Cuba is rising from the post-Soviet ashes, says Castro
February 14, 2005
By Anthony Boadle
Havana - Cuba's communist state was rising from the ashes of its post-Soviet economic crash with greater control over its economy and help from China and Venezuela, President Fidel Castro said on Saturday.
"The state is rising again like the phoenix," Castro said in an almost six-hour speech to economists at an anti-globalisation conference.
For two years Cuba has been steadily centralising control again over state companies, scaling back the autonomy allowed during the crisis that followed the collapse of the Soviet Union.
It has also introduced foreign exchange controls, eliminated the dollar as legal tender, increased regulation of foreign companies and curbed private enterprise in a return to a classic command economy that is 90 percent state-owned.
The centralisation of state company operations would save Cuba between $500 million (R3.05 billion) and $1 billion, Castro said.
He complained that previously 3 000 managers had authority to buy and sell, or run up hard currency debt.
Since the beginning of the year, all foreign exchange and its Cuban equivalent, the convertible peso, must be turned in to a single account controlled by the central bank.
Cuba would double its production of nickel and cobalt over the next four years thanks to Chinese investment and the increase in output by its joint venture with Canada's Sherritt International, the Cuban leader said.
Nickel, the Caribbean island's top export, would earn Cuba at least $800 million in gross revenue, or $500 million in net terms.
Cuba has the world's third-largest nickel reserves and its industry is producing at capacity of about 75 000 tons a year from three processing plants.
China's state-owned Minmetals Corporation signed an agreement in November to invest $500 million in a joint venture that aims to produce 68 000 tons of ferronickel a year. Castro called China the "new engine" of economic growth.
Cuba's tourism industry, the island's top foreign currency earner that brought in $2 billion last year, has cut its costs to between 60c and 80c per dollar of gross income.
Castro thanked Venezuela's leftist president Hugo Chavez, his closest foreign ally, for assistance in shipping vital supplies of Venezuelan oil, officially 53 000 barrels a day, on preferential terms.
The number of Cuban doctors, dentists and teachers sent to Venezuela in part payment for the oil would increase from 20 000 to 30 000 by the end of the year, he said.
The demise of the Soviet bloc deprived Cuba of billions of dollars in subsidies, mainly through cheap oil supplies in return for overpriced sugar.
The Cuban economy shrank by 40 percent between 1990 and 1993, and has not recovered to precrisis output.
Castro reluctantly legalised the dollar, opened up Cuba to foreign investment and tourism, and allowed private entrepreneurs in food, transport and other services the state could not cater for.
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