• Submitted by: admin
• Business and Economy
• 06 / 04 / 2010

HAVANA (AP) -- Cuba's foreign trade plunged by more than a third in 2009, with imports from traditional allies including Venezuela and China down sharply, the latest sign that the island is wrestling with a deep financial crisis.

Trade for 2009 totaled $12.7 billion, down 34 percent from the $19.3 billion registered the previous year, according to statistics released Thursday by the government's National Statistics Office.

The sobering figures are in line with previous disclosures that showed trade to major trading partners down by about a third.

Cuba's economy is weak in the best of times, but its condition has worsened considerably due to the global economic crisis, a drop in the global price of raw materials such as nickel, and the fallout from three devastating 2008 hurricanes.

The government has been forced to cut back on deep subsidies that Cubans rely on to make ends meet.

Under Cuba's system, workers make a tiny salary of about $20 a month, but the state provides free education and health care, virtually free housing and transportation, and ration cards that can be used to purchase a limited amount of heavily subsidized food.

President Raul Castro has warned repeatedly that some of the subsidies must be phased out and that belt-tightening is in order. He has urged his countrymen to increase production and cut out waste.

The government has also been on an anti-corruption drive, firing a number of senior officials.

The statistics released Thursday show imports were down the sharpest, falling 37 percent to $9.6 billion, from $15.4 billion in 2008. Exports for 2009 fell 21 percent to $3.1 billion.

The larger drop in imports brought a silver lining: Cuba reduced its trade imbalance for the year to $6.5 billion, down from $11.4 billion in 2008.

Imports of fuel and related products fell to $2.9 billion, down 42 percent from the 4.9 billion registered in 2008. Cuba has urged its citizens to use less fuel, and has clamped strict controls on the use of air conditioners and gasoline in offices and by state workers.

Food imports were also down, dropping to $1.6 billion from the $2.4 billion registered in 2008.

The news follows reports from China and the United States showing a severe drop in Cuban imports.

The United States has maintained a trade embargo on Cuba for 48 years, but an exception allows Cuba to purchase food products from its northern neighbor.

Paul Haven, Associated Press Writer

Source: Finance.yahoo.com