The threat

The following is the section on Cuba, a designated “state sponsor of terrorism,” from the “Worldwide Threat Assessment” provided to Congress yesterday by the Director of National Intelligence. The word “terrorism” does not appear, and Cuba is not discussed elsewhere in the 34-page document.

The continued deterioration of Cuba's economy in 2010 has forced President Raul Castro to take unprecedented and harsh economic actions that could spark public unrest over the coming year.

Havana announced last September that it will lay off 500,000 government employees by spring, with another 500,000 to follow. The government employs about 85 percent of the total work force of 5.1 million. In a probable attempt to consolidate his reforms, Castro is planning a Party Congress for April, the first in 14 years.

The economic situation is dire. Major sources of foreign revenue such as nickel exports and tourism have decreased. Moreover, a decline in foreign currency reserves forced dramatic cuts to imports, especially food imports, and we have seen increases in the price of oil, food, and electricity.

As a result, Havana has become even more dependent on subsidized oil shipments from Venezuela and earnings from over 40,000 health workers, teachers and advisers in that country. We doubt that the Cuban economy can quickly absorb all the dismissed state workers given the many bureaucratic and structural hurdles to increased private sector employment.

There is little organized opposition to the Cuban Government and Cuba's security forces are capable of suppressing localized public protests, although a heavy-handed Cuban putdown of protests could spark wider discontent and increased violence which could lead to a level of political instability.