The Miami Herald
November 7, 2001

Cuba facing financial troubles because of Michelle's destruction

 Herald Staff Report

 HAVANA -- Cuba will have to claw its way out of a deep financial hole in the aftermath of Hurricane Michelle and the damage the storm did to buildings and crops.

 Thousands of people across the island have lost their homes, Cuban authorities reported Tuesday.

 Agricultural fields took a severe beating. Add that to crippled national electrical and telecommunications systems and the destruction of roads, and what evolves is a
 recuperation effort that could take years to complete.

 ``I won't be surprised if the economy declines as bad as it did in '93,'' said economist Carmelo Mesa-Lago, a Cuba expert in Miami. In 1993 the collapse of the former Soviet Union ended subsidies to the communist island. ``There is a high probability of that,'' Mesa-Lago said.

 Government officials will now have to determine the quickest path to recovery. The effort will be intense and likely focused on the same options Cuba has been struggling with for the past 10 years: economic reform, a tighter grip on the status quo or some sort of compromise.

 However, the options are even more limited now.

 Cuba has poor credit in the global market so it is hard to attract investors and if the government allows an increase in domestic private enterprise, it runs the risk of losing political clout.

 ``Economic reform means delegation of economic power and delegation of economic power implies a loosening of political power,'' Mesa-Lago said. ``We are not going to know a lot about it, but I'm pretty sure the debate is going on already. The crisis will help the reformers and weaken the hard-liners.''

 With winds that hit 135 mph, Michelle caused extensive damage, primarily in the eastern provinces.

 Government media reported that at least 2,000 homes had collapsed and 10,000 others were damaged.

 Before the hurricane, fewer than four million homes were available for Cuba's 11 million people, according to government estimates.

 A still undetermined number of citrus, tobacco and banana crops were lost, ensuring another economic hit.

 ``This year, we're talking major losses on citrus,'' said Tom Spreen, a professor at the University of Florida's Institute of Food and Agricultural Sciences.

 ``Their citrus industry had began to recover. This thing is certainly going to set them back,'' Spreen said.

 During a tour through the hardest-hit areas, President Fidel Castro said Michelle had chosen ``a friendlier'' path across the island than authorities had feared.

 ``The damage was less than expected,'' Castro added. ``Nature could have behaved more badly.''

 Cuba may have to lean even harder on tourism, which had been serving as its most important source of hard currency. But the already slumping trade will face a challenge to revive immediately.

 Scores of tourists left Havana once flights resumed Monday evening.

 Business also plunged for cab drivers.

 ``It's really, really bad,'' said Roberto Miranda, 32, who used to earn $40 to $70 a day and is now lucky if he takes home $10.

 However, several tourists interviewed Tuesday said they doubt the hurricane will keep them from staying or returning in the future.

 ``I'd come back tomorrow if I had the chance,'' said Michael Lesley, 28, who arrived in Havana from Scotland the day before the storm hit.

 ``I feel very sorry for the local people. But in terms of how I've enjoyed it, it hasn't made any difference,'' Lesley said.

 Herald staff writer Nancy San Martin contributed to this report, which was supplemented with Herald wire services.

                                    © 2001