MercoPress. South Atlantic News Agency

Resources short Cuba cuts power to wasteful companies

The full impact of the global crisis on tourism and commodities exports has left Cuba short of strong currency.

Hundreds of Cuban entities and state-run companies were sanctioned when a drastic government plan to save energy entered into force, according to reports in the official media.

In the eastern province of Holguin, electricity was cut to 112 workplaces of various firms operated by the government. The energy cutbacks were implemented due to excesses in consumption or because the firms and government offices did not yet have their fuel savings plan developed.

Holguin last month consumed 18% more power than predicted.

Authorities and official media warned in recent weeks the heads of firms and institutions that they will be severely sanctioned if they do not comply with the power savings plans.

President Raul Castro’s government announced last week “exceptional measures” for reducing the consumption of electricity and warned of a return to blackouts if the goal isn’t achieved.

The plan includes closing at 6:00 p.m. all enterprises that do not provide goods or services directly to the public. Amusement parks will also cut back on the hours they are open, the use of air conditioning will be limited to five hours a day, and cold storage facilities will be disconnected for two hours a day.

The use of electric ovens is banned from 7:00 to 9:00 p.m. in bakeries and some industries, while sanctions on consumers committing fraud will be increased.

In addition, transportation services were reduced, with cancellations of schedules, routes and frequencies of service, while in the business sector the growing power supply shortage is evident.

Cuba receives from oil-rich ally Venezuela about 100,000 barrels of crude each day on preferential terms, but officials say the government doesn’t have the cash to acquire more fuel on the open market.

Economy and Planning Minister Marino Murillo said recently that the critical economic situation and lack of liquidity can be eased “only with efficiency and saving”.

He warned that the 6% economic growth projected by the government for 2009 “will not be achieved,” and that now the gross domestic product is expected to expand by no more than 0.5%.

The Cuban economy deteriorated over the last year because of three hurricanes causing estimated losses of 10 billion US dollars, the increase in import prices, the drop in exports and the reduction of revenues from tourism and remittances.

Unable to organize the economics of the rich farming sector, Cuba is forced to import more than 80% of the food its 11.2 million citizens consume.