• TABLE OF CONTENTS
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 Front Cover
 Recent economic trends: Introduction...
 Growth of the main sectors
 The external sector
 Tables






Group Title: Document / United Nations ; E/CEPAL/R.227/Add.10
Title: Economic survey of Latin America, 1979, Cuba
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Permanent Link: http://ufdc.ufl.edu/UF00086728/00001
 Material Information
Title: Economic survey of Latin America, 1979, Cuba
Series Title: Document United Nations
Physical Description: 16 p. : ; 28 cm.
Language: English
Creator: United Nations -- Economic Commission for Latin America
Publisher: United Nations, Economic and Social Council, Economic Commission for Latin America
Place of Publication: S.l
Publication Date: 1980
 Subjects
Subject: Economic conditions -- Cuba -- 1959-1990   ( lcsh )
Genre: international intergovernmental publication   ( marcgt )
non-fiction   ( marcgt )
Spatial Coverage: Cuba
 Notes
General Note: Cover title.
General Note: "Original: Spanish."
 Record Information
Bibliographic ID: UF00086728
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 10534193

Table of Contents
    Front Cover
        Front Cover
    Recent economic trends: Introduction and summary
        Page 1
        Page 2
        Page 3
        Page 4
    Growth of the main sectors
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
    The external sector
        Page 14
        Page 15
        Page 16
    Tables
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
Full Text
DUPLiiCATtE
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E/CEPAL/R.227/Add.10
July 1980
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CEP P L-
Economic Commission for Latin America











ECONOMIC SURVEY OF LATIN AMERICA

1979

ov CUBA


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This preliminary version of the Economic Survey of Latin America. 1979 is being
distributed in 27 separate parts: an Introduction of a general nature, bearing the
symbol E/CEPAL/R.227, and 26 Addenda to this document, each containing a study of
the economic development of a country of the region. These Addenda will not appear
in alphabetical order, but in order of completion. The .complete Survey will be
published in the usual printed version when the comments arisin out of this
preliminary version have been collected.


80-4-611


:~ dJ.2













CUBA


1. Recent economic trends: Intruduction and summary

In the evolution of the Cuban economy in 1979 a combination of various
factors of a conjunctural nature and some very long-standing difficulties
resulted in a slow growth rate of material production (2.j_) the lowest
in the last fi-year and led the government authorities to make a
rigorous review of the functioning of the economy (see tale 1).
The factors which adversely influenced the growth of the economy
Included the limitations imposed by the external sector on the processes of
production and accumulation, the damage caused in some sectors of activity
by tropical storm Frederick,. and the disease which damaged the tobacco crop.
These elements aggravated some maladjustments which have been accumulating
in the economic system for some time and have mainly affected the
productivity of labour and organizational. capacity.
As regards the limitations originating in the external sector, the
capacity to import goods payable in convertible currency was seriously
curtailed by the conditions prevailing in the sugar market and the short-
term indebtedness which the economy has been accumulating.l/ Sugar prices
remained depressed during the first six months of the year, and although
they rose during the rest of the period and improved the terms of trade
with the market economies there were few repercussions from 'this owing to
the stagnation of the volume exported. Moreover, the accumulated
disequilibrium in the balance of payments pushed short-term loans and
credits up considerably, and this in turn made it necessary to increase
the corresponding amortization payments. All this led to a forced reduction
in imports, particularly from market economy countries, and had a depressive
effect on domestic activity owing to the link between part of the apparatus
of production and supplies from these countries.



1/ During the three-year period 1976-1978 approximately 25% of the
volume of sugar exported went to the market economies.


/These limitations








2 -


These limitations affected all types of imports, but in view of
the policy adopted a few years ago of giving top priority to boosting the
consumption of certain goods and services considered basic for the
population it may be assumed that they affected the investment process to
a particularly great extent. This would explain the relative lack of
vigour in the construction sector, traditionally one of the most dynamic
activities in the Cuban economy. Although the policy of continuing to
give impetus to basic consumption helped to provide material support for
money earnings and reduced the excess of cash outside the banks, the lower
volume of imports in 1979 made it necessary to reduce and rationalize the
use of resources in construction ahd equipment.
The tropical storm Frederick, another of the adverse conjunctural
factors, caused a great deal of damage due to the torrential rains, which
in some places exceeded 500 millimetres. The excess of rain gave rise to
floods in both rural and urban areas and caused damage to the infrastructure
and housing as well as numerous crops. Fortunately, thanks to the security
measures taken by the government, khich evacuated nearly 60,000 people,
the loss of human life was minimal
In the material sphere, losses were estimated at over 120 million
Cuban pesos. Production activities suffered most damage (56%), followed
by damage to capital assets, machinery and equipment, buildings and
infrastructure (30%), and lastly, losses of raw materials, finished products
and growing crops (14%).
As already noted, not all the factors which adversely influenced the
evolution of the economy were of a conjunctural nature; some must be
located in a broader frame of analysis covering the functioning of the
economic system as a whole. This has been the subject of profound self-
criticism in governing circles, ani the entire process would seem to form
a new landmark in the manner of directing and planning the economy, suggesting
even that a thorough-going process of economic reform may be beginning.
One of the aspects which has caused'most concern is the tendency
towards the stagnation of productivity levels, associated with the weakening
of labour discipline. These imperfections are attributed in government

/circles to












Circles to shortcomings in the wages system including .the legislation
governing this and to lags in economic planning.2/ During 1979
productivity had been expected to grow by 4%, but in reality it increased
by less than 1%. The agricultural sector was one of those most affected,
since the investment made since the end of the 1960s in the mechanization
*of agricultural work has not been reflected, at least to a proportionate
extent, in an increase in production per person employed. Examples of
ifiefficiency and problems of productivity have also been observed in
transport, which, being a very widely used services sector, has had
repercussions on the pace of work in the majority of economic activities.
In a broader context, the imperfections in the functioning of the
economic system are also associated with the management of the producer
enterprises and the machinery for planning and control. The main action
undertaken by the State to correct this situation has consequently been
directed towards improving the organization of the units of production
and modifying the relations between enterprises and the central plan.
After the tests made in the previous year, when the system of economic
calculation was introduced in 274 enterprises,3/ in 1979 this system was
extended to a further 1,507, thus covering more than 60% of the enterprises
and budgetary units. Moreover, since 1977 efforts have been made to boost
the:efficiency of the apparatus of production by the integration of the
enterprises, which brought their number down from 3,318 in 1977 to 2,908 in
1979. Although the introduction of self-management for enterprises should
have coincided with the rationalization of stocks and inputs for production,
the failure to secure this synchronization has made it impossible to know
exactly what the different processes of production require in terms of


2/ See the speech by President Fidel Castro on 12 July 1979 in Bohemia,
vol. 71, No. 28, 15 July 1979, the speeches by General Rail Castro
Ruz on 28 October in Granma, vol. 18, No. 258, 29 October 1979, and
the speech of 30 November in Resumeh semanal de Granma, vol. 14,
No. 49, 9 December 1979.
3/ The basic aim of economic calculation is to ensure the autonomous
financial management and profitability of enterprises so that each
unit not only covers its expenditure out of the income received,
but also obtains a margin of profit.
/raw materials








-4-


raw materials and labour, This has given rise not only to the existence of
idle resources in some units and interruptions due to lack of supplies in
the activity of others, but also the impossibility of adjusting and
planning productivity at real levels.
In September 1979 the general regulations governing State enterprises
were published, establishing the terms of reference of these primary units
and the interrelation of their activities with the directives of the
central economic plan. In addition,* at the end of the year regulations were
drawn up governing individual work incentives, by the payment of bonuses
for achieving or exceeding specific indicators.4/ Lastly, with a view to
linking individual effort to the yield of the enterprise, a system of
economic stimulation funds was introduced on an experimental basis in order
to reward collective results.5/
In order to ensure that the higher degree of autonomy granted to the
enterprise is nevertheless in line with central management, greater
importance has been given to the financial apparatus. As from 1977, when
the system of inter-enterprise payments and charges was introduced, the
National Bank of Cuba opened bank accounts for the units of production
and acted as intermediary in their transactions,' In 1979, when the economic
calculation system was expanded and the majority of enterprises were
made subject to the success of their management, such financial indicators
as prices, costs and economic returns began to be used, and credit was
instituted for those units operating under the system of economic calculation.
State bank credit means that the enterprises have a certain degree of
access to supplementary resources which make it possible for them to meet


L/ Some of the indicators used to grant the bonuses are: fulfilment or
over-fulfilment of production targets, improvements in quality, saving
on raw materials, etc
5/ The enterprises will form two funds: a Reward Fund and a Fund for
Social and Cultural Measures. The former is aimed at directly
stimulating each worker, while the second aims at collective material
stimulation (building of houses, child care facilities., sports
centres, etc.).


/their seasonal;








- 5 -


their seasonal or extraordinary financial needs,6/ 'while this constitutes
for the Bank a form of control over the enterprise's activity.7/
In brief, in 1979 the Cuban economy faced a period of transition in
which the political action was aimed, in the medium term, at laying the
bases for an economic reform process seeking greater efficiency in production:
and in the short term at dealing with the immediate effects of domestic
and external imbalances.

.2. Growth of the ,ain sectors

As mentioned earlier, in 1979 the gross material product grew by
2.4%, well below the rate of the previous year.8/ The sectors which grew
More than this average were agriculture and industry (2.7% and 2.8%),
whereas construction virtually stagnated (see table 1).
In addition to the slow growth of production.there was deliberate
containment of imports. This gave rise to a situation of global limited-
availability of goods and services in which the growth of investment was
severely.restricted in order not to affect the levels of basic consumption
of the population. The volume of exports dropped by slightly over .7%,
although owing to the improvement in prices on the international market
the current value of exports rose by approximately 2.5%.
The smaller amount of resources available for investment gave ri.e to
a selective policy whereby these were earmarked-_f _aicertain bratiches of
industry metal manufactures and machinery and light industry and for
transport and ports. Noteworthy in the latter category were the continuation
of the 660 million peso project to develop a modern railway system, including
the reconstruction of the Santiago-Havana line (850 kilometres), and port


6/ Financing to cover investment expenditure and increases in production
are granted to the planned enterprises through the budget.
7/ Loans intended to increase working capital are issued for periods of
three months to one year, at an annual interest rate of between 6%
and 12%.
8/ The growth of the global social product (4.5%), which for methodological
reasons is not used in the analysis, was lower than the projected
6%.


/construction work








-6-


construction work to the value of 250 million pesos which will make it
possible to increase the potential operating capacity by 63%. In.addition,
following the major lines of economic policy laid down at the beginning
of the 1970s, impetus continued to be given to the mechanization of
agricultural work and the horizontal and vertical integration of the
sugar industry.
(a) Agriculture
The agricultural product increased by 2.7%, which was far below the
rate of 6.2% achieved in 1978. Sugar cane production, which accounts for
over 60% of the agricultural product, grew only slowly compared with the
pace of the previous year (25%). Even so, it was one of the most dynamic
items, thanks to the fact that the violence of tropical storm Frederick
only affected it to a limited extent, since-the cane harvest was nearly
over when the phenomenon occurred, and it did not yet suffer from the
effects of the outbreak of rust, which will be reflected in the 1979/1980
harvest. The increase in the harvest was basically due to an increase
in the growing area (over 650,000 hectares), since the yield was similar to
that of the previous year (56 tons per hectare), which was one of the
highest in the last 20 years, only surpassed by the 57.6 tons obtained in
the 1969/1970 harvest.
The mechanization of cane cutting continued, and it is estimated that
in the course of the year 60% of the medium-term target was achieved.
It should be stressed that in the early stages this mechanization affects
both the field and factory yields', since if the best advantage is to be
taken of the cane the technical norms must be complied with exactly, and
this is difficult to achieve in the training phase.9/ Furthermore, the
replacement of manual labour by machinery means that the results of the
cane harvest depend on the state of the machinery for cutting, lifting and
haulage of the cane and thus on the maintenance service, which still
'requires a substantial inflow of. imports despite the efforts made to
increase national production of.spare parts.


9/ The height at which the cane is cut affects the factory yield, since
the part of the cane closest to the ground has the largest sucrose
content.
/Productivity'per









- 7-


Productivity per person employed in sugar cane cultivation was
veiy uneven and even varied for the same task carried out under similar
technological conditions. For example, the cane-cutting productivity of
the so-called brigades millonarias (millionaire brigades) 10/ was two
and a half times that of the run-of-the-mill cutting teams, the average
-cane cut per person being around 40,100 arrobas in the case of the former
and only 16,100 in the case of the latter.
In non-sugar cane agriculture a combination of different factors,
including the passage of tropical storm Frederick, caused the stagnation
or decline of production of the main crops. The production of roots and
tubers, vegetables' and citrus fruits barely maintained the levels of the
previous year, while rice and cocoa fell by 9.5% and 12.5% respectively,
thus making it necessary to step Up food imports (see table 2).
Tobacco, the volume of production of which has been decreasing since
1977, constitutes a special case. More than two thirds of the area
harvested continues to be in the hands of private farmers, so that when
the purchasing price fixed by the State proved unattractive, the
producers replaced this crop with higher-priced items. In order to
reverse this phenomenon, the State raised the price in 1978 and undertook
a national programme to increase the area under cultivation to
67,500 hectares, in the expectation of obtaining a harvest of 46,000 tons.
Unfortunately, almost at the end of the harvest of the 1978/1979 crop the
S plants were attacked by the blue mould fungus, which had not appeared for
nearly twenty years, and which reduced the 1979 volume'of production by
27% and made it impossible to increase the sown for the 1979/1980 season.
The most noteworthy main crops whose production increased were
coffee (65%) and fruit (11%); it may be recalled that in the case of the
former, production had been.declining since 1975 and had reached its
lowest level (15,700 tons) in 1978, when the harvest was only about half


10/ A brigada millonaria is made up of a group of approximately 36.cane-
cutters who cut over a million arrobas of sugar cane, equivalent to
11,340 tons, during the harvest season. The "millionaire" cutters
I in the last cane harvest numbered 65,726 and represented 52% of the
entire labour force employed in cutting cane.

/that of









-8-


that of 1974. In that year, around 75% of coffee production came from
private farmers, but their share had fallen to 45% by 1977. The State
policies designed to secure a recovery in the cultivation of this crop,
which included increased prices, the provision of credit, and government
support for the cultivation and rehabilitation of coffee plantations,
resulted in a large increase in production, particularly that of small.
plantation-owners.
Stock-raising activity showed varied results. Following the medium-
term trend, milk production increased by 2.5%, egg production by 8.5% and
poultry by 11%. However cattle production once again dropped (-5%)
following the recovery which it had shown in the previous three-year
period. Pig production, for its part, remained at the level of the
preceding year.
Lastly, the passage of tropical storm Frederick caused damage to
various crops. Among those most affected were tubers and root crops,
followed by bananas, vegetables and citrus fruit. .The losses in the
livestock subsector amounted to 200,000 head of poultry, but only one
thousand cattle, thanks to the timely mass evacuation of the herds.
(b) The industrial sector
Industry -which includes manufacturing, electricity and mining -
has likewise followed an unstable course in recent years and only grew by
2.8% in 1979, after having increased by 9% the year before. The lower
growth rate (only 2.3%)of manufacturing activity which provides 95% of
industrial output contributed to this. The electrical energy sector
continued to grow rapidly (16.5%), but owing to its lack of relative weight
in industry its effects were hardly felt. Lastly, because of limitations
in the installed capacity for processing nickel, mining only grew by
1.4% (see table 1).
The greatest damage caused in this sector by the storm referred to
earlier was the interruption in production activity, mainly as a consequence
of the flooding of factories and electric power stations. This paralysed
the Maximo G6mez thermoelectric plant in Mariel which produces a third
of the total power generated in the country 'and covers the demand of the


/province of












-province of Havana the Cienfuegos power station, and another in Santiago
de-Cuba. In the rest of the sectors, the textile industry suffered the
'" greatest losses owing to damage to the Ariguanabo plant, the biggest in
the country.
(i) Manufacturing. The production of manufactures grew by 2.3% in
.1979 compared with 9% the previous year. The main impetus for this
activity came from the high rate of growth of the industries producing
consumer durables and capital goods (14.8%),. since the industries producing
inputs evolved slowly (1.4%), while those reducingg non-durable consumer
goods remained practically stationary (0.6%) (see table 3.)
The growth of the consumer durables and capital goods industry was
partly the result of the implementation of lines of economic policy aimed
at continuing the mechanization of agriculture, particularly in sugar cane
growing; expanding the consumption of electronic articles and household
appliances; increasing the amount of transport equipment, and enlarging
the capacity for the production of prefabricated building elements. Thus,
output of sugar cane harvesters was more than doubled and that of carts for
transporting this product increased by 30%; the manufacture of radios,
refrigerators and television sets went up by 19%, 23% and 2.3% respectively;
while the assembly of buses grew by 33% and the production of steel moulds
for plants manufacturing prefabricated building elements increased by 35%.
The low rate of growth of the intermediate goods indus-cry was due to
a 5.3% drop in textile production and the stagnation in the manufacture of
fuels and construction materials, which was only partly offset by the
production increases in the chemical industry (4.7%) and the basic metals
industry (3%).
The production of non-durable consumer goods excluding sugar -
remained at the same level as in 1978, since production of food, beverages
and tobacco which together account for 60% of this type of goods fell,
and the fishing industry declined by over 9% (see table 3). The growth
of the ready-made clothing industry and printing and publishing did not
suffice to offset this situation.


/The various


S9 -








- 10 -


The various branches of the food industry showed dissimilar results.
Milk products with the exception of butter generally showed a high
rate of growth in which processed milk (39%) and cheese (18%) stood out,
while wheat flour dropped by 3% owing to shortfalls in external supply,
and boned beef fell by 5% and pork by 2%, as a result of the limited
availability of national inputs.
In the case of beverages add tobacco, the former grew at different
rates (malt 23%, alcoholic beverages 8.5% and soft drinks 7%), with the
exception of beer, production of which remained at the level of the
previous year. The reductions in the tobacco harvest were only reflected
in a 17% drop in the production of twist, since cigarette production
continued to rise slightly (3%).
The fishing industry including both catching the fish and other
marine products and their industrial processing which registered growth
of nearly 15% in 1978, dropped slightly over 9%, as a result of the decline
in catches, which was greatest in the case of fish (-30.5%) (see table 4).
This decrease was largely due to the gradual adoption at the world level
of the limit of 200 nautical miles as the Exclusive Economic Zone, which
has restricted Cuba's access to its traditional open sea fishing areas.
According to international legislation on the subject, each .country
establishes annually, in keeping with its interests, the permissible catch
quotas (in terms of both volume and species) and the number of vessels
which may operate in its exclusive zone, in exchange for payment for the
permits granted.
In keeping with the policy begun several years ago of increasing the
availability of goods on the domestic market, the ready'-made clothing
industry continued to grow (4%) although at a lower rate than the last
two years (15.4% and 11.5%); as textile production dropped, the increase
in domestic consumption of clothing led'to a fall in the exportable surplus
of fabrics.
Of the large-scale industrial construction projects completed in
1979, the Villa Clara textile combine stood out as the most important of
the last five years. The construction of this plant, kith a capacity of


/60 million








- 11 -


60 million square metres of fabrics, cost 142 million Cuban pesos, 70% of
which was financed with convertible currency, since Japan, Belgium and
Spain collaborated jointly in the undertaking. A considerable part of
Sits production will be exported to pay for imports of fibres, chemicals
and dyestuffs required for the production process.
Towards the end of the year the wheat mills of Regla and Cienfuegos
were also completed, at a cost of 25 million Cuban pesos. These will
expand national production capacity for three types of flour.
The factory for the manufacture of pipes and accessories for sprinkler
irrigation, constructed in collaboration with Bulgaria, was completed, as
were the addition of an oxygen plant to the Antillana de Acero complex,
the Marianao industrial gases plant, and the plant producing wheels for
heavy equipment.
The sugar industry which accounts for 14% of manufacturing activity -
only grew by 3.4%, whereas during the previous two-year period it recorded
rates of 13% and 14.5% respectively. The processing yield, after having
sunk to one of the lowest levels in recent years in the 1977/1978 sugar
harvest, rose slightly (3.7%) in 1979, but still continued to be low
(109.4 kilos of sugar per ton of cane) compared with the average for the
1960s (122.8) and that recorded in the 1974/1975 sugar harvest (124.4)
(see table 5). Preferential attention continued to be given to the
ancillary activities which form part of sugar production. Among the main
industries which use sugar cane- by-products was that producing torula yeast,
which is used as animal feed and whose output nearly doubled.* Among the
industries producing capital goods for sugar cane agriculture and the
sugar industry, in addition to harvesters and carts, progress was observed
in the manufacture of sugar mill machinery, and although production is still
low, a level of national integration of nearly 60% has been achieved. A
particle board plant using bagasse also came into operation and plants were
installed to produce torula yeast at seven mills.
During the year the modernization and expansion of the'sugar industry
continued. Twenty-four mills are being adapted to achieve complete
automation, and four new mills the first since 1927 are being built
/in CamagUey,








- 12 -


in Camaguey, Cienfuegos, Granma and Pinar del Rio. The last-mentioned,
the daily milling capacity of which will be 7,000 tons of cane, will come
into operation during the 1979/1980 cane harvest. Of the total machinery
and equipment installed in this mill, approximately 40% was manufactured
locally, 35% came from countries with centrally planned economies, and
25% from market economy countries.
(ii) Mining. During 1979, mining increased at a rate of only 1.4%
(see table 1).. It should be noted that production of nickel the most
important item among the non-ferrous metals increased for the first time
since 1976 by 4.4%, a rate which it will be difficult to:better until the
projects to increase installed capacity are implemented. In this regard
progress continued on the construction of the new plant at Moa which will
have an annual capacity of-30,000 tons and will produce 10,000 tons of
nickel in its first stage; it is expected to come into production at the
end of 1980 or the beginning of 1981.
As regards copper, part of the manufacture of 18% concentrates was
replaced by 30% concentrates: thus, the production of the former was cut
by nearly 14% while that of the latter increased by 8%.
(iii) Electrical energy. The rate of growth of electrical energy
in 1979 reached 16.5%, which was the highest rate of the decade and
exceeded that of 1978 by 4 points. This was largely due to an increase
of 369 MW in generating capacity,ll/ giving a total of 2,150 EMW. However,
this was still insufficient to meet demand and some blackouts occurred
during the year.
Although the electricity industry was one of those most affected by
tropical storm Frederick, it was possible to meet the expected target of
over 8 million kWh of electricity thanks to the prompt repair of the
damage suffered in the "K ximo Gomez" plant at Mariel and the "Carlos
Manuel de, Cspedes" plant at Cienfuegos, which produce half the country's
electrical energy.


11/ Construction of the following extensions was completed in 1979: unit
4 of the "Carlos Manuel de Cispedes'" thermoelectric power station at
Cienfuegos (169 V1W); unit 7 of the "Maximo GCmez" thermoelectric
power station at Mariel (100 MW), and unit 4 of the "Rente" plant at
Santiago de Cuba (100 KM).
/The rationalization









- 13 -


The rationalization of fuel consurrtion in the thermoelectric power
stations continued and the fuel/kTWh ratio dropped from 290 to 284 grams,
This represents a saving of slightly over 150,000 tons of petroleum.
Lastly, the electricity distribution system continued to be improved
and the campaign to eliminate provisional lines (tendederas) reduced these
from 146,000 to only about .65,000.
(c) Construction
In 1979 the construction growth rate dropped notably; activity in
the sector grew by barely 0.8%, far below the rate of the previous year
(7.5%) which was itself in sharp contrast with the high average growth
rates of the first half of the 1970s (27%) (see table 1). In line with
this level of activity the construction materials industry maintained the
same production level as in 1978.
The lack of dynamism in this activity was due among.other causes to
the drop in the rate of investment, the reduced availability of convertible
currency, which restricted purchases of goods from market economy countries,
the delay in the delivery of external supplies, and various problems of
a domestic nature which particularly affected some industries producing
materials.
During the year, investment grew less than in previous periods and
was mainly earmarked for completing existing projects and, to a lesser
extent, starting on new construction work. In order to support the
apparatus of production and'basic services, an impulse was given to
industrial (5.5%) and railway (1%) works, although at a slower pace than
in previous years (see table 6). The importance of this type 6f. construction
has increased its relative participation in the sector from 13% in 1975 to
25% in 1979. Lastly, it should be mentioned that the shortage of resources
for investment made it necessary' to give less attention to other urgent
needs, notably housing.12/
Educational construction activities declined because of the reduction
in school infrastructure requirements resulting from.the preferential
attention given in the past to this type of building.


12/ However, during 1979 more materials for repairing dwellings were
distributed among the population than during other periods.
/Both the








14 -



Both the construction sector and the industries producing materials
for this activity were hampered by shortages in external supplies, which
were basically reflected in a drop in imports of timber, aluminium and
other items.
Various causes particularly the excess of iain during the month of
September, which paralysed activity in the quarries and delayed industrial
maintenance work made it impossible to reach the target of 3 million tons
of cement, and only slightly over 2.6 million tons were produced compared
with the 1978 level of 2,680,000 tons.
During 1979 the process of rationalizing the systems of construction
continued, resulting not only in a saving in materials but also in
increases in productivity per employed person.13/ This enabled Cuba to
obtain contacts abroad and owing to its growing importance it is expected
that this type of activity will employ around 25,000 workers in the next
few years. Among these contracts mention may be made of the construction
of a highway and 1,200 prefabricated houses in Libya; a highway and
1,500 houses in Iraq, and schools in Jamaica. In addition to these activities
which produce income for the country, mention should be made of co-operation
in construction of this type with countries of scanty resources. For
example, there are plans to co-operate in the establishment of a cement
plant with a production capacity of 300,000 tons in Ethiopia, in which
300 to 500 Cuban workers will take part.
In view of the dynamism of this new activity, the State set up a
corporation called Uni6n de Empresas Constructoras del Caribe (UNECA) to
promote this work and be responsible for it.

3. The external sector

Following the trend of the previous year, the trade deficit continued
to drop, after having reached one'of the highest levels of the 1970s in
1977 (520 million Desos) as a result of the increased imbalance in that


13/ Between 1971 and 1976 the productivity per employed.person in the
construction sector increased by nearly 45%.


/year in








- 15' -


year in trade with the market economy countries (see table 7), The
stabilization of imports, which fell by about 11% in real terms, was the
main balancing factor, since exports only increased by 2.5%, entirely as
a result of the rise in prices, since the quantum fell by slightly over 7%
on account of the reduction in sales of citrus fruits, tobacco and fishery
products and the maintenance of the volume of sugar exports.
The price of sugar in the world market remained almost stationary
during the first half of 1979 at between 7.52-and 8.52 US cents per pound,
with only slight fluctuations, but as from August, it rose to a monthly
average of more than 14 US cents, reaching 15.15 US cents per pound in
the first half of December. ''The price paid by the Soviet Union rose by
8% to 44 US cents per pound of sugar (see table 8).
In trade with the Soviet Union there were some changes from the trends
of the previous two years. Exports, whose value had grown at rates of
26% and 21%, dropped by 6%, and imports, which had risen by 25% during the
same period, only rose by 4%. This transformed the surplus of 179 million
pesos recorded in 1978 into a deficit, although only quite a small one
(68 million). It should be mentioned that as a result of the price-fixing
machinery for external trade with that country which has been in force since
1.975 and which links price increases in exports to those of imports,14/
the terms of trade remained at the level achieved that year.
In Cuba's trade relations with the market economy countries, the
increase in the value exported and the reductions in imports turned the
deficit of 214 million pesos of the previous year.into a surplus of
114 million (see table 7). The 'drop in imports nearly 20% in terms of
current value and over 30% in terms of the quantum was associated with
the policy of reducing to the minimum imports paid for in convertible
currency, since the lack of this in recent years has obliged Cuba to resort,
to short-term external indebtedness and thus considerably increased the
servicing of the debt in 1979. In oider to overcome this situation, the


14/ Tlis mechanism, known as a sliding base, means that starting from the
basis of a minimum price of 500 roubles per metric ton of raw sugar
increments are proportional to the -rise in the prices of goods -supplied
by the Soviet Union to Cuba.
/National Bank








- 16 -


National Bark of Cuba effected a renegotiation of the external debt
with the market economy countries.
As regards exports, the 38% increase in their current value was a
consequence of the above-mentioned rise in sugar prices (particularly
in the last three months of the year),15/ since.the volume sold remained
stationary. It should be mentioned that the Cuban Government was able to
profit from the increase in prices, thanks to the policy of conducting a
substantial proportion of sales in the free market during the last few
months of the year.16/
The terms of trade with the market economy countries, after having
fallen in 1978 to one of the lowest levels of the decade, recovered when
the prices of sugar, nickel, citrus fruits, fishery products and tobacco
rose. However, this recovery was not very.significant, since it only
slightly exceeded the 1977 level, while the price of sugar barely exceeded
the average production costs (see table 9).
In the field of external financial negotiations Cuba obtained bank
loans from market economy countries for an approximate value of US$ 230 million
far above the figure.of US$ 60 million contracted the previous year. Of
particular note was the 7-year credit from a consortium of European banks,
headed by the Credit Lyonnais, for 220 million Deutschmarks. In addition,
the Bank of Tokyo granted a 12,500 million yen loan, and the Belgian
Government granted a long-term loan 30 years with a 10-year grace
period of 100 million Belgian francs.17/








15/ In the last quarter of the year prices rose by 53%.
16/ In the last two months of 1979 Cuba sold 40% of its annual exports
on the free market.
17/ Together, these three credits amounted to roughly US$ 182 million.









Table 1

CUBA: MATERIAL PRODUCT, BY ECONOMIC SECTORS(a)
------ -------------------------------------------------------------------- --------------------------------
Millions of constant- Percentage
value pesos (b) breakdown Growth rates

1975 1976 1977 1978 1979(c) 1975 1979(c) 1976 1977 1978 1979(c)
------ -----------------------------------------------------------------------------
STotal material-product 8 142 8 431 8 690 9 404 9 634 100.0 100.0 3.5 3.1 8.2 2.4
Agriculture 1 607 1 665 1 735 1 842 1 892 19.7 19. 3.6 4.2 6.2 2.7
Sugar cane agriculture 554 557 629 684 ... 6.8 ... -0.5 12.9 8.7 ...
Non-sugar cane agriculture 365 384 362 378 ... 4.5 ... 5.2 -5.7 4.4 ...
Stock-raising 603 638 658 687 ... 7.4 ... 5.8 3.1 4.4 ...
Agricultural services 16 16 16 16 ... 0.2 ... -
Forestry 69 70 70 77 ... 0.8 ... 1.4 10.0 ...
Industry 5 285 5 446 5 505 6 003 6 171 64.9 64.1 3.0 1.1 9.0 2.8
Electrical energy 145- 159 184 206 240 1.8 2.5 9.7 15.7 12.0 16.5
Mining 60 65 72 73 74 0.7 0.8 8.3 10.8 1.4 1.4
Manufacturing (d) 5 080 5 222 5 249 5 724 5 85.7 62.4 60.8 2.8 0.5 9.0 2.3
Construction 1 250 1 320 1 450 1 559 1 571 15.4 16.3 5.6 9.8 7.5 0.8
-----------------------------------------------------------------------------------------
Source: CEPAL, on the basis of data from the State Statistical Committee of Cuba.
(Ta- The material product consists of the value of the gross production of the agricultural, mining, manufac-
t during, construction and electrical energy sectors.
1(b) The Anuario Estadistico de Cuba describes all this information as valued at current prices, whereas in
Desarrollo y perspectives de la economia cubana, (National Bank of Cuba) it is stated on page 23 that,
with the exception of commerce and transport, the "other sectors" -the material product plus
communications- are given at constant 1965 prices. In addition, sources in the State Statistical
Committee explained that as of 1965 prices were frozen for inputs and final goods in the agricultural,
industrial and construction sectors and only new products were valued at different prices from those
fixed then, but at prices frozen from the year in which they were incorporated in the Cuban economic
system. Thus, the terms "current prices" and "constant prices" are equivalent in the case of the
material product (at producer prices), and bearing in mind -according to the above-mentioned source- that
the group of new products is very small, it is considered that the interpretation stemming from the
resulting real growth rates is not affected.
(c) Preliminary figures.
d) Including the fishing industry.










Table 2


CUBA: STATE PURCHASES OF SELECTED AGRICULTURAL PRODUCTS(a)(b)
(Indexes of physical volume: 1970 = 100)

1972 1973 1974 1975 1976 1977 1978 19

Agricultural products
Roots and tubers 173.5 175.8 198.4 242.4 267.5 223.0 323.1
Grains (d) 85.1 83.8 108.4 116.4 .113.9 112.7 116.1
Rice 82.2 81.3 106.3 116.2 115.2 114.9 118.3
Vegetables (e) 115.3 183.5 250.8 285.5 269.5 198.6 199.3
Fruits 148.3 165.1 170.1 175.2 195.2 178.6 181.2
Coffee 128.6 106.5 145.9 90.1 96.4 79.7 68.0
Cocoa 142.9 131.3 102.0 93.7 111.9 96.7 121.9
Tobacco 124.6 137.2 141.0 130.6 159.9
Livestock products
Eggs 107.6 113.1 120.1 124.7 121.1 119.7 123.7
Fresh milk 160.6 176.9 196.3 211.9 246.1 262.3 284.3
Poultry 145.5 175.1 222.1 273.4 303.3 307.0 281.4
Cattle 92.4 79.2 66.8 64.2 76.9 79.0 82.1
Pigs 145.7 175.0 256.0 321.7 388.4 438.1 469.9

Source: CEPAL, on the basis of the Anuario Edsadistico de Cuba and the State Statistical Commi
-(a) See Anuario estadistico de Cuba, 1975, p. 50: "State purchases (acopio) are the sum of
purchases and receipts of agricultural products made directly from the agricultural un
distributive, wholesale and industrial enterprises (both for resale and for processing).
agricultural productive units selling to the State may be State farms, other State entil
private co-operatives and other private entities". See also on p. 87: "Excludes purcl
in the form of imports".
(b) Excludes State and private self-consumption.
(c) Preliminary figures.
(d) Includes rice, maize, millet and beans.
(e) Includes tomatoes, cucumbers, pumpkins, onions, chili peppers, garlic, melons, eggplant,
others.












CUBA: INDICATE
?*** *~--~----------------------




-al manufacturing sector
',Ilon-durable consumer goods
industry
'-.Food (excluding sugar)
Sugar and sugar products
'Beverages and tobacco
T Ready-made clothing
Fisheries
$ Printed matter
intermediatete goods industry
.Textiles
". Chemicals
S Fuel.s
Construction materials
. .: Basic metal products
Consumer durables and capital
. 2 oods industry
:Construction on non-electrical
machinery
Electrotechnical and electronic
goods
SMetal products
other manufactures (b)


Table 3

'ORS OF THE MANUFACTURING MATERIAL PRODUCT
-------------l--------------------- I---------------------- I----,-


Indexes (1975 = 100)


Growth rates


1976 1977 1978 1979(a) 1976 1977 1978 1979(a)

102.8 103.3 112.7 115.3 2.8 0.5 9.1 2.3


103.2
101.5
97.2
112.9
104.2
124.1
104.2
99.5
100.8
99.4
96.1
104.7
99.5


108.0
105.0
109.7
105.6
120.3
120.4
111.8
94.6
89.8
84.5
94.2
111.8
119.7


115.3
107.0
125.7
111.1
134.0
138.1
115.3
101.5
92.9
96.6
98.6
115.1
121.0


116.0
105.9
130.0
110.2
139.9
125.2
126.6
102.9
88.0
101.1
98.8
115.1
124.6


3.2
1.5
-2.8
12.9
4.2
24.1
4.2
-0.5
0.8
-0.6
-3.9
4.7
-0.5


111.1 111.3 132.5 152.1 11.1

117.3 122.6 148.5 172.8 17.3


97.6
103.8
101.8


76.4
105.9
98.1


87.3
121.8
112.0


106.0
128.0
111.6


4.7
3.4
12.9
-6,5
15.5
-3.0
7.3
-4.9
-10.9
-15.0
-2.0
6.8
20.3


6.8
1.9
14.6
5.2
11.4
14.7
3.1
7.3
3.5
14.3
4.7
3.0
1.1


0.6
-1.0
3.4
-0.8
4.4
-9.3
9.8
L4

4.7
0.2

3.0


0.2 19.0 14.8


.5 21.1
4.5 21.1


-2.4 -21.7
3.8 2.0
1.8 -3.6


14.3
15.0
14.2


16.4

21.4
5.1
-0.4


1.rce: CEPAL, on the basis of data supplied by the State Statistical Committee (CEE).and
Indicadores econ6micos seleccionados, 1978.
,l Preliminary figures.
|IIncluding, Inter alia: leather industry, glass and pottery, paper and pulp, forestry and
i timber processing.









.Table 4


CUBA: INDICATORS OF FISHERY PRODUCTION
---------------------------------- 7-------------------------------
1975 1976 1977 1978

Thousands of tons
Fish 117.5 145.1. 135.1 162.1
Crustacea 20.0 21.7 18.0 20.6
Molluscs and others (b) 6.0(c) 27.2 31.9 29.2
Index base 1970 = 100
Fish 114.4 173.5 161.5 193.8
Crustacea 143.7 156.3 129.2 148.2
Molluscs and others (b) 71.5(c) 322.6 378.1 346.0
Growth rates
.Fish ... 23.5 -6.9 20.0
Crustacea ... 8.8 -17.3 14.7
Molluscs and others (b) ... 351.3 17.2 -8.5

Source: CEPAL, on the basis of data from the Anuario estadistico de Cuba, and the State Stati
Committee.
(a) Preliminary figures.
(b) Including molluscs, turtles, sponges, trash fish and batrachians.
(c) Excluding trash fish.









Table 5


CUBA: BASIC INDICATORS OF'THE SUGAR INDUSTRY.

Production Industrial Shgar cane milled per
(thousands of tons) (a) yield Days day (tons)
------------- base-------- -----------
Sdgar cane Raw sugar 960 Nominal
milled base 960 percentagee) harvest Actual Harvest Actual

*O 47 492 5 943 12.51 103 88 466 289 542 344
il -54 325 6 876 12.66 133 104 408.731 522 186
i2 36 686 4 882 13.31 104 76 354 144 483 422
3 i 31 413 3 833 12.36 94 68 333 110 461 013
t 37.196 4 475 12.03 118 82 316 065 454 099
A5 .50 687 6 156 12.15 .130 105 388 449 482 050
i6 36 840 4 537 12.32 102 76 359 453 481 816
T7 50 880 6 236 12.26 133 101 382 985 502 638
-a 42 368 5 165 12.19 113 87 375 582 486 470
9 40 476 4 450 11.02 135 86 299 077 471 018
0 79 678 8 538 10.71 217 143 367 442 557 818
i 51 548 5 925 11.49 166 101 309 610 509 974
'2 43 545 4 325 9.93 153 91 284 750 476 579
f3 47 459 5 253 11.07 135 92 352 770 514 824
F[ 49 562 5 930 11.95 128 95 386 986 519 823
50 769 6 315 12.44 123 99 413 700 513 511
6 51 999 6 151 11.84 130 99 399 100 526 900
7 56 149 6 485 11.55 141 104 399 600 542 500
S: 69 653 7 351 10.55 168 119 400 100 562 700
3(b) 73 050 7 992 10.94 182 118 402 200 571 400

irce: 1960-1970: Central Planning Board Statistical Bureau, Boletin estadistico, 1970; 1971-1975:
S State Statistical Committee, Anuario estadistico de Cuba, 1975; 1976-1979: State
SStatistical Committee.
SSugar cane harvest year.
SPreliminary figures.









Table 6


CUBA: GROSS PRODUCTION OF THE CONSTRUCTION SECTOR(a)

Percentage
Indexes (1975 = 100) breakdown Growth rates

1976 1977 1978 1979 1975 1979 1976 1977 1978

Sectoral total 105.7 114.4 123.1 123.2 100.0 100.0 5.7 8.2 7.6
Agriculture 3.3 67.7 6.6 65.4 4 4.5 -16T -1i7 278 *
Housing and
urbanization 91.8 97.8 91.7 86.8 12.6 8.9 -8.2 6.5 -6.2
.Education 108.7 96.3 84.2 68.4 16.9 9.4 8.7 -11.4 -12.6
Industry 122.1 180.1 214.3 226.1 11.7 21.5 22.1 47.5 19.0
Water resources 106.8 108.4 113.8 101.7 9.5 7.8 6.8 1.5 5.0
Highways (exclud-
ing railways) 109.1 100.3 97.5 92.7 13.8 10.4 9.1 -8.1 -2.8
Railways 142.4 267.2 280.2 283.6 1.5 3.4 42.4 87.6 4.9
Hidrological works 100.5 113.6 118.2 110.5 1.9 1.6 0.5 13.0 4.0
Shipping
facilities 135.3 123.4 128.6 117.8 2.2 2.1 35.3 -8.8 4.2
Others 103.2 121.4 .153.2 174.3 21.5 30.4 3.2 17.6 26.2
-- ---------------------------------- ------------------------------ -------------------
Source: State Statistical Committee, Indicadores econ6micos seleacionados, 1978.
Ta) Does not correspond to the total since it excludes geological exploration, drilling and
geodesy and the preparation of construction projects.








Table 7


CUBA: EXPORTS, IMPORTS AND TRADE BALANCE
(Millions of cuban pesos)

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979

:.'.al -Exports 1 050 861 771 1 153 2 237 2 947 2 692 2 912 3 417 3 501
,i :..'. t, Union 529 304 224 477 811 1 661 1 638 2 066 2 496 2 346
': Rest of socialist
countries 248 261 197 268 472 341 452 378 410 451
SRest of world 273 296 350 408 954 945 602 468 511 704
l:tal imports 1 311 1 387 1 190 1 463 2 226 3 113 3 180 3 433 3 558 3 535
Soviet Union 691 731 712 TT 1 025 1 250 1 T90 T858 2 317 2
Rest of socialist
countries '226 239 200 224 328 354 374 467 516 531
Rest of world 394 417 276 428 873 1 509 1 316 1 108 .725 590
i;tal balance -261 -526 -499 -310 11 -166 -488 -521 -141 -34
Soviet Union -162 -427 -490 -334 -214 411 148 208E 179 -65
Rest of socialist
countries 22 22 -3 44 144 -13 78 -89 -106 -80
Rest of world -121 -121 74 -20 81 -564 -714 -640 -214 114

"I-e: For the period 1970-1978, CEPAL, on the basis of data from the Anuario estadistico de Cuba and the
State Statistical Committee; for 1979, CEPAL estimates on the basis of external trade information for
the Soviet Union, The International Sugar Organization, the Group of Latin American and Caribbean
Sugar-Ekporting Countries (GEPLACEA) and other international information.


Table 8

CUBA: PRODUCTION EXPORTS AND EXPORT PRICES OF SUGAR

Thousands of tons US cents per pound

Price paid Price on
Sugar Sugar by the the world
production exports Soviet Union market (a)
i _~~-------.-....-----------------------------------------------------------------------
O 8 538 6 906 6.11 3.68
371 5 925 5 511 6.11 4.50
2 4 325 4 140 6.11 7.27
73 5 253 4 797 12.02 9.45
3 5 925 5 491 19.64 29.66
75' 6 314 5 744 30.40 20.37
75 6 156 5 764 30.95 11.51
"T? 6 485 6 238 35.73 8.10
73 7 351 7 231 40.78 7.82
"T3 7 992(b) 7 269(b) 44.00 9.65(b)

zcce: CEPAL, on the basis of the Anuario estadistico de Cuba; National Bank of Cuba, Desarrollo
y,perspectivas de la economic cubana; International Sugar Organization, and other
international statistics.
~3 International Sugar Agreement price.
i) Preliminary figures.










Table 9


CUBA: MAIN INDICATORS OF FOREIGN TRADE(a)
(Indexes 1970 = 100)

1971 1972 1973 1974 1975 1976 1977 1978.
-----------------------------------------------------------------------
Exports of goods
Value
Soviet Union 57.5 42.3 90.2 153.3 314.0 309.6 390.5 471.8 4
* Market economy
countries 108.4 128.2 149.5 349.5 346.2 220.5 171.4 187.2 2
Volume
Soviet Union 56.3 42.7 55.6 59.0 87.1 85.3 105.1 111.2
tMarket econaay
countries &7.5 78.4 91.9 91.9 87.2 81.3 96.2 108.0 1
Unit values
Soviet Union 102.0 98.9 162.5 260.0 360.0 362.9 371.7 424.1 4
Market economy
countries 124.0 163.7 162.7 300.6 396.8 27.1.7 178.1 173.3 2
Imports of goods
Value
Soviet Union 105.8 103.3 117.4 148.3 180.9 215.6 268.9 335.3
Market economy
.countries 105.8 70.1 108.6 221.6 383.0 334.0 281.2 184.0 1
Volume
Soviet Union 100.6 95.7 103.6 108.5 101.0 119.8 145.9 159.1
Market economy
countries 99.2 66.5 101.0 164.0 273.6 250.3 186.5 108.2
Unit values
Soviet Union 105.2 108.0 113.2 136.7 179.2 180.0 184.3 210.7
Market economy
countries 106.7 105.2 107.6 135.2 140.0 133.5 150.8 170.1 1
Terms of trade for
goods
Soviet Union 97.0 91.6 143.6 190.2 200.9 201.6 201.7 201.3 2
Market economy
countries 116.2 155.6 151.2 281.5 283.4 203.5 118.1 101.9 1
--------------------------------------------------------------------------------------------------------
Source: CEPAL, estimates on the basis of data from the Anuario estadistico de Cuba, Foreign Trade Yearboo!
the Soviet Union; the Monthly Bulletin of Statistics and other international statistics.
(a) Not including trade with the socialist countries, apart from the Union of Soviet Socialist Republics.




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