Iván García, 18 July 2016 — Two retirees, a strolling detergent vendor and a vacationing doctor, kill time in a park in south Havana, debating the surprising Portuguese victory of Cristiano Ronaldo in the European Cup. They also comment on the Regime’s new austerity measures, which presage another season of “skinny cows” [shortages].
Neither the shade of a carob tree nor a soft breeze relieves the sleep-inducing heat of July. When it seems that the topics of conversation are exhausted, a grey-haired man, a now-retired civil engineer, asks: “Does anyone know where the money in Cuba is going? And what the Government does with the millions of dollars it receives from family remittances?”
No one has an answer. On the Island, the topics of hard-currency income and defined expenses are State secrets. It’s supposed that in a normal country the government officials offer this information to its citizens.
But Cuba isn’t a normal country. It’s an anachronistic autocracy ruled by the military and a gang of friends who, 57 years ago, descended from the Sierra Maestra promising to restore the Republic and rescue democracy.
Neither one nor the other happened. For decades, the calculations on the Island have never added up. Hypothetically, taking as a reference the economic growth beginning from 2000, the national economy has shown a numeric chain of progression in its GDP that not even the so-called Asian tigers have achieved.
If we add up the growth in GDP of the last 16 years — which in some years was greater than 10 percent — we arrive at a simple conclusion: If we believe the official report, Cuba has been the nation that has grown the most on the planet.
Into what accursed black hole has this “growth” fallen? A specialist I consulted bored me with figures and macro-economic data. And finally, as always, he blamed the Yankee “blockade.”
Okay. So we can’t have highways like those in Germany, or as many cars as the United States or a State of Well-being like Norway. But according to Eduardo, an ex-official of foreign commerce, “from the concept of exporting products and services, [and the receipt of] donations and family remittances, the Government, each year, brings in around 14 to 16 billion dollars.”
“So, where is the money?” I asked him. His answer is an invitation to do the math.
“In 2015, Cuba earned 2.7 billion dollars from tourism. Although the exact figures for the export of medical and professional services is not known, it’s calculated that it must be above 9.0 billion dollars. The exports of nickel (we’re going to discount sugar, since its production has been rickety for five years), tobacco, coffee, shrimp, vegetal charcoal, bee honey and other sectors, would round off to some 1.5 billion dollars. And as far as remittances, 3.0 billion. The result adds up to some 15 billion dollars,” emphasizes the ex-official.
But it doesn’t add up. The State earns hundreds of millions of pesos in taxes just on the more than 500,000 private entrepreneurs. Add the tax on cigars and alcoholic drinks, the silent tax on the salaries of State workers and the tax — between 200 and 300 percent — on products that are sold in convertible pesos in the dollar stores.
To all these taxes we must add the petty milking of the pockets of Cuban emigrants, who must pay hundreds of dollars in order to renew their passports, the inflated price of flights from Cuba and the abusive customs fees. And although this past March the Cuban foreign minister announced that the 10 percent penalty on the U.S. dollar would be eliminated, this “revolutionary tax” once decreed by Fidel Castro continues in force.
Nor is this the only way of taxing hard currency that the Government has. If a relative abroad sends a package that weighs more than one and one-half kilograms, there is a tax established by the General Customs of the Republic, and when you go to pick it up at the post office, you have to pay 20 Cuban convertible pesos [roughly $20] for every kilogram over that weight. A veritable robbery.
Being conservative, the sum total of all these taxes in both monies surpasses 20 billion pesos. And I believe I’m cutting it short.
And the expenses? Of course, as in every country in the world, the three hungry lions that devour an important part of the GDP are education, public health and defense.
But since Raúl Castro assumed power in 2006, few new schools have been built, and the existing ones are poorly repaired. Salaries for professors and teachers don’t exceed 20 dollars per month.
Healthcare is self-financed from the export of medical services. The amount of money it generates permits the design of an efficient health system. But it doesn’t happen that way in most of the hospitals. Some well-equipped clinics exist for ministers, high-ranking military officers and foreigners.
But the majority of hospitals and polyclinics need thorough repairs, and there’s a deficit in the supply of equipment and medications. A doctor earns a salary equivalent to 60 dollars a month, and many live in precarious conditions.
For 27 years, the Government hasn’t invested in buying combat weapons. But it wastes an enormous sum maintaining the colossal apparatus of repression and social control. The Regime never offers details about this.
The hypothetical expenses for defense, education and public health can reach the sum of 6 billion dollars, another 2 billion to buy food and some 5 billion for investments in tourism and industries that generate hard currency.
For 10 years, General Raúl Castro’s administration hasn’t spent its millions on public works or on the construction of housing. Any serious calculation that would be done would always reveal a surplus.
Where does all this money end up? There are two possible scenarios. The evil-minded one is that it goes into a Swiss bank account or a fiscal paradise. If we give the Government the benefit of the doubt, we can suppose that a good part of the money goes to create an important reserve of hard currency.
Not included in the national budget is the resale of some 25 percent of the petroleum sent by Venezuela to Cuba, which can reach around 8 billion dollars a year.
With the income from exports that the Government admits it has, and the studies on the income from family remittances, about which the Regime never informs us, it’s not understood how it spends 1.9 billion dollars a year to guarantee the annual supply of petroleum.
Nor can it evade the issue of donations made by millionaires from Middle Eastern countries for renewing the networks of aqueducts and sewers, and credits from China, Russia and other countries for constructing industries, hotels or golf courses.
Cuba, financially speaking, has achieved considerable guarantees. In spite of the embargo, since 17 December 2014, after the diplomatic renewal with the United States, a dozen nations have forgiven a substantial part of its debt.
Like the retired civil engineer, many Cubans wonder what the Cuban government is doing with the money. Any hint would be very valuable.
Diario las Américas, July 16, 2016
Translated by Regina Anavy