Cuba announces program to repair Irma-damaged homes as experts assess damage to economy

Cuba has announced plans to help its citizens recover from Hurricane Irma’s devastating swipe at its north coast and rebuild their homes.

Drawing on recovery lessons from recent hurricanes Sandy and Matthew, the government said it would finance 50 percent of the cost of construction materials for Irma victims who lost their homes or sustained heavy damages — with a few caveats. Defense councils will certify the extent of damages and the resources necessary to make repairs.

To acquire construction materials, victims will be able to request low-interest, long-term loans, according to a notice that appeared in Granma, the newspaper of Cuba’s Communist Party.

For homes that collapsed or lost their entire roofs, the state will take over interest payments. Defense councils also will consider subsidies for victims whose incomes are too low to purchase all the required construction materials. Those who still owe money on construction loans for previous programs also may be granted subsidies.

As Hurricane Irma raked the island from the eastern tip to Havana in the west, 10 people lost their lives and many homes were lost or damaged by high winds and coastal flooding. This past weekend the government encouraged people to clean streets and the interior of their homes and courtyards affected by floodwaters to prevent the spread of disease.

ACN, the Cuban news agency, reported Monday that a contingent of 200 linemen from Havana headed to Villa Clara province to help restore electrical service. Primary transmission networks have been restored in Havana, and work on secondary electrical networks in the capital is almost completed, Mercedes López Acea, president of the Havana Defense Council, told reporters.

The hurricane couldn’t have come at a worse time for Cuba as the all-important winter tourism season approaches, its benefactor Venezuela struggles to supply oil, and other areas of the economy aren’t doing particularly well.

Although damages were particularly acute in the central Cuban provinces where Irma made landfall Sept. 8, Cuban officials have emphasized that in one way or another, due to lost crops, damaged infrastructure and other factors, the entire country has been affected.

“With the passage of the hurricane, I’m convinced that GDP will be negative,” said economist Carmelo Mesa-Lago, a professor emeritus at the University of Pittsburgh.

The economy grew by 1.1 percent, largely buoyed by record tourism numbers, during the first six months of the year, according to the Cuban government. But that could dip below zero by year’s end, said Mesa-Lago.

In 2008, when three hurricanes caused about $10 million in damages in Cuba, the more negative effects were felt the following year.

“In 2008, the economy had grown 4.1 percent and in 2009, that was down to 1.4 percent — that is to say that the cost of the whole situation was GDP growth that was 2.7 points lower that year,” said Pavel Vidal, a Cuban economist who is a professor at Javeriana University in Colombia.

Disasters such as hurricanes can have lasting repercussions. Hurricanes Ike, Gustav and Paloma, which hit Cuba in 2008, caused an increase in the price of food, liquidity problems at banks and destabilization of the Convertible Cuban Peso, the money used for international and tourism transactions and by some state enterprises, said Vidal.

The damage caused by Irma, he said, may pump up inflation and cause “financial complications.”

Related stories from Miami Herald

“A favorable element is that the global economy is passing through a better time and the Cuban economy is weighted more toward the private and cooperative sector [now], and given more freedom, they could contribute in a greater proportion to the recovery.”

MiamiHerald