Gil suggests Cuba struggling to finance and deliver its economic model

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

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