MercoPress. South Atlantic News Agency

Cuba admits overseas purchases down 36% plus difficulties to pay suppliers

Trade Minister Rodrigo Malmierca forecasts more tough times ahead for the Cuban economy and consumers

Cuban purchases from United States companies will total some 580 million US dollars by the end of 2009, down 37% from last year, the head of the state corporation Alimport said this week.

“This will be the first year that they (purchases from the US) will decline both in volume and in value, and if current conditions continue, it will be very difficult to keep increasing the volume of business,” Igor Montero said at the inauguration of the 27th International Trade Fair in Havana.

He attributed the decrease in purchases – principally of food supplies – to the global recession, rising food prices and the economic embargo that the United States has imposed on Cuba since 1962.

The severe slump the island is going through has forced authorities to lower their forecast for 2009 economic growth from 6% to 1.7% and to make drastic cuts in imports, which were outpacing exports by a ratio of 5-1 at the beginning of the year.

Trade fair organizers in Havana estimate that deals will be signed this year for some 150 million USD compared with 350 million in 2008.

In 2001, Washington began allowing Cuba to make cash purchases of food and medicine from US firms, and since then Cuban purchases from the United States have been worth more than 4 billion USD, according to Alimport figures.

But Montero warned that if conditions for doing business in that country do not change, “it will be very difficult to continue with trade at the levels we’ve been used to.”

He added that 35 US companies are attending the fair (compared with 61 in 2008) along with delegations from state governments.

Also present at the fair’s opening was Cuban Trade Minister Rodrigo Malmierca, who said the island’s overall foreign trade dropped by 36% in the first nine months of 2009 compared with the same period last year.

He likewise acknowledged that the government has difficulties paying its suppliers.

“The Cuban economy is characterized by obstacles to getting international financing, the reduction of demand and of prices for our main export products, and the increase of priority imports like food, with the obvious decline in purchasing power,” Malmierca said.