Agricultural Cooperatives as an Example of the Internal Blockade

Empty pallets in the EJT market on 17 and K streets in El Vedado (Havana, Cuba). (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, June 7, 2022 — If 90% of Cuban food production originates from agricultural cooperatives, this figure must be reviewed as soon as possible. Cooperatives in the Cuban communist regime don’t fulfill their function of meeting the population’s food needs. In addition, at first glance they are very different from those that exist in other countries, such as Spain, where the cooperative movement reaches very prominent dimensions and relevance in terms of production and employment. Cuban agricultural cooperatives are unproductive and inefficient.

The authorities of the Ministry of Agriculture (MINAG) and the National Association of Small Farmers recognize that the model doesn’t work and that they can’t find the solutions they need in the implementation of the 17 measures approved for their strengthening and consolidation within the economic plan.

Perhaps cooperatives in Cuba don’t work because of the plan and the measures that are designed by communist bureaucrats, completely removed from reality and the needs of the cooperatives. Cuban cooperatives, led by communists and with the forced participation of private actors, have very little in common with these legal entities in other countries, where the worker takes precedence over capital, can make personal decisions and is free of interference. The origin of their failure is the economic and social model.

I insist, the supposed recognition in the National Economy Plan is useless to the agricultural cooperative sector if it then doesn’t work efficiently and can’t produce enough to feed all Cubans. If cooperatives represent 90% of food production in Cuba, and it’s not enough for everyone, something doesn’t work and has to be fixed as soon as possible. The problem of malfunctioning cooperatives can’t be fixed with either “recognitions” or with access to resources for production and investment.

According to the State newspaper Granma, the authorities have tested the implementation of solutions for the strengthening of agricultural cooperatives in 77 cooperatives (26 UBPC, 18 CPA and 33 CCS) belonging to 19 municipalities in five provinces (Holguín, Granma, Havana, Mayabeque and Artemisa). As a result, as of last April, 7,084 unresolved issues were identified in the cooperatives. These  were related to questions that, from a technically productive point of view, have little or no interest.

I will quote them, as listed in Granma. Some of them are amazing. continue reading

For example, the lack of presidents and economic managers has been detected among the “pending issues,” which, according to Granma, “translates into incomplete boards of directors, poor planning, poor financial status and lack of areas of collective use.” In other words, agricultural cooperatives don’t produce due to corporate and organizational problems. Is this really credible, is it really the cause of unproductivity?

Let’s continue with the “unfinished business” relationship. Granma cites, nothing more and nothing less, than “the need to implement a communication and education system that contributes to the promotion of the values and principles of cooperativism in Cuban society, through the national, provincial and municipal media, and education centers at all levels of education.” Well, that sounds good, but can it really be accepted that this is necessary to increase production in the furrow? Do the principles and values of cooperativism serve to produce more cassava and malanga to feed people? The truth is, I don’t know.

In addition, considered essential for the authorities, is “the completion of an awareness process with presidents, boards of directors and assemblies of cooperative members; and the consultation process on competencies.” To this end, 2,200 leaders of 550 cooperatives are being investigated as a baseline. Wouldn’t it be better if, instead of so much awareness, they were left alone to produce and dedicate themselves to harvesting crops instead of so many surveys and questions?

And to close the list of “pending issues,” the authorities highlighted the importance of the “procurement process, statistical control, the creation of a contract proforma (SIPA) for the procurement process in 2023, as well as the inclusion in the new Decree-Law of the cooperative method on what is related to the election of leaders.” Bureaucracy, hierarchy, control and communist interference in the lives of these organizations that, by their nature, should be free.

The leaders didn’t mention a single word from the regime about property rights, free choice and decision-making by the cooperatives about production and pricing or, for example, how to achieve continuous supplies of products and tools that can be bought with the national money [Cuban pesos].

Nor did they mention the need to ensure the existence of a competitive and flexible distribution market, capable of meeting the needs of urban consumption, much less talk about the necessary flexibility and autonomy of current cooperatives so that they can decide on all kinds of issues, including their structure and legal future, partnership with other entities, the entry of foreign capital or the free contracting of the market.

It’s not surprising that Cuban agricultural cooperatives don’t produce food and function so badly. They’re an obvious example of the regime’s internal blockade of everything that represents independent private economic activity.

Translated by Regina Anavy


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.

Freedom, Private Property Rights, Market and Profitability in the Cuban Countryside

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

14ymedio bigger 14ymedio, Elías Amor Bravo, Economist, 30 May 2022 — Cuban president Díaz-Canel wants to sound like Fidel Castro, but it’s hard. That way of approaching problems, as if he had a magic wand and the solution to everything, is leading him along the path to perdition. Castro did the same thing. Even when a threatening cyclone was coming, he became the television meteorologist to explain where it was going to go and where it was not going to go. Díaz-Canel has done the same with agriculture, and from there came a front-page report by the State newspaper Granma entitled “Producing food efficiently is the challenge,” which directly talks about how to feed Cubans every day.

Díaz-Canel met with agricultural producers to convey his impressions on what to do to “advance the processes of production, better use of land and promote the diversification of agricultural products; the objective is not to reduce production and planting but to do them in the most efficient way possible.” But you have the impression that he isn’t on the right track, that he’s not connected to reality. More or less like Castro, but look, it’s not the same. No one blamed Castro for his extravagances, like a deceptive cyclone that changed its trajectory and in the end went another way. Díaz-Canel should be careful.

No one at this point can have the slightest doubt. The Cuban communist regime may have two or three heartbeats left if it doesn’t find a solution to increase agricultural production. That is, so that a Cuban family can normally have three meals a day.

But any idea that occurs to the communists goes right in the opposite direction. With nothing better ahead, that idea of banishing food imports, because there is no foreign currency to pay for them, may end up creating more hunger problems and a terrible food crisis that blows everything up. In the short term, there is no choice but to import food and pay any price, no matter how high. The fault, as you know, lies with an ally of the Cuban regime: Putin, with his expansionist adventures in Ukraine.

Díaz-Canel speaks in an inappropriate way of “banishing the import mentality in an effort to meet the food needs of our population,” but he knows very well that, under current conditions, the agricultural sector is unable to feed the population. It may be very good to break that dependence in the medium and long term, but tomorrow, next month, things will be more complicated than ever.

And he doesn’t blame the bureaucracy and the obstacles that prevent the management of companies in this area, because he is solely responsible for that internal blockade, which we have denounced so many times in this blog. Freedom, private property rights, market and profitability are the principles that must be restored in the Cuban countryside, and in the economy as a whole, if it is to move forward.

But Díaz-Canel turns a deaf ear to these calls and remains silent on the subject of the application of science and innovation, which may be very good, and no one disputes it, but it must be raised over a longer time horizon. Tomorrow when they want to eat lunch and don’t have enough of what they need, Cuban families will not remember science and innovation at all. continue reading

He also spoke of “advancing production processes, better land use and boosting the diversification of agricultural products,” but this is impossible if the producers don’t own the land they cultivate. No one aspires to leave their mark on something that will never be theirs. Working for the communist state came to an end. Production and planting can only be increased and done in the most efficient way possible with private land-ownership rights, markets for the purchase and sale of plots and land, and private management of the agricultural sector. The land should belong to those who really work it. There is no other way; even the Vietnamese did it, and it was a wonder for them.

And then he talked nonsense at that moment, about “protein plants to increase the obtaining of animal feed, the production of feed with our own resources, or the development of mini-industries to take advantage as much as possible of agricultural production.” These are also things that don’t serve to solve the problem of tomorrow’s lunch.

The same is true of the use of bioproducts, even when the possible decrease in intermediaries between producers and agricultural markets is cited, and the speeding up of marketing in this area. No farmer supports the ideas that are included in the “63 measures.

Díaz-Canel knows that there is no point in publishing a Law on Food Sovereignty and Food and Nutrition Security or the 63 measures, if the crops aren’t harvested and the population can go to the points of sale. Something so simple and so easy to achieve in Cuba becomes, thanks to the communist economic model, a thankless task.

Hence, in the face of such a difficulty, which could be solved with the aforementioned recipe of freedom, private property rights, market and profitability, principles that must be restored in the Cuban countryside and in the economy as a whole, Cuban communists start rehearsing other collectivist experiments to see what comes out. Díaz-Canel is irresponsible, getting into these types of stories that lead nowhere. I am referring to the 19 “productive poles” that have been created throughout the country.

According to Granma, these poles are made up of 86 basic business units, 54 basic cooperative production units, 45 agricultural production cooperatives and 190 credit and service cooperatives, with an arable land area of 151,829 hectares.

Can these poles really solve the problem of tomorrow’s lunch? They are clear about it. The estimated production at the end of 2021 reaches a total of 706,200 tons of agricultural items,, only a quarter of the planned production. Honestly, such a bureaucratic and organizational effort to achieve only that percentage of agricultural production is unjustified. If private tenants obtained from the communist regime the same amount as these collectivist-inspired poles, they would surely produce much more than that quarter, and they would also do so more efficiently.

But the communist regime is more interested in poles and municipalities, in the commitment to transfer to the local representatives the responsibilities that the central government is unable to achieve because it has failed again and again. The local authorities are not in favor. This strategy that can even be counterproductive, but it offers an idea of how lost they are for not giving up failed ideological principles.

Especially worrying was Díaz-Canel’s message to the attendees: “We are called upon to train and mobilize government structures from the municipal level so that they are in a position to lead this production process with popular participation in the local stages and, in addition, to promote an intense process that reaches all local producers, both state, cooperative and private, the state enterprise and even the last farm, the agroindustrial productive pole, each local development project, favoring agroecology as a necessary alternative for agricultural production in the current circumstances.” What does this sound like?

In the midst of all this, Díaz-Canel called for “increasing exports, achieving the linkage of all producers through a state company, or in other cases of cooperatives and new economic actors also closely linked to production.” Not a single reference was made to the values of freedom, private property rights, market and profitability in the Cuban countryside. As if he were talking about another country, at another time. You have the feeling that every day that passes he is further away from the reality in which he lives, and it is not known if it is his fault or the court of party and regime sycophants that surround him. The same as Fidel Castro.

Translated by Regina Anavy


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.

But What Good Practices Are They Going to Substitute in Cuban Agriculture?

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

14ymedio bigger 14ymedio, Elías Amor Bravo, Economist, 29 May 2022 — Is the agricultural situation in Cuba really going to be substituting “good practices” to increase the production of food, vegetables, grains and fruits? Well, it seems that this is what they did in the National Plenary of Cooperatives and Advanced Producers of the Productive Poles of various crops. Tremendous name.

According to the State newspaper Granma, which carried out the news coverage of such an important meeting, “the integral management of agroindustrial chains to generate high value-added products and services was analyzed, and the good practices of producers were socialized, with the purpose of increasing the production of food, vegetables, grains and fruits.” Deputy Minister Tapia, Minister of Agriculture Ydael Pérez, along with other ANAP (National Association of Small Farmers) authorities participated in the event.

Faced with the terrible results of the agricultural sector in 2021, which apparently are just as bad in 2022, as Minister Gil acknowledged at the last meeting of the Council of Ministers, citing the numerous “non-compliances” in product deliveries, communist leaders organize these “flower games” in which the cooperatives that make up a so-called “Political Productive Vanguard Movement” participate for the 100,000 kilograms of various crops and advanced producers.

Apparently 19 municipal plenaries were preceded by as many others in the agro-industrial “productive poles” with an agricultural vocation, the last collectivist invention of the regime, and four provincial ones. And of course, in the face of so many agricultural gatherings of the “productive avant-garde” one asks: Who is left in the furrow working daily to produce more? continue reading

The communists, in the face of the evident failure of their “63 measures” and any initiative that has its origin in the social communist model that governs Cuban agriculture in the last six decades, can think of nothing more than to “distract” producers, instead of letting them work freely, decide how much to produce, in what dimensions of plot and at what prices.

The regime’s interference in agriculture is the origin of all the evils of a sector that aspires to have the freedom to decide. Agrarian reform was a disaster; INRA’s (National Institute for Agricultural Reform) replacing the old ministry was another. A lot of time has passed since then, but the evils of Cuban agriculture remain the same: statism, bureaucracy, interference, control and repression.

It is not with “substitution of good practices” that more and better can be produced. The communist invention of the so-called “productive poles” dedicated to the production of various crops, will not work either, since it implies exercising a coercive force on producers, based on bureaucratic and political decisions, which have little or nothing to do with the socio-productive reality of Cuban agriculture.

A good example of this deficient creation of the so-called “poles” was offered by Granma stating that this formula, despite the full support of the regime, including these “substitutions of good practices,” has only produced 706,200 tons, barely 26% of the total production achieved in the year. A minutiae. And in the first quarter of this year, when non-compliance by Minister Gil was reported, the productive poles have not improved their contribution, with only 232,485 tons, which represents 25.3% of total production, one point less.

Then the National Director of Marketing of the Ministry of Agriculture spoke about marketing policy to point out what everyone knows, “that it is once again a difficult task, especially because of the scenario that Cuba is currently experiencing.” The solution is at their fingertips, and if they don’t implement it, it’s because they don’t want to: suppress ACOPIO (Cuba’s State Procurement and Distribution Agency) forever and leave absolute freedom to the marketing of producers with competitive private distributors. That’s a good practice.

In reality, and although this plenary served to vindicate, for the umpteenth time, the 63 measures of agricultural production, the truth is that no more production has been achieved, and there are the official results of ONEI (National Office of Statistics and Information) and the statements of Minister Gil, and they have not served to improve marketing either. Cuban communists still do not understand that what is not produced cannot be distributed, and that before the pitcher, you have to have the cow to produce milk. The achievements in terms of new products, new points of sale and new economic actors that offer products in other varieties have been carried away by the wind, in a 2021 lost forever, and a 2022 that is not going any better.

And in the face of the failure of the “63 measures”, the leaders insist that it’s necessary to continue “advancing in the dissemination of this policy, in which its importance and advantages, especially for the producers, are understood.” The author of this blog has consulted several Cuban agricultural producers who insist that the problem isn’t in knowing the measures, but in their futility, which simply don’t address what is really needed, so they turn their backs on them.

The meeting also discussed agricultural prices, an issue of the utmost importance, which according to the CPI prepared by ONEI on a monthly basis, are the fastest growing of the different components of the index, with their negative influence on the population. The evidence indicates that the current inflationary process that the Cuban economy is experiencing, which will get worse in the coming months, is originating from and also influencing the prices of raw materials and food.

And that either the authorities face this problem with effective and practical solutions, or the probability of a food crisis in Cuba seems very high. Wasting time relying on a possible solution to the problem on the part of state-owned companies doesn’t make sense, in view of past experience. The productive poles don’t either. The regime has no solutions within the communist social model to deal with the agricultural crisis, a situation that, similarly, led the Vietnamese to apply the Doi Moi (1986 Vietnam economic reforms). Why not in Cuba?

With this type of substitution of “good practices” and support for statism, the communist regime is on its way to a situation of serious structural crisis in the agricultural sector that no one wants, but which is on the doorstep. For a long time, the Cuban guajiro has known what the good practices are in his sector, and although he cannot claim them freely for fear of repression, it’s very clear: freedom, private property rights and a free market. The rest is wasting time.

Translated by Regina Anavy


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.

No. The Cuban Agricultural Sector is Not Doing Well

Farmers believe that the new measures only support “on paper” what they had already been doing. (Archive)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 25 May 2022 — The worst thing that can be done to a person is to deceive him or take him for a fool, or both at the same time. This is what can be concluded from the Round Table program in which the Castroite Minister of Agriculture, Ydael Pérez, participated, and which Cubadebate has outlined with an article entitled “A year after their approval, how are the 63 measures to boost agriculture going?”

Well, they’re going badly. Very badly. They don’t produce the expected effects, no matter how much makeup you put on them, and now, in addition, as a council of economists in Davos warns in a quarterly report, a global food crisis is coming that won’t pass by Cuba, far from it. As happens in these cases, the blame for everything lies with the American embargo, and the rest is a mere formality.

It was another Roundtable program wasted for Cubans, in which Randy Alonso limited himself to agreeing with everything the communist minister said. Yes, the regime is concerned with looking for solutions and energizing agricultural production; yes, the processes in agriculture take time and some are long; yes, there are 63 measures and 658 actions with measurable goals and indicators, which are accountable to their promoters, and endless explanatory arguments that don’t convince anyone because once again they entertain themselves with indicators of process and not with the results, when what really matters to people is being able to eat every day. Very communist.

I ask, what Cuban is interested in the ministry’s decisions being divided into seven groups related to the management and finances of the agricultural system, the productive program, the cooperative system, the cadres of the sector, science, innovation and communication or the agricultural communities? What Cuban is interested in knowing that 16 agricultural policies, seven decree laws, 11 decrees and 19 resolutions have already been approved, to favor and unblock issues related to production? What Cuban is interested in knowing that the National Assembly recently approved the Law on Food Sovereignty and Food and Nutrition Security? As if hunger and food shortages were resolved by publishing laws and more laws. continue reading

The minister missed a golden opportunity to assume responsibility and speak clearly about why there is a lack of food in Cuba. Surely he knows why and also that getting lost in talking about a process indicator does nothing more than bore an audience that doesn’t give a damn that there is a reorganization of the ministry or that the role of the municipalities is strengthened, passing employees from one place to the other, as well as Raúl Castro’s old idea of producing in pots, parks and gardens.

At one point in his speech, the minister alluded to the restructuring of companies, which have reduced their workforce by 39%, especially the OSDEs*, which, out of an average of 180 contracted workers, now have fewer than 70. To avoid panic, he said that it’s not a matter of leaving people unemployed, but of “relocating them” and cited the example of “comrades who were heads of UEB** who today are heads of an irrigation-machine labor collective.” In other words, UEBs don’t help much, if budget tables can be dispensed with.

The minister said that “we need to look for more people dedicated to production.” it seems that he doesn’t have enough, that almost 20% of the employed population in Cuba is in the agricultural sector, and he wants more people producing with the result of lower productivity. On the other hand, he talked about “inflated structures” so we don’t really know what to expect.

He also talked about increasing foreign investment, recognizing that not enough progress has been made in agriculture. In fact, it has been on the margins of the projects, due to the legal structure of property rights that has to change.

He referred to the agricultural development bank, which in his opinion “has been very well received by producers,” but in reality has a marginal existence, since only 1.8 billion pesos were granted last year “mainly to producers linked to pig production, cattle ranching, and the cultivation of rice, bananas, cassava and guava” without significant increases in production, as revealed by ONEI*** data.

Other beneficiary products such as tomatoes, soybeans, pigs and livestock, in addition to rice, beans, corn, potatoes, bananas, cassava and sweet potatoes, also did not experience any improvements, with the exception of tomatoes. The 18,282 credits approved do not reach 10% of tenants and independent producers, and the 5 billion pesos are a drop in the bucket for the real needs of the sector. The farmers have turned their backs on the “dynamizing measures” of agricultural production. They have done the right thing.

Then, after talking about the need for more labor in agriculture, the minister said that “there is a lot of land to be exploited,” and in this case, once again, the direct responsibility is his. In reality, if “idle or poorly exploited land remains in Cuba, a problem to be solved in order to raise production,” the regime has to recognize that collective ownership of land is a strategic error and that it should be transformed into private property, as the Chinese and the Vietnamese did.

If the minister wants “our people to feel that making the land produce is part of their life project,” what has to be done is to give the land to those who work it, but with all the consequences, so that its use can be increased, reduced, sold, rented, or freely decided without ideological or partisan slogans, only with the criteria of efficiency and profitability.

The minister doesn’t seem to bet on this. For him, it’s more important to take care of labor groups as part of the land delivery process. He cited the more than 1,500 labor groups, with almost 15,000 workers, who could benefit from the approved measures, but acknowledged “that they’re not received everywhere in the same way (…) We find problems with the bosses, because they don’t change their methods. That doesn’t create a sense of belonging in the workers, and we need efficient management there as well.”

With regard to the delivery of land, the minister was critical and pointed out the delays in meeting the deadlines and resistance of the administrations to deliver idle land. The picture is bleak: premature requests that have to be resolved through political management, many more in process and the people going hungry.

The minister spoke of “working more intentionally with producers, approaching them and offering land to them.” But he stressed in this regard that “we don’t want to concentrate the ownership of the land in usufruct [a form of leasing], but in the management of that land.” And it was justified by the delivery of land for livestock, because of more than 7,000 hectares of land delivered, due to the lack of imported feed, no increases in production have been achieved.

In livestock production, milk and meat, the minister spoke of the recovery of more than 1,000 typical dairy farms, as well as the efficiency of the more than 150,000 producers, the 27,000 ranchers with 10 or more cows that “are key in our plans and we are visiting them” to give them land. Apparently it doesn’t work; they want to give them up to 555 acres of land but the average is around 165. No one wants to contribute their work and effort to something that will never be theirs. Let’s see when they learn. The minister acknowledged that there is a decrease in the livestock mass and said that “we have just over 3.5 million head of cattle, but only 40% of our cows give birth. Although we are complying with the milk plan, this is an area where more can also be done.”

In organic farming, the minister pointed out that the cultivated areas have grown but are insufficient. For example, bananas need 70,000 more acres, while malanga needs another 27,000 and cassava needs more than 125,000. The disturbing question is who decides which areas are organically cultivated, how and why?

He also pointed out that in the cultivation of food and vegetables, “more could be done” and cited as an example the autonomy of municipalities to agree on prices as a stimulus to production, while helping not to raise costs excessively, in his plans is to recover urban agriculture.

At another point he said that in Cuba there are 4,494 cooperatives and more than 400,000 producers and noted that “in the Political Bureau, 17 solutions for cooperatives were approved, and work is currently being done on a new legal norm that gives them more independence.” The organizational form is in crisis.

Regarding the training of cadres, with which he was dissatisfied, he pointed out that work is being done on skills and on the projection of the cadre and insisted that “we have to continue to improve work with young people.”

He reserved another part to talk about the role of scientists and science, which in his opinion has allowed progress in innovation-based management having achieved “247 innovations, 33 topics and 117 indications from the president.” In this regard, he said that “dissatisfaction persists. We must look for mechanisms that allow what has been achieved in one producer to spread more quickly to others.”

In summary, the minister defended the implementation of the 63 agricultural measures by justifying their positive impact, but didn’t offer a single indicator of improvement results. The recent publication of ONEI still gave figures very close to the negative balance of the agricultural sector in 2021. Therefore, following the lines of Minister Gil, the head of agriculture joined the official speech that “progress is being made, although we can’t feel pleased. We are totally dissatisfied.”

The question is, what gradual progress should be achieved to be satisfied with something that obviously doesn’t work? Because at this rate, either a new model for the Cuban agricultural sector is identified, or the food crisis anticipated by analysts and experts is closer than ever.

And it may be true that the solution is not to import consumables, as the minister said, but to find a way to produce them here, but perhaps others should look for and implement solutions. Cubans can’t be fooled any longer. Don’t take them for fools. Their daily meal is not secure. Things are getting worse and worse.

Translator’s notes:
*Organizaciones Superiores de Dirección Empresarial [Higher Organizations of Business Management]
**Unidad Empresarial de Base [Basic Business Unit]
***Oficina National de Estadisticas e Información [National Office of Statistics and Information]

Translated by Regina Anavy


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.

Where is the Cuban Embargo/Blockade?

A billboard in Cuba demanding “Down with the blockade” and vowing “Fatherland or Death”

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 30 April 2022 — Where is the embargo? Day in and day out, the communist leaders parade the intensification of the U.S. embargo/blockade as the origin of all the ills of the Cuban economy. And it turns out that these leaders contradict the news published by the official press of the regime.

The State newspaper Granma boasts in the run-up to May 1st of the signing of no less than 18 agreements this past week by the Castro consortium BioCubaFarma with Cuban and foreign entities.

I insist: where is the embargo? If this fiction created by the Cuban communists to hide their responsibilities really existed, this type of agreement would be impracticable, impossible. But no. The 18 agreements between companies of the BioCubaFarma group and Cuban and foreign entities indicate that there is no restriction whatsoever for Cuba to trade, receive investments, capital or any type of aid from 192 countries in the world.

There is, however, a dispute with the United States that regulates the scope of relations between the two countries, which, moreover, has its well-defined origin in the practices of the communist regime towards its northern neighbor, which has refused from the beginning to negotiate.

Nevertheless, BioCubaFarma’s agreements are implemented, as are the agreements with Vietnam, with Spanish hoteliers, Canadian or Dutch miners, etc. The Cuban economy is one of the most open in the world, receives donations from numerous countries that support the “revolution” and establishes, when it deems it convenient, the most controversial alliances, as in this case, in the field of biotechnology.

The agreements, moreover, have not fallen from the sky. They have been well worked out, despite the “threat” of the embargo, and have been presented as one of the results of the BioHabana-2022 International Congress, which concluded last Friday. Someone from the organizing committee of the congress told Granma “we exceeded a thousand participants, including Cubans and foreigners from 51 countries, although 10% participated virtually; in addition, more than 600 papers were presented in conferences, short oral presentations and posters.” continue reading

Indeed, it is very difficult for a blockaded or embargoed country to hold this type of international congresses, even to promote conference tourism, which is catered for in the formidable luxury hotels of the capital, close to the collapsed buildings, the destroyed streets and the rubble plots of that marvel that was long ago the world’ s old Havana.

Other information published in Granma that questions the embargo is the agreement signed by Cuba and Argentina concerning the housing sector, after the celebration of the XIII International Construction Fair Fecons-2022, which concluded this Friday.

This was a convention aimed at improving the production of construction materials in Cuba, with the participation of state-owned and foreign companies, non-agricultural cooperatives and MSMEs. There they talked about goods needed for Cuba to boost its industrial and housing construction sector, such as plaster, mortars, additives, and the repair and maintenance of equipment, and new investments in technology to achieve efficiency with a rational use of the workforce, but with diligence.

But the event led to the signing of a memorandum of understanding between Argentina’s Ministry of Territorial Development and Habitat  and Cuba’s Ministry of Construction, with the reciprocal interest of promoting the economic progress and integration of Latin America and the Caribbean and collaboration in the housing sector.

Under this agreement, emphasis was given to the family of medium, fine and special pegaporcelain mortars; ceramic tiles decorated with digital printing; gray clinker for cement and the housing cell construction system. This is the embargo/blockade, one more example that the arguments used by the regime are not true.

For the record, this blog will never be against the Cuban economy maintaining its openness to the outside world and obtaining these types of agreements, and even better ones. Cuban biotechnology should advance as much as possible, since it is one of the technologies that encourage the development of the fourth industrial revolution. Betting on this sector could be an intelligent decision. And the same goes for the manufacture of construction materials, whose scarce production has forced the regime to increase its prices significantly.

What we will always denounce in this blog is that the ills of the Cuban economy are attributed to something that does not exist, the embargo/blockade, or that only exists in the imagination of a regime that lives on confrontation and provocation to its northern neighbor since Fidel Castro’s visit to the Teresa Hotel in Harlem in 1959.

A lot of rain has fallen since then, but if in anything in the expectations of the communist regime devised by Fidel Castro have been exceeded, it has been in the field of the embargo/blockade fiction, of which these Granma articles are a good example, of course, of the very opposite.

The embargo/blockade propaganda has worked for the Cuban communists for more than 60 years. It is true that when the multimillion dollar subsidies from the former USSR used to flow in, nobody remembered it, but the sign of the times shows that the relations between two neighbors, which were built by geopolitics since colonial times, were destroyed by the communist regime as soon as it came to power, and this for its own benefit, even if it was detrimental to the interests of the Cuban people.

It is difficult to find a similar process in any other country in the world.

Translated by: Hombre de Paz


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Cuba: From the ‘Blockade’ to the Emigration Crisis

Cubans during the 1980 Mariel boatlift. (FLORIDA HISTORICAL SOCIETY)

14ymedio bigger14ymedio, Elias Amor Bravo, Economist, 22 April 2022 — There are two phenomena that have affected the life of the Communist Regime in Cuba for six decades. The two are closely related and have also been used for the Cuban government’s own benefit every time it wanted to.

To interpret both processes over such a long period of time can cause forgetfulness, intentional or not, which makes it difficult for the general public to understand what’s being discussed. Is it enough to read an article in the State’s flagship newspaper Granma entitled “Who benefits from creating a ’migratory crisis’ between the U.S. and Cuba”? The article goes to the heart of the matter by recounting facts that seem taken out of a fairytale.

It was enough to read that, already in the Fifties, Cuba wasn’t receiving immigrants and that what was really happening was a massive exodus of Cubans to the United States, where, the article says, 100,000 Cubans were living in 1958. This has nothing to do with the more than 2 million in 2022. But it’s all the same; when It’s a matter of distorting reality and creating a nonexistent alternative, the Communists have no rival.

And there’s no other way to look more ridiculous than to be determined to do the same thing over and over again. The only thing you can do is to go to the ONEI, the National Office of Statistics and Information, and consult the annual statistics for 2020, the latest published in the historical series of population by sex, annual rate of growth, and ratio of male to female.

If you take the figures from 1950, which show 5,876,052 inhabitants, and compare it to 1960, with 7,077,190 inhabitants, there is an increase in population of 1,201,138, or 14%, the highest in the historic data. Later, in the decade of the Sixties, the relative growth was lower, some 13%.

To think that this increase in population in Cuba in the Fifties was due only to birth and death is naive. A half-million Europeans came to Cuba in those years to realize their dreams, because in their countries of origin it was impossible. But be careful with the data, because they’re a boomerang that can come back to hit you. continue reading

Starting from this observation, reality confirms that the Cuban population is affected by the massive exodus of Cubans to the Exterior, a flow that hasn’t slowed since 1959 and that the Communist regime has managed at its will, encouraging every 15 years, more or less, massive population departures: 1965, Camarioca; 1980, Mariel, 1994 Guantánamo (Balseros).

The data exist for anyone interested, and there’s no need to invent them. This continual exodus of six decades has made Cuba the world leader as the country that has a larger percentage of its citizens living in the Exterior, nothing more and nothing less than 20%. Not even the levels of migration in the Third World reach these numbers.

Cubans have turned their backs on the Regime that requires them to live a certain way, a way they don’t want, and with the impossibility of democratic changes, they leave the country, because in Cuba it’s impossible, with the Communist Party in power, to open a space for a democratic process and freedoms, or for economic reforms that improve prosperity and a better quality of life.

So now we have the second result. The U.S, throughout this traumatic history, has received more Cubans and “prevented” them from living in their country because of the “embargo/blockade” (as Fidel Castro branded it), which certainly doesn’t exist. The U.S. has to face, every day, a political regime that presents the ’blockade’ to the international community as the cause of all Cuba’s ills.

But the argument creates many scandalous votes in the United Nations, with claims that Cuba is owed billions of dollars because of the embargo, and other absurd nonsense. The embargo has become wishful thinking that has no common sense. Trade between the United States and Cuba reaches 200 million dollars annually, and Cuba receives from the United States around six billion dollars in remittances each year that now other countries will want.

And in spite of the evidence, the leaders in Havana play the embargo card every time things get complicated in Cuba, as is happening presently, above all since they launched the ’Ordering Task’ in 2021* with disastrous consequences for the country.

So now we face a new cycle in which the Communist leaders can expect another massive exit from the country to reduce the internal social tensions provoked by poor management of the economy. They can blame the U.S. for everything under the heading of “blockade/embargo” and encourage it through some worthless negotiations, which end up with the U.S. welcoming those who want to abandon the Island in search of a better future.

In this way the ’blockade’ and the immigration crisis are two sides of the same coin which the Regime plays with. And it gets advantageous results in the international sphere at the same time it rids itself of many problems that it doesn’t recognize or, worse, that It doesn’t want to fix. And thus for more than 60 years, they fall into the same trap.

*Translator’s note: Tarea ordenamiento, the [so-called] ‘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 other measures. 

Translated by Regina Anavy


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Another Financial ‘Corralito’ of the Cuban Regime to Seize Deposits in CUC

This week the Central Bank of Cuba extended the term to exchange CUCs in pesos or foreign Currency. (14ymedio)

14ymedio bigger14ymedio, Elías Amor Bravo, Valencia, 3 April 2022 — In the history of the Cuban communist regime there have been several processes in which the State has appropriated people’s bank deposits and checking accounts. It happens that, with the passage of time, these operations that in Che’s time were simply changing the format of the bills, have now become a little more sophisticated, perhaps so that they will go unnoticed.

But the motive is the same as in 1960: to seize the financial capital of the people, to impoverish Cubans in order to swell the coffers of the state with economic resources that they do not have. Let’s go to the facts.

Why has the Central Bank of Cuba decided that fixed and certified term deposits in CUC* will now be extended until December 28, 2022? The decision is included in a recent resolution, number 74/2022 published in the Official Gazette No. 24 Extraordinary of March 30, 2022. continue reading

This decision has been surprising, because since the start of the Ordering Task**, the Central Bank reminded the population on several occasions of the deadlines stipulated for the exchange of currency during the currency unification process. On the one hand, commercial banks would continue to exchange convertible pesos (CUC) for Cuban pesos (CUP) in cash at bank branches until December 30, 2021, the date of the initial term of 180 days granted in the Resolution No. 178 of June 15, 2021 to carry out this operation, as published by that institution on its website expired six months later.

On the other hand, the same resolution established that it would only be until March 31, 2022 that the accounts in convertible pesos for on-demand savings, fixed-term deposits and certificates of deposit of natural persons would be kept in that currency. During this period, the holder could decide whether to convert the account to Cuban pesos or opt for the certificate of deposit in foreign currency, according to the conditions established for this product. There were no other alternatives for the destination of those deposits.

There was so much insistence on the urgency of this change that many people went to formalize the established exchange operations, even with significant losses in value. Already at that time, the price of the dollar against the peso in the informal market exceeded 100 units at times, completely eroding the purchasing power of the national currency. Opting for the exchange at that time was unprofitable, especially considering how little could be bought with Cuban pesos. Now, it’s worse.

Therefore, extending, as they have, the period to keep deposits in CUC until December of this year is a decision that entails risks for the holders of CUCs, and that the regime, only concerned about making cash for the State, cares little that this is so. The option of converting the account to Cuban pesos makes little sense, due to the loss of value affected since 2021 by the 77.3% inflation that has reduced the real value of the deposits to 30%.

On the other hand, turning these accounts into the deception of the certificate of deposit in foreign currency is even worse, if one takes into account that this type of format can become uncollectible, considering the prospects for the circulation of foreign currency in the national economy.

As has been pointed out on previous occasions, the certificate of deposit in MLC (freely convertible currency) is an example of a “financial corralito” [bank freeze] created by the regime to appropriate the currencies contained in these deposits in CUC or dollars or euros, which follow the same pattern.

This modality of certificates of deposit is inefficient for savings at times like the present, when exchange rates between currencies are distorted by inflation and the negative dynamics of the Cuban economy, with all its sectors paralyzed. If someone needs that money in foreign currency at some point, forget about the certificates because availability will last a long time. It would be a serious mistake.

In the case of “collaborators,” the resolution details that they may request, from their account in Cuban pesos, to fully or partially convert the balance they had at the end of December 2020 in their accounts in convertible pesos, to a certificate of deposit in foreign exchange. Here the corralito is ready.

In this case of collaborators, the power of attorney is allowed, in cases where the holder of the bank account is abroad, to convert the total or partial balance of the accounts into convertible pesos for on-demand savings, fixed time deposits and certificates of deposits in foreign currency, provided that the representation is accredited by special power of attorney. Such is the urgency that the authorities do not hesitate to impose limitations. The objective is to control those currencies deposited in the accounts, as soon as possible.

Finally, the resolution states that there will be no more terms, and, therefore, bank accounts for current savings, fixed-term deposits and certificates of deposits in convertible pesos of natural persons, in that currency, as of 28 December 2022, are automatically converted to Cuban pesos, at the exchange rate of twenty-four Cuban pesos for one convertible peso, in the modality and term originally contracted, and generate interest in this currency at the corresponding rate. A mandatory warning that involves many legal problems.

These postponements are coming to an end, but if the previous guidelines are followed, the first objective of the Ordering Task, the unification of the CUC with the CUP, should have happened long ago. The reason that led the communist leaders to cause the worst crisis in the Cuban economy in recent decades, is still kicking in the form of bank deposits.

However, now, the terrible tourist campaign, and the non-entry of foreign currency, has led the regime to start capturing the deposits in dollars and CUC, which are in the hands of natural persons, and they have put an end to the conversion processes, and in addition: in only two ways: receiving pesos that are worth nothing, or contracting an uncollectible. This is how much Cubans matter to the regime. The umpteenth financial corralito in the history of Cuba, and it will not be the last. And then they want people to trust the banks.

Translator’s notes:
* CUC = Cuban convertible pesos, one of two currencies used in Cuba between 1994 and 2021.
**Tarea ordenamiento = the [so-called] ‘Ordering Task’ which is a collection of measures that includes eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency which must be in the form of specially issued pre-paid debit cards, and others. 


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

Cuba’s Council of Ministers Turns its Back on the Country’s Economic Reality

Hundreds of boxes of mangoes were left in the fields torot in Camagüey in the current harvest of 2021, for lack of resources to collect and market them. (Adelante)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 30 March 2022 — Cuba’s Council of Ministers has said that “not without tensions, the Cuban economy is reactivated.” And to this the state newspaper Granma dedicates an extensive report, which includes no data to to justify this assertion.

We are at the end of March, and we are still waiting for the estimate of quarterly and annual GDP growth in 2021. Whatever happened in the fourth quarter, still unknown, will be a good indicator of whether the Council of Ministers is telling the truth, or simply, lies.

The economic plan, that impossible contraption to which the Cuban communists cling as if it were the philosopher’s stone, presents figures that are alien to the current reality of the world economy, and if they are not rectified, they will once again make a fool of themselves, with serious breaches of forecasts. Nothing will happen.

Later it will be decided that the  responsibility falls on the American ‘blockade’ and everyone is happy. But Cubans will once again suffer the scarcity, misery and unequal poverty that is the sign of the times on the island.

Cuban president Díaz-Canel said that “in the midst of the complex situation that Cuba is experiencing, we cannot give up compliance with the economic plan, we must continue to recover the levels of production, exports, income to the country, and change strategies in certain activities to fulfill and grow with respect to the previous year.” continue reading

Yes, this is all very well; Díaz-Canel says and repeats that “there is, there is and there is”, but who is in charge of achieving that “there is”? Because, it is all very well to direct the economy with harangues, but that is not how you feed the people, you have to be practical.

Prime Minister Marrero also praised the plan and pointed out that “our job is the constant, realistic and objective updating of the Economic-Social Strategy, taking into account the processes that are being experienced” and then continuing with the perfection of the state Enterprise.

But let’s go to the data offered in the Granma report. The Council of Ministers has recognized that February “was once again a tense month for the Cuban economy, although certain indicators showed a more favorable situation compared to January, and also to the same period in 2021.” Tense is one way of naming the serious crisis that continues to affect the Cuban economy and that it is hopeless to hide.

Among the improvement indicators, “the plan for exports of agricultural products with a better performance in the markets” was cited. But don’t even think about food. The exports are rum, lobster, shrimp, honey, products that we Cubans are totally ignorant of. That maxim of exporting without satisfying the population’s demand is an insult to the intelligence of Cubans, but the Council of Ministers considers these exports of agricultural products to be an improvement.

The other data in which they see better behavior is tourism, but it is recognized that “it has not yet recovered from the resounding fall.” If tourism in January and February 2022 is compared with that of the last year before the pandemic, it does not even reach 20% of the figures then. Other than discreet advances, tourism does not raise its head. And it is insisted that this scenario is typical of Cuba, while the Dominican Republic has registered an exceptional first quarter in the tourist business.

The Economic and Social Strategy, which in its day was Díaz Canel’s protective shield against the serious consequences of the pandemic, was also pursued for its proposals to “oxygenate the economy faster.” But there is a feeling that, two years later, due to some blockage, that oxygen does not reach the lungs, and the economy is failing, suffocating with so many measures that are useless, acting only as patches in the face of very serious problems that require structural decisions.

And the communists recognize and applaud that they have to “increase production; improve the supply of food and medicines, and public transportation, anti-inflationary measures and stability in the electrical system,” but these measures remain in the statement, and do not come down to reality, and meanwhile, the Cuban economy languishes.

In the Council of Ministers, there was talk of the existence of different recognized economic actors, but for them, the proposal is not in line with more freedom and capacity for autonomy, but rather that “the State continues to fulfill its regulatory role, fully entering in the economic-financial, planning, control and management methods of private companies.” They say they want to reduce bureaucratic obstacles, but they do not renounce an ideological and outdated interventionism that seeks to put private companies at the service of the regime. A bad business.

There was also talk of the purpose “of expanding, in a more efficient and effective way, foreign investment in the country,” but at the same time they are messing around with an expropriation law that establishes differences between foreign and national capital that, one can be sure, will generate not a little uneasiness among international investors who are going to promote projects on the island.

Similarly, measures to deal with shortages were cited, “applying measures to internal trade that generate tranquility in the population, based on forms of marketing that allow, in a controlled manner, that goods arrive more equitably.” The answer is easy. Stop marketing agricultural products through the State company Acopio, give producers freedom to decide what, how much and at what price to sell, and free the markets, and you will see how the supply to the national market in pesos increases.

Of the socialist state company, whose “disadvantages with respect to other economic actors” were highlighted, the Council of Ministers insisted on its “fundamental role in the future of the nation” but once again, its actions go in the exact opposite direction in which they should go. It turns out that now they think that state companies can improve their performance thanks to “a political process of characterization of business management, which is telling us that we must make the policy of cadres in that sector more dynamic.” Let’s see if they manage that.

They also defended popular participation in all the processes of the nation, and insisted that “business decisions must also be brought to the workers. In our companies there has to be a different dynamic of participation.” What was missing.

This is to be developed with the “potentialities of the interface companies that have been created with the knowledge sector” the new science and innovation toy that has been given a certain role in the technological science parks. Pure and simple consulting business.

At this point, Economy and Planning Minister Alejandro Gil Fernández. took it upon himself to explain, in somewhat more detail, the state of the Cuban economy in February.

In his opinion, the most significant thing was that “the export of goods grew compared to January and also to the same period in 2021,” but he did not provide the data, so it is impossible to confirm his assertion. Of course, he said that the best exportable items were rum, lobster, sea shrimp and other fishery products; in addition to honey and nickel. The same as always. In addition, it is noted that between 2017 and 2020 these products barely represented 20% of Cuba’s total exports, so their impact in terms of income is reduced.

The deviations came when talking about food deliveries from Agriculture to the balance of the country. In February this affected the national production of rice, beef and pork. Basic food products for the population that are scarce. However, he pointed out that milk presented a favorable situation. Here if he offered the data, “little more than 31 million liters collected, which has affected, fundamentally, the increase in the price to producers.” Between 2017 and 2020, the average annual milk production in Cuba reached 538.8 thousand tons. The figure of 31 million liters cited by the minister is very low, in relative and absolute terms, barely 5%.

Minister Gil pointed out that in some agricultural products growth is taking place. And for this, he cited the comparison with the production of the first two months of 2021, to point out that today there are 77,378 more tons, still far from satisfying the demand. It is not easy to determine the satisfaction of the needs of the population citing tons of food, as if it were food for livestock. That lack of respect that leads to using indexes that insult the intelligence. The minister said, in relation to this issue, that he sees “the presence of products in the markets and greater stability in supply, which is essential to control inflation.” If he says so.

With regard to tourism, the minister pointed out that it can “achieve a better recovery, and of course, it pulls other sectors,” a controversial issue that is not clear about this “draft” as it occurs. He highlighted that 99,223 tourists arrived in February, representing 66.3% of what was planned, a figure lower than the plan, which he justified by the rebound of Omicron in the world.

He insisted that the figure foreseen in the plan for the end of the year will be 2.5 million international visitors this year. It’s difficult. The 99 thousand tourists in February barely represent 20% of those who arrived in the same month of 2019 before the pandemic. There is a long way to go, because tourism is still moving at levels 80% below pre-pandemic figures. One has to lower expectations.

Nor did retail trade adjust to the plan, reaching only 92.2%, although the minister believes that “there are possibilities to improve this indicator, based on a set of measures that are being worked on, with the aim of increasing offers to the population.” He didn’t mention what the measures are. In addition, in Cuba, the indicator of mercantile circulation is so affected by the amount of money in the hands of the public, that it is not a good measure of the economic situation, but of the lack of control of prices.

He referred to the data of MSMEs (micro, small and medium size businesses) and CNAs (non-agricultural cooperatives) created in the period being evaluated. In total, 470 MSMEs and 7 non-agricultural cooperatives, with which 6,758 new jobs were generated from these undertakings. Figures that continue to be low and that prevent the process from being described as a success.

He also spoke of the 439 companies with losses, more or less the same ones that have been in this situation since last year, and although he justified the results by saying that before there were around 500, the truth is that he stated that the number of countries without losses has to reach zero. In that sense, he explained that they are in “a timely review of each of these entities to identify the causes and, above all, the solutions.”

Undertaking the rescue operation of these companies goes through privatization or sale decisions that do not seem to be in the plans of the regime, but that would serve to overcome the serious situation in which they find themselves. The rest is nonsense.

He then referred to inflation and what he called “irrational prices, both in the state and non-state sectors,” which are going to be confronted with effective measures, although he did not state what measures are involved. Of course, he turned to delivering the outdated speech that pleases the communist audience so much, in the sense that “abuse cannot be allowed, one thing is the increase in costs, associated with the increase in the price of imports, and it is another to take advantage of the scarcity and to try to win two, three and even four times more.”

Hopefully the minister was able to understand what is one thing, and what is another. He would have an easier time in an economy where prices were not set by bureaucrats, but by supply and demand. He did not want to take advantage of the February data, which has placed the year-on-year inflation rate at 23.03% compared to 77.3% in December 2021. A good result, which, however, the minister did not want to assert. He will have his reasons for that, most likely a price rebound in the coming months. We’ll see.

In his opinion, to fight against inflation “you have to work at the base, where the economic event is generated, where products are being sold at exorbitant prices.” In this he agreed with this blog, when he said that the solution “is not only to issue a Resolution of the Ministry of Finance and Prices that establishes certain parameters, we must combat this, arguing with the cost sheets in hand.” Goodness. We are gradually approaching rationality, but without reaching it. Finally, Marrero took the floor to ask, surprisingly, for “more solutions of our own to the problems that the nation faces today, in the midst of a complex situation marked by a tightened blockade, the crisis generated by the pandemic, to which is added the conflict in Ukraine, which logically has an impact on our economy.” But is it understood that he must be the one to find those solutions.

Well no. He took advantage of his turn to make a call to businessmen, to groups at all levels, to look for variants that allow each of the problems to be solved, because we cannot sit back and wait, for example, for foreign currency to be allocated to us, today it’s not possible. So, in this governance model that Marrero has invented, what should the government do? Lock up dissidents?

Marrero said that we have to continue developing ourselves. Now more than ever, “each of us from our responsibility, we have to dress up to look for solutions, to find alternatives that allow us to continue advancing in the midst of so many complex problems.” And doesn’t Marrero believe that you can also advance and much better so with fatigues and rolling up your sleeves to work hard?

The Council of Ministers addressed the same issues as always, which according to Granma “has a great impact for the country,” such as the status of accounts receivable and payable after the deadline; the implementation of the comprehensive strategy for the export of goods and services; the economic effects caused by irregularities in foreign trade activities; and compliance with the Port-Transport-Internal Economy Operation.

Other issues of “great impact” were compliance with the plans to confront urban illegalities, prevention and confrontation with fuel theft, postgraduate academic training, master’s degrees, specialties and doctoral training, as well as the proposal to promote a development resilient and low in greenhouse gas emissions.

Surprisingly, in the Council of Ministers, two leaders gave an account of their management, in compliance with the provisions of the Constitution of the Republic, the governor of Guantánamo, and the minister of energy and mines. Terminations in sight? Movements on the bench?

With regards to the minister of energy and mines, Marrero considered the need to move to another stage in the development of renewable energy sources, and pointed out that “we need to speed up the transition to cleaner energies,” relying on the experience of companies in the Mariel Special Development Zone. Afternoon. Their time is running out.


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 Threat of the New Expropriation Law in Cuba: A Wolf in Sheep’s Clothing

Expropriation in 1959. (

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 31 March 2022 — The Cuban communist regime has announced the forthcoming publication of a Law that will regulate the controversial issue of expropriations in the country.

An issue that deserves special attention, due to the repercussions it presents to the framework of property rights, and the necessary legal certainty that economic agents must have to produce in the economy.

According to a recent report by, Cuba’s risk of expropriation compared to 173 countries in the world places it in 15th place with a score of 6, which is immediately after the highest, of 7 points, shared by 12 countries including Afghanistan, Yemen or Venezuela, among others. Cuba falls out of this first group and is in the second step of the classification along with 14 other countries. More information from this study allows us to obtain an assessment of the importance of expropriations in Cuba.

The new law proposed by the regime to regulate expropriations seeks to put a lock on all the previous experience, and intentionally forgets the contentiousness that has persisted since the nationalizations, expropriations and confiscations occurred  in Cuba during the years 1960 to 1968. continue reading

It is observed that this “forgetfulness” of the legislator is intentional, and confirms that the communist leaders do not have the slightest intention of advancing in the restitution of the private property confiscated in those years, which reached practically 100% of the productive capital of the nation.

This law should have opted for achieving the necessary reconciliation with the owners and their confiscated heirs, but there is not the slightest intention that this should be the case. On the contrary, weak legal foundations are established to regulate expropriation processes, giving the communist state an evident supremacy with respect to other economic actors.

The law that is presented is confusing, has a terrible wording, errors in the enumeration of articles and points, and introduces dangerous repressive elements that show the worst face of communist ideology, contrary to the free and peaceful exercise of property rights by all economic actors.

A good example of this is the reference in the final provisions to the obligation imposed on small farmers to properly maintain, exploit and use the land and their other assets related to agricultural and forestry production, in a clear warning about possible expropriatory processes.

A brief review of the text raises many problems. It treats foreign and national capital unequally in confiscatory processes, does not properly define the assumptions of public utility and social interest that should justify expropriation and does not refer to legal content, maintains forced expropriation with an alternative process and carries out a confusing regulation of compensation payments.

Critically, the main problem with this law — which invalidates it for international purposes and, above all, as a possible instrument to consolidate the foundations of the future of the Cuban economy — lies in the fact that it grants the state an absolute pre-eminence with respect to the non-state actors in the expropriation processes, which borders on the most significant defenselessness, while laying the foundations for a process for which there are serious doubts about the political will to bring it to an end.

A more detailed study of the law will be carried out in the coming days.


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.

Diaz-Canel and the Photo With Sherritt, Or Is It the Other Way Around?

Díaz-Canel meets with Leon Binedell. (Granma)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 5 March 2022 — I admit that I was wrong. Not long ago, I wrote an entry on this blog in which I came to say that I did not find it too interesting for foreign investors in Cuba to take a souvenir photograph with Díaz-Canel. Without a doubt, I underestimated the persuasive capacity of the heirs of Fidel Castro, or perhaps, I failed to understand what the top executive of Sherritt International can get out of a meeting with light and stenographers with a communist leader.

It is evident that these meetings take place, and more frequently than is thought, but this time the regime’s state press, always ready to campaign in favor of the communist leaders, has featured the meeting and flooded its digital editions with an extensive visual report.

A Spanish businessman who started doing business in Cuba during the Special Period [after the fall of the Soviet Union and the sudden loss of its economic support for Cuba] and who ended up fleeing Cuba when things were made very difficult for him, told me that in the first years of his stay in Cuba, there was a line, as they say vulgarly, of foreign investors, waiting to be received by Fidel Castro, and to take a souvenir photo with the Cuban communist satrap. continue reading

Those businessmen, Spanish, Mexican, Dutch, Canadian, were specialists in the techniques of flirting with the left in their respective countries. This businessman told me that a friend of his, also Spanish, wanted to take a photo with Castro to show it to the unions of his company, the Spanish CCOO, strongly anchored in the left. The photo with Castro was clearly visible on the wall of his office when he had meetings with the union. Then he would remove it. The man hated Castro, but he had to pay a price for doing business in Cuba. As you know, ethics goes as far as it goes.

Then came the tributes from the Cuban communists to those who had risked their money in Cuba, and the busts of remembrance began to multiply in the parks and gardens. It is not known how many there are. They end up being abandoned testimonials to unknown people; many of them, having paid a great deal, for monuments. Sad. The last one that has come to us from the Island was the “collection” carried out among businessmen, many of them Spanish, to finance the construction of the “Fidel Castro museum” in several stolen Vedado mansions that, in due course, will once again become the property of their true owners.

And so, when we had not yet recovered from the bittersweet taste of the 20 million dollars given by those businessmen to worship the communist dictator, we received this report in the regime’s press according to which the first secretary of the Central Committee of the Communist Party and President of the Republic of Cuba, Díaz-Canel held a meeting with Leon Binedell, president of Sherritt International, which according to the State-run newspaper Granma is “a prestigious Canadian company in the mining and oil sector.” And I highlight the “prestigious” part, because Granma does not give this title to just anyone, and, furthermore, if it were not so, this company would not be able to take a souvenir photograph with Díaz-Canel.

As Granma adds in the brief note that accompanies the report (which seems more like a society note than anything else) “during the cordial exchange, held at the Palace of the Revolution, both parties discussed the potentialities that exist, even amid the tightening of the United States blockade, to deepen the participation of this company in the economic development of Cuba, especially in activities such as mining, oil prospecting and power generation.”

Wow, now it turns out that business can be increased with Sherritt, which is none other than Moa mining, and on the other hand, the Cuban communists shout to the heavens when they see that another Canadian company manages to re-establish the business of remittances to Cuba without having to go through the dark and lustful hands of state security and the army, who do not want to lose a share in this business that moves, dollar-up-dollar-down, about six billion a year. It is clear that with Sherritt they do not have this problem, and thus Ramiro Valdés and the Ministers of Foreign Trade and Foreign Investment, and of Energy and Mines, Rodrigo Malmierca and Liván Arronte, respectively, also appeared at the meeting.

Why yes with some and with others no? What are the communist leaders looking for with these types of meetings? Perhaps to drag Sherritt into the conflict with the United States that they do not want to resolve, or to show that these types of companies that are “obedient” are received by the “senior staff of the regime” while, on the other hand, those that do not behave well, will they ever receive such treatment?

The derivative is not this. You have to think what Sherritt gains from this report in Granma with the Cuban communist leadership. This company must have a top-level image department because there’s no free lunch. Obtaining a report like this, which will be seen by the global shareholders of this company, many of them restless and upset with doing business with a country as complicated as Cuba, is not easy and can have consequences.

At the moment, the president of Sherritt may have to face the corporate social responsibility committee of his multinational asking him a question about why do business with a country that does not respect and outlaws human rights. What is going to be done, the rules of compliance are what they are and if Mr. Leon Binedell wants to go to the financial markets in search of financing, he may find some clause against doing business with a political regime like Cuba.

It could be anything. Nothing happens naturally in communist Cuba. In this event there are winners and losers. They have chosen the moment (the prices of mineral raw materials are soaring in the world markets and Sherritt must be making a lot of money with Moa’s business in Cuba); and Díaz-Canel, who must have Putin screaming to high heaven because Cuba abandoned him in the recent United Nations vote on the invasion of Ukraine, siding with China, has used the occasion to improve his poor international image. I insist. In Cuba nothing happens by chance and this handshake between a top-level Canadian “capitalist” and a Cuban enemy of capitalism has to have some meaning. We will see.

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.

Do Hard Currency Stores in Cuba Have any Justification?

Cubans spend major portions of their lives waiting in line in hopes of being able to purchase the things they need.

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, 9 February 2022 — There are times when it is better to remain silent. The Cuban economy minister, Gil, has said on Cubadebate that “without the stores in MLC [hard currency], the economic situation in Cuba would be even more complex.” But he knows that this is not true and that, at some point, it will be proven that this is not the case, and that if those stores did not exist, Cubans could have better access to all kinds of goods and services.

The truth is that the Cuban economy minister has been saying the same thing for a long time to justify the decision that led him to authorize these stores in MLC, one more exception of the communist economic and social model that governs the country, difficult to fit into the slogans and ordinances of the communist party, and that have contributed to creating widespread discomfort in many social sectors, especially among those who do not have dollars and have to buy them.

In any case, the minister should tell the truth and explain why he has resorted to these stores that fragment the consumer market, and has forgotten a basic principle of his management, which should be to ensure of all kinds of goods and services are for sale to the population in Cuban pesos, avoiding the permanent shortage of the commercial network.

For those who seek answers without paying attention, the regime dedicates all kinds of flattery, such as “enemies of the revolution,” “people who distort reality,” and endless nonsense, but the reality is that it has never been explained convincingly, why a government launches to open stores that sell all kinds of products in foreign currency or its virtual exchange, the MLC, which has nothing to do with the old CUC (Cuban convertible peso), although many want to draw a parallel. continue reading

The only reason given by the minister, every time he talks about this issue, is that the stores in MLC emerged in 2019 (they are going to last three years when it was said that they were going to be temporary) “as the US blockade against the largest of the Antilles. Specifically, these stores were intended, according to the minister, to prevent foreign exchange from leaving the country by natural persons, then suppliers of the domestic market, to capture it and use it based on the development of the national industry and to maintain a stable level of offers. in pesos; but nobody calculated that an epidemic would make the situation even more complex.”

But if this really were the reason, then it would not be possible to understand how, later, the free entry of travelers through the airports loaded with suitcases with merchandise, such as food, cleaning products, medicines, or small appliances, was authorized, an authorization which has been extended for another six months. One thing does not agree with the other, and contradictions appear in the minister’s argument.

Are these stores in MLC a business of the communist state (commercial margins are 200% and 300% on some products), to fill their coffers with hard currency? Are they a charitable action to be able to finance the acquisition of goods abroad that are paid for in foreign currency? A way to collect as much as possible of the foreign currency that enters the country by any mechanism?

The only certainty is that, in October 2021, the minister explained in the National Assembly that 300 million dollars of the sales in MLC had been used to supply merchandise to the trade network in national currency. That is, by selling products in MLC, the communist state raised funds to buy goods abroad that were later sold to the population in stores that sell them in pesos. It shouldn’t have worked if you take into account that these stores are still empty.

That a country has to resort to this type of mechanism to buy goods abroad says very little about its economic potential and shows that the collapse of tourism, since the second half of 2019, has done a lot of damage to the regime. The exchange control that exists in the Cuban economy, controlled by the state through the Central Bank, paralyzes the country’s activity.  Then the ’blockade’ always comes as a justification, since, as the minister said, the dollars collected during the first months of the sale in MLC stores could not be used, “due to the blockade that has just celebrated 60 years of being formalized the receipt of US currency in Cuban banks had to be stopped, as of July 20, 2021.”

The “famous” decision to prohibit cash deposits of dollars in banks, a measure used by private recipients of remittances to refill the electronic cards which they later used to shop in MLC stores. The whole communist tantrum, as a result of the refusal of the United States to do business with companies controlled by the Cuban military and state security conglomerate.

The minister also made reference to the more than 6,000 containers destined for Cuba, with products to supply the stores in Cuban pesos and in freely convertible currencies, and that due to the world crisis “are paralyzed in international ports because there are problems with the shipping companies, with containers and freight costs have increased.”

If you don’t pay, there is no service. You have to get used to paying in cash, especially when you cannot access credit due to a bad history as a debtor. For the umpteenth time, the minister confirmed the transitory nature of the stores in MLC, and said that the objective is being met insofar as its period of time will depend on the recovery of the economy and it can provide the Cuban peso with a real capacity to purchase. And this is where he missed what is perhaps more important.

Provide the Cuban peso with real purchasing power? It is worth reminding the minister that they had ten years to think about the Ordering Task*, whose star measure began with the absurd devaluation of 2,300% of the Cuban peso with respect to the dollar (the largest in history) leaving the national currency in the toilet, with a fixed exchange rate that could never be supported by the central bank, since it lacked foreign exchange.

Mistakes of bad economics students, who did not understand the relationship between the value of a currency, in this case, the Cuban peso, and the fundamentals of the economy it represents. The peso was born broken, worthless, and the informal market has been in charge of showing the minister what it is worth and what its real purchasing power is, after the Cuban economy has suffered a 77.3% variation rate in 2021 year-on-year inflation, one of the highest in the world.

That is why now, the minister is facing a scenario of adjustments and consolidation of spending that he should be afraid of, because it usually ends in the form of a social explosion, such as the one that occurred last July. Decisions such as those adopted by the Ordering Task make us lose the little confidence and credibility that we have in the Cuban communist regime, and for this reason, the dollar will continue to rise and drag down the peso as happened in the Special Period. And it is most likely that the minister will continue to blame everything on the ’blockade’. He has for a long time.

But coming down to reality, the problem with the stores in MLC is that they are profoundly unfair and do not fit easily into the populist paradigm of the Cuban communist regime. How can it be accepted that those who live off the dollars sent by the exile ’gusanos’ (worms) live much better than those revolutionaries who receive miserable salaries and pensions in pesos? How can it be allowed that the farmer who sells cassava in Cuban pesos has to change to dollars to buy tools or supplies in dollars in stores in his own country? Where are you trying to get to with the stupidity?

The minister clumsily justifies himself by saying that “if tomorrow we put these goods up for sale in national currency they will last 15 days and then there will be neither neither hard currency nor pesos.” Well, and why don’t you explain the reasons that lead to this scenario, which does not exist in other countries of the world, and not the alternative that can lead to companies, when faced with growing demand, simply doing what they have what to do, what is to produce more? Has the minister stopped to think why that link between demand and supply is non-existent in Cuba? Is that why there are no domestically made canned sodas or floor mop-clothes?

The unfortunate and shameful thing is that it is said that the stores in MLC are “a measure of social justice because it allows us to redistribute the currency based on the supply of the commercial network in pesos.” Fake. Why does the currency have to be redistributed? In whose hands is it and why can’t distribution companies manage changes based on their operations? Why this suffocating control of the economy that does not let it work? An exchange rate system that does not depend on political and interested decisions of the regime would work much better, because it would serve the needs of economic agents. Much has been said about eliminating obstacles, the minister already knows where they can start.

And now, to make matters worse, inflation hits the whole world hard, and it can only be resolved, and the minister is right about that, if an increase in product availability is achieved by the state, or by anyone, in national currency.

It is true that this cannot be achieved overnight, but since 2019, when the stores in MLC have been operating, there has been plenty of time to overcome the problems of agricultural and industrial shortages, and of all kinds of services.

The minister really knows that there is something in the Cuban economy that prevents it from achieving these objectives and that it is not outside, but inside, and that we call it “internal blockade.” Much more serious than the other, and based on the fact that the regime does not want to lose control of the economy at the expense of economic actors.

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


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

Cuba: Is There Really a U.S. Embargo?

While the communist revolution was nourished by huge annual subsidies from the USSR during the height of the cold war, no one spoke of the embargo. (EFE)

14ymedio bigger14ymedio, Elías Amor Bravo, Valencia, 3 February 2022 — With regard to the embargo, which the official Castrist press has converted into a lightning rod, it is interesting to share some reflections which, for obvious reasons, will be very different from those launched by communist propaganda.

The truth is, taking advantage of the 60th anniversary of the provision that marked the beginning of this United States policy, which has been maintained for a long time though few remember its origins, the official press has organized a coven of propaganda that never fails to attract attention.

For this reason, without wishing to pontificate on a topic on which thousands of articles, books, reports, statements, etc. have been written, my proposal for this blog entry centers on a simple and easy-to-explain decalogue related to the embargo.

1. From 1960 to 1990 no one remembered the embargo.

While the communist revolution was nourished by huge annual subsidies from the USSR during the height of the cold war, no one spoke of the embargo or blockade, except for those days around the time the Soviet missiles arrived in Cuba, which the U.S. Marines forced to be sent back. When the millions dried up, then, with the Special Period in tow, the old embargo argument was dusted off. And so it is today.

2. There is a much more severe internal embargo.

It is the embargo practiced by the communist regime against Cubans, preventing them from having a modern and efficient economic system in which the right to property can be exercised, free elections, the accumulation of assets and wealth, the market as an instrument of resource allocation and free enterprise. This embargo is the one that keeps the Cuban economy impoverished and without a future.

3. An embargo, as such, does not exist; Cuba maintains economic relations with the whole world.

One only needs to observe the data on commercial relations, exports and imports, foreign investment, tourism, etc. Cuba is not limited in establishing economic relationships with whomever it wants, continue reading

as long as it has a need and can offer something in return. Even with the United States, in the form of food and medical equipment for $200 million a year, and more importantly, remittances, valued at $5 billion, from Cubans who had to flee the regime. That has nothing to do with an embargo or a blockade.

4. There has never been an acknowledgment of the events that gave rise to the claims. 

One could argue that the revolutionary regime offered to pay legitimate owners for their confiscated property in “junk bonds” backed by the sugar quota provided to the United States, which at that time, could not be met. That is why there has never been a recognition of the damages caused to the legitimate owners by the confiscation of property and much less a willingness on the part of the regime to pay the value of the expropriated assets, as in any other country in the world. The property rights which were the object of nationalization have not died and without a doubt, the claims and acknowledgment of the original owners or their heirs will be fundamental for the return of democracy to Cuba.

5. The United States continues to be the only defender of democracy in Cuba.

The United States has staunchly provided refuge to almost two million Cubans who fled the lack of freedom and prosperity of the communist regime, making it possible for many of them to realize their dreams. Thanks to the United States it is possible to tell the regime in Havana what it is, and what it represents, while observing the shameful and fickle behavior of other democracies, like those of Europe, which sometimes are against and sometimes in favor of the regime. The United States has always stood its ground and that should be recognized. Even bringing Cuban-Americans to the nation’s political institutions, which instills pride and recognizes the value of minorities in that great nation.

6. Three generations of Cubans have grown up with the embargo and they know why.

Escaping the country has been the only outlet for those who detest a forcefully imposed economic and social model which is resistant to change and evolution. For that reason, as soon as people are able to leave the country, they establish themselves in the United States, because despite having been educated about the evils of imperialism, the United States still is and will continue to be, the main reference point for many Cubans. As much as it pains the communist regime.

7. Ideology and propaganda are less and less capable of arguing against the embargo.

The official discourse is being extinguished. The new generations of Cubans do not believe the official language and the obsolete propaganda it exudes. Despite the continuous attacks on the United States and its institutions by the official Cuban press or whomever desires to unburden themselves, Cubans dream of living in the neighboring North, where in addition, they have acquaintances, family, and friends who can help them get ahead. It’s interesting, but it doesn’t occur to any Haitian, Honduran, or Salvadorean to migrate to Cuba; everyone aspires to establish themselves in the United States.

8. The histrionics at the United Nations results in hilarious and irresponsible calculations.

If the calculation of the damages caused by the embargo were actually $144 billion, the revolutionary regime would be making the ridiculous even more absurd by proposing this figure. Let’s think about what that represents, in 60 years, $2.4 billion annually, which is less than one-third of what Cuba receives annually in remittances from the United States. If they wanted to provide figures, they could have put more effort into it.

9. The embargo exists because that is how the communist regime wants it.

There is no room for doubt. It has generated rivers of ink that have allowed Cuba to have something to say to the world, occupy a media space in some newscast. And, above all, to be heard by those who want to fall for it. The David and Goliath of the Bible function in politics and if we consider that neither the end of the cold war, nor globalization, nor the fourth industrial revolution have altered the messages, there is no doubt that the conceptual authors of the embargo, who had an exceptional teacher in Fidel Castro, have been successful in adapting the concept to the times. The regime needs the embargo, just as it needs to identify the United States as an enemy. It is profitable.

10. The embargo served so that some Cubans live much better than others, within Cuba.

There is no doubt about it. The top leaders live oblivious to hardships of an unproductive economy and their pay is more than sufficient to justify the false submission to orders of the singular party. Those with access to dollars, around 30% of the Cuban population with family abroad, may live even better and the regime’s creation of MLC stores [stores that sell goods in hard currency] clearly indicates that it wants to make them privileged so as to access that hard currency.

All these considerations could raise the primary question, which is none other than, is there really a United States embargo on Cuba? Review other similar situations throughout history and you will see how much difference could be produced and which masterful techniques could be used to take advantage of things. The best thing about this is that the embargo, if it exists, has an expiration date: a democratic and free Cuba. And this has never been recognized by the communist revolutionaries. Why would that be?

This article was originally published in the author’s blog, Cubaeconomía.

Translated by: Silvia Suárez


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Organoponics and Food Self-sufficiency in Cuba

Urban agriculture in Havana (flickr)

14ymedio bigger14ymedio, Elías Amor Bravo, 10 December 2021 — The insistence of the communist Cuban regime in promoting urban, suburban and family agriculture as a way of achieving food sovereignty is now past a joke. Because it is one thing to amuse yourself in communist conclaves with these types of proposals which take you nowhere. There are darker motives, of that there is no doubt. But something else entirely is their idea of growing pumpkins or taros in parks or gardens, in flower pots, or raising pigs in your back yard; that is a solution to absolutely nothing.

In every country in the world, for considerations of hygiene, coexistence with other people, and social organisation, this kind of practice has been forbidden since the middle of the last century. That this is what they want to do in Cuba, to put something on the table for lunch, or one meal a day, gives you an idea of how little the communist leaders understand, and how little they know about agriculture and stock breeding. To set out on a headlong flight  on a matter this important is totally irresponsible.

In this blog, we have several times discussed the proposals which this “national group of urban, suburban and family agriculture” has come up with. The group is the organisation set up by Raúl Castro himself to advance these activities, and which, according to the state newspaper Granma, has just carried out its umpteenth tour, apparently number 90, and, also “through all parts of the country,” in order to “assess the production of vegetables using organoponic technology,” in parks, gardens, yards and flowerpots. No more, no less.

It isn’t surprising that there  is a shortage of food in Cuba when a government bets on this kind of production model instead of focussing on more important things. We get the impression we are clearly seeing the death throes of the communist social model when they do this sort of thing. And never more clearly than in products so specific and in so much demand from the Cuban people as vegetable production using organoponic technology. Its like a nightmare, and one of the worst.

Why do we say that urban, suburban and family agriculture  can’t solve the food problem in Cuba? continue reading

First of all , because it is a short run production model producing small quantities, just enough for a family’s own consumption, or at most for the people in a couple of streets, and on this basis, unable to resolve a problem which affects most of the society.

The Cuban agricultural sector, instead of producing in smaller spaces, needs to achieve increasing output to scale where it gets to the minimum point on the unit cost curve, with efficient technology, or, to put it into simple terms, growing things on land areas sufficient for what it wants to harvest. Vegetables, for example, require parcels of land of a certain size in order to grow things at the best prices.

Communist ideology’s rejection of wealth is a political obstacle to land distribution which, in other countries, like Vietnam, has been the solution to agricultural shortages.

Secondly, in contrast to what the communist leaders say, this programme is unsustainable, and, on the contrary, is high-risk. We have referred to sanitary conditions, but we have to pay attention to the processes and techniques used in production. To revert to obsolete and unproductive methods is hardly sustainable, calling for higher input than in efficient land plot sizes.

To bring agricultural activity near to urban areas where people are pursuing their lives, entails social risks. For example, crop irrigation; where does the water come from? Perhaps from everyone’s drinking water supply? This is unsustainable, and wasteful, which will end badly. Also one could mention use of fertilisers and plant protection products, which can be applied to organoponics in urban gardens, next to roses or daisies. All very pretty, but dangerous.

Thirdly, and most importantly, no-one can expect any kind of food self-sufficiency, despite Granma saying that they “have stabilised production.” If we want to talk about statistics, the ONEI (National Statistics & Information Office)  confirms that during 2021 (January to September period) vegetable production, including all varieties, has experienced a reduction of 214 thousand tons compared with the same period the previous year, that is 8.5% less, so that Cubans had less supply than in 2020, which was already a bad year. Less to choose from all the time.

Granma itself acknowledges, citing an expert in this programme attempting to cultivate taros in public gardens, that the levels of production achieved “are insufficient in most of the subprogrammes.” And, it has to be said, they will continue to be.

This “national group of urban, suburban, and family agriculture” can continue visiting every area in Cuba, and coming up with slogans in all of them, in order to carry on with its tours the following year. At the end of the day, going around like that at least does not get in the way of the work of the farmworkers working their furrows,  who are the ones who are really committed to food self-sufficiency in the country, but who are impeded by the government with all sorts of obstacles and intrusions.

Without any doubt, this model of garden agriculture will not increase agricultural productivity, nor assist food self-sufficiency, and certainly not local resilience and sustainability. It is a foolish dream from the past, like when Fidel Castro  in the middle of the “Special Period,” gave Cuban families chickens from the state farms to raise in their own homes, just to entertain people who had nothing to do, but will never produce more food nor sort out any kind of self-sufficiency.

The Cuban communist regime needs to understand that if it wants to provide a food supply to the people in this country, it needs to start by forgetting about 30 pounds per capita of agricultural products in their projects, or about worn-out experiments like organoponics, and let Cuban farmers decide what to produce, how much to produce, at what prices, and, above all, free to do it where they think convenient, and employing the area of land they wish, not what has been leased out by the local communists, Organoponics won’t appear anywhere. And won’t destroy the few gardens surviving in parks, accentuate the general destruction of the urban landscapes, or produce infections of back yards, and flower pots, with weeds, insects, and also cause sanitary and social problems.

Translated by GH


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.

Hard-Currency Debit Cards: Much More than a Waiting List

Harvesting crops in Cuba. (Bohemia)

14ymedio bigger14ymedio, Elias Amor Bravo, economist, November 1, 2021 — If there is one sector of the Cuban economy with no reason to be grateful for the changes the revolution brought about, it is agriculture. It employs almost one fifth of the nation’s workforce but contributes only 5% to GDP. Productivity is 80% below the economic average. As a result it cannot meet the food needs of the entire population.

None of this was the case before 1959. Responsibility for this serious problem lies with the communist economic model adopted by Fidel Castro. After pushing through a disastrous agrarian reform program, he expropriated all private-sector land and handed it over to an indolent and inefficient state bureaucracy, which is directly responsible for the chaos.

Then Raul Castro came along, acknowledged it was disaster and leased back the land (without granting property rights) to farmers who agreed to play by the new rules. Things still did not work.

Then came the era of agricultural experiments. All kinds of communist tomfoolery was tried without any acknowledgement of what actually had to be done. Many new amendments have been added to the 2019 communist constitution but not the one it so urgently needs. Land cannot be collectively owned by everyone.

It’s absurd to think the state is capable of managing farmland for the public good. It will never be able to produce enough. The experiments were continue reading

nothing more than patches on faulty marketing, contracting and scientific applications. They did not yield the expected results. Agriculture has remained stagnant, waiting for opportunities to open up in the private sector and for property rights to be restored. Vietnam provided these opportunities and, in little more than five years, famine was a thing of the past.

Recently, the State newspaper Granma has been reporting on the latest experiment. The government now says that agricultural producers whose crops are exported will be guaranteed a percentage of the proceeds in the form of hard currency. This is part of a package of measures (no less than sixty-three) that, the government complains, “farmers do not know about because they do not read them.” Meanwhile, Cuban farmers ignore the new regulations and go about tilling their fields, trying to find a solution to the many obstacles the system puts in their way.

Granma stated, “Some eight months after these measures took effect, changes are beginning to be seen in agricultural and livestock performance, with better numbers in the supply of milk, meat, fruit and honey… yes, though still far from satisfying current demand.” Curiously, however, the economics minister, Alberto Gil, looked at his balance sheet for the first nine months of this year and acknowledged a few days ago that no agricultural production targets were met. So who’s right?

But back to the issue at hand. According to Granma, the measure that has had the greatest impact is the one that gives farm producers a percentage of the proceeds in freely convertible foreign currency (moneda libremente convertible or MLC), which they can use to buy supplies to increase production and support their families.

The question is, why do they only get a portion of the proceeds and not the full amount? What is preventing producers from being able to reap the full rewards of their time and effort? Why is the state extracting all the income and wealth rather than relying on the tax system?

The Granma article describes a situation in Guantanamo where — and here comes the good part — there has been a significant “decline in the number of MLC debit cards issued to farmers who, without these cards, cannot receive the hard currency they have earned from the export of their products.”

Damn! So who has that money now? To provide some idea of the scope of the problem, Granma reports that, of the 20,000 fruit, vegetable and livestock farmers in the province, only 300 have these cards. The numbers speak for themselves.

The regime now requires MLC cards be used for a growing number of retail transactions to prevent foreign currency from circulating freely as cash, as farmers would prefer. One would assume, then, that the regime would see to it that its inefficient state-run banks would get the cards out quickly. Though the cards are essential to the whole MLC operation, that is not happening.

They trot out the usual excuses, which boil down to two things: reduced operational capacity due to Covid-19 and low interest on the part of consumers, who have made little effort to acquire the cards since efforts were made to streamline the process in November 2020 as part of currency unification reforms.

Anything that could stimulate agricultural production, though we have serious doubts this is even possible, is always delayed or stymied by the inertia of the government sector. The same could be said of the banking sector as well, which also has no incentive to make sure things work.

On the one hand, the banks do as they are told. They require farmers to open  accounts in person, in spite of the threat from Covid-19. Small farmers open bank accounts without a clear idea what they will get out of it. When they later encounter roadblocks, chaos is unleashed. Imagine how that turns out. Very badly indeed.

So far, only a few bee keepers and those who pay taxes to the Milk Company have been issued cards. And as Granma points out, many have not gotten them because bureaucratic rules require producers to provide copies of their lease and their ID cards to open an account.

Then the merry-go-round begins. The communists always manage to entangle everyone in their problems. On the one hand, officials say the country wants everyone to get what he or she deserves for his or her time and effort while at the same time claiming that MLC cards will help the economy.

To achieve that objective, every agricultural producer will need extra support because not all farm cooperatives have the computers and infrastructure needed to achieve this. In other words, farmers toiling in the fields will have to be computerized. How many Cuban peasants do you think have access to this technology?

Producers are more interested in being left alone to do what they do, which is tilling the fields. It is not clear to them why they would need a plastic card — many, in fact, are using the cards they already have to run their operations — especially when they are being told from on-high to get one even though it does not address their specific needs.

Add to that the banks’ complicated and cumbersome management of the cards, and delayed payments from the state. The benefit of the new card is that it would allow farmers to receive something from the sale of their exports. But if they are not receiving the full proceeds from those sales, why would they be interested? Then there are the payments producers have still not received for the crops they have already delivered. This further erodes confidence in the state, which has a reputation of not paying its bills and currently runs a deficit equal to 20% of GDP.

Officials should be encouraging economic actors to focus their attention on the things that really matter to them, not on red tape and communist craziness. If there are entities that are selling things online and generating significant hard currency income that they can later use to buy things in government-run MLC stores, let them keep doing it.

If economic actors benefit from entering into joint ventures or other cooperative business relationships, let them do it if they serve the interests of all parties. These are the keys to a functioning economy, which Cuban communists have made impossible for six decades. A return to rationality and efficiency is necessary but it is not enough to overcome backwardness and supply shortages.


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 Reason for the Blackouts in Cuba: Monopoly Costs and Prices

An old fashion oil lamp provides light on a counter where none of the electrical appliances can be used.. (EFE)

14ymedio biggerElías Amor Bravo, Economist, 30 October 2021 —  Blackouts have become a threat to Cubans this October, although in no way can they be considered only a current phenomenon. The difference between what happened before, and now, is the information offered by the authorities to explain why these unpleasant events occur. Undoubtedly, the regime must believe that they can calm citizens who are very annoyed with blackouts or companies facing a forced paralysis of their activities, but they are wrong.

The statements transmitted to the population through the state electricity monopoly confirm that the blackouts are going to continue and that, at least for the moment, it must be assumed that daily life will continue to coexist with the unexpected lack of electricity supply, and that this will happen even if the bills are paid as if nothing had happened. The monopoly also explains that the regime, far from telling the truth, hides itself in technical gibberish to avoid placing the responsibility for the blackouts on state management.

This week the information from the Electrical Union has been very intense. On Tuesday, they announced possible service interruptions as a result of a failure in the transmission line connecting with the Ernesto Guevara thermoelectric plant (CTE), in Santa Cruz del Norte, which led to the shutdown of Units 1 and 2 of that plant (155 MW), as well as others, Unit 6 of the Diez de Octubre CTE (90 MW), due to leakage in the boiler, and Unit 5 of the Antonio Maceo CTE (80 MW), due to the turbine speed regulator. continue reading

For the Electrical Union, the origin of the problem came from the greater impact on “peak hours.” which was 480 MW at 7:10 at night. Later, at 8:26 pm, Unit 1 of the CTE Ernesto Guevara (80MW) was incorporated, while Unit 2 was damaged by a leak in the furnace. It was not enough. This was followed by “service disruptions,” a convenient term, throughout the early hours of October 27, as a consequence of the reported breakdowns and, also, due to the behavior of the demand, which exceeded what was expected by 100 MW. From 2:00 am, the impact remained below 100 MW and, as of 6:02, the service was restored. Four hours of blackout.

At 7:00 in the morning, the availability of the national electrical system was 2,080 MW compared to a demand of 2,020 MW “with all the load served,” almost at the limit. As of 9:00 am, possible blackouts were noted again, this time due to a generation capacity deficit, with a maximum of 250 MW.

The information from the Electrical Union indicated that Unit 2 of the Ernesto Guevara CTE, unit 6 of Diez de Octubre,  Unit1 of the Lidio Ramón Pérez CTE and Unit 5 of Antonio Maceo remained out of service due to breakdowns. Meanwhile, maintenance work was being carried out on Unit 4 of the Antonio Maceo CTE. In addition, limitations persisted in thermal generation with 698 MW. As a consequence of the foregoing, 1,038 MW were not available in distributed generation and the breakdowns mentioned, and 329 MW corresponded to Units under maintenance.

The statement said that Unit 1 of the Lidio Ramón Pérez thermoelectric plant, which completed its hydraulic test, could improve the situation once again in the national electricity service. The Electrical Union indicated that for the peak hours of October 27, the incorporation, in addition to Unit 1 in question, of the CTE Lidio Ramón Pérez (260 MW), of the Rincón (15 MW), and Varadero (17 MW). An availability of 2,734 MW and a maximum demand of 2,700 MW were estimated for the “peak,” for a reserve of 34 MW. This meant that, given the low levels of reserves, the authorities ended up recognizing that blackouts could occur.

A new note from the Electrical Union regarding October 28 highlighted that there were no blackouts in the electricity service in the morning and afternoon. However, as of 6:14 p.m., the service began to be affected due to a generation capacity deficit. During peak hours the maximum impact was 247 MW at 7:30 p.m. As a consequence, from 9:31 p.m. there was a blackout of 3 hours and 17 minutes. The electricity monopoly apologized for the inconvenience to those who wanted to rest by watching television or listening to the radio.

Next, the causes of the blackout were explained again, starting with the exits of Units 5 and 7 of the CTE Máximo Gómez de Mariel, the delay in the entry of Unit 2 of the CTE Ernesto Guevara, which synchronized at 19:59 hours, as well as the increase in demand above the planned 62 MW. Later, at 11:08 p.m. due to the unexpected departure of Unit 6 of the Máximo Gómez CTE (90 MW), another blackout occurred, with a maximum of 80 MW, which was reestablished at 12:01 a.m. on the 29th.

The electricity monopoly indicated in its statement that the availability of the national electricity system at 07:00 hours was 2,183 MW and the demand 2,045 MW with all the load served, estimating that there would be no power outages due to a deficit in generation capacity during Friday morning and afternoon, to maintain the expected conditions. And this is the question, how difficult it is to maintain those conditions.

The Otto Parellada CTE and the Máximo Gómez CTE Unit 5 remained out of service due to a breakdown, waiting for someone to repair them. Unit 3 of the Carlos Manuel de Céspedes CTE was out of service for condenser cleaning, Unit 6 of the Diez de Octubre CTE and Unit 4 of the Antonio Maceo CTE were under maintenance, also ceasing to supply electricity to the grid. At Energas Varadero, 40 MW in the steam turbine was out of service and at Energas Boca de Jaruco so was a gas turbine with 30 MW, so the limitations on thermal generation were maintained (425 MW).

For the Friday peak, the electricity monopoly predicted several Units would come on line, specifically Unit 3 at CTE Carlos Manuel de Céspedes with 130 MW; Unit 5 of the CTE Máximo Gómez with 30 MW; Unit 6 of the CTE Máximo Gómez with 85 MW and an engine in the CDE Mariel with 5 MW, with the use of 291 MW in diesel engines. Under these conditions, an availability of 2,761 MW and a maximum demand of 2,650 MW were estimated for peak hours, for a reserve of 111 MW. So if these conditions were maintained, no blackouts were foreseen, although the reserve levels were low at this time.

These statements, appearing almost daily in the communist state press, with the same justifications of outages, breakages, lack of maintenance, disconnections of power plants, peak hours, etc., etc., not only end up tiring the population, but also come to confirm what Minister Gil said in his analysis of the economy before the National Assembly, placing “blackouts as one of the nation’s main problems, and one of the most difficult and complex to solve,” at least in the short term. In any case, who compensates Cubans for the blackouts, and how? This is an issue that is not discussed, but it is essential to put this situation in order.

The minister made a more general analysis of the matter, with reference to the energy shortage and its high cost, but also cited these problems and mechanical breakdowns, to to justify the unjustifiable. He did not tell the truth. And the electricity monopoly, in its communiqués, I’m afraid, did not either, going for the technological nonsense, without allowing the Cubans to really know what the origin of the problem is.

The Electrical Union functioned relatively reasonably in providing its services before January 1, 2021. Yes, of course there were blackouts, but much less so than now. In fact, during the closures of the pandemic, in Cuba there were almost no blackouts. It is a phenomenon of the moment, and that is related, on the one hand, to the small rebound in economic activity that is taking place on the Island, after the end of 2020.  The communists not only had not foreseen that to meet growing needs for electricity there need to be more production on the grid.

On the other hand, nobody wants to agree that, after the increases in electricity rates agreed to in the “Ordering Task*,” people were going to protest, as in fact happened. Electricity rates rose exponentially as of January 1 because the monopoly had no choice but to face wage increases without productivity benchmarks that compromised solvency. But the new rates were immediately questioned by all social sectors, forcing the regime to back down, thereby compromising the supply levels of the state monopoly, which are highly sensitive to prices.

The subsequent story is known. Who could be interested in providing a service, even a minimal one, when the prices charged to consumers do not pay them properly and they have to face imposed wage increases without reference to productivity?

It is already known that no leader of the Cuban economy will speak of this, but it is the origin of the problems with the blackouts and with many other sectors of activity. The Home Services price index prepared by the ONEI (which included electricity) increased by 152.8% in the interannual rate as of September, almost 90 points more than the average inflation rate, of 63.3%. The Ordering Task has upset the weak balances of the Cuban economy, specifically the relative prices of goods and services, and the blackouts will continue until the electricity monopoly restores its profitability and ensures the availability of resources to cover its very high costs (the regime seems to think that it no longer want to grant more subsidies and this cannot end well).


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.