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Posted June 14, 2009 by publisher in Business In Cuba

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Marc Frank | Reuters

Cuban factories are closing down and production is being cut at other workplaces as the international financial crisis weighs on the import-dependent Caribbean island, the official media said on Sunday.

A growing shortage of foreign exchange has forced the Communist-run country to drastically cut imports and local budgets, impose power quotas on state-run companies, restructure debt and put off payments to foreign suppliers.

The state-run Juventud Rebelde newspaper, the only national Sunday publication, said a tire factory had shut down since February due to a lack of rubber imports while an aluminum packaging plant cut output for similar reasons.

The newspaper said the plants were examples of a wider problem “in other sectors of the Cuban state company sector,” which encompasses 90 percent of economic activity.

Other workplaces were having difficulty obtaining spare parts, the newspaper said, and still others were being forced to scale back output after a recent government measure mandating a 12 percent reduction in power consumption.

Cuba, like other Caribbean countries, has been hit hard by the global financial crisis, which has slashed revenue from key exports, dried up credit and reduced foreign investment.

It is under longstanding U.S. economic sanctions and is recovering from three hurricanes that struck last year, causing an estimated $10 billion in damages.

Workers at lobster processing plants, cigar rolling factories and other establishments have reported layoffs for months, but Sunday’s Juventud Rebelde report was the first official admission of growing problems in the productive sector.

“The waves of the present international financial and economic crisis are slowly gaining force and the rough waters are reaching the pockets of companies and workers around the world,” the newspaper said.

“We can’t harbor the illusion that we can escape just because our country has a social system that defends justice for all,” it said.

Economy and Planning Minister Marino Murillo recently said Cuba’s growth forecast for 2009 was reduced from 6 percent to less than 2.5 percent.

Some local economists believe this year’s growth will be 1 percent or less, similar to forecasts for the region overall.

  1. Follow up post #1 added on June 15, 2009 by grant

    Well for sure we know how all this started, unregulated american credit granting(mortgages), toxic mortgages.

  2. Follow up post #2 added on June 15, 2009 by paul

    Cuban gov’t spambots just wait for anything bad from the US in order to blame their failures on it.

    The Cuban economy (an oxymoron) has always existed by being subsidized. It’s always doing bad, but has grant/pipefitter types to say otherwise.

  3. Follow up post #3 added on June 15, 2009 by Chuck Bailey

    Cuba - U.S.A. and the rest of the world are about to reap the whirlwind!! For far to long politicians and dictators alike have been thinking that survival can be obtained with short term revenue based on long term payments. The ducks are coming home to roost.

  4. Follow up post #4 added on June 15, 2009 by Yeyo with 411 total posts

    I do not feel that toxic mortgages had anything to do with the crisis of the 80’s, 90’s or 2000s. Come on Grant, Cuba had been always in crisis from the early stages of the Castro dictatorship and at least for the Cuban people it had got always worst. You can ask any Cuban and surely he or she would remember that their life years ago was better.
    What about in the late 70’s when we have lot of stuff in the corner stores, cookies, milk, yogurt, cream cheese? In the 80’s lots of Russian and east European conserves, Russian meat, wines etc, the ice cream cars, the frozen, cafeterias with lot of stuff, restaurants open to the Cubans, the Parque Lenin with lots of chocolates and other goodies, later the (Argentinean made) fish specialized stores with lot of fish products. Etc, etc, etc. All that stuff is now gone.
    Cuba is going down, has been going down for many years now, whenever the economy gets slightly better (mostly because of an strong foreign new friend aid) it do not reflect on the people living better but rather in Castro doing more propaganda and sending more soldiers, Doctors and teachers all over the world for free.

  5. Follow up post #5 added on June 16, 2009 by grant

    Cuba traded with the soviets at a favorable rate and thus cubans enjoyed a life higher than their economy would allow under normal circumstances. BUT the world economy and the demand for all countries products has decreased including Cuba, Canada, USA etc, etc, Nickel one of the products where demand has decreased and as you know Cuba is the second largest supplier of nickel ore. This loss of revenue is the direct result of the problems with the toxic mortgages as per Obama. For a good reference on the cuban economy in the early 1950’s read “ON BECOMING CUBAN by the american academic Luis Perez.

  6. Follow up post #6 added on June 16, 2009 by Lee

    Okay Grant/Fidel
    let’s try to straighten out your propaganda. If the US is doing well, it causes Cuba to be unproductive. But, if the US is doing poorly…it ahhh OOhh yeah um that is the reason Cuba is still unable to feed its people…Okay that makes sense. Everything negative in the world is somehow the fault of the US. One day Grant you’ll have to pull your head out of your hole. I’ve been to Cuba many times, i am intimate with her people. i have seen thousands of acres of abandoned, overgrown rich farmland, i suppose that is the fault of the US as well, huh. Cuba is failing because of Fidel (you) and the inability of communism to sustain itself. sorry to confuse the issue with facts.

  7. Follow up post #7 added on June 17, 2009 by Yeyo with 411 total posts

    Grant continues to try to confuse every one with his narrow-minded pro-Castro comments.
    The fact and the matter is that one way or the other Cuba’s boat has been going down since I remember. I remember Castro’s discourses (which by the way I did not read but watch them live in the Revolution square) and every year he was telling the Cuban people to get ready because the New Year coming would likely be worse than the one ending.
    I have not read the book you suggested about the Economy in the 50’s (I’ll try to read it) but I have the testimony of my family and many friends and all of them say that while there were certainly problems, Cuba was at that time a land of opportunities for whoever wanted to work hard. Thousands of people from all over the world immigrated to Cuba during that decade. I wonder how many want to emigrate there now, not even you that speak so highly about the “robolution”.

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