Friday, December 29, 2006
Cuba: Problems Don´t Mar Economic Growth
Transportation and food production were the targets of harsh criticism. Officials of the first sector came out of his predicament with flying colors because they are well on the way of solving the lack of transportation -which together with housing and food are the main causes of dissatisfaction among the population-, but the interim Agriculture Minister tried to give a sunny picture and raised the wrath not only of the presiding table, but also from many deputies on her.
The presentations, requested by Raúl Castro, dealt with issues like housing construction and rehabilitation; the situation of transport; control measures taken in connection with fuel distribution and sale; food production; the payment to farmers for their crops; and the payment by the population of new home appliances acquired in the framework of the on-going national energy saving campaign known as the Energy Revolution.
The debate around those issues resulted in the Cuban parliament setting forth five main work lines for 2007: the Energy Revolution, the housing program, food production, transportation and social and work discipline, explained Ricardo Alarcón who stressed that these work lines finge around active people´s participation.
An average Cuban may ask where does the 12.5 per cent economic growth rate comes from and why does he does not yet see his daily life significantly improved. Wages have gone up but also the electrical tariffs and staples like coffee, rice, eggs.
Ricardo Alarcón, president of the Cuban parliament highlighted that the highest economic growth in the country´s history is all the more commendable because it was achieved in spite of an escalation of Washington´s aggressive policy. To work for the change of such policy visited Cuba recently a delegation of 10 congresspeople headed by William Delahunt, Democrat for Massachusetts and Jeff Flake, Republican for Arizona.
The Year of Energy Revolution in Cuba ends with a significant reduction of power cuts by 90 per cent compared to 2005, as well as considerable savings in the energy bill.
Carlos Lage, Secretary of the Council of Ministers Executive Committee, rounded oil and gas production to over 3.9 million tons which is 50 percent of the domestic consumption that helped to half imports.
Lage toured ENERGAS Cuban-Canadian joint venture and the thermoelectric plant in Santa Cruz del Norte that filters the accompanying gas. The official said Cuba now enjoys another 400 MW installed capacity after some 140 MW were added in 2006, plus an expected 70 MW addition in 2007.
Lage, accompanied by Basic Industry Minister Yadira Garcia, witnessed the connection of a near 9.32 mile long gas pipeline from deposits along north Havana coast to the Puerto Escondido gas plant. The official recalled that producing power with gas is cost-effective and environment-friendly.
The Cuban official said Cuba enlarged its gas processing capacity, supplying manufactured gas plants and drilled 30 new oil wells, six Cuban and the rest in joint ventures, which should allow for more growth in production next year.
Housing, still short
According to Vice President Lage, this year will end with 110 thousand lodgings completed and the rehab of another 98 thousand. To achieve this boost in housing construction, 57 lines of the building materials industry were refurbished and another 36 units created.
The goal for 2007 will be to construct 70 thousand houses, 40 thousand of which will belong to those that were well advanced or begun this year, putting at the top of the list housing affected by hurricanes, the need for workers of big factories, doctors and other sectors, where demand is more pressing.
Although the plan is under this year´s target, greater efforts will be done to repair or improve construction of 150 thousand homes and all this requires more people´s participation, even though some parts will require qualified work force.
Based on a brief account from Interim Agriculture Minister Maria del Carmen Perez, other reports and information voiced by deputies, Raul Castro descried a possible lack of economic discipline in the sector and warned of the danger if farmers are not paid, or not paid fairly, by the State due to intermediaries acquiring products and raising prices.
Council of Ministers Executive Committee secretary, Carlos Lage, pointed out that the government has taken considerable measures to prevent this situation, also seen in the sugar sector.
Raul Castro was emphatic that this problem could not continue and repeated that imprecision and vagueness would not be acceptable in the reports. The plenary unanimously approved including this topic in its next session as well as to receive concrete solutions to the deficiencies.
Power to the People
Education and health services will receive 22.6 per cent of Cuba´s Gross Domestic Product (GDP), that is four times more than the average destined by any country in Latin America, according to 2007 budget figures.
Georgina Barreiro, Minister of Finances and Prices, presented before the plenary session of the Cuban parliament the 2007 State budget, where the resources destined to public health, education and culture sectors are due to increase, together with retirement and social security pensions, the country s defense and home security.
The eighth ordinary period of sessions of the Cuban parliament, presided over by first Vice President and Minister of Defense Raul Castro, Barreiro announced that the budget assigns 4.8 billion pesos to support investments related to the education and health sectors, housing construction, infrastructure for transport, energy and water resources.
She also stressed significant resources will go to subsidize regulated products sold to the population in which the country spends around one billion dollars in order to guarantee the products included in the basic food basket.
Minister Barreiro said it was considered convenient to provide 300 million pesos as an emergency fund for possible natural disasters for the next fiscal year. State control will focus on the money destined to its economic and social improvement, in order to obtain the most from available resources.
Barreiro said it is estimated national income will grow by 9.8 per cent next year, mostly due to export of services, retail sales and the increase of managerial efficiency, while expenses will grow 9.1 per cent, reflecting a positive trend.
The balance between income and expenses for the year 2007 is expected to leave a 1.9 billion pesos deficit, equivalent to 3.2 per cent of the GDP, trend consolidated over the last years that helps to maintain the deficit in a sustainable rank.
The Minister also reported that pensions will amount to 3.9 billion pesos, 330 million beyond the figure planned for the current year, while social security will reach 1.2 billion pesos, allowing to attend 588 thousand 097 beneficiaries.
Billion Program for Transportation
In response to public and governmental discontent with transportation, Cuban Transport Minister Jorge Luis Sierra announced a billion dollar investment in the sector next year to correct the serious problems it faces.
At the urging of First Vice President Raul Castro, who pointed out transportation ranks with housing and food for citizens as the most pressing problems, also recognized transportation had been a few feet from total collapse.
Immediate priorities include reorganization and strengthening of his ministry s role for a more efficient use of investment, and better discipline and energy saving, the minister said.
In 2007 the plan is to buy 200 buses from China, 50 used Mercedes Benz, and 344 school buses, as well as trucks for moving both human and cargo in the mountains while the railroads undergo major renovation to the tune of 230 million dollars.
The Bottom Line, 12.5 per cent Growth
The Minister of Economy and Planning, Jose Luis Rodriguez, assured the economy had grown 12.5 per cent this year, compared to 11.8 in 2005, and 5.4 per cent in 2004.
The report was short on figures of economic branches performance, but most of the growth came from nickel, tourism, biotech products and export of professional services. In spite of the program to substitute food imports, the country spent 948 million dollars in buying products for the regulated basic basket, mainly subsidized by the government.
Work productivity was said to be low as well as total hours worked not only in the agricultural sector, but also in industry and manufacturing. This may well be improved by better working conditions, more transportation facilities and improved organization at the workplace.
According to Minister Barreiro, the deficit for the next fiscal year was estimated at 1.7 billion pesos, representing 3.2 per cent of the GDP, considered “manageable” for an economy as the Cuban.