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Raul Castro warns crowd of tougher economic times ahead

HOLGUÍN, Cuba — These are hard economic times in Cuba, and they will likely get tougher.

That was the less-than-encouraging message delivered by President Raul Castro on Sunday, in the country's annual July 26 address marking the 56th anniversary of the launch of Cuba's revolution.

Speaking to a large crowd in the eastern city of Holguín, Castro warned Cubans to expect more belt-tightening because of the effects of the global financial crisis.

To substitute for the rising costs of food imports, Cuban farmers needed to be more productive, he said.

"It is an issue of national security to produce the products in this country," Castro said. "We spend hundreds of billions of dollars, and I don't exaggerate, bringing them from other countries." He went on, "The land is here, the Cubans are here, let's see if we work or not, if we produce or not."

As a sign perhaps of how serious Cuba's economic woes are, Castro's 30-minute speech focused entirely on the island's domestic problems. It was virtually devoid of the kind of ideological rhetoric that laced the speeches of his ailing older brother, Fidel Castro. There were no attacks on U.S. policy toward Cuba, and no mention of President Barack Obama.

Unlike Fidel Castro's famous marathon speeches, usually improvised for four or five hours and full of diatribes against the injustices of "Yankee imperialism," his brother prefers to stick to a prepared text.

Raul Castro is the practical brother, Cubans like to say. He may not have his brother's charisma, and his speeches may not be the most inspiring, but they carry a simple and direct message.

Pounding the podium at one point, he exclaimed, "It is not a question of yelling 'Fatherland or death! Down with imperialism! The blockade hurts us,' " referring to the 47-year-old U.S. embargo. "The land is there waiting for our efforts."

Since being elected president early last year, Raul Castro has made increasing food production a top priority. Cuba imports 60 percent of its food, including $860 million worth of products from the United States.

A year ago Cuba began handing out idle state land to private farmers and cooperatives to stimulate production, with more than 1.7 million acres distributed so far, Castro said.

While Cubans in the crowd did not appear to react with much enthusiasm to the idea of sweating in the fields under a tropical sun, there was plenty of positive talk afterward. "We have been through it before and we'll do it again," said Ernesto Lopez, 36, a mechanical engineer.

"There's no country better prepared to confront a crisis," he added, referring to the so-called Special Period in the early 1990s when Cuba's economy imploded in the wake of the downfall of the Soviet Union.

Others were less impressed. "It's always the same. More sacrifice in the name of the revolution," said Richard Labrada, 55, a former state vet who now sweats out a living pedaling a bicycle taxi around Holguín. "But the state controls everything and nothing changes."

The island's trade deficit soared by 65 percent in 2008, largely because of the higher costs of food imports, a doubling in the cost of oil imports and a decline in export revenue. Income from nickel, mined in Holguín province and shipped to Canada, fell to $1.5 billion from $2.2 billion in 2007 because of falling global prices.

On top of that, Cuba was hit by three devastating hurricanes, which Castro said cost the island $10 billion in lost crops and damage to housing and infrastructure, equivalent to 20 percent of the nation's overall economic output.

As a result Cuba has been forced to severely cut imports this year, postpone payments to creditors and impose drastic energy-saving measures. Top Cuban ministers will meet on Tuesday to consider revising spending cuts for the rest of the year, Castro said.

To the disappointment of some Cubans he said nothing about possible reforms to open up the island's tightly controlled state-run economy. After he replaced his ailing brother as president in February 2008 he raised expectations of reform by announcing the need for "structural and conceptual" changes.

But those changes have been limited so far to allowing Cubans to buy cell phones and computers, as well as permitting access to previously off-limit tourist hotels and issuing more licenses for private taxis.

The July 26 ceremony marks the date of the 1953 rebel attack led by the Castro brothers on the Moncada army barracks in the eastern city of Santiago, two hours' drive from Holguín.

The attack failed, but it became a rallying cry for a subsequent revolutionary movement that eventually toppled dictator Fulgencio Batista in January 1959. It was three years ago in Holguín that Fidel Castro made his last public appearance, for the July 26 anniversary. He was reportedly on his way back to Havana when he was taken ill, later undergoing undisclosed abdominal surgery from which he has not fully recovered.

The older Castro remains first secretary of the Cuban Communist Party, one of the island's top posts. He also remains active behind the scenes, writing a regular column, "Fidel's Reflections," in the state-run media.

The Obama administration has relaxed some aspects of U.S. policy, including lifting restrictions on cash remittances and travel by Cuban-Americans with relatives in Cuba, as well as opening the door for U.S. telecommunications firms to do business. But Obama has pinned any major rethinking of U.S. policy to signs of deeper political reforms of Cuba's one-party communist system.

Obama said Friday that he's open to more overtures to Cuba, but not without signs of changes from the government in Havana. "We're not there yet," he said. "We think it's important to see progress on issues of political liberalization, freedom of the press, freedom of assembly, release of political prisoners in order for there to be the full possibility of normalization between our two countries."

Last week the State Department resumed talks with Cuban officials on immigration issues that had been suspended by the Bush administration.

Obama expressed the administration's hope that "if we're seeing progress on those issues, then they can begin to broaden."

He added: "We're taking it step by step. … I don't think it's going to be happening overnight. I think it's going to be a work in progress."

Raul Castro warns crowd of tougher economic times ahead 07/26/09 [Last modified: Monday, July 27, 2009 9:59am]

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