Economy, crime and bloggers added to Cuba's woes in 2009

Raul Castro was right, when he predicted on Jan. 1 that 2009 would be a tough year for Cuba.

Havana faced its worst economic crisis in 20 years, myriad scarcities, freezing foreigners' deposits in its banks — with promised reforms stalled and its political cohesion put in doubt by one of the revolution's worst-ever leadership purges.

Crime and corruption increased, according to official reports. Bloggers as well as black Cubans fired increasingly daring darts at the government, but Castro gave no ground on human rights.

Brother Fidel Castro, meanwhile, often appeared to veto deep reforms intended to help Cuba survive, and ended the year apparently far healthier than he was at the beginning.

At the root of Cuba's crisis is its centralized, unproductive communist-styled economy, $10 billion in damages caused by three hurricanes in 2008 and a global recession that shriveled virtually all the sources of Cuba's income.

The price of main export nickel plunged by half, income from tourism sank by 10 percent and foreign credits dropped by a reported $1 billion -- a devastating blow to an island long accustomed to financing its operations by taking out loans to pay old debts.

Throughout the year, the government railed against admitted economic mismanagement and exhorted Cubans to tighten their belts and work harder. And while Castro initially promised ``structural'' reforms to improve the economy, his actual steps were more tentative. ``Raúl has done more to diagnose the problems than to solve them,'' said Phil Peters, a Cuba expert with the Lexington Institute think tank in suburban Washington.

With his coffers empty, Castro set out to cut government spending and imports, step up production and reduce labor inefficiencies. In the most telling sign of Cuba's crisis, he also reportedly froze at least $600 million in foreign businesses' deposits in Cuban banks.

"It's one thing to fail to pay a loan, but to seize money in Cuban banks, that tops it all and shows the chaos in the country," said dissident Havana economist Oscar Espinosa Chepe.

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