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Economy

Cuba’s Economy Was Hurting. The Pandemic Brought a Food Crisis.

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HAVANA — It was a lucky day for the unemployed tourism guide in Havana.

The line to get into the government-run supermarket, which can mean a wait of eight or 10 hours, was short, just two hours long. And better yet, the guide, Rainer Companioni Sánchez, scored toothpaste — a rare find — and splurged $3 on canned meat.

“It’s the first time we have seen toothpaste in a long time,” he said, sharing the victory with his girlfriend. “The meat in that can is very, very expensive, but we each bought one simply because sometimes in an emergency there is no meat anywhere.”

Cuba, a police state with a strong public health care system, was able to quickly control the coronavirus, even as the pandemic threw wealthier nations into crisis. But its economy, already hurting from crippling U.S. sanctions and mismanagement, was particularly vulnerable to the economic devastation that followed.

As nations closed airports and locked down borders to combat the spread of the virus, tourist travel to Cuba plummeted and the island lost an important source of hard currency, plunging it into one of the worst food shortages in nearly 25 years.

What food is available is often found only in government-run stores that are stocked with imports and charge in dollars. The strategy, also used in the 1990s, during the economic depression known as the “special period,” is used by the government to gather hard currency from Cubans who have savings or get money from friends or relatives abroad.

Even in these stores, goods are scarce and prices can be exorbitant: That day, Mr. Companioni couldn’t find chicken or cooking oil, but there was 17-pound ham going for $230 and a seven-pound block of manchego cheese with a $149 price tag.

And the reliance on dollar stores, a move intended to prop up the socialist revolution in a country that prides itself on egalitarianism, has exacerbated economic inequality, some Cubans say.

Police officers in Havana organizing a line of people waiting to buy food. Lines are often many hours long.
Credit…Alexandre Meneghini/Reuters

“This is a store that charges in a currency Cubans do not earn,” said Lazaro Manuel Domínguez Hernández, 31, a doctor who gets cash from a friend in the United States to spend at one of the 72 new dollar stores. “It kind of marks the difference in classes, because not everyone can buy here.”

He left the Puntilla supermarket with a cart full of fruit cocktail, cheese and chocolate biscuits that he loaded into a 1950s Dodge taxi.

Cuba’s economy was struggling before the coronavirus. The Trump administration has worked hard to strengthen the decades-old trade embargo, going after Cuba’s sources of currency. It also imposed sanctions on tanker companies that delivered petroleum to Cuba from Venezuela and cut back on the commercial flights from the United States to the island.

Last month, Secretary of State Mike Pompeo announced an end to charter flights, too. After the Cuban state energy company Corporación Panamericana faced sanctions, even cooking gas rations had to be reduced.

Then Covid-19 put a stop to tourism. Remittances sent by Cubans who live abroad began to dry up as the illness led to huge job losses in the United States.

That left the Cuban government with far fewer sources of revenue to buy the products it sells in state-run stores, leading to shortages of basic goods throughout the island. Earlier this year, the government warned that personal hygiene products would be hard to come by.

Cuba is facing “the triple threat of Trump, Venezuela and then Covid,” said Ted A. Henken, a professor at Baruch College and a co-author of the book “Entrepreneurial Cuba.” “Covid was the thing that pushed them over the edge.”

Credit…Yamil Lage/Agence France-Presse — Getty Images

The pandemic, and the recession that followed, pushed the government to announce that, after years of promises, it would make good on a series of economic reforms intended to stimulate the private sector.

The Communist Party said in 2016 that it would legalize small and medium-size private businesses, but no mechanism was ever set up to do so, thus business owners are still unable to get financing, sign contracts as a legal entity or import goods. Now, that is expected to change, and more lines of work are expected to be legalized, although details have not been announced.

Cuba also has a history of offering reforms only to rescind them months or years later, entrepreneurs said.

“They go back, go forward, then back again,” said Marta Deus, the co-founder of a business magazine who owns a delivery company. “They need to trust the private sector for all its capacity to provide for the future of the economy. We have big ideas.”

The government puts the blame for the current situation squarely on Washington.

“Why can’t we export what we want? Because every time we export to someone, they try to cut off that export,” President Miguel Díaz-Canel said of the United States in a speech this summer. “Every time we are trying to manage a credit, they try to take away our credit. They try to prevent fuel from reaching Cuba. And then we have to buy in third markets, at higher prices. Why is it not talked about?”

Mr. Díaz-Canel stressed that despite the hardships, Cuba still managed a successful battle against the coronavirus: The health system did not collapse, and, he said, no children or medical professionals died of the disease.

With 11.2 million people, Cuba had just over 5,000 coronavirus cases and 115 deaths by Friday, one of the lowest mortality rates in the world. By comparison, Puerto Rico, with 3.2 million people, had five times as many deaths.

People who tested positive in Cuba were whisked away to the hospital for two weeks — even if they were asymptomatic — and their exposed contacts were sent to isolation for two weeks. Apartment buildings, and even entire city blocks, that saw clusters were closed to visitors.

Credit…Yamil Lage/Agence France-Presse — Getty Images

Anyone flying in after March also had to isolate in quarantine centers, and medical students went door to door to screen millions of people daily. Masks are mandatory, and the fines for being caught without one are stiff.

With international flights at a virtual standstill, immigration officers are now assigned to stand guard outside quarantined apartment buildings, making sure no one goes in or out 24 hours a day.

At a quarantined building in Boyeros, a neighborhood near the Havana airport, an immigration officer sat in the shade while messengers and family members of those inside dropped off food. Daniela Llanes López, 21, left vegetables for her grandfather, who was stuck inside because five people in his building had tested positive.

“In Cuba, I don’t know anyone who knows anyone who got the coronavirus,” said Ms. Llanes, who studies German at the University of Havana, noting that she does know people in Germany who contracted the illness.

The strategies worked, although when the authorities started lifting restrictions in July, opening beaches, bars and public transportation, the nation’s capital saw an uptick in cases and a curfew was imposed there.

“Cuba is good in crisis and good in preventive health care,” said Katrin Hansing, a professor at Baruch College who spent the peak of the pandemic in lockdown in Cuba. Support for the government was notable, she said; even if the store lines were long, people felt safe from the virus.

Many Cubans are now hoping the economic reforms will stimulate the private sector and allow independent business operators to kick-start the economy.

Camilo Condis, an electrical contractor who has been out of work for months, said the changes must come quickly, and must allow Cuba to function, whether the United States is under a second Trump presidency, or under Joe Biden.

“Like we private business owners say here: ‘All I want is for them to let me work,’” he said.

Credit…Ramon Espinosa/Associated Press

Ed Augustín reported from Havana, and Frances Robles from New York.

Source:- The New York Times

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Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

The Canadian Press. All rights reserved.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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