By Patricia Grogg
HAVANA, Oct 11 2001 (IPS)

Prolonged blackouts this week in the capital and several provinces heightened the sensation of uncertainty with respect to the economic impact of the slowdown of the global economy and the international crisis triggered by the Sep 11 terror attacks in the United States.

The power cuts began last Sunday afternoon, shortly after Cuba’s state-run television interrupted its regular programming to announce the start of the US and British aerial attack on Afghanistan.

The electric company blamed the outages on a lack of fuel to run the Felton thermoelectric plant in the province of Holguín, some 1,000 kms east of Havana. A tanker carrying 9,500 tonnes of fuel to the plant had run aground late Saturday near Holguín, and took three days to remove.

Brief official statements reporting on the case also urged Cubans and all government entities to do their utmost to save energy.

The situation began to return to normal late Tuesday. But the unexpected blackouts brought back memories of the worst years of the economic crisis of the 1990s.

With the break-up of the Soviet Union in 1991, this Caribbean island nation of 11 million lost its main supplier of oil, which led to drastic power shortages.

In the 1990s, “the power would go out for 10 hours or more,” recalled Lázara Martínez, a local resident of one of the Havana neighbourhoods hit this week by the new wave of blackouts.

According to Martínez, the timing of the latest power cuts, which coincided with the start of the air strikes on Afghanistan in reprisal for the Sep 11 terror attacks on New York and Washington, was seen among Cubans as “a bad omen,” and fuelled the public’s concerns as to what the future had in store.

The socialist government of Fidel Castro warned that no country could escape the effects of an international armed conflict. But it also stated that no country was “more prepared, better organised and more aware than Cuba when it came to dealing with any difficulty that could crop up.”

Martínez added that “many believe that the situation will become more difficult, and that we are going to see a return to the worst days” of the 1990s recession, which peaked in the middle of the decade.

One of the strategies adopted by the government to deal with the energy crisis included scheduled daily blackouts that rotated according to time of day and neighbourhood, in accordance with a strict energy rationing programme.

Greater availability of oil this year led local authorities to finally announce the end of scheduled power outages, and to promise a summer free of such problems – crucial given the high temperatures in Cuba during that season, when a fan becomes a necessity rather than just another household appliance.

Nevertheless, annoying electricity failures continued to occur, blamed by the power company on breakdowns of equipment rather than fuel shortages.

During the summer, electricity generation topped 40 million kilowatt/hours a day, according to the power company.

A large part of Cuba’s energy needs are covered by domestic oil production and imports of 53,000 barrels a day of crude from Venezuela, 80 percent of which is payable within 90 days of delivery, at market price.

Although oil prices “are low at the moment, they tend to rise during times of war, which would be a serious problem for us,” a Cuban economist, who preferred to remain anonymous, told IPS.

He said tourism, Cuba’s chief foreign exchange-earner, would be one of the first sectors to feel the impact of the international crisis unleashed by the Sep 11 terrorist attacks.

Some hotels have already reportedly closed off entire floors and sent home part of their staff due to low occupancy rates. “In crisis situations like this one, most people prefer not to travel, and to reduce their expenses,” he noted.

Canada is the main source of visitors to Cuba, although 55 percent of all arrivals come from Europe.

Sales are also down in the network of stores that only accept dollars, set up by the government to draw in foreign exchange after possession of dollars was legalised in 1993. “Sales are slow. I think people are waiting to see what will happen,” said a cashier at one of the stores.

Nearby, taxis line up waiting for tourists who don’t arrive.

The economist consulted by IPS also predicted that the cost of food would rise. The Cuban government imports around 700 million dollars a year in foodstuffs.

In addition, he forecast a sharp drop in remittances from Cubans living abroad, who send home 800 million to one billion dollars a year.

“The price of sugar might rally, but we don’t have much to sell,” added the economist, who pointed out that this year’s yield stood at just 3.5 million tonnes.

The current international juncture will make the government’s projection of 4.5 percent economic growth this year even more unlikely, he said. “The Cuban economy is very seasonal, and what is not achieved in the first half of the year is very difficult to achieve later. That means the chances for growth are not good.”

Cuba’s Gross Domestic Product (GDP) grew 3.6 percent in the first six months of the year. “A 3.5 to 3.7 percent growth rate by year-end would be good, although lower than last year’s 5.6 percent,” he concluded.

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