years ago, growing 0.7 percent in 1994 and 2.5 percent last year. Authorities predicted that the Gross Domestic Product (GDP) would increase five percent in 1996, as improvements continued in some sectors continue and with the sugar industry finally taking off.

Economic data aside, for the island’s inhabitants the important facts are that the periodic power failures continue to occur, that urban transport creates problems and the national currency is ever- decreasing in value. New taxes are believed coming within the next few months, including taxes on currency brought into the country, house rents, and maritime transport along with a plan to open toll stations on the highways.

All in all, Cubans are slightly better off than than the crisis years of 1992-94 when the “balseros” (raft people) sailed en masse for a better life in the United States.

“There were times when there was nothing to eat. Now everything is expensive, but you know its just a case of finding the money to buy what you need,” a Cuban teacher told IPS.

The 42-year-old woman, who works overtime making sweets for private restaurants, requested anonymity as she is registered with the government as “self-employed.”

With a monthly salary of less than 200 pesos (officially 200 dollars but unofficially worth only 25 dollars this woman is forced to work double in order to make ends meet. By not registering with the government she avoids paying the progressive taxes imposed on independent workers.

Official figures show the 208,500 authorised “self-employed” work in 160 different jobs, 60,000 have no other work, 50,000 are retired and 38,000 are housewives.

“Between my husband and me, we earn around 400 pesos, but we have two children and an old lady to look after,” the teacher said.

The government is still rationing sales and some staple foods are subsidied, but supplies of these products fell drastically during the crisis. Luxury goods like pork, garlic, onions, vegetables or oil, have to be bought direct from the agricultural market, or on the hard currency network.

And while prices on the agricultural market fell last year, they are still high for the average Cuban who must pay 60 pesos or more for a kilogramme of Pork and 12 pesos for five or six onions.

The government extended the self-employment market in September 1993 as an alternative solution to the need for order in the workforce and greater economic efficiency. Some 500,000 more jobs have still to be shed under these reforms.

Authorities, however, are keeping an eye on the new job sector after observing that some people were becoming “too rich too fast.”

A document produced by the Ministry of Employment and Social Security said that snack food producers and taxi drivers are making between 100 and 400 pesos per day, while a shoe-maker earns only 95.

“We are not all rich nor thieves,” claim the “self- employed,” many of whom have no other way of making a living.

Meanwhile, the specialists assure that “whatever happens” development in this emerging sector cannot go into reverse, stating that the government can keep the necessary control through the tax system.

This new form of employment appears to be the escape valve for the unemployment issue, also providing the goods and services the people need.

Local observers estimate that closing this valve or forcibly reducing the sector would create discontent and put the nation into an even more unstable position.

“If taxes go up, so do prices,” is one of the most popular refrains heard these days on the streets of Havana.