ECONOMY-CUBA: Burnt by Sun, Lashed by Wind, Swamped by Rain

By Patricia Grogg Reprint | | Print |

Patricia Grogg

HAVANA, Oct 5 1998 (IPS) - The downpours that accompanied Hurricane Georges as it ripped through Cuba in late September ended a long drought in the Caribbean island, but the strong winds also left a trail of destroyed plantations.

It will take months for agriculture to recover. In fact, the hurricane’s effects will still be felt in next year’s harvest, according to unofficial sources.

The agriculture sector in and around the eastern city of Santiago de Cuba, the country’s second largest town, lost an estimated 3.9 million pesos, according to the official press. (The peso is on par with the U.S. dollar at the official rate, but is quoted at 21 to the dollar in foreign exchange bureaux).

Coffee, one of the main export commodities, and bananas, a staple, were heavily hit.

The government had set aside food aid for some 600,000 people – those worst affected by drought – but now it plans to provide food relief to four million persons, more than a third of the 11 million Cubans.

This will decrease Cuba’s fiscal earnings by “dozens of millions of dollars”, according to the authorities, even though it will not significantly increase the daily fare of the beneficiaries.

“It won’t be much but it has an important political effect,” commented a lawyer in Holguin, 771 kms east of Havana and one of the provinces worst hit by the drought – which affected the east of the island – and later the hurricane.

The daily ‘Granma’, official organ of the Communist Party, commented in Friday’s edition that people were aware that the measures taken by the government “in the midst of a complex economic situation” to help those affected by the disasters are significant.

Not long before Hurricane Georges waded into the island on Sep 23, the UN’s World Food Programme (WFP) had warned that Cuba could be in for a severe food crisis because of the drought. It had said in a document released by its Havana office that the situation was worsening and that it was clear the country was experiencing a serious food shortage.

After a visit in July to the provinces worst hit by drought, a team of officials from various UN agencies had estimated that the country would lose more than 260 million dollars if the rains kept away after the end of September.

However, the rain that accompanied Hurricane Georges left an extra 1,544 million cubic metres of water in the country’s dams, according to sources at the National Institute of Hydraulic Resources.

In Holguin, where rivers burst their banks and many areas were flooded, the rains added 88.6 million m3 of water to the province’s dams and replenished its ground water. They have guaranteed the town of Holguin at least one year’s supply of water and will enable agriculture to recover from the damage caused by drought, according to Granma.

In the sugar sector, unofficial reports estimate the damage at more than 160,551 ha of canefields, a heavy blow to plans for the industry’s revival. However, sugar officials said Georges’ winds did not inflict heavy economic damage on the sector. They said the rains should benefit a number of provinces that had put off planting cane because of the drought.

As a result of drought, this season’s cane output, estimated at 3.1 million tonnes, is one of the lowest in 55 years. A decline in the harvest last year had caused gross domestic product (GDP) to grow much more slowly, at 2.1 percent, than in 1997, when GDP growth was 7.8 percent.

Since 1995, Cuba has had to resort to high-interest short-term foreign loans to finance its recovery plans for the sugar industry. The U.S. embargo prevents the island from applying for loans from multilateral lenders, whose terms are less burdensome.

Moreover, Cuba has not managed to renegotiate its debt to bilateral creditors, estimated at around 10.46 billion dollars.

Some experts forecast that the next harvest will be only slightly higher than this year’s given the deterioration of canefields, which will take years to recover.

However, Jose Luis Rodriguez, minister of economic affairs and planning, is optimistic. “Despite the difficulties and a very low harvest, we’re sure the economy is going to grow,” he said in late September.

His forecast is that GDP will increase by 2.5 to 3.5 percent in 1998. Tourism, the most dynamic sector of the economy, is expected to gross around 1.8 billion dollars this year, he said.