Cuba says economic crisis slows output, closes factories

Cuba says economic crisis slows output, closes factories
Sun Jun 14, 2009 1:36pm EDT

HAVANA (Reuters) - Cuban factories are closing down and production is
being cut at other workplaces as the international financial crisis
weighs on the import-dependent Caribbean island, the official media said
on Sunday.

A growing shortage of foreign exchange has forced the Communist-run
country to drastically cut imports and local budgets, impose power
quotas on state-run companies, restructure debt and put off payments to
foreign suppliers.

The state-run Juventud Rebelde newspaper, the only national Sunday
publication, said a tire factory had shut down since February due to a
lack of rubber imports while an aluminum packaging plant cut output for
similar reasons.

The newspaper said the plants were examples of a wider problem "in other
sectors of the Cuban state company sector," which encompasses 90 percent
of economic activity.

Other workplaces were having difficulty obtaining spare parts, the
newspaper said, and still others were being forced to scale back output
after a recent government measure mandating a 12 percent reduction in
power consumption.

Cuba, like other Caribbean countries, has been hit hard by the global
financial crisis, which has slashed revenue from key exports, dried up
credit and reduced foreign investment.

It is under longstanding U.S. economic sanctions and is recovering from
three hurricanes that struck last year, causing an estimated $10 billion
in damages.

Workers at lobster processing plants, cigar rolling factories and other
establishments have reported layoffs for months, but Sunday's Juventud
Rebelde report was the first official admission of growing problems in
the productive sector.

"The waves of the present international financial and economic crisis
are slowly gaining force and the rough waters are reaching the pockets
of companies and workers around the world," the newspaper said.

"We can't harbor the illusion that we can escape just because our
country has a social system that defends justice for all," it said.

Economy and Planning Minister Marino Murillo recently said Cuba's growth
forecast for 2009 was reduced from 6 percent to less than 2.5 percent.

Some local economists believe this year's growth will be 1 percent or
less, similar to forecasts for the region overall.

(Reporting by Marc Frank; Editing by Maureen Bavdek)

Cuba says economic crisis slows output, closes factories | Reuters (14
June 2009)
http://www.reuters.com/article/internalReutersGenNews/idUSN1412101020090614?sp=true