/IPS DEVELOPMENT BULLETIN/ CUBA: Gloomy Prospects for Sugar

By Dalia Acosta Reprint | | Print |

Dalia Acosta

HAVANA, May 10 1997 (IPS) - Cub’s already battered economy is set for another body blow as official estimates on this year’s sugar crop now indicate a lower harvest than in 1996.

Concern over Cuba’s economic revival began earlier this month when Fidel Castro announced that this year’s sugar harvest would be less than expected – and short of last year’s tonnage.

Government officials earlier had predicted a harvest of 4.5 million tons of sugar in 1997 – 500,000 tons up on last year. These figures barely improved the production collapse that reduced tonnage from 8.5 million in 1990 to 3.3 million in 1993.

Cubans on the street had no illusions another round of belt- tightening lay ahead. “We’re headed for hard times,” was the typical reaction to Castro’s announcement as, despite government efforts to diversify the economy, most Cubans still belief the fate of sugar determines their overall quality of life.

Between 1989 and 1993 Cuba’s gross national product (GNP) fell, as did sugar productionm by 34.3 per cent. In 1994, with the first signs of economic recovery GNIP inched up by 0.7 per cent followed by growth rates of 2.5 per cent and 7.8 per cent in each of the following two years.

In spite of the disappointing performance of sugar, Castro says that the economy will grow in 199 since predicted increases in tobacco, nickel, fishing and other industries will compensate for sugar’s decline.

The alarm bells have been sounding in the sugar industry ever since since march, when adverse weather conditions affected the crop. Last month, Vice President Carlos Lage revealed that the late arrival of 350 million dollars credit would delay harvesting and refining, thus upsetting production schedules.

Then Came Castro’s announcement that Hurricane Lili’sravages in October had affected more than 500 thousand hectares of cane, resulting in the loss of 200 thousand tons of sugar.

Until the late 1980s Cuba was one of the world’s top ten sugar producers. Annual production averaged 8 million tons, and sugar was well-established as the island’s main export.

Sugar and molasses comprised 80 per cent of Cuba’s total exports in 1958, 77 per cent in 1970, 90 per cent in 1975, 84 per cent in 1980, 75 per cent 1989 and 65 per cent in 1994.

In his book “Island of Sugar”, Ramiro Guerra reports that Cuba was home to 159 sugar refineries in 1939. Sixty-six of these refineries were Cuban-held properties, 59 were owned by North American interests, 21 belonged to Spaniards and the rest were distributed among Canadian, British, Dutch and French entrepreneurs.

Although Cubans owned the greatest number of refineries in 1939, Cuban-owned facilities only accounted for 28.12 per cent of the nation’s total production. 55.93 per cent of Cuban sugar was produced by North American interests.

Fifty years later sugar was still riding high – employing 400,000 workers in 156 factories, 226 derivative plants and 800 stockpiling and cane-cleaning centers, according to official reports Throughout the 80s, Cuba’s sgr industry was supported by 12 firms dedicated to sugar processing equipment, research centers (employing 2,900 people) and numerous collateral entities.

Only last week, Jose Luis Rodriguez, Cuba’s Minister of Economy and Planning, stated that the 7.8 per cent growth in 1996 GNP was made possible by a widespread economic recovery that included Cuba’s sugar industry.

Rodriguez, an economist, said that last year’s steep increase in GNP was also attributable to an 8.5 per cent rise in productivity and a 54 per cent increase in investment capital.

Rodriguez declared that “growth rates in coming years will be sizable, and we do not anticipate any economic contraction. We think the worst is behind us”. The Minister also stated that Cuba’s economy would expand in 1997, but less than in 196.

Rodriguez says that Cuba will continue to prioritize tourism, sugar, nickel, fishing, tobacco, pharmaceutical and biotech products and a wide range of non-traditional exports.

According to official economic forecasts, Cuba’s economy should grow by 5 per cent this year. However, these forecasts assume that all sectors of the Cuban economy will grow, and that sugar production will exceed 4.45 million tons.

Agricultural experts say that sugar production will stabilize over the next three years, but the government must still confront the long-standing problem of whether Cuba should continue its traditional dependence on sugar.