Cuban President Raul Castro attends the first annual session of the Cuban Parliament in Havana, Cuba.
Cuban President Raul Castro attends the first annual session of the Cuban Parliament in Havana, Cuba. - 
Listen To The Story
Marketplace

TEXT OF STORY

Over the weekend, Cuban president Raul Castro announced
the Communist nation will cut spending on education and health care in an effort to revive its sputtering economy. Right now, growing budget deficits and falling exports are pretty much squeezing the island's available cash. From the America's Desk in Miami, here's Marketplace's Dan Grech.


DAN GRECH: Cuba is running low these days on yogurt and spare tires. That's because dairy farms and tire factories in Cuba have cut productions due to a shortage of cash. The Lexington Institute's Phil Peters says Cuba's state-run manufacturers can't raise financing in the typical ways.

Phil Peters: They don't have access to world bank credit, and the international financial institutions in general. They rely a lot on short-term credit, and in today's credit environment that hurts them a lot.

Cuba's cash crunch has led it to fall behind on its bills. Earlier this year the Canadian firm, Sherritt, shut down drilling on the island because of late payments. That's contributed to the island's energy crisis.

Peters: There have been factories that have been closed. There are scheduled power blackouts and they're being told to conserve energy by turning of air conditioning in the offices in the afternoon.

Cuba has kept afloat with subsidized oil from its ally, Venezuela.

I'm Dan Grech for Marketplace.

“I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself.” – Michael in Arlington, VA

As a nonprofit news organization, what matters to us is the same thing that matters to you: being a source for trustworthy, independent news that makes people smarter about business and the economy. So if Marketplace has helped you understand the economy better, make more informed financial decisions or just encouraged you to think differently, we’re asking you to give a little something back.

Become a Marketplace Investor today – in whatever amount is right for you – and keep public service journalism strong. We’re grateful for your support.