Cuba Briefing
The Caribbean Council's Exclusive Publication on Cuba

The Cuba Briefing is your news and insight resource for the latest developments in Cuba.

Published since the mid-1990s, Cuba Briefing is an unparalleled resource of detailed analysis on economic, social and political developments going on inside Cuba including analysis on the Cuban government’s priorities and policy developments towards foreign investors, economic reform, and the growth of the private sector.

Cuba Briefing is produced on a weekly basis by David Jessop, the director and founder of the Cuba Initiative and Non-Executive Director of the Caribbean Council, providing expert insight and a longer term lens on week-to-week developments in the country.

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20th May 2024

The US government has removed Cuba from its latest list of countries that it says do not fully co-operate with its anti-terrorist efforts. Despite this, Cuba remains on Washington’s separate list of nations that it alleges are state sponsors of terrorism: a designation that has made it difficult to undertake international financial or other business transactions with the island.

In an email, a US State Department spokesperson confirmed that Cuba was not on its list of non-fully cooperating nations for calendar year 2023 under Section 40A of the Arms Export Control Act. It reflected, a spokesperson said, the fact that on the order of Colombia’s President, the country’s Attorney General had suspended the arrest warrants for 17 ELN commanders, including those whose extradition Colombia had previously requested from Cuba. It also noted that “The United States and Cuba resumed police cooperation in 2023, including in the fight against terrorism. Therefore, the Department determined that continuing to certify Cuba as a ‘not fully cooperating country’ was no longer appropriate.”

The official added however, that the designation was “not the same list as that of State Sponsors of Terrorism”, which “under US law establishes specific legal criteria for rescinding a designation of that nature.” “Any future review of Cuba’s status would be based on the law and the criteria established by Congress,” the official said.

Responding to the change in designation, Cuba’s Government said that the US decision was insufficient. President Díaz-Canel wrote on X: “By confirming what is widely known, that Cuba cooperates in the battle against terrorism, the US should do what is correct and consistent with that position: remove #Cuba from the State Department’s arbitrary list and end the coercive economic measures that accompany it.”

In another post, Bruno Rodríguez, Cuba’s Foreign Minister, wrote that the US “has just admitted what is known to everyone: that Cuba collaborates fully with efforts against terrorism.” Rodríguez demanded that the US Government remove Cuba from “the arbitrary list with which it designates countries that supposedly sponsor terrorism.” “All political manipulation of the issue should cease and our arbitrary and unjust inclusion on the list of countries sponsoring terrorism should end,” he added.

Other similar posts on X were made by MINREX Ministers who have actively participated in recent meetings with US officials in Washington and Havana on security matters. Such exchanges aim to deepen existing cooperation on counter-terrorism, narcotics interdiction, and human trafficking, matters on which the two capitals, their coastguards and related entities co-operate.

Responding to the Biden Administration’s decision, the US Senator, Rick Scott, (R-Florida)  said that the removal of Cuba as a non-cooperating state was “a first step to reverse the designation of Cuba as a State Sponsor of Terrorism.” He described it as an act of appeasement, as destabilising to the Western Hemisphere, supportive of terrorism, and delivering “a huge favour for America’s enemies in Russia, Iran, and communist China.”

The nations listed by Washington in its 2023 report as non-cooperating countries are North Korea, Iran, Syria, and Venezuela. The inclusion of Cuba in the US list of countries alleged to be sponsoring terrorism was taken in January 2021, one of the last decisions made by the Trump Administration. It did so on the basis that Cuba refused to extradite to Colombia, guerilla leaders involved in peace negotiations in Havana, a process in which Norway and Cuba were guarantors on terms that included safe passage for all participants out of the country.

29 April 2024

Cuba is making steady progress towards achieving its objective of receiving 3.2mn tourists this year, but still has far to go to achieve the 4.5mn visitors it received in 2019 before the pandemic.

Figures released recently by the island’s Office of National Statistics and Information (ONEI) show that in the first three months of 2024 total international arrivals numbers grew by 7.5% from 752,431 in 2023 to 809,238 this year.

The figures show numbers from Canada, Cuba’s largest market, increasing by 3.2% to 399,272 in the first three months of 2024 from 387,069 in the same three months of 2023, accounting for some 49.3% of all visitors so far this year.

Notably, visitor numbers from Russia continue to increase significantly as new airlift is added, promotional activity enhanced, and the Russian government actively encourages tour operators, airlines, and investors to take a greater interest in Cuba as a destination. ONEI’s first quarter figures show that Russian arrivals more than doubled, from 32,222 stopovers in the first three months of 2023 to 66,887 in the same three months of 2024.

In contrast, Cubans living abroad, a category Cuba counts separately, accounted for 75,386 of all international visitors arriving in the first quarter of 2024, a figure down from 83,663 recorded in the same three months of 2023.

For the month of March, international visitor numbers arriving were up 6.7% at 281,139 compared to the 263,465 received in March 2023. The arrivals numbers for March this year show, in addition to significant growth from Canada and Russia, the island’s other leading visitor markets were the United States with 46,717 arrivals, and Germany with 22,097. Visitor numbers from other European source markets remained low, however, with Cuba’s principal European markets, France at 19,377, the UK 16,719, and Spain 14,036, all likely affected by US travel regulations. These now require anyone eligible to enter the US under its ESTA visa waiver scheme to apply for a US visa if they entered Cuba after 12 January 2021.

As the year progresses, Cuba is hoping to increase visitor arrival numbers particularly from Latin America. Announcing details of this year’s International Tourism Fair (FitCuba 2024), Cuba’s Minister of Tourism,  Juan Carlos García, recently highlighted the promotional emphasis now being placed on increasing the number of travellers from Mexico, Colombia, Argentina, Brazil, and the rest of the Caribbean. This year’s fair takes place on Cuba’s from 1-5 May in Jardines del Rey located on the north coast of the provinces of Ciego de Ávila and Camagüey.

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.

15 April 2024

 Cuba’s Central Bank (BCC) has said that it hopes this year to reduce further the amount of cash in circulation and make more effective measures announced last August that seek to direct state and non-state enterprises and individuals to use banks and magnetic cards for most transactions. 

The policy limited cash withdrawals to CUP5,000 per transaction, required the payment of all salaries, pensions, and benefits to be by electronic means, and sought to encourage all future economic activity to be e.commerce based. (Details Cuba Briefing 4 September 2023). 

 The measures formed a part of a response to surging inflation in both the official and unofficial economy, and an ongoing government liquidity crisis. 

Speaking at this year’s just held annual audit meeting of the BCC, Julio Pérez, the Director General of Operations and Payment Systems, said that at the end of 2023, 91% of state entities and 74% of non-state forms of enterprise undertook their accounting activity through current accounts, but 30% of transactions still took place in cash compared to 68% carried out by electronic channels. 

 This was due in part, he said, to the obsolescence of technological equipment, including the country’s 800 ATMs “of which, on average, 77% dispense cash.” The meeting also heard that despite the measures introduced in 2023, the amount of cash outside the banking and financial system continued to grow “based on the presence of new actors in the national economy.” This group, it emerged are now permanently monitored by the BCC in relation to government’s macroeconomic stabilisation programme introduced in December. 

Among the other problems BCC officials identified in moving to a near cashless society is the continuing resistance to making and receiving payments by electronic means by many smaller mainly non-state providers of goods and services, “inadequate control measures” to ensure compliance by regulatory bodies, the availability of cash at banks, and the variable levels of service offered. 

Speaking at the BCC meeting, Cuba’s Prime Minister, Manuel Marrero said that additional incentives must now be sought to stimulate cash deposits in the country’s banks and an improvement in the quality and provision of services were required. He also stressed the centrality of the BCC to the 2 

implementation of the country’s macro-economic stabilisation programme, to monetary policy, as well as to the elimination of exchange rate duality, and the technically illegal informal exchange rates widely used by most Cubans to change convertible currency. 

Although there was no reported discussion about the steps Cuba might take to address the ever-widening gap between its two official exchange rates and the still surging street rate for the US Dollar and the Euro, the Minister President of the BCC, Juana Delgado, told the meeting that work is being done on “resizing the exchange market,” and that this year the BCC will identify projects that generate external income and promote the improvement of the flow of foreign currency to the country. The bank, she said, would additionally focus on expanding the Cuban banking and financial system’s international relations. 

In her reported remarks, Delgado stressed that the BCC would this year seek to consolidate the banking process so that it involved the full participation of Cuban society, by engaging with “the providers of goods and services, regulatory authorities, local governments and non-state forms of management (MSMEs).” 

Other planned actions, Delgado indicated, focus on standardising electronic payment systems nationally on all platforms, the design of new strategies which reduce the use of cash in transactions to stimulate deposits, and the adoption of measures that increase the availability of cash. 

The BCC would also, she said, seek to attract new financing with an emphasis on enhancing the activities of Cuba’s export sector, create a new mechanism for the allocation and management of liquidity for all economic actors, and introduce measures that recover remittance flows. No details were provided. 

18th March 2023

The outline of a possible approach to unifying Cuba’s multiple foreign exchange rates and addressing dollarisation has been published in Granma. The much-needed measure is widely believed to be the key determinant in the success or failure of government’s macroeconomic stabilisation reform package. (See Cuba Briefing 2 January 2024).

In a second commentary in a month to be published in the Communist party’s official publication by Joel Marill, an economist specialising in Strategic Macroeconomic Projections at the Ministry of Economy and Planning (MEP), he argues that because the price of currencies is transversal, addressing exchange rate policy in the short term is vital.

Marill writes that the issue forms an important part of the internal debate that is continuing in relation to the package of reform measures agreed in December as necessary to rectify past mistakes and create the conditions for future economic growth.

These discussions, he suggests, are in part focussed on “the implications of an official exchange rate of US$1 to CUP24 and another at US$1 to CUP120” (the Cadeca rate); both of which he describes as  “clearly disconnected from the economic reality” of the informal market (currently at US$1 to CUP325). This he suggests, needs to be “formalised” and used “to stimulate national production and macroeconomic stabilisation.”

To this end he proposes a solution requiring “correct management” and recognition that it will be  “one of the most complex transformations to undertake, in a scenario of currency restrictions and internal macroeconomic imbalances.”

Marill goes on to note that the two official exchange rates mean that national or foreign companies cannot directly access foreign currency. Instead, they must use a “complex and mostly inefficient centralised allocation mechanism” to legally exchange  CUP “which overvalues the Cuban peso.”  This he writes, severely impacts the export sector, limiting its ability to expand production, employment, and to create fresh foreign exchange.

By contrast, Marill argues, the informal exchange market used by the non-state sector and the Cuban population, “offers more flexible access to currency” at high prices, but is based on speculation and uncertainty, and excludes state and mixed companies.

To remedy this, the MEP economist proposes in the short-term the creation of a flexible scheme providing direct and legal access to foreign exchange for MSMEs, and state and mixed companies. This he suggests should be followed in the medium term by an approach that has as its strategic objective the gradual convergence and unification of the exchange rate “through successive iterations.”  An approach, he believes, that would eventually enable the recovery of the “full sovereignty of the peso as the single currency” for internal transactions, creating also a single exchange rate for all external operations.

To achieve this far from easy sequencing and objective, he proposes “first, the relaunch of the official exchange market and, subsequently, the slow devaluation of the official exchange rate.”  He also recommends that the informal exchange market be addressed by “the redirection” of the flows involved towards the formal financial system.

Although an institutionally complex task, he suggests that this could be achieved through three actions:

  • The Central Bank of Cuba (BCC) setting an equilibrium exchange rate that is regularly modified by the movement in the supply and demand for the currencies the financial system receives and by underlying market conditions
  • Providing foreign currency through the financial system to those who presently operate in the informal market
  • And then, when foreign currency flows are oriented towards the formal financial system, granting state-owned companies gradual access to this market based on exports and the capture of foreign currency earnings in the financial system. 

Marell recognises that there are risks attached in relation to money supply, and that there would be constant pressure for the Central Bank to depreciate the exchange rate. He suggests, however, that the monetary and fiscal transformation accompanying the opening of an official exchange market would enable the changes required to deliver the country’s macroeconomic stabilisation programme.

No alternative commentaries have so far appeared in Granma. Both by Marell were published after the appointment  was announced on 2 February of Joaquín Alonso, the Minister President of the Central Bank, as the new Minister of Economy and Planning. Details of Marell’s earlier commentary on the macroeconomic stabilisation process can be found in Cuba Briefing19 February 2024.

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: cubaniatravel.com

4th March 2024

Jorge Pérez, the Commercial Vice President of Habanos SA, Cuba’s principal tobacco exporter, has said that sales of the joint venture’s cigars rose by 31% to US$721mn in 2023.  He was speaking in Havana during the twenty fourth annual Habano Festival which this year  was attended by more than 2,900 participants from 108 countries.

The growth, according to other Habanos executives, largely reflected market recovery after the COVID-19 pandemic and the increasing demand globally for “limited and exclusive” high end editions.  It also responded, they said, to strong growth in global demand in the luxury market for premium cigars.

Speaking to the media in the margins of the festival, José María López, Habanos’ Vice President for Development, said that the outcome reflected the strong positioning strategy that had been developed for the company’s brands, its policy of permanent innovation including the launch of 31 new products, and improvements to its supply chain. By value, he said, the company’s most important market was China, followed by Spain, Switzerland, Germany, and the UK. In the Americas the principal markets were Mexico, Canada, and Cuba itself. Habanos sales by region were Europe (56%), followed by Asia-Pacific (21%), the Americas excluding the US (13%), and  Africa and the Middle East (10%).

Separately, Luis Blanco, the Agricultural Director of the Tabacuba business group, confirmed that the present planting campaign for the 2024-25 harvest will see about 14,000 hectares planted from which some 20,000 tons of tobacco will be obtained, guaranteeing the industry’s production plans for 2025. He said that the province of Pinar del Río, Cuba’s largest producer, will  plant 10,200 hectares of tobacco, with yields expected to be between 1.37 and 1.4 tons per hectare. In the case of covered tobacco from which the best leaf comes for Cuba’s premium cigars, he confirmed there are no problems with planting.

As reported previously (Cuba Briefing 19 February 2024) to try to achieve the optimum outcome, Tabacuba is now concentrating on having farmers with the best historical results plant in the best soil in the Vueltabajo tobacco massif. In mid-February Granma quoted a local official as saying that the supplies and fuel necessary for growers to conclude the campaign had been received. It additionally quoted Tabacuba as indicating that full recovery of the industry’s infrastructure will take at least two years with the 2024-2025 harvest envisaging 14,000 ha under tobacco, a figure still below that when Hurricane Ian crossed the Western end of Cuba in 2022. Farmers not able to plant tobacco are being encouraged to engage with a Tabacuba programme to plant other crops.

Habanos SA is a 50/50 joint venture between the Cuban state and Asia Uni Corp, a BVI registered company reportedly bringing together a consortium of Asian investors.

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: www.cigaraficionado.com

12th February 2024

Cuba’s Council of State has appointed Joaquín Alonso, the Minister-President of the Central Bank of Cuba (BCC), as Minister of Economy and Planning, removing Alejandro Gil from the post.

The decision to appoint Alonso and make other changes was revealed in a Council of State declaration on 2 February, published the following day in Granma under the minimal headline ‘Council of State approved cadre movements.’

Just days before, on 29 January as Minister, Gil had outlined to the Council of Ministers the timetable for implementing approved policy reforms intended to restore economic growth (Cuba Briefing 5 February 2024).

The declaration said that Gil, would be released from his responsibilities as both Deputy Prime Minister and Minister of Economy and Planning. The decision was taken, it said, with the prior approval of the Politburo of the Central Committee of the Cuban Communist Party (PCC) and on the proposal of President Díaz-Canel.

Radio Havana reported that the decision related to “movements of cadres in portfolios of great economic impact.”

Alonso will be replaced by Juana Lilia Delgado as Minister President of the BCC.  Delgado has previously been Director of Operations and General Director of Treasury at the BCC, Vice Minister at the Ministry of Economy and Planning, and worked at Cuba’s Permanent Commission for Implementation and Development.

Alonso, who is 60, reportedly accumulated extensive management experience during his time at the National Bank of Cuba, Banco Popular de Ahorro, Cubalse Commerce and Services Corporation, the non-banking financial institution Casas de Cambio SA, and most recently as Minister President of the Central Bank of Cuba. He also served as provincial vice president of the Association of Economists and Accountants of Cuba.

In a further change, Dr Eduardo Martinez, President of Cuba’s highly successful BioCubaFarma business group, has been appointed Minister of Science, Technology and Environment, in place of  Elba Pérez who had held the position for  over 11 years. Dr Martinez, a deputy to the National Assembly, is respected for the innovative work he led on the development and production of Cuba’s pentavalent vaccine and the national role he played during the fight against COVID 19. 

It was also announced that Alberto López, the Governor of the province of Villa Clara and a National Assembly Deputy, has been appointed as Minister of the Food Industry, replacing Manuel Santiago Sobrino. 

The Council of State noted that “all the colleagues released from their respective positions were recognised for their effort and dedication in carrying out such high responsibilities and in the coming days they will be assigned new missions.”

Although there has been no further official comment on the decision to remove Gil, speculation continues as to whether it relates to the sudden decision in late January to delay at the eleventh hour the implementation of fuel and transport price rises announced in December. The increases formed a key part of an integrated group of measures intended to rectify past mistakes and generate renewed growth.

It is not now clear whether the overall package of measures agreed to late last year will be implemented within the timetable planned. They were first announced by the Prime Minister, Manuel Marrero, in December, although at the time Cuba’s President cautioned that they should only be introduced gradually due to their sensitive nature.

In an apparent expression of concern about the country’s economic and social fragility, and in response to many Cubans’ doubts about the impact of the proposed reforms, Díaz-Canel stressed at that time the need for the new policies to be implemented with great sensitivity. Ministers and government, he said, “must constantly study impacts, states of opinion, and make the necessary corrections.” (Cuba Briefing 2 January 2024).

In recent weeksformer President Raul Castro, PresidentDíaz-Canel, and the Secretary of the Central Committee of Cuba’s Communist Party, Roberto Morales, have all stressed “the decisive importance” of maintaining national unity this year. (Cuba Briefing 8 January 2024).

Gil’s departure from office additionally coincides with government’s recent admission that the 2021 economic ordering task failed, surging inflation, and a growing and huge variance between the official and street rate for the Cuban Peso.

Following his replacement as Minister of the Economy and Planning, Gil noted on X in a tweet addressed to President Díaz-Canel: “It has been a pride and an honour to work alongside you in the service of our people and our Revolution. As always, I’m at your command, to continue, “ to which Díaz-Canel replied by sending a “Grateful hug” to all those replaced, noting that “they gave their energies in very hard years for the country” and wishing success to the new appointees.

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: Reuters/Amr Alfiky

5th February 2024

Deputy Prime Minister Alejandro Gil, Cuba’s Minister of the Economy and Planning, has said that the Cuban government expects this month to bring forward measures to control Cuba’s increasingly volatile foreign exchange market. In recent weeks the street rate of the Cuban Peso (CUP) has surged to close to CUP300 to US$1, compared to the official rates of CUP24 or CUP123 to the US Dollar. 

Speaking at a meeting of Cuba’s Council of Ministers, during which he outlined an action plan and a timetable for introducing measures aimed at encouraging renewed economic growth while ‘rectifying’ past mistakes, he said that his ministry was developing plans to “resize the exchange market,” and take back “control of the exchange rate in the country.”

“Next month, progress will also be made in the presentation of proposals to resize the exchange market, the intervention of the informal sector, and the control of the exchange rate in the country, which includes the determination of the exchange rate and the formation of prices,” he was reported by Cuba’s Presidency website as having told the meeting. “We are working hard on this because of the impact it has on promoting and stimulating production,” Gil said.

The reference to the informal sector relates to government’s belief that actions by some of those in Cuba’s rapidly developing, independently managed non-state MSMEs are distorting demand for foreign exchange. 

In his reported remarks the minister indicated that emphasis will also be placed on recovering remittance flows. This will involve, Gil said, encouraging their capture, and studying the feasibility of new channels, platforms, and the use of digital scenarios for remittances and banking operations for collections and payments from abroad.

In the first of what is expected to be a monthly update to the Council of Ministers on the progress being made in implementing the reforms announced last year, Gil said that another priority will be the implementation of a new approach to managing the financial resource held by both state and non-state businesses.  This would involve he said a “new mechanism for the allocation and management of liquidity for all economic actors, based on the distortions that exist today, in order to achieve a more harmonious functioning of the economy.” It would enable, he suggested, progress to be made in enabling previously announced plans to encourage “the autonomy of the state company.”

Stressing the importance of what he described as government’s “high-impact plans,” he noted, among them would be a “currency allocation and management mechanism, which includes the resizing of the exchange market.” This, he said “is transversal to the entire economy and we are going to face it this year; the transition from subsidy to products to subsidy to people, which implies a change in the distribution of wealth, that is more fair and equitable; as well as the transformation in the institutional, regulatory and organisational environment of the economy.”

Gil’s remarks suggest that the intention, as previously announced, is that 2024 will be the year when most socialist state enterprises must control their own budgets and are required to operate under central and local government constraints to deliver surpluses, and if relevant to do so by working in conjunction with state and non-state MSMEs.

Previous statements indicate that the government’s longer-term objective is to create a circular domestic economy, making Cuba as far as possible self-sufficient. How rapidly this might happen in the light of shortages of inputs and foreign exchange, uncertainty on the part of managers, continuing migration, and other constraints such as constant power outages, has yet to be clarified.

In his remarks, Gil stressed that the group of economic measures announced in December by the island’s Prime Minister, Manuel Marrero, (Details Cuba Briefing 2 January 2024)are intended to deliver what is necessary to boost productive activity, increase national production, and generate exports and income in foreign currency with the objective of achieving macroeconomic stabilisation.

He also sought to reassure Cubans concerned about large increases in the cost of utilities and transport:   “It is not about raising prices for the sake of increasing them,” he said, “but rather about encouraging savings, making more efficient use of resources, and seeking a more fair and equitable distribution of the wealth that is generated,” he stressed.

 “That is the meaning of the rates and prices that we are updating, because they have been left behind in time, disconnected from costs, and today what is really happening is that waste is being encouraged,” Cuba’s state media quoted him as adding.

In his presentation to the Council of Ministers of an ‘Action Plan for the Implementation of the Government’s Projections to Correct Distortions and Re-boost the Economy’, Gil noted that every included action was linked to government’s macroeconomic stabilisation programme, including “price correction …. because it eliminates or reduces subsidies and increases tax revenue.”

Speaking about increasing and diversifying external income, Gil emphasised that “many of the projections included in the document will have more favourable impacts if more resources are available.” “Having more fuel, more inputs for national production, necessarily involves income in foreign currency, external income that must be encouraged,” he pointed out in a reference to the need to export more, and Cuba’s interest in increasing the role of foreign investment in a broader range of operations in Cuba’s domestic economy and productive sectors.

Among the objectives of government projections, Gil noted, is an increase in national production using installed capacities. In this respect and referring to recently introduced measures to reduce tariffs on imports of raw materials, inputs, and intermediate goods (Cuba Briefing 5 February 2024)  he noted the need for Cuba to address idle capacities in industry, and the importance of products being produced  domestically.

Developing the economy, Gil stressed, means “offering greater well-being to the people, and what we are doing goes in that direction.” The worst risk, he said, would be in not changing and not transforming.

At the Council of Ministers meeting, details of other aspects of the proposed timetable were reported to have been discussed, including plans to update regulations in February to allow the restructuring of the ways in which local development projects are managed.

More generally, the meeting heard that the measures being introduced across the year will be accompanied by several “political processes”.

Reports of the meeting quoted President Díaz-Canel as saying  that the intention is to “confront everything that deviates from the spirit of the Revolution in our society.”  A common thread, he said,  will be the approach proposed by former President Raúl Castro, (Cuba Briefing 8 January 2024), and will be about ‘the decisive importance’ of maintaining Cuban unity, the work of the cadres, ideological work, and facing the problems of the economy.”

Cuba’s President said this will be a large-scale process that will involve “a discussion of partisan militancy, cover all administrative structures, and also groups of workers, students, and the population in communities,” and “therefore the entire Cuban society.” “It is a process,” he indicated, “that will contribute to reaffirming the need and strategic importance of unity, exemplarity and combativeness in the revolutionary ranks.”

Also speaking, Roberto Morales, the Secretary of Cuba’s Communist Party (PCC) and an increasingly high-profile politburo member, said that “the Party will promote discussion of the document: ‘Basic concepts for the correction of deviations and negative trends in Cuban society’.” A practice, he recalled, that is not new in 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.

Photo: via @PresidenciaCuba

15th January 2024

A proposed second National Conference of Cuba’s Communist Party (PCC) that was to have taken place during the first quarter of 2024 has been postponed. The decision, which was  endorsed at a plenary meeting of the Central Committee of the PCC held in mid-December, reportedly reflected the need to concentrate on delivery, the “urgencies and priorities of the country,” and to accelerate decision making. The mid-December meeting principally focussed on the steps needed to encourage the better delivery of solutions in ailing sectors of the economy, and was notable for its stress on action rather than debate. Among the less publicised decisions taken was recognition of the need to establish “a close relationship between all economic actors based on the development of the country,” and the creation of “a superior contracting process” between state entities and suppliers to satisfy the demand for food.

The little reported plenary also agreed that fifteen new Economic and Social Policy Guidelines should be adopted in relation to Cuba’s National Economic and Social Development Plan 2030, largely relating to new priorities and updating.  The new measures proposed include promoting the insertion of non-state companies into the national economy and their integration with state companies to improve economic and social outcomes; the creation of new financial mechanisms to stimulate exports, import substitution, and foreign investment; and the promotion of international cooperation directly with Cuba’s provinces. Official reporting also noted that the guidelines should in future seek to promote the de-dollarisation of the economy; developing an exchange market with an economically founded and stable exchange rate; and the introduction of measures aimed at reducing inflationary pressures “to stop the deterioration of the purchasing power of salaries and pensions.”

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: via Granma

11th December 2023

 The Director of Cuba’s state sugar group, Azcuba, Julio García, has said that the 2023-24 harvest will be “superior” to that of 2022-23, while indicating that government regards the sector’s future as strategic in relation to power generation. 

In 2022-23 the country recorded an all-time production low of about 350,000 tonnes despite a significant restructuring of the sector. 

Speaking on the television and radio programme Mesa Redonda, he gave no indication of expected production levels in the coming campaign. Instead García set out the sector’s plans for recovery, in part with foreign investment, while making clear the many challenges facing the industry if it is to achieve its objective of becoming a profitable, integrated ,agro-industrial sector. 

 García made clear that the coming campaign is expected to guarantee all the sugar necessary for the domestic economy, as well as to produce alcohols and spirits, but said nothing about previously unmet export contracts with China for the supply of sugar. He also stressed the importance of planting a greater area under cane, describing it as “a fundamental step for growth.” 

“We expect a harvest greater than the previous one, with the capacity to ensure the demands of the economy and [to] allocate a part to exports. It will be a short but efficient harvest, in which we must place the worker at the centre of attention. We know that an economic recovery of the country requires the contribution of the sugar sector,” he told viewers. 

In his remarks García stressed the strategic importance of the sector and its restructuring, observing its important contribution to the country’s energy supply. “This is a strategic sector due to its contribution to the energy matrix,” he said, noting that up to 14 % of the country’s energy supply could be achieved using as biomass, sugar cane, other crop residues such as sugar cane straw, and forest residues. 

He also set out the extent to which plans to restructure the industry had been achieved. Today, he said, the sector consists of 56 agro-industrial sugar companies, one sugarcane factory in the Santa Cruz del Sur municipality, and 16 support companies which include 12 distilleries, 11 refineries, as well as 114 derivatives plants and 10 rum factories. 

García said that to “advance and recover,” the sector’s new business model allowed for “obtaining 84% of the foreign currency to buy inputs for sugar cane, such as herbicides and fertilisers.” Listing some of the derivatives the sector produces including electricity, alcohol, rums, sorbitol, cane wax, raw materials for more than 50 medicines, and bioproducts some relating to the planting of sugarcane, he suggested their export development potential “can provide the sources of financing that the sector needs.” 

Azcuba, he noted, had “approved foreign investment negotiating directives” …. “linked to BRICS countries, that are traditional sugar producers, [which can] contribute to the sector with modern technology: mainly Indian, Brazilian and Chinese,” but not mentioning recent Russian interest in the sector. 

Foreign investment, he made clear, will also be essential for 16 products the group has, to make use of planned increases in sugarcane production to develop other product lines such as brandy and wine. Azcuba was also exploring, he said, businesses linked to the modernisation of power plants and studying the development of biofuels. Noting that the entity’s new business model made this easier to do, he said that in the domestic market advantage will be taken “to introduce joint ventures and exporters into the value chain.” 

“Food production is a priority for our sector. Our plants with the greatest strengths are those that have a circular economy model, since they grow cane, manufacture sugar, but they also make alcohol, rum, produce electricity, yeast …. closing the cycle of the circular economy,” he told viewers. 

Despite this, García pointed to multiple challenges still facing the recovery of the sector. 

These included, he said, the fact that low production and shortages of sugar on the domestic market had seen its price there rise to CUP150 per lb, resulting in illegalities and the company having to work with Cuba’s judicial system and introduce video recording systems. 

He also pointed to the need to overcome the failure to date to achieve the required 1.4mn hectares under sugarcane required for future development; having to attend to changing organisational and management capacity as a result of those involved leaving the country or for self-employment or to MSMEs; existing debts to farmers from previous years; shortages of fuel and energy at key moments and undersupply; availability of all of the financing required for inputs when needed; shortages of fertilisers and herbicides; and climate change. 

García also referred to the impact that the excessive burning of cane had on yields and quality; the continuing impact of the embargo on critical items of imported equipment; and the failure to meet “very serious commitments” for contracted exports. He also noted the complexity of pricing of sugar cane because of its inclusion in the state regulated family basket, being able to produce enough food to feed and adequately house workers in the sector and attract better educated younger people into the sector. 

Cuba historically consumes around 700,000 tonnes of sugar each year and has exported under contract about 0.4mn tonnes to China. In 2019 Cuba produced 1.3 mn tonnes of sugar. 

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.