Cuba Business

Major cutbacks in electricity ordered in Cuba, GDP revised to .5 percent

Posted June 03, 2009 by publisher in Cuba Business.


The Cuban government will cut power supplies to companies and organizations that do not observe the “exceptional measures” set to take effect Monday to save fuel and relieve the deteriorating economy of the communist-ruled island.

Havana’s director of economy and planning, Jorge Luis Villa, said that each enterprise has a plan for using electricity whose observance “conditions” whether it may continue to consume energy, the official weekly Tribuna de La Habana said.

“The government could decide to cut off electricity to those who do not comply and who will then have to give an accounting of the deficiencies detected,” Villa said.

Some 2.2 million of Cuba’s 11.2 million inhabitants live in Havana and use a fourth of the nation’s energy, between residential districts and the more than 26,000 state companies, according to official figures.

Gen. Raul Castro’s government announced last week “exceptional measures” for reducing the consumption of electricity and warned of a return to blackouts if the goal isn’t achieved.

The plan includes closing at 6:00 p.m. all enterprises that do not provide goods or services directly to the public.

Amusement parks will also cut back on the hours they are open, the use of air conditioning will be limited to five hours a day, and cold storage facilities will be disconnected for two hours a day.

The use of electric ovens is banned from 7:00 to 9:00 p.m. in bakeries and some industries, while sanctions on consumers committing fraud will be increased.

Cuba’s Economy and Planning Minister Marino Murillo said recently that the critical economic situation and lack of liquidity can be eased “only with efficiency and saving.”

He warned that the 6 percent economic growth projected by the government for 2009 “will not be achieved,” and that now the gross domestic product is expected to expand by no more than 0.5 percent.

State-run media are absorbed in a campaign calling on everyone to save electricity, while multiplying news stories about the global recession and its repercussions on the island.

The first months of 2009 saw four times more imports than exports, according to official sources.

The Cuban economy deteriorated over the last year because of three hurricanes causing losses of $10 billion, the increase in import prices, the drop in exports and the reduction of revenues from tourism and remittances.

Member Comments

On June 03, 2009, publisher wrote:

Sounds like the Special Period all over again.

Whose fault is it this time Fidel?

On June 03, 2009, grant wrote:

Cuba to sell more oil abroad and consume less on the island to produce electricity, thus earning more foreign currency to buy more food from the USA.Price of oil reaching 70 dollars a bbl. We in Canada depend on our oil, natural gas and electricity sales to the USA, without them we would be in a sad state.(about one billion in sales a day)

On June 03, 2009, Yeyo wrote:

That’s obviously the US fault, don’t you see it?

On June 16, 2009, Chuck Bailey wrote:

You all know that if Fidel had paid General Electric for the electric plants back in the 60’s he could have purchased repair parts for the generation system.
However didn’t these guys purchase 4,000 portable generators for use by the necessary government services? Wonder how that worked out? Could that be the lost 6% of electric supply?