Thursday, November 10, 2011

Sugar ministry "extinguished"

“The process of improving the central administration of the state and the need for a government structure attuned to our current needs, as well as the nature of the functions of the Ministry of Sugar, counsel that it be extinguished as an organization of the central administration of the state, and that a business entity be created to take charge of the sugar agro-industry, an activity of great importance for the economic development of the country.”

With that, the Ministry of Sugar is dissolved with this set of decrees and in its place is the new state enterprise called Grupo Azucarero, or AZCUBA. Reuters report here.

That enterprise is now responsible for production of cane, milling, and production and sale of all derivatives – the entire industry, in other words.

Will this change anything?

If the enterprise is not subsidized, if the management is allowed to operate with autonomy, and if it is allowed to pursue all reasonable commercial options, I would say the answer would be “yes.”

But those are big “ifs.” They could imply cost-cutting through layoffs or closure of certain operations. On the upside, they could imply a move into energy production through sugar-based ethanol, powered in part by partnerships with foreign capital.

We’ll see.

1 comment:

Antonio said...

Ay, in my opinion the demise of the sugar industry has become the greatest disaster of the revolution. There are few other examples in history where a product is so intricately woven into the fabric and the soul of a nation.

I think that any resuscitation of azucar in Cuba will happen after Fidel and Raul are gone. Cuba lost the opportunity to start an ethanol industry while Lula was in charge in Brazil. He very much admires Fidel and a joint venture could have been initiated very easily. I was not amused at Fidel’s ranting against ethanol down the years. He said he was against the idea of land being used to grow corn and sugar which would be used for ethanol while there were food shortages worldwide. As valid as this point was, it beats his idea of shutting down the sugar industry and surrendering the land to the marabou weed, something Raul has tried to reverse.

For any foreign investment to happen, it will mean the revolution eating a lot of humble pie and admitting that it completely destroyed the sugar industry. Fidel was unwilling to do this; we will wait and see what Raul does.

On a sugar related side note, there is a very interesting book that came out last year. The Sugar King of Havana: The Rise and Fall of Julio Lobo, Cuba’s last tycoon (Pub. 2010) by British author John Paul Rathbone. The author also had a long interview on Fresh Air with Terry Gross on NPR here in the USA; I hope the interview is still available on NPR archives. I should have sent Peter my review then because it is worth a read.