The Cuban government has announced it will be drastically cutting electricity, imports, investments and fuel consumption through the end of the year. The new measures have been met with alarm by Cubans who remember the country’s economic crisis and rolling blackouts of the 1990s, but the government has so far been careful not to mention power outages in describing the new energy measures.
The announcement was made by Cuba’s economy minister Marino Murillo on Friday in a closed-door speech to the National Assembly.
President Raul Castro, also at the meeting, assured anxious Cubans that the economy was not facing a collapse like that of the early 1990s, after the fall of the Soviet Union. Without Cuba’s main oil supplier and benefactor, Cuba was plunged into an economic crisis then-president Fidel Castro referred to as the Special Period.
The effect was instantaneous: Transportation and agricultural systems were paralyzed, while widespread famine and power outages completely altered Cubans’ ways of life.
“Rumors and forecasts of an imminent collapse of our economy with a return to the acute phase of the Special Period … have started to appear,” said Castro to the assembly. “We cannot deny there will be some impact, including worse than currently, but we are prepared and in better conditions than then to revert it.”
Castro also noted that Cuban economic growth slowed to 1 percent in the first half of this year from 4.7 percent in the same period of 2015 – half of what the government had forecast. A failure to achieve the expected export earnings and “a certain contraction in the fuel supplies agreed upon with Venezuela,” among other factors, prompted the slowdown, Castro said.
Public offices and state-run companies have already cut work hours and are limiting the use of air conditioning, Reuters reported, and gas stations and cinemas have also been making cuts.
Now, Cuba must reduce all unnecessary spending and substitute imports for Cuban-made goods, Castro said, and invest in sectors that generate hard cash and use energy more efficiently.
In the absence of information in the official media on the energy situation, Murillo tried to further reassure the Cuban population that the government would not need to resort to blackouts. According to the Havana Times, he confirmed the comments of recent days from workers at state enterprises who had been warned of power cuts of 50 percent in their workplaces as an energy-saving measure.
Murillo also made a point of explaining that the cuts would be selective. Residential electricity will be spared, for example, while public lighting will be cut by 50 percent.
Cuba’s economy is in far better condition today than it was in the early 1990s, having diversified markets and achieved generally steady economic growth.
Even so, economic growth has slowed sharply in recent years. Obtaining even basic information about Cuba’s economy is a challenge – the government still dominates economic activity on the island, and national statistics are not always complete or reliable – but the most recent estimate of Cubans’ income is just $20 per month. While the government acknowledges that low wages are a problem, the Castro regime is quick to point out that Cubans enjoy universal health care and education and that prices in many other categories are subsidized.