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    With ally Venezuela struggling, Raul Castro prepares Cuba for tough year despite US opening

    With ally Venezuela struggling, Raul Castro prepares Cuba for tough year
    despite US opening
    Michael Weissenstein, The Associated Press
    The Canadian Press
    December 30, 2015

    Cuba’s President Raul Castro applauds as he sits next to Vice President
    Miguel Diaz Canel during the island’s twice-annual legislative session
    at the National Assembly in Havana, Cuba, Tuesday, Dec. 29, 2015. The
    assembly will hear a detailed report on the progress of the gross
    domestic product of the Caribbean nation, whose growth was estimated by
    authorities at 4 percent. Plans for 2016 will also be announced. (Ismael
    Francisco/Cubadebate via AP)
    By Michael Weissenstein, The Associated Press

    HAVANA – President Raul Castro warned Cubans on Tuesday to prepare for
    tough economic conditions in 2016 despite warmer relations with the
    United States. Castro said that while tourism is booming, low oil prices
    have damaged the outlook of an economy that depends on billions of
    dollars of subsidized oil and cash from Venezuela.

    According to state-controlled media, Cuba’s president told the National
    Assembly to expect 2 per cent growth in gross domestic product next
    year, half the rate his government reported in 2015. Foreign media are
    barred from the twice-annual meetings of the National Assembly.

    Despite the government’s assertion that the GDP grew 4 per cent this
    year, there is widespread dissatisfaction among Cubans over the widening
    gap between low salaries and the high price of essential goods, most
    particularly food.

    Castro appeared to be preparing Cubans for harder times ahead, saying
    that “we must cut any unnecessary spending and make use of the resources
    that we have with more rationality and with the goal of developing the

    He dedicated a lengthy section of his speech to Venezuela, where the
    opposition to Cuba-backed socialist President Nicolas Maduro recently
    took control of parliament amid widespread shortages and spiraling violence.

    Cheap oil “has affected our relationship of mutual aid with various
    countries, particularly the Bolivarian Republic of Venezuela, the target
    of an economic war aimed at undermining popular support for its
    revolution,” Castro said.

    He urged Cubans to avoid what he labeled “defeatism” in the face of a
    drop in Venezuelan aid, saying “the history of our revolution is full of
    glorious pages despite difficulties, risks and threats.”

    More than 3 million tourists visited in 2015, an increase of nearly 20
    per cent in the wake of President Barack Obama’s declaration of detente
    with Cuba. The surge in visitors pumped cash into the state-controlled
    tourist economy and the growing sector of private bed-and-breakfasts and
    restaurants, but it also drove up household inflation. In the absence of
    a wholesale market for private businesses in Cuba’s state-controlled
    economy, entrepreneurs have been forced to compete with cash-strapped
    consumers, driving up prices by driving off with cartloads of basic
    foodstuffs like eggs and flour.

    Salaries for state employees, who make up most of Cuba’s workforce,
    remain stuck at around $25 a month, leaving hundreds of thousands of
    Cubans struggling to feed their families.

    Falling oil prices have lowered the cost of the imported goods that Cuba
    depends on but have hurt the island’s economic relationship with
    Venezuela in 2015, Castro said. Cuba has sent thousands of doctors to
    Venezuela in recent years in exchange for oil and cash payments at
    highly beneficial rates.

    Cuba does not regularly release reliable economic statistics that
    conform to international standard but its top earners of hard currency
    in recent years have been tourism, nickel mining and the export of
    government-employed professionals like the doctors sent to Venezuela and
    other allied countries. Castro said lower nickel prices also hurt the
    country’s 2016 outlook.


    Michael Weissenstein on Twitter:

    Source: With ally Venezuela struggling, Raul Castro prepares Cuba for
    tough year despite US opening –