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Venezuela's Economic Downturn Forces Austerity Measures In Cuba


It's been a hot and tough summer in Cuba. Despite a tourism boom in the wake of warmer relations with the U.S., the Cuban economy is hurting. The island's benefactor, Venezuela, is suffering its own economic spiral downward and has drastically cut oil subsidies to Cuba. For the first time in decades, Cubans are dealing with power outages and transportation shortages. Communist Party officials say the last half of this year will be even tougher. NPR's Carrie Kahn is in Havana and joins us now. Good morning.

CARRIE KAHN, BYLINE: Good morning, Renee.

MONTAGNE: And ever since, Carrie, the U.S. and Cuba re-established diplomatic ties, we've been hearing about this flood of tourists rushing to the island. Why isn't that helping the economy more?

KAHN: Well, there are other really important moneymaking sectors here, and they're hurting. Like, for example, nickel is a commodity that's just had a worldwide price plunge. And the Cuban sugar crop, it hasn't been so great. So tourism is growing, but it can't do it all. You know, they've seen 3 million - more than 3 million tourists in the last year. That's a 20-percent rise over the previous year. But they just don't have the infrastructure to really get at all that money.

There's two large construction cranes on the historic Old Havana Skyline. I've never seen that before. They're building big, huge hotels. And direct flights from the U.S. to the island started last week, so they're expecting even more tourists. It's just how can Cuba really grab at that money and really take advantage of this boom?

MONTAGNE: Well, at the moment, to deal with this weakening economy, I gather the government has announced austerity measures.

KAHN: Yes, they have. They began in July. They started putting out all these warnings that they're really going to have to cut back on gas supplies, and that's been a big hit to Cuba's rough-and-tumble transportation system here. There are very few public buses, and there's always long lines. And you see these buses just stuffed to the gills. So many depend on this network of private taxis to get around the city.

You know, we see all those old, fancy cars, but those are for the tourists only. What the regular Cubans use are old, rundown cars. Nearly all those independent taxis bought their gas on the black market. And now, with these cuts and the oil subsidies and cuts to the gasoline supply, the black market's really drying up. And they just take their taxes off of the streets, so there's a lot of trouble getting around. It's really tough right now.

MONTAGNE: Well, all of what you just described suggests that detente with the U.S. hasn't necessarily helped ordinary Cubans, even though, in a way, that was how it was billed - better relations would help, not hurt at all.

KAHN: Right. What it also did was it raised expectations among foreign investors that came here and from Cubans, too, especially after Obama's historic visit here. That was in March, so just three months later they announced these austerity measures. It's just been a rough rollercoaster of emotions for Cubans.

MONTAGNE: Does that mean, then, that a lot of Cubans are leaving, given these tough times?

KAHN: Yes, a lot of Cubans are leaving, especially with, you know, all the tough talk in the U.S. election about cracking down on immigration and the possible end of the preferential immigration treatment that Cubans get who land on U.S. soil. So there is a fear that that's going to end, and that's pushing this tide of Cubans out, too, along with the terrible economic situation here.

The numbers are up of the amount of Cubans coming to the U.S. that, even in the last three years, if you total up those numbers, Renee, it's approaching that number that came during the Mariel boatlift. If you can imagine that now, when the austerity measures and the times are not as difficult, it's a huge number of Cubans that are leaving.

MONTAGNE: Carrie, thanks very much.

KAHN: You're welcome, Renee.

MONTAGNE: NPR's Carrie Kahn speaking to us from Havana, Cuba. Transcript provided by NPR, Copyright NPR.

Carrie Kahn is NPR's International Correspondent based in Mexico City, Mexico. She covers Mexico, the Caribbean, and Central America. Kahn's reports can be heard on NPR's award-winning news programs including All Things Considered, Morning Edition and Weekend Edition, and on NPR.org.
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