Cuba's declining trade betrays depth of its crisis
Tue Oct 20, 2009 3:52pm EDT
By Marc Frank
HAVANA (Reuters) – Business between Cuba and four of its top five
trading partners has declined sharply this year in a reflection of the
communist-led Caribbean island's deep economic crisis, trade reports
from the countries said.
Reductions in exports to and imports from Cuba ranged from 20 percent to
as high as 50 percent, according to the reports from China, Spain,
Canada and the United States. In descending order, they are the top
traders with Cuba after Venezuela.
Numbers were not available for Venezuela, which is the leading economic
and political ally of Cuba's government and supplies the island with oil.
China, Cuba's second trading partner, reported that imports from the
island fell 48.2 percent to $368 million through August, while Chinese
exports to Cuba dropped 12.7 percent to $641.9 million.
Spain, tied with Canada as the island's third biggest trading partner,
said its exports to Cuba declined 43 percent to $394 million through
July, while imports were down 24 percent to $91 million.
Canada, which did $1.4 billion in trade with Cuba last year, said
exports plummeted 52.4 percent to $242 million through August and
imports fell 55.7 percent to $283 million.
The United States, which is Cuba's fifth trading partner despite its
47-year-old trade embargo against the island, said sales to Cuba totaled
$383.8 million through August, down 23 percent.
Most U.S. exports to Cuba are agricultural products, which are permitted
under an exemption to the embargo.
While no information was available from Venezuela, Cuba's close
socialist ally, it is likely the value of its exports to the island —
mostly oil — will fall dramatically from 2008's $5.3 billion due to
lower oil prices.
Cuba's economy has been spiraling downward since last year when three
damaging hurricanes raked the country, followed by the onset of the
global financial crisis.
The combination of rising prices for its imports and declining value of
its key exports also depleted cash reserves to the point that the
government froze the local accounts of hundreds of foreign businesses
and stopped or slowed payments to many foreign creditors.
Cuba's government has forecast a decline of $500 million in export
revenues this year and slashed imports by 22.5 percent.
The island's trade deficit soared to $11.4 billion in 2008, up 65
percent, according to the National Statistics Office.
(Editing by Jeff Franks and Diane Craft)
Cuba's declining trade betrays depth of its crisis | Reuters (20 October