[PEN-L:6240] Cuban Bank Chief Touts Reforms (fwd)

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Associated Press 					APRIL 27, 1999

Cuban Bank Chief Touts Reforms

	By George Gedda

WASHINGTON -- In a rare visit to Washington, the Cuban Central Bank
president today outlined austerity measures Cuba has imposed since the
collapse of the Soviet Union -- steps that in some ways parallel those
often recommended by the pro-capitalist International Monetary Fund.

President Francisco Soberon said subsidies to state entities have been
reduced by 75 percent and that 19 state ministries and other national
agencies have been shut down, almost 40 per cent of the total. In addition,
Cuba has become far more hospitable to foreign investment, he said.

Cuba is one of an extremely small number of countries that do not belong to
the IMF and its companion institution, the World Bank.

But Soberon, nonetheless, came here as an observer for the semiannual
meeting of the two institutions. He attended meetings Monday of an IMF
subgroup of 24 developing countries.

Soberon spoke today before a group of bankers, academics, government
officials and others at a session organized by three local private research
groups.

He described how Cuba was forced to undertake a series of reforms in the
wake of the collapse of the Soviet Union, its main partner in trade and
assistance. He said the number of independent farmers has increased to the
100,000 range and that Cubans who engage in once-forbidden self-employment
total about 150,000. The budget deficit, he added, has been reduced to 2.5
percent of the total budget compared with more than 30 percent five years
ago.

The State Department normally does not grant visas to Cuban officials but
makes an exception for those wishing to attend meetings of multinational
institutions.

A U.S. law requires the president to take steps to block any Cuban bid to
join the IMF or the World Bank.

Soberon said he's not sure whether Cuba has any interest in joining. He
said the IMF generally offers the same formulas to all countries,
regardless of differing situations.

``We have a lot of doubts about their policies,'' he said. ``Each country
requires a different approach.''

He added that Cuba would feel uncomfortable in an institution, such as the
IMF, in which the United States has 15 percent of the voting power.

He also suggested that the IMF is insensitive to the social costs of its
economic reform policies. The IMF has been known, he said, to claim success
even though its policies have led to unemployment rates of 17 percent.

``I'd like someone to explain to me how you can have success with 17
percent unemployment,'' he said.




--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx