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Cubans are bracing for hard times in 2010 as President Raul Castro slashes imports and cuts government spending to get Cuba out of crisis -- and they are growing impatient with the slow pace of economic reform.

Hurricanes, the global recession, U.S. sanctions and the inability of the communist-run island's command economy to maneuver have put an end to recovery from the 1990s crisis that followed the Soviet Union's demise.

Local economists agree there will be little if any growth this year for the first time in more than a decade as Cuba battles a cash crunch that has forced it to stop paying bills and freeze bank accounts of some foreign companies in Cuba.

Castro, trying to balance books overflowing with red ink, has reduced imports this year by a third, or some $5 billion, and cut local budgets and energy consumption.

Cuba is dependent on imports, including food and fuel, of which about 70 percent of what it consumes comes from abroad.

The communist government gets moral and economic support from Venezuelan President Hugo Chavez and other leftist leaders in Latin America, as well as China, but Cuba's income from tourism and exports of nickel, petroleum derivatives, cigars and shellfish has fallen sharply this year.

The austerity moves were necessary after Cuba's trade deficit soared 65 percent and its current account, which measures the inflow and outflow of foreign exchange, went from a $500 million surplus in 2007.  

Castro's budget-cutting will put the current account into the black this year and "he intends to keep it that way in 2010," said one economist, indicating the belt-tightening will not end soon.

Castro, who took over as president from his ailing brother Fidel in 2008, makes no bones about dismantling the paternalistic economic and social model he inherited.

"Let's not deceive ourselves," he told the National Assembly a year ago. "If there is no pressure, if the people do not need to work in order to cover their necessities, and if we continue to give things for free here and there, we shall lose our voice calling people to work."


Castro, who served as defense minister for decades, in March replaced most of the economic cabinet he inherited, filling key posts with former and active military officers.

He has implemented reforms in agriculture, wage structures and some other areas but the changes have so far been small and reached few of the island's 11 million people.

There has been speculation he would take measures such as allowing small businesses to operate and putting some of the retail sector in the hands of semi-private cooperatives.  


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