ECONOMY-CUBA: New Budget Cuts in Store

HOLGUÍN, Cuba, Jul 27 (IPS) - The impact of the global financial crisis on the economy in Cuba was a major focus of a speech Sunday by President Raúl Castro, who confirmed that further "adjustments" will be made to this year's budget.

In his 35-minute address in this eastern city of Holguín marking the anniversary of the Jul. 26, 1953 attack on the Moncada military barracks in Santiago de Cuba, the leader did not provide details on the complex situation currently facing Cuba, but did say there has been a "significant reduction" in export revenues and "restrictions" in access to foreign credit.

The Council of Ministers will meet Tuesday to analyse "the second adjustment in expenditure in this year's budget plan," said Castro.

In the first few months of 2009, the government already cut the state budget by six percent.

The authorities also sharply revised their GDP growth projections downward from six to 2.5 percent, although economists consulted by IPS fear that growth could be under one percent this year.

In response to the reduced availability of foreign exchange, the government implemented a strict energy savings plan in June – including scheduled power outages and temporary workplace shutdowns - in an attempt to stick to the budgeted expenditure on fuel imports.

Castro also announced that the Council of Ministers meeting would be followed Wednesday by a plenary meeting of the Communist Party Central Committee, to discuss "vital matters related to the national and international situation."

In addition, the legislature will be meeting on Aug. 1 to debate a draft law creating a comptroller-general's office, whose oversight of government spending will contribute to stricter "compliance with regulations," he said.

The 1953 attack on the Moncada barracks led by Fidel Castro – in which his brother Raúl also took part – was the first attempt to overthrow dictator Fulgencio Batista and is considered the start of the Cuban revolution.

Sunday's anniversary was the third headed by Raúl Castro since his ailing brother stepped aside as president.

In a landmark speech given by Castro as interim president on this important holiday in 2007, he referred to the "extremely important need" to produce more food, since nearly half of the country's arable land was idle or underproductive.

The announcement foreshadowed the first major reform of his government: a 2008 law distributing unproductive government land to private farmers.

Castro reported that some 82,000 of the more than 110,000 applications for land have already been approved, with 690,000 hectares - 39 percent of the idle land – distributed so far.

The president said it was top priority and a matter of "national security" to produce food that can be produced in Cuba but is imported at an enormous cost. According to official figures, 2.4 billion dollars went to food imports in 2008.

One-third of the land distributed so far – 225,000 hectares – has been planted, said Castro, who also alluded to plans for expanding urban gardening, in people's backyards for example.

"If one day fuel is lacking in this crazy, fast-changing world," food would be closer that way, he said.

Baptist pastor Raúl Suárez, a legislator, said the policy of land distribution and Castro's emphasis on seeking "the best way" to get products from the farm to consumers, to avoid transporting them long distances, were "the right approach."

"We are moving forward, with the limitations faced by our country because we don't always have the infrastructure or resources. But we're progressing, which I know firsthand because I have my own organoponic garden and I have had a very good harvest, to share with my family and others," he told IPS.

The lawmaker also praised measures that have been adopted for conserving water and improving the efficiency of water distribution. "We are trying to get a leap on a crisis that inexorably lies ahead at a global level and for our country as well," he said.

In his speech, Castro gave a brief rundown of investments made in Holguín, Santiago de Cuba and other eastern provinces to expand water supplies in drought-stricken areas.

"These are projects for the present and above all for the future, when water will be an increasingly scarce resource on a long, narrow island like ours, where the precious liquid quickly runs into the ocean and is lost," he said.

Castro also mentioned the 10 billion dollars in damages caused in 2008 in Cuba by hurricanes Gustav, Ike and Paloma.

"Raúl, give Fidel a big hug from his people. We love you dearly" read a hand-written sign held by someone in the crowd Sunday in Holguín, where the president held the rally in recognition of the recovery efforts made by this province after it was hit hard by Hurricane Ike last year.

(END/2009)

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