Tuesday, October 17, 2006

Economic management, Castro style

Since colonial days, the economic future of Cuba has been historically linked to sugar. For better or worse.

The sweet stuff was the island’s number one export earner for decades, right up to the collapse of the Soviet Union and its empire in the early 1990s.

Then about five or six years ago, Fidel Castro decided that there was no future in sugar anymore.

The dictator dictated that the new money-spinner for the communist regime would be tourism.

And so, sugar mills were closed all over Cuba, sugar workers “retrained” and sent to work elsewhere (if they were lucky), and all that fertile land that used to grow sugarcane was left bare.

Now the regime has decided to restart the sugar industry, according to a report by Reuters.

But it’s not going to be easy.

The responsible minister, General Ulises Rosales del Toro, announced this week that he expects to have about 50 sugar mills operating during next year’s harvest - compared to 156 mills just three years ago.

General Rosales del Toro also predicted a 25 per cent increase in output, an outcome that will no doubt be met (aty least officially) but be hailed by the official media as a great achievement for the Revolution, etc, etc.

What the general did not point out is that the sugar crop output in 2006 is expected to be no more than about 1.24 million tonnes, which is the lowest level in over a century. That's right - the lowest level in over a century.

Something else the general didn’t point out: despite the ridiculously low wages paid to sugar workers, the Cuban sugar industry remains a basket case because little if any money has been spent in the past 40 years or so updating equipment and facilities.

In fact, the industry is so inefficient, its is now cheaper for Cuba to import sugar rather than grow and process its own.

Economic management, Castro style.


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