Raul Castro says Venezuela's crisis hurting island economy

Raul Castro says Venezuela's crisis hurting island economy

President Raul Castro acknowledged on Friday that the crisis in
Venezuela, Cuba's key ally and main trade partner, is having a negative
spillover effect on the island's economy, days after officials began
ordering energy-saving measures for the coming months.
BY ANDREA RODRIGUEZ
Associated Press

HAVANA
President Raul Castro acknowledged on Friday that the crisis in
Venezuela, Cuba's key ally and main trade partner, is having a negative
spillover effect on the island's economy, days after officials began
ordering energy-saving measures for the coming months.

According to a transcript of Castro's speech to members of parliament
posted by the official website Cubadebate, the Cuban leader said the
economy grew just 1 percent in the first part of the year, half of what
the government had planned for.

The economic performance was "conditioned by the intensification of
external financial restrictions caused by the failure to meet (targets
for) export earnings, together with the limitations faced by some of our
principal commercial partners due to the fall in oil prices," Castro said.

"To that you add a certain contraction in the fuel supplies agreed upon
with Venezuela, despite the firm will of (Venezuelan) President Nicolas
Maduro and his government to fulfill them," Castro added. "Logically
that has caused additional tensions in the functioning of the Cuban
economy."

Venezuela, which relies heavily on oil-export income, has been rocked by
a deepening political and economic crisis with shortages of basic goods
and rampant inflation. Although Castro mentioned the crisis in general
terms in December, it was the first time he referred to it specifically
or said that Cuba is getting less fuel from the South American nation
under preferential terms hammered out over a decade ago by
then-presidents Fidel Castro and Hugo Chavez.

Venezuela has been sending Cuba a little under 100,000 barrels a day,
accounting for about half the island's energy needs. Castro did not give
figures on how much less Cuba is now getting, nor did he specify whether
the hit was to fuel that the island consumes or extra volumes on top of
what the agreement calls for.

Cuba also says its economy is hurt by the U.S. embargo on the island,
despite a diplomatic thaw between Havana and Washington in the last year
and a half and measures by the Obama administration to ease some of its
restrictions.

International media were not allowed access to Friday's plenary session
in a Havana convention center, one of the National Assembly's
twice-annual gatherings.

Cuban officials warned this week that the falling prices of exports and
other economic problems mean Cuba is short of cash and needs to adopt
power- and fuel-saving measures in the second half of 2016. So far those
measures have included reduced bus services for workers, cutting back on
air conditioning at public offices, reduced work days at some state
buildings and slashing fuel allotments for government vehicles by half.

Cubadebate reported earlier that vice president and economic czar Marino
Murillo said the energy restrictions aim to reduce electricity
consumption by 6 percent without affecting residential supply, which is
responsible for about 60 percent of power consumption. Vital services
and key revenue-generating sectors such as tourism, nickel production
and other prioritized areas will not see cuts.

"We are going to face limitations in the second semester," Murillo was
quoted as saying.

The 506-member National Assembly also approved an economic roadmap for
the coming years that was produced by a Communist Party congress in the
spring, although there were no new economic reforms announced. Under
Raul Castro, Cuba has made reforms allowing a smattering of
private-sector activity, although the state still controls crucial areas
of the economy.

Cuba's is not a professional parliament. Instead, members keep their
normal jobs and gather twice a year to approve laws.

Also Friday, a government notice published in Communist Party newspaper
Granma said Abel Prieto, a well-known writer, professor and
intellectual, has been reappointed as the country's minister of culture.

Prieto held the same post from 1997 until 2012, when he was replaced and
named a special adviser to the president and the Council of State. He
replaces current Culture Minister Julian Gonzalez Toledo.

Source: Raul Castro says Venezuela's crisis hurting island economy | In
Cuba Today - http://www.incubatoday.com/news/article88440847.html