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Cuban Economy in 2019: No Decline Despite US Blockade

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Estimates indicate that the Cuban economy did not decline in 2019, another victory over the U.S. blockade. Evidence of the capacity to resist and untapped potential we have, stated Alejandro Gil Fernández, minister of Economy and Planning, in his report to the National Assembly

Despite the limitations, and thanks to the efforts of our people, it is estimated that the Cuban economy will not decline in 2019, evidence of our capacity to resist and the untapped potential we have, said Alejandro Gil Fernández, Minister of Economy and Planning, when informing deputies of the economy’s performance in 2019, prior to the Fourth Ordinary Period of Sessions of the National Assembly of People’s Power Ninth Legislature.

With President Miguel Díaz-Canel Bermúdez on hand, as well, the Minister noted that it is not easy to overcome the impact of the criminal U.S. economic, commercial and financial blockade, but even if all goals set are not met, we have managed to maintain important levels of activity in the economy.

He said that the Economic Commission for Latin America and the Caribbean (ECLAC) “has stated that the general slowdown in Latin America and the Caribbean persists, with growth of 0.1% expected. Low growth is expected for 2020, with an estimated rate of 1.3%, amid a complex international context characterized by worsening trade tensions, among other factors”.

For Cuba, he stated, 2019 has been marked by the tightening of the economic, commercial and financial blockade imposed on the Cuban people by the U.S. government for more than 60 years, despite widespread condemenation by the international community.

He denounced U.S. government efforts focused on preventing fuel from reaching the country, with the open purpose of asphyxiating the economy and with it, causing greater suffering to our people.

“They say that the blockade only affects the government, an absurd lie; the blockade affects the entire Cuban people and all sectors of the economy. In fact, the greatest impact of the end of the cruise ships visits is on the non-state sector.

“Since April, we have faced additional restrictions impacting the availability of fuel, which has affected public transportation, among other arenas, forced us to temporarily suspend some investment projects and slow down work on others, and negatively impacted agriculture, food production and distribution and other items of economic and social importance,” he said.

The Minister emphasized that our people have responded to this challenge with more unity. “We have not applied neoliberal measures; no schools or hospitals were closed; no increases in fuel or electricity prices to reduce consumption. On the contrary, we have been called upon to conserve and to share, among all of us, the effort, not only to resist, but to continue investing in development”.

He pointed out that we have many problems of our own to be solved and that it is up to us to ensure that the economy provides for the welfare of our people, although we could do much more, without the blockade.

He noted that these are issues are not considered by our enemies or those who are hypercritical of everything we do. They propose that we follow formulas that do not take into account the context in which we must operate.

Nevertheless, the Minister said, during the year an important set of measures were approved that, yes, are things we can do, among them were the long-awaited wage increase in the budgeted sector, which benefited more than 1,400,000 workers, increasing the average wage in this sector from 667 to 1,067 pesos; the launching of retail sales in foreign currency, to address, from the supply side, the exit of foreign exchange from the country; and 28 measures to strengthen socialist state enterprises.

He explained that measures will continue to be evaluated and implemented, based on what has been approved for the updating of our economic model, which will contribute to boosting the economy. Toward this end, proposals from important congresses held this year will be taken into account, especially those from the Federation of Cuban Workers and the National Association of Economists and Accountants (ANEC).

2019 ECONOMIC MEASURES

During this past year, 28 new directives were approved to continue the perfecting of socialist state enterprises, including:

– Establish a financial institution, a bank or not, to promote development of enterprises, supply working capital, and finance plans to generate productive chains.

– Use the indicator of foreign exchange spent on imports per dollar of income to evaluate the impact of the aforementioned measure in the Tourism sector.

– Operate closed financing schemes at the company level, identifying those that are in a position to do so.

– Expand the use of the closed scheme, maintaining the rate approved in the Economic Plan.

– Encourage pre-financing of production and investment by national entities. Identify possibilities for the first stage.

– Allow companies producing for export to directly manage financial or commercial credits, foreseen in the Economic Plan, assuming responsibility for their repayment, with the participation of the banking system.

– Generalize the system of relations of state enterprises, 100% Cuban trading companies, and those involving foreign capital, with the Special Zone for Mariel Development (ZEDM), which allows companies to retain 50% of the foreign currency they earn from operations with such entities.

– Eliminate limitations on companies’ relations with non-state forms of management, making them conditional on the use of bank accounts and prior approval by the highest collegiate management body at the corresponding level (enterprise or basic unit). Maintain the use of cash only for minor payments, as established. Establish procedures to regulate the above.

– Reduce the indicators issued in the Economic Plan.

– Study and present proposals to the Council of Ministers’ Executive Committee on fiscal policy or other policies that favor exports.

– Prioritize the allocation of financial and material resources to national industry to increase export production, and meet the demand for intermediate parts and materials of entities that produce exports.

– Concentrate efforts on meeting the demand for products needed to guarantee exports, food, inputs for tourism, renewable sources of energy, the computerization program and medicines.

– Ensure the population’s basic needs, mainly food, low-cost products and fuel. – If necessary, raise the import allocations foreseen in the economy plan for these sectors, reducing the financing of other activities.

– Prioritize tourism, taking into account its importance for the development of the country and the effort and resources being invested in this activity.

– Make planning more flexible, while maintaining centralized management.

ROADMAP FOR 2020

The Minister of Economy and Planning stated that, with the resources allocated to different sectors of the economy, 2020 growth in the Gross Domestic Product, at constant prices, is expected in the area of 1 %, coinciding with that projected for the first stage of the National Economic and Social Development Plan through 2030.

“This growth will be achieved with our available resources, without increasing the country’s foreign debt, and requires great effort, discipline and the search for alternatives, which always exist,” he explained.

He pointed out that with the levels of activity foreseen in the plan, employment is projected to increase by 0.7%, reaching 4,545,200 individuals working; of these, 3,099,500 in the state sector, representing 68%, and 1,445,700 in the non-state sector, representing 32%. “In 2019, there was an increase of 32,500 workers in the economy; 12,500 in the state sector and 20,000 in the non-state sector.”

Reposted from MLToday.

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