Now, the Street Belongs to Everyone in Cuba

Cuban President Miguel Díaz-Canel, in his television appearance on July 11. (Screen capture)

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14ymedio, Elías Amor Bravo, Valencia, 12 July 2021 — On an important day for freedom and democracy in Cuba, Díaz-Canel, in an improvised appearance on television, could not think of anything  to say other than “the order of combat is given: Revolutionaries take to the streets.”

A bad business. Pitting some Cubans against others is a bad precedent that can lead to a civil war. Fortunately, the Cubans who took to the streets are peaceful people, who only aspire to live better, enjoy the benefits of work and get rid of the repressors of State Security that harass them daily.

On the other hand, with the eternal communist propaganda, Díaz-Canel places the conflict exactly where it is not, which is on the anguished people. The problem is him, his economic policies, the disastrous result of the ’Ordering Task’*. He was warned and, with everything, he decided to go ahead. Now he has what was expected.

Díaz-Canel acknowledges that the situation is difficult. Neither more nor less than is being experienced in other countries of the Caribbean, Latin America and the world. Cuba is no exception. Covid-19 hits the world economy hard and even developed countries resent the current scenario. continue reading

The difference with Cuba is that no one, in their right mind, has inplemented a hard adjustment policy in the midst of the pandemic, Rather there is an inopportune policy, incorrectly designed and poorly implemented, forced by the ideological circumstances of a communist congress. And now its effects are here.

Blaming the United States embargo for what is happening no longer believed by anyone. Credit has been exhausted. The Cubans who came out to protest know that the only one who suffocates the economy is Díaz-Canel and, therefore, the social outbreak is already here. There’s no turning back. Díaz-Canel is responsible for the food shortage in the country and the inability to boost the economy. If Venezuela can no longer ship its compromised oil, it’s a bad business, but the fault lies with him. The campaigns to discredit the Cuban communist regime are deserved, and more will come, because the credit has run out.

Half of the television appearance was directed to attacking the United States and the other half, to avoid personal responsibility for everything that happened. Díaz-Canel is alone, he no longer has General Raúl Castro protecting his excesses. The communist organization that took to the streets yesterday in response to his call does not faithfully reflect the new Cuban society. It crumbles like a sugar cuba, it has no future. And that loneliness in the dome of power terrifies Díaz-Canel, who does not understand how it is possible that he is not loved.

Cuban communists do not know how to manage social protest, because they have experienced 63 years of leading an endless project that has resulted in failure. And now, they are clinging to a power that no longer responds to social needs, nor to the demands of these times.

All authoritarian regimes end this way, some in traumatic situations like Ceausescu’s Romania. Díaz-Canel knows that he will never be the Cuban Gorbachev, and that terrifies him. He has lost the opportunity offered by the historical scenario for a profound transformation of Cuban society, and now he is afraid, and he is throwing his “militants” into a civil war that, in advance, they have lost.

Does Díaz-Canel really believe that, if there were no such thing as a ’blockade’, the current situation in Cuba would be much better, that is, and his chances of remaining in power indefinitely would be greater? He is wrong. The worst thing is that he believes that his regime is not a dictatorship because it gives healthcare to the population and seeks the well-being of all.

Once again he is wrong. The people no longer believe this argument that could serve Fidel Castro 40 years ago. The Cuban communist dictatorship, for the many programs and public policies that it deploys for everyone, is a dictatorship that vindicates violence, the confrontation of one against another and the use of an undemocratic, contemptuous and reactionary language that does not contribute to, much less calm, the situation.

Díaz-Canel’s television appearance was a good example of this by introducing a new figure, the “confused revolutionaries,” who even he does not believe in at this point. Those who have participated in the spontaneous demonstrations throughout the island this past Sunday have no confusion and know what they want: in fact, they chanted it continuously: freedom, democracy and a better future.

*Translator’s note: The so-called ’Ordering Task” — Tarea ordenamiento — is a collection of measures that includes eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency which must be in the form of specially issued pre-paid debit cards, and others. 

Editor’s Note: This text was originally published on the Cubaeconomía blog and is reproduced here with the author’s permission.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Why Can’t a Cuban Farmer Buy a Tractor With Cuban Pesos?

A Cuban farmer plows the land with oxen (CC)

14ymedio biggerElias Amor Bravo, Economist, 8 May 2021 — It is hard to imagine a Spanish or French agricultural producer wanting to buy a tractor and having pay for it in dollars in a store in Spain or France. I comment on this circumstance here and my interlocutors are surprised. Then comes the tentative question, can’t a Cuban farmer buy a tractor and pay for it in his country’s currency, the Cuban peso (CUP)? And I have to answer, No.

I explain that the communist regime has devised a network of stores for the agricultural sector that sell only in freely convertible currency. In these stores you can find all kinds of inputs, fertilizers or tools for agricultural production, but you have to pay in dollars. This measure of the Logistics Business Group of the Ministry of Agriculture (Gelma) has been underway for some time as another of the mechanisms devised by the regime to take possession the scarce foreign currency that circulates in the country.

They have already done it with the stores in MLC (freely convertible currency) to collect the foreign currency that reaches families in the form of remittances from abroad. Now with the Gelma stores they want to collect the resources from the agricultural sector. So when, this Friday, the first 14 tractors were moved to the shopping centers of seven provinces for sale exclusively to agricultural producers, more than one had to use a calculator to check how much they should pay for that means of production which, for some, is essential, especially for those producers who have the most land under cultivation, who are the fewest in number overall. continue reading

For this reason, the tractors to be sold are of small power, according to reports in the state newspaper Granma, of 32, 80 and 82 horsepower, with the latter even coming with air-conditioned cabins. The first units have been directed to stores in the provinces where requests have been received from producers, that is: Pinar del Río, Artemisa, Mayabeque and Villa Clara, as well as Sancti Spíritus, Santiago de Cuba and Granma.

Apparently, as the authorities have pointed out, these vehicles are the result of the negotiation of a consignment from the Central Company of Supply and Sales of Heavy Transport Equipment and its Parts (Transimport) to be marketed in Gelma stores in MLC. They will be joined by another ten that will arrive with the same purpose. The source of the tractors is international industry, so their sale will not entail any benefit to the Cuban productive sector.

In short, to be able to buy this equipment, Cuban farmers with the Cuban pesos (CUP) they generate on their farms have to have the necessary financing, in dollars, to do so (from a bank or in the case of a remittance, they will have to explain the origin of the funds).

In the current situation of the economy, there are doubts about the possibility of obtaining financing in dollars or any other currency, so the funds must have another origin (such as money from sales to the hotel sector, which is also at a minimum, as a consequence of the collapse of tourism). Most likely, the Cuban farmer who cannot pay in Cuban pesos, will have to go to the informal exchange markets to get dollars.

In fact, you can forget about the official exchange in the cadecas — the government exchanges because they do not function.  Instead, the farmers will have to accept the exchange rate offered by the operators in the informal economy, which is around 53 pesos per dollar, which will mean an unjustified increase in the price of the tractor, as the government’s plan is to not lower prices, even if the tractors go unsold.

Once the dollars have been obtained and deposited in a bank account in MLC in one of the state banks authorized to do so, the buyer will have to make the payment through the magnetic card backed by the account. Then they can take possession of the tractor. What would be easier would be to go to Gelma’s store with the value of the tractor in Cuban pesos, pay it and let Gelma be in charge of obtaining the foreign exchange.

But this is not possible, of course, because the regime wants to collect the dollars from the informal circuits, where the farmer goes to get the dollars, even if this makes what he has to pay in national currency twice as expensive. The regime doesn’t care. The farmer who needs the tractor will be the person who gets the foreign exchange for the government, as do those who buy food or cleaning products in stores that sell only in MLC.

By the way, this occurs because foreign exchange in the Cuban economy is so scarce that the regime has devised whatever ways are necessary to capture it in order to meet its needs. In Spain or France, the mechanism is as stated. The tractor is bought in euros, and if it has had to be imported, for example, from China, this has already been done by a private importer who paid in Chinese currency after having managed the euros.

Any resemblance to the Cuban reality is impossible. To make it all worse, the Cuban farmer who is going to buy a tractor must not forget to take with him his certificate from the municipal Delegate of Agriculture, which accredits him as a producer. It is the same as always, without authorization from the local communist, nothing can be accomplished. There is not even the freedom to buy a tractor.

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Diaz-Canel at the Ibero-American Summit: The Failure of a Speech

Diaz-Canel speaking at the Ibero-American Summit. (en.escambray.cu)

14ymedio biggerElias Amor Bravo, Economist, 22 April 2021 — Bad. Very bad. The first international speech from Miguel Díaz-Canel, from his new position of First Secretary of the Communist Party, as well as president of Cuba, at the forum of the Ibero-American Summit of Heads of State and Government, on April 21, 2021, held in Andorra. Analysts say only first two minutes were correct, when he expressed appreciation to the host authorities for organizing the event in the complicated conditions of Covid-19.

Later, everything fell apart into a string of nonsense that left Díaz-Canel’s profile as a political leader very effected. Between the acoustic difficulties and the nonsense he spouted, Díaz-Canel appeared as what he is, or what he intends to achieve, a low-level provocateur who is looking for handouts, without showing any interest in making things easier for Cuba to return to the concert of nations.

Because to whom did Díaz-Canel address his speech at the summit? It is not an easy answer.

He could have dedicated his speech to what he has done every time he has participated in an international forum, “selling medical and professional services” wrapped up in a false international cooperation. But from the first moment, he must have understood that the occasion was not the most propitious. And having the brilliant speeches by the presidents of Chile and Colombia before him, the repetitive proposals of a “Cuba that has experience to offer and gives special relevance to innovation for  a 2030 sustainable development goal,” he turned around and, without further ado, began to release poison. continue reading

The first axis of the speech: a complaint that little progress has been made in the 2030 Agenda, but what does he know about the progress of this program in the most advanced countries and the investments that are being mobilized in this regard? What does he know of President Biden’s summons to 42 leading countries in the world to propose immediate progress on this matter? Once again, as in the times of Fidel Castro, Díaz-Canel threatened the world with chaos, total disaster and the disappearance of humanity if his positions are not followed.

Despite the long time that has passed, the alarmist speech-making of Fidel Castro remains anchored in the genes of the successors of the regime. A shame. With what Diaz-Canel knows about innovation and technological development (his doctoral thesis is about that, precisely, and he even allowed himself to recite his 2014 speech at the summit on these same topics) he did not give a single explanation and/or reference to this matter, which he passed over as if it were nothing. With headlines, and little else.

The second axis of the speech was another classic of Fidel Castro, the debt and its unbearable weight. While other countries requested deferrals or more flexible and creative ways to pay, Díaz-Canel focused on eliminating his country’s commitments. He cares little about what may be behind Cuba’s foreign debt, and he even denounced “the impact of unilateral coercive measures that violate International Law and obstruct our legitimate right to development.” Well then, speak up, denounce in international courts that someone from the Club of Paris or London would do well to remember him or Cabrisas.

The third axis was the “fair, democratic and equitable international economic order” that the communists spend their lives demanding from the rest of the world, but which they rarely respect in their own countries. For example, see the political repression in Cuba, which does not stop, even with Covid-19 running rampant throughout the country. It is still nonsense for Díaz-Canel to say that the “Sustainable Development goals will continue to be a chimera for most of the peoples of the world,” and not stop for a moment to explain the lack of food that exists in Cuba, the lines, the desperation and the climate of uncertainty and social unrest that spreads through the country.

Surprisingly, making use of his “personal honesty,” he denounced “the current development paradigms, because they cause poverty and exclusion of the majority due to their irrational patterns of production and consumption that, under the designs of the market, disdain what is most valuable: life and human dignity.”

The market, the neoliberal order, the anathemas of Castroism always have an outlet in these speeches, but they rarely refer to the internal situation of Cuba where the other paradigm, the Marxist and Leninist communism, continues to rage for 62 years. I understand the surprise of foreign investors in Cuba, startled to hear this kind of thing from the president of Cuba. Some would have the opportunity to quickly pack their suitcase and go home.

Díaz-Canel did not miss the opportunity to speak about a vague series of issues such as an inclusive Ibero-America, insisting on financial and technology transfer from developed countries to the poorest, the situation of the pandemic and the healthcare and social protection systems, where he took the opportunity to attack some “petty interests of a few,” while claiming once again the role of the state, why not?

He even had the audacity to announce the five vaccine candidates available in Cuba, two of them, Soberana 02 and Abdala, in Phase 3 of a clinical trial and announced the goal of immunity to the entire Cuban population before the end of 2021 with said vaccines to emphasize the prominence that Cuba gives to science and technology.

He could have stayed on this ground until the end, but incomprehensibly, he turned the speech around. And the time has come to attack the United States in a thousand ways, which he identified as “an enemy of Cuba due to the intensification of the blockade and its support for acts of violence and disrespect for the law to promote social and political instability in our country.” He even attributed to the United States alleged campaigns of “discrediting and boycotting Cuba’s medical cooperation.”

But not satisfied with this untimely intoxication, the reference to Venezuela arrived. It was surprising, but to be expected. Díaz-Canel defended the legitimacy of the Maduro government because it “emanates from the express and sovereign will of his people,” which implies accepting the result of what they call elections in that country. And he contrasted it with what he called “pressure from foreign powers” in clear reference to the United States.

This part of the speech could not have been well-received by the US Secretary of State and it is most likely that it has opened a parenthesis difficult to close in possible relations with Cuba. President Biden has information to know what to do. It is not lawful to have normal relations with a country that takes advantage of its presence in any international forum to launch unjustified attacks against its northern neighbor.

And this was what happened in this part of the speech, in which Díaz-Canel not only said that it was unfair to blame the Venezuelan government for the economic and social situation facing the country, to denounce, once again, “the application of cruel unilateral coercive measures , projected and applied by the United States accompanied by several of its allies, with the aim of causing suffering in the population.”

I can only imagine what the organizers of the forum, and especially the presidents of democratic countries, should think of such an annoying presence. And not satisfied with the above, he ended by saying that, “it would be useful and sincere to recognize that the US design of intervention in Venezuela failed miserably and placed other countries that supported it in an unsustainable political and legal situation.”

He didn’t have to say anything else to say in the speech. At that point, when Díaz-Canel sided with the political power that leads Venezuela and commits the crimes denounced in international democratic forums, such as the European Parliament, he excluded himself from the international order.

In Díaz-Canel’s opinion, “it should be recognized that the Bolivarian Republic of Venezuela is a sovereign State, and the interference must cease, acting with respect to the United Nations Charter and the proclamation of Latin America and the Caribbean as a zone of peace.”

Precisely what the governments of Cuba and Venezuela do not practice with their own peoples. Diaz-Canel dixit.

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Last Castro Speech in Cuba

Brothers Fidel and Raul Castro before Fidel’s death.

14ymedio biggerElías Amor Bravo, Economist, April 16, 2021 — There is expectation, and even a certain morbid curiosity, about what Raul Castro will say in his speech before the upcoming Communist Party Congress, a conclave that will serve as his final farewell as leader. The feelings are understandable given that he will be the last Castro to occupy such a prominent position in Cuban political life.

His brother Fidel used to have the starring role at these events, eliciting tears and applause from many of his followers, both national and international, without saying much of anything. Can we expect the same of Raul. I don’t think so.

Do not expect a panoramic speech, with dramatic overtones and triumphalist rhetoric, full of revolutionary fervor and messages intended for domestic consumption. No one buys that stuff anymore. From 1971, when the first speech was given, to 2021, our year of living dangerously, these speeches had to be carefully crafted if they were to reach their target audience. They are now aimed at those who still do not understand the collective madness of trying to assimilate into society a political party whose propaganda has continually distorted political and social reality. continue reading

And that’s Raul’s problem. Having survived for so long, anything he says at this congress will be applauded by the opportunists. But it will not reverberate with large segments of the population whose minds will be elsewhere and who long ago learned to tune out the official dogma. The revolution and everything it represents have grown old, which is why preparing the speech now requires so much care.

The reasons?

First of all, Cuban society has changed. People want to move forward, improve their quality of life, increase prosperity, end poverty. They know the government is responsible for the never-ending system of rationing, that it is a tool the regime uses to keep the population under its economic control. How to get out of this quandary, not even Raul Castro knows. Who would ever have imagined that Cuba’s communists would one day open foreign currency stores to sell basic products? Let’s see if Raul says something about that in his speech.

Secondly, at this point it is hard to fool people with obsolete, outdated messages which have no relevance in the face of worldwide trends such as globalization, digitalization and a new industrial revolution. Cubans have travelled overseas, they own cell phones and personal computers, they talk to foreign tourists. They are not isolated they way they were during Fidel Castro’s first congress. It is a historical oddity that Raul Castro, the person responsible for restoring some basic freedoms, became the victim of a process he started. That’s how it goes.

Thirdly, there is the issue of time. There is no going back, no matter how much we might want to do so. The train only moves in one direction, towards the final destination. Rewinding the clock is not an option. One could talk about the present but it is complicated, difficult, chaotic, and there are no concrete solutions. No one is interested in the future because all that matters now is getting by day to day. And any mention of past congresses is just a waste of time.

We will have to keep in mind what he says is largely determined by what the scribes, the guardians of official ideology and the bootlickers allow him to say. They exercise their influence by correcting speeches and inserting their own thoughts and ideas into the words of others. It would be a shame if this gang were responsible for Raul Castro’s last words to his party comrades. I am still hoping that the last of the Castros will pull a rabbit out of his hat and then retire to his eastern refuge.

The dream of any matador is to leave the bullring through the main gate of the plaza after a great performance, basking in the adulation of the crowd. But a time of severe economic crisis unlike any in the last five years is no time for communist fanfares. The people, the masses, would not understand. Though the crowd will not reward Raul with spoils of battle, he can at least try to leave the communist conclave with a good taste in its mouth. What will matter to the rest world, which in this case will be listening in, is that this will be the last time.

Therefore, if I were writing Raul Castro’s official farewell speech, I would recommend that he acknowledge the following:

That he did not have the courage to see the reform process he started to its conclusion. That he ended it too soon, succumbed to pressure and left things unfinished, with only 13% percent of the workforce employed in the private sector.

That he made a mistake in choosing his successor. That Diaz-Canel has not been up to the job, working on his doctorate in the middle of a crisis.

That the Castro family is out of control and possibly in danger. That they can be seen coddling their puppies while driving their high-speed luxury cars and hosting lavish banquets while most Cubans go hungry.

That, like his brother, he will not write anything in his final years of life. That he will retire and go fishing. That he will be happy.

That he has missed the chance to leave Cuba a big inheritance. That he no longer blames the U.S. embargo, or “blockade,” admitting it was always a secondary issue, that it was his brother’s thing, not his.

That he has left the nation’s economy in much worse shape than he found it. That he was not able reform the system and make it viable. That he acknowledge it is not viable and that he is leaving it to those who come after him to change it. That he insist this is something that must done.

That the momentum to restore relations with the United States faltered because he lacked political will and because his brother used his position as an influential writer to wreck the process from the sidelines. That there were too many missteps before Trump came along and everything fell apart.

That he has been unable to overcome the legacy of his brother, no matter how hard he tried. That people now speak less and less about Fidel and that, for this, we should all be grateful.

That there were too many years were spent stalling for time. That, yes, things should have changed during Perestroika, but Gorbachev upstaged Fidel, and Fidel never let anyone get in his way.

That, with him, the Castro dynasty ends. Once and for all. That he does not really care might happen to them other than that they stay safe, that he will leave them what he can. That they do not cry for him, that he doesn’t deserve it, that he be cremated and his ashes scattered in the Sierra Maestra, that they forget about him as though he had never existed.

That he ask forgiveness and walk away in silence.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Cuba: Reforms in the Countryside Should Not be Left Half Done

Cooperatives are one of the forms of agriculture in Cuba. (Bohemia)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 5 April 2021 — While more and more images are arriving of the impact of the social protests that increase throughout Cuba — including the San Isidro Movement and UNPACU — the communist leaders try to cope with the great problem of lack of food and introduce small reforms such as renting a part of the State Agricultural Markets (MAE) to farmers, agricultural land leaseholders and cooperatives, as sources of supply. Meanwhile, the inefficient and unproductive state intermediary, ceases to provide these functions.

Measures that have yielded, where they have been implemented, immediate results, such as a greater number of products sold, higher collections from sales, customers who are more and better satisfied thanks to greater freedom of choice, in short, small advances in the serious problem of scarcity that exists in the country. The field-to-market channel, previously obstructed by communist inefficiency, now serves as a win-win for everyone.

However, the incorporation of private management into the State Agricultural Markets for the commercialization of agricultural products is a formula that, without reaching the structural reforms that the Cuban economy needs, confirms that where private initiative increases its participation and occupies spaces that, until then, had been prohibited by communism, the economy begins to function again and to produce. continue reading

This means that it is not a question of leasing the facilities from the private sector, while the state continues to be the absolute owner of the means of production, but rather that it is necessary to privatize, transfer ownership of the means to private actors so that they can be drive profitability, motivation, and scale growth.

Everything that can be done in Cuba to open spaces in the economy and society to private initiative should be welcomed. And it is necessary to provide legal guarantees so that a return to nationalization does not take place, when the regime wants, but rather that there are stable reforms that provide security to the new private actors. The same thing will happen with the opening of licenses to 2,000 activities or the allocation of food services and small businesses to private operators.

All of a sudden, positive effects will be noticed, because private initiative works much better than state initiative, and is capable of reversing the state of prostration and inefficiency in which the economy finds itself. It is a pity that these opening decisions are adopted by the Cuban communist regime as a consequence of social pressure and the latent threat of a social outbreak of great proportions. The transfer of economic power to private parties should be the result of a decision based on the opportunities that arise from it, and that it is the only way to open general spaces for freedom, prosperity and development in Cuba.

Trade reforms, as a note from the State newspaper Granma says, have been applied slowly and only in certain areas, because the government does not want to lose control of the economy. And this despite the fact that the new markets sell between 10 and 13 products, planning to expand that to 23, a consumer basket unknown to many Cubans, made up of numerous meats, vegetables and fruits, among others. The level of collection also increases, around 19,000 pesos as a daily average, a figure higher than previous businesses, and all this without increasing prices, despite the general inflationary environment.

The leasing of the establishments incorporates another measure, which is still in the testing phase, in Ciego de Ávila and Morón, according to which greater autonomy is granted to the management of the market itself, which has transport and can contract for products directly anywhere in the province, as well as in the base business units of Acopio.

Announced in the same Granma article is the possibility of making online sales for which the customer can pay digitally, and then has 12 hours to reach Market 3 (Marcial Gómez, corner of Benavides ) to collect their products in more prominent formats. The objective is to transfer the products purchased in this way to homes, say those responsible for it.

All of these reforms are positive, but they fall short. There is no private property either at the origin of production, or in the distribution markets. Private property grants the necessary independence and autonomy from political power for free and unconditional decision-making by the members of the supply chain, except for the objective of efficiency and profitability. It is necessary to continue the reforms towards the legal and structural aspects that weigh down the economy and lead to the current scarcity and poverty.

The problem of the Cuban countryside, its unproductivity and inefficiency, is not fixed by leaving production cost increases that fall on the profitability levels of the producers, as Murillo has done with electricity, water or airplane transport among others, by disproportionately increasing budget subsidies, with the increase in the additional public deficit that this may entail in a context of high inflation. The Ordering Task has dealt a severe blow to the agricultural sector and these patch-type measures try to mitigate the effects. But they are not being taken in the only area that matters, that of structural reforms.

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Another ‘Great Achievement’ of the Revolution: Havana Turned Into an Urban Garden

As Cuba’s economic situation worsens, citizens are faced the with empty markets. (14ymedio)

14ymedio biggerElías Amor Bravo, Economist, 31 March 2021 — Current attempts by Cuban leaders to solve the problem of self-sufficiency in the capital are giving rise to exceptional proposals, such as the famous ’Marrero patios’. Well, it’s very simple, you have to forget what they say they want to do, before it’s too late. The communists have gone out of their way to propose a series of actions and programs aimed at boosting the food supply for the more than 2 million inhabitants concentrated in the capital. An activity that fails over and over again. It turns out that the idea of turning Havana into an urban garden was brought up and analyzed by Valdés Mesa in a meeting this past Monday with municipal authorities. It seems incredible that there are people who dedicate themselves to these nonsense, with all that has rained in 62 years.

At the event, according to the State newspaper Granma, the results achieved in 2021, consisting of the planting of 600 hectares of bananas and yucca in the capital, were presented as a success. In an urban area, with high levels of pollution, congestion of activities and a high population density, cultivating the land in something other than gardens or parks to beautify the landscape, is a real nonsense. Where have these banana trees, or cassava, been cultivated? It’s scary, just thinking about it.

Based on information from Granma, an important part of the land planted in the capital has its origin in the so-called “program of 800 rustic farming houses by 2023”, of which 85 (less than 10%) have been finished, with a contribution of 64 tons of products, while another 54 houses are in different phases of construction. And later, it has its origin in the “urban, suburban and family agriculture for the planting of vegetables”, at 3.5 square meters per inhabitant. At the beginning of the year it has grown to 4.34 square meters, of the 10 that the country plans to achieve, nothing more and nothing less than 10 square meters for vegetables. continue reading

The meeting also presented the work for the recovery of organoponics, as well as the incorporation of patios and plots for the production of food, the same ones that Marrero said he wants to activate, knocking on the doors of the houses. Of the 113,925 patios and plots, 113,118 are planted. For this there are data.

Various indicators related to the commercialization of agricultural products were also reviewed, one of the weaknesses recognized by the authorities. The municipalities with the lowest amounts per capita were La Lisa (13.2 pounds), Diez de Octubre (15.7) and Boyeros (15.8) due to the closure of leased markets and outlets for self-employed workers during January and February (the repression against the merchants of Decree 30, continues).

It was said that, in the case of the city, up to nine different forms of commercialization of agricultural products coincided and that there was no actual commercialization policy. To reach the plan’s target 30 pounds, it is required to produce more, including through all forms of management, both in production and marketing. Specifically, the authorities insisted that marketing should be reviewed in the different forms of management, so that there is a balance, it is safe and equitable in the territories.

In short, a call was made to grow and plant more in the different areas of the capital, as well as to maintain permanent monitoring of commercialization. It was said that Playa, with a per capita of 17 pounds in January and February, should not only depend on other territories, but has to plant about 60 hectares of banana and yucca. Who was going to say it, convert the luxurious houses of Miramar into rustic farmhouses, with orchards in the patios?

To address the issue of unlocking the commercialization, measures were proposed, such as “the legalization of the various existing routes today (online sales, unlicensed pushcart sellers, for example), as well as the creation of Wholesale Business Units and the lease delivery of agricultural markets. ”Attention was also devoted to reviewing the reasons for Artemisa’s defaults and defaults in provinces such as Artemisa and Mayabeque and the Acopio Company, which resulted in non-payments to producers.

There was reference to the need to comply with the indicators of the plans and ensure that, when the commercialization is arranged and the retail and wholesale networks are stabilized, the benefits of the prices reach the producer, and do not remain with the intermediaries, as if the producers should not have a reward for their work. In addition, it was insisted that agricultural companies must carry out a series of actions to obtain freely convertible currency, citing as an example the Metropolitan Agricultural Company, which continues to inject foreign exchange into the resources that agriculture needs.

They also spoke of the need to complete and dignify the marketing network of agricultural products, ensuring both hygiene and presence, as well as the quality of what is sold and services. Valdés Mesa even spoke of transforming marketing, having products of different quality. It is not only having more markets, but also all these purposes, for the benefit of the population. He also insisted on making better use of the land available in the capital and once again insisted on the need to reach 10 square meters per inhabitant for planting vegetables.

Havana turned into a “fertile garden”. An image that goes back in time to long before the colony. It is incredible that the communists pursue something like this, and, furthermore, they insist on achieving it, dedicating resources and means to this objective. Valdés Mesa concluded by relating his dream that “this wonderful city will be more so when it has all its lands and patios planted,” and all this, within the constitutional precept that points to the need to strengthen the municipalities, with greater autonomy and authority to promote their development. Havana will have to grow yams and taro even in the gardens of the Capitol. At least there are no chickens anymore*.

*Translator’s note: Among Fidel Castro’s many schemes was one to give every Cuban family chicks to raise, as a source of eggs if the chicks turned out to be female, and a source of meat, if male.

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Cuba’s Marino Murillo: Nothing More to Lose

Cuban Vice-President Mariano Murillo.

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 8 March 2021 — Cuban Vice-President Marino Murillo, has returned to the forefront of current affairs to talk about what he considers to be the positive effects of the currency unification and exchange. He insists on the same arguments, and of course, it is his opinion, and of course, respectable, but if he had read any of the nearly 2,000 comments from the Cubadebate survey, he should remain silent in relation to economic matters and the Ordering Task.

More or less the same as his leader, much more concerned with burning himself with the state and the evolution of the economy. One has the feeling that Murillo has been left alone, and that he has no choice but to defend himself by attacking. It will be seen if it is successful.

Cubans know that Murillo is not telling the truth when he insists that the currency unification and exchange is a fundamental measure to encourage the development of the country’s productive and business sector. Raúl Castro never imagined that what began to be talked about in the so-called “guidelines” could end like this. In fact, the currency unification and exchange could have been a good thing for the economy, but it should have been done well. continue reading

Perhaps for this reason, many are convinced that before, with the two currencies, people lived better, within the precarious scarcity that characterizes the Cuban economy. Even companies that have seen their balance sheets become insolvent from one day to the next, miss the times of the fictitious parity, the dollar, the Cuban peso and the convertible peso.

Nor is it true that in these two months the currency unification has served to highlight the innumerable distortions that existed in the national economy, which were not noticed before, and now, with the Ordering Task, they are identified as problems and conditions are created to solve them. Murillo is not telling the truth on this matter either.

The problems from before have continued, and gotten worse, and the Cuban economy and society, accustomed to living with them, has been shocked to see that the changes could be made and that things could get worse. Murillo should speak clearly, identify what international pressures are behind the Ordering Task, if any, and above all, because the decisions of the Communist Party are put before the needs of the population. With statements of this type he would ensure his political future much more than with what he is doing.

It is also a surprise that all this information provided by Murillo has come out on his Twitter account and then later, the official press takes charge of continuing the dissemination. The order of factors, in this case, may be altering the result, because no one doubts that it is an action by Murillo directed at his colleagues from the Communist Political Bureau which, after the publication of the Cubadebate survey, is possible. The normal thing for a minister with the power that Murillo has had is not to go around entangling with social networks, but to call a press conference or any other formal act, which would surely achieve a quorum of international press delegates.

But again, going back to the core of the information, the monetary and exchange unification of the Ordering Task could have been implemented without the need to muddy the aspects related to subsidies and gratuities, salaries and pensions or price setting. The one that comprises a lot, little squeezes, and the bet on the centrifugation of so many elements in what should be a simple process of currency exchange, has led Murillo to a critical situation because everyone blames him for the failure. Releasing him from his position could be a gift, thinking about what may come next.

If it had been limited to facilitating the circulation of the Cuban Convertible Peso (CUC), with its corresponding collection period of six months, and the establishment of a single exchange rate of 1 dollar for 24 Cuban pesos (CUP), it would have had much more success in reordering the economy, and the results would be much better (for now, inflation need not have skyrocketed in this way). Acting with prudence and rigor, the objective of encouraging the development of the productive and business sector of the country would have been more achievable, without the need to put many companies into insolvency.

On the contrary, the state business system and the majority of private entrepreneurs have been shaken by the regime’s decisions regarding the Ordering Task, making it difficult to transfer production costs to prices and thereby further limiting the  productive supply.  The general opinion of the companies is that now they are in a much worse situation than before, and the feeling “each man for himself” has spread like wildfire through the weakened Cuban economy. Most people also believe that it is much worse now than it was at the end of 2020.

Murillo is pleased with the rate of collecting the CUCs that were in the hands of the population, because the process is proceeding at a higher rate than expected; to date, 57% of the total has been collected. And why isn’t it going to go fast, when the only thing that people want is to get rid of their CUCs because they are no longer worth anything. Another merit turned into a bungle by a lousy design of the devaluation process that has ended up dragging to the CUP the weaknesses that the CUC had and that are now visible.

And to top it all, Murillo says that an important achievement of the Ordering Task has been the increase in people seeking work and the fact that most find it where wealth is generated, citing that 72% have been employed in the business system. We have already had occasion to comment on this issue. That people have to look for a job, as it is, says little about a favorable economic situation, since it indicates that the economic situation is difficult and all family members have to pitch in and contribute a salary.

This is anything but positive. Especially if half go home without a job, because the provincial directorates have not been able to facilitate the search task. Against Murillo, this increase in the active population, which clashes with the trends of recent years, is not at all favorable, and good proof of this is that less than 35% of those who find employment do so in companies, because that 72% has to be calculated on the 50% who get a position, which is half of those who go to the provincial directorates.

So not so fast. The only labor market result that Murillo cites leaves much to be desired. Higher wages, moreover, are already being driven by inflation and will soon cease to be attractive. For how long can the staff of the bloated state companies be maintained? Murillo does not know. Perhaps because he does not intend to be there when that happens. Nothing more to lose.

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Even with Price Rollbacks, Can the Regime Control Inflation Caused by Currency Reform?

Marino Murillo, Cuba’s so-called Reform Czar.

14ymedio biggerElías Amor Bravo, Economist, 5 February 2021 — It seems the subject of prices continues to be one of the main problems stemming from the recent currency unification reforms. A problem for which the the communist model, with its emphasis on economic planning and state intervention in the economy, is incapable of setting prices for the goods and services it provides at an adequate level. The state-run newspaper Granma has echoed authorities’ statements about their decision to initiate a “review process” to prevent excessive price increases from affecting the public’s purchasing power. That it has done it, is doing it, and will do it is a story that is not over. What does this “review” sound like?

The reasons behind the explosion in wholesale and retail prices, which is creating public alarm, are many and complex. Some have a medium and long-term impact (such as the lack of monetary control and government debt) while others have their origin in the currency unification process and the disparate, controversial measures that the authorities had wanted to apply this past January.

Clearly, there are problems with price controls. There have been very few instances in which communist authorities’ goal of setting maximum allowable price ceilings on consumer products has been met. This suggests that, if prices rise between 2% to 5%, they will have reached this cap. And this will happen either because all the calculations required by the producers have not done things correctly, or alternatively, because some consumers are willing to pay the highest prices. continue reading

In other words, supply does not respond to lower prices unless demand justifies it. And that is why, despite controls and ceilings set by the regime, there has been an increase in consumer prices. This has become a social problem only because more and more sectors of the population have taken note of the growth in speculative pricing and the subsequent surge of price gouging.

Once the government officials became aware of the problem, economics minister Marino Murillo announced they would be reviewing everything, using the political argument that economic inefficiencies cannot be passed along to consumers in the form of higher prices.

Since Murillo is the person responsible for the guidelines, the first thing one might ask him would be what inefficiencies does he believe are being passed along to consumers. There are some clues. It is worth noting that these inefficiencies were not present before currency unification. This is not to say that prices were not going up before January, just that they were not doing so with same intensity as they are now. That is why the public was not openly expressing its discontent back then.

These inefficiencies must, therefore, have something or a lot to do with the way currency unification was implemented, and possibly with two key measures of the process that were not well considered by those responsible for the economy.

First of all, the devaluation of the Cuban peso has seriously impacted the business sector — making imports more expensive and domestically produced alternatives without a positive impact very hard to find — without having a positive effect on exports. This has disrupted the market for wholesale goods and will continue to do so for the rest of the year. The government has yet to determine a stable exchange rate, though the current unofficial rate provides some idea of where it might eventually settle, and further devaluations can be expected.

Secondly, the elimination of subsidies and grants only leaves vulnerable sectors of society, which rely on them to augment their meager salaries and pensions, helpless. Meanwhile, some providers of goods and services — mainly state-owned companies and organizations which are financed by these subsidies — have taken advantage of currency unification to raise prices beyond what is legally allowed, causing inflation.

Price adjustments have been made to grants and subsidies for the Family Aid System, restaurant and food workers and postal rates, and are under review for water utility rates, the school snack program and other goods and services. The review the regime is conducting of its own companies aims to determine whether the standards were was correctly applied or not.

Under this scenario, an enterprise that manages to achieve a high profit margin will trigger a review, the reason being that the regime does not want to give the impression that the profitability of their own companies is dependent on prices, regardless of the organizational, administrative and underemployment problems they may have. Like robbing Peter to pay Paul. In this way, the issue of the quality-price ratio of government grants and subsidies remains unresolved, keeping the potential threat of upward pricing pressure alive.

It is clear that the effects of devaluation have not been enough to halt traditional policies such as price controls and centralized planning. It is one thing to impose them under normal economic conditions but another to prevent market forces from responding to changes in pricing during a period of devaluation

Authorities have demonstrated that the more many anti-inflationary measures they put in place — including price controls on high-end products and services, and limits on free-market wholesale prices — the more unit production costs increase. If they do not pass along the costs of higher wholesale prices, their companies risk serious capital shortfall and insolvency.

Initially, the regime responded by unfairly blaming private sector business owners for the rise in prices, launching a wave of inspections, levying increased fines and sanctions, and trying to turn public opinion against retailers who provide services to consumers. Later, in what seemed like a timeout in a boxing match when one fighter is being pummeled by another, it acknowledged in Granma that “it is inevitable that prices will rise.”

The regime’s only aspiration is “for prices, as well as costs and expenses associated with them, to be applied correctly.” The all powerful communist regime, with full power to intervene in the economy, has taken away Cubans’ property rights to the means of production and stigmatized the free market as a tool for assigning resources, acknowledging that it can do nothing to fight inflation caused by currency unification.

At a time when economic forces are interrelated and decision makers are hoping for balanced solutions through prospective actions, the communist government is falling back on the old, reactionary paradigm of price and cost controls. These are inefficient and do not even come close to solving the problem. It’s throwing in the towel.

To say that “due to strong public sensitivity, the pricing policy adopted as part of currency unification will undergo a process of review and analysis in order to reconcile how companies make their profits with how to offer acceptable prices for the income level of the population” is to say nothing. It is an acknowledgement of the failure of an economic system and its policies.

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In Cuba, the Ration Book’s Goodbye Causes a Stir

Interior of Cuban ration store, a hallmark of the Revolution. Photo: Glass&Tubes via Flickr.

14ymedio biggerElías Amor Bravo, Economist, January 28, 2021 — I recall that not so long ago, around October of last year, Cuban economics minister Manuel Murillo said during one of his many appearances on Cuban TV’s Roundtable program that the “elimination of the ration book would be very gradual.” It was in response to a question by the journalist Randy Alonso on the future of Cuba’s controlled distribution of consumer goods.

They then began discussing the ramifications of eliminating subsidies and grants as part of the government’s currency unification process, a cause of great public concern which sparked Alonso’s question to Mr. Murillo, who must have been annoyed judging from his blunt and unequivocal response.

The issue raised questions and several days later President Diaz-Canel had to assure the public that, during the first phase of currency unification, the rationbook would be maintained as a tool to guarantee citizens’ access to staple goods that are in short supply and to prevent rampant speculation. He added that, once market conditions had improved and a new set of economic and financial relationships had been established, “we will have reached the point when it is time to phase out the rationbook.” continue reading

He was not hiding the fact. He was very clear. For the regime’s leaders, who set the currency unification process in motion, rationing is an extremely expensive proposition. They believe the retail practices of state-owned neighborhood grocery stores are flawed and present more than a few problems. The quality of the goods these stores carry has been steadily declining and, all things considered, they have been thinking it may be time to finally say goodbye to this thing Fidel Castro himself dreamed up back in 1962.

Authorities, however, credit the rationbook with having a certain efficiency when it comes to dealing with shortages. So much so that every time the Population and Housing Census is carried out, it is compared with the consumer registry. That is why they defend it as a method of distribution and why it seems to make sense to leave it alone for now. Today yes, tomorrow no, and after that, we’ll see.

In reality, the eventual phase-out of the ration book, which is as part of the currency unification process, was first announced back in 2011. At that year’s Sixth Communist Party Congress, Raul Castro said that suspension of the rationbook was not an end in itself nor an isolated decision but rather one of the principal measures that had to be applied “with the objective of eradicating the existing and profound distortions in the economy and society as a whole.”

Raul Castro, who was there during the rollout of ration book back in 1962, understood and admitted at the 2011 communist party congress that the book essentially contradicted the socialist principle of “from each according to his ability to each according to need.” So having acknowledged the uselessness of the ration book, the decision now is when to say goodbye to this monstrosity that has prevented eleven million Cubans from exercising their freedom of choice as consumers.

Things being what they are, a rumor started several days ago that fines of up to 5,000 pesos ($208) are being levied against those persons who do not remove the names of deceased relatives or household members who are not currently living in Cuba from their ration books. The agency in charge of this, the Consumer Registry Office (OFICODAS), has been around for awhile but it is going about enforcing it with a rigor and zeal that suggests authorities have issued an order to speed up the phase-out of the ration book. Or perhaps not.

In recent days, in the midst of a raging pandemic, long lines of people terrified of being fined have been observed outside OFICODAS offices to take care of this paperwork. It seems absurd that, in a country where the state maintains absolute control over the economy and society, this agency has to rely on citizens to provide this information.

State-run media later reported that the fines in question would not be imposed. At the same time, however, it explained that Resolution #78/91, adopted by the Ministry of Domestic Commerce, requires heads of households to remove the names of any person listed in ration book who has died, been imprisoned, or been living in a nursing home or hospital for the more than three months, or has been out of the country on a permanent basis for more than ninety days. The issue becomes complicated when it is not clear who this “head of household” is, a frequent situation on the island.

This happens over and over. When the communist regimes drafts rules people must follow, they either end up being too homogenous to cover everyone or highly asymmetrical, favoring some people over others. This situation seems to be an example of the former. There have been complaints about difficulties finding the required documentation or information as it pertains to ration book itself, which helps explain why so many have disdain for and little interest in this obsolete throwback.

Perhaps the measure is a way of getting things in order before the final shutdown. There were complaints in the National Assembly about people who had emigrated or died but were still receiving their benefits, a symptom of low-level corruption that indicates Cubans’s needs go well beyond what the regime wants to recognize.

The rationbook will say goodbye, sooner rather than later. Correcting certain problems created by poverty, scarcities, and the reduction in supplies provided by the state may be fair and necessary but, at the same time, the communist regime should take responsibility for creating these conditions. Cubans are not satisfied with what they are getting, and they want more and better choices. Until that happens, which under the communist social model is not feasible, the best thing is to do is finish off the ration book once and for all.

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Currency Unification Status: One Month Out

14ymedio biggerElías Amor Bravo, Economist, January 30, 2021 — January is coming to an end and we still know little about the effects of the government’s currency unification program. Recent official press coverage of a nation-wide tour by senior government officials has provided some loose, unrelated bits of information but not a comprehensive, accurate and competent analysis of the measures adopted by the regime.

What is obvious is that currency unification has all the characteristics of a political compromise that prioritizes the sloganeering of communist party congresses over social and business needs. Initial impressions based on recent statements by senior government officials is that currency reform is an economic policy without public support. It has been widely rejected and heavily criticized by all sectors of society, which has forced authorities to go back and quickly retool it.

This kind of reaction is what happens when a government tries to implement economic policies that do not respond to social needs or that are perceived as such by the public. One of the basic tasks of public policy makers is knowing, understanding and interpreting what people want and then designing appropriate economic policies to address their social demands. continue reading

Currency unification does not do that. It seems more like a burden imposed by a government  oblivious to social demands, one that is only interested in fulfilling some guidelines dictated by the ruling party, of which, it can also be said, has never taken into account the real needs of society.

What can be said at this point about currency unification is that it has created a divide, with officials on one side and the Cuban public on the other. Among the many reasons for this are wildly unpopular price increases and tariffs, the rise of hard currency stores that force customers to use dollars to make purchases, an artificially high official exchange rate, and the reduction in subsidies to families whose incomes have not kept pace with inflation, which the government has been unable to control and that is bound to get worse.

What can be said at this point about currency unification is that it has created a divide, with officials on one side and the Cuban public on the other. Among the many reasons for this are wildly unpopular price increases for goods and services, the rise of hard currency stores that force customers to use dollars to make purchases, an artificially high official exchange rate, and the reduction in subsidies to families whose incomes have not kept pace with inflation, which the government has been unable to control and that is bound to get worse.

The exchange rate initially set for the Cuban peso has been falling and further devaluation will be necessary. The unofficial rate on informal market has been setting the pace of the Cuban economy, leaving the Central Bank to follow its lead. But the longer this goes on without the government taking action, the harder and more painful the adjustments will be, leading to the dreaded shock therapy, which communist leaders have said they do not want to apply.

After the steep devaluation of the peso, businesses now also face higher costs for intermediate goods and are not finding domestically produced alternatives for more expensive imports.

Higher wages without increases in productivity will also lead to higher labor costs. If this is not offset by price increases, the result could be underfunding and bankruptcy, as happened from 2014 to 2019, when 12% of Cuban companies disappeared.

The most serious aspect of this inflationary spiral, fed by one of the highest money surpluses in the world and a runaway deficit equivalent to 20% of GDP, is that it could reach double digits. Much of the problem stems from rising prices and taxes on goods and public services, though the regime has never missed an opportunity to blame self-employed workers and rental property owners of price gouging, and to launch smear campaigns against them.

The relationship between state and non-state pricing is leading to a significant transfer of wealth from the miniscule private sector to the state sector which, if not corrected soon, could end up ruining many small-scale entrepreneurs, who had been generating substantial tax revenue for the regime.

No sooner had the cancellation of subsidies and grants been announced than the first protests began. In the end the plan was shelved. Instead, the regime has had to allocate additional budget reserves to deal with increases in subsidies for utilities and food. Rationed goods and services are in increasingly short supply, a situation which more severely impacts so-called vulnerable groups. In time, the ration book will disappear but it will happen in the worst possible way because nobody is thinking about how to reduce consumer prices by increasing supply. What’s to come is even worse.

People suddenly realize that, though wages and pensions have risen, the increases are not enough to offset the rise in consumer prices and that living on a state salary means being poor. On the other hand, the communists see the rise in job applications at provincial employment offices, which they believe to be a result of the rise in wages, as a good thing. But perhaps it is the other way around. This is also the kind of thing that could have negative effects in the short term.

The one-month-old currency unification process is the result of an economic policy that is not well designed, not well timed and does meet any of its stated objectives. Among its results:

• Public dissatisfaction with wages, consumer prices and reduced subsidies for vulnerable segments of the population

• Companies’ inability to use profit sharing strategies to improve worker productivity.

• A generation of artificially high public sector employment in which surplus jobs and redundancies abound, systemically reducing productivity.

• The increasing inability of the agricultural sector to produce enough food.

These problems could increase in the coming months if steps are not taken quickly to address them. Governments have a responsibilty to make changes in economic policy without directly interfering in the economy by creating conditions conducive to economic activity, clearing up uncertainties and addressing the expectations of businesspeople.

The communist regime’s priority in relation to currency unification should be to stabilize the economy, which will likely not be easy given the magnitude of the deficit, the lack of foreign exhange earnings and the need to negotiate debt relief with Russia, the Paris Club and Angola. It does not have much wiggle room and at some point will have to decide if the chosen path, based on previous communist party slogans made during times that were very different from the present, must still be followed.

President Díaz-Canel has only one card to play. And when a politician is facing a dilemma like this, he either has to finish the game or reshuffle the deck. His legacy wil be measured by the decisions he makes. With all the talk by the nation’s leaders about about the revolution and “dialogue,” they now has a historic opportunity to actually do it. The Cuban economy will not last another quarter, regardless of what Biden does. They all know this.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

The Hunt for Hard Currency Never Ends

While a Cuban farmer plows the land with oxen, the Cuban government is hoping to be able to sell the farmers tractors. (CC)

14ymedio biggerElías Amor Bravo, Economist, January 26, 2021 — The emergence of retail stores that only accept freely convertible currency — known in Cuba as MLC stores — and a system governing exports by private entrepreneurs are two recent developments that have attracted attention from analysts and observers of the Cuban economy due to their significant short, medium and long-term repercussions. These instruments share many common elements but that are hard to find in other countries, two features which accentuate the unusual nature of Cuba’s communist economic model.

The two actions arose out of the communist regime’s need to find a stable source of hard currency at a time when tourism, exports of goods and services, foreign investment, Venezuelan petroleum and even remittances are down as a consequence of the economic crisis brought on by Covid-19. Cuba’s eternal economic dependency on other countries, which goes back to the Soviet era, has only gotten worse and the state seems incapable of finding a solution in the current era of globalization.

Little more can be said about the MLC stores other than they have met expectations. Through clever design they have become an instrument for funneling remittances from overseas while at the same time diminishing the activity of so-called “mules,” which had reached spectacular proportions in recent years. continue reading

Shopping at these stores requires a customer to use a debit card. So far, nothing unusual about that. The problem is that the card has to be linked to a checking account at a state bank. Again, nothing strange. The symbolic importance, however, is that the funds in the account must be dollars or other hard currency because prices for merchandise at these stores are denominated in foreign currency, not in the country’s own legal tender.

The shortages some of these establishments have experienced in recent days is further confirmation of the policy failures of Cuba’s communist system. It is unfathomable that stores that stock their shelves with merchandise purchased with the same currency with which the items are sold (and at substantial markups to boot) cannot continuously restock their shelves and avoid these uncomfortable shortages, endless queues and uncertainties, not to mention ever higher prices?

Shortages are an impediment to increasing sales. If there is no revenue, profits fall and less merchandise can be purchased, which again creates shortages in spite of stable demand. The eternal, vicious cycle of the Cuban economy.

When these stores were announced by the economics minister almost two years ago, the idea was that they would sell only “high-end” products. But reality is stubborn. What MLC stores sell is practically everything that is hard to find in the rest of the country’s retail sector.

Management at these stores is provided by corporations linked to the army and state security apparatus, which supply the government with the hard currency required to meet its needs. These entities are not displaying the expected level of responsibility when it comes to paying suppliers or to logistics and supply management. What is even worse is that they are not providing the hard currency the regime needs to, for example, pay its debts to foreign creditors.

It is very likely that, once tourism picks up again, these stores will be phased out. Authorities have acknowledged on several occasions that their existence is not compatible with “revolutionary” values but that they are currently the only option for controlling the flow of hard currency coming into the country, largely in the form of remittances. Except in some tourist resorts and other places geared to short-term travelers, no other country in the world has a retail model similar to it. The brutal segmentation caused by MLC stores in the Cuban consumer market could be a harbinger of social disruption, especially for those without access to foreign exchange, which are most people.

Though the system set up to handle exports by private entrepreneurs is a different phenomenon, it shares the same objective as the MLC stores: providing the regime with hard currency. In this case it involves a government intermediary, an agency “specializing” in foreign trade, which helps the entrepreneur manage his foreign trade operations in exchange for a fixed percentage of sales. Certainly, there are such export promotion agencies in other countries but they do not charge for their services. They are funded through taxation and certainly do not assume the role they have in the Cuban system: negotiating with the foreign buyer.

In this way the regime prohibits a private entrepreneur from freely exporting his goods to a foreign business, Spanish or Italian, by forcing him to go through a government middleman. In order to be able to export, the entrepreneur must also agree to become part of a “map” drawn up by government bureaucrats which, you can bet, favors those entrepreneurs who agree to its conditions.

This statutory intrusion into a free market economic activity such as foreign trade is justified on the basis of maintaining quality, solvency and company size. In the reality of global economics, small and medium-sized companies export by tapping into international supply chains without the need for state involvement. This means that, in the short term, some of these private Cuban exporters might experience strong revenue growth, something the regime does not allow because of its obsession with maintaining control over the economy.

Unlike MLC stores, which will probably be phased out once tourism revives or foreign investment picks up, the system of private sector exports appears to have a level of permanence and continuity within the regime’s economic framework. It is all a matter of whether enough goods can be produced for export and producers can maintain a steady supply. And this depends on whether prices for exported goods are remunerative and levels of profitability in the Cuban economy improve, which should be easy. International buyers will also be able to determine if the prices for Cuban exports are competitive with respect to those from other countries, assuming the currency exchange rate is correct.

Though neither the MLC stores nor the system governing exports by private entrepreneurs are part of the series of recent currency reform measures, they are both undoubtedly related to them. If the dollar-to-peso exchange rate gradually rises, as is already happening in the informal market, it wil be very difficult for Cubans who do not get dollars from overseas to access hard currency, open bank accounts or obtain debit cards for MLC stores.

On the other hand, exporters that carry out their activities continuously and retain 80% of their foreign exchange earnings as authorized by the regime will receive increasing infusions of hard currency. The regime is already doing this for the chain of stores in the Logistics Business Group of the Ministry of Agriculture (Gelma). The funds will be used to acquire tools and supplies for their MLC stores following the model mentioned above. There is even talk of them selling tractors. Will they manage to get there?

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Threats to Merchants in Cuba Continue: The Worst is Yet to Come

As Cuba’s economic situation worsens, citizens are faced the with markets that are closed because there is nothing to sell. (14ymedio)

14ymedio biggerElías Amor Bravo, Economist, 7 January 2021 —  The official Castroist press continues its campaign of defamation, harassment and demolition of humble entrepreneurs dedicated to commerce, who only want to work and serve the people. Dislocating reality and creating a false sense towards these private sellers, labeling them a “crowd of profiteers” and accusing them of increasing agricultural prices and miscellaneous items in a “disproportionate” way, the Cuban government is making attempt is made to foster a climate of rejection by the people while at the same time defending the repressive actions of the government. It’s a good thing that the people are not fooled

The first thing one has to ask the Greek chorus of clerks of the Castro regime who attack the merchants who just want to survive, one today and another tomorrow, is why are the merchants successful selling to people even at high prices, or, for example, what makes the consumers pay those astronomical prices that the state newspaper Granma denounces in an article titled, “The people’s retaining wall”?

People who buy food and other products from these “profiteers” do so, even knowing that the prices are expensive. You don’t have to think much about the answer. They do it because it is where they are sure they can find what they need to make one proper meal a day, or because the product that has long disappeared from state stores. That is the reason and no other. The regime can say what it wants, but if these high-priced sellers survive it is because the trading system as a whole facilitates their activity, which, on the other hand, is commonly used by many buyers. continue reading

Moral. If the authorities begin to develop actions to put an end to what they call “the excesses that lacerate, above all, the compatriots with the lowest incomes,” what follows is what Cubans know, because they have been suffering from it for 62 years: A lack of products and return to deprivation and scarcity. There is no other reason. Then the situation would be worse.

If the Greek chorus who write in Granma want to end what they describe as “abuses,” the solution is no longer the stick, repression and confiscation of the merchandise, but quite the opposite. Increasing the goods that are available to the population will automatically lower prices. Liberalizing the practice of trade and wholesale and retail activity in this sector, authorizing private franchises, would increase professionalism and quality of service. Putting an end to the regulated, controlled, intervened, centralized prices of a ministry that has no justification, is another necessary measure to make the market work efficiently.

There is no alternative to this model which, on the other hand, does not have to do with socialism or capitalism, but with the quality of life of the people and their prosperity. It is almost certain that what the “thousand abusers,” persecuted and harassed by the communist state’s State Security arm, want is precisely that: freedom of establishment, operation and activity. Depending only on the consumer they want to serve and listening to their messages. Without the usual interference from the government. It’s that easy.

The numerous incidents that Granma refers to in the article entitled “The people’s retaining wall” give a good account of this. The more the repression, seizures and ban on the commercial activity of the sellers, those who remain will have more incentive to alter prices severely. The adjustment of supply and demand, spontaneously, in short, economic freedom, is the best sterilizer of these situations of imbalance. The communist authorities only end up worsening it with their repressive policies that, on the other hand, entail a cost, because it is necessary to pay inspectors, policemen, guards etc.

The article says that where the repression of the revolutionary police has been unleashed, ” the abusive salesmen frown and even blaspheme” while “the people who go out to stock up, appreciate and applaud that action, because they have had the opportunity to access, without excessive outlays, food, fruit, vegetables, ham, and mutton and pork.” The conflict is served, because that access to the merchandise does not usually last long and when the goods run out, penury and scarcity return.

Granma points out the importance of the collaboration of good sellers in the fight against “price alterations” and emphasizes that “denunciations” is the only way to solve these problems. People must report what they call “unscrupulous procedures that affect the community,” and this, they say, is a civic attitude. It is already known what the denunciation means in Cuba because several generations of Cubans have had to live with this false civility that ends up being a painful “quítate tu pa ponerme yo” [get out of the way and make way for me] with unfortunate consequences, since it can mean imprisonment or exile for those reported.

So encouraging this type of repressive practices does not help to provide more supply at low prices. Consumers want the security of going to the market and buying what they need, no more. They don’t want to run around watching everyone and reporting them. The person spends 12 or 14 hours a day in charge of his small sales operation, does it because it compensates him. Nobody forces him to do so. The alternative is to go fishing, but not everyone prefers that alternative, and in a country there must be space for everyone.

Nobody is defending speculation and hoarding operations, or practices contrary to public health or fraudulent, based on illicit sales. Commerce is an activity of honest and helpful people who want to serve their fellow citizens and in return, obtain a profit. If this is not understood, the worst is yet to come.

Why? Because the “Ordering Task” opens an uncertain space for price increases that the authorities will not be able to control with their intervention systems. And so, before labeling as violations or alterations certain decisions that will be inevitable, it is convenient to put the brakes on the Provincial Labor and Social Security agencies who are in charge of these matters so that the evils do not get worse.

Granma concludes by pointing out that “it is necessary to banish selfishness and the exclusive search for personal benefit that moves some to fish in the troubled river of the needs of the majority, abusively raising prices,” and this phrase sums up the philosophy behind of the actions of the communist government, but falls under its own weight.

Again, we must insist hat there is nothing selfish about someone who dedicates 12 or 14 hours a day to serving their fellow citizens. Trade must be accompanied by profitability, because otherwise, no one will be interested in dedicating themselves to it.

Finally, if the needs of the Cubans resemble a “troubled river,” someone with high responsibility for the direction of the economy should be answerable for that. The usual thing is that the needs of the majority are attended to on a regular basis, without shortage, without the absence of products, without tension and much less, long lines or waits.

This is the source of the problem: the availability of goods, the provision of which also has to be rewarded so that it is worth the effort to produce them.

As long as this is not recognized, the Cuban economy will continue in its vicious cycle.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

January 1, 2021: Cuba’s Communist Regime at the Crossroads

Fireworks in Havana 12 years ago for the 50th Anniversary of the Revolution. (Xinhua/Reuters Photo)

14ymedio biggerElías Amor Bravo, Economist, 1 January 2021 — The political heirs of the revolution’s first-generation leaders already have their own legend. After a speech by President Miguel Díaz-Canel, Cubans will henceforth associate January 1 with not one but two great failures in their nation’s recent history.

The results of the first — the triumph of the Revolution, which marked its 62nd anniversary at the beginning of the year — are so familiar that there is no point discussing them. The second, the beginning of the currency unification process, was announced with great fanfare by Raúl Castro himself after having written an article for Granma about the fall of Batista.

Seen from a historical perspective, this January 1 will represent the greatest accumulation of failures to befall a nation that, unfortunately, no longer knows in which direction it is moving. And while it is true that communists around the world still defend the Cuba’s revolutionary experiment, none to date have risked setting up residence in the paradise of the world’s poor, to live under the same conditions as the ordinary Cuban. continue reading

No, It’s much better to keep defending the “wonders” of the Castro regime from a comfortable office at a public relations firm in Madrid, collecting more than 5,000 euros a month for defending the indefensible.

And as it becomes increasingly difficult for these dreamers of the Cuban communist nightmare to find arguments to justify their defense of the regime, Cubans waste their time waiting in lines, unless they can pay someone else to do it for them. Those same Cubans, fed up with rationing and shortages, publicly defend pushcart vendors, whom Granma will later accuse of being speculators, against harassment by state security. They also worry about the salary or pension increases that they will not see until the middle of the month.

Added to these people’s misery is Covid-19, which continues on mercilessly, the absence of tourists in the middle of the busy season and the steady decrease in remittances that was already beginning to have a noticeable impact in November.

And now, amid messages of goodwill at year’s end, the leaders of this failed 62-year-old experiment have taken to promoting currency unification as the new national frontier. Prime Minister Manuel Marrero has been the most creative. On Twitter he expressed the conviction that “the People showed their spirit of resistance, demonstrating that YES WE COULD, YES WE CAN and YES WE ALWAYS WILL.” The question to Marrero should be: What could, can and will do we supposedly do? It is no surprise that messages like these contribute to an increasing uncertainty many Cubans have about their future.

Someone else who did not waste time was communist leader Ramiro Valdés, who rather than mentioning currency unification, returned to the basics, clearly demonstrating in which sector power lies. “We are marking the 62nd anniversary of the Revolution. It will continue to be a beacon in the fight against imperialism, oppression and injustice. That is why the people defend it and why it has many friends overseas.” That, I must to say, is open to debate. It is the kind of lighthouse whose lantern has become increasingly dim and distant. A beacon that, every time it tries to guide a ship, steers it to disaster. Just look at Venezuela.

2021 is going to be an important year for Cubans and the time for resolutions has come. Those of us who truly love Cuba, those of us who know how to distinguish between the island that gave us birth and the government that has been in power for sixty-two years, are not going to fall for its subterfuges. Though the government is a failure, it will not succeed in dragging down the nation. In Cuba there are many people outside of politics who feel, like me, that if democratic and pluralistic elections were held, they could really test the current government’s level of popular support. Ramiro Valdés knows this. That is why he talks about the people defending the Revolution. But what percentage? How many Cubans?

Equating Cuba with its regime is a ploy used by its cheerleaders when writing in support of Castroism but which should, at this point, no longer confuse us. Or allow us to fall for the regime’s propaganda traps. There are many Cuban alternatives to Castroism. Out there is a pluralistic, vigorous and competitive society, when the conditions are right for it.

This is the time for New Year’s resolutions.Cuba deserves a better future and this blog, which is celebrating its first decade, wishes all readers a VERY HAPPY 2021.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

Raul Castro’s Distorted Memory

Raúl Castro embraces his successor, Miguel Díaz-Canel, on the last commemoration held for the 26th of July assault on the Moncada Barracks in 1953. (EFE)

14ymedio bigger14ymedio, Elías Amor Bravo, Valencia, 1 January 2021 – The newspaper Granma, on December 31st of this cursed 2020, presents us the testimony of Raúl Castro published in the book El pueblo cubano, from the collection La Naturaleza y el Hombre, by Antonio Núñez Jiménez.

I do not know if it is their intention – as it was with his brother in the last years of his life – to turn Raúl Castro into the author of “Reflections” in the privileged space of the official newspaper of the Communist regime. If this is the case, welcome to the writer Raúl Castro. At least this way we can find out what he thinks, what he believes and what has led him to live the life he has lived.

The article, titled When I found out about the fall of the Batista regime, features a snapshot of the young Raúl entering the Moncada barracks alone with his bodyguard, where he seems to be talking with Colonel Rego Rubido, chief of the Santiago de Cuba’s military. continue reading

And after narrating the events, the battles, with the sympathetic reference to “gerolán” (a restorative medicine for old people from which the soldiers borrowed the name to describe the bonus they were paid in the campaign), very well known, by the way, because it has been referred to so many times in the Castros’ historiography that it’s now boring, the article enters into a description of the situation in Cuba at that time, which it relates as a “bleak outlook” and among the poorest countries in the world. And it does this with numerous indicators that seem taken from the Guinness Book of Castroism records.

It is precisely at this point that either Raúl Castro’s memory fails or he wantes to forget those times prior to 1959, when he was lucky enough to live in Cuba. Sometimes the memory disappears, or tends to overshadow events that occurred long ago, due to a serious illness. On other occasions, passions obscure or distort times lived in the past, basically because something happened that remains recorded in the subconscious and prevents objective vision. Whatever the ailment, there is no doubt that if Cuba had been in 1959 as Raúl Castro describes it, it is most likely that neither he, nor his brother, nor all those who seized power so as never to return it to Cuban society, would have existed. And it can be demonstrated.

I’m not going to bore readers with a lot of data. A few points will tell the story. For example, Raúl says that “secondary and higher education was reserved for only a minority.” Well, then he and his brother were part of this select group of students who in Cuba could escape from a “miserable” life. He and his brother, and most of the rebels, were not among the 23.6% illiterate — the million who could not read or write. They had gone to school, unlike the 45% of children who, according to Raúl Castro, did not attend school. Furthermore, they were not part of the 6% of children who managed to graduate from public school. Of course not, they went to religious schools in Havana, with high prices and elite education, where only the “privileged” went.

I do not think it appropriate to continue citing the figures that Raúl Castro offers about his alleged distortion of the historic reality. The interested reader can go to the Granma article and draw their own conclusions.

What I do think is convenient is to explain to Raúl Castro why he is wrong in his description of reality.

In that false scarecrow that he remembers and describes, it would have been impossible for Cuba to achieve a GDP per capita higher than that of Spain or Italy in those years and to have more than half a million visa applications from nationals of these countries wanting to realize their Cuban dream. Nor would it have been possible to have a currency, the Cuban peso, exchanging at parity with the dollar, the result of the competitiveness of an export sector that combined being the leading world power in sugar with the development of other activities in the service sector in which Cuba had clear world leadership, as in television for example.

With the Cuba described by Raúl Castro, it would not have been possible to count on generations of professionals who were contributing their knowledge to the country, for its accelerated development and modernization. The Cuban agricultural sector produced a surplus to feed the population, the markets and warehouses were well stocked, lines and ration cards were unthinkable, and the population enjoyed freedom of choice.

Motorization levels were approaching those of the United States and tourism was beginning to emerge as an economic activity. There were medical and educational services throughout the country, to which the population had access, both public and private, so that they could choose freely, and Cubans had bank deposits, pension and retirement plans, physical and economic assets, built with the effort and work of several generations.

Raúl Castro lived through those years and benefited from that vibrant society that, politically, did not want a regime like Batista’s, but rather aspired to a democratic, plural and free society, like those that were beginning to appear in Europe in those years of the Cold War. A society with advanced institutions for its time, with a relatively advanced level of governance compared to other countries, which aspired to progress and achieved increasing levels of quality of life.

History, however, did not want it to be so. Raúl Castro, his brother and that group of revolutionaries had a lot to do with this nation’s coming to a standstill. And that is why, 62 years later, starting this January 1st, with the implementation of the umpteenth of the Castro economic reforms — the so-called “Ordering Task” –Cubans will continue to think about how to ensure they can put one meal a day on their tables, or how to get deodorant or cleaning products by standing in some unknown line. Cubans who remain from before 1959 know that the country today is much worse than it was  then. It makes no sense to go against historical memory, because stones that are thrown upwards at some point fall again.

As much as Raúl Castro insists on distorting reality, the existence without freedom, without respect for political rights, and dependent on the crumbs of the omnipotent state, it is the daily reality of Cuba that he and his generation leave for the future. Those who disappeared in 1959 had built a society with difficulties, of course they did, but notably better than today, and any contrast is not open to dispute.

I insist, although the data Raúl Castro offers in the article does not serve to understand what Cuba really was like in 1959, the grandfather’s war stories and the reference to gerolán deserve a few minutes. It’s not worth the trouble to talk about it here. I leave to his distorted memory the little battles to entertain the bored. Whoever has had the option to lead a Government and to adopt concrete and necessary measures to improve an economy and society, and simply does not do it, or, what is worse, is not capable of doing it, must assume that one day history will forget him, because his legacy is useless. However much effort the chorus and the applauders put forth, this is what is happening with his brother, Fidel, who, honestly, left the country much worse than Raúl.

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Editor’s Note: This text was originally published on the Cubaeconomía blog and is reproduced here with the author’s permission.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.

An Unrealistic Peso-Dollar Exchange Rate as Cuba Unifies its Currency

The newly announced date for currency unification is perhaps the latest bequest from the Castros. (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo, Valencia, December 11, 2020 — O.K. So now we know. All the official news media outlets made the big announcement: there will be one single currency for the entire economy, the transition* will begin January 1, 2021, and we know what the official peso-to-dollar exchange rate will be. Postponement is not an option, no doubt about it. What’s done is done.

With this decision the fates of Raul Castro and Miguel Diaz-Canel are forever linked. They have set in motion a process that people have talking about since the summer, though the initial decision was announced way back in 2011.

Henceforth, January 1 will be a day for celebrating more than just the “Triumph of the Revolution.” It is clearly the latest unwanted bequest from Fidel to his brother. After today January 1 will commemorate the triumph of the currency unification. But perhaps we will have to first wait and see if it turns out to be a bust or not. continue reading

Diaz-Canel used the first part of his speech to make it abundantly clear this decision was made with the full backing of the State and the Party, which control the fate of every Cuban. Just in case.

In his historic address he cited the support of the Politburo as well as the Communist Party Central Committee as expressed during the VII Party Congress and later in the “Conceptualization of the [Economic] Model,” which established guidelines for monetary policy, exchange rates, taxation, credit, pricing, salaries and miscellaneous personal income.

He also cited Statutory Guideline #40, which describes the process of monetary and currency unification as a decisive step in the country’s financial transition process. As though that were not enough, the” 2020 Economic and Social Strategy” document describes it as a key structural component of the entire Cuban economy.

It seems that, after almost a decade, the process of putting together the necessary legal and statutory framework is finally complete. Making the announcement in this way rather than during an appearance on the Roundtable TV program is an indication that, this time around, the authorities are playing for keeps. It’s the last chance they have to set the economy on the right course.

There is no point in criticizing the decision to move forward with monetary and exchange reform. The time has come to do away with the convertible peso, the CUC — an absurd, fictitious currency created by Fidel Castro — and restore the old Cuban peso to its role as the country’s sole legal tender. The decision makes sense. It points the country in the right direction, towards financial sovereignty, and should have been done years ago.

What the regime will not do, however, is renounce, monitor or analyze any individual economic policy decisions that have caused distortions in the economy and worsened the standard of living for all Cubans.

The first thing to note is that the new exchange rate of twenty-four Cuban pesos to the dollar is not the most appropriate. Nor does it represent a “significant devaluation” as  the chairman of the Economic Policy Commission, Marino Murillo, said during a recent Roundtable interview. Murillo lied.

This type of rate is designed specifically for the business sector which, until now, was using a one-to-one exchange rate to the dollar for accounting purposes. But the leap of faith from the CUC to the CUP for consumer purchases is the first indication that this rate of exchange will not last much longer. Soon Cubans will be trading the CUP for the same rate that once applied to the now doomed CUC.

The policy authorities have adopted is an attempt to correct the serious shortcomings of the state-owned business sector. There are doubts, however, that it will benefit Cubans more broadly. The artificial status quo it creates for the CUP will not last very long. We will have to wait and see what the informal markets have to say. They are the ones to determine what the real value of the Cuban peso will be relative to other currencies. Will twenty-four Cuban pesos really be equivalent to one dollar?

The official communiqué now makes it clear that authorities’ commitment is to business and that they are disinterested in using the CUP exchange rate to benefit the population: “The monetary transition also creates conditions so that the business system can react positively by increasing benefits for all its workers and for society.”

The priorities behind this decision are obvious: to provide oxygen to the state-run business sector in hopes it will export more and import less. But it is yet to be seen if the planned devaluation of the currency, which is already steeply discounted, actually takes place. In reality, the collective interests of the Cuban people must once again take a back seat. Correcting the course of this economy with interventionist measures and communist fiscal control is a serious mistake.

Diaz-Canel acknowledges that the monetary transition “is not without risk” and justifies it, as usual, by blaming it on the “blockade” [i.e., the US embargo]. The Cuban economy, he points out, is not having one of its best moments and the current international outlook is not bright. He acknowledges that the threat of inflation is just around the corner and that this new system of monetary exchange will not solve the consumer goods shortages the economy is suffering. He also fails to offer any solution that might raise production levels.

The government communiqué states, “As always, we are open to public comment. Steps have been taken that allow us to make sure no one will be left helpless. People will not be subject to shock therapies in socialist Cuba.” Perhaps this is because the authorities fear the worst or don’t want to acknowledge it. Diaz-Canel must know that helplessness could result from setting the CUP exchange rate at a level that would not benefit, for example, people who rely on remittances from overseas or even foreign visitors at the country’s privately owned restaurants.

The communist leadership acknowledges that the transition “is not a magic bullet that will solve all the problems of the economy.” They are right to show caution because this is likely not the end of the story. In the coming months Cubans will see devaluations in the rate of exchange. A value of twenty-four pesos to one dollar is not realistic or sustainable and cannot be justified from any rational economic standpoint.

With the transition set to take effect, will the significance of January 1 be forever changed. Is this perhaps the bequest of Raúl Castro?

*Translator’s note: Cuban officials have been using the clumsy term tarea ordenamiento, translatable as “statutory task,” to refer to what is more widely known as “monetary unification.” Both terms refer to the consolidation of Cuba’s two currencies into a single currency. For purposes of clarity, these terms have been translated here as “currency unification,” “monetary unification” or simply “transition.”

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Editor’s note: This article was originally published in the blog Cubaeconomía and is reproduced here with permission of the author.

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COLLABORATE WITH OUR WORK: The 14ymedio team is committed to practicing serious journalism that reflects Cuba’s reality in all its depth. Thank you for joining us on this long journey. We invite you to continue supporting us by becoming a member of 14ymedio now. Together we can continue transforming journalism in Cuba.