The Cuban Revolution on January 1 celebrated its 50th anniversary within a bleak economic context. The end-of-the-year session of Cuba's National Assembly highlighted the country's severe economic difficulties. The leadership stressed the need to cut down on state subsidies and raise salaries, but did not spell out any single reform.
After 50 years of revolution, Raul used his address to the National Assembly to prepare the population for more hardship to come. Apart from the devastation created by 2008's three hurricanes Raul stressed the external financial squeeze:
Falling export prices have reduced hard-currency income; nickel has been hit particularly hard, with revenues cut by over one third in 2008 compared with 2007.
As Cuba imports at least 80% of foodstuffs consumed on the island, rising prices for these have meant an additional cost of about 840 million dollars in 2008, according to government data.
Hard times ahead.
As neither China, Russia nor Venezuela are compensating for these costs, Raul announced that belt-tightening is the only solution:
The National Assembly passed a new social security law, which raises the retirement age from 60 to 65 for men and 55 to 60 for women.
Subsidies and free-of-charge services will be reduced or eliminated. Most importantly, this targets the rationing-card system, which provides basic food staples to the population at large. However, no schedule for implementation was outlined, nor alternative programmes for the needy.
Free vacations in state-run hotels, widely used as incentives for cadres or exemplary workers, will be eliminated.
Funds for travels abroad for state functionaries will be cut in half.
The government's stated aim is to restore value to salaries:
In his speech, Raul argued that people do not value what they are given free, but are primarily interested in their salary.
Raul and the minister of economy mentioned economic distortions caused by the present currency dualism -- the co-existence of the regular peso with a dollar-fixed convertible peso -- but neither gave any indication of a single currency anytime soon.
Meanwhile, mobile phones, made accessible to ordinary Cubans less than a year ago, are now a permanent fixture. Telephone company ETECSA already reports 330,000 mobile phone users, and prices for connection have been lowered. When Raul took over from his brother in February, he raised expectations of material improvements for the population. In contrast, he closes the year announcing hard times to come, and the need to tighten belts. While he has not reneged on an agenda of gradual and controlled reform to revitalise Cuba's socialist economy and society, this has come so close to standstill that among ordinary Cubans disillusionment seems to have displaced hope. At its 50th anniversary, the Cuban revolution faces a tense present, and uncertain future.