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    Cuban President Raul Castro faces deep problems in 2017

    Cuban President Raul Castro faces deep problems in 2017
    Castro must manage economic and diplomatic challenges during a year of
    transition
    Published: 16:15 December 26, 2016
    AP

    Havana: Alex Romero was delighted when President Barack Obama came to
    Havana in March bearing the promise of a bright new future.
    Like so many other Cubans, the 42-year-old state photography shop
    employee thrilled at the president’s vision of restored ties between the
    US and Cuba. Families would reunite. A flood of American business would
    lift the stagnant centrally planned economy, fuelling its slow path
    toward reform. Even as Obama spoke, an 80 per cent surge in US visitors
    was drenching state-run and private businesses with hundreds of millions
    of desperately needed dollars.
    Nine months later, the world seen from Havana looks very different.
    President Raul Castro faces what could be his toughest year since he
    took power in 2006. 2017 brings a possible economic recession and a US
    president-elect who has promised to undo Obama’s normalisation unless
    the Cuban government makes new concessions on civil rights. Resistance
    to pressure from Washington is a founding principle for the Cuban
    communist system, making domestic concessions in exchange for continued
    détente a virtual impossibility.
    “People expected that after Obama came there would be changes in the
    relationship between the US and Cuba but that we could keep the best of
    what we have, the benefits for the people,” Romero said. “Trump’s not
    going to be able to get what he wants, another type of Cuba. If the
    world’s number one power takes us on, 2017 is going to be really bad for
    us.”

    Castro must manage these twin economic and diplomatic challenges during
    a year of transition. The 85-year-old general has promised to hand over
    the office in early 2018 to a successor, widely expected to be Miguel
    Diaz-Canel, a 56-year-old official with neither the Castro name nor
    revolutionary credentials. The change will occur without Castro’s older
    brother Fidel, the revolutionary leader whose largely unseen presence
    endowed the system he created with historical weight and credibility in
    the eyes of many Cubans before he died last month at 90.
    “Even if those two events hadn’t taken place — Trump’s victory and
    Fidel’s death — 2017 was going to be a very difficult year for Cuba,”
    said Cuban economist Omar Everleny Perez, a visiting professor at Keio
    University in Tokyo.
    Cuba publishes few credible economic statistics, but experts expect the
    country to end this year with gross domestic product growth of 1 per
    cent or less. It maintained a rate close to 3 per cent from 2011-2015.
    One bright spot is tourism, booming since Obama and Castro’s December
    17, 2014, détente announcement set off a surge in overall visitor
    numbers, up more than 15 per cent in 2015 and again this year.
    “I’ve never seen as many tourists as I have this year,” said Magalys
    Pupo, a street-corner pastry vendor in Old Havana. “They’re everywhere
    and they’re the income that we need in this country.”
    The slowness of macroeconomic growth despite a surge of interest in
    foreign investment and the greatest tourism boom in decades attests to
    both long-term mismanagement of the Cuban economy and the depth of the
    crisis in other sectors, particularly aid from Venezuelan in the form of
    deeply subsidised oil.
    Analysts believe that as Venezuela’s Cuba-inspired socialist economy has
    disintegrated, exports to Cuba has dropped from 115,000 barrels daily in
    2008 to 90,000 in recent years to 40,000 a day over the last few months.
    Venezuela was the prime destination alongside Brazil for Cuban doctors
    and other professionals whose salaries go directly to the Cuban
    government, providing another vital source of hard currency believed to
    be slackening in recent years. Nickel, another of Cuba’s main exports,
    has seen a sharp price drop this year.
    The revenue drop may be creating a vicious cycle for Cuba’s state-run
    industries. Experts say cutbacks in imported industrial inputs this year
    will lead to lower productivity in Cuba’s few domestic industries in
    2017 and make zero growth or recession highly likely.
    “Raul Castro’s government has a year left and it should be planning what
    needs to be done,” said Pavel Vidal, a Cuban economist at the
    Universidad Javeriana in Cali, Colombia. “Above all, it will be managing
    a crisis.”
    The government cut back summer working hours and gas rations for
    state-owned vehicles and has so far avoided any sustained power outages.
    But a crackdown on black-market gasoline sales to taxi drivers led them
    to increase prices, causing drivers to raise their prices, squeezing
    many Cubans already struggling to get by on state salaries of about $30
    (Dh110) a month. Many Cubans say, however, that worsening conditions
    could drive them to rally around the government rather than against it.
    “It’s going to be a tough year,” said Antenor Stevens, a 66-year-old
    retired public water specialist. “We’re a people who’ve suffered a lot.
    We’ve felt a lot of need, but there’s still a revolutionary consciousness.”
    One cushion will be remittances from Cuban expatriates in the United
    States and other countries, estimated by some experts to be in excess of
    $3 billion a year and rising as Cubans flood to the United States in
    fear that they may soon lose special immigration privileges.
    Another bright spot is Cuba’s growing private sector, particularly
    businesses boosted by increased demand from tourists.
    While rising food prices are a constant problem for ordinary Cubans,
    many of those investing in food production are finding success.
    Fernando Funes, owner of a farm that supplies vegetables to about 30
    private restaurants in Havana, most with tourist clienteles, has nearly
    doubled his workforce from 12 to 20 in recent years, all earning about
    $25 a week. Five have begun cultivating their own plots of land
    alongside to produce food for sale to similar clients.
    “We have a lot more opportunities to start projects these days,” Funes
    said. “Personally I’m optimistic about 2017.”

    Source: Cuban President Raul Castro faces deep problems in 2017 |
    GulfNews.com –
    gulfnews.com/news/americas/cuban-president-raul-castro-faces-deep-problems-in-2017-1.1951921