Austerity Measures In Cuba Spark Fears Of A Return To Dark Economic Times : Parallels Since July, authorities have cut work hours, electricity and gas supplies. Those measures have prompted fears of a return to austere economic times. Meanwhile, Venezuela has cut subsidies to Cuba.
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Austerity Measures In Cuba Spark Fears Of A Return To Dark Economic Times

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Austerity Measures In Cuba Spark Fears Of A Return To Dark Economic Times

Austerity Measures In Cuba Spark Fears Of A Return To Dark Economic Times

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ROBERT SIEGEL, HOST:

Cuba's economy is in trouble. And that's partly due to problems in Venezuela. That's the island's main supplier of fuel. Beginning in July, authorities parties cut work hours, electricity and gas supplies.

And now, many people fear things are getting so bad that the government could revert to the strict measures it imposed after the Soviet Union collapsed.

NPR's Carrie Kahn reports.

CARRIE KAHN, BYLINE: Cuban officials won't give hard figures, but some estimates say as much as 40 percent of the oil supplied from Venezuela has been cut. That's put quite a strain on Cuba's rough and tumble transportation system, which consists of few public buses always stuffed to the gills and a pack of privately-run taxis.

At this transfer stop in the middle of Havana, passengers jump in and out of taxis, except 20-year-old medical student Claudia Arango.

CLAUDIA ARANGO: (Foreign language spoken).

KAHN: "I've been here 10 minutes already and not one taxi going my way has come by," she says.

There are fewer taxis on the road ever since the austerity measures took effect this summer.

Thirty-one-year-old Roy Ramirez says it's tough filling up his beat up '57 Chevy taxi.

ROY RAMIREZ: (Foreign language spoken).

KAHN: "To run a car this big I need 40 liter of gas a day," he says. At the official state-run gas station, that will cost Ramirez about $45.

While the price at the pump remains the same, not so on the black market, where the cost of a liter of gas has soared and supplies have shrunk. Away from my mic, taxi drivers will say that means their wages have been slashed by as much as 30 percent. Many have just opted to pull their cars off the road.

On top of the transportation woes, authorities have cut office hours in some state industries and turned the electricity off. They insist, though, the blackouts won't affect residential areas or the booming tourist hotels and restaurants.

More than 3 million tourists, including many now from the U.S. hit Cuban shores last year. But that surge hasn't been able to offset shortfalls in other cash-generating exports like nickel and sugar. That has many Cubans worried about a return to the dark economic days of the so-called special period after the collapse of the Soviet Union.

Adriana Norman looks in the window of a state-run shop selling small kitchen electronics, all too expensive for her meager monthly salary, she says.

ADRIANA NORMAN: (Foreign language spoken).

KAHN: The 39-year-old, who was a teenager during the special period, says sometimes with the lack of buses and blackouts, "it feels like we're back there again."

NORMAN: (Foreign language spoken).

KAHN: But, she says, "hopefully it won't come to that."

Cuban leader Raul Castro shrugs off speculation of an imminent collapse of the economy. In a speech to a closed session of the Parliament this summer, Castro said there's no denying there will be ill effects. But in remarks published in state media, he said Cuba is better off today.

International economy professor Richard Feinberg says Cuba does have far more economic partners than it did in the 1990s, when Cuba relied solely on the Soviet Union.

RICHARD FEINBERG: But they haven't succeeded in diversifying their export offerings, therefore they remain without the ability to earn foreign exchange. And they continue to need to import almost everything.

KAHN: And Feinberg, author of "Open For Business: The New Cuban Economy," says the Castro government has slowed its plans for opening to foreign investment and reforming key industries. All initiatives, he said, Castro detailed several years ago.

For their part, Cuban officials warn the second half of the year will be even tougher, as they expect further drops in export income and fuel supplies.

Laura, a state worker who didn't want to give her name because she was not authorized to speak to the press, says she's praying this isn't true. She says so far the cuts haven't been too bad, only about two hours a day. The worst part is battling to get to work on packed public buses and taxis in the cruel Caribbean heat.

LAURA: (Foreign language spoken).

KAHN: "And you get to your office thinking at least there is air conditioning, but then find out it's been shut off." She says that's "a big psychological blow."

Carrie Kahn, NPR News, Havana.

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