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Cuban parliament hears bleak economic report

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HAVANA — Cuba's economy minister delivered a bleak and unforgiving assessment of the communist-run island's finances Wednesday, telling a packed house of grim-faced parliament members that inefficiency has cost the country tens of millions of dollars. He also said Cuba has fallen short in many key production goals.

Economy Minister Marino Murillo said the state lost $120 million in potential nickel industry profits in 2010 because it failed to meet world demand, and $60 million to $65 million more in the sugar industry, which suffered its worst harvest in 105 years.

"We had export products that were priced higher (on international markets) than what we had forecast, but we weren't able to meet our production targets," said Murillo. "We weren't able to take advantage of the situation."

Murillo said inefficiencies meant Cuba had to spend $63 million more than budgeted to import rice, beans and pork that should have been produced domestically.

He added that despite the problems, export revenue still rose by more than 40 percent in 2010, but he did not give overall dollar figures.

The pessimistic outlook came in remarks opening a gathering of Cuba's National Assembly, which will be debating the government's make-or-break plans to retool the island's economy. The session is the first — and likely last — time legislators will get a chance to discuss the changes ahead of a major Communist Party congress next year.

The 611-member assembly meets in full session just twice a year, and then only briefly, to approve laws and discuss national issues. The next session is due next summer.

President Raul Castro was expected to address the lawmakers in one of his few yearly speeches, though it was unclear when. Foreign journalists are usually granted access to the opening of the assembly, but were not invited this year, and Murillo's speech was only broadcast on state-run television hours later.

Murillo repeatedly referred to a report provided to legislators at the session, but not shared with the television audience, making it difficult to understand what statistics he was talking about, or put them in context.

Still, the overall picture was far from cheery.

"We lack analysis and a comprehensive vision in our economic planning, and this goes for every government agency," Murillo said, with Raul Castro looking on.

The Cuban president has announced plans to lay off a half million state workers, and the government is already issuing licenses for a limited number of small businesses in an effort to open the state-dominated economy to more private enterprise.

Castro has slashed some food subsidies, raised state-controlled oil and utility prices and eliminated free lunches from many government workplaces. He says the cash-strapped state simply cannot afford them anymore.

Cubans make just $20 a month, but in return get free health care and education along with nearly free housing, utilities and transportation. Even so, making ends meet is extremely difficult for most.

The government has said increased productivity is the key to improving living conditions, a refrain repeated often in recent decades. Many workers in turn blame the government for the low productivity, saying many factories barely function due to bureaucracy, crippling inefficiency and a lack of spare parts.

The government has begun distributing a 32-page list of guidelines for next year's Communist Party Congress — the first such gathering since 1997. The guidelines are being discussed by Cubans in thousands of meetings at workplaces and neighborhoods around the country.

In addition to allowing more private enterprise, the government has said it wants to pay down the island's billions of dollars of foreign debt and eventually scrap its unusual dual currency system.

Parliament chief Ricardo Alarcon said Friday that this week's assembly session will allow legislators a chance to weigh in on the changes.

"We're going to talk about the economic plans. The main focus is going to be to allow the delegates to debate the guidelines," he said.

Cuba's government bristles at suggestions the national parliament serves as little more than a rubber stamp, noting that its members are elected by the island's citizens, though campaigning is prohibited and opposition candidates almost never run — let alone win seats.

The parliament, in turn, decides who will serve on the Council of State, Cuba's supreme governing body.

The country has been run by Raul Castro and his brother Fidel since 1959.

Cuba has slashed imports due to lack of funds, and has already announced that harvests of key crops like sugar and rice were among the worst in decades. Tourism revenue has been a bright spot, holding steady despite the global economic slowdown.

Cuban economists have been warning that there are more hard times to come.

Joaquin Infanta, one of the island's main economists, told the state-run newspaper Juventud Rebelde on Sunday that Cubans should prepare to tighten their belts because the economic overhaul will take time to bear fruit.

"It will have an impact in 2011 and 2012," he said. "The benefits of the changes won't be seen until 2013."