CUBAN PARLIAMENT: NO FIDEL; RAUL ADMITS PROBLEMS

C O N F I D E N T I A L SECTION 01 OF 02 HAVANA 023634 SIPDIS SIPDIS E.O. 12958: DECL: 12/26/2016 TAGS: PGOV ECON CU SUBJECT: CUBAN PARLIAMENT: NO FIDEL; RAUL ADMITS PROBLEMS HAVANA 00023634 001.3 OF 002 Classified By: DCM Buddy Williams; Reasons 1.4 (b) and (d) ¶1. (C) Summary: Friday December 22 was Cuba's annual parliamentary session, at which Raul Castro permitted public admission of shortcomings in transportation, agriculture and housing, just after the economy minister bragged that Cuba grew by 12.5 percent in 2006. Parliamentary president Ricardo Alarcon dubbed 2007 "Year 49 of the Revolution," and praised the GOC for its progress despite unrelenting U.S. pressure. Fidel Castro was a no-show, and did not even send a message. The public is unimpressed: Neither by the fake sincerity in seeming to address the country's obvious problems, nor by the claim of 12.5 percent growth. Experts we contacted provided data that contradict the parliamentary expositions on transportation and agriculture. End Summary. ¶2. (U) The Cuban parliament, or "National Assembly of Peoples Power" (ANPP) meets briefly, once a year in late December to take stock of the calendar year. Last year, with Fidel Castro sitting on the dais, Foreign Minister Felipe Perez Roque gave a memorable address regarding passing the communist torch to a younger generation. This year the themes were much more mundane, touching the issues that concern most Cubans: Transportation, housing, and food. The parts of the proceedings that were televised gave the impression of debate in committees, followed by a public airing of problems in those sectors. -- Housing: Council of Ministers President Carlos Lage gave the regime credit for building over 100,000 units, and promised 70,000 in 2007; but he admitted deficiencies in the production chain; -- Agriculture: Economy Minister Jose Luis Rodriguez, in his address that bragged about 12.5 percent economic growth, acknowledged production shortfalls in basic agriculture and bottlenecks in distribution of farm produce to market; -- Transportation: Minister Jorge Luis Sierra, following an introduction by Raul Castro, who recognized that the sector was on the verge of collapse, diagnosed the problems: theft of bus-fares, low investment, subsidized fares, and insufficient attention to maintenance. When he finished, promising results by 2008, Raul Castro said, pounding his fist on the table, that the sector needed "...more discipline. Without discipline, nothing runs." ¶3. (U) Jose Luis Rodriguez's 12.5 percent growth speech acknowledged that Cuba's record-keeping, which attributes 3 percent of its growth to state-provided education and health services, was still at least 9.5 percent, by traditional methods, "way ahead of the average of 5.3 percent for all of Latin America." He then said that the GOC "doesn't lie or manipulate its economic statistics," and explained that the growth was due to increased energy efficiencies and investments all across the Cuban economy. ¶4. (U) No Fidel: Fidel Castro was not present for any of the ANPP session. Ricardo Alarcon presided, and provided the usual language that praised Fidel Castro's inspiration, blamed the USA for Cuba's problems, and urged that the "Five Heroes" (convicted spies) be freed and returned to Cuba. All speeches from the floor included an obligatory "Viva Fidel," even as those with speaking roles all saluted Raul Castro as the senior official present. Alarcon said that, as customary, the ANPP would give a name to the new calendar year, which in 2007 will be "Year 49 of the Revolution." 2006 has been "Year of the Energy Revolution." ¶5. (C) Reality Checks: Pol-Econ Counselor asked Ramon Vinas (protect),a retired GOC economist, what to make of the 12.5 percent growth figure. Vinas said it was not to be believed, beginning with the health/education sleight of hand and continuing through the obvious poverty-stricken reality that most Cubans are living. He acknowledged that Cuba was accepting large subsidies from Venezuela and that the price of nickel had increased; but most of the rest of the economy was flat, he added. He then zeroed in on the transportation sector, which is probably the single biggest source of frustration to average Cubans. In the late 1980s, he said, transportation was an enormous problem. At the time, the metro-Havana area had 2000 buses, of which 700 were in service. Today, metro-Havana has about 600 buses, of which maybe 200-250 were in service. A few hundred extra buses donated from China were simply not going to solve the HAVANA 00023634 002.3 OF 002 problem, even before they start breaking down, he concluded. -- Alejandro Gonzalez (protect),a manager in the Agricultural distribution sector, told Pol-Econ Counselor that no statistics the GOC provides in agriculture should ever be believed. He said that if an area produces 200 units of Crop X, the GOC will announce 3,000, creating an atmosphere of skepticism in the workforce, the large majority of whom learn to steal from the food distribution chain to make ends meet. (Note: Neither Vinas nor Gonzalez are dissidents; their perspectives on the Cuban economy come from overseas travel and having relatives in the United States. End note.) -- Roberto de Miranda, a bona-fide dissident, commented that Cuban housing is essentially crumbling. He could find no examples of urban renewal in his Central Havana neighborhood, where it is obvious to any visitor that buildings are on the verge of collapse and the streets are moonscapes of potholes. De Miranda also pointed out that to the extent that there are any housing renewal projects at all, they would benefit regime loyalists, of which he was proud not to be one. ¶6. (C) Comment: There might be some significance to the parliament publicly confessing shortcomings in housing, transportation and agriculture, even if juxtaposed with an over-the-top assertion of 12.5 percent annual growth. On the understanding that Raul Castro and the ruling clique would have scripted all the speaking lines at the ANPP, our assessment is that Raul Castro is trying to pass himself off as a hard-headed problem solver, open to debate and constructive criticism. He used the same approach a few days earlier at the annual University Youth Federation conference, which was also unquestionably scripted. It's not a bad strategy, at least on the public relations side, since it appeals to Cubans' own frustrations with the sectors highlighted during the parliamentary session. However, Raul Castro's solution -- more discipline and efficiency -- promises to be a loser, as long as he maintains a rigid state-run economy. To admit otherwise would be to dub 2007 "The Year That Communism Ends In Cuba," which Raul Castro would not permit, certainly not before his brother dies. PARMLY