Austerity set to deepen in 2019

Cuba’s President Miguel Díaz-Canel, and Raúl Castro, the First Secretary of the Cuban Communist Party, have both emphasised that the fundamental challenge facing Cuba in 2019 will be economic, and that resolving such problems must be a first priority.

Speaking in late December to the Economic Affairs Committee of the National Assembly, Díaz-Canel said that the ‘inadequacies’ were principally due to “accumulated structural and operational problems” as well as to increased pressure from the Trump Administration particularly on financial transactions. He said that 2019 would therefore be a year of “order and adjustment”.

To achieve this in 2019, it would be necessary, he said, to reduce imports, increase exports, and reduce costs while continuing to fund national investments. In his remarks he also stressed the need to reduce bureaucracy, strengthen management, and for greater use to be made of the expertise of scientists and specialists. Overcoming the economic challenges facing the country would require “more intense, proactive and concrete attitude in the actions of leaders” in socialist state enterprises, he told the National Assembly.

In other remarks to legislators, Cuba’s Minister of Economy and Planning, Alejandro Gil, said that the country was planning for a minimum growth rate of 1.5% in 2019 with no increase in debt.

Presenting the country’s economic plan for 2019 he indicated that austerity would continue and that rather than increase its indebtedness, Cuba would reduce imports by 11.2%, including food and fuel. He noted that the plan however envisaged increasing the level of national and foreign investment so as to give priority to areas including sustainable energy, tourism and the railway system.

In his remarks he made clear that “the plan has no reserve” and “there is no deficit but no surplus”.

“The 2019 plan is one of adjustment to current realities. We cannot spend more than we earn”. “Any increase in expenditure or failure in income will suppose a search of alternatives. The fundamental task is to meet the income (envisaged)”, Gil told members of the National Assembly.

Speaking subsequently on 1 January, on the occasion of 60th anniversary of the Cuban Revolution, Raúl Castro said that the Communist Party endorsed President Díaz-Canel’s analysis reiterating his words about the centrality of resolving the country’s economic problems and the need for ‘a more proactive, intelligent and concrete attitude’ among leaders.

Elsewhere in his remarks, he noted that the US Administration had again taken a path of confrontation and was presenting Cuba as a threat to the region. Senior US officials, with the complicity of some in the Cuban American community, who he referred to as “lackeys”, were, he said, disseminating falsehoods and trying to blame Cuba for the ills of the region.

“They are the same ones that declare the intention to continue forcing the deterioration of bilateral relations and promote new measures of economic, commercial and financial blockade to restrict the performance of the national economy, cause additional limitations in the consumption and welfare of the people, hinder even more foreign trade and curb the flow of foreign investment”.

The former President concluded his blistering criticism of the Trump Administration by noting that Cuba is not seeking a confrontation and “hope that the most balanced minds in the US Government can avoid it”.

He also made clear that Cuba was continuing to ensure its readiness “for all scenarios, including the worst” noting that Cuba’s strategic concept of the War of All the People, was included in the country’s new constitution and that it was the duty of Cuba to prepare meticulously.


Cuba Briefing is available on a subscription-only basis. Please click here to sign up to a free trial