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Monday, September 28, 2009

No more free lunch in Raul Castro's Cuba

By Isabel Sanchez:

HAVANA, Cuba (AFP) -- President Raul Castro is taking a bold gamble to ease communist Cuba's cash crunch by eliminating a costly government lunch program that feeds almost a third of the nation's population every workday.

The Americas' only one-party communist government, held afloat largely by support from its key ally Venezuela, is desperate to improve its budget outlook; the global economy is slack, and Havana is very hard pressed to secure international financing.

Cuban President Raul Castro. AFP PHOTORaul Castro, 76, officially took over as Cuba's president in February 2008 after his brother, revolutionary icon Fidel Castro, stepped aside with health problems.

Though some wondered if Raul Castro would try to move Cuba's centralized economy toward more market elements, so far he has sought to boost efficiency and cut corruption and waste without reshaping the economic system.

And so far it has been an uphill battle, something akin to treading water.

But now, Raul Castro has moved to set in motion what will likely be the biggest rollback of an entitlement since Cuba's 1959 revolution -- starting to put an end to the daily lunch program for state workers, as announced Friday in Granma, the Cuban Communist Party newspaper.

In a country where workers earn the average of 17 dollars a month, and state subsidized monthly food baskets are not enough for families, more than 3.5 million Cuban government employees -- out of a total population of 11.2 million -- benefit from the nutritionally significant free meal.

The pricetag is a cool 350 million dollars a year, not counting energy costs or facilities maintenance, Granma said.

But that will come to a halt in four ministries experimentally from October 1, Granma said. As workers stream to the 24,700 state lunchrooms, the government "is faced with extremely high state spending due to extremely high international market prices, infinite subsidies and freebies," Granma explained.

Parallel to the cutback, workers will see their salaries boosted by 15 pesos a workday (.60 dollar US) to cover their lunch.

It is a dramatic shift in Cuba, where the government workers' lunchroom has been among the longest-standing subsidies, though even authorities have called it paternalistic.

And more troubling, especially for authorities, is the fact that the lunchrooms' kitchens have become a source of economic hemorrhaging, from which workers unabashedly make off with tonnes of rice, beans, chicken and cooking oil to make ends meet.

The Castro government is keen to reduce the 2.5 billion dollars a year it spends on food imports, which it has to buy on the international market in hard currency.

"Nobody can go on indefinitely spending more than they earn. Two and two are four, never five. In our imperfect socialism, too often two plus two turn out to be three," Raul Castro said in an August 1 address alluding to corruption problems.

Some Cubans were aghast at the idea of losing a free lunch.

"What am I going to buy with 15 pesos," asked a bank worker, who spoke on condition of anonymity. "I cannot even make anything, even something horrible, at home for that little."

But Roberto Reyes, a construction employee, said sometimes the state lunch is so bad, he would rather not eat it -- and pocket the small monthly raise.

The president has said health care and education were not cuts he would willingly make.

But Cubans wonder how long it will be until the legendary monthly ration books with which Cubans receive limited basic food goods, such as rice and beans, for free, come under the budget axe.

September 28, 2009