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Cuba cutting subsidies to balance the budget

Posted by CaribShout on October 19, 2009 at 8:30pm

HAVANA, Cuba: Cuban President Raúl Castro is willing to risk unpopular measures to free the state from its excessive burden of subsidies and for-free services, as part of a programme to adjust public expenditure to shrunken government revenues and balance the budget. The president has reiterated in his speeches that no individual or country can indefinitely outspend revenues, and that government subsidies must be limited to ensuring that all citizens have equal access to vital services like education, health and social security. Castro is constantly saying that maintaining such guarantees depends on producing more and increasing national income. "That's why he is trying to bring people 'down to earth,' to make them understand that every person is an important part of the solution to the country's problems," said a long-time active member of the ruling Cuban Communist Party (PCC). Bringing expenditure into line with revenues was one of the points proposed for a new round of public discussion, like the one that followed a landmark speech by Raúl Castro in 2007, delivered before a crowd of three million on July 26, the holiday that marks the start of the Cuban revolution. Three million people have participated so far in the current round of meetings, in September and October this year. The aim is for "people to look within themselves and at their immediate surroundings, based on the central ideas of Raúl's speeches on July 26 in the eastern city of Holguín, and a few days later in parliament," the source said. The government hopes that these meetings for reflection and for identifying specific problems in every workplace and educational institution will also come up with concrete proposals to solve them with everyone's participation, added the PCC activist, who wished to remain anonymous. But the authorities did not wait for popular backing to start trimming subsidies. In late 2008, one of the first of these measures was to end "heavily subsidised" vacations and other benefits, previously awarded to exemplary workers and party cadres. Annual state expenditure on these amounted to some 60 million dollars. Following a spate of rumours of all kinds, workers' canteens providing free meals were closed this month at the ministries of Labour, Finance, Domestic Trade, and Economy and Planning, as an experimental trial intended to be applied gradually throughout the country. Instead, each worker is being given 15 pesos (something over 50 cents) a day as a meal stipend. According to official statistics, over 3.5 million people a day eat at 24,700 workplace canteens nationwide, at a cost to the government of over 350 million dollars. According to Granma, the PCC newspaper, this figure only includes four ingredients - rice, beans, meat and oil - and does not include "large expenses for other foods, fuel, electricity and maintenance of the dining halls." The ration book system, under which Cubans buy food at deeply subsidised prices, has been in place since 1962, and at one time ensured egalitarian distribution of food to every Cuban family, until it was cut back during the 1990s economic crisis. At present it is estimated to cover a family's nutritional needs for no more than 12 days a month. Even so, its possible elimination is a cause for concern for many people. "The news came as a shock to most of the families I work with. They think there won't be enough supply to meet the demand that will be created, and they are afraid there will be hoarding," said social worker Celia Díaz. "Many people are afraid there will be endless queues to buy food, which will add to the anxiety in many homes where women wake up every day wondering what they will cook in the evening," added Díaz, while 28-year-old Miguel Alcántara predicted that a great number of people would be upset by such a measure. According to experts, Cuban families spend between 60 and 70 per cent of their income on food, going to high-priced farmers' markets for the food they need over and above the subsidised rations. Food imports cost 2.5 billion dollars in 2008, an amount the government wants to reduce. (Adapted from IPS)
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