December 16, 1999
Increase in tourism boosts Cuban economy

                  HAVANA (Reuters) -- Communist-run Cuba, still recovering from the
                  collapse of the Soviet bloc a decade ago, nevertheless reported on Thursday
                  that its economy had grown by 6.2 percent, one of the fastest rates in Latin
                  America or the Caribbean.

                  The official preliminary growth figure was based primarily on an improved
                  1998-99 sugar harvest and continued rapid growth of the Caribbean island's
                  tourism sector.

                  It compared with just 1.2 percent growth in 1998.

                  "It has been a positive year because the process of gradual economic
                  recovery is continuing," Osvaldo Martinez, of the National Assembly's
                  economic commission, told a briefing of Cuban state reporters. His
                  comments were later obtained by Reuters.

                  Martinez added Cuba could expect its gross domestic product to grow a
                  healthy four to 4.5 percent in 2000.

                  Cuba's economy has been growing steadily since 1994, although last year's
                  rise was slowed by a combination of drought, hurricane damage and low
                  commodity prices.

                  Prior to that, the economy shrank a remarkable 35 percent between 1989
                  and 1993 under the shock of the Soviet collapse and the subsequent loss of
                  aid and generous trade ties.

                  Despite the impressive 1999 growth figure, Cuba's economy still needs
                  years to reach the point it was at before the Soviet collapse, analysts say.

                  There is a chronic shortage of hard currency, Cuba's 11 million inhabitants
                  are still feeling the squeeze and the government has still not announced an
                  end to the "Special Period," its euphemism for economic hard times.

                  Other figures given Thursday by officials from Cuba's Economy and Planning
                  Ministry showed 1999 growth was again led by the booming tourism sector,
                  up 20 percent this year.

                  The 1998-99 sugar harvest of 3.78 million tons -- up from a 50-year low of
                  3.2 million the previous year -- also played an important part in boosting
                  growth. That sector grew 7.0 percent, while industry grew 4.5 percent.

                  Martinez said 1999 was the first time in years that all sectors of the
                  economy, including sugar, had grown. "Cuba will have, in 1999, the highest
                  growth rate in Latin America," he said.

                  The United Nation's Chile-based Economic Commission for Latin America
                  predicted Thursday, however, that Costa Rica would grow by 7.5 percent in
                  1999 and Nicaragua by six percent. It also said that Cuba's Caribbean
                  neighbours -- the Dominican Republic and Trinidad and Tobago -- would
                  each grow by seven percent.

                  Mirta Villanueva, Cuba's vice-minister of economy, said the islanders were
                  starting to feel the benefits of economic growth, saying that there were 25
                  percent fewer power cuts in 1999. She also said that plans were in the
                  works to raise bread rations in the provinces to the same 80 grams daily
                  given to Havana residents.

                  Cuba runs a nearly totally state-controlled economy. Islanders receive
                  monthly food rations and subsidized services.

                  Martinez added that on the positive side, economic efficiency was
                  improving, new oil finds had been made and the budget was better balanced.

                  But he admitted there were "other limitations" hindering growth and
                  prosperity. The high growth rate for 1999, he said, "does not mean that
                  everything is perfect, does not mean at all that the economy is swimming in
                  abundance. Problems persist."

                  Among those negative factors were a widening commercial deficit because
                  of falling sugar prices and the rising cost of oil imports, which had produced
                  a "tense situation for external finances." The continuing U.S. economic
                  embargo "of course plays an especially important role," he added.

                     Copyright 1999 Reuters.