Category: Elias Amor Bravo

What has happened to Spanish tourism to Cuba to end up being one of the least relevant? One of the Spanish representatives of a travel agency said that he has not visited the largest island in the Caribbean for 20 years, and now he hopes to see its “infrastructure, hotels and other facilities.”

Twenty years without traveling to Cuba. That is, the last time he was on the Island was at the beginning of the century when the Island began to emerge from the Special Period and Fidel Castro was sending to re-education camps the prostitutes and others who offered their services to Spanish tourists, mainly single men, according to statistics on the sociodemographic profile of those travelers. The fun was over, the commander arrived with the oil from Venezuela, Spanish tourism plummeted, and the figures were not repeated.

These Spaniards who now travel to the Island invited by the regime were practically children at the beginning of this century, and in these 20 years they have been able to travel to countless destinations of a much higher level of quality and competitiveness. Therefore, they are going to observe what is on the Island, and many of them are going to be surprised, but not for the better. The great opportunity to promote the Caribbean nation, which the communist regime expects from the expenses, will fall apart, because the leaders of Cuban tourism cannot think that in 2023 they can attract demand for tourism with a similar supply, in quantity and quality, to what there was in 2000.

And, of course, with much less “fun” despite the fact that Spanish travel agents are going to enjoy the paradisiacal environment of Cayo Santa María. I hope that the farmers with supply contracts have obtained sufficient quantities of products for them to enjoy the hotel buffet and breakfast. Sometimes there isn’t enough food.

That the authorities have planned tours of Havana for these travelers says a lot about their age and the number of times they have visited the Island: zero. We will see what they think of the streets without water or electricity, the semi-destroyed buildings, the lines of hunger or the lack of gasoline. Oh no, of course, that tour is not planned.

A recommendation: it would be good for these travel agents to take a walk by themselves to know the true reality to which they are going to send tourists. It does not seem that this idea is in the plans of the regime’s partner, the DIT Gestión group, located in Guipúzcoa, which hopes to achieve business once the action of the fair is over. The question is, why can’t that business be done by a private Cuban company, and should it be left in the hands of foreigners?

In the midst of all these trappings, the state press reported that the tourist company TUI Spain has launched a promotional campaign called “Two Weeks in Cuba,” which will be active until May 7, or that the firm TUI AG, from Germany, has more than 2,300 places with guaranteed departures from May to October to the Caribbean island. It was also said that from this coming June the connections between Spain and Cuba will increase depending on tourism, with the new air route of Enjoy Travel Group/Enjoy Barcelona-Havana.

All this is very nice and with great expectations, but the goal of the plan for 2023 of 3.5 million tourists is not going to be achieved.  Tourism to Cuba comes mainly from Canada. It’s almost 65% of the total. Have you heard anything about Canada at this Havana fair? No. Why does the regime disdain and not pay attention to tourism from the main market? Are they that confident about it? The regime’s tourism policy is an absolute failure, and in addition, these glories end up being paid for by Cubans. The same ones that tourists are going to see, if they manage to escape from their controllers, standing in the lines of hunger.

Translated by Regina Anavy

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

First of all, she wants to stop the loss of staff in the system. Controllers are leaving for the United States, Europe and Latin America. She knows that their experience and qualifications can help them get work as auditors in consultancies where they can earn six figures a year and not suffer the deprivations of communism. No wonder Mrs. Bejarano complains of a diminishing workforce.

Secondly, she called for the promotion of a culture of prevention and control in administrations and increased rigor in confronting manifestations of indiscipline, illegality and corruption in the field of administrative management. She offered to be at the head of the repressive mobs that communists like so much. It seems the Comptroller’s Office should exist for something else.

Third, she asked to update and optimize the self-control routes of the administrations and reduce the aspects that have to be checked. That is, work less for your organization, and if possible, look the other way if problems appear that can create some difficulty for the hierarchy. No. That’s not how you should play.

Fourth, she mentioned the realization of the next National Check of Internal Control, which evaluates the economic results; the quality of prevention and control actions; and the increase in speed in the processing and response to complaints and requests of the population, among other objectives. The truth is that little is known about those annual checks. It would not be a bad thing if the results of the work were disclosed.

Díaz-Canel, very much in his role, said he met young people in all the provinces willing to work in the Comptroller’s Office. In fact the UJC [Young Communist League] was present at the event and once again extended itself in its successful “innovative capacity, from the concept of creative resistance” to apply it to the daily task of the auditors. Díaz-Canel knows little about audit work.

At the close of the meeting, Díaz-Canel pointed out the high ideological training of those who make up the Office of the Comptroller General of the Republic and the National Audit System. Maybe that’s why they have difficulty retaining professionals who are fed up with so much ideology. He spoke about the negative consequences of the ’blockade’, which in his opinion has generated a context conducive to the increase of social indiscipline, illegalities, crime and corruption.

And he added, “in the face of imperialist logic, let’s impose socialist logic” supported by creative resistance, the completion of tasks and making it happen by the participation and dialogue of the workers. When it seemed that he was saying goodbye, he resorted, as it could not be otherwise, to the subject of his doctoral thesis, the paradigm of government based on science and innovation, social communication, computerization and digital transformation, which he asked to be applied to the activity of the Comptroller’s Office. And all this, without forgetting the “battle against corruption, against simulation, against shamelessness, and against double standards,” putting “socialist morality and honest and creative work first.”

A radical speech, of angry positions, far from reality and which  shows the enormous weaknesses of Díaz-Canel and the model he tries to defend at any price. The obsession with confronting corruption is greater than the corruption itself that has been installed in society, which, as we have highlighted in this blog, has a lot to do with the apparatus of administrative and legal rules of the Cuban communist system. Now Díaz-Canel not only wants to apply it to the Comptroller’s Office but also to popular control, and thus he announced that “people are needed to control and make the processes more transparent.” Hold on, curves are coming.

Translated by Regina Anavy

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

The financial crises that have shaken the world in recent years have not directly affected Cubans because their banking system is so primitive and so isolated from the world that it barely penetrated. Banking in Cuba, Gil’s great goal, is one of the lowest in the world. Cubans don’t trust their banks, with good reason. Most transactions in Cuban pesos (which represent 70% of the commercial circulation) are made in cash.

And what about the challenges of the BCC right now? Of course, they have no relation to what Marrero said in his speech. Neither is there a need for “a comprehensive analysis that allows us to face the phenomenon of the lack of cash that occurs in several territories of the country,” nor “the review of plans or measures that can truly generate foreign exchange income for the nation.”

If Marrero wants to direct the BCC, he has to bet on his international credibility and ensure that the international financial markets take it into consideration. I insist, reading the ruling of the London judge offers ideas of where to go.

Marrero said something related to “working with respect to the foreign debt situation; rethinking the financial bases of foreign investment in the country; and taking forceful steps in the quality and organization of the national payment system, banking, financial education and computerization.” These terms seems interesting but in the long run will not lead to anything concrete.

The solution to the debt is to pay, reduce the internal spending of the state where possible and stop adventures. Be responsible and pay the arrears. Catch up, like any neighborhood debtor. And as much as it hurts, forget about Fidel Castro’s outcry about non-payment of international debt and try to make everyone see that Cuba pays, and that those crazy ideas will no longer be repeated. They must return to the fold. There is no alternative for the communist regime.

And then, of course, Marrero spoke of the eternal improvement of the banking system, which now wants to accelerate with the paradigm of science and innovation of Diaz Canel’s doctoral thesis, which is now essential, while trying to justify the measures of the foreign exchange market saying that they were going in the right direction, but that the measures have not worked. So, they don’t work, we’ll say. In banking matters, there is little to investigate. Ask any of the economists who provide their services at the BCC.

At the meeting, other topics were reviewed, such as cybersecurity, the human capital that is present in all sectoral assessment meetings, and working conditions and credit facilities for new economic actors. Marrero asked for the prevention of financial crimes, with the priority being money laundering, and to increase compliance with the control measures and procedures established in the banking system. These messages are for the international gallery and can only be useful if the appropriate measures are taken in financial operations. It’s one thing to say and quite another to do.

He also demanded that “quality has to reign in the banking system facing the population,” undoubtedly forgetting the clearly-visible lines at some banks to carry out currency exchange operations or the terrible functioning of ATMs, which forces customers to travel miles to find one.  He only briefly referred at the end of his speech to what “recently happen in London as an issue that must be treated and reflected on with a self-critical attitude.” We’re dying to hear more.

The management report of the BCC in 2022, presented by its president (who was not in office during that year), said that in a hostile and complex scenario, the national banking and financial system “maintained the vitality of essential services, actively participating in the Economic and Social Strategy, with a group of actions to design and implement mechanisms to advance the recovery of the economy.” We would have to know what those actions are, because the economy, far from improving, has gotten worse.

And he added in this regard that “the indications related to government measures adopted to increase food production, agricultural development banking, the direct marketing of productive forms and the development of investments were complied with.” It’s no use obeying the government if the same problems continue. The central banks are not here to devote themselves to this kind of thing.

He recognized that the quality of the service provided by the BCC does not yet show the results that society requires, and from here we wonder to which sector of society the BCC directs its services. He also pointed out that the main problems were identified as “the increase in the number of operations that do not correspond to the technological infrastructure and the current labor force; customer dissatisfaction due to delays in services; non-conformity with banking procedures that do not conform to current requirements; inadequate treatment; uncovered demand for cash in Cuban pesos and foreign currency; and inefficiency.” So it’s more of the same as always, and with all that, they want Cubans to put their money in the banks. Good luck.

The president of the BCC also referred to the implementation, as of August 4, 2022, of the mechanism of access to foreign exchange for the population, associated with the development of the foreign exchange market, a measure that he described as “a challenge for the system from the operational point of view and for the very distortions that its implementation has presented.” He must know what he is talking about; he comes from the CADECAS, the state currency exchanges.

In fact, when referring to the distortions, he pointed out that “one of them is the persistence of monetary imbalances that have generated a substantial increase in the amount of money in national currency in the economy, with high accumulation outside the banks, which exerts enormous pressure on the demand for currencies that cannot be satisfied with the supply available in the market at the current exchange rate.”

Monetary imbalances have their origin in the irresponsible and bulky public deficit that the president of the BCC did not have the courage to mention. Here you can see his lack of independence from the BCC, one of the issues that undermines the international credibility of the Cuban communist economy.

And then, as a final instruction, the president of the BCC announced that in 2023, “it is up to the Bank to institutionally redesign the banking and financial system, adjusting it to the current requirements of the economy for its better functioning,” and he announced “other work priorities such as the development of financial intelligence activity; the design of a comprehensive strategy for the reorganization of the Cuban debt; the creation of the public debt market; the strengthening of the foreign exchange market; the improvement of the liquidity allocation system in conjunction with the Ministry of Economy and Planning; and the rescue of the cash coverage necessary for the proper functioning of the banking system and the economy.”

Undoubtedly, duties accumulate, although the most important thing  — implementing a serious and credible monetary policy — is left aside. And the most alarming of all this is the reference to the “institutional redesign of the system,” a proposal that is very cryptic and that could well mean something else, such as the entry of foreign private banks to operate with the state banks, following a model similar to the hotel sector. In for a penny, in for a pound.

Translated by Regina Anavy

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

International prices are unaffordable for the regime as a result of the shortage of foreign exchange caused by economic activities that do not generate the necessary currencies to formalize these purchases. Commercial credit is unfeasible, and even more so after the judgment of the London trial. Therefore, the regime resorts to donations or barter at subsidized prices, which are practices that, at the moment, cannot be assumed by the main producers, even by friends like Venezuela, which is positioned on world markets to take advantage of the favorable situation. Other producers, such as Algeria or Libya, look the other way.

In spite of all this, the Cuban communists have not been able to foresee a scenario that had been perceptible for months. All governments assume the preparation of a secure technical oil reserve, which could last between three and six months to face specific crises. The competent ministry is responsible for these actions. In the Cuban case, it is easier to blame others than to take responsibility. And that’s why the minister announces what the communists have practiced for more than six decades: the rationing of gasoline and diesel, with the now-known results of lines at gas stations, desperation and loss with downtime for workers. A disaster and chaos.

In addition, the minister assumes that an eventual improvement in supplies in the short term does not mean that the levels of the past will be recovered, but that we must prepare for the worst, because the fuel shortage will not be easily resolved. And the solution is to take out the little fuel that remains in a partially reduced way so as not to stay at zero, but with the known negative effects for the population in essential services like transport. As in the ‘Special Period’ in the 1990s after the collapse of the Soviet Union, “alternative” animal-powered vehicles may return to the streets, although some Cubans are pessimistic about this. There is also no food for the horses, so they lack energy.

So, while the minister of the branch and other leaders spend their time blaming the U.S. ‘blockade’ [i.e. the embargo] for the fuel crisis, someone has to think about what to do. The margins are reduced because the main supplier of oil to Cuba, Venezuela, already began in the second half of 2019 to reduce shipments to the Island, and that was decisive enough for the Cuban economy to experience a recession in the same period, starting its free fall in 2020 and then in 2021. Without oil those countries that still maintain a high dependence on non-renewable energy are not able to produce, and the 8.3 million tons of fossil fuel that Cuba consumes each year jeopardizes its growth, since only 39% is obtained from national production.

The regime announces restrictions and the rationing of fuel amid diminished capacity; it is not known how long it will last. Domestic fuel will also falter in supply since, as the minister pointed out, “there is not enough,” while some provinces “are left with one day of reserve, others have two and the eastern region ran out of fuel in the Cupet tanks of our bases.” Yet they remain calm. The lack of domestic fuel will join the blackouts that have already been occurring for some time, and a perfect storm is approaching, which may end with a collapse of the system, ending the patience of all Cubans.

The authorities say that they have done the impossible to alleviate the situation and at all times have kept the population informed, but this is not true. On the one hand, by not paying debts on time, they are having these problems now. No one will say it and much less recognize it, but debts that have been unpaid for decades act like a sword of Damocles at the present time. The information reaches the population too late, and nothing can be done, and the  “sectoral and territorial priorities” established by the regime aggravate the people even more.

The scenario is not favorable. The weakened Cuban economy will be even more so with the lack of fuel, and the supply will be lower, which will increase prices and cause more inflation. The trickle of fuel, prioritizing certain activities and not others, can end up generating distortions in relative prices and even, in the extreme, in informal practices that can emerge if the situation continues over time, as all indicators confirm. It only occurs to the regime to increase surveillance, controls and repression by limiting the number of gas stations that will give “vital” services to the population and by limiting the amount of fuel to be marketed. It’s bad, and very difficult times are coming.

Translated by Regina Anavy

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

In this way, the regime wants to face the crime of usurpation with an approach commensurate with its interests. For example, before the entry into force of the current penal code, only those who entered other people’s homes or premises through violence or intimidation were prosecuted for said crime. Not those who didn’t do it in that way. The housing officials and the commissions to confront the illegalities managed their extraction from those places after declaring them illegal occupants, which was interpreted as a softer and more comprehensive treatment toward practices that they now want to eliminate.

And why this change? Well, basically because of the spectacular increase that has been occurring in these occupation practices and, with it, the harmfulness and aggressiveness of behaviors in any modality, which requires an intervention of criminal law in the solution of these conflicts aimed at protecting property as a legal asset. Yes, everything is very correct, but the protection of what property? Of the property previously usurped by the same regime that governs the destinies of Cubans? No. It’s not something to celebrate. It’s unbelievable that this type of approach emanates from an economic system in which private property, although recognized, continues to have a marginal role in the economy as a whole, where the collectivist mentality prevails overwhelmingly.

Thus, the authorities understand that ensuring and strengthening the inviolability of the home, recognized in the constitution of the Republic, is an objective that is related to the current socioeconomic conditions in which Cuba operates, where private ownership of housing is still limited to a maximum of two. It would be good if this measure were applied to all kinds of interference in homes, such as those that state security maintains in the form of repression against dissidents, for example.

But the regime seems to be clear about what it wants and that’s why it gets straight to the point. Only in this way can the publication by the Governing Council of the Supreme People’s Court be interpreted, through Opinion No. 471, of February 15, 2023 (published in the Official Gazette of the Republic of Cuba, no. 17, extraordinary edition, of March 2, 2023) of judicial practice in the processing and solution of these matters. An extensive document that is worth reading in detail.

When the illegal occupation or seizure of a house takes place in Cuba, the authority, once the complaint has been formalized, will immediately inform the administrative bodies responsible for the  system of housing, territorial and urban planning, the community prevention bodies and the municipal administration councils, so that, together with the National Revolutionary Police, they adopt the measures to extract the illegal occupants, thus restoring, with identical immediacy, the broken legality.

We would have to ask ourselves at this point, what is the legality? The fiction created by Raúl Castro or the one before 1959 that continues to be documented in the historical property deeds of the Cuban economy? Remember that the law does not state which one, much less the law of property. The communists have gotten into a good mess, they alone. Will the historical owners of the homes be able to exercise this right of complaint or are they still excluded? Are the squatters the ones who were established without an acquisition or rental operation in the homes and premises confiscated by the revolution?

It is also stated that, against those who execute these illegal acts of seizure, the prosecutor’s office or the court will have one or more precautionary measures provided for in the law, which can be provisional imprisonment in cases where the property is not immediately abandoned, in order to avoid the continuity of the allegedly criminal conduct committed and the restitution of legality. The perpetrators of this crime can have penalties imposed that run from six months to two years, or a fine of 200 to 500 pesos, or both.

If the occupation is carried out with force, violence or intimidation, or the act was a consequence of gender or family violence, or for discriminatory reasons of any kind, the penalty increases from two to five years, or a fine of 500 to 1,000 in installments, or both. A similar procedure will apply when the occupation or empowerment takes place with premises belonging to state entities, and the administrative authorities, holders of these, are responsible for restoring legality, in conjunction with the other groups or institutions that are deemed relevant. What could happen when a holder of historical rights takes action against the state for the premises that have been confiscated and occupied since revolutionary times?

The rule states that criminal responsibility increases if the crime is committed against children under 18 years of age, people with a mental disorder or taking advantage of that situation, or the occurrence of a disaster, public calamity, or any other situation of that nature, or under the ingestion of alcoholic beverages, drugs or substances of similar effects.

When the occupant leaves the property voluntarily, without the need for the aforementioned administrative and preventive bodies to act, the court, at the time of adjusting the sanction, may assess the positive conduct of repentance and, consequently, apply a reduced penalty.

The court, in the execution phase of the sentence, if necessary, will be assisted by the administrative, preventive and police bodies, to extract the person who has illegally usurped a property, and will restore legality, returning it to its owner or legal possessor.

There is no doubt that the situation in Cuba must be very complicated for the regime, the authority, to try to face it with a procedure like this, which has nothing to envy compared to the one that is applied in privately owned market economies. The procedure described circumvents this legal right with ambiguous references to the inviolability of the home and uses dubious concepts, such as “owners or cohabitants.” There is no doubt that the owners of the property usurped by the regime can apply this procedure in defense of their rights. This is another issue that creates important gaps and inequalities in Cuban society. Some Cubans will be able to resort to the procedure in case of occupation or usurpation of their homes; others will continue without a recognition of their rights. In the Cuban communist regime, some things change, but, unfortunately, never in the right direction.

Translated by Regina Anavy

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

The ruling, subject to appeal, leaves both parties without achieving their main objectives. CRF I finds it difficult to collect the claimed debt; hence, a director of the entity has already offered to begin negotiations with the regime. For Cuba, the sentence represents an international slap on the wrist for terrible public management of its debt policy and an anachronistic bureaucracy that transfers responsibility to employees to prevent the damage from reaching the top.

It is true that the judge does not investigate in depth the totalitarian roots of the communist regime, and this can make him lose perspective, but he did address economic and financial issues in a comprehensive way, even with that brief historical recourse to the background of the BNC in the times of Prío Socarrás [President of Cuba, 1948-1952].

No one should see in the ruling a document critical of the management of the regime prepared by the democratic opposition. It is a text of an independent judicial ruling that shows the complex mechanisms and bureaucratic tangle with which the Cuban communist regime attends to its financial affairs. First conclusion: it does not seem that the list of investors in Cuba is going to increase.

In addition to the breaches of the debt service, the algorithms of international analysts will be nourished by the information from this ruling, and the Havana regime, no matter how much its spokespeople say, is going to be demoted as a recipient of investments and loans.

The international image of terrible managers, corrupt practices and falsifying ownership of credit institutions to avoid lawsuits which derives from the ruling, should worry the regime, because it entails loss of credibility and trust and will make it even more difficult to access the international financial markets. The proximity to the closing off of credits is more than real. What will probably happen, since the parties have not achieved their objectives, is that they will appeal the ruling and prolong the trial.

In fact, a careful reading of the judgment guides the plaintiff (and many others) how to approach the claim to collect the debt, but the regime has some tranquility in the short term and is allowed to present the result as a triumph.

That is why I agree with my colleague Emilio Morales when he points out that in any judgment about the debt of the Cuban regime, the mechanism of transferring that debt from one entity to another has to be analyzed. That analysis is essential to “determine whether Havana’s assets are today in tax havens or in the hands of foreign entities that could be sued.” He adds, “the genesis of this conflict is to determine how they they were able to remove those assets from the BNC and transfer them to the BCC. There was an act of bad faith in the 90s when dividing the bank.” On these issues, Judge Cockerrill did not want to get involved.

And one last observation. The regime announced last January that the Superintendency of the Central Bank of Cuba, as a technical body with autonomy for the exercise of its functions assigned by the law related to the inspection, surveillance and control over the institutions that carry out financial and banking activity in the country, would be “in charge of reporting the results of the trial in a timely manner.” That has not happened. Instead, a Cuban television journalist has assumed that role.  Even in their statements they contradict each other. Our nerves are on edge.

Translation by Regina Anavy

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

All the exchange decisions that are taken in Cuba, including the fixed exchange rate of the ordering task, go through arbitrating mechanisms for the spin of currencies that enter the country for the benefit of the state. The discrepancies between the official and the informal exchange rate prevent any possible solution to the problem of the loss of value of a currency, the fundamentals of which are in serious crisis. The regime does not like the alternative of a foreign exchange market and, therefore, will block this proposal of the Russians, even if they recognize the consequences of the disastrous exchange rate policy.

Secondly, the Russian plan proposes to Havana to empower and promote small and medium-sized enterprises, which in Cuba are known as SMEs, and which have already been criticized from different positions. Are the Russians thinking that Castro’s SMEs serve their reforms? I doubt it. They have proposed an in-depth reform of fiscal policy to bring out activities from the underground economy. As a theoretical approach it could work, but first you have to throw something away. In the Cuban economy, taxes are only a small part of what prevents the SMEs from prospering.

The main problem lies in the absolute interference that the communist regime maintains in the SMEs, which in Cuba must be authorized by the Ministry of Economy and Planning and violates the right to free enterprise that exists in market economies. The Ministry offers monthly data from authorized SMEs, but nowhere is there information on those that go out of business, and it is known that this type of project usually presents a high mortality in its early years. Without this data, it is impossible to determine the scope of the reform of SMEs and their economic and social impact. Presumably, the Russians have asked for the data. Meanwhile, the Cuban state maintains its absolute control over all strategic areas of the economy and corners the SMEs by limiting their possibilities for growth.

The SME sector and other private actors cannot lead any economic change because it only represents 7% of GDP, 11% of budget income and offers employment to a quarter of the country’s workers (1,600,000 according to data from the Ministry of Labor, compared to more than 3 million, double, employed by the state and its companies). The figures do not allow comparison: the private sector in other countries represents more than 80% of employment and in terms of GDP management it far exceeds 70%. The distance from Cuba with these international parameters indicates the intensity and complexity of the reforms to be undertaken.

Thirdly, the Russian plan aims to eliminate other obstacles faced by companies in Cuba, such as the difficulty in accessing credit, high taxes, problems with the rate of return due to the prices of some goods, which are established in a directive way by the regime, or the price of other goods, limited by low wages in the public sector.

In short, return the axis of the functioning of the economy to the private market. Correcting the aforementioned factors is not easy, especially since, in this case, it would not be fair to apply corrective measures only to private companies, when the state companies, which are the “center of the economic system” for the regime, will not receive the same treatment.

Fourthly, the Russian plan believes that making the tax regime more flexible can help the private sector get out of the underground economy and the vicious circle in which it finds itself, and produce results in the increase of the production of food and commodities. The proposal is to move slowly, but surely, in terms of reforms, to avoid what happened in Russia, where structural transformations caused notable social injustices.

The question is how to reconcile reforms in the functioning of the economy with the maintenance of social quotas served by a budget that, necessarily, has to be reduced in size to free up resources for the private sector. It is not a matter of shock therapies or anything like that, but if the state is intended to reduce its weight in activity by placing itself at levels similar to other countries, and central planning is to be replaced by the laws of supply and demand in the setting of prices, the population cannot be deceived: sacrifices will have to be accepted.

And those sacrifices will be the greater the more the structural decisions are delayed and the more they try to sustain the state budget with the current superfluous spending commitments that currently exist. There is no possible alternative, and it should be explained to the people that the adjustments are necessary to build a prosperous economy, capable of generating employment and wealth for all, far from the Stalinist collapse of six decades.

Fifth, the definitive farewell to collectivism must be accompanied by transparent privatization processes with international observers, to ensure the legality of the actions. But as far as we know, the Russian plan doesn’t say much about this. The redistribution of economic power that is associated with these processes should not lead to the creation of mafia groups or companies of the regime, which in reality already exist, but to the birth of efficient, flexible and competitive private companies that help in the reconstruction of the nation. If the Russians are not able to offer this solution, it’s better that they don’t do anything.

In reality, the experience of Cuban SMEs in the last year has little to do with the free enterprise of which the Russians speak. Of course, it is much better that there are SMEs than that there are none. But the regime has absolutely controlled the process of creation and approval, and despite everything, it has not been able to consolidate productive structures in the field of food, where unattended needs are still very prominent. There has been a commitment to the manufacturing industry and services, which have been consolidated in the first sectoral position.

There have also been complaints that some SMEs have been oriented to develop businesses that are in the hands of family and friends of senior officials, as well as foreign entrepreneurs related to the regime. But the truth is that, so far, you can’t talk about an economic class with defined objectives and purposes. The state maintains absolute control of the process, and the SME as an alternative to communist power is weak.

Within the framework of the projects that the Russians want to implement in Cuba, there has also been talk of a joint commercial company, based on foreign investment to distribute food, chemicals and other items with the participation of the Cimex group, although no contract has yet been signed, and it is already known how these things end. Another investment project, also to be developed, is a hotel for the exclusive use of Russians, justified by the return of tourism from this country to the Island. The authorities have denied this information.

Okay, then. Russia’s relations with other countries, including Cuba, are usually structured on a framework of obscurity and little transparency that, at times like the present, with the war in Ukraine and the international embargo, multiplies significantly. Geopolitics also has a very important influence. Russians are not Cubans, nor are Cubans Russians. It will be difficult to know exactly what the Russian plans consist of, but there is no doubt that they may be compromised by what happens in Russia in the immediate future. Most likely, they will amount to nothing.

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

This controlled peddling by the state experienced a significant acceleration in 2022, as recorded in MINCULT’s annual balance sheet meeting. After the pandemic, with the return to normality and in-person meetings, cultural activities increased. Not surprisingly, they served the regime to balance the figures of the economic growth of 2022, along with other state programs.

In this sense, according to MINCULT, celebrations such as the 120th anniversary of the birth of Nicolás Guillén and Wifredo Lam and the centennials of Haydee Santamaría, Carilda Oliver, Jesús Orta Ruiz and César Portillo de la Luz were accompanied by traditional events such as the Havana International Book Fair and the Jazz Plaza Festival, which reached high levels of participation thanks to a growing presence on social networks and digital platforms.

At the balance sheet meeting, more than 900,000 cultural activities were reported in the country, aimed at eight million spectators, including the plastic arts exhibitions that toured the Island, more than 300 record productions and dozens of concerts. Likewise, it was a year of intense exchange with international personalities and officials who visited the Island, from Mexico, Venezuela, Paraguay, Serbia, Benin, the United Arab Emirates, South Africa, Spain and France.

And of course, this deployment of activities that doesn’t seem to skimp on expenses that have to be paid has left a worrying mismatch in the accounts, recognized by the Ministry itself, and they point out that the territorial budget has been insufficient to design the cultural programming. They also complain about the lack of coordination with the Ministry of Education to make schools reference cultural centers in the community, and the poor conditions of houses of culture, cinemas and theaters have also appeared among the main problems.

All this causes a lack of money and, as a result, insufficient management of cultural heritage and historical memory. Despite the deployment of expenses and activities, 62 museums remain closed, and 77 monuments are threatened with deterioration. Local governments did not advance during the year in the search for funding and equipment to increase the number of interactive museums; technological deficiencies affected the digitization of documentary heritage; and inputs for the conservation and restoration of heritage assets were not enough. The panorama is not flattering.

Therefore, at the balance sheet meeting, it was considered urgent to solve these pending problems by increasing the necessary funds with the promotion of artistic creation and the culture-tourism relationship, which is considered important for the economy. In addition, actions were announced to promote cinematographic and audiovisual creation, a protocol to improve the conditions of conservation of documentary heritage, an increase in the realization of tours of groups and shows, and work to make film presentations in the communities. More spending, more money needs. Where are the funds going to come from?

It was then that the key moment arrived, when the Ministry of Culture announced that it is immersed in the complex task of improving the business system of music. What is this? Well, basically make money by selling Cuba’s musical talent. And for this, the Ministry, as if it were an agent of artists, will be tasked with the promotion and development of musicians throughout the country. State business is in sight.

Cuban music has a great international acceptance. Styles are changing and modernizing, but the ability of Cuban artists to reach mass audiences has always been there. There are great prospects of obtaining income that, applying the “improvements” by MINCULT, can end up in the state coffers but not fully benefit artists and performers. The regime’s decision has caused surprise, but not so much.

Those who include in their agenda such state issues as the strengthening of the National Program against Racism and Racial Discrimination have set as a priority for the Ministry in 2023 to increase foreign exchange income through the export of goods and services (the sale of artists and their productions) in the same way that has been done with other professionals, such as doctors, security agents and certain athletes.

MINCULT’s “improvement” or commodification of Cuban music by the state also involves promoting alliances with new economic actors and, in addition, encouraging foreign investment aimed at the substitution of imports and the expansion of markets, applying strategies that allow the self-financing of events. More doubtful is what can be achieved in this area, but the bet is made. That said, the Ministry of Culture has become an agent of artists and wants to earn money at any price.

Translated by Regina Anavy

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

The Ministry of Higher Education, which is behind this initiative, has begun to promote “new economic forms of management aimed at generating income for higher-education institutions and thereby expanding the link between universities, companies and other entities of the territories, in order to articulate and strengthen local development programs and municipal autonomy.”

Are they kidding?

Well, it looks like it’s going to happen and, not only that, quickly. When communist leaders want to, they can promote changes in reality as owners of all the nation’s productive capital. In this case, a state SME has been created at the University of Granma, the third of its kind in the country belonging to the sector, with the name ‘Innovaudg’, whose main purpose is “the selling of professional, scientific and technical services to natural and legal persons.”

This is full-fledged subcontracting, which makes available to this SME a proposal of commercial value that has previously been generated with the public resources that Cubans contribute to the state budget. A private business for a public offer, which is supposed to belong to everyone. Contradictions and even illegalities are already beginning.

If the university SME financed with its own resources the professional, scientific and technical services that are going to be sold to society, there would be nothing to object to. However, the problem is the origin. That professors or research fellows, who receive a salary from the state for their products and services, participate in a private company for their commercial sale, is at least questionable and opens a space that should deserve a little more attention, because it borders on the misuse of public resources, which have a legal, administrative and political responsibility.

However, Cuban communists have stepped on the accelerator in this area, and they want the University of Granma to manage its services through the SME, while the employees receive their salaries from the university. At the moment, the SME has five professionals based on the UDG campus in Bayamo, but, according to the state press, it will have highly competent staff from the university itself, who will be hired as a workforce through multi-employment. That is, not only does it use state personnel, but the SME also takes advantage of the facilities, equipment and means that are supposed to be financed by the state.

The university SME projects all kinds of services, including accounting, bookkeeping and management consulting, as well as activities to support agriculture, post-harvest, and seed treatment for propagation. A real hodgepodge of offers where one can earn pesos or foreign currency. And as if that were not enough, it contemplates the realization of “professional improvement actions, the organization of conventions and commercial exhibitions, the rental of physical spaces, machinery and equipment, among other things.” A whole privileged university business will compete, evidently, with other entities and economic actors that do not have the advantage of selling what is produced with public salaries. Something doesn’t sound right here, and sooner or later, it will blow up.

The SME has studied its relationship with the university “from the financial point of view, and it has designed an agreement with the university that foresees the contribution of 50% of the profits in national currency and 60% of the income in foreign currency to the university’s self-financing account, which will allow it to use the money not only for its current expenses, but also for future investments, both technological, constructive or otherwise.” And it adds that “in accordance with the development of business and the liquidity capacity available, capital contributions can be made that include technologies or assets. That relationship is bilateral; that is, similar shares can be received from the university.”

It doesn’t stop there, because UDG took advantage of the inter-institutional relations already established between the university and the business sector of the province, as well as with the government and other entities, so it will be able to carry out the process of commercial identification of the demands and needs existing in the territory. In addition, UDG has integrated, according to the state press, “in parallel, the already existing agreements of business opportunities that promote the implementation of the results of science and technology in the business, governmental and budgeted spheres, and in actors of the economy constituted as natural persons, while the free access of professionals in the state sector to postgraduate courses and other actions of improvement and training is not limited.”

UDG has had a strong start and already has its first contract with the Agroindustrial Grain Company, the largest rice producer in the country, by providing services and advice to strengthen the economic growth of the entity, through a feasibility study to diagnose which of its basic business units had the conditions to become a state SME.

Behind these approaches, the application of science and innovation in production processes is again detected (again, Díaz-Canel’s doctoral thesis). The University of Granma continues to advance this entrepreneurial initiative. As one might suppose, UDG defends and justifies itself by saying that there has not been the same impact on all sectors and entities of the Cuban economy, “because not all companies in the territories identify the business options offered by these new policies, and they are still waiting for guidance from higher agencies.”

Universities that create state SMEs to market their products and services and ultimately make money can introduce controversial elements into the weak Cuban economy that distort competition between economic actors and will end up subtracting market opportunities for private and even state initiatives. Something doesn’t work in this accounting, and at some point it will fall apart.

Translated by Regina Anavy

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

even more negative influence. The Cuban economy has been dragging for several consecutive years for cyclical and structural reasons, and this can make it more difficult to correct imbalances and to slow the growth of them.

Third, the recipe proposed by Gil, based on consolidating the restructuring of the currency allocation mechanism of the economy, the decentralization of competences to the territories and the integral transformation of the socialist state enterprise is not what the Cuban economy needs at the moment. It falls short, and this may be due either to technical ignorance of the rules of operation of an economy or to the lack of effective instruments to face problems. Or both at the same time.

The Cuban economy needs a more effective policy mix of monetary and fiscal policies to promote growth. Delaying  decisions over time can further aggravate the current scenario. For example, the idea of decentralizing spending to the territories may further increase waste, deficits and indebtedness, which is exactly what is not needed at the moment. Similarly, the Cuban communists say they want to advance in the macroeconomic stabilization of the country in 2023, but they neither adopt measures nor know in which direction they have to move to do so. The result will be a failure.

Fourth, Marrero said that there are still distortions that must be corrected to continue developing the economy and active participation in society, a disturbing message if they do not specify what those distortions are. In any case, they have their origin in the interventionist model of the regime since they are only found in Cuba. In that sense, Gil’s proposals for economic actors, consisting of creating an institute and a general direction of the ministry for attention, coordination and control of economic actors, more bureaucracy and intervention, have as its main objective to further subordinate the performance of economic actors to the decisions of the regime. Farewell to economic freedom.

The announcement of fiscal stimuli only to economic agents dedicated to producing and importing goods and raw materials in the Cuban economy to create productive chains within the socialist state company seem more like an unproductive expense that is useless, than like a program aimed at consolidating the productive structures of the economy. Why don’t they stimulate everyone? In reality, this type of asymmetric and partial measure, instead of improving the general functioning of the economy, cause negative effects with dangerous intersectoral transfer of resources.

Fifth, with regard to the transformation of the socialist state enterprise, Gil said that in order to advance in this area and achieve effective performance as the main actor of the economy in the production of goods and services, two things are required: to start the classification of state companies, which has all the aspects of a bureaucratic task, and to present the proposed law of companies that, clearly, seems to show a preference for state companies without any glimmer of hope for the private sector. The 400 companies with losses will not see their situation improve.

Sixth, and closely related to the design of economic policies, it is useless for Gil to defend maintaining the principles of more equity, social justice and benefits to the population if this does not produce more and better. This will not be achieved if the priority is not set correctly. And it seem sthat in this balance-sheet meeting, the importance of production and supply is is not taken into account.

Conclusion, more of the same, without being able to see signs of improvement in the Cuban economy. In six months the Cuban economy will be much worse than now. What’s the point of voting on March 26?

Translated by Regina Anavy

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

In his speech, Marrero surprised the attendees by pointing out that the most economical solution for the transport of goods “must be shipping,” and, a little surprisingly, he affirmed the need to “maintain performance with the support of state cars in public transport.”

Next, he said that a proper implementation of the recent Decree 83 on the transfer of ownership of motor vehicles, trailers and semi-trailers, their marketing and import (which seems to be a failure in view of the results) must be achieved; and they must raise the coefficients of technical availability of the vehicles with closed financing schemes (in the most absolute gibberish of the regime) and, from innovation, recover spare parts and added values (the scrappers’ business).

Next, he referred to the dissatisfactions with the work of the freight forwarding companies (dedicated to the distribution of international and state parcels, that is, dependent on it), which, in the case of Mitrans, are the entities Aerovaradero S.A. and the Freight Carrier Company (Transcargo). He concluded by saying that “Roads are one of the most complex issues facing the Island and, to guarantee productive activity, a solution must be found and the issue of road safety must be analyzed.” Traffic accidents are increasing significantly.

When talking about the transport of goods, Mitrans’ Director of Cargo of pointed out that the participation of various economic actors in the management must be increased. Work plans must be organized objectively to optimize resources, as well as the use of rail and shipping for the transport of cargo over long distances. It was the only reference to the private agents who offer their services in the sector.

In the case of Operation Port-Transport-Internal Economy (OPTEI), the Brigadier General at the head pointed out that it is necessary to maintain as a style of work the most agile transport groups at the beginning for extraction in the ports and final delivery to the client.

The director of passenger transport for Mitrans, pointed out that, although 2023 will be difficult, the measures adopted will allow the gradual recovery to begin. He insisted on the need to set objectives to meet the transport plans of the main services: taxis, school, urban, intercity, workers and rural. All this, without taking into account the February price increase in these services.

The general director of the Union of Railways of Cuba stressed that part of the actions for this year are focused on achieving the recovery of discharged equipment, including the manufacture of railways and on increasing efficiency, the quality of services and strengthening preventive work to avoid rail accidents. But it cannot prevent the use of the railway from being marginal for both passengers and goods.

At this point, Marrero ended by requesting the use of “carahatas,” a word that has no definition in the dictionary but that the prime minister said are small motor cars, alternatives for transport in rural areas. He also asked to conclude the work at the Central Railway Station of the capital and analyze the use and operation of urban trains.

For his part, the director of the Port Maritime Business Group (Gemar), said that within the projections is the launching of the ferry service and the floating dam, which Marrero said was a priority for the country, although curiously, he did not say anything about the transport of goods by shipping.

Finally, the president of the Corporación de la Aviación Cubana S.A. (Cacsa), spoke of improving the quality of passenger service and aircraft and achieving the sustainability of technological systems with a great impact on air activity, among other aspects. He also reported that work is being done on repairing the runways of the airports of Cayo Coco, Havana and Santiago de Cuba, as well as the expansion of Terminal 3 of the José Martí International Airport, which must be completed this year.

The vision that the authorities of the communist regime have of the transport sector does not go beyond the design of state policies, which leave aside the marginal private initiative that tries to survive on the Island. Good proof of this are the few 190 SMEs [small and medium-sized enterprises] authorized by the regime for transport, which are barely 4% of the total. That scarce participation of private activity says a lot about the grip that the regime has on the sector, preventing its development.

Translated by Regina Anavy

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

The number of international tourists stood at 62.1% less than the 2019 data, but the indicator of overnight stays that combines the number of tourists and days decreased even more, by 69%.

This is a lower percentage than that experienced by the occupancy rate, which fell from 48.2% in 2019 to 15.6% in 2022, a collapse of 67.6%. It offers an idea of the direct impact that this will have on the profitability levels of hotel management.

Tourism income (applied to the official exchange rate of the regime) did not exceed 800 million dollars, 69.8% less than in 2019, and income per tourist stood at 495 dollars, 20.2% less than in that year. These numbers could be even lower if the alternative exchange rate (between the dollar and the peso) of 1×120 or the one that governs the informal market is applied.

If the comparison of data was made with respect to 2021, as they do in the ONEI report, the panorama changes, because 2021 was a very negative year, in which only 356,470 tourists arrived in Cuba, and revenues did not exceed 365 million dollars.

While tourism in Cuba fell behind, other competing countries in the Caribbean recovered to the levels they experienced before 2020. In such conditions, the 2022 recovery in Cuba is insufficient, and there are reasons to think that the distances that have to be traveled to return to a normal scenario are still very important. What is worse, it does not seem that in this year, 2023, the gap will be closed.

To cite an example that shows the difficulties the sector has in recovering, it is important to take into account that Canada, the main tourist market for the Island, barely contributed 532,487 tourists in 2022, a figure that is nowhere near the one for 2019, when 1,120,077 Canadians arrived on the Island. Canadian tourism is 52.2% below the 2019 figure.

Certainly, those responsible for tourism in Cuba must be very concerned with figures like these. That only 9% of Canadians who came in 2019 did so in 2022 is, to say the least, alarming. There is a lot to do. But it’s the same in other geographical markets that offer similar signs of collapse, with problems that will have to be overcome.

For example, the second market in origin, the Cuban community abroad, fell from 623,972 tourists in 2019 to 333,191 in 2022. The Russians, with their transportation difficulties, from 177,977 in 2019  to 54,383 in 2022. And so, on. The declines are significant, and no market shows symptoms of recovery. In 2023, the levels before 2020 will not be reached, and this will have very negative repercussions on the entire economic activity of the Island.

Translated by Regina Anavy 

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