Cuban Economy 28

The big swindle

1 year ago Granma, Translations, ,

 

The big swindle

There is a tendency to publish arbitrary and manipulated exchange rates in the media financed from abroad, as well as false information, which has been denied by our media and on institutional sites.

January 26, 2022 23:01:05 PM

Translated and edited by Walter Lippmann for CubaNews.

Photo: Screenshot

Could someone tell us how many daily transactions are made in Cuba to buy pesos with MLC cards? Of course not, it is CUP data that banks keep secret. Maybe tell us the number of people who, in parks, living rooms of their homes, or wherever they consider appropriate, exchange CUP in cash for dollars? Of course, it is not possible to know this either.

And then, how do you believe those media that claim to know the exchange rate of the dollar, the euro, or the MLC in the street? Are these gentlemen hackers capable of spying on the phones of Cubans? Are they fortune tellers or telepaths? Did they buy a crystal ball that tells them?

Do you know what a self-fulfilling prophecy is? Let me explain: it is a prediction that, once made, is in itself the cause of its coming true. I mean, inflation certainly exists, the exchange rate on the street is different from the official one, but it is not the one that certain sites offer as true either. It becomes real thanks to the fact that many people believe them and take them as such.

How do these gentlemen arrive at the number: they simply place it with their hand. They say that they calculate it based on trends in certain WhatsApp groups, which in turn are taken from Revolico groups, which in turn… That is, Pancho says, Maria says, Pedro says, Songo says: the one who gave it to Borondongo, the one who gave it to Bernabé.

It turns out that our economy grew by 2% in 2021.Since November, the borders were opened, tourism started, the pandemic fell to bearable levels, the so-called mules return, and as a consequence of this, which means greater availability of foreign currency and products in the street, the exchange rate does not decrease, as it is to be expected, but rather it becomes violently more expensive.

How there are people getting rich thanks to such a trick. The next move was already a foregone conclusion. For a week the supposed exchange rates were manipulated until they reached spectacular numbers, and then, suddenly, by other means, the lie was circulated -by falsifying the official Gazette- that soon our banks would begin to sell a limited amount of foreign currency to the population.

Can anyone still not see the scam? It is easy to illustrate. Since I am confident that a significant number of people trust me, I say that the exchange rate is, let us say, at 105. Then, given a supposed government announcement, I claim that the rate is going down, and so I take the opportunity to buy dollars at a much lower price. With a simple deception operation, bingo, I fill my pockets. I will never lose because, if this trap does not work, I can always buy more in local currency, where, paradoxically, prices maintain a certain stability, and some even decrease.

I uploaded a post on Facebook with this topic -which was shared in several groups, and also on other social networks-, and there I said: “Now academics and other “experts” will come to justify and show the existence of these alleged rates as a scientific truth”. And I was not wrong. Someone immediately came out to refute me, and to say that a certain colleague of theirs, with a copious curriculum vitae, received an award for having invented a novel method to calculate exchange rates based on Revolico’s sales.

Really, more than 200 years after Gauss, Bayes or Laplace? And what was the name of the thesis? A magic formula for the calculation of prices, based on a population sample of speculators on Revolico? Surely the calculation of this “scientist” would be accompanied by a warning letterhead: “Estimates, I owe you the size and segmentation of the sample, variance and standard deviation, confidence intervals and other elements of seriousness and predictive good faith, because I really do not know the definitive prices agreed “privately”, nor how many products the speculators sold or if they ever sold any”.

We have every genius…! But let’s not stop at the idea that this hoax is intended to obtain illegal profits; behind it lie more sinister intentions. For example, in Venezuela, they used the same modus operandi to destroy the exchange value of the bolivar. They created a site called Dolar Today, based in the United States, which manipulated the rates upwards every day. Thus, together with other economic blockade measures, they succeeded in inducing galloping inflation in that country. From morning to afternoon, in just three or four hours, prices rose extraordinarily: something impossible to explain with sound logic.

Of course, conditions in Venezuela are different from those in Cuba: 95% of the retail trade there -as well as the foreign trade that feeds it- is in private hands. It is not surprising then that we have seen such “geniuses” many times trying to show the “advantages” of privatizing foreign trade for our economy. This is the strategic link they need to change.

In any case, these are illegal practices that generate uncertainty and violate international norms; but respect for legality has never been a virtue that accompanies U.S. governments when they insist on destroying countries that do not bow to their designs.

Have you ever wondered who finances those sites that supposedly inform you of how the MLC is doing today? Do you believe in the goodness of the same people who blockade us and prevent a father from sending remittances to his children, or a son to his mother, from their territory?

Certainly, our country is going through difficult times. To overcome them and reactivate the economy, it is necessary to control the pandemic, and in this -thanks to our vaccines created by true scientists- we have taken solid steps forward.

There is no other solution than to generate goods and services with our own efforts: something that can be achieved with dedication and responsibility in all areas.

IN CONTEXT

There is a tendency to publish arbitrary and manipulated exchange rates in the media financed from abroad, as well as false information, which has been denied by our media and in institutional sites.

It is noted that they intend to establish the same logic of the so-called Dolar Today in Venezuela, inducing an exchange rate that generates an inflationary stampede, by involving part of the commerce and the private sector, which take these exchange rates as a reference.

In Europe there are also antecedents of this practice. The date of September 16, 1992 is known as Black Wednesday, due to the collapse of the pound sterling, which became one of the main reasons why the United Kingdom was unable to adopt the euro. The event ultimately forced Britain to exit the European Exchange Rate Mechanism. The crash of the pound created immense wealth for investors such as George Soros. It also caused tremendous turmoil in Britain’s political landscape. The reason is that they were spending taxpayers’ money in an attempt to keep the pound afloat.

In the case of Cuba, they are also looking for a way to irritate and capitalize on the popular displeasure caused by inflation, in the midst of a scenario of shortages also motivated by the impact of the persecution of the blockade and the crisis derived from the pandemic, in order to generate scenarios of destabilization.

The three battles of 2021

1 year ago CubaDebate, Translations, , , ,

cuba-debate

The three battles of 2021

By Agustín Lage Dávila
December 28, 2021

Translated and edited by Walter Lippmann for CubaNews.

Photo: AP

This (No. 25) is the last note of 2021 and it is unavoidable to use it to summarize the message of what we appreciate has been essential in this difficult but also glorious year.

Cubans, each one from his or her position, with his or her ideas and values, but essentially all of us, have been involved in three great battles that will decide our future:

The control of the COVID epidemic.
The confrontation of the media and cultural aggression against our project of society.
Economic development, even in the context of the blockade.

These posed enormous threats to us: the first one threatened our health, the second one, our thinking, the third one, our material sustenance. The three together threatened our Nation.

In the first two we won, unquestionably. We must consolidate them and project them into the future, because they can continue, but they are essentially victories. In the third one, we managed to resist, which is no small thing, and it is the indispensable step to win, but the great victory still requires a lot of effort and intelligence.

The control of the epidemic of COVID-19 was achieved this year with biotechnology, science, the strength, and the experience and universality of our health system, and the educated participation of the people and their institutions. It validated the fertility of the scientific development strategy implemented by the Revolution for decades, and the importance of the connections between science and production that were built since the founding moments of the Scientific Pole, under Fidel’s leadership.

It validated the concept that health cannot be merchandise, and that the budgeted or entrepreneurial institutions on which health services depend have to be the socialist property of all the people. This is not only for moral reasons (which is the main thing) but also for reasons of efficiency. This battle will leave experiences for the improvement and development of both actors, industry and the health system, which we must apply immediately because the global pandemic context will continue in 2022.

The media and cultural aggression, with which, especially this year, an attempt was made to divide the people and erode their collective capacity to respond to the challenges of the moment, was defeated. Its implementation and financing (we know well by whom), in combination with the reinforcement of the blockade, precisely at a time when we were facing a dangerous epidemic, will go down in history as one of the greatest political immoralities of this century. It will be remembered in the gallery of shame, together with the Weyler reconcentration, the Nazi holocaust, the nuclear bombing, the Vietnam war, the support to the dictatorships of the South American cone, the South African apartheid and the murders of teachers by counterrevolutionary gangs in Cuba. History will not absolve its articulators.

The media and cultural aggression against Cuba is a war of thought. We defeated it, as Martí wanted “with thought”. The encouragement of violence, the promotion of selfish appetites, the distrust in the future of the country, and the dissemination of intellectual superficialities, crashed against the wall of Cuban culture, now solidified by six decades of massive and free access to education. They gambled on finding many influential fools in Cuba, and it turned out that there were very few.

This battle also leaves us experiences for the improvement and development of political and cultural work, which must be well analyzed because this episode of 2021 is part of an historical dispute of more than two centuries.

The third battle, that of economic development, has not yet been won. And it would be superficial to attempt a simplifying analysis in the space of 4 pages of a blog. But there are some things to say:

The first is that we have resisted the longest economic onslaught in world history (60 years), articulated by the largest economic and military power in world history; and we continue to resist 30 years after the collapse of the allies we had in Eastern Europe. And here we are, our people without hunger, without mafias, without housing evictions, with all their children in school, with our people’s government functioning under the socialist Constitution that we made and approved ourselves. This capacity dor resistance makes us proud, not only because of the resistance itself, but also because it indicates our capacity for development. Without sovereignty and national unity, no economic strategy, no matter how “technically brilliant” it might be, could work.

The second is that we are not frozen in old economic strategies, which worked at the time but have already fulfilled their historical role and exhausted their capacity to adapt to the changes in the world economy. We are in a moment of legislative and organizational creativity to adapt our development model to the new realities, without ceasing to be sovereign, equitable, educated and socialist.

The third is that the road to economic and social development must be traveled in a world context that is not the one that existed in the 1960s, when the Revolution made its first plans for economic take-off. We must now work in a globalized economy, which depends much more on the external economic balance, and on the capacity for international insertion, especially for small countries. It is also in an economy of rapidly changing technologies, which demands a higher dynamic of creation of diverse enterprises and connections between enterprises and scientific and educational institutions, as well as a higher dynamic of diversification of products and services of high added value.

All this requires managerial as well as technological creativity, and it is necessary to create the regulatory context that allows and stimulates it; and to train the young cadres who will play a leading role in it.

The fourth is that, with few natural resources and scarce domestic demand, and with a blockade that will continue (because our historical adversaries do not know how, nor can they do otherwise), our audacity to build material prosperity based on social justice and access to knowledge is essentially a cultural challenge. It will be culture, ethical, legal, scientific and technical, that determines our capacity to decouple economic growth from the expansion of inequalities, that expands the space of the possible, and establishes the speed of our progress.

The battles of this year 2021 prepare us to continue building the possible country that we Cubans want. Not the one that others want to impose on us, but the one we Cubans want.

Agustín Lage Dávila is a prominent Cuban scientist. He was the Director of the Center of Molecular Immunology in Havana for 25 years. Advisor to the President of BioCubaFarma. He has received numerous national and international distinctions. He was Deputy to the National Assembly for several legislatures.

Mandatory quarantine ends November 7

1 year ago CubaDebate, Translations, ,


Cuba eliminates mandatory quarantine of international travelers upon arrival in the country from November 7 (+ Video)

By: Lissett Izquierdo Ferrer, Journalist from Cubadebate. Graduated from the University of Havana (2014). She worked at the Cuban News Agency from 2011 until September 2018. Contact: lissett@cubadebate.cu
October 19, 2021
Translated by Walter Lippmann for CubaNews.

As of November 7, the mandatory quarantine of international travelers upon arrival in the country is eliminated. Photo: Ariel Ley Royero / ACN.

The 10 international airports are already ready for the reopening of the Cuban borders on November 15, Tourism Minister Juan Carlos García Granda reported on Tuesday at the International Press Center.

“It will be a controlled and staggered reopening, with the guarantee that in the next month more than 90% of the population will have the complete vaccination scheme,” he said and commented that in the last 15 days there has been a decrease in the number of positive cases to covid-19, with the same behavior in all provinces.

García Granda specified that as of November 7, the mandatory quarantine of international travelers upon arrival in the country is eliminated.

Other measures announced by the minister:

  • By day 15, the border entry PCR is eliminated.
  • All travelers (Cubans or foreigners) who enter the country must present a health passport or international anticovid certificate of those vaccines certified by the corresponding regulatory agencies.
  • Those who do not have these documents are obliged to present a covid-19 negative PCR certification at the arrival of the country with no less than 72 hours before traveling, carried out in a certified laboratory in the country of origin.
  • Epidemiological surveillance of international sanitary control will be maintained at all entry points, as well as in hotel facilities, for which medical assistance is strengthened with the location of basic health equipment in the facilities themselves.
  • Children under 12 years of age, regardless of their nationality, will be exempt from presenting a vaccination schedule or PCR test upon arrival in Cuba.
  • The presentation of the Declaration of Health of the Traveler (Affidavit of Health) will be required for all those who arrive in the country.
  • The mandatory use of the nasobuco is maintained within the air and port terminals, as well as throughout the country.
  • To board the flight at origin, airlines will require their passengers to provide evidence of a vaccination scheme or a negative PCR test applied within 72 hours beforehand.
  • The International Sanitary Control staff will randomly take samples for PCR at the airport.
  • Any traveler who arrives in the country and shows signs and symptoms of covid-19 or another communicable disease will be referred to a health institution and a PCR test will be performed.
  • The owners of rental houses or people who host non-resident travelers in the country are responsible for immediately informing the corresponding health authorities of the appearance of any symptoms that they present.
  • The health areas in the community will maintain epidemiological surveillance of tourists staying in private homes.
  • For Cuban travelers residing in the country, the obligation to appear at the family doctor’s office or health area is restored within a period of no more than 48 hours after their arrival, to be followed up by the family doctor.
  • All Cuban travelers residing in the country, if not vaccinated, will be performed an antigen test on the seventh day of arrival in their health area and if they present symptoms, they will be treated as a suspected case.
  • The protocols in the facilities are reinforced: the use of the mask in closed places and in the presence of other people, physical distancing, constant sanitation, hand disinfection measures, taking temperature and others.

 

The minister recalled that workers in the tourism sector and workers in transport, customs, immigration and aviation, together with those of Public Health, were among the first to be vaccinated, and it was agreed that before November 15 they would be vaccinated. apply a booster dose.

“We work for a responsible recovery of tourism in Cuba: All the facilities that will provide service will have the Tourism + Hygienic and Safe certification, guaranteeing compliance with the sanitary protocols established by Public Health”.

García Granda highlighted that a second training cycle is currently being developed on hygienic-sanitary protocols in the tourism sector, with the participation of state and non-state workers.

Varadero opens its doors to domestic tourism from next October 25

 

Varadero opens its doors to domestic tourism from next October 25. Photo: Ismael Franciso / Cubadebate.

As they announced in a press conference, as of November 15, the domestic market, complying with the established protocols, will be able to fully enjoy the country’s tourist offer.

The minister announced that starting next Monday, October 25, the Varadero tourist center will receive domestic tourism and the marketing of all open facilities is authorized , including those that operate today for the international market, such as Cayo Santa María, Cayo Coco and Cayo Guillermo.

The owner specified that there are provinces such as Matanza and Havana whose tourist facilities already receive customers, and “as inter-provincial and inter-municipal mobility increases and taking into account the situation of each territory, this activity will grow.”

“We are in a favorable moment of de-escalation, which means to begin to recover our customs, to be able to visit relatives and go on vacation, as well as to recover the economic activity of the country, not only in the state sector, but also in the non-state sector.”

Cuba expects to receive 100,000 international travelers in the remainder of the year

 

The 10 international airports are already ready for the reopening of the Cuban borders on November 15. Photo: Ariel Ley Royero / ACN.

According to the minister, so far this year some 200,000 travelers have entered the country, and another 100,000 are expected before the end of 2021. “It is a challenge, because it depends on how the markets react, but we are optimistic.”

“We do not think that on the 15th (November) the country will be full, but we estimate that we can have an early winter,” he predicted.

The owner said that since the announcement of the opening of the Cuban borders, a great expectation has been created among tour operators and airlines and thanked the commercial partners for their confidence in the Cuban destination.

“Our expectations have been exceeded, because the tour operators of the traditional destinations in Cuba have requested more requests than planned.”

There are, he said, requests for flights from Canada, the United States, the United Kingdom, and from other European countries, as well as from Mexico, Panama, the Dominican Republic, essential to connect the markets of the Southern Cone and some European customers who are in those Destinations.

As for Russia, he specified that it plans growth for the winter season and announced that it has already been authorized to fly from different cities in that country to Cuba.

García Granda pointed out that today there is air connectivity through the regular lines that have historically flown to the Island, such as Air France, Iberia, Air Europa, and charter flights with Evelop. Recently “WorldToFly was incorporated, in which we have placed a lot of trust”.

For its part, Cubana de Aviación will soon resume its traditional routes to the markets of Argentina and Spain, said the minister and argued that for those customers who wish to come from Asian countries and the Pacific area, they can do so through Turkish Airlines, which has restored frequencies to Havana.

Regarding flights from the United States, the minister emphasized that Cuba is open to all countries, “no one is discriminated against,” and it is even expected that American airlines will be among those that will rejoin when the borders are reopened. “There will be the option of traveling to any of the 10 international airports, everything will depend on what they are allowed to do.”

Asked about the losses suffered by the sector due to the pandemic , García Granda recalled the impact that tourism activity has on the national economy and said that currently the focus is on reversing the situation as soon as possible. “More than looking back, looking forward; how much more needs to be done to attract travelers; what must be foreseen so that the level of satisfaction is higher ”.

Tourist offer will have 4,000 new rooms

 

The minister informed that 4,000 new rooms will be incorporated and asserted that the country is open to more negotiations, air operations and even to cruises from any destination.

In these last two years, he commented, the sector has taken the opportunity to increase e-commerce and its necessary infrastructure, as well as to increase “the participation of all economic actors that complement and enrich the tourism product and enable new life experiences for those of us. they visit ”.

Likewise, he added, work is being done on the possibility of offering Cuban anticovid vaccines to international visitors.

  • At airports, the client will have access to free WiFi for 30 minutes.
  • The facilities have improved their comfort, and those with a five-star category already guarantee Internet connection from the rooms, public areas and beach areas, while working in four and three-star hotels.
  • New platforms and APKs are incorporated to serve the client in airports, transport and hotel facilities.
  • The information will be digitally available and online payment facilities are enhanced.

The owner recalled the ban on using the US dollar in cash in Cuba, and reiterated that transactions may be carried out in freely convertible currencies authorized in the country such as the Canadian dollar, the euro, the British pound, the Japanese yen and the Mexican peso. .

For months, prepaid cards in freely convertible currency (MLC) have been available, which can be purchased by tourists in the exchange offices of airports, marinas and tourist areas, and used to pay for services in Cuban territory.

These cards are valid for two years and the amount that the traveler has not spent upon leaving the country will be reimbursed if he wishes.

Prepaid cards available in freely convertible currency (MLC). Photo: Ariel Ley Royero / ACN.

 

“We work for a responsible recovery of tourism in Cuba.” Photo: Ariel Ley Royero / ACN.

On video, press conference


https://www.facebook.com/watch/?v=1059060618236269

Unseemly proposals: medicines “a la izquierda”

2 years ago Granma, Translations, ,

Unseemly proposals: medicines “a la izquierda”

Unfortunately, while some seek any remedy to survive the setbacks in the midst of a health crisis, there are those who take advantage of this misfortune to enrich themselves.

Author: Ventura de Jesús | internet@granma.cu
Date September 4, 2021@ 00:09:22 AM

Translated and edited by Walter Lippmann for CubaNews.

Photo: Freddy Pérez Cabrera
One listens impassively, as if deaf, when someone mentions that a certain medicine, such as a Rocephin vial or an Azithromycin tablet, is quoted in the informal market at prices exceeding one thousand pesos.

This is a simple reaction, because this type of information is not always completely real. However, we are facing a sad truth.

According to the listings on digital platforms, there are other drugs that exceed 500 pesos, such as Cephalexin, Duralgina, Vitamin C, Ibuprofen, Amoxicillin, Paracetamol, Metronidazole, Tetracycline, Clotrimazole in ovule and Nasalferon, just to mention a few.

One knows that the real basis is the shortage caused by the obstinate economic blockade of a government that cannot stand us as a sovereign country, and hunts us down in order to hinder any attempt to buy medicines and the supplies [needed] to manufacture them -and then they say that it is not to death, that the war they are waging against us is not against the people-. This, together with the world crisis that has unleashed this pandemic.

However, no one can deny that, behind closed doors, the shortage situation is aggravated by the lack of administrative control over the flow of drugs, and by carelessness, irresponsibility and indolence.

In any case, it takes a hard face, and a human face like a rock, to approach a family that is fighting tooth and nail for the life of a loved one, and make the unseemly proposal of selling salvation at a sky-high price.

It happens that, overwhelmed by the illness of the family member, shaken by the desperation caused by the real risk of death, many people get away from what is decent and unceremoniously pay the shameless opportunists for the smuggled medicine or the one brought in duty-free from abroad and which was not authorized for legal sale. On the other hand, necessity means that no one takes the trouble to speculate on the origin of the drug, nor does anyone notice the clear malice of the gesture. It is like a reciprocal effect, the shameless one takes advantage and the needy one solves part of his problem.

On the subject, in recent days it became known that a woman from Matanzas is serving a six-year prison sentence for illicit drug trafficking, an unscrupulous practice which, we insist, has been accentuated in times of pandemic.

The aforementioned author of the crime managed to acquire in several units of the province the analgesic known as Tramadol, for its subsequent sale at an overprice, using the informal market in Havana.

The severity of the sentence also has to do with the fact that the said drug is among those that produce effects similar to drugs, narcotic and psychotropic substances.

After the investigation and the exhaustive review of the facts, the First Chamber of the People’s Provincial Court of Matanzas issued the sentence, which also included sanctions for other persons involved.

This issue, and its different aspects, has been addressed without failing to point out the undeniable link of this practice with the lack of control and supervision, especially within the pharmacies and the whole network of entities involved, in one way or another, with the distribution and sale of medicines.

Successive evaluations of the pharmacy system in Matanzas in less than a year have brought to light the disorder in those establishments, according to the local newspaper Girón. On the other hand, in only two units economic damages for a value of more than 107,000 pesos were detected, a sign of fissures in the organization of the processes.

Even so, no explanation can justify the transfer of high-demand medicines which, as it is known, are not enough to satisfy the demand of the population.

Unfortunately, while some seek any remedy in order to survive the setbacks in the midst of a health crisis, there are those who take advantage of this misfortune to get rich.

There must be an end to contemplation with them, commented in recent days the First Secretary of the Central Committee of the Party and President of the Republic, Miguel Díaz-Canel Bermúdez, referring to this unacceptable procedure at the expense of human health.

Tinkering or integral re-design?

2 years ago Translations

 

 


Tinkering or integral re-design?

By Domingo Amuchastegui
August 18, 2018

Translated and edited by Walter Lippmann for CubaNews.

In the time that has elapsed since the social outbreak of July 11, the Cuban leadership has undertaken a number of changes, mostly in the sphere of the economy -of agriculture in particular- without any of them suggesting a comprehensive redesign. In good Cuban fashion, what prevails is a patchwork, patches here and there, seasoned with the usual language, without essentially modifying the statist-absolutist model that has prevailed for more than six decades.

It is a package of sixty-three measures aimed at -according to official statements- increasing food production and satisfying the unmet demand for agricultural products. The costs of inputs, electricity and aerial spraying are reduced, although they are much lower than those announced in January when the Ordinance was enacted.

The problem of non-payments is of the utmost importance. For decades the State has been collecting the crops which, after countless delays and formalities, reach the markets in reduced quantities. It is now said and repeated that “whoever buys has to pay immediately”, but the real fact is that this does not happen, and producers (private farmers -the most productive-, tenants and cooperatives) must wait for months. This has been a problem for more than sixty years. At present, these producers are owed 43 million pesos.

Last June, the provincial newspaper of Camagüey reported the case of a lost peanut harvest due to bureaucratic obstacles (Photo: Leandro Pérez Pérez/Adelante).

The pricing policy is also redefined, in products such as cattle and milk, as well as various agricultural products. But, all this “after fulfilling their contracts” with the persistence of the Acopio mechanism, which ensures the state monopoly over all forms of production and the phenomenon of non-payment: Acopio collects crops and livestock, but does not pay!

Finally, it is announced that the cooperatives that have no possibility of productive and economic recovery will be extinguished and their lands will go to the state fund instead of being immediately redistributed among tenants and individuals or among the cooperative members themselves. Or is it not an irrefutable truth that two-thirds of Cuba’s agricultural production is contributed by private farmers, a premise that should guide any agrarian policy? The real panorama is symbolized and summarized by the well-known phrase -originated in the defeat of the English King Richard III- of a Cuban economist: “My kingdom for a sweet potato”.

At all times the sweetened phrases of official optimism are repeated: “processes of objective and subjective factors”, “consolidate what we have been doing and project ourselves in other actions”, “how much we still have to do”, “the economic actors will not change with the new models if we continue with the old practices”, “foreign investment, despite the blockade, continues to be an opportunity that has not been taken advantage of (…)”.

Phrases such as: “backwardness in everything: in good practices and conceptions in agriculture, housing, in the industrial base, in agriculture…” are used again and again. But is it worth asking – sixty years later – “backwardness” or irrefutable proof that the model has not worked, and does not work?

All provinces face equally serious problems of non-compliance with respect to the areas committed for the coming harvest, which suggests -unquestionably- a harvest well below the lowest production levels of recent years. Salvador Valdés Mesa, vice president of the country, exhorts to “produce sugar with a business mentality”, as if such exhortations -which are repeated on a daily basis- had a magical effect on a population that is going through its worst economic and social moments.

Tinkering Salvador Valdés Mesa, vice president of the country, exhorts us to “produce sugar with an entrepreneurial mentality”, as if such exhortations had a magic effect (Photo: Azcuba/IPS)

In a meeting with economists and accountants, where numerous criticisms and proposals were made (not disclosed in the official press), President Díaz-Canel went so far as to state that: “The problems raised [at that meeting] are set out in the Central Report of the 8th Congress of the PCC and in the closing speech, and now you ratify and support them”.

Nothing could be further from reality. A load of criticisms and proposals made in the referred meeting -which includes a document of fundamental importance signed by five renowned economists-, goes far beyond what Díaz-Canel affirms. The most critical economists who, for years, have been raising the need to remodel the system in its essential aspects, were present there.

On the other hand, in a radio interview, the secretary of the Party in the province of Santiago de Cuba and member of the Political Bureau, Lázaro Expósito, pointed out that in his province there are more than 5000 hectares without cultivation; and that the promised hectares of sugar cane are not being fulfilled. He described as unacceptable what is happening in Public Health and Communal Services and his conclusion was categorical: “The cost of making a mistake can be very high”.

In similar terms, Prime Minister Manuel Marrero characterized the situation in the province of Cienfuegos after a recent inspection visit. Both Cienfuegos and Santiago were provinces that until just a decade ago were classified as examples of good functioning and today face extremely serious situations, a situation that extends to the rest of the country, with even more serious cases such as that of Matanzas.

MSMEs and non-agricultural cooperatives (NACs0

The role that MSMEs and NACs will be called upon to play has been highlighted a lot these days. There is no speech or newspaper report that does not highlight the issue, including their possibilities of interacting with foreign trade. However, very little has been specified to date.

Where are these MSMEs going to get the financing funds or the foreign currency they need to start their projects? The development banks are still conspicuous by their absence and nothing is being done to make their access to foreign currency investments viable. The handling and circulation of dollars continues to be subject to various restrictions, starting with remittances and how they can be freely used.

Card obligations and deductions hinder their free circulation, including the most elementary buying and selling actions; meanwhile, the official exchange rate remains at 24 pesos to the dollar, while under the table the exchange rate is 70 to one.

A positive step has been to allow MSMEs the free hiring of up to one hundred workers and the announced boost. But it has not been clearly defined which areas will be open to them. Textiles and footwear; technologies, services, tanneries, furniture and construction, housing, others? Very little or nothing has been clarified or specified. What investment funds and salaries are involved in an industry with a hundred workers? What specifications are to be defined in terms of investments from abroad?

These questions have yet to be determined, and so on, until foreign investment is reached: 100% direct or through forms of association in which the State does not have to reserve 51%? The long run of failures in this field is a dismal precedent. And foreign investment in the form of small businesses (as has prevailed until now) contributes very little. Meanwhile, the tourism industry is still reluctant to move beyond management contracts.

The Hard Core of the Cuban Economy

2 years ago Esteban Morales,
  • English
  • Español

The Hard Core of the Cuban Economy and its Consequences

by Esteban Morales
August 22, 2021

Translated by Walter Lippmann for CubaNews.

I believe that with the 8 resolutions recently approved by the Council of State and which have already been published in the Official Gazette of the Republic, our economy will enter into what can be considered the hard core, so far not taken into account by our economic policy.

Our economy, in order to become a socialist economy, must be a transitional economy.

It is that, between capitalism and socialism, there is a historical period, aimed at transforming the former into the latter. There is no direct conversion, nor automatic transition, between capitalism and socialism. Between them there is a Period of Transition, within which the struggle for the transformation of capitalism into socialism takes place. Under the power of a state, which is the representation of the conquest of political power.

Cuba, called socialist until now, had not yet entered this period of transformations from the first to the second.

The fact is that neither the state enterprise is socialist, nor state property. Both have problems that must be overcome. Together with those of an excessively centralized planning, such as ours.

The state enterprise is gradually transformed into socialist, only within a transition period, in which it, as a whole and competing with the rest of the forms of property and management, becomes the dominant one, becoming then social property or property of all the people, which is what really transforms the state enterprise into a socialist enterprise and state property into social property. As long as this transition period is not covered, which is a period of struggles and transformations, neither the state enterprise becomes socialist, nor state property either.

It is only now, when the economic policy gives the rightful place, in the process of its application, to private, medium and large property, to cooperative property, to self-employment and SMEs, all functioning as forms of management, together and coherently, with state property and foreign investment, that the objective conditions begin to be produced for us to enter into the true period of transition towards socialism. In the meantime, we were nothing. That is why our economy could not grow systematically.

When the Revolution took political power, what it achieved was only to have the capacity to begin the economic, social and political transformations to convert Cuban society into a socialist society. A process in which to convert the Cuban economy from capitalism into a socialist economy. Without this, Cuban society cannot become socialist.

And this is essentially the reason for the continuous failures in making our economy grow.

Now that we will put the economy to work in line and in a coherent manner, with all forms of ownership and management, Cuba enters into the transition towards a socialist economy and socialism.

If we had tried to do so from the moment we entered the so-called Special Period, making the real economic transformations that were required to give stability to the process of economic growth, we would not be, as we are now, headed for a new Special Period, with no time to overcome it. Well, time has already run out.

We have gone around the wheel many times, with designs and redesigns, without putting anything into practice, exhausting the political capacity of our state to achieve it.

Here is, in part, the explanation for July 11, but also, a cause, if not the only one, then the fundamental one, of Biden’s decision to betray Obama and his own campaign promises, taking up Trump’s policy towards us. Following the so many times failed, Miami’s extreme right.

And that today Cuba is facing a situation that almost surpasses all the dangers experienced until today, being necessary to put into practice, in a coherent manner, the 8 Resolutions of the Council of State, which will be what will allow us to get out of the critical juncture in which we find ourselves.

August 22, 2021.

Received by email from the author. Photo by Walter Lippmann

EL NUCLEO DURO DE LA ECONOMIA CUBANA Y SUS CONSECUENCIAS.

Por Esteban Morales
22 de agosto 2021

Creo, que con las 8 resoluciones aprobadas recientemente por el Consejo de Estado y que ya han sido publicadas en La Gaceta Oficia de la Republica, nuestra economía entrara, en lo que puede ser considerado el núcleo duro, hasta ahora no tomado en cuenta por nuestra política económica.

Nuestra economía, para pasar a ser una economía socialista, tiene que ser una economía de transición.

Es que, entre el capitalismo y el socialismo, media un periodo histórico, dirigido a transformar el primero en el segundo. No hay una conversión directa, ni transito automático, entre capitalismo y socialismo. Media entre ellos un Periodo de Transición, dentro del cual se produce la lucha por las transformaciones del capitalismo en socialismo. Bajo el poder de un estado, que es la representación de la conquista del poder político.

Cuba, llamada hasta ahora socialista, no había entrado todavía en ese periodo de transformaciones del primero en el segundo.

Es que, ni la empresa estatal es socialista, ni la propiedad estatal tampoco. Ambas arrastran problemas que tiene que ser superados. Junto a los de una planificación, excesivamente centralizada, cómo la nuestra.

La empresa estatal, se trasforma paulatinamente en socialista, solo dentro de un periodo de transición, en que la misma, de conjunto y compitiendo con el resto de las formas de propiedad y de gestión, va convirtiéndose en la dominante, deviniendo entonces en propiedad social o propiedad de todo el pueblo, que es lo que realmente transforma a la empresa estatal, en empresa socialista y a la propiedad estatal en propiedad social. Mientras no se cubre ese periodo de transición, que es un periodo de luchas y transformaciones, ni la empresa estatal pasa a ser socialista, ni la propiedad estatal tampoco.

Solo ahora, cuando se da, por la política económica, el lugar que le corresponde, en el proceso de su aplicación, a la propiedad privada, media y grande, a la propiedad cooperativa, al trabajo por cuenta propia y a las PYMES, funcionando todas, como formas de gestión, dé conjunto y de manera coherente, con la propiedad estatal y la inversión extranjera, es que se comienzan a producir las condiciones objetivas, para que entremos en el verdadero periodo de transición hacia el socialismo. Mientras tanto, no éramos nada. Por eso nuestra economía no puede crecer de manera sistemática.

Cuando la Revolución tomo el poder político, lo que logro solo fue, tener la capacidad de comenzar las transformaciones económicas, sociales y políticas, para convertir a la sociedad cubana, en socialista. Proceso dentro del cual, lograr convertir a la economía cubana, proveniente del capitalismo, en una economía socialista. Sin lo cual, la sociedad cubana, no puede transformarse en socialista.

Y de ello provienen, esencialmente, los fracasos continuos en hacer crecer nuestra economía.

Ahora, que pondremos la economía, a funcionar en línea y de manera coherente, con todas las formas de propiedad y de gestión, es que Cuba entra en la transición hacia una economía socialista y el socialismo.

 Si lo hubiéramos, tratado de hacer desde el momento en que entramos en el llamado Periodo Especial, haciendo las verdaderas trasformaciones económicas que se requerían, para darle estabilidad al proceso de crecimiento económico; no estaríamos, como ahora, abocados a un nuevo Periodo Especial, sin tiempo ya para sobrepasarlo. Pues el tiempo, ya se nos agotó.

Hemos dado muchas vueltas a la noria, con diseños y rediseños, sin poner nada en práctica, agotando la capacidad política, de nuestro estado,  para lograrlo.

Aquí está, en parte, la explicación del 11 de julio, pero también, una causa, sino la única, si la fundamental, de que Biden, haya decidido traicionar a Obama y sus propias promesas de campaña, retomando la política de Trump hacia nosotros. Siguiendo a la tantas veces fracasada, extrema derecha de Miami.

 Y que hoy Cuba se encuentre frente a una situación, que casi sobrepasa todos los peligros vividos hasta hoy.Siendo necesario poner en práctica, de manera coherente, las 8 Resoluciones del Consejo de Estado, que será lo que nos ira permitiendo salir de la coyuntura critica en que nos encontramos.

Agosto/ 22 del 2021.

Recibido por correo electrónico del autor. Foto de Walter Lippmann

The VIII Congress of the PCC: Possible Scenarios

2 years ago Translations, , ,

  • English
  • Español

The VIII Congress of the PCC: Possible Scenarios
by Domingo Amuchastegui
February 12, 2021

Translated and edited by Walter Lippmann for CubaNews.
Received from the author by email.

Finally, after two months without any official mention, the announcement was made confirming the holding of the VIII Congress of the Communist Party of Cuba (PCC) on April 16-19, coinciding with the 60th anniversary of the proclamation of the socialist character of the revolution and the victory of Playa Giron (Bay of Pigs). Quite a few Party militants and foreign observers on the subject harbored doubts as to whether or not such a congress should be held in the current conditions of economic, social and political crisis Cuba is going through. Not a few insisted that the most important thing now is to overcome as far as possible the major crisis and leave the formalities of the congress for a major.

But, something symptomatic indicated that the congress would certainly be held: the prominent and sustained manner during several days in the Cuban official media about the holding of the Congress of the Communist Party of Vietnam (PCV), highlighting in these reports the reelection of the first secretary, the election of a new Politburo with many new figures and the impulse to the redesign of its economic model of changes and reforms known as Doi Moi. Such informative coverage fit perfectly as an introduction to the holding of the VIII Congress of the Cuban Communists.

And the other “letter of introduction” to the congress, was the announcements of revision and critical rectification of the first steps (especially in matters of extreme shortages, prices, salaries, monetary unification plus corruption, monetary unification, plus corruption and “kickbacks” that have unleashed a tremendous wave of unrest and discontent) linked to the implementation of the so-called “Ordinance”. These were accompanied by the much delayed green light for the promotion of micro and small enterprises, abandoning the old limit of 127 occupations for a horizon of no less than 2000 occupations, the most important announcement in the matter of very late and always postponed reforms.

With these “letters of introduction” a certain guessing game becomes necessary, that which they call possible scenarios and hypotheses, which we will be able to see in the unfolding of this next congress.

The most positive scenario would be:

—Definitive retirement of the last leaders of the so-called “historic generation,” well into their 80’s and approaching their 90’s, headed by Raul Castro and Jose Ramon Machado Ventura. This withdrawal could have a compensatory formula similar to the one carried out by the Vietnamese a few years ago when they withdrew their “historical leaders” but keeping them in a sort of advisory council, more symbolic than effective.

—Expansion of economic reforms involving the redefinition of areas such as property, limiting the State to “the fundamental means of production” (as the great majority of the best economists in the country have been demanding for many years) and substantially increasing foreign investment [“inversión extranjera” or “EI”] in a direct and mixed manner at a much more accelerated and flexible pace.

—The land must return to its original principle: to the one who works it, converting the current tenants into owners and “freeing” the agricultural cooperatives from the constant interference and suffocation by state regulations in their work and commercialization (end of Acopio). Full independence for them.

—A possible, and more functional, reduction of the institutional and bureaucratic apparatus, be it the Political Bureau, the Secretariat, the Council of State, the Executive Committee, the National Assembly (one of the most numerous in the world and which barely functions six days a year). The National Assembly should function as a permanent body.

—The changes and reforms adopted so far are presented as starting points for a more effective deepening of the redesign of the model.

—Such changes should lead to a significant reduction of unrest and discontent if they imply a significant improvement in the current levels of crisis of the model, which is perceived as the turning point towards effective recovery horizons. Such a scenario would also have a positive impact on the international interlocutors most closely related to Cuba, laying the foundations for a better image and greater attractiveness.

The less positive scenario

—Extend the terms of the “historic generation,” introducing only minor changes in the composition of the leadership at the highest levels.

—Maintain restrictive foreign investment schemes.

—Maintaining the heavy burden of party and state apparatuses.

—The adoption of very limited “patches” to the Ordinance.

—The changes made so far are presented as the culmination of the reforms.

—If this less positive scenario prevails, it will be yet another congress without any transcendence, except that of prolonging and worsening the present levels of crisis mentioned above. In the international arena, the image it would project would be particularly negative and very unattractive to more constructive levels of association.

As for possible changes in figures, the following can be pointed out:

—Effective retirement of the most important leaders of the “historic generation,” headed by Raúl Castro and Machado Ventura in their 80s and not a few approaching their 90s.

—For the leadership of the Party, Miguel Díaz-Canel -current president (59)- should take over as First Secretary and most likely as Second Secretary Lázaro Expósito Canto (65), the most recognized and efficient provincial secretary of the Party (Santiago de Cuba).

—To replace Díaz-Canel in the presidency, the most suitable candidate -with more political-diplomatic stature and experience- would be Bruno Rodríguez Parrilla (62), current Foreign Minister, with General Luis Alberto Rodríguez López-Calleja (59), executive director of the holding company known as GAESA, as probable vice-president due to his experience in the economic field and with broad international experience.

In his absence, the engineer Inés María Chapman Waugh, favorably noted for her economic management in the field of water resources. Then comes the question: Who would assume the position of Foreign Minister? The two most likely candidates: Vice Minister Rogelio Sierra, especially for his experience in the field of relations with respect to Latin America and the Caribbean or José Ramón Cabañas could also be considered, given his extensive experience in relations with the U.S. and Canada.

—Another variant to the above would be to appoint the current Vice-President and Minister of Economy and Planning, Alejandro Gil Fernandez (54), as second to Rodriguez Parrilla, considering his proven experience in promoting the current changes, with Luis Alberto Rodriguez Lopez-Callejas assuming his position.

—It is no less important to take a no less speculative look at the current commanders of the FAR. The “historical” division generals in their 80s and some approaching their 90s, such as Ramiro Valdés Menéndez (88), vice-president Samuel Rodiles (89), President of the Institute of Physical Planning, Ramón Espinosa Martín, Vice-Minister of the FAR; Joaquín Quintas Solá (83), Leop[oldo Cintra Frías (80), the current minister of the FAR.

They could be relieved by the so-called “generation of Africans” due to their military missions in Africa and who today are in their 60s and some of them are already entering their 70s. They could be division and brigade generals such as Onelio Aguilera (62), chief of the Western Army; Rafael Hernández (71, who is black), chief of the Eastern Army; Raúl Rodríguez Lobaina (71, also black), chief of the Central Army and the recently appointed Minister of the Interior, Lázaro A. Alvarez CaSAS (57), former vice-minister of the MININT. For Minister of the FAR, the most likely candidate is Raul Castro’s favorite and current Vice Minister of the FAR, Alvaro Lopez Miera (77).

But ultimately, the most essential thing will not be the movement of leaders and commanders, but the policy designs towards a positive change or to continue clinging to the provenly inoperative model that still prevails.

 

VIII CONGRESO DEL PCC: POSIBLES ESCENARIOS 

Por Domingo Amuchastegui
12de febrero 2021
Recibido del autor por correo electrónico.

Finalmente, luego de dos meses sin referencia oficial alguna, se conoció el anuncio ratificando la celebración del VIII Congreso del Partido Comunista de Cuba en los dias 16-19 de Abril, coincidiendo con el 60 aniversario de la proclamación del carácter socialista de la revolución y la victoria de Playa Girón (Bahía de Cochinos).  No pocos militantes del Partido y observadores  extranjeros del tema, albergaban dudas sobre la conveniencia o no de celebrarse semejante congreso en las condiciones actuales de crisis económica, social y política por las que atraviesa Cuba. No pocos insistían en que lo primordial ahora es superar dentro de lo posible la mayor dicha crisis y dejar las formalidades del congreso para un major.

Pero, algo sintomático indicó que con toda seguridad se celebraría el congreso: la manera destacada y sostenida durante varios dias en los medios ofciales de información cubanos acerca de la celebración del Congreso del Partido Comunista de Viet Nam (PCV), destacándose en esas informaciones la reelección del primer secretario, la elección de un nuevo Politburo con muchas figuras nuevas y el impulso al rediseño de su modelo económico de cambios y reformas conocido como Doi Moi. Semejante cobertura informativa encajaba perfectamente como introducción a la celebración del VIII Congreso de los comunistas cubanos.

Y la otra “carta de introducción” al congreso, eran los anuncios de revisión y rectificación crítica de los primeros pasos (sobre todo en materia de carencias extremas, precios, salarios, unificación monetaria más corrupción y “mordidas” que han desatado una tremenda ola de malestar y descontento) vinculados con la puesta en práctica del llamado Ordenamiento y acompañado por la muy demorada luz verde para el fomento de las micro y pequeñas empresas, abandonando el viejo límite de las 127 ocupaciones por un horizonte de no menos de 2000 ocupaciones, el más importante anuncio en materia de reformas bien tardías y siempre aplazadas.

Con estas “cartas de introducción” se hace necesario un cierto juego de adivinanzas, eso que llaman posibles escenarios e hipótesis, que podremos ver en el desenvolvimiento de este próximo congreso.

El escenario más positivo sería:

—Retiro definitivo de los últimos dirigentes de la llamada “generación histórica,” bien entrados en los 80 y acercándose a los 90, encabezada por Raúl Castro y José Ramón Machado Ventura. Este retiro pudiera tener una fórmula compensatoria similar a la realizada por los vientamitas años atrás cuando retiraron a sus “históricos” pero conservándolos en una suerte de consejo consultivo, más simbólico que efectivo.

—Ampliación de las reformas económicas que supongan la redefinición de las áreas de propiedad, limitándose el Estado a “los medios fundamentales de producción” (como han venido reclamando la gran mayoría de los mejores economistas del país desde hace muchos años) e incrementar sustancialmente la IE de manera directa y mixta a un ritmo mucho más acelerado y flexible.

—La tierra debe volver a su principio original: al que la trabaja, convirtiéndose los arrendatarios actuales en propietarios y “liberar” las cooperativas agrícolas de la constante injerencia y asfixia de parte de las regulaciones estatales en su quehacer y comercialización (fin de Acopio). Plena independencia para las mismas.

—Una  posible, y más funcional, reducción del aparataje institucional y burocrático sea el Buró Político, el Secretariado, el Consejo de Estado, el Comité Ejecutivo, la Asamblea Nacional (una de las más numerosas del mundo y que apenas funciona seis dias al año). La Asamblea Nacional debe funcionar como órgano permanente.

—Los cambios y reformas adoptados hasta ahora se presentan como puntos de partida para una profundización más efectiva del rediseño del modelo.

—Semejantes cambios deberán producir una sensible disminución del malestar y descontento si los mismos suponen una sensible mejoría en los actuales niveles de crisis del modelo, que sea percibido como el punto de viraje hacia horizontes de recuperación efectiva. Semejante escenario supondría además un impacto positivo en los interlocutores internacionales más relacionados con el tema de Cuba, sentando las bases de una mejor imagen y mayores atractivos.

El scenario menos positive

—Prolongar los mandatos de la “generación histórica,” introduciendo sólo cambios menores en la composición de la dirigencia a los más altos niveles.

—Mantener los esquemas restrictivos a la IE.

—Mantener la pesada carga del aparataje partidista y estatal.

—La adopción de muy limitados “parches” al Ordenamiento.

—Se presentan los cambios efectuados hasta ahora como culminación de las y final de las reformas.

—De prevalecer este escenario menos positivo, será otro congreso más sin trascendencia alguna, salvo la de prolongar y agudizar los presentes niveles de crisis antes apuntados. En el orden internacional, la imagen que proyectaría sería particularmente negativa y muy poco atractiva a niveles de asociación más constructivos.

En cuanto a posibles cambios de figuras, se pueden señalar los siguientes:

—Retiro efectivo de los más importantes dirigentes de la “generación histórica,” encabezados por Raúl Castro y Machado Ventura en sus 80 y no pocos acercándose a los 90.

—Para la dirección del Partido, deberá asumir como Primer Secretario Miguel Díaz-Canel -actual presidente (59)- y como Segundo Secretario más probable Lázaro Expósito Canto (65), el más reconocido y eficiente secretario provincial del Partido (Santiago de Cuba).

—Para reemplazar a Díaz-Canel en la presidencia el candidato más idóneo -con más estatura política-diplomática y experiencia- sería Bruno Rodríguez Parrilla (62), actual Ministro de Relaciones Exteriores, teniendo como vice-presidente probable por su experiencia en el campo económico y con amplia experiencia internacional al General Luis Alberto Rodríguez López-Calleja (59), director ejecutivo del holding conocido como GAESA, o en su defecto a la ingeniera Inés María Chapman Waugh, destacada favorablemente por su gestión económica en el campo de los recursos hidraúlicos.  Viene entonces la pregunta: ¿Quién asumiría la posición de canciller? Los dos candidatos más probables: el Vice Ministro Rogelio Sierra, sobre todo por su experiencia en el campo de las relaciones con respecto a América Latina y el Caribe o también pudiera considerarse a José Ramón Cabañas, dada su extensa experiencia en las relaciones con EEUU y Canadá.

—Otra variante a la anterior sería la de nombrar al actual Vice-Presidente y Ministro de Economía y Planificación, Alejandro Gil Fernández (54), como segundo de Rodríguez Parrilla, considerando su probada experiencia en el impulso a los cambios actuales, asumiendo su cargo Luis Alberto Rodríguez López-Callejas.

—No menos importante es echar un vistazo no menos especulativo a los mandos actuales de las FAR. Los generales de division “históricos” en sus 80 y algunos acercándose a los 90 como Ramiro Valdés Menéndez (88), vice-presidente Samuel Rodiles (89), Presidente del Instituto de Planificación Física, Ramón Espinosa Martín, Vice-Ministro de las FAR; Joaquín Quintas Solá (83), Leop[oldo Cintra Frías (80), ministro actual de las FAR. Podrán ser relevados por la llamada “generación de los africanos” por sus misiones militares en Africa y que hoy están en sus 60 y tanto y algunos ya entrando en los 70. Ellos podrán ser los generales de division y brigada como Onelio Aguilera (62), jefe del Ejército Occidental; Rafael Hernández (71, negro), Jefe del Ejército Oriental; Raúl Rodríguez Lobaina (71, negro), Jefe de Ejército Central y el recién designado Ministro del Interior, Lázaro A. Alvarez CaSAS (57), ex viceministro del MININT. Para Ministro de las FAR lo más seguro es que sea el favorito de Raúl Castro y actual Vice Inistro Priumero de las FAR, Alvaro López Miera (77).

Pero en última instancia lo más esencial no será el movimiento de drigientes y mandos, sino los diseños de política hacia un viraje positivo o continuar aferrados al modelo probadamente inoperante que todavía prevalece.

 

 

 

 

 

Challenges and Priorities for Cuba Today

2 years ago Translations, ,
  • English
  • Español

Challenges and Priorities for Cuba Today

By Domingo Amuchastegui.

Translated and edited by Walter Lippmann for CubaNews.
Received by email January 27, 2020.
Written during the Trump administration.

Cuba today faces its most critical and complex situation. This is the result of the interaction of three factors. The most recent is the multifaceted impact of the arrival of the coronavirus or COVID-19, which ranges from damage to the health-care system and the population in general to the impact on its economy.  Added to this is the economic war of the Trump administration against Cuba, and with a no less harmful gravitation, the persistence of a proven inoperative model that refuses to deepen and broaden the path of reforms.

In such a context, it is essential to examine the challenges and priorities that in the short and immediate term -and with a level of urgency as never before- the Cuban leadership will have to deal with and find the best and most lasting solutions to ensure its recovery and stabilization.

At the level of the INTERNAL SECTOR:

The need to minimize and reduce to a minimum the complexities and costs of the effects of the pandemic in the shortest possible time.

Undertake the redesign of the economic model with the necessary comprehensiveness and depth. This  has been lacking in the reform measures adopted so far, which appear as isolated and incomplete patches that fail to energize the entire economy at the levels it requires. Let no one be scandalized by what I am saying. Let us recall Fidel Castro’s words to journalist Jeffrey Goldberg for the important US publication The Atlantic (9/8/2010): “The Cuban Model Doesn’t Even Work for Us Anymore”.

Such a redesign in which the state concentrates on what Cuban economists repeat over and over again: the fundamental means of production (key sectors) of the island (sugar industry, not its agricultural part; nickel/cobalt, biopharmaceuticals, tourism industry, exportable medical services, energy, citrus, fishing, rum and tobacco), which must be consistently opened to its association with foreign capital (an aspect that President Diaz-Canel and the Minister of Economy, Alejandro Gil, have been insisting on repeatedly, but still without translating them into actions and projects consistent with such an imperative).

At the same time, to get rid of the heavy and unproductive burden that has been represented for decades by the costly and unproductive ownership and administration of tens of thousands of small businesses that should be transferred to the cooperative and private sectors, in a broad and sustained project for the promotion of SMEs [Small and Medium Enterprises].

Recovery and effective dynamization of the key sectors mentioned above in terms of productivity and export capacity. SMEs -private, cooperatives and tenants or farmers- must be exempted from the tax burdens and bureaucratic interference that today slow down and asphyxiate their normal operation and development. This includes their more functional and flexible articulation to the export/import and financing processes and space in the national banking system. Open these sectors to investments by Cuban emigrants.

Specific issues of utmost importance are the need to: a) Significantly increase productivity levels and reduce production costs, especially in the tourism and biopharmaceutical industries; b) Eliminate the mechanisms of compulsory contracting by foreign companies through state agencies and the tax overload that this mechanism entails; c) Guarantee the sale of all goods and services to the Cuban economy, especially in the tourism and biopharmaceutical industries; d) Ensure the sale of all goods and services to foreign companies through state agencies and the tax overload that this mechanism entails; e) Ensure that all goods and services are sold in the Cuban market. To guarantee the sale of all supplies and equipment rental to SMEs (otherwise theft, corruption, and the so-called underground economy will continue to reign); d. To reduce by no less than 50% the tax on purchases in convertible currency stores (MLC).

Last but not least: To advance definitively, and in a comprehensive manner, in the process of monetary and exchange unification in order to stabilize in a real way the income of the population and the exchange and transfer of foreign companies operating in Cuba.

At the EXTERNAL SECTOR level:

To promptly and effectively face and settle foreign debt obligations as well as commercial credits owed.

In line with the official emphasis on the need to promote foreign investment (FI) as a strategic component, review and update the 2014 Investment Law in order to make it more attractive and encourage the arrival of foreign capital, including foreign direct investment (FDI) and other modalities that more effectively meet the requirements of foreign investment. Avoid at all costs, negotiating disasters such as those conducted with GLAXO and the Siemens/Total energy project, among others. Rationalize the Portfolio of Opportunities offered every year to foreign entrepreneurs attending the Havana International Fair (FIHAV), making it more selective and with greater incentives.

With the utmost urgency, design a strategy -and as an effective practice- to boost the growth of investments in the Special Development Zone of Mariel (ZEDM) and its Container Terminal, since so far its revenues barely cover its operating and maintenance costs. This project -the most important in the Cuban economy so far in the new century- may perish due to starvation or lack of relevant projects. Attracting important projects with the capacity to re-export to the entire region is no less indispensable.

It is time for the Cuban leadership to reflect on its pariah status with respect to the international financial system, its institutions and mechanisms, and to consider exploring and advancing in this direction, which could well begin through levels of association and cooperation with the World Bank. If successful in this approach to the World Bank, and considering that the OAS sanctions were lifted several years ago, Havana could manage -without a formal return to that organization- an approach that could be sponsored by CELAC members and that would result in some level of association and cooperation with the IDB. Such steps would undoubtedly serve to give confidence and encourage the flow of EI and credits to the Cuban economy.

Desafios y Prioridades para Cuba Hoy

Por Domingo Amuchastegui
Jan 27, 2021 8:57 AM

Cuba enfrenta hoy su más crítica y compleja situación. Ello es resultado de la interacción de tres factores. El más reciente lo constituye el impacto multifacético de la llegada del coronavirus o COVID-19, que va desde los perjuicios al sistema de salud y a la población en general hasta el impacto a su economía (Ver Coronovirus y Cuba). A esto se suma la guerra económica de la administración Trump contra Cuba, y con una gravitación no menos perjuidical, la persistencia de un modelo probadamente inoperante que se resiste a profundizar y ampliar el camino de las reformas.

En semejante contexto, resulta imprescindible un examen de los desafíos y prioridades que a corto e inmediato plazo -y con un nivel de urgencia como nunca antes- la dirigencia cubana tendrá que lidiar con ello y encontrar las mejores, y más duraderas, soluciones que aseguren su recuperación y estabilización.

A nivel de SECTOR INTERNO:

Aminorar y reducir al mínimo las complejidades y costos de los efectos de la pandemia en el más breve posible plazo.

Acometer el rediseño del modelo económico con la integralidad y profundidad necesaria, y de lo cual han carecido las medidas de reformas hasta ahora adoptadas, que aparecen como parches aislados e incompletes que no logran dinamizar la totalidad de la economíaa los niveles que la misma require. Nadie se escandalice por lo que planteo. Recordemos las palabras de Fidel Castro al periodista Jefrrey Goldberg para la importante publicación estadounidense The Atlantic (9/8/2010): “The Cuban Model Doesn’t Even Work for Us Anymore.”

Un rediseño tal en los cuales el Estado se concentre en lo que los economistas cubanos repiten una y otra vez: los medios fundamentales de producción (sectores claves) de la isla (industria azucarera, no su parte agrícola; níquel/cobalto, biofarmacéuitica, industria turística, servicios médicos exportables, energía, cítricos, pesca, ron y tabaco), que deben abrirse consistemente a su asociación con el capital extranjero (aspecto éste en el que viene insistiendo repeidamente el presidente Díaz-Canel y el Ministro de Economía, Alejandro Gil, pero todavía sin traducirse en acciones y proyectos consistentes con semejante imperativo).

Paralelamente, desembarazarse de la pesada e improductiva carga que ha venido representando durante décadas la propiedad y administración costosísima e improductiva de decenas de miles de pequeños negocios que deben ser transferidos a los sectores cooperativo y privado, en un Amplio y sostenido proyecto de fomento de las PYMES.

Recuperación y efectiva dinamización de los sectores claves antes apuntados en términos de productividad y capacidad exportadora. Las PYMES -privadas, cooperativas y arrendatarios o finqueros- deben ser eximidas de las cargas fiscales e injerencias burocráticas que frenan y asifixian hoy su normal funcionamiento y desarrollo, incluyendo su articulación más funcional y flexible a los procesos de exportación/importación y de financiamiento y un espacio en el sistema bancario nacional. Abrir estos sectores a las inversiones de la emigración cubana.

Cuestiones puntuales de suma importancia son: a) Aumentar sensiblemente los niveles de productividad y reducir costos de producción, en especial en la industria turística y en la biofarmacéutica; b) Suprimir los mecanismos de contratación obligatoria por compañías extranjeras por intermedio de agencias estatales y la sobrecarga impositiva que este mecanismo acompaña; c. Garantizar la venta de todos los suministros y alquier de equipos varios, a las PYMES (de lo contrario seguirán reinando el robo, la corrupción y la llamada economía sumergida); d. Reducir en no menos de un 50% el gravamen sobre las compras en los comercios en moneda convertible (MLC).

Por ultimo y no por ello de menor importancia: Avanzar definitivamente, y de manera integral, en el proceso de unificación monetaria y cambiaria a fin de estabilizar de manera real los ingresos de la población y de cambios y transferencias de las empresas extranjeras que operan en Cuba.

A nivel de SECTOR EXTERNO:

Afrontar y solventar con prontitud y eficacia las obligaciones de la deuda externa asi como de los créditos comerciales adeudados.

En consonancia con el énfasis oficial en la necesidad de promocionar como componente estratégico la inversion extranjera (IE), revisar y actualizar la Ley de Inversiones del 2014 en función de hacer más atractivo e incentivar la llegada del capital del capital extranjero, incluída de manera destacada la inversion extranjera directa (FDI) y otras modalidades que se ajusten más aficazmente a los requerimientos de la IE. Evitar a toda costa, desastres negociadores como las conducidos con GLAXO y el proyecto energético Siemens/Total, entre otros. Racionalizar la Cartera de Oportunidades que cada año se oferta a emporesarios extranjeros asistentes a la Feria Internacional de La Habana (FIHAV), haciéndola más selectiva y con mayores incentivos.

Con máxima urgencia, diseñar una estrategia -y una práctica efectiva- para dinamizar el crecimiento de las inversiones en la Zona especial de Desarrollo de Mariel (ZEDM) y su Terminal de Contenedores pues hasta ahora sus ingresos apenas cubren sus costos de operaciones y mantenimiento. Este proyecto -el más importante en la economía cubana en lo que va del nuevo siglo- puede perecer por inanición o ausencia de proyectos relevantes. Atraer proyectos de peso y con capacidad reexportadora hacia toda la region, es algo no menos indispensable.

Es hora ya de que la dirigencia cubana reflexione acerca de su status de paria con respecto al sistema financiero internacional, sus institucones y mecanismos, y considere explorar y avanzar en esta dirección que bien pudiera comenzar por medio de niveles de asociación y cooperación con el Banco Mundial. Caso de tener éxito en esta aporoximación al Banco Mundial, y onsiderando que las sanciones de la OEA ya fueron levantadas hace ya varios años, La Habana pudiera gestionar -sin un regreso formal a dicha organziación- gestion que pudiera ser auspiciada por miembros de la CELAC y que se tradujera en algún nivel de asociación y cooperación con el BID. Semejantes pasos, indudablemente, servirían para dar confianza e incentivar los flujos de IE y créditos parfa la economía cubana.

Other Dimensions with the Virus

3 years ago Translations

  • English
  • Español

Other Dimensions in the Time of the Corona Virus

By Domingo Amuchastegui
April 2020

Translated and edited by Walter Lippmann for CubaNews.

Not a few specialists on the Cuban issue – some with morbid jubilation and others with serious concern – evaluate, from the outside, the current situation on the island in increasingly alarming terms, to the point of using the famous formula of a “perfect storm” to describe what is coming.

Without a doubt, the situation may reach profiles of extreme gravity, but – understandably – not in the dimension of public health and healthcare to the population. Here the country’s health system – even in extreme emergency conditions – is still proving to be very effective. Some data (April 15) from official sources indicate that 2,466 people have been hospitalized, of which 814 have been confirmed, 151 have recovered and 24 have died. Compared to the rest of Latin America, Cuba presents a much smaller picture.

This is not the case when we examine the economic dimension. But, beware of blaming the virus or the economic warfare unleashed by the Trump administration. It is not by chance that Cuban economist Ricardo Torres (Progreso Semanal, 4/8/2020) makes clear: “The Cuban economy was already showing a gloomy picture before the beginning of the current epidemic. This panorama was clearly noticed when the average annual economic growth was falling unstoppably, with 2.7% in 2010-2015 and by 2016-2019 it was maintaining the same trend, with a growth of only 1.4% (data provided by Torres).

This macroeconomic dimension of Torres is complemented by key data provided by another well-known Cuban economist, Juan Triana Cordoví, in an analysis (OnCuba News 4/8/2020): “In the 1985-1986 biennium the total harvested area was 1,328,600 hectares, production reached 68.5 million tons of products and yields were 51.6% tons per hectare”.

And he adds the comparison with the results between 2015 and 2016 (Note: the embargo persisted, but Trump had not started its economic war); “The harvested area was 421,600 hectares (Note: Almost one million less), production was 18.1 million tons (Note: 50 million tons less) and yields per hectare were 43 tons per hectare, or 8 tons less.

If official policy to date calls for a drastic reduction in food imports, the determining factor is its failed policy for decades in the area of domestic food production. And may I add: this element – food production – is essential for good health.

By way of conclusion, Triana connects these numbers with the issue of the virus and emphasizes: “The pandemic emphasizes something that almost everyone has known for many, many years: the strategy of having a food production system that is as solid as possible, something that we have never achieved.”

Torres’ conclusion in this area is very similar and precise, in the following terms: “It is time to recognize that the current production and distribution scheme is a complete failure, and needs to be revised from its foundations. In that review, the private and cooperative sector must be empowered.

The potential and results of Cuba’s health system are there. They are widely recognized internationally, including by the World Health Organization (WHO) and the Pan American Health Organization (PAHO). Not least, the successes of the industry and research in the bio-pharmaceutical sector are there.

It is not by chance that at this critical time, some twenty countries, including most of the CARICOM countries, Italy (Lombardy and Turin regions), Andorra, Qatar, South Africa, Angola, Venezuela and others have contracted the medical services available on the Island. However, such a successful component is not combined or complemented by the economic picture previously presented by two well-known Cuban economists.

Nevertheless, the health services factor (doctors in the first place) and bio-pharmaceutical products have been significantly affected and reduced by the expulsion of the doctors from Brazil by Bolsonaro – contrary to the favorable opinions of all the municipalities where they were providing their services, the political turnaround of Ecuadorian President Lenin Moreno and the coup d’état in Bolivia.

Figures are not yet available to measure the extent to which the medical services currently contracted and the markets for bio-pharmaceuticals can compensate, and to what extent, for the hemispheric setbacks noted above.

In such a context, it should be concluded that Cuba is entering a phase of acute recession and that its GDP could be reduced by any amount, which is very difficult to calculate at this point. Torres summarizes it as follows: “A substantial negative impact is inevitable: open, under strong sanctions, dependent on tourism and no access to any external compensation mechanism in the form of contingent loans from international financial organizations.

Other dimensions that aggravate this situation are:

1- The total paralysis of the tourist industry in the short term and the many uncertainties regarding its eventual recovery in the short-and medium- term, as well as a significant reduction in the flow of remittances from Cuban immigrants, due to two factors: a. A reduction in the income of these immigrants and b. The interruption of travel and the total interruption of monetary flows in this way.

2- The pressures arising from Cuba’s financial obligations with respect to its foreign debt and short-term commercial debts. The G-20 has agreed on a moratorium on the debt of 70 poor countries (40 of them African) until December, with French President Emmanuel Macron insisting on the hypothesis of forgiving significant portions of this debt.

However, Cuba does not fall into this group of beneficiaries and will have to negotiate a similar treatment on a bilateral basis with the Paris Club, with its European (Spain in the first place) and Asian (China in the first place) creditors. Under these conditions, and their uncertain prolongation, it is impossible to imagine that the Cuban authorities can expect an improvement in their already very low levels of EI.

3- In parallel with the pandemic, the crisis in the oil markets has affected and will affect in the near future the payment capacity of two large Cuban debtors for cooperation projects, Venezuela and Angola. Likewise, it is not to be expected in the immediate future investments from both in any sphere of the Cuban economy, including the important sphere of oil.

4- The multi-million dollar projects agreed upon with Russia at the end of last year will be postponed indefinitely, with a very recent negative precedent. Rosneft, Russia’s major oil company, gave in to extra-territorial pressures and threats from the Trump administration and announced the end of its operations in Venezuela.

If so, serious doubts could be raised about its current and future operations in the energy sphere with Cuba. A very similar panorama is presented in the relations and agreements between Havana and Beijing, but with a very significant difference: China is Cuba’s main trading partner and has been pending for years the execution of multiple agreed projects and the granting or not of new soft loans and forgiveness of portions of Cuba’s high debt with China.

5- Projects and measures to reform or redesign Cuba’s inoperative economic system will once again be “frozen”, pending improvements in circumstances.

Once again, the Cuban leadership’s ability to survive and recover is being put to the test – this time in the face of unusual dimensions of extreme gravity. Whether or not the willingness to change and the circumstances to come will have the last word.

OTRAS DIMENSIONES EN TIEMPOS DEL CORONAVIRUS

Por Domingo Amuchastegui
Avril 2020

No pocos especialistas del tema cubano -unos con júbilo morboso y otros con seria preocupación- valoran desde el exterior la actual situación en la Isla en términos cada vez más alarmantes, al punto de utilizar la famosa fórmula de una “tormenta perfecta” para describir lo que se avecina.

Sin lugar a dudas, la situación puede alcanzar perfiles de extrema gravedad, pero -entiéndase bien- no en la dimension de la salud pública y asistencia sanitaria a la población. En esto el sistema de salud del país -incluso en condiciones de emergencia extrema- da todavía sobradas muestras de su eficacia. Algunos datos (abril 15) de fuentes oficiales consignan 2 466 hospitalizados, de estos 814 confirmados, 151 recuperados y 24 fallecidos. En comparación con el resto de los países de América Latina, Cuba presenta un cuadro realmente menor.

No ocurre lo mismo cuando examinamos la dimension económica. Pero, mucho cuidado con culpar al virus o a la guerra económica desatada por la administración Trump. No por casualidad aclara el economista cubano Ricardo Torres (Progreso Semanal, 4/8/2020): “La economía cubana ya exhibía un panorama sombrío antes del comienzo de la actual epidemia.” Este panorama se advertía claramente cuando el crecimiento económico promedio annual descendía de forma imparable, con un 2,7% en el 2010-2015 y para el 2016-2019 mantenía la misma tendencia, con un crecimiento de apenas el 1.4% (datos que aporta Torres).

Esta dimensión macroeconómica de Torres, se complementa con datos claves que nos ofrece otro bien conocido economista cubano, Juan Triana Cordoví, en un análisis (OnCuba News 4/8/2020).: “En el bienio 1985-1986 la superficie cosechada total fue de 1 328 600 hectáreas, la producción alcanzó los 68,5 millones de toneladas de productos y los rendimientos fueron de 51,6% toneladas por hectárea.”

Y agrega la comparación con los resultados entre el 2015 y 2016 (Nota: persistía el embargo, pero Trump no había comenzado su guerra económica); “La superficie cosechada fue de 421 600 hectáreas (Nota: Obsérvese: Casi un millón menos), la producción fue de 18,1 millones de toneladas (Nota: 50 millones de toneladas menos) y los rendimientos por hectáarea fueron de 43 toneladas por hectárea, o sea, 8 toneladas menos. Si la política oficial hasta hoy clama por una drástica reducción de las importación de alimentos, el factor determinante es su fracasada política durante décadas en la esfera de la producción doméstica de alimentos. Y me permito añadir: este elemento -la producción de alimentos- es esencial para una buena salud.

A manera de conclusion, Triana conecta estos números con el tema del virus y subraya: “La pandemia enfatiza algo que desde hace muchísimos años casi todos sabemos: lo estratégico de tener un sistema de producción de alimentos lo más sólido possible, algo que no hemos logrado jamás.” La conclusión de Torres en este terreno es muy similar y precisa, en los términos siguientes: “Ya es hora de que se reconozca que el esquema de producción y distribución actual es un fracaso rotundo,y requiere ser revisado desde sus fundamentos. En esa revision, el sector privado y cooperativo debe ser empoderado.”

Las potencialidades y resultados del sistema de salud de Cuba están ahí. Tienen amplio reconocimiento internacional, incluyendo la Organización Mundial de la Salud (OMS) y la Organización Panamericana de la Salud (OPS). En no menor medida se suman los éxitos de la industria e investigaciones del sector biofarmacéutico. No por casualidad en estos momentos críticos, una veintena de países, incluyendo la mayoría de los países integrantes del CARICOM, Italia (regiones de Lombardía y Turín), Andorra, Qatar, Africa del Sur, Angola, Venezuela y otros han contratado los servicios médicos de que dispone la Isla. Pero, semejante componente exitoso no se conjuga ni es complementado por el cuadro económico antes presentado por dos economistas cubanos bien conocidos.

No obstante, el factor servicios de salud (médicos en primer lugar) y productos biofarmacéuticos se ha visto sensiblemente afectado y reducido por la expulsion de los médicos de Brasil por Bolsonaro -contrariando el criterio favorable de todas las municipalidades donde los mismos prestaban sus servicios, el viraje politico de presidente ecuatoriano Lenin Moreno y la asonada golpista de Bolivia. No se disponen aún de cifras que permitan medir en qué medida los servicios médicos contratados en la actualidad y los mercados para los biofarmacéuticos puedan compensar, y en qué medida, los reveses hemisféricos antes apuntados.

En semejante contexto, concluir que Cuba entra en una fase de aguda recesión y que su PIB podrá reducirse en cualquier magnitud, bien difícil de calcular a esta altura. Torres lo sintetiza de la manera siguiente: “Un impacto negativo sustancial es inevitable: abierta, bajo Fuertes sanciones, dependiente del turismo y nulo acceso a algún mecanismo de compensación externa en la forma de préstamos contingents de organismos financieros internacionales.”

Otras dimensiones que agravan esta situación son:

1- La paralización total de la industria turística a corto plazo y las muchas incertidumbres sobre su eventual recuperación a corto y mediano plazo asi como una sensible reducción del flujo de las remesas de los cubanos emigrados atendiendo a dos condicionantes: a. Reducción de los ingresos de estos emigrados y b. La interrupción de los viajes y la interrupción total de los flujos monetarios por esta vía.

2- Las presiones derivadas de las obligaciones financieras de Cuba con respecto a su deuda externa y adeudos comerciales a corto plazo. El G-20 ha acordado una moratoria sobre la deuda de 70 países pobres (40 de ellos africanos) hasta diciembre, insistiendo el presidente francés, Emmanuel Macron, en la hipótesis de perdonar porciones signficativas de dicha deuda. Pero, Cuba no entra en dicho grupo de beneficiados y tendrá que negociar un tratamiento similar sobre bases bilaterales con el Club de París, con sus acreedores europeos (España en primer lugar) y asiáticos (China en primer lugar). En estas condiciones, y su prolongación incierta, es imposible imaginarse que las autoridades cubanas puedan esperar una mejoría en sus ya reducídisimos niveles de IE.

3- Paralelo a la pandenmia, la crisis en los mercados petroleros han afectado y afectarán en el futuro próximo la capacidad de pago de dos grandes deudores de Cuba por concepto de proyectos de cooperación, Venezuela y Angola. Igualmente, no es de esperar en lo inmediato inversiones de parte de ambos en ninguna esfera de la economía cubana, incluyendo la importante esfera del petróleo.

4- Los proyectos multimillonarios acordados con Rusia a finales del pasado año se verán aplazados por tiempo indefinido, con un precedente negativo de muy reciente fecha. Rosneft, la gran empresa petrolera de Rusia, cedió ante las presiones y amenazas extraterritoriales de la administración Trump y anunció el fin de sus operaciones en Venezuela, en cuyo caso cabe plantearse serias dudas sobre sus operaciones, actuales y futuras, en la esfera energética con Cuba. Un panorama muy similar se presenta en las relaciones y acuerdos de La Habana con Beijing, pero con una diferencia muy significativa: China es el principal socio comercial de Cuba y tiene pendiente desde hace años la ejecución de múltiples proyectos acordados y el otorgamiento o no de nuevos préstamos blandos y perdón de porciones de la elevada deuda de Cuba con China.

5- Los proyectos y medidas de reforma o rediseño del inoperante Sistema económico de Cuba quedarán, una vez más, “congelados,” a la espera de mejoras circunstancias.

De nuevo se pone a prueba -esta vez frente a dimensiones inusuales de extrema gravedad- la capacidad de sobrevivencia y recuperación de parte de la dirigencia cubana. La disposición o no al cambio y las circunstancias venideras dirán la última palabra.

Challenges and Priorities for Cuba Today

3 years ago Translations
  • English
  • Español

Challenges and Priorities for Cuba Today

By Domingo Amuchastegui, April 2020
Translated and edited by Walter Lippmann for CubaNews.

Cuba faces its most critical and complex situation today. This is the result of the interaction of three factors. The most recent is the multifaceted impact of the arrival of the coronavirus or COVID-19. Its impact ranges from damage to the health system and the general population to the impact on its economy (see Coronovirus and Cuba). Added to this is the Trump administration’s economic warfare against Cuba, and with no less perjured gravitation, the persistence of a proven ineffective model that resists deepening and widening the path of reform.

In such a context, it is essential to examine the challenges and priorities that in the short and immediate term – and with a level of urgency as never before – the Cuban leadership will have to deal with and find the best, and most lasting, solutions that will ensure its recovery and stabilization.

At the level of INTERNAL SECTOR:

  1. Minimize and reduce to a minimum the complexities and costs of the effects of the pandemic in the shortest possible time.
  2. Undertake the redesign of the economic model with the necessary depth and comprehensiveness, which has been lacking in the reform measures adopted so far, which appear as isolated and incomplete patches that fail to energize the entire economy at the levels it requires. No one should be shocked by what I am proposing. Let’s remember Fidel Castro’s words to journalist Jefrrey Goldberg for the important US publication The Atlantic (9/8/2010): “The Cuban Model Doesn’t Even Work for Us Anymore.
  3. Such a redesign in which the State concentrates on what Cuban economists repeat over and over again: the fundamental means of production (key sectors) of the island (sugar industry, not the agricultural part; nickel/cobalt, bio-pharmaceuticals, tourism industry, exportable medical services, energy, citrus, fishing, rum and tobacco), which must be consistently opened to their association with foreign capital (an aspect that President Díaz-Canel and Minister of Economy, Alejandro Gil, have repeatedly insisted on, but still not translated into actions and projects consistent with such an imperative).
  4. At the same time, to get rid of the heavy and unproductive burden that has been represented for decades by the very costly and unproductive ownership and management of tens of thousands of small businesses that must be transferred to the cooperative and private sectors, in a broad and sustained project to promote SMEs.
  5. Recovery and effective revitalization of the key sectors mentioned above in terms of productivity and export capacity. SMEs -private, cooperatives and tenants or farmers- should be exempted from the tax burdens and bureaucratic interference that hinder and assimilate their normal functioning and development, including their more functional and flexible linkage to export/import and financing processes and space in the national banking system. Open these sectors to investment by Cuban emigrants.
  6. a) To significantly increase productivity levels and reduce production costs, especially in the tourism and bio-pharmaceutical industries; b) To abolish the mechanisms of mandatory hiring by foreign companies through state agencies and the tax burden that this mechanism entails; c) To increase the number of jobs in the tourism and bio-pharmaceutical industries. Guarantee the sale of all supplies and the purchase of miscellaneous equipment to SMEs (otherwise theft, corruption and the so-called underground economy will continue to reign); d. Reduce by no less than 50% the tax on purchases in shops in convertible currency (MLC)
  7. Last but not least: To make definitive and comprehensive progress in the process of monetary and exchange rate unification in order to stabilize in a real way the income of the population and the exchange and transfer rate of foreign companies operating in Cuba.

    At the level of the EXTERNAL SECTOR:

  1. To face and solve with promptness and effectiveness the obligations of the external debt as well as the commercial credits owed.
  2. In line with the official emphasis on the need to promote foreign investment (FI) as a strategic component, review and update the Investment Law of 2014 in order to make it more attractive and to encourage the arrival of foreign capital, including in particular foreign direct investment (FDI) and other modalities that are more effectively in line with the requirements of the FI. To avoid at all costs, negotiating disasters such as those conducted with GLAXO and the Siemens/Total energy project, among others. Rationalize the Portfolio of Opportunities that is offered every year to foreign business people attending the International Fair of Havana (FIHAV), making it more selective and with greater incentives.
  3. As a matter of urgency, design a strategy -and an effective practice- to boost the growth of investments in the Mariel Special Development Zone (ZEDM) and its Container Terminal, since so far its income barely covers its operation and maintenance costs. This project – the most important in the Cuban economy so far in the new century – businesses may perish due to starvation or the absence of relevant projects. Attracting important projects with the capacity to re-export to the entire region is no less indispensable.
  4. It is time for the Cuban leadership to reflect on its pariah status with respect to the international financial system, its institutions and mechanisms, and to consider exploring and advancing in this direction, which could well begin through levels of partnership and cooperation with the World Bank. If the World Bank is successful in this effort, and considering that the OAS sanctions were already lifted several years ago, Havana could manage – without a formal return to that organization – an effort that could be sponsored by CELAC members and that would result in some level of partnership and cooperation with the IDB. Such steps would undoubtedly serve to build confidence and encourage the flow of EI and credit to the Cuban economy.

Retos y prioridades para la Cuba de hoy

Por Domingo Amuchastegui
Avril 2020

Cuba enfrenta hoy su más crítica y compleja situación. Ello es resultado de la interacción de tres factores. El más reciente lo constituye el impacto multifacético de la llegada del coronavirus o COVID-19, que va desde los perjuicios al sistema de salud y a la población en general hasta el impacto a su economía (Ver Coronovirus y Cuba). A esto se suma la guerra económica de la administración Trump contra Cuba, y con una gravitación no menos perjuidical, la persistencia de un modelo probadamente inoperante que se resiste a profundizar y ampliar el camino de las reformas.

En semejante contexto, resulta imprescindible un examen de los desafíos y prioridades que a corto e inmediato plazo -y con un nivel de urgencia como nunca antes- la dirigencia cubana tendrá que lidiar con ello y encontrar las mejores, y más duraderas, soluciones que aseguren su recuperación y estabilización.

A nivel de SECTOR INTERNO:

  1. Aminorar y reducir al mínimo las complejidades y costos de los efectos de la pandemia en el más breve posible plazo.
  2. Acometer el rediseño del modelo económico con la integralidad y profundidad necesaria, y de lo cual han carecido las medidas de reformas hasta ahora adoptadas, que aparecen como parches aislados e incompletes que no logran dinamizar la totalidad de la economíaa los niveles que la misma require. Nadie se escandalice por lo que planteo. Recordemos las palabras de Fidel Castro al periodista Jefrrey Goldberg para la importante publicación estadounidense The Atlantic (9/8/2010): “The Cuban Model Doesn’t Even Work for Us Anymore.”
  3. Un rediseño tal en los cuales el Estado se concentre en lo que los economistas cubanos repiten una y otra vez: los medios fundamentales de producción (sectores claves) de la isla (industria azucarera, no su parte agrícola; níquel/cobalto, biofarmacéuitica, industria turística, servicios médicos exportables, energía, cítricos, pesca, ron y tabaco), que deben abrirse consistemente a su asociación con el capital extranjero (aspecto éste en el que viene insistiendo repeidamente el presidente Díaz-Canel y el Ministro de Economía, Alejandro Gil, pero todavía sin traducirse en acciones y proyectos consistentes con semejante imperativo).
  4. Paralelamente, desembarazarse de la pesada e improductiva carga que ha venido representando durante décadas la propiedad y administración costosísima e improductiva de decenas de miles de pequeños negocios que deben ser transferidos a los sectores cooperativo y privado, en un Amplio y sostenido proyecto de fomento de las PYMES.
  5. Recuperación y efectiva dinamización de los sectores claves antes apuntados en términos de productividad y capacidad exportadora. Las PYMES -privadas, cooperativas y arrendatarios o finqueros- deben ser eximidas de las cargas fiscales e injerencias burocráticas que frenan y asifixian hoy su normal funcionamiento y desarrollo, incluyendo su articulación más funcional y flexible a los procesos de exportación/importación y de financiamiento y un espacio en el sistema bancario nacional. Abrir estos sectores a las inversiones de la emigración cubana.
  6. Cuestiones puntuales de suma importancia son: a) Aumentar sensiblemente los niveles de productividad y reducir costos de producción, en especial en la industria turística y en la biofarmacéutica; b) Suprimir los mecanismos de contratación obligatoria por compañías extranjeras por intermedio de agencias estatales y la sobrecarga impositiva que este mecanismo acompaña; c. Garantizar la venta de todos los suministros y alquier de equipos varios, a las PYMES (de lo contrario seguirán reinando el robo, la corrupción y la llamada economía sumergida); d. Reducir en no menos de un 50% el gravamen sobre las compras en los comercios en moneda convertible (MLC).
  7. Por ultimo y no por ello de menor importancia: Avanzar definitivamente, y de manera integral, en el proceso de unificación monetaria y cambiaria a fin de estabilizar de manera real los ingresos de la población y de cambios y transferencias de las empresas extranjeras que operan en Cuba.

A nivel de SECTOR EXTERNO:

  1. Afrontar y solventar con prontitud y eficacia las obligaciones de la deuda externa asi como de los créditos comerciales adeudados.
  2. En consonancia con el énfasis oficial en la necesidad de promocionar como componente estratégico la inversion extranjera (IE), revisar y actualizar la Ley de Inversiones del 2014 en función de hacer más atractivo e incentivar la llegada del capital del capital extranjero, incluída de manera destacada la inversion extranjera directa (FDI) y otras modalidades que se ajusten más aficazmente a los requerimientos de la IE. Evitar a toda costa, desastres negociadores como las conducidos con GLAXO y el proyecto energético Siemens/Total, entre otros. Racionalizar la Cartera de Oportunidades que cada año se oferta a emporesarios extranjeros asistentes a la Feria Internacional de La Habana (FIHAV), haciéndola más selectiva y con mayores incentivos.
  3. Con máxima urgencia, diseñar una estrategia -y una práctica efectiva- para dinamizar el crecimiento de las inversiones en la Zona especial de Desarrollo de Mariel (ZEDM) y su Terminal de Contenedores pues hasta ahora sus ingresos apenas cubren sus costos de operaciones y mantenimiento. Este proyecto -el más importante en la economía cubana en lo que va del nuevo siglo- puede perecer por inanición o ausencia de proyectos relevantes. Atraer proyectos de peso y con capacidad reexportadora hacia toda la region, es algo no menos indispensable.
  4. Es hora ya de que la dirigencia cubana reflexione acerca de su status de paria con respecto al sistema financiero internacional, sus institucones y mecanismos, y considere explorar y avanzar en esta dirección que bien pudiera comenzar por medio de niveles de asociación y cooperación con el Banco Mundial. Caso de tener éxito en esta aporoximación al Banco Mundial, y onsiderando que las sanciones de la OEA ya fueron levantadas hace ya varios años, La Habana pudiera gestionar -sin un regreso formal a dicha organziación- gestion que pudiera ser auspiciada por miembros de la CELAC y que se tradujera en algún nivel de asociación y cooperación con el BID. Semejantes pasos, indudablemente, servirían para dar confianza e incentivar los flujos de IE y créditos parfa la economía cubana.

 

 

Skip to toolbar