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2 November 2001

                  Televised presentation by Dr. Fidel Castro
                  Ruz, President of the Republic of Cuba, on the present
                   international situation, the economic and world crisis and
                   its impact on Cuba. Havana, November 2, 2001

                   My fellow countrymen:

                   At the opening of the Social Workers Training School in
                   Santiago de Cuba on October 24, I said that in the coming
                   days I would speak about the international economic situation
                   and how it could affect our country, which was carrying out an
                   unprecedented social development program as it gradually
                   recovered from the special period. I do not want to put that
                   discussion off any longer.

                   To characterize the current situation, one could say, by way of
                   a very brief summary, that in the mid-1990s, when
                   globalization was extending around the planet, the United
                   States, as the absolute masters of the international financial
                   institutions and through its immense political, military and
                   technological strength, achieved the most spectacular
                   accumulation of wealth and power ever seen in history.

                   But the world and capitalist society were entering into an
                   entirely new phase. Only an insignificant part of economic
                   operations were related to world production and trade. Every
                   day three trillion dollars were involved in speculative
                   operations including currencies and stocks. Stock prices on
                   U.S. exchanges were rising like foam, often with no relation
                   whatsoever to the actual profits and revenues of companies.
                   A number of myths were created: there would never be
                   another crisis; the system could regulate itself, because it
                   had created the mechanisms needed to advance and grow
                   unimpeded. The creation of purely imaginary wealth reached
                   such an extent that there were cases of stocks whose value
                   increased 800 times in a period of only eight years, with an
                   initial investment of 1000 dollars. It was like an enormous
                   balloon that could inflate to infinity.

                   As this virtual wealth was created it was invested, spent and
                   wasted. Historical experience was completely ignored. The
                   world’s population had quadrupled in only 100 years. There
                   were billions of human beings who neither participated in nor
                   enjoyed this wealth in any way whatsoever. They supplied
                   raw materials and cheap labor, but did not consume and could
                   not be consumers. They did not constitute a market, nor the
                   almost infinite sea fed by the immense river of products that
                   flowed, in the midst of fierce competition, from factories that
                   were ever more productive and created ever fewer jobs, based
                   in a privileged and highly limited group of industrialized
                   countries.

                   An elementary analysis was sufficient to comprehend that this
                   situation was unsustainable.

                   Nobody seemed to realize that any apparently insignificant
                   occurrence in the economy of one region of the world could
                   shake the entire structure of the world economy.

                   The architects, specialists and administrators of the new
                   international economic order, economists and politicians, look
                   on as their fantasy falls to pieces, yet they barely understand
                   that they have lost control of events. Other forces are in
                   control now. On the one hand, those of the large and
                   increasingly powerful and independent transnationals and, on
                   the other, the stubborn realities are waiting for the world to
                   truly change.

                   In July of 1997, the first major crisis of the globalized
                   neoliberal world erupts. The tigers fall to pieces. Japan has
                   still not managed to recover, and the world continues to
                   suffer the consequences.

                   In August of 1998 comes the so-called Russian crisis. Despite
                   this country’s insignificant contribution to the worldwide gross
                   domestic product, barely 2%, the stock markets of the United
                   States were badly shaken, dropping by hundreds of points in a
                   matter of hours.

                   In January of 1999, only five months later, the Brazilian crisis
                   breaks out.

                   An all-out joint effort by the G-7, IMF and World Bank was
                   needed to prevent the crisis from spreading throughout South
                   America and dealing a devastating blow to the U. S. stock
                   markets.

                   This time, the inevitable has happened: the crisis began in
                   the United States, almost imperceptibly at first. Beginning in
                   mid-2000, the first symptoms began to be observed, with a
                   sustained decrease in the rate of industrial production.

                   In March of that year, the so-called high-tech NASDAQ index
                   had already begun to drop.

                   At the same time, the trade deficit showed an enormous
                   growth, from 264.9 billion dollars in 1999 to 368.4 billion in
                   2000.

                   In the second quarter of the year 2000, the gross domestic
                   product registered growth of 5.7%; in the third quarter, it
                   grew by only 1.3%.

                   Industrial sector production began to fall in October of 2000.

                   Nevertheless, at the end of the year 2000, opinions on the
                   prospects and forecasts for the world economy were still
                   rather optimistic. But reality soon reared its ugly head.

                   Since the beginning of 2001, the IMF, the World Bank, the
                   Organization for Economic Cooperation and Development
                   (OECD) and the European Commission, along with private
                   institutions, have been obliged to downwardly adjust their
                   growth predictions in the various regions of the world for
                   2001.

                   In May, the IMF forecast 3.2% worldwide growth in 2001. For
                   the United States in particular, projected growth was 1.5%,
                   and 2.4% for the eurozone. Japan was facing its fourth
                   recession in 10 years, leading to a prediction of 0.5%
                   negative growth for the same year.

                   IMF Managing Director Horst Kohler, during a speech to the
                   United Nations Economic and Social Council (ECOSOC) in
                   Geneva, on July 16, 2001, stated, "Growth is slowing
                   throughout the world. This may be uncomfortable for the
                   advanced economies (the developed and wealthy countries),
                   but it will be a further source of hardship for many emerging
                   markets and developing countries (the poor and
                   underdeveloped countries), and a real setback in the fight
                   against world poverty."

                   Production has dropped in the majority of the Southeast Asian
                   countries, with the exception of China, and in Latin America,
                   too. According to the World Bank, growth in Southeast Asia,
                   which had begun to recover after its dramatic fall in 1997,
                   would decline from 7.6% in 2000 to 4.5% this year, while
                   Latin America’s growth would be around 2%, one half of the
                   growth registered in 2000.

                   Other institutions also made predictions. The Economist
                   magazine estimated in April that world growth in 2001 would
                   be only 2.7%, in contrast to the 4.6% growth registered in
                   the year 2000, while world trade would grow by 3.5%,
                   compared to the 13.4% growth in 2000.

                   With regard to the eurozone, the OECD, in is quarterly report
                   issued in early May of 2001, estimated that the European
                   Union would experience growth of 2.6%, a figure 0.5% lower
                   than its initial projection.

                   On September 10, just one day before the events in New York
                   and Washington, the IMF analyzed the evolution of growth
                   predictions for the world economy and for the economies of
                   the United States, Europe and Japan. Its findings were as
                   follows:

                   World Economy - percentage of growth:

                   Autumn 2000 4.2

                   March 2001 3.4

                   Spring 2001 3.2

                   September 2001 2.7

                   A progressive fall from 4.2 to 2.7 in less than a year.
 
 

                   The United States:

                   Autumn 2000 3.2

                   March 2001 1.7

                   Spring 2001 1.5

                   September 2001 1.5

                   More of the same, from 3.2 to 1.5 over the same time period.
 
 

                   Japan:

                   Autumn 2000 1.8

                   March 2001 1.0

                   Spring 2001 0.6

                   September 2001 0.2

                   The numbers speak for themselves.
 
 

                   The Eurozone:

                   Autumn 2000 3.4

                   March 2001 2.7

                   Spring 2001 2.4

                   September 2001 1.9
 
 

                   Without exception, the three major centers of the world
                   economy saw their growth rates fall simultaneously, dropping
                   to less than half of initial figures over the course of less than
                   a year. In the case of Japan in particular, growth dropped to
                   almost zero.
 
 
 
 

                   The employment situation:

                   At the end of the year 2000, the unemployment rate in the
                   United States was only 3.9%. What happened in the year
                   2001?
 
 
 
 

                   Unemployment rate (percentage):

                   February 4.2

                   March 4.3

                   April 4.5

                   May 4.4

                   June 4.5

                   July 4.5

                   August 4.9

                   Although official statistics are not yet available, it is
                   estimated that unemployment has now reached 5.1%, a rate
                   that had not been registered in the United States for many
                   years.

                   Today, November 2, after this material had been drafted, the
                   official figure was released: it is 5.4%. In just one month,
                   415 thousand jobs were lost.

                   The increase of the unemployment rate is irrefutable evidence
                   of the deterioration that the U.S. economy had been suffering
                   prior to the terrorist attacks.

                   It should be kept in mind, as an important precedent, that
                   over the last 50 years, when the unemployment rate has
                   reached 5.1%, this has coincided with the beginning of a
                   recession.
 
 

                   Percentage of industrial capacity used in the United States
                   in the year 2001:

                   February 79.2

                   March 78.7

                   April 78.4

                   May 78.0

                   June 77.1

                   July 77.0

                   August 76.4

                   In August, industrial production fell by 0.6% as compared to
                   July. Over the previous 12 months, industrial production had
                   shrunk by around 5%. August was the 11th consecutive month
                   of economic contraction.

                   The figure registered in August is very close to the lowest
                   level reached since 1983.

                   Also registered in the month of August of 2001 was a budget
                   deficit of 80 billion dollars.

                   That same month, Democratic members of Congress were
                   already pointing that predictions indicated that the
                   government would have to use social security money to
                   finance current expenditures.

                   During the second quarter of 2001, U.S. imports shrank by
                   13.9 billion dollars, while the low level of trade activity in the
                   rest of the world led to a 9.1 billion-dollar reduction in
                   exports.

                   Stock values on the main indexes have suffered the following
                   decreases in 2001:

                   Dow Jones 18.06%

                   NASDAQ 66.42%

                   Standard and Poor’s (S&P) 28.48%

                   This means the loss of trillions of dollars in less than a year.

                   The Federal Reserve has lowered interest rates nine times in
                   2001. The goal in doing so is to lower the cost of money,
                   boost consumer confidence and thus promote economic
                   activity. This frantic frequency clearly reflects desperation.
 
 
 
 

                   Europe:

                   Industrial production in the European region experienced a
                   sustained decline in the first quarter of the year 2001 that
                   obliged companies to reduce staff, and this, in turn, reduced
                   consumption, thus creating a vicious downward circle.
 
 

                   Investment and consumption are depressed, aggravating the
                   trend towards recession.

                   The European Commissioner for Monetary Affairs has stated
                   that the European economy will grow by only 1.5% this year.
                   Meanwhile, the six most prestigious economic research
                   institutes in Germany have predicted that their country’s
                   economy will grow by 0.7% this year and 1.3% next year, and
                   announced that the German economy is on the verge of a
                   recession. This will have a strong negative impact on the rest
                   of Europe, given that Germany is considered the region’s
                   "economic motor."
 
 
 
 

                   Japan:

                   Japan’s real gross domestic product in the first quarter of the
                   year 2001 dropped more dramatically than expected, with a
                   decrease of 0.2% as compared to predictions of 0.1%,
                   followed by an additional 0.8% drop in the second quarter.

                   The decrease in industrial production that began in March
                   reached 11.7% by August. This phenomenon of six
                   consecutive months of decline in industrial production has not
                   been witnessed in the Japanese economy since the period
                   from December of 1991 to May of 1992, and it places
                   industrial production at the lowest level of the last seven
                   years. This means an even worse crisis than the financial
                   crisis of 1997-1998, according to Japanese analysts.

                   Japan’s trade surplus decreased 48% in July of this year.

                   As a defensive measure, companies are cutting staff, leading
                   to a rise in the unemployment rate, which reached an all-time
                   high of 5% in August of this year, something never before
                   seen in Japan.
 
 
 
 

                   Latin America

                   In August, the Economic Commission for Latin America and
                   the Caribbean (ECLAC) reported that the region’s economy
                   would grow by only 2% in 2001, a mere half of the growth
                   registered the previous year (4%). In so doing, it retracted its
                   prior prediction, made in May, forecasting a GDP growth of
                   between 2.7% and 3%.

                   According to ECLAC, this is the result of the worldwide
                   economic weakening and instability in a number of the
                   region’s key countries: Peru and Uruguay will experience no
                   growth; Brazil has been affected by a scarcity of fuel supplies,
                   which has hit its productive activity, and by an almost 40%
                   devaluation of its currency this year; and Chile’s economic
                   reactivation has come to a halt. In the case of Mexico, a
                   feeble economic growth of 0.13% is predicted for this year,
                   and 1.74% for 2002. The government had originally forecast
                   4.5% growth in the gross domestic product for 2001, but it
                   has downscaled that figure a number of times due to the
                   slowdown in the world economy, and particularly that of the
                   United States.

                   ECLAC estimates that unemployment in the region will reach
                   at least 8.5%.

                   There are people who calmly speak today about the "world
                   economic crisis caused by the terrorist attacks that took place
                   in the United States on September 11 and by the war against
                   Afghanistan initiated on October 7." Such statements are
                   completely baseless. What I have just outlined irrefutably
                   proves this. The crisis was already breaking out,
                   uncontrollably.

                   Every week I receive a bulletin with the most important
                   economic news gathered from the most prestigious and
                   reliable public sources of information, or statements made by
                   specialists and political leaders. I remember in particular the
                   bulletin I received on September 8, 2001, exactly three days
                   before the terrible tragedy in New York. It had been many
                   years since I had read so much bad news about the prospects
                   for the international economy in just one bulletin.

                   Curiosity led me to look it over once again. I have chosen a
                   number of reports from it, which read as follows:

                   "Hitachi Ltd., Japan’s biggest manufacturer of electronic
                   products, announced that it will cut 14,700 jobs this year, or
                   4% of its staff, while preparing for a loss of over a billion
                   dollars caused by the collapse of the high-tech sector."

                   "Rival Japanese conglomerates Toshiba Corp., NEC Corp. and
                   Fujitsu Ltd. have also announced that they plan to cut
                   thousands of jobs." (CNN, 31/08/2001)

                   "The president of the United States Federal Reserve said that
                   the rise in housing prices, at the same time that the stock
                   market has collapsed, is making it difficult for the central
                   bank to diagnose the state of the country’s economy. This
                   divergence ‘could have significant implications’ for the
                   country’s economic growth, he declared. (The Wall Street
                   Journal, 31/08/2001)

                   "The U.S. Federal Reserve has warned in its latest report to
                   the country’s banking institutions that they have not
                   reinforced their risk management systems to the extent
                   demanded by the economic slowdown facing the international
                   economy." (Spanish newspaper Cinco Días, 31/08/2001)

                   "The European Commission admitted yesterday that the
                   prediction for economic growth in the eurozone this year will
                   be less than 2.5%. The monetary affairs commissioner, Pedro
                   Solbes, who even noted that Brussels has "some doubts"
                   about this figure, acknowledged this. The drop in rates by a
                   quarter of a point, announced last week by the president of
                   the European Central Bank (ECB), was accompanied by an
                   explicit acknowledgement of an error in calculation. ‘What we
                   have underestimated is how long and severe the slowdown
                   has turned out to be in the United States,’ Duisenberg said.
                   ‘If I may say so, we, and also the United States authorities,
                   have tended to be too optimistic regarding the duration and
                   depth of the slowdown,’ he said, recalling the opinions of
                   Treasury Secretary Paul O’Neill.

                   "The ECB’s orientation difficulties are contained in this brief
                   analysis, which comes a bit late after the gradual reduction
                   from the 3.2% growth in the eurozone predicted in January to
                   the 2% estimated in recent days." (Spanish newspaper
                   Cinco Días, 31/08/2001)

                   "The president of the United States acknowledged his concern
                   over the persistent decline in U.S. economic activity and its
                   repercussions on the labor market. I am aware of the
                   problems being faced today by the families of workers
                   affected by the economic crisis, but I am convinced that the
                   economy will get back on its feet, he declared before a
                   meeting of trade union groups.

                   "With the economy on the brink of a recession, the president
                   tried to convince U.S. workers that he was aware of their
                   situation and that he is doing something to remedy it. The
                   matter is complicated, given that the weakening of consumer
                   confidence, the decline in financial markets and the lukewarm
                   growth of the major world power have placed economic affairs
                   at the top of the president’s agenda." (Spanish newspaper
                   Expansión, 04/09/2001)

                   Note that President Bush, who is not very partial to these
                   subjects, made these declarations one week before
                   September 11.

                   "Growth is practically arrested in Latin America, according to
                   first-quarter figures on the gross domestic product.

                   "The balance for 2001 will show a new drop in per capita
                   gross domestic product in the region, asserted the Banco
                   Bilbao Vizcaya Argentaria in its latest report on Latin America.
                   The bank has lowered its prediction of growth in this group of
                   countries from an initial 3.9% down to 1%, a rate that fails to
                   match population growth.

                   "The reasons for this more pessimistic view are to be found in
                   a world economic slowdown greater than estimated at the
                   beginning of the year."

                   "The feeble growth of the main economies has translated into
                   a heavy reduction in external demand and, as a result, in
                   Latin American exports as well.

                   "The Mexican economy has been the hardest hit by the
                   consequences, given its high degree of dependence on
                   industrial activity in the United States. Its growth this year
                   will be limited to 0.2%, according to the bank, as compared
                   with the 6.9% growth registered in 2000." (Spanish
                   newspaper Cinco Días, 04/09/2001)

                   "The number of layoffs announced in the United States has
                   already surpassed one million so far this year, despite the
                   fact that the pace of cutbacks was curbed in August. In all,
                   U.S. companies announced plans to eliminate 140,0199 jobs
                   that month, which was 32% less than the total for July, but
                   over double the cuts registered in August of 2000. As a result,
                   the sum total for the first eight months of the year reached
                   1,120,000 jobs eliminated, a number 83% greater that the
                   total cuts in the year 2000. The telecommunications sector
                   continues to be the hardest hit, with 19% of jobs in the
                   sector eliminated so far this year." (Spanish newspaper
                   Cinco Días, 05/09/2001)

                   "The serious budgetary difficulties in Germany and Italy and
                   less severe difficulties in Spain are joined by those of France,
                   whose cash deficit rose by 16% in the first five months of the
                   year." (Spanish newspaper Expansión, 05/09/2001)

                   "German Minister of the Economy Werner Müller admitted that
                   growth in the gross domestic product of the German giant will
                   not reach 1.5% this year. Up until now he had only admitted
                   that growth would be ‘under 2%’. Müller’s declarations will act
                   as a further bucket of cold water for those who had predicted
                   a swift recovery for the German economy." (Spanish
                   newspaper Cinco Días, 05/09/2001)

                   "While U.S. industry was beginning to give off positive signs
                   of recovery, it is now the service sector that is responsible for
                   throwing a new bucket of cold water on expectations. Activity
                   in the service sector declined once again in August, according
                   to figures from the National Association of Purchasing
                   Managers. The monthly index of activity dropped from 48.9
                   points in July to 45.5 points in August, which represents the
                   second consecutive month below the 50-point level,
                   considered the dividing line between recession and growth. In
                   August there was a sharp drop in new orders, indicating a
                   serious decline in activity for the coming months. The figure
                   far exceeded the predictions of analysts who expected a
                   minimum reduction to 48 points at most." (Spanish
                   newspaper Cinco Días, 06/09/2001)

                   "According to figures from the International Monetary Fund,
                   between 500 billion and a trillion and a half dollars a year –
                   between 1.5% and 4.5% of worldwide gross domestic product
                   – generated by illegal activities are laundered through the
                   banking system." (Spanish newspaper El País,
                   06/09/2001)

                   "The Central Bank of the United Kingdom recently cut its
                   prediction for gross domestic product growth in 2001 to 2%,
                   the lowest level since the recession in the early 90s."
                   (Spanish newspaper Cinco Días, 06/09/2001)

                   "Moody’s, a rating agency specializing in risk assessment and
                   considered a world leader in this area, warned yesterday of
                   the possibility of lowering the rating of Japanese sovereign
                   bonds."

                   "Today the gross domestic product figure for the second
                   quarter of the year will be announced, and analysts’
                   predictions point to a drop of between 0.9% and 1%. If this is
                   the case, the economy would technically enter a recession
                   after a 0.2% fall in gross domestic product between January
                   and March. The figure raises questions about the future of the
                   world’s second economy in the context of a slowdown
                   heightened by the weakness of the United States." (Spanish
                   newspaper Cinco Días, 07/09/2001)

                   As can be seen, the economic crisis is not a consequence of
                   the September 11 attacks and the war against Afghanistan.
                   Such claims could only be made out of total ignorance or an
                   attempt to hide the real cause. The crisis is a consequence of
                   the resounding and irreversible failure of an economic and
                   political conception imposed on the world: neoliberalism and
                   neoliberal globalization.

                   The terrorist attacks and the war did not give rise to the
                   crisis, but they have considerably aggravated it. What had
                   already been rapidly advancing was abruptly and untimely
                   boosted even further. Humanity must now confront three
                   extremely serious problems, which feed off of one another:
                   terrorism, the war and the economic crisis.

                   The economic crisis also means the aggravation of major
                   problems that are far from being solved: poverty, hunger and
                   disease, which kill tens of millions of people in the world
                   every year; illiteracy, lack of education, unemployment, and
                   the exploitation of millions of children through child labor and
                   prostitution; the trafficking and consumption of drugs, which
                   mobilizes and absorbs hundreds of billions of dollars; money
                   laundering; the lack of drinking water; the scarcity of housing,
                   hospitals, communications, schools and educational facilities.
                   The crucial rights of all human beings are affected.

                   The crisis will have an especially negative impact on the
                   struggle for sustainable development, the preservation of the
                   environment and the protection of nature from the merciless
                   destruction to which it is being subjected, and which is
                   causing the poisoning of the waters and the atmosphere, the
                   destruction of the ozone layer, deforestation, desertification,
                   and the extinction of animals and plants. How could this
                   possibly not be taken into the slightest account?

                   There are nations and even entire regions on some continents
                   that could be annihilated if terrifying plagues like AIDS are
                   not urgently combated and defeated by humankind; and if
                   terrorism, war and the economic crisis are not resolutely
                   confronted. Now is the time when cooperation among all
                   countries is needed more than ever before.

                   Although it is essential to return to this theme before I finish
                   my presentation, I would first like to explain how the current
                   international situation and the economic crisis are influencing
                   and will undoubtedly continue to influence our own country.

                   The economic crisis had already been affecting some of our
                   main sources of convertible currency.

                   The most direct immediate consequences: the price of sugar
                   on the world market has fallen from 9 to 6.53 cents a pound;
                   the price of nickel, another export line in which production had
                   increased alongside a reduction in costs and fuel
                   expenditures, dropped from 8.64 dollars to 4.715 dollars a
                   ton; sales of tobacco, another of our most important export
                   products, are declining in all markets. The crisis has also
                   limited other exports of goods and services that were being
                   developed.
 
 
 
 

                   Direct consequences of the terrorist attacks and the war
                   unleashed

                   Despite the world economic crisis that was developing and
                   the rise in airfares resulting from increased fuel costs, we had
                   received a total of 1,304, 597 tourists as of August 31 this
                   year. This represented growth of 7.8% in comparison with the
                   same period last year, when 1,200,076 tourists were received.

                   The number of visitors staying in tourism industry facilities
                   grew by 11.3%.

                   In September, the total number of visitors decreased, in only
                   20 days, by 9.9% in comparison with the same month last
                   year. It is estimated that the decrease for the month of
                   October will reach 14%. Varadero and the city of Havana, the
                   country’s two most important tourist destinations, are also
                   the most affected.

                   The goal of receiving a total of two million tourists was
                   feasible, and the first million was reached three weeks earlier
                   than last year, during the first quarter. Now the growth
                   achieved will likely be only 3% to 6%.

                   The blow dealt to the Caribbean after September 11 was even
                   more severe. They depended more on tourism from the United
                   States.

                   There have been other negative effects resulting from the
                   causes mentioned above and from other causes aside from
                   terrorism and the war:

                   The possibility of obtaining credits has been reduced due to
                   the reduction in our convertible currency income.

                   We have financial obligations that must be met despite the
                   reduction in convertible currency income.
 
 
 
 

                   Foreign exchange bureaus

                   Cuba’s foreign exchange bureaus (known by the acronym
                   CADECA) felt an immediate effect as soon as the bombing
                   started. To allow for a fuller understanding, I need to explain
                   that during the most difficult moments of the special period,
                   the depreciation of our currency, the Cuban peso, led the
                   exchange rate to 150 pesos to the dollar. The measures
                   adopted and the creation of the CADECAs improved the rate
                   to 20 pesos to the dollar. This brought major benefits to the
                   population: their money rose in value, and all the people were
                   given access to stores operating in convertible currency.

                   Over the course of more than five years, our country achieved
                   an unprecedented feat, unique in the world: despite the
                   blockade and the economic war, it managed to maintain a
                   stable exchange rate for its currency, with minor fluctuations
                   in one direction or the other. The bank always obtained a
                   small difference in its favor, because the CADECAs met with a
                   greater supply of dollars for pesos than the supply of pesos
                   for our convertible pesos [equivalent in value to U.S. dollars
                   within Cuba]. The difference obtained was devoted entirely to
                   acquiring raw materials sold in convertible currency in order to
                   manufacture products for sale to the population in Cuban
                   pesos, from French bread to brand-name beer, along with
                   many other products. The national currency funds thus
                   recovered served in turn to maintain the stability of the
                   peso-dollar exchange rate.

                   Then the situation was reversed: the supply of dollars
                   decreased and the demand for convertible pesos increased.
                   For 20 consecutive days, with the exception of three, the bank
                   supplied more dollars than it received. The adverse balance
                   reached almost four million dollars.

                   The CADECAs operate on the principle of supply and demand;
                   it can be no other way. As a result, the peso began to decline
                   in value. At one point, the exchange rate reached 28 pesos to
                   the convertible peso in a number of provinces. Three days ago
                   it stabilized at 26 pesos to the convertible peso; convertible
                   pesos are equivalent in value to U.S. dollars and can be
                   immediately changed into U.S. dollars upon request.

                   The peso, in these circumstances, lost 18.18% of its value.
                   This is a situation that must be monitored closely. At the
                   moment, the country should not take any risks with its
                   convertible currency resources. It is our duty to inform our
                   people, so that they may adopt the decisions they deem most
                   advisable under any given circumstances. At times when the
                   situation calls for the devaluation of the peso, they should
                   not let themselves be influenced by the advice of speculators
                   or by fear.

                   It should not be forgotten that the Revolution, in such
                   difficult conditions as those prevailing in 1994, succeeded in
                   bringing about the decrease in the exchange rate from 150
                   pesos to the dollar to 20 to the dollar, and it kept this rate
                   relatively stable for many years. The population has the
                   possibility of making term deposits in pesos, which pay an
                   interest rate of 7.5% annually, triple the interest paid on
                   accounts in dollars, and 50% more than the interest paid on
                   convertible pesos.

                   In the end, the Revolution will win this battle against the
                   consequences of the international economic crisis as well, no
                   matter how serious that crisis becomes, and its currency will
                   eventually increase in value once again.

                   The Revolution, with all its moral authority, guarantees all
                   citizens:

                                  That the CADECAs will not be
                                  closed

                                  That all bank deposits, whether
                                  in regular Cuban pesos,
                                  convertible pesos or dollars, will
                                  be absolutely respected.

                                  That the stores that sell goods
                                  in convertible currency, and to
                                  which everyone has access, to a
                                  greater or lesser extent, in
                                  accordance with their income in
                                  one currency or the other, will
                                  not be closed.

                                  That the farmers markets will
                                  remain open.

                                  That the value of the Cuban peso
                                  will be resolutely defended. The
                                  prices of goods and services
                                  currently offered to the
                                  population at official prices,
                                  whether rationed or not, will not
                                  go up by a single cent. In
                                  accordance with this policy, the
                                  only prices that may vary are
                                  those in the farmers markets, for
                                  obvious reasons, since they
                                  operate on the basis of supply
                                  and demand, and those in the
                                  state-run farmers markets, which
                                  should use the regular farmers
                                  markets as a point of reference,
                                  but maintain lower prices,
                                  depending on the resources
                                  available to us. The prices in
                                  convertible currency stores may
                                  vary as well, as they always
                                  have.

                                  The prices of the 700,000
                                  Chinese television sets that will
                                  be distributed and sold to the
                                  population in national currency
                                  will be calculated at the
                                  exchange rate of 20 pesos to the
                                  dollar, as was previously
                                  established. They will be paid for
                                  in the installments agreed upon,
                                  with no interest charges
                                  whatsoever.

                   We have not lived through ten years of the special period in
                   vain.

                   Today, of course, the main concern of our people and the
                   planet as a whole is the preservation of peace, because
                   without peace, the world would be headed towards a fatal
                   abyss. And we will struggle for peace with the same courage,
                   honor and dignity as we always have.

                   We will confront the economic crisis successfully. No sacrifice
                   intimidates us, not even the sacrifice of our lives. This is very
                   well known. We have endured all manners of sacrifices for
                   many years. Those who thought the Revolution would only
                   last a matter of weeks now admire our heroic capacity to
                   resist and move forward.

                   Many pages could be filled with accounts of the feats we have
                   achieved. We need only mention a few:

                             Before the special period, out of every
                             peso invested, 80 cents were exploited,
                             and that figure fell to 50 cents in 1994;
                             today it stands at 91 cents. In 1994, it
                             took approximately 12 days to build one
                             hotel room; in 2000, the time was reduced
                             to 2.2 days.

                             The budget deficit has been maintained at
                             less than 3% of the gross domestic
                             product over the last five years, after
                             reaching 33.5% in 1993.

                             Labor productivity has increased by 19%.
                             Almost 75% of the growth in the economy
                             has resulted from this factor.

                             The tourism sector has experienced an
                             eight-fold increase in income and a
                             fivefold increase in the number of tourists.
                             This has been achieved by merely tripling
                             the number of hotel rooms and doubling
                             the number of workers.

                             Oil production, which totaled 500,000 tons
                             at the beginning of the special period, has
                             now risen to the equivalent of 3.6 million
                             tons, between oil and natural gas. We will
                             not hesitate to invest in this area. Next
                             year we will surpass the figure of four
                             million tons. For each ton of Cuban oil and
                             natural gas used in electrical power
                             production and other industries, the
                             country saves 60% of the price in
                             convertible currency.

                             Production levels today are the same or
                             much higher in comparison with 1989 in
                             sectors like tourism, manufacturing for the
                             domestic convertible-currency market,
                             electrical power generation, nickel,
                             vegetable crops, citrus fruits,
                             pharmaceuticals, cigars for export, and
                             others. The same holds true for results in
                             education, health care, culture, sports and
                             science.

                             The daily per capita calorie intake rose
                             from 1948 calories in 1994 to 2578 last
                             year, while the protein intake went from
                             47.7 grams to 68.3 grams in the same
                             period.

                             The average monthly salary, which was
                             185 pesos in 1994, should reach 242 pesos
                             by the end of the year, while the average
                             income, which includes monetary
                             incentives and other forms of payment in
                             kind, will reach 373 pesos.

                             In the state-funded public sector, 82% of
                             workers, or 1,091,200 workers in all, have
                             received raises in their salaries.

                             In the self-financing enterprise sector,
                             73.3% of workers, or 1,322,000 workers,
                             are paid according to performance.

                             Over 1.2 million workers are eligible for
                             performance-based incentives in
                             convertible Cuban pesos or their
                             equivalent.

                             The farmers markets, from their
                             emergence in 1994, reduced their prices by
                             84%. The state-run farmers markets,
                             which now extend throughout the country,
                             and charge lower average prices than the
                             regular farmers markets, have served to
                             curb price increases in the latter.

                             Unemployment, which rose to 8% in the
                             worst years of the special period, was
                             reduced to 5.4% in 2000. The differences
                             among regions in this regard are a focus of
                             special attention.

                             In 1994 there were power cuts on 344
                             days, almost every day of the year, and
                             1.2 million MW of energy were not
                             provided due to a power deficit; last year,
                             there were power cuts on only 77 days,
                             with 64,000 MW not provided.

                             Residential power consumption grew by
                             16% in the last few years. That growth
                             could have been 25% if the energy-saving
                             program had not been implemented.

                             There is greater protection of the
                             environment today, with a decrease in all
                             types of pollution (of the soil, water and
                             air). Economic growth has not been
                             achieved at the cost of destroying the
                             environment, but instead has contributed
                             to improving it, in line with sustainable
                             development.

                             The percentage of the population with
                             access to drinking water rose from 82% to
                             94%, with over 1.2 million people
                             benefiting from the construction of water
                             supply systems in 2454 rural communities.
                             Almost all of the country’s water is
                             chlorinated.

                             A natural gas program is underway, and
                             since the end of 1998, it has benefited
                             over a million people in 268,209
                             households, who can now cook with
                             bottled gas instead of kerosene.

                             The telephone expansion program that
                             began in 1999 has provided 146,750 new
                             telephone lines so far.

                             All public telephones have been changed
                             to digital phones. In 1999, there were
                             11,860 public telephones, and that number
                             had risen to 18,000 by the end of the year
                             2000. A further 4700 will be installed this
                             year.

                             Some 320,000 new homes have been built
                             in the last five years, benefiting over 1.2
                             million people.

                             Social security and social protection
                             services have been guaranteed for the
                             most vulnerable sectors.

                             During these 10 years of the special
                             period, over 17 billion pesos have been
                             paid out in pensions.

                   There is no need for me to talk about the battle of ideas and
                   the colossal social project that you all know about, which is
                   leading us towards a much more fair and improved socialism,
                   and towards the goal of becoming the most educated and
                   cultured people in the world. Suffice it to say that it
                   encompasses 70 programs and hundreds of tasks, with
                   several of the most important already completed.

                   Some future dreams will have to wait, but these will be
                   fulfilled.

                   The most important investments have already been made,
                   and were minimal. The fundamental role has been played and
                   will continue to be played by the immense human capital of
                   our people.

                   Today we are politically more united and stronger than ever.

                   We are much better prepared to confront this situation.

                   Our social justice will allow us to protect all our people.

                   There is greater organization in our political and grassroots
                   institutions, our State and our Government.

                   Our enterprise sector is improving; we have learned to
                   produce with fewer resources, greater efficiency and greater
                   discipline.

                   We are aware of what has been happening in the world to
                   those who have renounced socialism and implemented
                   neoliberal policies.

                   We have a people who are steadily becoming ever more
                   cultured, more conscientious, and better prepared in every
                   sense.

                   At the beginning of the special period, our socialist ideology
                   had suffered a terrible blow. Today, the terrible blow has
                   been dealt to the ideology of our adversary, through a
                   profound economic and ideological crisis.

                   I noted earlier that before concluding, I would return to the
                   issue of terrorism, the war and the international economic
                   crisis.

                   Although we have made our stance known, I think it would be
                   worthwhile to recall that on September 11, just hours after
                   the events, and having expressed our total condemnation of
                   the brutal attack and our sincere and selfless solidarity with
                   the people of the United States – since we never asked for
                   nor expected anything in return – we expressed a conviction
                   that we continue to hold today, with more strength and
                   certainty than ever: "None of the present problems of the
                   world can be solved by force. [...] The international
                   community should build a world conscience against terrorism.
                   [...] Only the intelligent policy of seeking strength through
                   consensus and the international public opinion can decidedly
                   uproot this problem [...] this unimaginable event should serve
                   to launch an international struggle against terrorism. [...] The
                   world cannot be saved unless a path of international peace
                   and cooperation is pursued."

                   A week later, in San Antonio de los Baños, I declared on
                   behalf of our people, "Whatever happens (that is to say,
                   whether or not there is a war), the territory of Cuba will never
                   be used for terrorist actions against the American people."

                   I added something else: "We will do everything within our
                   reach to prevent such actions against that people. Today we
                   are expressing our solidarity while urging to peace and
                   calmness. One day they will admit we were right."

                   A week later, on September 29, at the Revolutionary Mass
                   Rally held in Ciego de Avila, I continued to stress our points
                   of view: "Nevertheless, no one should be misled into thinking
                   that the peoples of the world, and a number of honest
                   political leaders, will not react as soon as the war actions
                   become a reality and their horrific images start to be seen.
                   These will then take the place of the sad and shocking
                   images of the events in New York at a time when forgetting
                   them would bring irreparable damage on the spirit of
                   solidarity with the American people that is today a primary
                   element towards the eradication of terrorism, without the
                   need to resort to a war of unpredictable consequences and
                   avoiding the death of an incalculable number of innocents.

                   "The first victims can already be seen. They are the millions
                   trying to escape the war and the dying children with ghastly
                   appearance whose images will move the world to pity without
                   anyone being able to prevent their dissemination."

                   The events that have been taking place make it increasingly
                   clear how right we were.

                   An editorial in Granma, the official newspaper of our
                   Communist Party, published on October 8, just hours after the
                   war had been unleashed, stated: "It is not a war against
                   terrorism; [...] it is a war in favor of terrorism, since the
                   military operations will make it more complicated and difficult
                   to eradicate it. It is like pouring oil on the flame.

                   "From now on, there will be a real avalanche of news about
                   bombs, missiles, air strikes, the advance of armored vehicles
                   with troops of ethnic groups allied with the invaders, the
                   dropping of paratroops or the ground advance of elite forces
                   of the attacking countries. Rather soon, there will be news
                   about occupied cities, the capital included, and TV images of
                   whatever censure permits or escapes control. The fight will be
                   against the people of that country and not against the
                   terrorists. There are no battalions or armies of terrorists. This
                   is a sinister concept and an insidious method of struggle
                   against a ghost."

                   After 26 days of relentless bombing, those who have been
                   following events from day to day can see that what has
                   happened up until now is exactly as we predicted.

                   The war began inexorably. We knew that it was extremely
                   unlikely, practically impossible, that it would not happen.
                   Nevertheless, this has not led us, either before or after, to
                   become discouraged or renounce our stance.

                   We insisted that it was necessary to fight against terrorism
                   and against the war. A spirit of revenge or hatred against
                   America never led us. It was with sadness that I meditated
                   on the mistake that, in my view, was being made but I never
                   uttered an insult or a personal offense. I have often said to
                   those involved in this battle of ideas that there is no need to
                   personally offend anyone. I rather enumerate facts, avoid
                   adjectives, and analyze with cool head and wage arguments.
                   That preserves our moral authority and prevents anyone from
                   questioning the strength and sincerity of our position.

                   Presently, I am afraid that if the possibility existed to defeat
                   terrorism without a war, through cooperation and with the
                   unanimous support of all the international community leading
                   to truly efficient measures and to the building of a strong
                   moral conscience against terrorism, that possibility tends to
                   fade away with every passing day.

                   The worst would be to come to a point when it would no
                   longer be possible to find a solution that way because I see it
                   ever more clearly that it is absurd and impossible to try to
                   resolve this through war. I try to imagine what was going
                   through the minds of the American political and military
                   strategists; maybe they thought that a colossal deployment
                   of forces would crush the will of the Taliban; perhaps, they
                   were hopeful that an initial devastating blow would attain
                   that objective.

                   Everybody knows the estimates made by NATO during the war
                   against Yugoslavia. The idea was that the objectives would
                   be accomplished in 5 days, but almost 80 days passed and it
                   had not happened. It is also a known fact that despite the
                   extraordinary display of technology and means, the Serbian
                   army was practically intact. The envoys of Russia and Finland
                   had to weight heavily to "persuade" the adversary through
                   diplomatic channels when the time had come to fight on the
                   ground, something that the members of the coalition were not
                   particularly fond of.

                   I do not share the view that the United States’ main pursuit
                   in Afghanistan was oil. I rather see it as part of a
                   geo-strategic concept. No one would make such a mistake
                   simply to go after oil, least of all a country with access to any
                   oil in the world, including all the Russian oil and gas it
                   wishes. It would be sufficient for the U.S. to invest, to buy
                   and to pay. Based on its privileges, the United States can
                   even purchase it by minting reserve bonds on a 30 years
                   maturity span. That is how, throughout more than 80 years, it
                   has bought products and services accounting for over 6.6
                   trillion dollars.

                   Military actions in Afghanistan are fraught with dangers. That
                   is an extremely troubled area where two large countries have
                   fought several wars. There are profound national and religious
                   antagonisms between them. The population of the disputed
                   territory is mostly Islamic. As the tempers grow frail, a war
                   might break out; and both countries have nuclear capability.
                   That risk is as serious as the destabilization of the Pakistani
                   government by the war. That government is being placed in a
                   highly complicated position. The Taliban emerged there, and
                   they share the same Pashtun ethnia with an undetermined
                   number of Pakistanis, in fact, no less than 10 million; and I
                   have chosen the most conservative figure among those that
                   have been mentioned. They also share with fanatic passion
                   the same religious beliefs.

                   The U.S. military are usually well versed in their trade. I have
                   met some when, after retirement, they have visited Cuba as
                   scholars. They write books, tell stories and make political
                   analyses. I was then not surprised by the information
                   released by The New Yorker magazine of October 29 in the
                   sense that there was a contingency plan to seize the
                   Pakistani nuclear warheads, in case a radical group took over
                   the government of that country.

                   It was absolutely impossible for the American strategists to
                   overlook that substantial risk. Every bomb dropped on
                   Afghanistan, every picture of dead children or people dying or
                   suffering from terrible wounds, tend to compound that risk.
                   What is hard to imagine is the reaction of those responsible
                   for protecting those weapons, to a plan that is by now of
                   public domain as much as Chronicle of a death foretold by
                   Gabriel García Marquez.

                   I am not aware of something the U.S. Special Services should
                   know only too well, that is, where and how those nuclear
                   warheads are kept and the way in which they are protected. I
                   try to imagine –and it is not easy-- how such an action could
                   be conducted by elite troops. Perhaps, one day someone
                   might tell how it could be done. But, still, I find it hard to
                   imagine the political scenario in the aftermath of such an
                   action when the fight would be against over 100 million
                   additional Muslims. The U.S. government has denied the
                   existence of such contingency plan. It was to be expected. It
                   could not do otherwise.

                   The most logical question that crosses my mind is whether
                   the heads of governments and statesmen who are friends of
                   the United States and have a longstanding political and
                   practical experience did not see these potential dangers, and
                   why they did not warn the United States and tried to
                   persuade it. Obviously, America’s friends fear it but do not
                   appreciate it.

                   It is always difficult to try to guess when it comes to these
                   issues. But, there is something of which I am absolutely
                   certain: it would be sufficient if 20 or 30 thousand men used
                   clever methods of irregular warfare, the same that the United
                   States wants to use there, and that struggle could last 20
                   years. It is completely impossible to subdue the Afghan
                   adversary in an irregular warfare on that country’s ground with
                   bombs and missiles, whatever the caliber and the power of
                   these weapons.

                   They have already been through the hardest psychological
                   moments. They have lost everything: family, housing, and
                   properties. They have absolutely nothing else they can lose.
                   Nothing seems to indicate that they will surrender their
                   weapons, even if their most notable leaders were killed. The
                   use of tactical weapons, which some have suggested, would
                   have the effect of multiplying by one hundred that mistake
                   and with it unbearable criticism and universal isolation.
                   Therefore, I have never believed that the leaders of that
                   country have seriously considered such tactics, not even when
                   they were most enraged.

                   These are simply my thoughts that I am expressing to you. I
                   think the way to show solidarity with the American people
                   that lost thousands of innocent lives, including those of
                   children, youths and elders, men and women to the
                   outrageous attack, is by frankly speaking out our minds. The
                   sacrifice of those lives should not be in vain, but rather it
                   should be useful to save many lives, to prove that thinking
                   and conscience can be stronger than terror and death.

                   We are not suggesting that any crime committed on Earth
                   should be left unpunished, I simply do not have elements of
                   judgement to accuse anyone in particular. But, if the culprits
                   were those that the U.S. government is trying to punish and
                   remove, there is no doubt that the way in which they are
                   doing it will lead to the creation of altars where the alleged
                   murderers will be worshiped as saints by millions of men and
                   women.

                   It would be better to build an enormous altar to Peace where
                   Humankind can pay homage to all the innocent victims of
                   blind terror and violence, be it an American or an Afghan
                   child. This is said by somebody who considers himself an
                   adversary of the United States’ policies but not an enemy of
                   that country, one who believes to have an idea of human
                   history, psychology and justice.

                   Having come to this point there is only one more issue left to
                   discuss.

                   What is happening with the anthrax is absolutely
                   incomprehensible. Real and sincere panic has been created.
                   The stocks of medications to fight that bacterium are being
                  depleted. Many people are buying gas masks and other
                   devices, some of which cost thousands of dollars.

                   Extravagant behavior can cause more damage than the
                   disease. When there is an outbreak of any disease, whatever
                   the cause, it is essential to warn the people and to provide
                   information on the illness and the measures that should be
                   taken to prevent it, diagnose it and fight it. Diseases are
                   carried from one country to another in natural ways, that is,
                   through people, animals, plants, food, insects, commercial
                   products and a thousand other ways, without the need for
                   anyone to produce them in laboratories. That is how it has
                   been historically. That is the reason for so many public-health
                   regulations.

                   The chaos and the psychological reaction to anthrax have
                   turned the American society into a hostage of those who want
                   to hurt it, knowing beforehand that they will sow terror. On
                   numerous occasions our country has had to face up to new
                   diseases affecting people, plantations and herds, many of
                   them deliberately introduced. No wonder our country has
                   graduated 67,128 medical doctors and thousands of
                   technicians in plant and animal health. Our people know what
                   should be immediately done in such cases.

                   No other country in the world compares with the United
                   States in the number of research centers, laboratories and
                   medications, or the capacity to produce them or purchase
                   them, to fight that or any other disease.

                   In the face of real or imaginary risk, either current or future,
                   there is no other choice but to educate the people to cope
                   with them. This is what the Cubans have done.

                   The causes that gave rise to panic should be analyzed.
                   Certainly, it could not be said that the United States is not in
                   risk of terrorist actions. However, I do not believe that under
                   the present circumstances of generalized alertness, and the
                   measures taken, any group inside or outside America could
                   come up with a coordinated action, organized in every detail
                   for a long time, synchronized and executed with such
                   precision as that of September 11.

                   In my view the main risk may lie with individual actions, or
                   actions carried out by very few people from inside or outside
                   America that could cause lesser or greater damage. None can
                   be underestimated. But as important as the preventive
                   measures that should be taken to tackle such risks, or even
                   more important, is to psychologically disarm the potential
                   perpetrators. And these include those who might want to do it
                   out of political extremism, vengeance or hatred, or a
                   significant number of people who are frustrated, unstable or
                   deranged who might feel tempted by the spectacular or by
                   wishes to be the main actors of well-known events. They
                   could drive the American people mad by sending mail with or
                   without anthrax. Everything possible should be done to put an
                   end to panic, extravaganza and chaos, then danger will be
                   reduced.

                   In Cuba we have also seen the arrival and circulation of
                   letters and postcards with strange powders and other things.
                   One hundred and sixteen of them were detected from 15 to
                   31 October. 72 were coming from abroad: 36 from the United
                   States, 8 from Great Britain, 3 from Canada, 2 from the
                   Checkia Republic, 2 from Spain, 2 from The Netherlands, 1
                   from Denmark, 1 from Chile and 1 from the Arab Emirates. Of
                   these letters 25 were addressed to me. I thank the senders
                   for their kindness.

                   Our laboratory staffs are becoming real experts. Thirty-one
                   originated within the country and circulated here, several were
                   no more than bad jokes. Five were being sent from Cuba to
                   other countries: 2 to the United States, 1 to Pakistan, 1 to
                   Italy and 1 to Costa Rica. In eight cases it has not been
                   possible to determine where they have come from.

                   Out of the 116 letters that have been examined, except for 24
                   that are still under analysis, no biological agent has been
                   found. Not one worker in our postal services, the offices in
                   the Palace [of the Revolution] or the laboratories has been
                   contaminated. We are all in good health. There was no
                   sensationalism, no scandal, no alarm or panic. No one
                   purchased gas masks or medications. I am telling you the
                   story simply to illustrate what I said about how
                   incomprehensible it is what has happened with the anthrax in
                   America.

                   Even if a bacterium had been introduced here, there would be
                   no panic and everybody would know what to do. But, it would
                   certainly be very difficult for a letter to go out from Cuba to
                   another country carrying viruses or bacteria. We are pleased
                   to know that the two letters addressed to the United States
                   did not leave our country, neither did the others that were
                   supposed to get to other countries.

                   And thus we will cooperate with every people in the world.
                   Our doctors and other specialists as well as our technicians,
                   research centers and our modest experience will be available
                   in the struggle against biological bio-terrorism and other
                   forms of terror.

                   It is clear by now that America’s friends fear it but do not
                   appreciate it. Cuba is not in the least fearful of the enormous
                   power of that nation, but it can appreciate its people.

                   Thank you, very much.

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