4th December 2023

During an official visit to the United Arab Emirates, Cuba’s President has said that the Cuban Government is willing “to support any type of investment that the Emirati business community wants to make on the Island.”

Speaking in Doha to leading local businesspeople and prior to participating in the COP28 Climate Change Conference, President Díaz-Canel said that when he had met with Sheikh Mohammed Bin Zayed Al Nahyan, the President of the UAE and Emir of Abu Dhabi, several important agreements had been signed. They are expected, he said, to raise economic-commercial engagement to the same level as the two nation’s “excellent political-diplomatic relations.” 

These would, he said, support the Emirati business community become investors and included: a reciprocal Investment protection treaty; another eliminating double taxation; the creation of an inter-governmental commission; the establishment of a bilateral business committee; the development of an economic cooperation agenda; and the signing of a memorandum of understanding between the central banks of both countries.

Díaz-Canel also noted that the cooperation developed so far, including the use of credits from the Abu Dhabi Fund for Development, for upgrading water infrastructure and new renewable energy sources, pointed the way to develop new business opportunities with this fund.

He also referred to Cuba’s willingness to access the UAE’s Mubadala Fund, through joint projects and investments in the fields of food production, tourism, renewable energy, and biotechnology, and in other areas. The Mubadala Fund is a sovereign wealth fund with US$276bn in assets, has global interests across multiple sectors and asset classes, and operates from offices in Abu Dhabi, London, Moscow, New York, and Beijing.

In his remarks Díaz-Canel highlighted the Emir’s proposal that they explore ways to significantly expand travel in both directions, strengthening air interconnections. He also stressed the opportunities in tourism and biotechnology that Cuba is willing to provide, as well as in the wholesale and retail trade.

In a briefing to the Cuban media accompanying the President, Déborah Rivas, the Vice Minister of Foreign Trade and Foreign Investment (Mincex), said that the conversation between the two Presidents “will have an energising effect on economic and commercial relations.” Because after many months of preparation it had been possible to establish a group of international legal instruments “of utmost importance for investors in any country in the world,” Cuba, she said, regarded the visit as both

“strategic, [and] historic.”

“Signing these documents with a country like the United Arab Emirates opens a path of greater transparency and legal certainty for investors” in a manner that is attractive, she said. It will enable Cuba  “to achieve our policy of attracting foreign investment for prioritised sectors.”

In her remarks, Rivas noted that Emirati investments in Cuba could enable food production both for domestic supply and for export to the Latin American and Caribbean region, and facilitate the development of renewable energy, especially solar. She also suggested that the agreements reached will open business opportunities in the real estate sector and in hotel development.

On banking, the Vice Minister indicated that it is expected that the memorandum of understanding between the central banks of both countries will open possibilities for Cuban and Emirati commercial banks to establish direct banking and financial relations. She also noted that during the visit other agreements were signed relating to science, technology, and innovation, and in the sports sector.

During his visit to Dubai, President Díaz-Canel met with resident Cuban nationals to whom he indicated that the Emir, the UAE President, Sheikh Mohamed Bin Zayed Al Nahyan, “was very sensitive towards Cuba, understanding our situation and with a tremendous willingness to increase economic-commercial relations.“

“Friendship, mutual respect and admiration have predominated in our relations, and I believe that all possibilities are opening up at this time” to promote everything based on mutually beneficial economic-commercial development,” Cuba’s President said.

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

Photo: Gulf Observer

20th November 2023

Cuba has urged the Biden Administration to comply with the two  nation’s agreements that guarantee the regular, safe, and orderly migration of Cubans to the US.

Speaking to the media following a 14 November meeting in Havana with senior US officials on migratory issues, Carlos Fernández de Cossío,  Cuba’s Vice Minister of Foreign Affairs, said that the US proportionally admits more irregular migrants from Cuba than from any other country, and that its policies towards Cuba acted as a “stimulus.”

“By accepting the majority of those who arrive,“ he said the US was failing to comply with bilateral agreements in their entirety.

Fernández de Cossío said that the inclusion of Cuba in the US’s list of state sponsors of terrorism and the socioeconomic effects of sanctions, acted as an important stimulus for irregular migration. It was important, he said, that bilateral migration agreements were complied with in their entirety and not selectively.

In his remarks to the media, De Cossío stressed that the creation by the US of legal pathways for Cubans to migrate, including family reunification and humanitarian parole programmes, meant that the problems will continue.

In Washington, he noted, “there is no political will” to change the immigration policy.  “For the United States, the priority of destabilising Cuba continues to take precedence over stopping human flows and guaranteeing safe, regular, orderly and legal migration,” he observed.

More generally, De Cossío described the meeting as a “useful exercise,” but added that in bilateral migration matters “there is much to do.”

Cuba’s Ministry of Foreign Affairs (MINREX) in a statement noted the negative impact that the embargo and its tightening since 2019 have had on the Cuban population, observing also that the preferential treatment received by Cubans who enter US territory irregularly under the Cuban Adjustment Act, which grants permanent residence to Cubans after a year, encouraged irregular migration.

Minrex added that during the meeting Cuban officials expressed Havana’s concern about the granting of political asylum by the US to those who hijacked Cuban aircraft, observing that it incentivised similar acts with dangerous consequences for the national security of both countries. It reiterated Cuba’s willingness to comply with established commitments

In a minimal statement released after the meeting, the US State Department said that “the  regular semi-annual meeting to discuss the implementation of the US-Cuba Migration Agreements, saw the US delegation raise important issues for cooperation on migration, as well as the obstacles that hinder the achievement of the objectives of the Agreements.”

It added that the talks in Havana underscored Washington’s desire to maintain constructive engagement “that advances the interests of the US” and is consistent with “our interest in fostering family reunification and promoting greater respect for human rights and fundamental freedoms in Cuba.” The State Department’s Deputy Assistant Secretary for Western Hemisphere Affairs, Eric Jacobstein, led the US interagency delegation.

Last calendar year more than 313,000 Cubans arrived irregularly to the United States mainly through its southern border. According to the Department of Customs and Border Protection (CBP) 200,287 Cubans arrived in the US in fiscal year 2023, which ended in September. In October this year alone, a record monthly 18,083 Cuban migrants arrived mostly through Mexican border points according to the CBP. For the ten months up to the end of October this year, 57,243 Cubans obtained legal entry to the US under the Biden Administration’s humanitarian parole programme. So far the US has returned 5,056 irregular migrants mostly arriving by sea.

As Cuba Briefing has reported previously, high levels of migration are beginning to affect Cuba’s economic  recovery. The island’s official national and provincial media now regularly report that shortages of food and medicines, power outages, soaring inflation, low state wages, dollarisation, and the need for a source of foreign currency to survive, are together resulting in many Cubans seeing migrating to the US as an attractive option, especially for those who are young and well educated. The reported effect of US policy now appears  to be a growing island-wide skills shortage in medicine, teaching, heavy industry, manufacturing, and the professions, all of which need to function effectively if the island is to experience economic recovery in the near future.

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

Photo: EL Pais

30th October 2023

A Chinese-built floating dock located in the Casablanca Shipyard in Havana and operated by the Caribbean Drydock Company SA has been inaugurated. The facility, described as the largest and most modern to offer services in the Caribbean region, has a lifting capacity of 22,000 tons allowing the shipyard to carry out repairs and improve the independence of Cuba’s shipping. The multi-million-dollar investment is also intended to  become an important source of foreign exchange income for Cuba. Miguel Pineda, the Director General of the Maritime-Port Transport Business Group, said that depending on the availability of resources the facility’s services will be offered to both national and foreign vessels.

Photo: Ricardo López Hevia

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

6th October 2023

Cuba is facing a serious new fuel and power crisis with uncertain outcomes for the broader economy, according to senior ministers.

Speaking on the television programme Mesa Redonda on 27 September,  the Deputy Prime Minister and Minister of Economy and Planning, Alejandro Gil, and the  Energy and Mining Minister, Vicente de la O Levy, explained that because of shortages of imported oil and gas, nationwide blackouts are expected to increase significantly during October.

To address fuel shortages severe energy use restrictions will be placed on manufacturing, transportation, and electrical consumption. In addition, homeworking will be undertaken where possible, and university classes, sporting and other events postponed. The new measures come a time of continuing shortages of food, medicines, and hardship.

Country facing shortage of fuels

Explaining how government had over the past nine months been largely able to repair and bring back online Cuba’s aging and inefficient power plants, De la O Levy told viewers that the issues had now changed and “we have a situation with fuel.” “The main impact today is on diesel,” he said,  making government’s first priority maintaining the supply of energy, especially diesel.

Speaking about its supply, the Minister noted that Cuba consumes about 120,000 to 130,000 tons per month of diesel, all of which is having to be imported to enable the economy to function. Diesel, he said, provides for electricity generation, as well as lubricants and greases and domestic fuel consumption. The rising world price, shortages of foreign exchange, and the reluctance of some suppliers to deliver because of sanctions had, for Cuba, he said, made resolution of the supply situation more complex.

In his remarks, De la O Levy  also indicated problems with the supply of fuel oil. Noting that in the past fuel oil problems had been solved at much less cost by refining heavy crude in the country’s four refineries, he said that this had recently become more difficult. “Because the supply of fuel oil comes with poor quality from our suppliers, requiring us to mix it with good fuel oil, that takes days,” he said. We do not lack as much for fuel oil as diesel, “but we have been delayed by the problem of the mixture and the qualities,” he told viewers.

Noting the wider economic challenge fuel supply presented,  the Minister said that the island must guarantee fuel for aviation at a cost of €30mn (US$32mn) a month. “But if we do not have fuel, we do not have aviation, and without that there is no tourism. You have to guarantee it,” he explained.

In his remarks De la O Levy  also sought to reassure Cubans  that the country had run out of fuel. “The country has never reached zero fuels. We know that there are queues, we are distributing a daily amount of fuel with a control in all the service centres, despite increasing consumption, he stressed

The Minister went on to explain the measures that would now be taken. Assuring Cubans that the present “tight situation” would be lifted, he said that in early October fuel shortages would cause cuts in power generation of  “400 to 450 MW” causing “a blackout level of 700 MW maximum in the day.” “We’re not going to have the level of fuel we need or the level we had in previous months, but we’re going to raise distributed generation and supply to the economy” De la O levy said, indicating that government estimated that there would be a 140MW improvement when onshore gas offtake from onshore oil comes on-stream from Energas (Cuba Briefing 9 November 2023).

The Minister however warned that Cubans  could expect power outages of up to eight to 10 hours a day starting in October, including in areas previously little affected beyond Havana, and that all Cubans should reduce their domestic consumption.

Severe economic and social impact likely

Also speaking on the programme, Deputy Prime Minister, Alejandro Gil, the Minister of Economy and Planning, indicated the seriousness of the situation now facing the island, and its likely wider potential economic and social impact.

“Yesterday there were important meetings of the country’s leadership with the authorities of the territories, in which they evaluated province by province how the measures are being implemented and what the results are, which also allowed for socialising the experiences.” “We are not at zero; We have restrictions, but we have a set of possibilities,” he said, seeking to reassure Cubans.

Then, indicating that the effects will be seen on daily life and stressing that “The economy is in a complex situation, with a supply deficit, inflation”, he went on to explain that some activities will be prioritised.

Observing that in addition to electricity generation, the highest consumption of diesel corresponds to agricultural activity and cargo and passenger transport, he said: “In these activities it will not be possible to maintain the same levels of weeks ago. Although we are not at zero some we will postpone.”

In his remarks Gil, sought to assure viewers that agriculture will be protected “as much as possible” because of its importance to the population, and because a good planting campaign had been achieved. “A tremendous effort has been made in planting, which we cannot lose now in the harvest,” he said.

in his remarks, he acknowledged however the worsening problems facing the country in the delivery of the basic subsidised guaranteed food basket.  “We have had in the course of the year delays in deliveries, some products have not been able to be delivered on time. One hundred percent of the basket is imported. We have not been able to import coffee. The price of food on the international market has increased. There are countries that have imposed restrictions to export their products and guarantee their self-sufficiency.”…. “We don’t have credits to buy food. The current situation is complex, and, with a lot of effort, children’s milk is being guaranteed,” he said

Gil stressed that as far as possible, passenger transport, health services, water supply, and the transportation of tourists  would be maintained, in the latter case because the sector represented a  source of income for the country. He also noted the need to “eliminate meetings, lighten the burden of bureaucracy”,  and emphasised that cost-saving measures were equally applicable to state and non-state entities. Gil noted too the need for officials to “reason and explain” to citizens the situation Cuba is in.

Speaking about the broader economic impact, he said that government had made projections about how in the coming weeks the cuts would affect Cuba’s provinces and how they would operate using the  limited resources available. “It is difficult” he said, “we are planning at the point of a pencil” and have empowered some ministers to move resources to achieve overall priority objectives. “The way in which we have been working, in the constant exchange with the provinces, assures us that there is no disorder and that this process takes place in a coherent manner,” he noted.

Ministers seek to reassure Cubans

In an attempt to reassure Cubans, Gil said that that the main economic decisions  were being addressed by government through “very collective management”. “The people,” he said, “must have confidence that the leadership of the country and the Government is working tirelessly to improve the situation. We are committed to working for the people.”

The country, he said, did “not have the foreign exchange to guarantee supply and reduce inflation and had less foreign exchange.” Inflation so far this year “exceeds 20%” he observed, while noting that currency circulating in the informal market was distorting the economy and work was required to correct this.

“We are living in complex moments,” he said “ but they are solved with understanding, with the support of the people. This moment requires an objective understanding and measures adjusted to the current context.”

Then in an apparent riposte to liberal reformers, and those in business in Russia and the US who envisage freeing Cuba’s private sector, Gil said: “An agenda of neoliberal measures is not in our equation. We have to overcome the complexity of the current context and we will move forward in the defence of our socialist model.”

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

25th September 2023

Despite the Cuban Government’s best efforts to restore tourism to previous levels, data produced by Cuba’s national statistical office ONEI suggests that hotel occupancy rates remain low, and the country may struggle to achieve its projected 2.5mn visitors this year.

Government said previously that it hoped to see the sector play a significant role in stimulating national recovery, economic growth, and playing a major part in contributing to foreign exchange earnings.

According to ONEI, the overall total number of travellers to Cuba in the first eight months of this year stood at 2.1mn, of whom 1.66mn were international visitors, a term used by ONEI to classify all those arriving who reside abroad, including tourists and returning Cubans.

The hoped for international visitor arrivals figure for 2023 of 2.5mn compares with pre-COVID arrivals of  4.3mn in 2019, and 0.97mn in 2022. Statistics produced for the period between January and June of this year indicate that hotel occupancy stood at just 28%, far below that of other competing Caribbean destinations.

Although Cuba continues to belive that tourism will rebound and new markets such as Russia, Latin America and China will emerge, the weak arrivals numbers up to the end of August suggest that the country will struggle in the remaining months of this year to achieve the international visitor numbers needed to meet the Ministry of Tourism’s (MINTUR) plan for 2023.

While arrivals to the island continue to be led by Canada – Cuba’s most important tourist market – in the first eight months with 0.7mn visitors, recent Canadian government travel advice (Cuba Briefing 11 September 2023) may negatively affect high season arrivals when most Canadians choose to visit. At 241,115 arrivals, the Cuban community abroad, a group Cuba categorises separately, have for the time being made up for the loss of Russian visitors (106,529 by the end of August) following the discontinuation of direct flights in April, after the invasion of Ukraine and the introduction of western sanctions. However, arrivals from Russia are now expected to rise as Russian airlines including Aeroflot and Rossiya have resumed direct services, albeit involving longer flying times to avoid EU airspace.

ONEI’s figures show that arrivals from the US increased to 111,100, placing it in third position, but that arrivals from Europe remain weak, with Cuba recording 62,415 visitors from Spain;  45,318 from Germany; and 40,516 from France in the first eight months of 2023. Arrivals from the UK were recorded at 35,053.

The Cuban government recently indicated its concern about the impact of Washington’s decision to require all visitors to the US previously able to use its ESTA visa waiver programme, but who visited Cuba after January 2021, to now seek a visa if they wish to travel to the US.

Despite the weak arrivals outcome to date, Cuba continues to construct new hotel rooms – a possible factor in the low occupancy rates recorded –  in the belief that the sector will recover in 2024 or 2025.

According to Curacao based Tourism Analytics as of December 2022 Cuba had 77,800 hotel rooms. Of these 44.5% have a five-star rating and 29.6% four-stars with 48% of the properties belonging to the state entities Grupo Gaviota, 48%; Cubanacán, 22%; Gran Caribe, 18 % ; and  Islazul, 12%. Of the total some ​50,000 rooms are managed by foreign hotel companies, mainly Meliá, Iberostar, Blue Diamond, Roc, Barceló, Blau, Kempinski, Accor, NH, Axel, Be Live and Sirenis.

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

Photo by Mony Misheal 

18th September 2023

President Díaz-Canel, speaking in his capacity as pro tempore president of the G77+China, has expressed the hope that its 15-16 September summit in Havana will pave the way for practical action, enabling participating nations to “find and design together possible solutions to the most serious problems facing our world.” 

In doing so he made clear that Cuba is hoping to achieve a consensus among the nations of the south on solutions to pressing development problems facing members of the group. Granma quoted him as saying that an “unjust international economic order” had “exacerbated the marginalisation of many countries …. with serious consequences for the nations of the South.”

The summit, which began as Cuba Briefing went to press and which was described by Díaz-Canel as a “survival summit,” had as its theme ‘The current challenges of development: role of science, technology and innovation’.

Providing more detail before its opening, Cuba’s Foreign Minister, Bruno Rodríguez, said that Cuba hoped that the event would foster “a high-level, substantial debate, with forceful pronouncements on the most pressing political and economic issues for developing nations” at a time of systemic international crisis.

Granma reported that Cuba’s principal objective in hosting the summit is to strengthen the unity of what is a very diverse but mainly non-aligned group of nations around collective and practical actions in international fora in relation to the delivery of UN’s seventeen Sustainable Development Goals (SDGs) agreed in 2015.

Meeting with the press before the event, Rodríguez described the draft final declaration, which was expected to be approved on the second day of the Havana summit, as a “progressive text” that  provides a general and critical outline of the main obstacles to the development of the nations of the South. Cuba hoped, he told the media, that the final text approved would call for the establishment of a new international economic order, and the profound reform of the world’s financial architecture.

The draft also seeks, he said, adequate treatment of growing external debt, and compliance with international commitments regarding official development aid, which he described as “a moral obligation of industrialised countries.” It would also, he said, address financing to confront climate change and contain proposals in relation to periodic meetings in the field of science, technology, and innovation. As such they will be  “a part of historical and new claims from the countries of the South,” Rodríguez told journalists

Speaking shortly after his arrival in Havana, the UN Secretary General, Antonio Guterres, said that his presence demonstrated  the UN’s “very strong commitment to the efforts of the Group of 77, so that there is more justice in international economic and financial relations.” In a press conference before his departure from New York, Guterres had said that the event will serve as a preview before the forthcoming Sustainable Development Goals Summit this month, enabling the UN and government to learn about the needs and objectives of the largest group of nations within the UN. The G77+China comprises 80% of the world’s population

In New York, the Secretary General had highlighted that that the Havana summit would be of vital importance to the future path of the SDGs. “Unless we act now, the SDGs could become an epitaph for a world that could have been. It is an issue of vital importance for the bloc that brings together the global voice of the South, he said.

Guterres also emphasised that diplomacy had become more important than ever to navigate tensions in an emerging multipolar world and that dialogue remained the only way to find joint approaches and common solutions to  global threats and challenges.

Speaking in Havana, the resident coordinator of the United Nations System in Cuba, Francisco Pichón, was quoted by Cubadebate as saying that “The visit of the UN Secretary General to Cuba to participate in the Summit of the Group of 77 and China has strategic importance.” As the Group77+China constituted two-thirds of the Member States of the UN, he said, “It is a very important voice from the South, without which international consensus cannot be achieved.”

Guterres, he said wants to encourage bold proposals towards the recovery of the 2030 Agenda and how to do it effectively in their respective economic and political agendas, noting that “financing for development and the reform of the architecture of the international financial system” were central issues that countries could advance during the meeting in Havana.

The UN recently published a document indicating that delivery of the SDGs is facing serious difficulties at the midway point to their agreed full delivery in 2030.

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

4th September 2023

Cuba’s Central Bank (BCC) has introduced a series of measures aimed at constraining the use of cash in the Cuban economy.

New regulations published in early August are intended, wherever possible, to see all Cubans, and state and non-state companies migrate as rapidly as possible to the use of electronic payments. The new policy has the immediate effect that almost everyone requiring cash must now obtain it from banks or from the country’s relatively few serviceable ATMs.

In a statement about the new measures which formally took effect on 3 August, the BCC noted that they are intended to ensure that all future economic transactions become e.commerce based.

Noting that cash operations across Cuba have in recent months grown in greater proportion because of inflationary and other factors, the Bank said that the new measures will be accompanied by improvements in bank access and longer opening hours.

The new policy came against the background of an ongoing liquidity crisis and surging inflation in both the official and unofficial economy. In addition, in addition, in late July and the early part of August there had been a rapid increase in the street rate for the US Dollar and other convertible currencies against the Cuban Peso (CUP) largely caused by non-state enterprises seeking cash to buy convertible currency for inputs, and continuing shortages of food and medicines, requiring Cubans to seek cash to make purchases on the unofficial market (See Cuba below).

Following the announcement, the BCC gazetted Resolution 111/2023 on the bankarisation of operations establishing for all companies a maximum limit of CUP5,000 per operation for cash receipts and payments, with higher value cash payments having to be withdrawn directly from the bank, with priority being given to electronic transfers.

Speaking to the media and on the television programme Mesa Redonda, the BCC’s Vice President, Alberto Quiñones, said that the new measures will be implemented gradually, maintaining equality among all economic actors. Observing that the recently increased use of cash in economic and financial transactions in Cuba had setback banking and financial inclusion, he said they had also resulted in higher costs associated with bank note issuance, transportation, processing, and storage, and increased demand on ATMs. In doing so, Quiñones recognised the deterioration in Cuba’s ATM network and that the service they provided was inefficient in relation to demand.

New measures apply to all  state and non-state enterprises

The BCC resolution makes clear that all collection and payment relationships between all economic actors must be based on the payment methods established by the bank, prioritising the use of electronic channels. It establishes a maximum limit of CUP5,000 per operation for cash collections and payments between companies, MSMEs, self-employed workers, cooperatives, and other forms of management. In addition, the BCC has said that Cuba’s ATM network will no longer service their accounts and will only be able to take cards associated with pensions, savings accounts, salaries, and personal assets.

Analysts suggests that the new measures will slow the growth of Cuba’s independent MSMEs.

Under the new regulations companies requiring cash for their activities can only request it at the bank branches where their current or fiscal accounts are operated, “adjusting to the conditions agreed with the bank and in accordance with operational and fiscal levels,” according to the BCC’s Vice President.

The new measures also require all economic actors contract the services of Cuba’s Transfermóvil or EnZona electronic payment gateways or use Point of Sale (POS) terminals. “These channels allow safer, faster operations” Quiñones said.

Also speaking to the media Julio Pérez, Director General of the BCC, indicated that as in some locations, banks may not yet have the facilities for electronic banking, a grace period of up to six months would exist enabling cash withdrawals in Cuban pesos above the newly established limit for payments to workers.

In subsequent reporting and clarifications, it was explained that the new regulations require cash withdrawals for the payment of salaries, subsidies, and other social security benefits to be made at most three business days before the date payment, and that cash receipts in CUP received by all economic actors must be deposited in a checking account, no later than the next bank business day from the date of receipt.

Granma in its reporting stressed that state companies are also subject to the resolution as are “higher business management organizations; budgeted units; non-agricultural cooperatives; agricultural cooperatives; agricultural producers; individual farmers; commercial fishermen; micro, small and medium enterprises; local development projects; the self-employed; artists and creators; and all modalities of foreign investment and associative forms created under the Associations Law.” It also noted that the new regulations apply to individuals if they carry out legally authorised commercial and service activities.

The official Communist Party publication also wrote that the BCC’s decision had been endorsed by a meeting of the Executive Committee of the Council of Ministers which reportedly said that the measure was “considered a necessary, modern strategy that will benefit the majority of the population.” Ministers noted, however, the need to give “better information to the citizenship, give answers to the concerns and doubts that the population and economic actors have.”  It also quoted Roberto Morales, the Secretary for Organisation of the Central Committee of the Communist Party, as observing “the dissatisfaction that exists” and the need for “continuing to report and do so in understandable language.”

Granma additionally indicated that while training was underway in banks to ensure delivery of the new regulations “the challenge is to improve the service, which will not be achieved while the long queues at the banks continue.”

In subsequent explanatory television broadcasts several new points emerged as the BCC, Ministers and other officials sought to allay citizen concerns.

• The pace of delivery will not only be controlled by the BCC but will involve the participation of all Central State administrative bodies.

• Implementation will advance only in places where the right conditions exist as many fisherfolk and small farmers live in areas where there is no relevant infrastructure.

• Companies will be encouraged to offer discounts on payments made by electronic means. An agreed initial 6% limited period discount on digital payments is only intended for customers, consumers, and individuals.

• Fincimex is prepared to work with any economic actorto install point of sale equipment, but this is subject to availability because of the cost of imported items.

• Banks and ATMs have extended their hours of operation, but bank staff will require retraining and a change in mentality.

• The Ministry of Internal Commerce will gradually ensure electronic payments by every state and non-state establishment.

• The new measures are seen as contributing to a reduction in tax evasion. Cash will only be for minor operations by all companies.  Tax audits will be able to see clear movements in electronically managed accounts.

The gazetted text of the resolution in Spanish is at https://www.gacetaoficial.gob.cu/sites/default/files/goc-2023-ex55.pdf

Photo: El diario de Cuba

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

24th July 2023

Cuba’s Deputy Prime Minister, Alejandro Gil, the Minister of Economy and Planning, has painted a bleak picture of Cuba’s attempts post-pandemic to turn the island’s economic fortunes around. Addressing a plenary session of Cuba’s National Assembly, he said that the country was struggling to meet its planned economic targets for 2023, and that the island had only achieved economic growth of 1.8% in 2022 compared with a forecast figure of around 4%.

Observing that “The fall is much more accentuated than the recovery,” he noted that while tourism, transportation, communications, and the social sectors of education, culture, and sports had been recovering rapidly, the slowest to recover were primary activities linked to production including agriculture, livestock and forestry, and manufacturing, commerce, and power generation.

“Beyond the price issue, it is one that begins with the productive deficit.” he pointed out. “Practically none of the productive activities where wealth is actually generated have grown”, he told delegates. “We maintain a trend of falling activity levels,” Gil observed. He also acknowledged that the poor outcome was closely linked to inflation.

Regarding progress in the first months of 2023, he noted that only US$1,282mn had been captured through the export of goods and services, or just 35.7% of the plan for the year, and US$94mn less than expected. This, he said, had resulted in “a direct effect on the activities that demand foreign currency,” impacting the National Plan for which the main source of finance for its delivery was income in foreign currency.

Indicating the precariousness of Cuba’s financing model, he observed that all exports whether of goods or the supply of tourism have costs.  Whether goods or services “everything we export has a cost,” he observed. “The country’s profits are in the net margin, in the profits left by these exports rather than in the absolute value exported,” he told a National Assembly plenary. Gil also stressed the importance of guaranteeing the continuing flow of remittances which he described as “another source of foreign currency for the country”, but this too he said had a cost as its flow requires the Cuban market to be kept supplied with imported goods for purchase.

Gil noted that so far this year the expected revenues from exports of nickel, sugar, honey, and charcoal had not been achieved but that better results had been obtained from sales of tobacco, rum, and seafood, as well as biopharmaceuticals.

On tourism (see report below) he noted that this stood at 80% of what had been foreseen in the plan or just 51.1% of arrivals registered at the same stage at the end of June 2019. Although providing no indication of the spend by visitors, more promisingly he said that the planned foreign exchange income from the number of tourists/days spent on the island had been fulfilled and that national tourism was expected to reach 7.6m tourists/days by the end of the year. Despite this, he stressed, “We must move quickly in the recovery of the tourism sector.”

On income from telecommunications services, Gil said that although a downward trend in foreign currency receipts from abroad continued, an increase in sales in CUP had been good for the population but had affected external revenue earnings.

Observing that deficits in income from exports cannot be replaced with credits because of the cost of debt servicing, he stressed to delegates the importance of the country being able to meet its planned export targets so as to ensure the delivery of activities provided for by the country’s Economic and Social Plan.

Other speakers addressing various Commissions of the National Assembly painted an equally bleak picture. In one, Deputy Prime Minister of Economy and Planning, Leticia Morales, confirmed that official inflation was running year-on-year in the formal market at 45.48%.

In another session, Vladimir Regueiro Ale, the Minister of Finance and Prices, noted that despite developing a comprehensive programme to tackle inflation, additional effort was required in all economic and social sectors to generate greater budgetary resources. Noting that adjustments will have to be made to spending programmes he said that this would have to be done without compromising basic services, making the task more challenging. There was also, he said, a need for municipalities and provinces to take responsibility and consolidate objectively their responses, delivering a seven-point plan that he announced, and acting more firmly against illegalities.

Anger at agriculture’s failings sees Assembly place sector under ‘high supervision’.

When it came to the National Assembly debating Cuba’s failure to increase agricultural production, senior figures showed something close to anger at the failure of local and government entities to respond to the law’s requirement and meet promises made to the population to deliver domestic food sufficiency and achieve planned targets.

In a lengthy and hard-hitting critique of the failure to deliver what Cubans want, Deputy Prime Minister Jorge Luis Tapia, said that although a law aimed at achieving food sovereignty had been passed in 2022, a revolution involving “real work” was needed in agriculture involving delivery by all the agencies of the Central State Administration.

“Every Cuban must understand the need to produce food. This must be done from the schools themselves” he said, before going on to say that the work required to produce food was absent. “We all wait for food to be sent to us, but we do nothing to produce it. There is a lack of productive culture”, Tapia said.  “We don’t have more time, there is no other alternative than to sow, sow, and sow,” he told delegates.

In another intervention broadcast on Canal Caribe, the President of the National Assembly, Esteban Lazo, angrily criticised failures in agricultural management. “We are already very tired of programmes, measures, studies, diagnoses. And where is reality? And where is the solution to the problem?” “Today the country does not have the resources to keep up with the level of imports we have. Practically 100% of the family basket is being imported.” “Rice is not produced …. 100% of beans are being imported,” compared to 2017 and 2018 when, he said, there were plenty of such products.  Stating that “a revolution in agriculture” was required, Lazo told the Assembly they must consider how policies have been implemented and “what we are going to do to solve one of the main problems of the population.”

Subsequently and exceptionally the Parliament agreed to “submit the Ministry of Agriculture to high supervision” placing it under the direction of its Agri-Food Commission with the participation of the Economic Affairs Commission and other entities of the National Assembly.

Photo: Prensa Latina

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

3rd July 2023

Plans being discussed, intended to transform Cuba’s state enterprises are likely to be transformational and possibly socially and politically challenging, according to remarks made during a recent discussion on the flagship television programme Mesa Redonda.

Although the detail of the changes envisaged is yet to be agreed, Johana Odriozola, the Vice Minister of Economy and Planning, told viewers that socialist state enterprises are likely to undergo a significant transformation, requiring a design that is less administrative and more about financial economy.

Odriozola noted that this will follow from the introduction of a new law for state companies that will see more powers being granted, structures being modified, and their autonomy deepened.

In her remarks, she stressed, however, that a change in the law will not be enough. “This will be the institutional and regulatory framework that designs the causes of the company’s operation; but of course, we need other transformations in the functioning of the economy that allow the company to be a company,” she said.

Also appearing on the programme, the respected Cuban  academic, Professor Ileana Díaz, the Director of the Centre for the Study of the Cuban Economy at the University of Havana,  stressed the  need to change the environment in which Cuban state-owned companies operate.

If they are to achieve the efficiencies the country needs to develop, and they are to deliver economic growth based on better results, greater exports, and fewer imports, “we don’t have to be afraid of the market,” she said, “The market is regulated by the state.”

Setting out what many would see as a basic description of a social market economy, Díaz went on to note the need to relate prices and wages to the market and the need to have access to resources not administratively but through profitability and efficiency. “If you have the money to access, you will be able to buy in the market; [if] you don’t have the money, you won’t be able to enter. If a company is more efficient, it will have better conditions for access”, she observed.

Relating this to the need for companies to make profits to generate wealth for the national good she told viewers: “But you have to make the company create wealth and profitably create wealth with a higher percentage of profitability. Why? Because to the extent that you create wealth, you not only satisfy the needs of the population but also those of the State, because you will pay more taxes and you will have greater contributions to the State budget. ”

In her remarks Díaz indicated that the practice of “homologism” or the creation of  identical norms for every Cuban state company cannot continue in future.

Indicating that “no company is equal to another, even if they produce the same thing,” any more than their workers, managers or history are the same, she went on to say that the business law that is being considered  “would put an end to comfort zones” and give companies autonomy.

“If we don’t do that, it’s salt and water. The Constitution of the Republic says that the state company is autonomous but in reality it is not completely so, since many times it has to wait for countless authorisations,” she said.  In future, she noted, the idea is that the company will operate in an environment where it can exercise and make business decisions and so make greater contribution to the country.”

Observing that the process of change would be gradual, Diaz went on to note that it will be possible in future that some companies go bankrupt. “Some companies are born, and others die. It happens in human life and in companies the same,” she stressed. In doing so she cautioned that the changes that are expected to be introduced, albeit with some modifications, cannot be undertaken overnight.

Confirming that there will be different classifications of companies (Cuba Briefing 19 June 2023)  relating to their role in the economy and this will see some to be allowed to act and manage independently, she stressed that in such cases the state would demand results in return. “An environment where I am going to give you autonomy, where I am going to allow you to search the markets, where you can command within your company, I am also going to demand results from you,” Díaz observed.

In her remarks she however cautioned that as change is introduced other Cuban factors and constraints will have to be taken into account. The Head of the Cuban Centre for the Study of the Cuban Economy noted that the process will have to “go little by little” towards what is required,  “creating the markets that are necessary such as the foreign exchange market, the input market, the labour market.”

“The day we achieve a functional currency market, we will be in better conditions to be able to make a transition from what we have today to find that the company really has autonomy and can operate”, she stressed.

She however warned, “You cannot remove a mechanism from now to later in the economy, because it will fail.” “It is vital to change those rules of the game” she noted, emphasising that there was no value in undertaking a  macroeconomic stabilisation programme if at the same time there was not a programme that will see the structural transformation of the economy involving state companies. “This is what will provide the possibility of macroeconomic sustainability in decisions”, if made gradually, she said.

The draft business law is expected to be published and considered later this year then go to the Cuban National Assembly in December.

The Caribbean Council is able to provide further detail about all of the stories in Cuba Briefing. If you would like a more detailed insight into any of the content of today’s issue, please get in touch.

Source: Cubahora