Cuba examines weak economy, seeks 'socialist development'

Cuba examines weak economy, seeks 'socialist development'

Havana (AFP) - Cuba's National Assembly opened its biannual session,
with the communist island's faltering economy topping the agenda, but no
plans unveiled for change.

President Raul Castro, 83, addressed the assembly, which discussed why
one of the world's last command economies has not grown faster, after
six years of very tentative reforms.

"Our growth rate is not something we are pleased with, but it does not
discourage us in the least," the president said.

Castro urged Cuban workers, who earn the equivalent of $20 a month, to
work "hard and optimistically, to turn this around and guarantee growth
rates that will make socialist development possible."

But he failed to unveil new strategies at the day-long meeting of 612
legislators and other senior officials.

The government has said it plans to end an unpopular dual currency
system, but has not given a timeframe for doing so.

- Two currencies or one? -

The dual currency system is blamed for aggravating social inequality,
which also worries the government.

"We don't want shock methods to be imposed, or for the (change) to be
traumatic for people, which also adds to the degree of complication" of
the change, said Marino Murillo, the government official in charge of
the slow, limited reforms.

Many Cubans fret that they might lose saving in pesos if the traditional
peso is eliminated in favor of the CUC, a second local currency equal to
the dollar (25 pesos) and accepted where only hard currency is accepted.

The government does not want to trigger a run on banks.

Castro, however, stressed to the assembly that "it is appropriate to
underscore that (Cuban) bank deposits will be guaranteed" in hard
currencies and local ones.

And he blamed US sanctions for Cuba's economic hardship.

Yet however keen for growth, Cuba -- the only communist-run one-party
state in the Americas -- has refused to adopt market economics as have
allies China or Vietnam. It fears such reforms would cause social strife.

The government has pared state payrolls, and allowed more Cubans to be
self-employed.

But it produces little outside the mining sector. One of its key exports
are government health workers on state contracts.

Havana depends massively on ally Venezuela for cut-rate oil and other
cooperation.

In a country with ample farmland for its population of 11 million, Cuba
still imports most of its food.

Agriculture Minister Gustavo Rodriguez told a farm committee that the
industry is experiencing "problems in all spheres" on the island, which
will spend some $2 billion in precious hard currency on imported food.

Cuba's economy in 2013 grew by 2.7 percent, below the official target of
3.6 percent.

Havana last month lowered its growth forecast from 2.2 percent to 1.4
percent, blaming "adverse" economic conditions, including fewer than
expected funds sent to its citizens from their relatives overseas.

Economy Minister Adel Yzquierdo said at a recent Council of Ministers
meeting that growth in Cuba was just 0.6 percent for the first half of
the year.

While the government has legalized such activities as buying and selling
cars and homes, few Cubans have the resources to make big purchases.

Source: Cuba examines weak economy, seeks 'socialist development' -
Yahoo News -
http://news.yahoo.com/cubas-lawmakers-examine-faltering-economy-172805914.html