Cuba reports 5 per cent growth in 2004
Campaign News | Monday, 27 December 2004
budget for 2005 will increase social welfare spending
HAVANA 24 Dec: Cuban tourism and the economy overall continued the remarkable growth of recent years in 2004 despite a pair of devastating hurricanes, increased US sanctions and higher oil prices, the island's top economic planner said on Thursday.
Cuba's gross domestic product (GDP) reached 36.5 billion US dollars this year, meeting the government's goal, Economy and Planning Minister Jose Luis Rodriguez Garcia said on Thursday December 23.
Rodriguez said Cuba encountered many difficulties in its economic development this year, such as devastating hurricanes, increased US sanctions and rocketing oil prices. But the GDP growth still reached 5 percent compared with that in 2003.
Cuba posted remarkable increase in foreign trade, with export being estimated at over 2 billion US dollars). Great achievements have been made in tourism, the pillar industry of the country, Rodriguez stressed. Over two million foreigners visited Cuba this year.
The minister also admitted that the development in industrial sectors has not met their expectation, some due to energy shortage.
Cuba's main goals in 2005 were to build up defense capability, fight against natural disasters and achieve a 5-percent economic growth, he said.
Jose Luis Rodriguez told Cuba's National Assembly that 2004 had been "extraordinarily difficult" in part because of more than US$2 billion ($A2.61 billion) in damage caused by Hurricanes Charley and Ivan.
Cuba, which imports about half of the petroleum it needs, also has been hit hard by oil prices. It also received fewer visitors than expected this year because of the tightening of American restrictions on travel to the communist-run island.
Nevertheless, the United Nations Economic Commission for Latin America and the Caribbean, using traditional criteria for calculating gross national product, reported last week that Cuba's economy grew 3 per cent in 2004. Growth was 2.6 per cent the year before.
Rodriguez, using a different formula Cuban planners devised to take into consideration the communist nation's broad social safety net and heavily subsidized services, said the economy grew 5 per cent this year.
More than a decade ago, many Cuba watchers had predicted the economy would collapse as it struggled with the sudden loss of critical Soviet aid and trade.
But it has steadily grown since, in large part because of a new focus on tourism as its No. 1 source of foreign currency needed for international trade.
Rodriguez said 2.05 million people visited Cuba in 2004, despite stepped-up U.S. restrictions announced in the summer that cut the number of authorized family visits to the island by Cuban-Americans from once annually to once every three years.
He projected as many as 2.3 million people would visit Cuba in 2005.
Rodriguez said the government's expectations for 2005 were low for the sugar industry, which was once the economic motor of this Caribbean nation. The industry has been undergoing a major restructuring in recent years.
The news was brighter for nickel, another major Cuban commodity sold abroad. Rodriguez projected production would reach 77,000 metric tons next year to be sold at favourable prices on the international market.
During a state visit here by Chinese President Hu Jintao last month, Cuba agreed to begin providing 4,400 metric tons of nickel annually to the fellow communist nation. The same agreement calls for a US$500 million ($A652.66 million) Chinese investment in a new nickel plant in Moa, in Cuba's eastern province of Holguin.
Cuba endorses budget estimate for 2005
On Friday, the Cuban legislature approved a budget estimate for 2005, under which nearly 10.6 billion USD or 68 percent of the total will be spent on social affairs.
Investment in education will be increased to about 4 billion pesos, an increase of 11.3 percent over 2004, while 2.3 billion pesos, up 9.4 percent, will go towards improving the quality of healthcare services.Next year, Cuba will spend nearly 3 billion pesos on pensions and social allowances, 152 million pesos higher than 2004's level.
Meanwhile, investment in culture, arts, physical training, sports and scientific, technical and environmental research will also grow significantly.