Cuba braces for more austerity to face global recession

Havana, Dec 29 (IANS) Cuba, reeling under three devastating hurricanes in recent months and a 50-year old US embargo, is bracing for more austerity measures in the wake of the global economic recession.

'We must act realistically and adjust all the dreams to the real possibilities,' EFE news agency Monday quoted President Raul Castro as telling parliament during a special session on the state of the country's economy.

'The nation needs to increase production, adjust spending and optimise international trade relations,' the president told the National Assembly Saturday.

Castro emphasised that the state-controlled firms must prune costs and increase production, adding that the government was working to create a comptroller's office to oversee performance of the state entities.

The Cuban leader recalled his inauguration address in which he insisted on downsizing the number of state entities to 'make management more efficient' and to set up 'a more compact and functional structure' to prop up the economy.

'Next year is one of much uncertainty in the world economy and we should be prepared to deal with this serious challenge that has been affecting us in a clear way,' Castro said.

'No one, not an individual, not a country, can have the luxury of indefinitely spending more than they receive from the sale of their production or from the services they provide,' the Cuban president said.

According to official estimates, the recent hurricanes caused the country losses worth some $10 billion, which is equivalent to 20 percent of the nation's GDP.

Hurricane Ike battered the island Sep 7-9, while Gustav hit western Cuba Aug 30 and Hurricane Paloma made landfall in November. More than 530,000 houses were destroyed displacing millions.