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Castro shuffles posts as Cuban economy sags
Miami Herald ^ | July 14, 2003 | NANCY SAN MARTIN nsanmartin@herald.com

Posted on 07/14/2003 12:01:56 AM PDT by Cincinatus' Wife

The primary reason the government has been able to maintain its existing commercial and economic structure is because it hasn't been paying off its foreign debt since the mid-1980s, analysts said.

WASHINGTON - Facing Cuba's worst economic crisis in a decade, President Fidel Castro has turned to a string of newly appointed loyalists to help keep Cuba's troubled economy afloat without placing his socialist system in peril, several analysts say.

The moves, involving the replacement of at least five officials in economy-related government posts, appear designed to bolster Cuba's socialist system during a period of deteriorating economic conditions.

''There is pressure in Cuba for economic reform, but most signs point to a president that is resisting,'' Javier Corrales, an assistant professor of political science at Amherst College who has studied the makeup of the Cuban Cabinet and the Cuban economy, said in a telephone interview.

William LeoGrande, a Cuba specialist at American University in Washington, D.C., said he believes that ``Fidel has made the decision to hold the line politically until the economic turmoil passes.''

''Castro shuffles the Cabinet as the economy stagnates,'' LeoGrande said. ``The economy is not in good shape and there is a rising level of discontent. They're looking for the economy to get going again and the current team hasn't done the job.''

According to a new report by the University of Miami's Institute for Cuban and Cuban-American Studies, the population is feeling the effect of a significant downturn in the economy.

The report, Cuba's Economy in the Doldrums, is a compilation of data gathered from government statistics reported in Granma, the voice of Cuba's Communist Party, and other sources by the institute's Cuba Transition Project.

DRAMATIC ASSERTIONS

Among the report's most dramatic assertions:

o At least 13 percent of the population is clinically undernourished, as the state's food rationing system now provides for only a week to 10 days of basic nutritional needs each month. Rations began to shrink with the start of Cuba's so-called special period in the early '90s.

o Unemployment hovers at about 12 percent and up to 30 percent of workers are displaced or underemployed. Government figures put unemployment at 3.3 percent in 2002, compared to 7.9 percent in the mid-1990s, but the official figure does not include the loss of up to 100,000 jobs last year in the sugar industry.

''Cuba's economy is un callejón sin salida. It's a dead end,'' Jaime Suchlicki, director of the UM institute, said in a telephone interview.

Even though the government recently announced a 16 percent increase in foreign visitors -- suggesting that the island's tourism industry is on the rebound -- ''that's not going to take them out of the hole,'' Suchlicki said.

''Cuba is not going to collapse, but it is going to continue to sink,'' he said. ``The only miracle is if the guy [Castro] opens up the economy. But there are no indicators of that.''

DISMISSALS

The government changes began in March with the dismissal of four of six deputy ministers at the Economy and Planning Ministry. Their replacements have not been made public.

Last month, Castro also replaced the minister of finance and pricing.

The changes come amid one of the harshest waves of repression since Castro rose to power in 1959. Beyond the recent arrests of 75 dissidents sentenced to as many as 28 years in jail and the executions of three hijackers who tried to commandeer a passenger ferry to Florida, the government also has cracked down on black marketeers and conducted raids allegedly in search of drugs, according to various independent reports out of Havana.

In previous economic crises, government crackdowns on dissent have been followed by reforms spearheaded by new government appointees who have tended to be younger. Although most of the recent appointees are younger than their predecessors, they are viewed as loyal to Castro.

''They're baby dinosaurs,'' said Daniel Erikson, director of the Caribbean Program at the Inter-American Dialogue in Washington. ``Their thinking is old guard, but they just happen to be younger.''

It is uncertain how the new appointees will respond to Cuba's economic situation.

UNCERTAINTY AHEAD

John Kavulich, president of the New York-based U.S.-Cuba Trade and Economic Council, which monitors Cuba's economic performance, said tougher times are likely ahead.

''The economy is bad: 2002 was worse than 2001 and 2003 may not be better than 2002,'' Kavulich said by telephone.

Over the past decade, tourism has replaced sugar exports as Cuba's main foreign-exchange earners, bringing in as much as $2 billion each year, according to government estimates. However, that calculation is based on gross revenues, meaning Cuban coffers get perhaps 10 to 15 percent, Kavulich said.

Remittances from Cubans living abroad account for another $400 million to $1 billion a year, according to various estimates.

While such numbers seem impressive, they pale in comparison to Cuba's estimated $12.2 billion hard-currency debt to the Western World.

The primary reason the government has been able to maintain its existing commercial and economic structure is because it hasn't been paying off its foreign debt since the mid-1980s, analysts said.

''By not having to put aside substantial foreign exchange, that allows the government to use foreign exchange for other purchases,'' Kavulich said. It does not include money owed to the former Soviet Union.

That poses another question: What's in the future?

''Some in the government of Cuba may correctly calculate that with a post-Castro Cuba there would be widespread foreign debt relief,'' Kavulich said.

``If they believe that is likely to happen, which it likely will, why put additional pressure on the economy?''


TOPICS: Business/Economy; Crime/Corruption; Cuba; Culture/Society; Foreign Affairs; Front Page News; Government; News/Current Events; Politics/Elections
KEYWORDS: communism
Historic arrival in Havana harbor - Cash on the barrel head ***Since the collapse of the Soviet block in 1991, however, Cuba has eagerly sought trade with the capitalist world while trying to maintain a communist system. Numerous ships have carried U.S. goods to Cuba since December 2001, when the U.S. government permitted cash-paid shipments of food and some other goods. Seventy-one percent of those were U.S.-owned, said Pedro Alvarez, leader of the Cuban government import company Alimport, which has signed contracts for about $480 million since the rules were eased.

But the Helen III was the first to carry cargo under a U.S. flag and with a U.S. crew. It was also the first vessel from Mobile, Ala., to carry cargo under the recent rules. Fabian said the barge carried 1,614 metric tons of newsprint and about six tons of timber.

As tugboats maneuvered the barge to the docks, Fabian stepped aside to make a phone call to check the company bank account. ''By law, the money has to be in our bank account before we can unload,'' Fabian said, referring to the U.S. regulations that set conditions on trade with Cuba. Fabian said the shipment, worth about $1.5 million, was part of a contract to ship a total of 10,000 tons, with another 5,000-ton deal in the works.***

Cuba's Communist Party replaces its head of ideology *** HAVANA - Esteban Lazo, the head of Cuba's powerful Communist Party in the nation's capital, has replaced one of the party's founders in a key national post overseeing ideology, the daily newspaper Granma reported Tuesday. Lazo, 59, replaces José Ramón Balaguer, 71, a fellow member of the party's governing politburo, as head of the ideological department dedicated to preserving and promoting support for the government's communist principles. Granma, the voice of the Communist Party of Cuba, said the changes were made during a meeting overseen by Fidel Castro, who heads the party as first secretary.

Both men are seen as orthodox party leaders intensely loyal to Castro. A former Cuban ambassador to the Soviet Union, Balaguer in particular has long wielded much influence inside the party, which is technically separate from the government but populated by the same players. Balaguer and Lazo also serve inside Cuba's government on the nation's supreme governing body, the Council of State that Castro heads as president. Lazo is also a first vice president on that council.***

1 posted on 07/14/2003 12:01:57 AM PDT by Cincinatus' Wife
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To: All

Let's keep the Dem's on the run!
Click the Pic!

2 posted on 07/14/2003 12:03:42 AM PDT by Support Free Republic (Your support keeps Free Republic going strong!)
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To: Cincinatus' Wife
Castro still hasn't learned that oil and water don't mix. Capitalism will eventually triumph in Cuba.
The communist system there rests entirely upon Castro's shoulders, and is doomed to failure.
3 posted on 07/14/2003 5:19:37 AM PDT by reagan_fanatic
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To: Cincinatus' Wife
Dannay Glover is now head of telecommunications in Cuba.

With Robert Scheer as minister of the press.
4 posted on 07/14/2003 10:51:34 AM PDT by Kay Soze (Itís already too late to regain the United States through negotiations and radio talk shows.)
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My brother-in-law called about 10 minutes ago and told us that he heard news on a Mexican radio station that said that Castro has died! So far I haven't seen squat on American news, though. Oh, if ONLY it were true!
5 posted on 07/14/2003 10:53:20 AM PDT by Green Knight (Looking forward to seeing Jeb stepping over Hillary's rotting political corpse in '08.)
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To: Cincinatus' Wife
Facing Cuba's worst economic crisis in a decade, President Fidel Castro has turned to a string of newly appointed loyalists to help keep Cuba's troubled economy afloat without placing his socialist system in peril, several analysts say.

a.k.a. Mission Impossible. How about that? They nailed in the first sentence.

6 posted on 07/14/2003 10:55:56 AM PDT by Cincinatus (Omnia relinquit servare Republicam)
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To: Green Knight
Have you heard anything else to confirm this?
7 posted on 07/14/2003 10:59:30 AM PDT by Pyro7480 (+ Vive Jesus! (Live Jesus!) +)
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To: Pyro7480
Nope. That's why I'm here and flipping through news channels on the tv, to see if it does appear in the mainstream press.
8 posted on 07/14/2003 11:01:29 AM PDT by Green Knight (Looking forward to seeing Jeb stepping over Hillary's rotting political corpse in '08.)
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To: Green Knight; Pyro7480; All

A flower arrangement sent by Cuban President Fidel Castro with a ribbon attached reading on one side 'by the Commander Fidel Castro,' sits in the courner of the funeral parlor where Cuban musician Compay Segundo is being mourned in Havana, July 14, 2003. Compay Segundo died in Havana on July 14 at the age of 95 years. REUTERS/Claudia Daut

Who will send flowers to Fidel Castro?

9 posted on 07/14/2003 11:58:28 AM PDT by Cincinatus' Wife
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To: Cincinatus
Soon these aging "loyalists" will be dead and buried.
10 posted on 07/14/2003 11:59:14 AM PDT by Cincinatus' Wife
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