Plagued by torrential rains in the sugar fields and saddled with heavy foreign debts, Cuba appears headed for a new period of austerity and increased reliance on Soviet-oriented trade and aid.
The squeeze demonstrates the economic fragility of Cuba's dependence on sugar to earn foreign exchange and the key role of the Soviet Union and its allies in filling gaps created by shortages of hard currency for western goods. By tying Cuba more closely to Moscow economically, it also is likely to reinforce their long-term political cooperation in the Caribbean and Central America.
"What is evident is that inasmuch as we can find products in socialist countries that are as good as those in the market countries, we are going to be buying things more from the socialist countries," Deputy Foreign Commerce Minister Amadeo Blanco said in Havana.
Imports from the West are expected to drop substantially in 1983 for the second year in a row, according to Blanco, reversing a rise in 1980 and 1981 that brought them close to $2 billion annually. As a result, foreign economic observers here predict Cuba's trade with the Soviet Union and its allies could mark a temporary rise to as much as 90 percent of the total after several years at the 75 and 80 percent level.
The shift fits into Cuban Communist Party directives and the 1981-85 plan outlining more integration into the Soviet economic sphere. But Blanco, who is directly responsible for western trade, said the Cuban economy in the long run will probably direct about 20 percent of its trade toward the West, out of necessity if not desire.
"I don't think I'm going to be out of a job," he said.
Salesmen from Brazil, Mexico and several European countries were in Havana last week bidding on a major purchase of buses and trucks, he said, for example, and the Cuban sugar industry needs about $100 million a year worth of spare parts for its western machinery.
President Fidel Castro's government has urged the state economic apparatus to prevent the belt-tightening from hitting everyday Cubans with too much of a shock. The loosening at the beginning of the decade, along with introduction of parallel free markets for some food and goods, have improved living standards markedly in the past several years, according to Cubans and foreign residents, and the leadership is reluctant to call on people to forsake their gains.
"In practical terms, Cubans should not feel very much difference in what is available to them in the way of consumer goods," Blanco said.
The relative improvement still seems to reflect government priorities for such collective goals as better schooling and health care rather than individual consumer items. Residents of the town of Banes near here, for example, have free schools for their children but pay $25 to $40 and a ration coupon for low-quality high heels at the Paradise shoe store across from local Communist Party headquarters.
"Things are really better," a Cuban intellectual said. "But we are disappointed, because we had hoped that by now the economy would be stabilized."
The main reason it is not, Cuban and foreign experts say, is the island's overwhelming reliance on the sugar industry. This is easily visible in cane fields stretching across this region an hour's plane ride southeast of Havana. It is also visible in trade statistics from U.S. experts, who say sugar accounts for more than 80 percent of the value of Cuba's exports.
World sugar prices fluctuate widely and have been about 8 cents a pound recently, which Blanco said falls about 7 cents below what Cuba needs to make a profit. This year, however, there is another problem. Unusually long and heavy rains in the first few months of the year have hit the crop hard, slowing maturation and harvesting.
The delays have meant Cuba has had to buy sugar in the international market to meet previously agreed contracts, part of the 2.4 million metric tons sold annually for hard currency under agreed quotas.
A foreign economist estimated Cuba has lost as much as 1 million metric tons from a 1983 crop planned to yield 8.2 million tons. Although the shortages appear to be improving world prices slightly, the result, nevertheless, is expected to be less vital hard currency sales and exports to the Soviet Union at prices subsidized by Moscow up to five times the world market price.
Such guaranteed Soviet purchases, along with 16 million metric tons of Soviet oil at $16 a barrel, help lift Soviet aid to a level western economists put at about $4 billion this year, about a quarter of the Cuban gross national product. Cuban officials have told western bankers that none of the Soviet aid goes for arms, which they said Moscow gives for free.
But the island has continued to import western goods with scarce hard currency and, increasingly, borrowing. Several years of low sugar prices in the hard-currency markets and low prices for nickel, another major export, have driven up Havana's debt to government and private banks in the West and Japan to such a level that Cuba can no longer pay the interest and principle due.
Cuban officials, in contacts with the creditors, have put the total at $3.5 billion. Unable to pay, Cuba has sought to renegotiate along lines similar to deals worked out by Mexico and Brazil. In a deal likely to define agreements for the rest of its debt, Cuba reached an accord March 2 for rescheduling $413 million due this year, most of it payable over a 10-year period beginning in 1986 but at a higher interest rate.
According to Blanco, the United States intervened with banks and government agencies in creditor countries such as Spain, France, Argentina and Japan to discourage short-term credit for payments coming due and sought to prevent the bankers from granting Cuba favorable terms for the longer-term rescheduling.
"There was pressure, I can tell you, there was pressure," he said. "But on the other hand, bankers are by their very nature conservative people."
As part of the negotiations, Cuba pledged to carry out a number of austerity measures likely to be made even more severe by this year's bad sugar crop. Gasoline prices have recently jumped and other increases are expected.
Juan Antonio Ochoa Gonzalez, who runs the Nicaragua sugar mill at Banes, acknowledged over a shot of rum the other day that the harvest was coming in behind schedule because of the rain.
The setback around the country is bad for everyone's finances, he nodded, but added that his 1,500 workers will, nevertheless. get their pay on schedule.
"If this had happened before the revolution, we would have died of hunger," he said. "The imperialists never assisted in anything."
The Nicaragua sugar mill, with its giant poster of Augusto C. Sandino at the entrance, was called the Boston mill before Castro's 1959 revolution took it over from its American owners.