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Cuba shuts factories, cuts energy to save economy
(Agencies)
Updated: 2009-07-31 17:25

Beginning June 1, the government ordered energy conservation measures as part of a broader plan to cut the national budget by 6 percent. Central planners also revised their economic growth projections from 6 percent to 2.5 percent and could lower expectations even further.

Cuba shuts factories, cuts energy to save economy
A bicycle-taxi driver waits for passengers in front of the National Capitol building in Havana, Thursday, July 30, 2009. [Agencies]


The island's economic woes began in earnest with three hurricanes last summer that caused more than $10 billion in damage and wiped out some of the food and grains the government had stockpiled to insulate itself from rising commodities prices.

How much Cuba has spent on hurricane recovery is unclear. But Castro said the government has rebuilt or repaired 43 percent of the 260,000 homes damaged or lost in the storms.

Cuba consumed about 150,000 barrels of crude oil a day in 2008, of which 52,000 were produced domestically and 93,000 imported from Venezuela, said Jorge Pinon, an energy fellow at the University of Miami's Center for Hemispheric Policy. Half is used to generate electricity, according to Cuba's Ministry of Basic Resources.

Though the numbers leave the country 5,000 barrels a day short, Pinon said natural gas production last year covered the energy equivalent of 20,000 barrels of oil daily and kept the power plants running smoothly.

"Cuba, from a petroleum point of view, is balanced," he said. "It's not running out of oil."

So far the power-saving measures have been confined to state-run businesses and factories, though many Cubans fear they will soon hit residential users as well.

Workers at a tire factory in San Jose de las Lajas, a rugged farming town 30 miles (50 kilometers) south of Havana, said production is down and the factory goes dark when demand for electricity is high -- leaving gas stations and mechanics short on spare tires.

Some government office workers say their hours have been cut to between 8 am and 3 pm, and others are being told to come in only twice a week.

State companies also have stopped offering employees low-cost lunches in worker cafeterias to save power.

Other government offices, businesses, banks and stores have ordered air conditioners turned off for much of the day, rather than close early.

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