Cuba slumps back into hardship

Cuba's socialist system has done little to protect the island from the economic turmoil that has engulfed its capitalist adversaries.

The combined effect of higher international food prices, three hurricanes and the general worldwide slowdown have pushed Cuba into its worst financial crisis since the collapse of the Soviet Union.

Since an already ailing Fidel Castro stepped down as president in February 2008, his brother Raul has announced some modest economic reforms, such as legalising mobile phones and issuing licences for private taxis.

But he has also had to promote austerity measures as well, including a 50% cut in foreign travel by government officials.

"The accounts don't square up," he told the National Assembly in December 2008. "We have to be realistic and adjust our dreams to real possibilities."

In recent years, subsidised Venezuelan oil and Chinese investment deals became Havana's latest means of shoring up basic living standards and defying the US economic embargo.

But falling oil prices have put Venezuelan President Hugo Chavez's "Bolivarian revolution" under pressure, while the Chinese economy is starting to falter as world demand slows.

War of attrition

Economically and politically, Cuba is a long way from the revolutionary confidence it enjoyed during the height of the Cold War in the early and mid-1970s.

By that stage, the island had successfully overcome the worst that the US could throw at it.

The turmoil of the 1960s, marked by the abortive Bay of Pigs invasion and the Cuban missile crisis, had given way to a sullen war of attrition that continues to this day.

But Fidel Castro reacted to Washington's trade embargo by forging ever-closer links with the Soviet Union and its Comecon network of Eastern bloc states.

Moscow propped up the Cuban economy by buying a huge chunk of the country's sugar crop at inflated prices, while providing cheap supplies of crude oil.

Despite this lifeline, conditions were not particularly comfortable even then for ordinary Cubans, who had been subject to rationing since the US embargo began in 1962.

Not just food, but even clothing was rationed. Every Cuban was entitled to two shirts, a pair of trousers, a pair of shoes and two pairs of underpants a year.

Vanguard hopes

These items, of course, were produced on a one-size-fits-all basis, under a rigidly centralised state planning system more concerned with meeting quotas than aspiring to elegance.

But back then, Cuba could still bask in the belief that its much-vaunted revolution had put it in the vanguard of history.

When Chile's Salvador Allende became the world's first democratically elected Marxist president in 1970, the Cuban model started to look