News and Facts about Cuba

Amid Grim Economic Forecasts, Cubans Fear a Return to Darker Times

Amid Grim Economic Forecasts, Cubans Fear a Return to Darker Times
By VICTORIA BURNETT JULY 12, 2016

MEXICO CITY — During the economic turmoil of the early 1990s, power cuts
in Havana were so routine that residents called the few hours of daily
electricity “lightouts.”

Now, grim economic forecasts; the crisis in its patron, ; and
government warnings to save energy have stoked fears among Cubans of a
return to the days when they used oil lamps to light their living rooms
and walked or bicycled miles to work because there was no gasoline.

Addressing members of Parliament last week, Cuba’s minister,
Marino Murillo, said the country would have to cut fuel consumption by
nearly a third during the second half of the year and reduce state
investments and imports. His comments, to a closed session, were
published on Saturday by the state news media.

Cuba’s economy grew by just 1 percent in the first half of the year,
compared with 4 percent last year, as export income and fuel supply to
the island dropped, said Mr. Murillo.

“This has placed us in a tense economic situation,” he said.

Weak oil and nickel prices and a poor sugar harvest have contributed to
Cuba’s woes, officials said. Venezuela’s economic agony has led many
Cubans to wonder how much longer their oil-rich ally will continue to
supply the island with crucial oil — especially if the government of
Nicolás Maduro falls.

Those fears grew last week after Mr. Murillo warned of blackouts and
state workers were asked to cut their hours and sharply reduce energy use.

“We all know that it’s Venezuelan oil that keeps the lights on,” said
Regina Coyula, a who worked for several years for Cuban state
security. “People are convinced that if Maduro falls, there will be
blackouts here.”

President Raúl Castro of Cuba acknowledged those fears on Friday but
said they were unfounded.

“There is speculation and rumors of an imminent collapse of our economy
and a return to the acute phase of the ‘special period,’” Mr. Castro
said in speech to Parliament, referring to the 1990s, when Cuba lost
billions of dollars’ worth of Soviet subsidies.

“We don’t deny that there may be ill effects,” he added, “but we are in
better conditions than we were then to face them.”

Mark Entwistle, a business consultant who was ’s ambassador to
Cuba during the special period, said that despite its dependency on
Venezuelan fuel, the island’s economy is now more sophisticated and
diversified than it was before the Soviet collapse.

Besides, he said, Cuba has “this phenomenal social and political
capacity to absorb critical changes.”

Still, some are perturbed at the prospect of power cuts. None of the
Havana residents interviewed over the weekend had experienced power
failures in their neighborhoods.

In an unusually blunt speech to journalists this month, Karina Marrón
González, a deputy director of Granma, the official Communist Party
newspaper in Cuba, warned of the risk of protests like those of August
1994, when hundreds of angry Cubans took to the streets of Havana for
several hours.

“We are creating a perfect storm,” she said, according to a transcript
of her speech that was published in various blogs. She added, “Sirs,
this country cannot take another ’93, another ’94.”

Herbert Delgado-Rodríguez, 29, an art student, remembered his mother
cooking with charcoal in the 1990s.

“I don’t know if it will get to the point where there will be protests
in the street,” he said. However, he added, Cubans “won’t tolerate the
extreme hardships we faced in the ’90s.”

One worker at a bank said employees had been told to use
air-conditioning for two hours each day and work a half-day. Fuel for
office cars had been cut by half, she said. A professor said
she had been given a fan for her office and told to work at home when
possible.

José Gonzáles, who owns a small cafeteria in downtown Havana, was more
sanguine.

“Raúl is simply urging us to cut back on unnecessary consumption, that’s
all,” he said, adding that talk of another special period was “just a
lot of speculation.”

Not all offices or companies have been affected, and Mr. Murillo said
the idea was to ration energy in some users so that others — homes,
facilities and companies — could use as much as they need.

In all, he said, the government aimed to cut electricity usage by 6
percent and fuel by 28 percent in the second half of the year.

Under an agreement signed in 2000, Venezuela supplies Cuba with about
80,000 barrels of oil per day, a deal worth about $1.3 billion, said
Jorge Piñon, an energy expert at the University of Texas. In return,
Cuba sends thousands of medical and other specialists to Venezuela.

On Friday, Mr. Castro said there had been a “certain contraction” of
that oil supply.

How large of a contraction is unclear. Reuters reported last week that
shipments of crude to Cuba had fallen 40 percent in the first half of
this year. Mr. Piñon said that at least part of the reduction was oil
that Venezuela refines in Cuba and then ships out again.

Cuba’s energy problems may also be a product of growing demand on the
electricity grid, he said. Electricity consumption has risen
significantly over the past 10 years as Cubans who receive remittances
from abroad kept air-conditioners whirring and private restaurants, bars
and bed-and-breakfasts added refrigerators and heated in toaster ovens.

has soared since the United States and Cuba announced an end to
their 50-year standoff in December 2014. The number of visitors rose
13.5 percent in the first four months of 2016 and is likely to rise
further when commercial flights from the United States begin this year.

If Venezuela did halt oil exports to Cuba, it would not necessarily
precipitate a political crisis, experts and bloggers said.

The United States may offer help in order to prevent instability or a
mass exodus of desperate Cubans. The Cuban government might speed
reforms and open the door wider to foreign , Mr. Entwistle said.

“To extrapolate some dire political consequence is unwise,” said Mr.
Entwistle, adding, “There are so many levers that they have to push and
pull.”

Hannah Berkeley Cohen contributed reporting from Havana.

Source: Amid Grim Economic Forecasts, Cubans Fear a Return to Darker
Times – The New York Times –
www.nytimes.com/2016/07/13/world/americas/cuba-economy-venezuela-power-cuts.html?_r=0

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