Elias Amor Bravo – Page 3 – Translating Cuba

‘Bankification’ of the Economy and the Circulation of Counterfeit Banknotes: Another Blow to Credibility

ATMs in Cuba are often unreliable because there is no electricity, or the cash runs out and is not refilled.

14ymedio, Elías Amor Bravo, Economist, 1 August 2023 — Cuba’s state press reports that last Monday a meeting of the executive committee of the council of ministers of the regime was held, an organ that between meetings of the council of ministers is responsible for the decisions that are attributed to it.

With the presence of President Díaz Canel and Prime Minister Marrero, this executive committee addressed several issues of the economic and social life of the country; among others, food production, the distribution of the regulated family basket, the transport of cargo and passengers, the supply of water, and the generation of electricity.

However, even if it was outside the agenda that was initially disclosed to the press, the executive committee addressed an undoubtedly relevant issue, which has already been referred to in previous entries on this blog. I am referring to the program for the ’bankification’ of the country, an issue that they have been working on in recent months and that includes a set of measures to gradually encourage the use of electronic channels for collection and payment in the national territory.

Whether Cubans use banking to carry out their usual economic transactions, as happens in other countries, depends on their seeing that it is useful and provides some kind of benefit. And even that there is availability of money in the accounts for different electronic transactions. The communist authorities should be aware that bankification of the economy depends on the people, the economic actors, seeing it as convenient and useful, and in Cuba, at least for the time being, this is not the case.

To begin with, following Minister Gil who reported on these issues in the Assembly a few months ago, it makes no sense to pay in installments in the national money [Cuban pesos] and the freely convertible currency created by the regime, in a proportion of 70% to 30%. A dual monetary system, which was one of the objectives set by the Ordering Task,* continues to be a brake on the integration of the national market, and, therefore, Cubans do not use banks. continue reading

Second, Cubans have a growing distrust in the banks. It hasn’t been a peaceful relationship. The banks, as instruments of the state, put the regime’s demands ahead of those of the citizens. And that’s why, when a Cuban is going to withdraw cash at an ATM, a simple operation within the banking system, he encounters the unavailable cash cartel. Cubans are wary of any confiscation of their savings and the impact of inflation on their deposits.

Perhaps for this reason, in Cuba, cash in the hands of the public continues to reach one of the highest percentages in the world, not only for the purchase of goods and services in national currency, but for transactions in informal markets — in particular, the exchange of the peso with the dollar. Even the small and medium-sized enterprises are dedicated to operating in cash and do not use banks as happens in other countries; in this case, so as not to have to be giving explanations to banking employees about the origin of the funds.

Well, in the executive committee it was reported that in the coming days managers of the banking sector will offer all the details to the population about the bankification process, which they describe as “of vital importance for the Cuban economy.”

And since there are no two without three, in the same edition of the state press in which the regime’s interest in bankification of the economy is reported, the Central Bank authorities, through their website, were forced to deny that banknotes in the denominations of 100 and 1,000 CUP [Cuban pesos] circulate in the country with errors in their printing or are false. The note added that so far in the bank branches, no customers have met with this situation. In the case of banknotes dispensed by ATMs and the present difficulty in their printing, customers can go to the nearest bank branch. The report ended by pointing out that the population should follow the official sites and channels to stay informed.

Where’s there smoke, there’s fire. It is still significant that counterfeit banknotes are appearing in the Cuban economy and that it can happen, just when the regime wants Cubans to use banks for their economic transactions and reduce the use of cash. Of course, they couldn’t have chosen a worse time to announce the measure. So much so that there are those who see the two reports as the result of small internal battles, skirmishes, between different factions of the Cuban communist nomenclature, who are putting up roadblocks to cause stumbling.

If this is the case, it is recommended that they choose other areas for that dangerous little game, and that they leave the functioning of the economic institutions alone. With this type of news about counterfeit banknotes in circulation, which undoubtedly causes alarm in the population, the Cuban financial system, the Central Bank and the authorities lose the little credibility they have as managers of an economy that isn’t getting back on its feet. There is no point in announcing the intention of bankification if Cubans wake up in the morning with the news of counterfeit banknotes in circulation. The Cuban economy is in such a serious state that it doesn’t need this type of experiment.

*Translator’s note: The Ordering Task is a collection of measures that include 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 a broad range of other measures targeted to different elements of the Cuban economy.

Translated by Regina Anavy

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The Economic Competition of the Territories, the Tip of the Dying Cuban Economy

In his declining years Fidel Castro dedicated himself to the cultivation of moringa, “the magic tree.” (EFE)

14ymedio, Elias Amor Bravo, Economist, 6 August 2023 — A kind reader of the blog asks me why the Cuban economy is having so much difficulty getting ahead and improving the living conditions of the population.

And my first warning is the mention of the embargo/blockade of the United States as a limiting factor to the country’s economic possibilities. My answer is clear: if in Cuba there is no process of economic recovery as in other countries of the world and in Latin America, it is because there are internal factors that prevent it.

One doesn’t have to look for those responsible outside, because there isn’t anyone. The seed of economic failure was planted by Fidel Castro 64 years ago when he decided to transform the structural base of the nation’s economy, betting on an adventure that at that time was fashionable in the countries dominated by the Soviet empire or China, but that over the years was seen to be unsustainable.

And while other countries were leaving behind that useless and inefficient economic model, Castroite leaders clung to it, as if it were a DNA trait impossible to replace. And so we come to the present day, when the communist regime continues to believe that the key to the nation’s economic prosperity is based on the “control and efficiency” of the economy by the regime. As if it were a military barracks. That’s how it goes. continue reading

The economic history of the nation is sad and offers a balance for future generations that only serves one thing: to understand that you can’t live in Cuba and that the solution is to go abroad. The same thing that has happened on the Island since the flights of Camarioca (1965) were inaugurated, after the massive departure of the Mariel Boatlift (1980) and Rafter Crisis from Guantánamo (1994)

Every fifteen years, Cuban communism is forced to open the doors of the prison so that people who hate the system flee and the regime thereby strengthens itself and gains time. The operation has gone well for the Castro leaders, but not for the Cubans. The Island decreases in all its indicators. It ages, is depopulated, lacks international solvency, is technologically lacking and continues to lose the talent and energy of its young people.

And in a scenario like this, it now turns out that the regime wants the provincial councils, protected by the communist territorial power, to assume the planning and management of the economy as part of the competition that has been ceded to them from the central regime.

And that is where the local communist bureaucrats have found some meaning in their lives, elaborating statistics of dubious quality confirming that on the one hand there is economic recovery, but on the other, the opposite happens. And with these data they launch themselves into a competition with the other territories to impress the hierarchical leaders of the party and the regime, installed in their comfortable offices in Havana, who have done their homework well and deserve a little applause, in the form of a visit or some institutional act.

Then, the controlled and submissive state press is in charge of covering this activity as if it were something transcendental, but the reality is that people are still standing in lines, suffering from a shortage of all kinds of goods and services. Private enterprises are blocked, and with optimism at rock bottom, Cubans can’t wake up from the terrible nightmare in which they live.

This analysis of the territorial economies that has just begun will give surprising results, which will soon be put on the table.

The communist regime has led to a very unequal distribution of state income and wealth in the different parts of the territory, which is reflected in numerous aggregated indicators. No one is surprised that the highest wage levels in Cuba are paid in the western provinces, while the lowest are obtained in the eastern ones.

This depends, and a great deal, on the territorial specialization, the density of companies and the number of jobs that are assigned in each area of the country. And for this reason, territorial governments will begin to acknowledge the effects of these inequalities very soon, especially when they have access to the business activity and the results of the management.

That will be the moment when it will be possible to verify that the permanent shortage of food and products, such as bananas and sweet potatoes, rice, vegetables, fluid milk and beef, has little to do with acceptable business results, duly made up by the managers.

Even when the analysis of compliance or non-compliance with the plan arrives, an approach to management can be contemplated, which does not imply a clear improvement in people’s living conditions.

The instruments that support the economic model of central planning will not serve to determine the conditions in which people live. The data will give satisfactory information on one hand, but the reality of the people on the street, of the average Cuban, will be very different. The communist Tovarich — the comrades — of the Iron Curtain already faced this problem in the 80s of the last century, and perestroika and glasnost emerged as recipes to solve it.

The governments of these communist countries realized that while they spent their time measuring, for example, the indecipherable indicators of overcompliance with retail commercial circulation, the people turned their backs on them and took to the streets in a demand for freedom and a different and more prosperous model for the economy. And what no one thought would happen happened. The Berlin Wall came down, and the communist empire of the USSR disappeared from the history of humanity. Then China and Vietnam did their own homework and ended up being part of the global economy.

The world changed but Cuba didn’t. Fidel Castro was a decisive block on the arrival of those winds of change and took advantage of the last years of his life to reinforce the old Cuban communist economic model that became the disaster that currently presides over the situation of the Island.

It is a scenario in which there is a shortage of food, state companies with losses, international insolvency, absence of foreign investments, collapse of tourism, territorial decentralization, galloping inflation, destruction of the value of the national currency and an obsession of the regime to control the money in circulation.

And the leaders of 2023 are reluctant to implement changes in the economic model to get Cuba out of this disaster and want the measures that are applied to be based on central planning and not on the market. For example, when they threw themselves into the Ordering Task* because it was going to be the solution to all the problems, they were already warned of the consequences. Now they’re here, and let’s see how they turn out.

And with this balance of widespread poverty, local leaders, who lack a global vision of the economy and only attend to their territorial objectives, say they want to export to other countries, without previously covering the internal needs of the population, as is the case with fresh fruit. The objective of achieving foreign exchange is only achieved with the entry of remittances that bets on the informal market and moves away from the economic controls of the regime.

However, the export categories do not work and the non-compliances are significant. And what is worse, the party’s local leaders refuse to allow exports from each area to leave the country through airports located in other provinces, since this goes against the presentation of results to the higher authorities. Unfortunately, the market unity in Cuba has been broken. This is the situation now.

*Translators Note: The Ordering Task is a collection of measures that include 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 a broad range of other measures targeted to different elements of the Cuban economy.

Translated by Regina Anavy

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The Central Bank of Cuba as a Repressive Instrument of the Regime

A line at the doors of a bank in Havana (14ymedio)

14ymedio, Elías Amor Bravo, Economist, August 3, 2023 — The Central Bank of Cuba announces Resolution 111/2023 of August 2, which establishes a maximum limit of 5,000 Cuban pesos (23 dollars at the current informal exchange rate) per operation for collections and cash payments arising from a contractual relationship between the subjects included in the resolution, as well as for the increase of small cash intended for minor payments. If the amount exceeds that figure, the operation will have to be carried out by electronic means. This represents an increase compared to the 2,500 Cuban pesos that were regulated by Resolution 369, of December 29, 2021, of the Minister President of the Central Bank of Cuba.

This rule annuls the previous one of only two years and gives an idea of the monetary expansion produced on the Island by the uncontrolled increase in inflation. That 2021 rule regulated cash payments derived from a contractual relationship between Cuban state legal entities, and the payments of these and foreign legal entities to natural persons authorized to work independently and in non-state forms of management.

The new resolution recognizes that the increase in the use of cash in economic and financial transactions has caused a decline in the levels of banking and financial inclusion in the country, to which are added the high costs associated with its issuance, transport, processing and storage, as well as the growing demand for more ATMs for the extraction of cash. The regime feels overwhelmed and tries to regain control. And it offers precarious arguments to justify this new turn of economic policy.

Under such conditions, the new resolution requires that collection and payment operations that exceed the figure of 5,000 Cuban pesos be carried out through payment instruments and credit securities other than cash, and execution through electronic payment channels is prioritized. This means practically any transaction, given the low amount established. continue reading

Those subject to the resolution are state companies; higher business management organizations, budgeted units; non-agricultural cooperatives; agricultural cooperatives; agricultural producers; individual farmers; commercial fishermen; micro, small and medium-sized enterprises; local development projects; self-employed workers; artists and creators; the modalities of foreign investment and the associative forms created under the Law of Associations.

In other words, practically all economic actors are included in the regulation. And it is expressly stated that the provisions of the resolution are applicable to natural or legal persons not included in the previous relationship, if they carry out legally authorized commercial and service activities.

The mandatory use of payment instruments and credit titles other than cash — in particular, the means of electronic payments recognized in current banking legislation — is an organizational effort for many economic actors, especially the private and smaller ones. They will have to adapt to the requirements of the regime, despite the fact that their preferences for cash collections and payments of operations with the bank are usually organized with cash inflows and outflows, either directly and in person, or by means of a check or other payment instrument issued to be cashed by its beneficiary. This option becomes problematic with the new resolution, at least in the field of formal economics. But if they don’t comply, they can have their accounts confiscated.

In addition, the rule requires economic actors to guarantee their customers the access and use of electronic payment channels for the acquisition of goods and the provision of services, and payments arising from obligations to the state budget must be made through payment instruments and electronic payment channels from current accounts and for tax purposes.

To be clear, it’s an open and shut case. With this resolution, the regime intends to convert the Central Bank of Cuba into a conveyor belt for the transmission of orders from the executive to the banking system, for the withdrawal of funds in the accounts. And let no one be deceived, repression does not admit questioning. For example, the deadlines for the application of the rule are accelerated in a surprising way, because it is announced that the provision enters into force three days after its publication in the Official Gazette of the Republic of Cuba.

Some economic actors have felt trapped in a financial “corral” in poor taste, at the wrong time. The regime’s financial situation must be bad, very bad, so that overnight, in the dark and with treachery, the authorities gave an unexpected turn to their banking system, with consequences that can be dire for the economy.

And to make it clear that they are serious, the communist resolution warns that if the bank presidents, or the persons they delegate in writing, decide to suspend banking services or close the accounts to customers, “they repeatedly fail to comply with the provisions of the Third and Fourth sections of this Resolution.” Once again, arbitrariness is at the center of decisions: “repeatedly,” what it is, how many times, in what way.

That is, it’s not a joke but a full-blown threat to navigators, that you have to get ready to comply with what’s established, no matter how irrational and inefficient it may be. Or if not, be willing to lose everything. To emphasize here that this is a case of confiscation unrelated to the provisions of the communist constitution of 2019, where is the public utility or the social interest in these maneuvers of suspension or closure of banking services by the banking authorities? Castroism is showing its worst face once again.

And what do these two sections of the same old thing say that become a sword of Damocles?

The Third section provides that the cash income in Cuban pesos received by the subjects of the resolution as a rule must be deposited in their current accounts no later than the next banking business day from the date of its receipt. Why that precautionary delay, and what implications does it have on the operation of the actors? It is clear that the cash they deposit will not be available immediately.

On the other hand, in the case of non-state forms of management, there are more demands, because the deposit or payment is made in the account recognized for tax purposes to the National Office of Tax Administration, which has obvious effects of tax control and supervision. In addition, to make the deposits you can hire the services of the securities transfer companies authorized to carry out that activity.

Without prejudice to the provisions, the subjects of the resolution can agree with the bank, in the current account contract, on other deadlines for the cash deposit, but then certain conditions must be respected:

A) The extension of the term may not exceed 5 calendar days between one and the other deposit.

B) Every time the sum of the cash income received reaches the figure of 100,000 pesos (454 dollars, at the current exchange rate), the deposit must made on the next banking day.

Excepted from the provisions of the previous case are those in which the services of the securities transfer companies are contracted, whose terms are in accordance with what is agreed by the parties to the contract.

The subjects of this resolution who at its entry into force are not banking, after agreement with the bank and for a period of up to 6 months, can make cash withdrawals in Cuban pesos exceeding the limit of 5,000 pesos (22 dollars at the informal exchange rate), but in this case, the use is restricted to payments of: a) Wages, premiums, gratuities and other remuneration for workers, as long as there is no direct debit for payroll; b) Student loans; c) Alimony and child support; and d) medical diets. This covers only a small part of the social cash needs, and for only 6 months.

The Fourth section indicates that cash withdrawals for the payment of salaries, subsidies and other social security benefits and student benefits must be made, at most, 3 working days before the date established for payment. That is, one must notify with more time because otherwise, the money will not be available. Three days seems like an excessive term that overflows any rational financial planning, but in Cuba it is already known that everything that works is put at the service of state inefficiency.

In short, there are more limits and conditions. As if the above were not enough, the cash extracted from the branch for the payment of salaries, subsidies and other social security benefits and student loans, that are not paid to their beneficiaries within 7 bank working days following the date of payment, will be returned to the same branch on the next bank business day. Banks must include in current account contracts the terms and conditions set forth in this resolution for the deposit, extraction and holding of cash in national currency.

The executing arm of these measures is the Central Bank of Cuba, which should be independent of the regime, focused on the execution of an efficient monetary and financial policy. Surprisingly, it establishes a period of 30 working days, counted from the entry into force of this Resolution, in conciliation with the banks, the agencies of the Central Administration of the State and the provincial governments of People’s Power, to draw up a schedule for the incorporation of economic actors into the banking program.

The curious thing about this is that the communist state has cooked up this resolution with the banks, and once the schedule is completed, compliance will be demanded from the economic actors. Hierarchical decisions that turn their backs on reality usually go wrong. These will be a good example. And the haste of the regime resurfaces: the schedule cannot exceed 6 months, counted from the entry into force of this resolution, and is only renewable for those who subscribe for the term of up to 3 months.

What can one expect from this whiplash to the private sector? Well, many actors, especially the smallest and those with less capacity to assume the regime’s demands, will be able to opt for informal activity, concentrating their resources and priorities in that sector, in which it is easier to find what they need, and where it can even be generated at the same level as the foreign exchange market, a financial market that fills the shortcomings and demands of the state system. This Cuban private banking sector can be closer than ever and contribute to consolidating structures that at the moment can’t achieve due to communist obstacles.

Translated by Regina Anavy

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The Population of Cuba in 2023: Low Fertility, Aging and Depopulation. And Then What?

According to a study, Cuban women have an average of 1.14 children, the lowest rate in the region. (14ymedio)14ymedio, Elías Amor Bravo, Economist, 12 July 2023 — In order to study the demographic and social problems, countries conduct research through surveys of the main variables that affect the population. Therefore, the fact that the Cuban communist regime does the same as other countries is not new. Ideally, when this type of study is carried out, such as the National Fertility Survey reported by the state press, international methodology should be respected in order to compare the results. This time, it seems it was. The 2022 National Fertility Survey, carried out by the National Bureau of Statistics and Information (ONEI), in collaboration with other national and international organizations and presented on the occasion of World Population Day, confirms an alarming fact: the low level of fertility in Cuba. Is that the only one, or is it possible to “confirm” other, even worse results?

So what are we talking about? The synthesis variable was offered by the deputy director of the Center for Population and Development Studies of the ONEI, who said that the accumulated fertility rate is 1.14 children per woman from 15 to 54 years old; and 0.79 children per man. Possibly one of the lowest in the world, and of course, a limiting factor for population growth. For example, the overall fertility rate of Latin America and the Caribbean in 2022 stood at 1.85 live births per woman. Bolivia, with a rate of 3.24, had the highest index in the region.

What is happening in Cuba that men and women aren’t having children? The survey indicates that the nulliparity indicator, (the number of people who end their reproductive period without having had children) presents values classified as “remarkable”: 13% in women and 24% in men, while only 14 years ago, in 2009, these data were 9% in women and 18% in men. Significant? No. Alarming.

In summary, the study highlighted that there is a tendency to stop reproducing when you have a maximum of two children. And this, despite the fact that the age of beginning to have sexual intercourse is very early. According to statistics, 69.8% of women and 75.8% of men began to have sex before the age of 18, while 10.8% and 15.9%, respectively, began before the age of 15. continue reading

With regard to the indicator of reproductive plans, the low birth rates and intention to have children in people of childbearing age are confirmed. Among women aged 15 to 49, only 21.2% say they will have children, and 9.3% in the next three years. Within the same age range, 27.3% of men say they will procreate, while 12.8% would procreate in the next three years. Less than a quarter. The other 75%, no.

The authors of the study point out that there is low fertility with limited birth reserves, compared to the percentages in the previous survey, carried out in 2009. Among women of childbearing age from 15 to 49, a third of them, 32%, have no children (29% in 2009); 36% have only one child (32% in 2009); 32% have two or more children (39% in 2009); and 29% have fewer children than they would like to have (40% in 2009). This last percentage is dangerously close to half, 50%, and is evidence of the seriousness of the situation.

The survey also investigated the circumstances of so-called child marriage, observing the existence of a large gender gap. In the age range between 15 and 19 years, 16.9% of women married before the age of 18, and 3.8% before the age of 15. On the other hand, in that same age group, 7.5% of men married before the age of 18, and 0.7% before the age of 15. The average age for having a first child is 23 years for women and 27 years for men, which was interpreted as a relatively early age for a context of low fertility. It was even explained that this fact may be associated with adolescent fertility, since according to the results, 26.2% of women had their first child before the age of 20; 12.5% before the age of 18; and 1.1% before the age of 15.

Therefore, the survey also investigated teenage pregnancies, and pointed out that 20% of women became pregnant at least once before the age of 18 and 15.6% between the ages of 15 and 19. Research showed that 84% of adolescents became pregnant by carelessness and 48% by misuse of contraceptives. Also, the average age at the first pregnancy is two years lower than the age of having the first child, which suggests that many first pregnancies are interrupted before procreation.

As for reproductive care and family planning, the results verify that knowledge of contraceptive methods is almost universal, with 85% of women and men using contraceptives. Fewer than 2% used traditional methods, and 71.6% of women between the ages of 15 and 49 make their own informed decisions about sexual relations, the use of contraceptives and healthcare. Despite this, the rate of unwanted or inopportune pregnancies is high, with 25.6% resulting in live-born children and 35% terminated by abortion or menstrual extraction (emptying of the uterus before confirmation of a pregnancy).

The survey defines the pattern of low fertility of the country by identifying the demographic, socioeconomic and cultural factors that condition the decision to have children or not, and the motivations and circumstances that intervene in the delay of maternity and paternity, acting as inhibitors of the desired fertility. From a sample size of 12,093 people (6,471 women and 5,622 men), the universe and scope covers the entire population from 15 to 54 years old, men and women, permanent residents in private homes. It has national and urban-rural representation for four regions of the country (Havana, West, Central and East) and was carried out through direct interviews with members of households between April 1 and 30, 2022.

And at the same time that Cubans are not having children and the population is reduced in its growth potential, the regime also announced another fact: the accelerated aging of the population, a trend that has made the Island one of the oldest countries in Latin America and the Caribbean, where more than 20% of its population is 60 years old and older.

The situation does not admit palliatives: a downward trend in the population, which is influenced by the low fertility described in the survey, the negative balance between birth and mortality rates, and the external migration. More than half a million Cubans have left the country in the last year and a half.

It’s not much of an “accomplishment” for the revolution that fewer and fewer people are being born due to low fertility, and the country is being depopulated by the emigration of young people and the elderly at the same time. It paints a picture that is difficult to observe. The regime considers that these trends will cause an increase in the demand for geriatric, gerontology, security, social assistance and care services for the oldest population. Also, this low population growth is a direct threat to the growth potential of the economy.

Economic models establish a proportional relationship between the increase in population and technology with GDP growth in the medium and long term. The case of Cuba, with a low technological level and a declining population, presents alarming prospects for which the regime has no solutions, because the Marxist model of the economy simply does not work and does not serve to face these threats. It is alarming that since 1977, population replacement has not been reached in Cuba, and it is estimated that by 2025, the total number of inhabitants will fall from the current level of 11 million.

Translated by Regina Anavy

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Foreign Investment in Cuba: Data from the Regime’s ‘Friends’

“Law No. 118. Law of Foreign Investment”

14ymedio, Elías Amor Bravo, Economist, 11 July 2023 — Friends of the Cuban communist regime are everywhere, even in the most incredible places. Yesterday we had an opportunity to verify that when it comes to helping the Island’s political system, friends do not skimp on resources or prestige. I am referring to the press conference presenting the Economic Commission for Latin America (ECLAC) report entitled “Foreign Investment in Latin America and the Caribbean 2023.”

There, the executive secretary of this organization, José Manuel Salazar-Xirinachs, took off with the answer to a question from the Prensa Latina agency and said that in 2022, 35 new businesses with foreign capital were registered on the Island, 18 more than in 2021.

Amazing. And the reality is that when the cited publication is examined, these data are not found anywhere. Specifically, in tables 1.A1.1 to 1.A1.5 (pages 68 to 85), where the statistics of foreign direct investment in Latin America and the Caribbean are presented, there is information from 32 countries in the region, but Cuba does not provide its data, and, therefore, the Island does not appear in any of these basic tables of the report.

Reviewing the rest of the contents of the different sections, the only reference to Cuba is found in solar energy projects and little else. The Island is still on the margins of official information, a practice that the communist regime does not seem to want to change, not even with friends such as ECLAC.

And here comes the best part, because we would have to ask the managing director of the organization by virtue of what or why he has that information about foreign investment on the Island, which does not appear anywhere in the publication presented. continue reading

Will we have to believe the managing director and the friendly data he offered from Cuba? Pointing out 35 new businesses with foreign capital, 18 more than in 2021, means accepting a reality that doesn’t exist and that situates the Communist Island as one of the countries with the greatest attraction for foreign capital on the continent. And, he added, those “ghost” projects that do not appear in the official publication, reached an amount of 400 million dollars, about 200 more than in the previous year.

The managing director also reported that the priority sectors for the Caribbean country were food production, with 28%, tourism (18%), oil (16%) and industry (14%). He even reflected on biopharmaceutical products, traditional exports such as nickel, rum, tobacco and sugar, among others, and the exploration of new bets such as cobalt. Cuba has the third largest reserve of this mineral in the world. Also, computer and professional services were mentioned.

And then the source of the data was discovered, by pointing out, and I quote verbatim, that “in the work we have done with the Cuban government we have identified that the main opportunities are associated with the promotion of exports, very important for the reception of foreign currency given the restrictions on access to international markets.”

“Work that we have done with the government.” Hence the data offered by the director of ECLAC to Prensa Latina takes them for a walk in communist propaganda. Which, more or less, they don’t even believe. And the bad thing is that this type of information discredits even more the information sources on the Cuban economy, which detracts from their credibility and certainty doesn’t help if they intend to access capital movements worldwide.

This “work between friends” has led ECLAC to “highlight the benefits of the Opportunity Portfolio,” described as “a policy design that updates and structures data on investment projects and systematizes information by sectors, amounts and provinces.” And although it seems a lie to them, the director of ECLAC publicly praised the single window of Castro’s foreign investment, saying that “it allows the expedition of permits, licenses and authorizations.”

You have to see the friends of the regime. They can be anywhere and appear when you least expect it. In a year in which ECLAC has confirmed that foreign direct investment in Latin America has grown by 55.2% in 2022, reaching its highest historical value, it “gives” the Cuban communist regime a similar growth. Without Cuba making its foreign investment data public in the report, it’s still something valuable. But useless, since everyone knows that foreign capital passes by those who do not pay their debts and are continually indebted because they lack financial solvency. Trying to say the opposite is a waste of time.

In any case, if the data of 400 million dollars of foreign investment were true, it would be appropriate to make a comparison with the data from the Dominican Republic that (this is official and has been disclosed in the same report) reaches 4.01 billion dollars, ten times more. Cuban communists should take good note of it.

Translated by Regina Anavy

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In Cuba People Go Hungry but Communist Experiments Continue

Cuban farmers have been hit hard by lack of inputs, fuel shortages and drought. (Flickr / Kuhnmi)

Elías Amor Bravo, Economist, 6 July 2023 — The steps that Cuban communist leaders say they are taking to “strengthen local food systems in all municipalities of the country” can give much worse results. This blog has previously warned that transferring production, which should be attended to at the national level, to the territories is a loss of efficiency, because resources are not used properly. If the authorities persist in the effort, let them be warned. This is not the way to achieve sovereignty or food and nutritional security.

The effort to transform local food systems has been one of the latest ideas of communist leaders for a little more than a year, as part of the actions to deal with the serious economic situation in which the economy finds itself, because of the Ordering Task.* The leaders’ slogan is that “there should be no patio, plot or piece of land unplanted.” But the State continues to maintain thousands of idle acres, which do not produce and do not become profitable. Behind this initiative is Prime Minister Marrero, who will end up reaping one more failure in his long political career.

It seems unbelievable that the communist leaders believe that there are strategies to strengthen local food systems in all the municipalities of the country. Apparently no one has explained to them what economic geography is and the remarkable disparity that exists between some areas and others for a productive dedication to agricultural tasks. That disparity favors the specialization and the search for economies of scale to produce at minimum unit costs.

Therefore, in Cuba before 1959, there was one head of beef cattle per inhabitant on the plains of Camagüey and the best sweet potato obtained in the fields near the capital. No one would think of raising cattle in the latter area or planting sweet potato on the Camagüey plains. The Spaniards had already realized these circumstances since colonial times. If it is now intended that the same thing will occur in each municipality and province, not even those commissions created to implement the measures will be successful. continue reading

Why have the communists come to these measures to take advantage of local systems? According to Marrero, because of the “financial restrictions faced by the country, the impacts of climate change, the global food crisis and the origin of food in imports.” And once again the question is, what do local systems have to do with these problems that belong to the agenda of governments? Isn’t there a covert intention of the regime to transfer its problems and responsibilities to others? Is there no one in local and provincial governments who doesn’t realize the trap they are setting for them? Well, it doesn’t seem so. And so, if no one or nothing says otherwise, this transfer of power will soon take place and will create first and second class Cubans at the same time.

The point is that with these measures it will not be possible to reduce the importations of food and, at the same time, increase the sources of national production. Quite the contrary. The dependence of imports on the financial resources that can be obtained once again poses the problem of the payment of debts, which the communists never talk about. But in reality, if Cuba does not have access to the international financial markets it is because it does not comply with payment of its debts, and, logically, no one wants to lend. So tell me what this has to do with local and provincial governments.

In addition, what no one understands is that 2 billion dollars are allocated to food imports, and at the same time, national productions of rice, beans, corn and pork continue to have low yields, very low production levels and very high financial costs. Something happens in the structure of the land that prevents Cuban agriculture from prospering.

Going to the 7,000 communities of the country to produce food, reaching the popular councils, constituencies, self-consumption, patios and plots, offers an idea of the current desperation of the leaders to produce food. A flight forward that will end up disrupting the productive structure, more or less the same thing that happened with the harvest of the 10 million. The leaders want everyone who has land to have to produce. Although they recognize that the level of self-sufficiency is insufficient for the demand, the official slogan is maintained: “We must sow and achieve compliance with what was designed in each municipality.”

Accompanied by this plan, the leaders want to perfect the process of contracting agricultural productions and at the same time, enhance the so-called urban, suburban and family agriculture program, with an agro-ecological approach based on the reserves and potential of each locality.

The actions proposed for this are hilarious, to classify them in some way. The communists propose “the transformation of urban farms, the use of the agricultural areas available in labor centers, the promotion of a popular productive movement, the consolidation of structures for obtaining organic fertilizers and bio-products, and the commercialization of productive surpluses, freely and directly, by families.” Except for the latter, which is conditioned by low yields, the other measures are absurd.

The regime insists that “we have to continue planting, because yields are limited due to objective conditions of the soils, substrates and irrigation systems.” However, no one assumes any responsibility for the idle lands that belong to the State and that cannot be obtained because of the obstruction of the local leaders who are responsible for applying the legal rules that have been published for this purpose.

And so, entertaining themselves with this nonsense, the population still does not find in the shops the food that it needs or must pay very high prices for the few items that are obtained in the informal markets. No matter how urgent Marrero says it is to apply these reforms, the truth is that a year has passed since the measures were implemented, and the results are even worse than before.

Once again, we warn that food sovereignty will not be achieved through this initiative to consolidate local food systems and even less so with the approach of the Law that is oriented to the elements of sustainability and resilience, when the priority should be yields and production. Communism, as an economic ideology, has no remedy.

*The Ordering Task is a collection of measures that include 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 a broad range of other measures targeted to different elements of the Cuban economy.

Translated by Regina Anavy

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Cuba Lacks Food. . . and Will Continue to Lack Food

Feeding the fish at the Sancti Spíritus Fishing Company. (Escambray)

14ymedio, Elías Amor Bravo, Economist, 22 June 2023 — In Cuba, food is lacking. It’s been six decades of pernicious scarcity that demand a response to one of the most serious day-to-day problems for Cubans. A recent edition of the State TV program Mesa Redonda [Roundtable] was dedicated to this issue, with the title What is happening with food production in Cuba?

Four officials participated in the program. The Minister of Food Industry, Manuel Santiago Sobrino; the Director of Food Industry Research, Jesús Lorenzo Rodríguez; the President of the Food Industry Business Group, Emerio González and the Vice Minister of Food Industry Midalys Naranjo. Each one spoke, without responding to the question all Cubans are asking, Why isn’t there any food?

The Minister of Food Industry stated, in the first place, that in the country’s development plan for 2030, food production is strategic for Cuba, and later recognized that the industry has been affected by the country’s current economic situation, which he attributed to the embargo/blockade. He did not take responsibility for a single thing. He spoke of the increase in international market prices in the last years and of the war in Europe as determinants of the increased food prices in Cuba, without once mentioning the person responsible for it all, the regime’s ally, Putin.

He ended by saying that the availability of electricity has affected the industry’s productifity, in a clear allusion to that branch minister, and even referenced the effects of climate change, specifically drought, as responsible for low production. continue reading

Secondly, the Minister said that the new economic actors have energized the sector and stated that, in the country, there are 844 micro, small, and medium private enterprises, of which 144 are bakeries and cake shops, 194 are meat producers, 188 produce preserves and 92 produce dairy products. He referenced the existence of 350 microindustries primarily in agriculture and in AZCUBA (sugar producers). Enough? Appropriate distribution? Sustainability? All doubtful.

Third, he referred to changes in the agricultural commerce introduced last year, establishing that contracts for these products within the industry should be producer-to-producer, a measure that has not been applied correctly, which affects the size of milk and meat contracts offered to producers. For that, he requested a changes in mentality, business concepts, and leadership structures, and a reliance on communication and information systems. That’s it? And who is responsible for inspiring and promoting change if not him?

Fourth, he referred to the Food Sovereignty and the Food and Nutrition Security Law, which according to him, provides the tools necessary for the Ministry of Food and other actors involved in food production. He recognized that people still cannot see the changes reflected at their tables, for which there are doubts about them. He is not of the same opinion as the UN World Food Programme which gave a stern warning to Cuba for its inflation.

The next one to speak was Jesús Lorenzo Rodrīguez, Director of Food Industry Research, who centered his remarkes on the results of scientific-technical activities within the sectot that, over the last 46 years, has developed 700 products, provided tools to all food processors, from product nutrient composition to the implementation of technical processes and the most efficient equiment. Where are those developments and what have been their results?

He spoke of research projects, such as flour production, training of local producers, to produce food to satisfy the population’s demand in terms of protein, fats, etc. And all that, without citing specific results, such as, for example, the 16 technical consultations. He cited some projects of major impact, all at the direction of the Council of Ministers (a political not technical decision) in the areas of Puerto Padre and Los Palacios. He cited, as if it were notable, the use of food industry sub-products, a practice that is widespread throughout the world and that reduces the environmental impact of waste. Finally, he signaled that currently, since the sugar shortage, the Ministry is working with AZCUBA to use sugar byproducts as sweeteners in other products.

After that, the president of the Food Industry Business Group, Emerio González spoke; he referenced last year’s structural reforms, with the creation of a group dedicated to agrifood activities to attend to the source of primary inputs for agriculture, dairy, meat, preserves, coffee; another fish industry group.

Among the group’s tasks is guaranteeing wheat flour, through the National Milling Company that produces and distributes wheat flour and also yeast and other inputs for bread production destined for the basic food basket and other consumption. The Roundtable participants dedicated their attention to flour and bread, because they know that the issue is worrisome for Cubans.

He explained that, with regard to this product, a very critical situation began in mid-2022 with the wheat supply and it has become more acute in the first six months of this year. To achieve stability in wheat production and traditional consumption within a month requires three shiploads of wheat valued at $35 million. In that regard, he signaled that in 2023 they’ve only managed to purchase four shiploads of wheat, the price of which has increased considerably and pointed to a product that is heavily affected by the blockade.

It’s all the same, the issues are due to the blockade and he cited the case of spare parts. There are four mills, with financing available, they have paid spare parts providers and their banks will not accept payment, but without these spare parts they can’t function. Well, search for them elsewhere. As of now, no one is going to gift them.

Despite the difficulties, the government does not give up bread production and has adopted several actions such as searching for flour and wheat in nearby regions to reduce the shipping time. According to the directors, two ships containing wheat flour have been contracted to arrive in the coming months, though the volume is not large, but two more ships containing wheat are also scheduled to arrive. With that, they can guarantee July and they are working on the contracts for August.

He also recognized that they have not been able to deliver flour to Cadena Cubana de Pan and that several economic actors have imported some flour and have participated in this supply chain. Furthermore, these supply chains are also achieving results in the confectionery industry. What he did not say is that to purchase and contract, they must pay debts, and in that regard, Cuba has bad, very bad data.

With regard to production of alcoholic beverages, he said that the decline in sugar production in Cuba has negatively impacted the sector. Nonetheless, he pointed to measures approved by AZCUBA as an opportunity to correct the situation. In addition, with AZCUBA they are conducting systematic checks on productive processes and to date they have been able to produce more than two million cases of rum, which will allow them to recover production.

Then, to speak of fisheries, the Vice Minister of Food Industry, Midalys Naranjo, surprised everyone by saying that although Cuba is surrounded by sea, its waters do not have the required levels of fish to satisfy the population’s demand. Since when does she have this information?

She explained that between 1976 and 1990 Cuba had a fishing fleet that operated in international waters and provided a portion of the fish consumed in the country (around 100,000 tons per year). However, since 1992 the fleet had to slowly withdraw from international waters, because it could not comply with fishing agreeents, which affected the availability of this food item in Cuba. Between 1986 and 2009, the country imported around 33,000 tons of fish products, which the Vice Minister said was not currently possible to maintain, because of the levels of financing required.

As a result, the regime decided that fish should be based on aquaculture in Cuba, with a program that includes all the provinces in the country. Among products, developed extensively, because intensive aquaculture demands high volume of feed for the fish, which is not currently available. Production of cyprinids (what is commonly known as tench) is one of the most common, although it requires around 18 months to achieve a commercial size fish. Furthermore, there are new economic actors in this activity. There are, for example 485 private producers with around 1,546 hectares under production. It is not a private initiative. They are tenants who do not own the means of production.

The Vice Minister referred to some difficulties in aquaculture, such as the effects of climate change (especially drought and heavy rains), the timeline for producing marketable fish and limited fishery capacity at the moment. With regard to the latter, she informed that the shipments contained inputs for fisheries.

After that, she referred to the Fisheries Law of 2019, which according to her, was debated in fishing communities who offered suggestions; were evaluated and it wasn’t until four years later that they were taken into consideration to supposedly ease the norms. Haven’t they had enough time? In essence, there is a working group charged with revising the legal norms that support the law; it has drafted proposals to develop fishing activities which have been approved by the Executive Committee of the Council of Ministers.

Among the reforms, they discussed gradually creating conditions in all regions for the wholesale and retail of fishing supplies, offering construction and boat repair services, allowing commercial fishing between August and January in areas declared as preferential to tourism for a period of two years, modifying navigation area three C. Currently the following have been approved: navigating up to 12 miles, an increase in the size of motors to seventy horsepower, a revision to the plans for managing protected areas, declaring fishing bases such as fishing ports as areas of local interest and facilitating fish commerce, applying the sales and pricing concepts in accordance with all products and economic actors. Note this last one.

Resolution 52 was approved in October 2022 precisely for this reason, which already applies; it states that commercial fishermen are not required to have a contract with a state entity and can sell products directly. That resulted in an increase in the sale of non-state commercial licenses, which reached 4,042 licenses at the end of May, a much larger number than in 2022.

She clarified that the prior measures were being implemented and that in the next few months they should allow a greater level of easing of fishing activities, which will be well received by fishermen. That remains to be seen. Hopefully all this will result in greater production and consumption of fish, but it does not seem probable. The right to property continues to be untouchable.

At the end of the event, the Minister broached the situation of the basic food basket, the products it comprises and its current situation. A topic of interest for the population.

His remarks addressed what he called challenges in food packaging, safety and quality. Specifically, the bread, in addition to the issues with raw materials, the quality of this product is influenced by the lack of quality control in places where there have not been enough requirements in place.

He later referred to the complex situation of the products that make up the basic food basket, practically all of them.

Of powdered milk he said that to ensure consumption within the country they rely on small imports from Latin America and the Caribbean, which he acknowledged, do not satisfy demand. Regarding oil, he acknowledged they owe consumers one months’ supply [as a part of the rationed goods], but said that it is in the country aboard a ship with enough inventory to satisy demand for two months and assured that oil distribution to the population would begin in the coming days. With regard to baby food, with a difficult situation at the beginning of the year, it seems that the raw materials for its production are now available and it is currently being distributed.

About coffee, he said they are finishing up distribution of the supply for May’s basic food basket, which can be guaranteed with domestic raw materials. He then said something surprising: from now on, coffee production will depend on what can be imported because domestic production can no longer cover these months. With regard to chicken included in the basic food basket he said distribution will begin any day but only for a portion of the population and he assured that in July and August distribution of this product in the rationed basket will improve. About other meats, he said that in the coming days a ship should arrive at a Cuban port carrying raw materials and inventory for two months, designated for production of food items such as ground beef and ham. With regard to soy products, he said the picture is complex due to a shortage of products on the international market and only said that they are working on a timely solution.

After this story, certainly dramatic, he said that a government-driven program is underway to improve the situation this summer, with products such as beer, soft drinks, ice cream and candies. Curiously, these have experienced declines in inflation during the month of May.

He announced that in the coming days more than five foreign capital investment projects and two domestically funded projects will be functioning, which should improve the consumption scenario. Among these are factories for crackers, candies and coffee; as well as a brewery in Mariel; a candy factory in Caibarién, Villa Clara; the launch of the chocolate factory in Baracoa; the expansion of production in the Bucanero brewery; among others.

An extensive event. Anything less would not do. Without a doubt, the topics covered deserved it. The audience that put up with the program up to this point went to bed with the same sensation of misfortune. Even worse, feeling they had been fooled once again.

Translated by: Silvia Suárez

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Cuba: In Search of the Lost Tourist

Elías Amor Bravo, Economist, June 27, 2023 — Nobody understands how it is still possible that some leaders of the Ministry of Tourism of Cuba, at this point in history, continue to believe that the recovery of the sector on the Island will happen “through their efforts.” It is a way, like any other, of denying reality and imposing political ideology on rationality and economic efficiency. Tourism will only come out of the hole it is in if a solid and powerful private sector directs it at the national level.
If this is not understood and the arguments are not convincing, the necessary recovery of tourism will not occur in the short or medium term, no matter how much the communist leaders believe what the “experts” say.

Specifically, 70 journalists from 10 countries specialized in tourism, spent a week in Havana “with all expenses paid by the government.” What are these guests going to say, entertained in luxury by those who want to hear their opinion? Their assessment leaves much to be desired. Maybe we should ask the tourists who come to the Island and don’t return. That information is, without a doubt, much more useful for making decisions.

The data is eloquent. So far in 2023, Cuban tourism is still 40% below the level reached in 2019, the last normal year before the COVID-19 pandemic. Other destinations in the Caribbean have already far exceeded the records of that year, but tourism in Cuba has slowed down and does not stand out. There is something that prevents the sector from prospering. The claw of the communist state has a lot to do with it, but attention must also be paid to other issues.

For example, the Regime’s plan for tourism, which has been reported ad nauseam, hopes to close this year with 3.5 million foreign visitors, which could bring the figure closer to the level of 2019 but without reaching it. In reality, no one believes at this point in the year that the plan will be fulfilled, so all the establishments that depend on it are cutting back to avoid major losses.

And what about the state’s tourism promotion policy? It’s not enough to stop in Varadero, as the island’s main vacation hub, and in Havana, for the international tourist demand that arrives on the Island. This model worked in the 1950s. It’s true that it was interrupted between 1959 and 1990, when international tourism was reopened, but there is now a repetition of tourist destinations and centers of interest. Shouldn’t we start thinking about other kinds of attractions? continue reading

And what about hotel construction by the communist state? According to official data, Cuba already has more than 300 hotels, some with four and five stars, and 70,000 rooms distributed throughout the archipelago. But the leaders think that this is insufficient to make a real impact on the entry of travelers, so the state continues to build hotels and then transfers their management to foreign tourism companies. As all the money comes from the same place, what is invested in tourism has to be deducted from other social and infrastructure needs, and then hotel occupancy doesn’t increase beyond 16%. The disaster is total and absolute.

And what about the communist state’s reaction to technological challenges? This is even better. The leaders have discovered that “information technologies and their relationship with tourism must be strengthened.” This conclusion was reached during the XVI international seminar on journalism and tourism by the “experts” of the José Martí International Institute of Journalism in Havana. They proposed some “tourist recipes” that should give results in a relatively short period.

The conclusion was that electronic communication networks have to be extended to all hotels in the nation and other establishments that require it. The seminar talked about “tourism 4.0” in the fourth industrial revolution and about digitization. This is an academic topic, undoubtedly interesting for those countries that have experienced the previous stages of tourism 1.0, 2.0 and 3.0, which in Cuba have neither been transited nor expected.

So wanting to skip those phases and go directly to tourism 4.0, where there is supposed to be “a digital traveler who uses these tools before, during and after his vacation (…) who is always connected, informed and requires fast services, along with personalized treatment,” is an absolute nonsense that can end up giving a much worse result than the current one. It can’t be rushed. When the state directs and controls an economic sector – in this case tourism – these things happen that no one can understand.

It is the same as speculating about the future of Caribbean tourism as a global tourism product, which must be prepared for a new era. The Caribbean has been successfully functioning since the 1950s and has been earned prestige on its own merit, but if you want to make a realistic diagnosis you have to forget about the Caribbean as a homogeneous space and verify that there are many Caribbeans, and in that variety is the success of the destination that other areas of the world do not have. The problem, in particular, is how to place Cuba in the context of the successful tourism of the Caribbean, and the conclusion is that it’s not easy.

For example, the real estate sector, which is absent in Cuba, has been one of the strengths of the Caribbean destination that attracts loyal tourists and stable residents, who generate a very solid and effective demand. In fact, the sun and beach as a basic element of the offer is more than surpassed, and no country in the area bets only on that combination. Those who come late, as happens in Cuba, should think of other more sustainable and lasting proposals. But this is what happens when the state directs and controls a sector. Its priority is not profitability and business continuity but to fill the coffers with foreign currency and then allocate it later to unproductive and inefficient activities. And that vicious circle has to be broken so that tourism means something real for Cuba.

State leaders of tourism policy always have the possibility to evade their responsibilities, which are many, and they use the easy argument that the problems of the sector on the Island are due to eternal difficulties: inflation, international trade situations and of course, naturally, the pressures of the United States against Cuba, precisely in economic matters. But in reality, all that affects other countries that have had great success in the recovery of the tourism sector. By the way, in all these countries, the state has no participation, nor does it direct or control tourism.

Translated by Regina Anavy

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A Critique of Cuban President Diaz-Canel’s Speech at the Paris Summit

Cuban President Miguel Díaz-Canel speaking in Paris. (cubadebate.cu)

14ymedio, Elías Amor Bravo, Economist, 23 June 2023 — We already know that Cuban President Miguel Díaz-Canel went to the Summit for a New Global Financial Pact in Paris with nothing to offer. At the expense of the meager Cuban budget, basically, he took some souvenir photographs, checked in with friends like Lula and Guterres and said things that could very well have remained unsaid. But of course, as president pro tempore of the G77+ China, he has several doors open to forums like this, and you know, you have to denounce the embargo/blockade wherever and however. Public spending in Cuba finances this kind of thing. There is no investment in housing or infrastructure, but not a penny is spared in propaganda.

After all, attending these conferences does not usually have any benefit other than the media coverage, and one should not expect anything else. The only one who wins from all this is Foreign Minister Bruno Rodríguez, who is seen with a nervous smile behind his boss in all the photographs. He has managed to stick his nose into a conference that has been foreign to Cuba. Welcome!

The whole thing wasn’t much fun. Just a few minutes before it began, not far from the headquarters of the summit, a building had exploded with a gigantic column of smoke, and it was also raining, a typical Parisian day, gray and dark. The inauguration of the event was given by French President Macron who, sitting in shirt sleeves next to Díaz-Canel, did not look very comfortable in the day’s sessions.

And then, when his turn came, Díaz-Canel took advantage of his moment of glory and launched into a speech that can best be described as harsh, diffuse and critical of the central theme of the event, which was the definition of a new contract between the North and the South to face growing challenges related to climate change and development in this context of multiple crises. His advisers were not wise with the content or the statement. continue reading

According to the Cuban communist press, Díaz-Canel was grateful for the invitation to participate in the Summit for a New Global Financial Pact, which he described as “another starting point towards a broader intergovernmental process of discussion and decision-making within the framework of the United Nations.”

He presented himself as president of the Group of 77+China, which he described as “the most representative group of developing nations and the one that has historically been the flag and spokesperson for the claims that bring us together today.” Sheer propaganda.

Having said the above, he went into the matter, noting, “I do not reveal any secret if I affirm that the most nefarious consequences of the current international economic and financial order — deeply unjust, undemocratic, speculative and exclusionary — have a stronger impact on developing nations.”

Of course, I would not expect much applause when saying this kind of thing, which no longer connects even with the most revolutionary France of all time. Messages of this caliber are not only part of an ideologized analysis of reality, but they no longer serve to define the current scenario of the world economy.

In the crazy and undiplomatic thesis of Díaz-Canel’s speech, he said that “it is our countries that have seen their external debt practically double in the last ten years, that have had to spend $379 billion of their reserves to defend their currencies in 2022, almost double the amount of new Special Drawing Rights allocated to them by the International Monetary Fund.”

But of course, at no time did he say that Cuba’s indebtedness is not mandatory or forced, that no one uses a shotgun to force it into debt. However, the countries that go to the financial markets, get loans and then spend without control, without rhyme or reason, so that the impact of the investment is zero, only get into more debt. As Fidel Castro said, indebtedness is not something bad. What’s bad is the country that receives the money and then wastes it.

And of course, Díaz-Canel said that “in such unfavorable conditions the South cannot generate and access the 4.3 billion dollars annually necessary to achieve the Sustainable Development Goals in the remaining decade of action.” Of course he can’t agree, because Cuba doesn’t pay its lenders, as was proven in the London trial.

But let’s not generalize. There are countries of the South that receive generous investments, loans and financing every year because they are up to date on payments, and thanks to that the South develops and becomes “North.” But Díaz-Canel doesn’t understand this scheme, nor does he share it, and he doesn’t want to and can’t see it. As a reactionary communist, he is anchored in ideological positions unrelated to the world in which we live.

That is why he further hardened his speech by saying, “our people cannot and should not continue to be laboratories of colonial recipes and renewed forms of domination that use debt, the current international financial architecture and unilateral coercive measures to perpetuate underdevelopment and increase the coffers of a few at the expense of the South. It is urgent, like the greatest of all emergencies, to have a new and fairer international order.” This argument is false, and, in addition, those laboratories and recipes are only present in a mind incapable of understanding reality and benefiting from it. That argument of the enrichment of a few at the cost of the South could have worked in the 60s of the last century, but not today.

Díaz-Canel’s recipe, to the misfortune of Cubans, is the same as the one of Fidel Castro, who evaded the current situation and said, “it will be essential to face, as has been discussed here today, a reform of international financial institutions, both in matters of governance and representation and access to financing that properly takes into account the legitimate interests of developing countries and expands their decision-making capacity in financial institutions.” And who is going to be in charge of the reform? Díaz-Canel and those who don’t pay, maybe? What does Díaz-Canel intend to do, perhaps control the lending banks and decide who receives the money?

But then, contradicting his previous allegation, he said that “in the 21st century it is unacceptable that most of the nations of the planet continue imposing on us obsolete institutions inherited from the Cold War and Bretton Woods, far from the current international configuration and designed to profit from the reserves of the South, perpetuate the imbalance and apply interim solutions to reproduce a scheme of modern colonialism.”

The Cold War, if I remember correctly, ended in 1989 with the fall of the Berlin Wall and a year later with the collapse of the Soviet empire and the ideology that sustains the Cuban regime. It’s too bad he didn’t realize it. But the international order of Bretton Woods, which Díaz-Canel mentions, disappeared almost twenty years earlier, when the gold standard was abolished and the free flotation of the dollar was decreed. But it’s okay. Díaz-Canel believes that these institutions are still in force because his regime has been locked in a time capsule that was closed in 1959 and that has not been touched by reality since.

At this point, he devoted himself to saying things he does not know about, such as, “multilateral development banks must be recapitalized to improve their lending conditions and meet the financial needs of the South. This includes the call for countries with unused Special Drawing Rights to redirect them towards these banks and developing countries, taking into account their needs, special circumstances and vulnerabilities.”

Díaz-Canel wants to recapitalize banks with money of dubious origin. If indebted countries do not improve their balance of payments, the only way to increase money to meet financial needs is the international monetary expansion that generates more inflation. He doesn’t know what he’s talking about.

Subsequently, he asked that “official loans be increased for the achievement of the Sustainable Development Goals. Our countries need additional resources that are supported by concrete actions in terms of market access, capacity building and technology transfers.”

Cuba barely produces 5% of its energy from renewable sources. But it should really invest in these projects and not waste money on unproductive current spending. In no case is any clue offered as to who is going to pay off the loans. This does not enter into Díaz-Canel’s perspective.

And then, to close, he asked for measures of progress in terms of sustainable development that go beyond the gross domestic product. Fortunately, he did not dare to cite the “human development index” of the United Nations that places Cuba in an astonishing 77th place out of almost 200 countries in the world. He also referred to climate change and described as “deeply disappointing the goal of mobilizing 100 billion dollars a year up to 2030 for climate financing.” He added non-compliances and the impact of inflation, undoubtedly thinking about the one that currently hits the Cuban economy, a 45.5% year-on-year rate in May, which rises to 66% in the case of food.

And he closed by going into harangues in defense of the 2030 Agenda and its Sustainable Development Goals and of alleged North-South relations and coexistence on the planet. Plus he quoted Fidel Castro in a speech from 10 years ago: “Today it is possible to prolong the life, health and useful time of people; it is perfectly possible to plan the development of the population by virtue of increasing productivity, culture and the development of human values. What are you waiting for to do it?” I repeat, the hermetic time capsule with which Castroism has locked up Cubans since 1959 is impregnable.

Díaz-Canel said goodbye with something like “Let’s not ignore the warnings, let’s not underestimate the emergencies. Let’s act with a sense of being an endangered species. Let’s act with a sense of humanity.” He should take good note of his own harangues. The situation to which his policies have led the Cuban people are very similar to that agonizing description that is difficult to find in the world of the second decade of the 21st century. What Diaz-Canel can be sure of is that, with this type of speech, they are not going to give him money. The cupboard will still be empty. When will he learn?

Translated by Regina Anavy

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‘Green Banking’ in Cuba Will Wither Before it Begins

Lines at Cuban ATMs grow on weekends (14ymedio)

14ymedio, Elías Amor Bravo, Economist, 12 June 2023 — Another surprise arrives from the Island. A report in the state press says that “green banking is being encouraged in Cuba, aimed at promoting products and services focused on biodiversity,” from the incorporation of regulated risk management for the development of green financing and banking eco-efficiency practices.

What do you think? In a banking system controlled and managed by the state, inefficient, unable to encourage the use of electronic instruments by a population that distrusts these entities, they now announce “green banking.” It reminds me of that phrase of distraction used by Fidel Castro, before taking over the means of production and the property rights of all Cubans: “This revolution is green like the palms.” Well, no, it ended up being red and bloody, and history is there to confirm it.

So don’t believe it. This report on “green banking” is not very relevant. To begin with, I have my doubts that it can be launched on the Island under current conditions. This is just one more of the many examples of the regime’s propaganda to distract people from talking about the country’s real problem: the lack of food, gasoline and electricity.

As has already been pointed out, green banking is represented by a series of financial institutions that offer financing for renewable energy projects to activate the fight against climate change. The main reasons for investing in this type of project are concern for the future of the planet, climate change and the growth prospects of these energies.

Therefore, there is an increasing number of banks that are betting on investing in “green” projects that allow renewable energies to be a main source of energy around the world. In Cuba, it is worth remembering, renewable energies barely represent 5% of the country’s electricity generation, and the investments that must be made are conspicuous by their absence while waiting for some foreigner to opt for the Island. continue reading

In any case, it should be remembered that green banking arose as a result of the limited aid that the governments of many countries offered to the development of renewable energies, so that financial institutions, betting on their corporate social responsibility, started programs to support clean energy.

From there, green banks began to offer very attractive loans, under more favorable terms than the market average, to private individuals and companies that, by investing in these energies, began to pay lower bills for the use of renewables and even, in some countries, to supply the surpluses to the network, for which they obtained income. So green banking, while betting on profitable investment projects, boosted the economy and employment and managed to curb climate change. In many cases, the costs of financing the investment were covered by the benefits derived from energy savings, especially for large consumers.

And here comes another aspect to take into account. As in many other areas of modernization, green banking originated in the United States as a result of the lack of attention of the government of that country to support green energies with public funds. So the first entity that opted for this business model was the Connecticut Green Bank. These are public institutions, controlled by state governments, that invest through loans in renewable energy projects at the same time that they are dedicated to attracting the savings of private investors to this type of investment.

Another problem. Savings in Cuba are scarce, and in addition, they are subject to the financial priorities of the mechanism with which the regime covers its public spending needs, placing government bonds in banks. Therefore, it will be difficult to mobilize resources for green banking initiatives in Cuba.

However, the state press says in its report that the regime offers, until 2025, a training and awareness-raising process to guarantee the success of the progressive application in the national territory of green banking, meaning that the issue is still incipient and that it can end up being filed in a drawer if the demand, as expected, is not activated.

In this regard, the authorities point out the commitment to “promote products and services focused on biodiversity, from the incorporation of environmental risk management governed by regulations to developing green finance and banking eco-efficiency practices. In addition, they plan to encourage the mobilization of resources for such purposes as the sustainable management of biodiversity, climate change, the rational use of natural resources and environmental quality.” Resources? From where?

What’s more, producers or economic actors who think of these projects as a profitable option will not be attracted by advantages in interest rates or by some type of guarantees, because these indicators in the Cuban financial system do not adjust to supply and demand but are the result of administrative decisions. Also, the level of the productive business sector in Cuba is not in a position to place this type of initiative in its business plans, even less so at the individual level.

Taking into account which type of project can be financed with green banking, there are only those “aimed at the conservation of biodiversity; the reduction of pollution; the use of natural resources such as water, land degradation and desertification; strengthening agricultural systems to contribute to food security and credits for renewable energy purposes.” It is not easy to identify private economic agents, like small enterprises or self-employed workers, who can be eligible for this type of initiative.

Little is known about the facilities provided by the regime for the importation of renewable equipment, basically nothing. It’s another unsuccessful measure. Cubans are worried about other things that are very different. Understandably.

Translated by Regina Anavy

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Moringa Attacks Again

An old edition of Granma, the official newspaper of the Cuban Communist Party (and so the official newspaper of Cuba), follows Fidel’s lead and gets all excited about the Moringa tree’s ability to supply Cubans with “an inexhaustible supply of milk, eggs and meat.”

14ymedio, Elías Amor Bravo, Economist, 29 May 2023 — We all remember that back in 2012, Fidel Castro, already retired from the political front line, began to publish a series of articles in the state press to explain, with quasi-scientific details, the properties of moringa and mulberry. Those explanations drew attention, because after a long life at the head of the regime created by his communist revolution, no one thought of Fidel Castro as an amateur scientist, much less, as a moringa specialist. So, in that article now distant in time, Castro devoted himself to detailing the benefits that, according to him, could be attributed to moringa, a plant native to India that had all types of amino acids and numerous medicinal properties, although he clarified at some point that it should never be consumed in excess.

Castro’s article went on to point out that “we have supplied samples of seeds of different varieties to agricultural research institutes. Soon we will learn more about its potential. From my point of view, its greatest benefit for the population lies in its qualities as animal consumption for the production of meat, milk, eggs, and even the cultivation of fish,” something like the Castro manna that can do anything.

So those “scientific” collaborations coincided with the aggravation of the ailments that the old revolutionary was already suffering at the time, at age 86, and the state press used them as a talisman to stop the tide of rumors about an alleged worsening of his health. From that time the images of a Fidel Castro in a wheelchair visiting moringa fields are remembered, and in one of his last collaborations, he proposed the massive cultivation of these vegetables as alternatives to food and for health.

Some time later, and once the old dictator died, the regime did what it had to do, and in that way, by 2018 the council of ministers approved the creation of the science, technology and innovation entity “Sierra Maestra,” with the aim of investigating and putting into practice the reflections of the late Cuban dictator related to the medicinal properties of moringa and other plants that occupied his “studies.” No expense was spared for this project; it was, as on other occasions throughout history, about validating Castro’s ideas and proposals, no matter how absurd they might seem. Ideas that bordered on “devotion” for the moringa tree and its medicinal properties. Rivers of ink ran. continue reading

Fidel Castro had not said it, but his followers, determined to give continuity to those “collaborations” stressed that “the conditions are created for the country to begin to massively produce moringa oleífera and mulberry, which are also inexhaustible sources of meat, egg and milk, (and) silk fibers that are spun by hand.”

In this way, coming out of nowhere, the “Sierra Maestra” institution was aimed at guaranteeing, in addition, the continuity of the investigations ordered by Castro, related to the production of silk, fodder and the sacha inchi, the native seed of the Peruvian Amazon known as the “peanut of the Incas,” much appreciated for the properties of its oil.

And you will wonder, what is all this about?

Well, the heirs of Fidel Castro, in 2023 have launched the first integral moringa powder plant in Cuba, inaugurated in La Sierpe, Sancti Spíritus, destined to produce 20 tons. According to the state press, “the powder will have three destinations of vital importance for the development of the nation: the pharmaceutical industry, export and as a nutritional supplement in the manufacture of cookies,” a project conceived by Fidel Castro and, as it could not be otherwise, “an honor for us to comply with it.”

Apparently the entity has state-of-the-art technology of Austrian origin — you can imagine the cost — “and the processor dries the leaf in conditions of airtight darkness, avoiding the denaturing of chlorophyll and other nutritional properties of the tree.”

It is assumed that the plant will have various benefits for the local economy, such as “providing a nutritional supplement for human beings, as well as, from the protein content of the green mass, food for sheep, goats, pigs and birds,” following the script of Fidel Castro, who identified moringa “as a miraculous tree of life, light and hope, like an angel turned into plant. It is a very complete food.”

The inauguration of the entity was attended by Jorge Luis Tapia, member of the central committee of the party and deputy prime minister, and the division general of the reserve Ulises Rosales. Teresita Romero, governor of the province, also participated. We are talking about moringa again after 11 years.

Translated by Regina Anavy

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The Electricity Crisis in Cuba From Bad to Worse: Towards a Long and Warm Summer

Cuba’s thermoelectric plants are routinely out of service. (14ymedio)

14ymedio, Elías Amor Bravo, Economist, 28 May 2023 — If the current scenario is maintained, the forecast for the coming months is that the blackouts will continue and this when now the hottest months of the year arrive, in which consumption becomes more necessary to face the high temperatures. The situation of the national electricity system, despite what Economy Minister Alejandro Gil said in the national assembly, is one of the absolute inability to comply with the strategy outlined to reduce blackouts during the summer holidays, when demand levels increase in a sustained way.

There is a fairly widespread sense of absolute failure to solve the fuel deficit in the nation. These are the conclusions of an interview in the state press of the minister of the branch, Vicente de la O Levy, in whom many hopes were placed when he was appointed, raising expections that he could address a situation that worries all Cubans. Well, no, realism forces us to think that the problem continues and that neither the generation of electricity in the country nor the sale of fuel in the service centers will be normalized in the short and medium term.

The minister explained some of the actions implemented by the regime, all of them unsuccessful. He cited, for example, what he called “sacrificing the power that was available, with the aim of increasing maintenance work and gradually reducing breakdowns.”

A work that was carried out “in the worst conditions of supply of spare parts, materials and raw materials for not having access to financing or suppliers, due to the resurgence of the blockade and the inclusion of Cuba in the arbitrary list of countries that support terrorism, prepared by the United States Department of State.”

That is, power plants mostly from Eastern European countries in Soviet times that make up Cuba’s electricity grid cannot renew their parts because of the ’blockade’. But does the ’blockade’ affect Cuba’s trade with these countries? Can the parts only be purchased in the United States? continue reading

It doesn’t look like it. The thing is that there is no money at all, and that includes for the purchase of the parts. Nor is there money for many other necessities that have to be imported, which Cuba can’t buy because it doesn’t have the credit to do it. This is what happens when the debts are not paid and the international markets do not give loans. In such conditions, without parts, the results of maintenance and the recovery of power that had been out of service for some time have not allowed a decrease in the blackouts. It’s a failed measure.

The minister insisted on his task of increasing the maintenance load from February, and for this, he decided to pull the consumption of units such as Céspedes and Felton to meet this objective. In such extreme and complex conditions, the average number of hours of affected each day was only reduced to three hours, “being able to rotate the scheduled blocks every four days, except for the days when the system was completely disconnected.” The fact is that the blackouts continued, because their continuous appearance is the result of much more complex factors that are not fixed with these juggling exercises.

And in addition, in a short duration. The minister explained two situations that occurred a short time ago and generated complications: the failure of the fuel supply as a result of a shortage from suppliers (he said that 400 W were left out for this reason) and the exit of the Guiteras thermoelectric plant due to a large-scale breakdown. As a result, the hours when electrical service is affected were extended in almost the entire country, and the alleged improvements in the Céspedes and the Felton plants passed on to a better life immediately.

Looking ahead to the summer, the minister listed some of the actions that are undertaken so that the situation does not worsen, including “the maintenance of Felton 1, the recovery of unit 6 of the Mariel, the maintenance in the Cienfuegos thermoelectric plant, the recovery of power of the engines of the Mariel and Moa, the elevation to 300 MW of the generation of Energas, the recovery of more than 600 MW in distributed generation and the incorporation of new fuel-oil engines (100 MW).” All hasty and with a lack of parts because there is no credit to buy. A bad business.

In particular, and with regard to the effects in Energas, he said that “after several days with more than 300 MW of generation for having drilled a first well of three that are giving us more than 200,000 cubic meters of gas, last Sunday a breakdown occurred that took out all the generation units and limited the manufactured gas destined for the population in the capital.” Then he added that “the service was restored immediately and power has been recovering, until next week, when, again, 300 MW will be delivered.”

The minister believes that with the Guiteras and Energas, before the end of May there will be a considerable decrease in the affected periods and a few months of summer in better conditions. He insisted that “daily, our people have been kept informed about the situation of the national electricity system and of each of these actions,” a measure that also does not solve the problem of the blackouts, and that contributes, even more, to tightening social needs.

The minister also referred to the situation of the 1,000 distribution transformers, which suffered damage during the passage of Hurricane Ian and are being gradually replaced, with priority for strategic sectors such as agriculture. Ian happened in September 2022, soon approaching a year, and they are still trying to solve the problems.

Then, at that time, according to the minister, “it was decided, in addition to taking from the state reserve, to use those that were in the centers of the economy to install them and provide service to the population.” And in this regard, he said that “at the moment raw material for the national production of transformers is arriving in the country, and with this it will be possible to gradually replenish those that were taken, prioritizing strategic sectors such as agriculture.”

And at this point, the minister called on the population and the sectors of the economy to save electricity and fuel, “making a rational and efficient use of energy,” a message that has little to do with the reality of a country in which if consumption is squandered it is not for the population, but for the high level of consumption that the state needs for its platforms of economic control in all areas of economics and society. The communist state is the great squanderer of electricity consumption in Cuba. In addition, it does not pay for it, since everything is charged to the same account. A disaster.

The minister said he hopes that “the lines in the service centers and the situation with the fuel will recover significantly.” Regarding this worrisome aspect and its undesirable effects, the minister said that “we have not had to go to a zero fuel option, with gigantic financial efforts,” but the lines at the gas stations do not seem to indicate that.

The problem is that the lack of fuel in Cuba is generalized not only to gasoline but also to diesel from service and electricity, turbofuel for airlines and to all petroleum derivatives in general. Nobody at this point asked the minister how the production of renewable electricity is going, which barely reaches 5.5% of the total, one of the lowest in the world. Nor has the minister done much to improve this result, which is essential.

Translated by Regina Anavy

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Cuba’s 64 Years of Agrarian Reform: Nothing to Celebrate

A farmer works on the sugar cane crop in Maduga, Maraeque. (EFE/Ernesto Mastrascusa)

14ymedio, Elías Amor Bravo, Economist, 21 May 2023 — Fidel Castro activated a plan, not deviating one millimeter from its content, for seizing power in Cuba following the fall of the Batista regime. And in that plan, one of the first actions — when the execution machinery was in full swing at La Cabaña fortress — was the agrarian reform law. The law was one of the plan’s media events, and so Castro decided that the setting for its signing should be the Sierra Maestra de La Plata* in Bartolomé Masó municipality, Granma province — located more than 1000 kilometers away from the ministerial offices of the capital — where panic was starting to spread among state officials. It all happened on May 17, 1959. It’s been 64 years now. A lifetime.

The Castro regime turned the agrarian reform into one of its main points of reference. So much so that, at the international level, others tried to copy it, but in the end threw in the towel. The usurpation of economic power that took place in Cuba in favor of the state caused a trauma that was very difficult to overcome in a productive sector that, until then, had generated enough food to feed the entire population, and had two export products with which it obtained income from abroad: sugar cane and tobacco. Never after in history have there been similar processes in other countries of the world.

Agrarian reform took place in Cuba because the circumstances of the moment allowed it. The economic powers that could have opposed those measures now had nothing to do but escape repression and death. And the political powers were dragged down by the revolutionary pressure. Not even the president of the republic, Manuel Urrutia, forced to resign in July, and who ended up taking refuge in the Venezuelan embassy, or Miró Cardona (whom Castro himself had replaced in February) had anything to say in the matter.

The only protagonist from then on was Fidel Castro, who appropriated, on the other hand, a program that was not his, but which served him well. In fact, the author of the text, Humberto Sori, minister of agriculture, resigned days later when he saw that his attempt to protect Cuban agrarian interests was falling on deaf ears. Sori was executed on April 20, 1961, shortly after the Bay of Pigs invasion. He did not see the end result of the reform in which he had to submit to the dictates of Che Guevara.

In reality, when that agrarian reform law was signed in the guerrilla and campesino landscape of Bartolomé Masó, few of the guajiros** present at the act knew what it was all about. A law that, up until the last moment, was being touched-up by Che Guevara as efforts were made to explain to those around there what the whole thing was about. continue reading

For Castro’s propaganda, which already in those months of 1959 had entrenched itself to influence society with its messages, the law was a triumph, one more victory for Fidel, the first revolutionary measure aimed at “restoring hope to the humblest” and at the same time, promote a profound transformation of Cuba’s economic and social structure. However, the law was full of inconsistencies and falsehoods that, with time, could be more than verified.

To begin with, it established a presumed right of the farmers who farmed the land to own the land. But this was not the case, since what the law really did was to pass the large estates and large private farms, in which sugar cane production or livestock economy was carried out, into the hands of the state. Marxist collectivism turned the communist state into the main owner of the land, of the means of production, while the existing farmers were forced to accept small plots of land from which they could do little more than produce for their own consumption.

The communists claimed that before the law, 1.5% of the owners owned more than 46% of the national land area. After the agrarian reform, a single owner, the state, came to hold practically 54.2% of the land area, a percentage that increased over time until it reached almost 80% before Raúl Castro’s reforms, while independent farmer participation was practically marginal. And the most alarming part was that the land in the hands of the state remained idle, without being put to use, which reduced productivity and yields, forcing the Island to import food that it used to produce.

In addition, the law made inefficient smallholdings the main feature of agriculture. In effect, the maximum limit of land that a natural or legal person could own was established at 30 caballerías (402 hectares)***. Castro’s plan was to consolidate small agricultural property, tying the farmers to the land, in order to prevent rhwie progress, accumulation of wealth and development. The law turned former tenant farmers into poor small landowners, with little or no possibility of accessing more land to increase the economies of scale.

It is true that more than 100,000 property titles were granted and that this benefited some 200,000 farming families, but with economic and social costs that ended up causing structural damage to the productive sector, from which it never recovered. After the reform, no farm in Cuba reached more than 100 caballerías.

Thus, the law put an end to large estate ownership and foreign private possession of land by creating an army of poor farmers, who, after a while, were forced either to work as wage laborers on state farms, or to join cooperatives controlled by the communist party to market their admittedly limited productions. The result of these changes was immediately evident: loss of technology, capital, and investments, causing irrecoverable damage.

The communist narrative of agrarian reform insists on drawing a scenario in which the transformation of the Cuban countryside manifested as a fatal blow only for the national and foreign landowners, and in particular for the Americans. It has even created a false image that these sectors, “wounded in their pride and displaced from their bourgeois and landowner position, later led, in exile, the countless campaigns and actions that since that time and to date have been orchestrated against Cuban agriculture, even introducing pests and diseases into various crops”.

There is nothing to say about these falsehoods. Arguments of this type topple under their own weight and confirm the root of the hatred that communism exudes against those it considers its enemies, and it does not accept differing positions. The reality of this story is that the main victim of the agrarian reform was the small Cuban farmer, the people in general, and what happened is that those agrarian entrepreneurs whose properties were confiscated on the Island were able, in some cases, to rebuild their lives and achieve success for their projects in other countries.

To complete the operation of control of the agricultural sector, two years later the revolution allowed the creation of ANAP, the National Association of Small Farmers, on another May 17 —in this case, grouping the farmers in an organization penetrated and directed by the Communist party to impose its thesis on the sector. ANAP is not a business organization; it does not defend the economic interests of its members and is a mere instrument for transferring power from the state to the producers.

Some 64 years after the enactment of the law, what can be said about the Cuban agricultural sector?

The state continues to be the absolute owner of the land, which is also recognized in the Communist Constitution of 2019. Its percentage has grown to around 80%, but through the lease formula it has transferred the management of production to the farmers — who have, if this is possible, more problems than ever in achieving better harvests and more productivity. The lands that continue to be in the hands of the state are idle, without the Communist organizations ceding them to the private sector. On the other hand, these producers lack incentives to work and improve what they know will never be theirs. The conflict in the legal framework hangs like a sword of Damocles over the Cuban countryside.

There is abundant labor in the agricultural sector, much more than in other sectors of the economy. Almost a fifth of the employed population works in the countryside, and although statistical data are unavailable, it is an aging population, geographically dispersed, with low mobility, and with increasing levels of dependency and vulnerability. This concentration of the working population means that the productivity of the agricultural sector barely reaches 10% of the average for the entire economy.

The agricultural trade balance continues to show a deficit and it is necessary to import two billion dollars annually in agricultural products that are not obtained on the Island and that are necessary to avoid systemic famines. There is no product capable of obtaining income from exports, except for tobacco, which maintains its figures. Sugar, the emblem of the Cuban agricultural sector, disappeared after the reforms introduced by Fidel Castro at the beginning of this century, and currently the harvests, around half a million tons, are even lower than in colonial times.

The regime’s recent experiments to reactivate the sector, such as the 63 measures or the 93 measures, do not yield results because they are superficial and do not address the structural problems that must be tackled. They provoke price increases, a galloping inflation of the “Food” component of the Consumer Price Index above the average, and a real impoverishment of Cubans in relation to the dwindling shopping basket.

The agricultural sector is not an exception to the rest of the economy, but suffers from the same problems as other economic activities, because the regime’s model is not capable of finding formulas for improvement and prosperity that pass, above all, through the legal framework of property rights.

The limits to the development of agriculture in Cuba do not come from outside, but are found in the internal structure of the economic model that has created all kinds of pitfalls and shortcomings that have limited the efficient development of an essential sector for the welfare of the entire population.

In reality, 64 years later, Cuban farmers have very little for which to thank the Revolution’s agrarian reform. Reversing this scenario is possible and necessary. They already did it in Vietnam with the Doi Moi land ownership reforms that actually transferred property rights to the farmers. In just five years, Vietnam went from suffering famines to becoming a grain exporting power in Asia. It even makes periodic donations to impoverished Cuban agriculture.

The true meaning of the agrarian reform that Cuba needs will force a change in the Communist constitution. The regime itself wanted to block the necessary reforms, but it has no alternative. The Communist path is exhausted.

Translated By: Alicia Barraqué Ellison

Translator’s Notes:

* The Sierra Maestra mountain range was home to the rural guerrilla headquarters of Fidel Castro’s revolution in the 1950s.
** In Cuba, “guajiro” [wah-hee-roe] is a colloquial term for farmer.
*** The word caballería here means a unit of measurement in Latin America, equal to approximately 100 hectares.

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Cuba’s Diaz-Canel Does Not Understand the Food Situation, Rather, He Sees It Backwards

Cuban farmers have been hit hard by lack of inputs and fuel shortages. (Flickr / Kuhnmi)

14ymedio, Elías Amor Bravo, Economist, 13 May 2023 — Perhaps someone could think that the script for the meetings the regime leaders are conducting throughout the Island could change at some point and gain a certain realism. An expectation that, unfortunately, hasn’t been met in Matanzas (nor in Mayabeque.) There, Cuban president Díaz-Canel once again repeated the mantra that food is a priority. Later, the state press referenced that message from the communist leader in relation to the increase in inflation for agricultural products. A serious issue that is at the origin of the social protests and growing separation between the people and the communist leaders, who didn’t even dare celebrate May 1st at the controversial Plaza of the Revolution.

Thus, if food is a priority and the main problem is food price inflation, what are they waiting for to take action? People are starting to get fed up with so many exchanges, that the state press describes as “sincere and profoundly critical”, during which, as previously in Artemisa, Sancti Spiritus, Villa Clara or Cienfuegos and Camagüey, they talked and talked about all sorts of things, many of them trivial, but they did not get to proposing concrete solutions to the problems. People get exasperated. And the worst of it is that, if there is a lack of trust in the county’s top leaders: Díaz-Canel, Marrero, Gil, etc., what they will gain is that people will begin to think the same of local and provincial leaders. They have been warned, they should prepare for the worst.

It’s the same old same old. The script has not shifted a single millimeter: the US ’criminal blockade’ is responsible for what happens, the party needs to perfect itself, power must be shifted to the territories and much remains to be done. A song, which surprisingly, is used later by the state press to attempt to gain some time in a critical economic scenario. The expectation now is that Minister Gil will offer real information on the economic situation during the next general assembly which has been scheduled with this topic as the order of the day. continue reading

As of now, what is not expected is for any delegate to demand explanations or responsibilities. It’s all the same, in no time the first semester of 2023 will be over, and in reality, the diagnosis will remain unknown for an economy that is in what economists describe as stagflation, a dangerous combination for its consequences — economic stagnation and inflation. The worst possible.

In the case of Matanzas, the provincial governor said that of the 264 agreements made last January, 195 have been met, showing management deficits. In Mayabeque they provided similar percentages of underperformance. The opposite could occur, that problems are not guaranteed to be resolved just by meeting the agreements.

Díaz-Canel says that much remains to be done, and the question is, what have the local communists been doing since January? The situation is grave in Matanzas where 16 companies report losses, a result that depends very much on the economic conditions created by Díaz-Canel.

They also spoke about the diminishing cattle mass and milk production, as well as not meeting the targets for fattening pigs and the slow pace, once again, of sugar production which will give way to another sugar harvest that is smaller than the previous year’s. A terrifying assessment of the situation that occurs in the rest of the provinces. The only highlight was the increase in exports of honey, charcoal and medical services. Incredible.

These meetings with Díaz-Canel, Marrero, and communist leaders with local regime representatives have placed food production at the center of the debates. As if the supply of agricultural products depended on decisions at the local level. The communists deny the existence in Cuba of agricultural holdings that benefit from large-scale operations, which allows them to achieve increasing yields, at lower unit costs.

They do not want that model because they prefer to maintain control of production so that consortia of economic power do not emerge able to escape from the ideological slogans. Thus, they want to take production to the local level, so that it occurs with small farms destined for small markets. A good example is milk, which sinks to state levels due to low farm yields, lack of motivation among ranchers, and the objective and contrasting fact that there is no milk to sell.

When paralysis strikes production, the only remedy is to review the production relationships. Even Marx would end up agreeing on this matter. If a system of production, any of them, is unable to feed the entire population and must resort to imports to cover food deficits, its design is distorted, inefficient, and should be replaced. The Cuban communists insist that the system continues functioning, and attempts to find solutions within the system, but that is impossible.

With regard to inflation, Díaz-Canel, who has been responsible, in large part, for the situation after the mistaken attempt to apply the so-called ordering task, should not say he was not warned. Prices increase in Cuba but not because people have more purchasing power and increasing demand. Prices rise because the supply is continually declining, for the reasons stated above.

And food prices rise more because agricultural production is at its lowest. Díaz-Canel is already delayed in beginning to solve problems and apply the correct decisions because the ones he’s applied until now have not yielded results. Precisely because they end up encouraging more and more reductions in supply, which must increase for prices to level off and begin to decline. Is it so difficult to understand the issue?

Díaz-Canel was worried he would not be capable of “ordering” prices, to avoid a surge in a “chain of intermediaries” because that is what, in his opinion, increases prices. He is mistaken; prices are currently rising and rising a lot, and not because intermediaries exist, which are outlawed by the communist regime. In Cuba, the only intermediary–the state through Acopio–is the one that creates these situations of food shortages in consumer markets. Díaz-Canel not only does not understand reality, but rather, he sees it backward.

Translated by: Silvia Suárez

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Cuba’s Food Production Labyrinth: Heading Toward Failure

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

14ymedio, Elías Amor Bravo, Economist, 9 May 2023 — Local food production is the latest experiment practiced by Cuban communists but it will be a failure. Like many others. The municipalities aren’t up to the task of producing enough food. The idea proposed — to shift state responsibilities to the local level for them to be managed by the territorial communist organizations — is a useless, inefficient exercise and far from improving the quality of life for people, will result in authentic chaos, exacerbating differences among Cubans according to the zone where they live, and many other things.

But Cuban President Díaz-Canel’s persistence in implementing structural changes and in managing and eliminating obstacles, so that municipalities develop these functions seems firm. And the state-run press does not pass up an opportunity to spotlight the gesture.

This is what occurred on Monday in Artemisa, where Díaz-Canel participated in a meeting to “evaluate achievement of the commitments made in January by this territory to overcome the complexities the nation is experiencing in the economic, social, and political-ideologic order.” A kind of ministerial review meeting that, since it will extend to the rest of the provinces, will keep the junta that runs the country occupied for quite a while.

And here comes the most notable result, when they realized that five months after a similar meeting was held in the province, during which they identified strategies to produce food in the area, “much remains to be done and there is great potential in several places that are not being used.”

Our position on this matter is clear. If, instead of focusing on creating and strengthening local production systems, they bet on the unity of the national market to take advantage of the production potential of increasing economies of scale, which ensures a superior efficiency of production processes, it would be another story. continue reading

Any first-year economics student would have corrected their “localist” initiative which is stifled by a phenomenon economists know well: diminishing returns. These occur precisely when the scale in which one factor operates, for example, the land, is not sufficient for the amount of work available. The obsession with producing in this manner creates inefficiency and “multiple potentialities,” as the state press note says, are lost.

But this local food production is another one of the communist congress’s conclusions, of those that when implemented end up damaging the Cuban economy. Remember what happened with the Ordering Task*, which also was imposed as a communist obligation. Putting ideology ahead of economic rationality is one of the most evident examples of failure in communist Cuba.

Wanting a municipality to become the fundamental entity responsible for food production is a mistake. Another is expecting food sovereignty goals to be met; as is believing that local authorities have the capacity to make decisions related to state companies located in their territories; and getting them to produce more is another inefficient idea.

Communists are adamant about these changes in structure and resource management because the central budget is at its limit and they need to transfer expenses to the territories where tax collection tends to be higher. But they don’t realize that, by imposing this model, what they are really doing is transferring the inefficiencies and the communist central government’s poor functioning to the territories, which will end up imploding the system. Those responsible at the local level should confront the central government about this imposition which can only lead to chaos.

Moreso because the current economic conditions and the complex international scenario are not the most amenable to absurd experiments. It is bad enough to depend on imports, as happened with the communist centrally-planned economy; it is worse to try formulas so that each territory is capable of producing a good portion of the food consumed by its population. Small-scale does not work, it is inefficient and also not very profitable.

And we realize the absurdity of Díaz-Canel’s initiative when we see that what matters to him is to have a livestock census to achieve control over the masses; to facilitate the approval of foreign investment and good evaluations of food production projects funded by international donors; to join forces with the youth labor army to farm fields that are currently fallow; and to promote the development of areas within businesses or employers to produce food for their internal consumption. Bureaucratic and administrative work. When it comes to changing things, wouldn’t it be better and more correct if they restored property and land rights and facilitated a structural transformation of the Cuban economy to a free market economy?

For their part, local governments justify to Díaz-Canel their failure to meet targets by claiming: “too much subjectivity and lack of awareness when applying the food sovereignty and nutrition education law,” and the lack of “training that includes all those implicated in the implementation.” Another good example of the improvisation that goes along with the regime’s application of ideological measures.

No one dares to say, publicly, that it is an absurd idea best tucked away in a drawer. There is not a single opposing position that defends a thesis like the ones proposed here. Everyone knows that the formula is useless, but everyone moves forward, united, toward the disaster. And for that reason, the most curious thing is that they devote themselves to counting “commitments” and there is someone who congratulates themselves when they state that of the 111 general commitments made during the previous meeting 72 have been met to date, 24 have not been met, and 21 could possibly be met. What do you think of that? Counting nonsense and meanwhile, the people experience deprivation, scarcity, and out-of-control price increases.

And clearly, it’s time to review this year’s targets and it’s like turning off the lights and saying goodbye. A wide spectrum of unmet targets weighs on the local managers and exempts Díaz-Canel and his people.

No matter, the thing is that Cubans continue experiencing hunger. They reported that the production targets will not be met for meat and sugar, nor will the targets for international tourists in the territory. They highlighted that they surpassed the targets set for exported services, but not goods; even though they did not delay making the fallow lands available — 14,000 hectares in eight months — producers are still not satisfied with the pace at which this process is carried out. That is, leasers request more land and the communists do not make it available. And this is in Artemisa, which is productive.

The meeting went down another path, subsequently turning its attention to the programs prioritized as demographic dynamics, the Life Task, and the production of local construction materials. They reported that in six months more than 600 jobs were created, in the government and non-government sectors; and they said that they continued to repair health and education institutions, and that 141 new slots were created in pre-schools.

Generally, in the province they worked to implement the strategic lines of action in the national plan for economic and social development 2030. They also highlighted a lack of training among party cadres to confront the complexities that lie ahead. They also talked about integrating all forms of production at the municipal level; promoting greater agility in the procedures that must be followed in order to export goods; and the importance of making better use of science and innovation. About the population’s dissatisfaction, those at the meeting only talked about “the revolutionary dissatisfaction with what we do every day.”

*Translator’s note: The “Ordering Task” [Tarea Ordenamiento] is a collection of measures that include 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 a broad range of other measures targeted to different elements of the Cuban economy.

Translated by: Silvia Suárez

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