Defending the ‘Coleros’ and ‘Dishonest Speculators’

Cubans spend a huge part of their lives standing in line to meet their everyday needs. (14ymedio)

14ymedio biggerElías Amor Bravo, Economist, 29 July 2020 — Granma, on its website, says that complaints from readers about so-called “dishonest speculators” are accumulating. Really, you can’t fall much lower or be worse. On the part of Granma, of course.

The article, I can’t remember the author, describes the long lines and the coleros, who are people who are paid by others to stand in line for them. Both things are plentiful in these months of COVID-19 in Cuba, but the most important question isn’t asked: Why do the lines and coleros exist? It’s curious that the article doesn’t mention Miami, Madrid or Mexico City, where no Cuban has to get up at dawn and spend sleepy hours of sweat standing in interminable lines in order to get groceries. It’s unthinkable.

In Cuba, the line is a hardship, something that can’t be avoided if you want to eat every day and have some basic cleaning product to combat the dirt. And Granma, instead of going to the root of the problem, which they know perfectly well, attacks and insults the “dishonest speculators”, who are just the tip of the iceberg. continue reading

The article describes the numerous and varied behaviors of “resolving” that Cubans practice, as if it were a matter of a crime, “like standing two or three times in line for several people, selling their spots to anyone who can pay at high prices, to accelerate their moment of buying”.  Serious crimes, no doubt. They don’t say, however, that this happens when the consumer, after desperately trying to buy a product for several unfruitful days of standing in line, ends up running to the service that assures him of being among the first to have access to one of the scarce products for sale.

Equally condemned are those who “whisper in your ear that you can have what you want (wet wipes, diapers, chicken, picadillo, oil, air conditioners, freezers…), but only if you’re ready to pay double, triple or who knows how much in Cuban convertible pesos (CUC) over the price in the State stores”. It’s normal; for a start, these people can communicate their services however they find it convenient, and, in addition, they have every legitimate right in the world to profit from an activity in which they spend time, strength and, in many cases, economic resources.

And of course, immediately the Ministry of Interior arrived and ended the fun, with the emission of sanctions for more than 1,285 coleros from the beginning of the pandemic, with the certainty that not everyone who received a fine actually engages in these activities. There’s always a threat of repression thrown in, just in case.

So that, in order to be prepared for what the Ministry views as a growing phenomenon, and thus nothing is said about how to address it with economic measures that are necessary and advisable, the Government announces through Granma more repression against what it calls “the indolence of people with no social commitment, dedicated to accumulating products needed by families in the midst of a context of shortages and a national health emergency”. Once more, incredible but true. Insults, condemnations, judgments about presumed crimes, lack of respect for the principle of presumed innocence. For the Communists, the guilty are the innocent.

The columnist even “doubts the humanity of these beings, who, motived by individualism, forget that the children, elderly, pregnant and sick won’t have the opportunity to get what they need”, without realizing that thanks to these dehumanized beings, many of the above-mentioned people now manage to have access to the goods and services they need but can’t get in any other way, not even in their dreams. Rather than committing crimes, these beings are providing a benefit to many people who are willing, logically, to pay for that. Nothing is free, and the Communists know it, although they toe the Party line when it’s convenient.

The amount of the fines is also questionable, because they don’t bring in a lot of money. If the fines were excessively high, the sanctionable act would demand a higher price from the client, which would reduce the size of the demand and, thus, the potential capacity of the offer. So these fines of 100 to 300 pesos are perfectly designed by the Government to keep the coleros and “dishonest speculators” continue to offer their services. Ask the authorities why.

The article continues along other paths, pointing out that many coleros are the same people in charge of organizing the lines in these establishments, which makes the crime worse, but without recognizing that the problem could be solved by supplying enough products in the shops. Then in Havana, as in Madrid, the lines would disappear, along with the coleros and the speculators. An impossible dream for several generations of Cubans who know that their economic system is incapable of accomplishing this basic life goal.

Proposals like scanning identity cards to organize the lines, improving control inside the shops, using the ration card, administrative surveillance of workers, etc. are the Communist solutions to this phenomenon, which, if applied, would surely multiply. Don’t be deceived. These proposals are the ones that Granma says must reach online readers of the newspaper. I’m afraid there are many people who are ignorant about economic matters and only see the situation through an absurd ideological lens that has reached its end. Perhaps the moment for education has arrived.

Translated by Regina Anavy

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

The Adventure of Opening an Account in Cuba in MLC (Hard Currency)

Waiting in line. A daily fact of life in Cuba.

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, July 26, 2020 – Imagine that you’re going to your bank to open an account. One of the simplest operations in any country in the world.

You really could save yourself the trouble, if you want, because online banks offer a way to do that. In Cuba, it’s more complicated, although this option also exists.

On the Island, it’s normal to have to visit the bank, and in addition, to hurry, because there are only three places where you can open the account, and you will probably have to wait in long lines. Specifically, you can open the account in the Bank of Credit and Commerce (BANDEC), the Metropolitan Bank (BM) and the Peoples’ Savings Bank (BPA), all of them State controlled.

After waiting for hours, you address the employee and tell him you want to open an account in freely convertible money (MLC — moneda libremente convertible) so you can buy goods and services in the MLC shops, which are usually better supplied than the regular State stores. Your goal is to get the debit card associated with the MLC account, so you can buy everything.

The first thing the employee clarifies is that the MLC shops are accepting U.S. dollars and euros. You can forget about using any money from Cuba’s commercial friends, like Venezuela, China and even Russia. They also accept, with a certain reluctance, Canadian dollars, British pounds and Swiss francs. And other currencies, like the Mexican peso, the Japanese yen, the Danish crown, the Norwegian crown and the Swedish crown, but they tell you that the account will be denominated in U.S. dollars, in accordance with the official exchange rates.

You’ve come well prepared, with your identity card (for example, your drivers’ license won’t work, but it’s okay, irregularities are thereby avoided), and you’re surprised when the employee informs you that you don’t need money to open the account. What’s more, don’t worry because the account can be opened with a zero balance. You don’t understand anything, and the wad of bills you have in your pocket is worrisome, because the employee is blunt when he tells you that the account has to be supplied with transfers made from the exterior – from abroad – whether through a bank or by Fincimex (the financial arm of CIMEX, a State entity) with remittances.

With a certain resignation you sign the first pile of papers, and stamps and other administrative elements are added. In the conversation with the employee, he suggests that you use the AIS USD card, which Fincimex offers the population, and he even promotes your request from overseas; in other words, the possibility exists that remittances from the exterior can be requested in the country where you are located. The employee can’t avoid commenting that my card might take a long time, we don’t do well with plastic here so it’s better to get the card outside, you would be able to make purchases sooner.

While the employee introduces the information into a computer, which crashes several times (the network is slow and the employee complains), he comments that BANDEC (a credit bank) offers anyone the possibility through the Transfermóvil application to request an MLC card without having to come in person to the bank branch (the online option). You think it’s a pity you didn’t know this before. You could have saved a lot of lost time, but in Cuba now it’s understood. And besides, you want to go with your card in hand to teach your friends and family how to use it.

But then comes the critical moment. When it seems that everything is ready and that the card is now within reach, the best part arrives. The employee tells you that the card won’t be there for 7 to 10 days, and it could be longer, and he asks for your phone number so he can call you when it arrives. Resignation. It’s not possible to leave the bank with the card.

Then you remember a similar transaction performed by a relative in a bank in Hialeah some months before, and how he left triumphant with the card, with assurance, with a policy of credit and several gifts from the bank. A different system. Once more, the employee whispers, to avoid being heard, deficiencies exist in the deliveries, and we’re continuing to work on this.

The fact is that when Monday comes you still don’t have the card, and when you consult with friends from work you realize that some have spent two weeks waiting, without news. The shops are open, but people can’t buy with cards that were issued by the banks. The lines shown on Cuban television are due to the fact that many buyers have other cards that can be used the same way.

In effect, in addition to the cards from BANDEC, BM and BPA, there are the AIS USD cards of Fincimex, which function in these shops and also in the other electronic payment channels of the Cuban banking system. You thought about the Visa card that was brought back from one of your trips to Miami, which you couldn’t find anywhere.

The employee has you sign several papers, while he gives final instructions. With this account and debit card you can go to another shop, not only to the USD one, and use it the same way. You also can access ATM machines and withdraw money, but be careful, you won’t get dollars or euros, only Cuban convertible pesos (CUCs), at the same exchange rate that the bank has right now for the U.S. dollar.

Then, you dare to formulate a question, only one. Are you sure that the tax on the dollar has been eliminated? The employee smiles and informs you that it was eliminated on Monday, July 20, in accordance with the measures approved recently by the Cuban Government. Before, if you came to the bank with North American dollars in cash, a 10% discount would apply. For example, if you brought 100 dollars they would deposit 90 in your account. Now that doesn’t happen. And he goes back to insist, again, that the account is now open and you don’t need to deposit cash right now.

However, he reminds you again about the three ways to have funds on the MLC cards. He recommends a bank transfer from the exterior and also by way of remittances through Fincimex.

The second can be through a transfer you receive from another USD account, between individuals.

The third is cash, and it can be in North American dollars or other currencies.

At this point, you wonder why they rejected your cash deposit and whether you understood anything at all.

Translated by Regina Anavy

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

"Where are the Chinese trains?": Transport in Post-COVID Cuba

Cycle rickshaws, known as bicitaxis, are common in Cuba; and the country has received a donation of 23 “auto” rickshaws, which are similar but powered by a motor.

14ymedio biggerElías Amor Bravo, Economist, 24 July 2020 – A few days ago, a post-COVID update on the interventions of the state in the transport and tourist industries was held at the round table. In today’s article, we will look at the former, an area within the Cuban economy with closer ties to the private sector and thus particularly relevant for discussion.

The paralisation of transport following the confinement measures and the resulting decrease in tourist arrivals since the start of the year have determined the results of a sector now on the brink of collapse. Especially vulnerable to this situation are the private brokers who rely on loans and charging the public for their services.

Shamefully, the ministro (transport minister) did not produce any contingency measures, such as reimbursement of the lost revenue suffered by transport carriers who now find themselves on the verge of bankruptcy. This is unlike other countries, where governments have offered temporary loans to help combat the complex situation caused by the pandemic. Instead, private carriers in Cuba have been left to their own fortune by the government. continue reading

Instead, the transport minister was quick to proclaim, at the very beginning of his presentation, that “the reactivation of public transport in La Habana was the greatest challenge, requiring the guidance of the Ministerio de Transporte (Ministry of Transport), the Consejo de Defensa Provincial (Provincial Defense Council) and of bodies with the Ministerio del Interior (Ministry of the Interior)”. What else is to be expected? Even during periods where none of the problems created by COVID-19 existed, the industry has long resented the various difficulties weighing it down that are caused by chronic structural deficiencies, such as weak demand and an inflexible operating framework in the provision of of public and private services.

This raises the question, how are problems within the sector being addressed? For the transport minister, the answer is simple, “by guaranteeing compliance with the measures, by the posting of inspectors at stations and by the establishing of a youth force in collaboration with la Unión de Jóvenes Comunistas (the Union of Young Communists) aimed at identifying problems and sharing them via a WhatsApp group”.

In other words, monitoring and informing on private brokers. A cocktail of increased order, discipline and obedience is the speciality of a ministry seeking to eliminate what it calls “irregularities” in the capital, such as playing music at a high volume or staging protests against the inspectors on behalf of the population. If someone complains about the transport service, they are deemed responsible for an “irregularity”, which could then be classified as a offence. A masterclass in the handling of complaints and demands by the communist government. It is incredible that situations such as the one outlined above can still arise in the 21st century.

The transport minister repeatedly described the problems within the sector, which “require the understanding of the public during this period”, and added that “a systematic reform of the stops is underway with the active involvement of the Defence Council”, another one of the regime’s informants. Images of the long queues of Cubans waiting to use a public transport network running at full capacity all throughout the day have been widely circulated on social media sites during the pandemic, images that are also notable for the complete lack of social distancing.

Given the severity of the situation, confronting statements made by the Ministry of Transport can seem like some kind of a sick joke. One such statement is “the establishment of a reinforced service to the beaches. This has involved the reorganisation of the entire flow of transport based on the fact that the beaches are an area where people tend to congregate”. In particular, the Ministry referred to the “9 a.m. Tuesday-Sunday train to Playas del Este that leaves from the loading bay of the Central Station, La Habana Vieja“.

It highlighted that services were restricted during the pandemic in line with the confinement measures taken by the government. Consequently, the interprovincial lines have been running at 30% of normal as 70% of these lines are connected to the capital. The Ministry also signalled “difficulties with airplanes” when discussing air transport, which explains the focus of the ministry on buses and trains. It confirmed that the ticket sales would be made through the app “Viajando” (Travelling) and las Agencias de Venta (Sales Agencies) while marking the recent “significant investment in the Terminal de Ómnibus Nacionales (National Bus Terminal)” as a success. This investment includes a refurbishment of the terminal with the goal of improving ventilation and with it the passenger experience.

Also emphasised was how “the initial phase will soon put into service the 23 ‘electric trikes'” (small 3-wheeled motorized carts also commonly called auto rickshaws) that were donated to the country; these will operate along routes in Centro Habana and Habana Vieja. Likewise, an app will soon be made available for users of the “gazellas” (metropolitan taxis), allowing them to check prices, routes and even the real time location of the taxis, in addition to other features currently being finalised. The figure of 23 auto rickshaws in a city of more than 2 million inhabitants is somewhat perplexing, to say the least.

Having reached this point, the minster began to explain the integration of transport within the context of the revitalisation plan for the Cuban economy that was recently approved by the Consejo de Minsistros (Council of Ministers).

At its most basic, the measures proposed are designed to “make the most of what we already have”, taking into account that the “financial resources will be limited”. Furthermore, the interventions in transport must “give priority to exports and import substitution, as well as providing the scope for improved management and greater efficiency. This will generate incentives and management strategies that mutually support one another”. All this is accompanied by the potential of “science, digitalisation and other alternatives that prioritise greater efficiency”.

Having finished his presentation, the minister then provided additional detail on the measures.

With regard to freight transport, it was announced the publication of “a series of guidelines establishing the responsibilities of all actors involved in internal port-freight economic activity that would improve control and management systems for GPS-equipped fleets”. It is unbelievable that this technology needs to be improved, or worse, that it does not already exist in the first place.

Secondly, the minister signalled the adoption of additional measures to “restructure the transport network, because there are cases where the means of transport are not in the hands of the state entities that most need them”, which could be interpreted as an increased centralisation of services that were previously offered by private brokers.

Next, an increase in “the more efficient mode of cabotage transport (management, manufacturing and maintenance of small boats)” was announced, a service that the government is constantly trying to secure but is usually hindered by the insular structure of the country.

Fourthly, and with respect to passenger transport, the minister indicated that “there will be a reorganisation of routes in order to adjust schedules in line with demand during peak hours. The use of bicycles, auto rickshaws and electric motorcycles will also be encouraged, all of which are expected to improve traffic flow in the upcoming months”. The consequences of these initiatives that interfere with the autonomy of private enterprise while increasing state control are well known.

The fifth presentation follows its predecessors, with what the minister called “the establishment of an organisational task force to facilitate improvements to the efficiency of the railway system, including the transport of sugar”, as if the problem of the Cuban rail network could be resolved through organisation and nothing else, given the constant delays and abysmal quality of an infrastructure left to decay because of a lack of state investment.

Almost slipping under the radar was the minister’s announcement of a new railway operator “to provide services to the Zona Especial de Desarrollo Mariel (the “Mariel” Special Development Zone). Meanwhile, the transportation of passengers and cargo via an express service will continue to be developed. This is the development that had previously been put on hold, but should soon restart with better organisation”. The minister concluded the section about the railways by indicating that “work will be done to transform the railway maintenance networks, which had seen delays due to the current constraints.”

Finally, and forming part of the additional measures taken within the industry, the minister highlighted the “work being done to fine tune the necessary protocols for the sale of internal combustion engines within the country”. It is expected that they will be available in shops dealing in MLC (moneda libremente convertible, freely convertible currency). In this sense, the minister highlighted the need to “provide incentives that will increase the production of spare parts both in the public and private sector”, without going as far as to indicate what these incentives might be.

In line with the introduction of MLC in all areas of the economy, the minister affirmed that work is being carried out in the “promotion of various enterprises that currently provide services in the public sector so that they can continue to provide the services in MLC. Foreign companies will also receive assistance”.

With regard to the service in state-owned workshops that are privately run, featuring as one of the few references to the private sector, it was remarked that “there will be an evaluation to determine which state-owned workshops would be able to pass into private management (of which La Habana already has experience in this)”. There was little more, if anything at all, on the matter. It was also said that “cooperatives will continue to be actively promoted, and modes of transport will be loaned by state entities to individually selected productive activities”. Once more, precious little detail was provided on what form this would take.

There was also time to dangle a carrot in the direction of one of the nation’s great powers. This carrot consisted of an increase in support from the Ministry of Transport to the Unión de Industrias Militares (The Union of Military Industry) with the aim of “boosting the number of drivers, chauffeurs and crew members who are competent with the latest technologies”.

Finally, the minister heralded the arrival of e-commerce to the transport industry, encouraging private carriers who provide interprovincial services to register with the “Viajando” application, as well as incorporating the sale of airplane tickets to e-commerce platforms.

By way of a summary, the minister asserted that mass transport, both by train and bus, had now been restarted, as had the sale of interprovincial tickets through “Viajando“. Despite being relatively a relatively new platform, approximately 26,000 bus tickets have already been sold via the application. He went on to state that the Cayo, Coco, Cayo Largo del Sur and Villa Clara airports were ready and waiting for when international flights are permitted and begin arriving once more, adding that all of the services comply with the health procedures put in place. This includes the obligatory use of facemasks, the disinfection of transport facilities and capacity limits placed on terminals around the country.

The minister affirmed that “all the freight transportations scheduled by the country have had safety checks performed as part of the process in which begin provide their services once more. This process includes an update of the fuel cards to the latest version”. On that note, it was shown that more than 70% of freight carriers had updated their cards, which can now be used in conjunction with the Transfermóvil application to carry out transactions on the go. The remaining workers in the industry, totalling more than 70,000 (including mechanics and repair technicians), are able to continue working without any issues.

There is no doubt that the reactivation of the transport industry is crucial for the national economy, and there is a lot at stake. Most important are the interests of the state and the private sector. Supported by the WHO, the gradual, phase by phase restarting of services according to the regulations established by Salud Pública (Public Health) follows a path that attempts to limit new outbreaks.

However, the process is by no means free of contradictions. To that end, since regular flight schedules were suspended on March 24, the minister has confirmed that there have been more than 300 “humanitarian flights” chartered for various reasons. The flights have carried more than 30,000 Cubans and foreign citizens abroad, while more than 7,000 have entered the country.

The minister indicated that local trains have their services up and running again, as do a number of interprovincial lines linking together more than one province. On the subject of the Chinese trains, the minister had to explain that these were still not in service “since that all of the national routes start from La Habana, which is still in phase 1. Additionally, the establishing of interprovincial lines that do not include La Habana is complicated, especially since all of the trains are based in the capital”. It is precisely the capital where these dormant Chinese trains can be found.

 Translated by: Andy Barton

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

Elimination of the 10% Tax on the Dollar

The Cuban convertible peso and a US two dollar bill. (EFE)

14ymedio bigger

14ymedio, Elías Amor Bravo, Economist, July 17, 2020 – Let’s imagine a government that spends 61 years calling another government an enemy, accusing it of economic harm. That includes, among other things, a prohibition against using the other country’s money. It also condemns to prison those who are caught transacting on the informal economy (the black market). Then, having said this, the government has no other solution but to return to authorizing transactions in said prohibited money for the purchase of food and cleaning products that are basic to the population.

And in addition, the authorities of this government maintain that the same old measure is fair and benefits all Cubans inside and outside the country. Incredible, because this is Cuba in the time of Díaz-Canel, and this is how the international communication media have covered this news coming from the Island.

Fidel Castro did it another way. When, in the middle of the Special Period he saw that the dollar was devouring the Cuban peso and that the national money was scorned by the population in the face of the free-for-all that brought with it the collapse of the Berlin wall, he created a fictitious currency, the CUC (Cuban Convertible Peso), in order to collect hard currency directly, and he didn’t bat an eyelid. continue reading

The dual currency in Cuba has been here for a quarter of a century and could continue indefinitely, in spite of the strain it puts on the functioning of the economy.  But Fidel Castro created the CUC, and no one up to now has had the courage to eliminate it. The CUC won’t survive the present measures. That’s for sure.

But let’s go to the heart of the matter, which has attracted the attention of the international media. It’s clear that this country, which had prohibited the use of the foreign enemy’s money, had established a tax of 10% on transactions, generally on remittances made in said currency. All of a sudden they decide to eliminate this tax. As there are few governments that act this way, you have to ask why the Cuban Regime has decided not to charge this 10% on transactions in dollars.

The question is easy to answer. Basically, a system of commercial intermediation was conceived last year with the sale of appliances, air conditioners, computers, auto parts, refrigerators, etc., and now they want to extend it to basic goods and cleaning products in 72 shops that will certainly have everything, as opposed to the State stores where, after long lines and wait times, you normally can’t get the product you want. Let’s say that, in addition, they have announced more products and shops for August. The Cuban Government sees commercial transactions with hard currency as a way to overcome the present Covid-19 crisis.

Why are we saying this? Basically, because now food can be imported and paid for with the hard currency that’s collected in the dollar stores by the sale of products—hard currency that doesn’t exist in the national economy because tourists haven’t come to the Island in four months, as the Minister of the Economy recognized. Thus, the dollars needed to buy corn or rice from the U.S. can be obtained in the shops which sell in Moneda Libremente Convertible [Freely Convertible Money). These shops are being inaugurated on Monday, July 20, by the Communist Regime, and everyone is very happy because the threat of a food crisis is thereby removed from the dismal scenario of the Cuban economy.

But this same measure has two sides, like the money. Side A is positive, because it allows Cubans who have access to dollars to open accounts in certain banks, obtain debit cards and embark on buying what they want in the stores. But the question is, what happens to the 80% of Cubans who have no access to the dollar, nor family in the exterior to send remittances?

This is Side B. They would have to save a lot, which is very complicated with the salaries they are paid, and they would have to exchange Cuban pesos with the dollar. The Cuban peso will be the first to notably depreciate in the informal market, and, most probably, these Cubans won’t be able to buy anything in these stores.

Surely Cubans will regulate this injustice in the informal economy, with creative formulas that show us how clever and capable they are. Meanwhile, State Security is training to put an end to the so-called “illegalities”, which are nothing less than a cry for freedom.

For the moment, let’s say adiós to the 10% tax on transactions with dollars, which Fidel Castro also established in 2004 to respond to what he called “attacks of the embargo”. The reality is that nothing has changed since then, even if the application of Title III of the Helms Burton Law has made things more complicated. Now the Cuban Communist Regime has decided to eliminate the tax so people won’t lose that 10%, which still doesn’t make anyone jump for joy.

No one should expect these measures to revolutionize an economy that, according to the latest data from CEPAL (the Economic Commission for Latin America and the Caribbean), will sink to -8% in 2020 (remember that in April they had estimated only -3.8% because things were going badly, and what is worse, much worse, is that this decline will continue). The Government has reacted by applying, inside the profit margins allowed, a measure that tries to obtain all the hard currency circulating in the country from remittances (the only hard currency that presently comes in).

The older generation remembers Fidel Castro’s dialectic against the U.S. and the threat of the dollar. Decriminalizing the possession of dollars took place in 1993 during the so-called Special Period, but before that date many Cubans suffered imprisonment and heavy fines for having dollars. History can’t be easily forgotten, and much less should it fall into oblivion when the past is reconstituted.

Before 1959, the U.S. wasn’t insulted for meddling in the Cuban economy. Prices in stores were established in dollars, and the peso was on a parity with the dollar. The Cuban economy rested on more solid fundamentals.

So much demagoguery and long hours with speeches empty of content in order to stop selling pork, shampoo and hamburger meat in dollars to Cubans in a series of select shops. Basic products in prices given in dollars in a country with two official currencies in circulation, the historic Cuban peso and the Castro invention called Cuban Convertible pesos. Sometimes history goes backwards from good sense to those who offend it by playing Russian roulette. What’s going to happen in Cuba starting from next Monday, July 20, has a lot to do with those lost battles by governments and political regimes, in which there is no type of justification for supporting them.

What’s bad about all this is that they want to present these measures as something beneficial for the Cuban people, when they aren’t. That 80% of Cubans don’t have access to the dollar leaves many people on the margin of this commercial system oriented to capturing hard currency. This causes discontent, because no one is going to understand this difference. In Cuba, the access to buying goods and services that don’t exist in other shops isn’t going to be a function of the value of work, strength, motivation or performance, without having family or friends in the exterior to send dollars. Is this the moral lesson that the Castro Regime wants Cubans to have? If those who govern the country have nothing better to do than insult those who question these measures, let them retire and make way for others. They are losing very valuable time that can’t be recovered. Luckily, Cubans know it.

Translated by Regina Anavy

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

A New Call For Possible Dialogue In Order To Overcome The Crisis

Masked police agent controls line to buy food in Havana (File photo)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, July 8, 2020 — The virulence of the economic crisis that is battering Cuba, as a consequence of containment measures for the Covid-19 pandemic, is becoming more serious and profound than expected. Spaces for dialogue are opening up because of the surge in outbreaks, which create uncertainty about the future.

The data and information trickle in drop-by-drop for the authorities to confirm. And if it’s true that no data exist on the economic situation, some that are known, like the statistics on travelers, are frightening. In May, only 993 visitors arrived, which represents a decrease of 99.7% compared to the same month last year. Tourism has disappeared from the Island, and possibilities for recovery are scarce.

Certainly it won’t happen in 2020. The authorities will go back to their sales pitch to explain the failure, but they won’t have far to go. The forecast for economic development in Cuba has to be revised downward and thus assumes that the economy can collapse, given the great importance of the State in all economic activity. continue reading

There is nothing now that allows anyone to have any real confidence in the future of the economy. Our estimate of the drop in the economy’s GDP was initially situated around -6.2% when CEPAL* showed only -3.8%. The data and information that come from the Island require caution and point to a particularly important decline, probably in the neighborhood of -10%, almost three points lower than the initial estimate. This puts Cuba among the countries that could be the most affected by the crisis in Latin America, although it won’t be the only one.

The fact that we’ve revised our initial prediction downward shows the lack of confidence and credibility in the authorities to surmount the present crisis. It’s difficult for any country to try to confront such a situation on its own, so this whole experience is going to be harder and more complex than was believed.

In reality, there isn’t any analyst who thinks that a true recovery of the Cuban economy will happen in the last two quarters of the year, so 2020 will be remembered as a time when the Cuban economy came close to collapse, because of the intensity and unexpected origin of the crisis.

The updated forecast contemplates a complex international scenario for tourism, with risk factors of difficult control from the Cuban perspective, which will have a potential negative effect on recovery. This downward trend of tourism will coincide with lower remittances, a low level of foreign investment and fewer exports of minerals and tobacco.

As a consequence, hard currency will be scarce, and that will put the brakes on imports. In addition, on the internal front, the agricultural sector won’t be capable of producing sufficient food for the whole population. The authorities know this, and the building industry isn’t going to bail out the economy because the State’s budget has committed resources to current expenses, which will have limited impact in terms of growth.

In sum, these factors, together with inattention to the self-employed, abandoned to chance by the Government, depend on the political goodwill of the leaders and their ability to promote measures that really serve to bring the economy out of the hole it’s in. Perhaps if, instead of making individual decisions based on communist orthodoxy, all sectors of the economy, State and private, came to the table for a dialogue, the Regime leaders would realize the enormous importance and the social support they would have; for example, if they approved a special fund to help the economy recover.

Decisions of this type could serve to establish the basis of an economy centered on a common goal, incorporating an integral plan of reforms and support for the private entrepreneurial fabric. At the same time, resources could be generated for the social protection of the least-favored groups because of the crisis.

The authorities of the Cuban Regime still haven’t accepted that they have a long and difficult process of recovery ahead of them, a great challenge in the coming months, which will demand far-reaching measures that, alone, might not give them the results they need. The moment for dialogue and consensus has arrived.

Unilateral Communist decision-making must end. If they want to light the way to the first fruits of recovery, they have to participate in all the plans for aid proposals, and they must have the funds and tools available to transform the economy. Díaz-Canel’s government must understand that the survival of the Cuban economy depends on being able to confront the task of economic reconstruction by collaborating with all State and non-State economic agents, and by promoting  a climate of political and social dialogue on new foundations, which will help Cuba return, as soon as possible, to a sense of sustainability and fiscal consolidation.

The challenge in the next few months is to support a progressive return to growth and consolidate the first fruits of the recovery. Without dialogue, it will be impossible.

*The United National Economic Commission for Latin America and the Caribbean

Translated by Regina Anavy

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‘Scientific’ Meetings Don’t Put Food on Cuban Tables

Current Cuban president Miguel Díaz Canel, when he was vice-president, with then General-President Raul Castro. (Archive)

14ymedio biggerElías Amor Bravo, Economist, 11 July 2020 — A brief note in the state-owned newspaper Granma, reports on a meeting between Cuban president Díaz-Canel and scientists and experts from prestigious Cuban institutions, held to discuss issues of food and nutritional sovereignty. The article offers an analysis of the problem that has always affected the Cuban economy, exacerbated as a consequence of COVID19, and all of this, says Granma, “from an integral point of view, where all the links with regards to food and nutrition are considered.” Pure propaganda.

On this occasion, experts from the Soil Institute addressed the analysis of the needs of Cuban agriculture, from the perspective of fertilizers and pesticides. Nothing new. These are intermediate products that have to be imported because they are not produced on the Island, but which, in the absence of foreign exchange cannot be imported, thus limiting the objective of producing more. As usual. A problem caused by the poor development of an economy subsidized and led by the state for too many years, with criteria that are not the most appropriate. While these issues are addressed, valuable time to take action is lost.

But no. It does not seem that this is the objective of these type of meetings with scientists, but that there is a certain disposition in the official propaganda to follow a script already written in the “scientific” article that Díaz-Canel published some time ago. The matter goes a long way, without a doubt. continue reading

And from this “scientific” perspective that Díaz-Canel wants to use to analyze the problems that affect his government, it was said at the meeting that the traditional unproductiveness of Cuban agriculture to generate food for the entire population must be “addressed taking into account other processes that also intervene, such as the introduction of scientific results, problems in marketing and distribution, affordable consumption, nutrition, good habits and, ultimately, the role of food and nutrition in the health of our people.”

Believe it. Said and done. Not a single reference to the crucial issue that grips the Cuban countryside and prevents it from being prosperous: the legal framework of property rights, the land tenure regime, in short, allowing Cuban farmers to truly be the owners of the production factor and to freely decide what they want to do, without interference from the communist state.

This question, essential for sufficient food to be produced, was not raised at Díaz-Canel’s “scientific” working meeting, and I am very much afraid that it is beyond any consideration under official communist doctrine. In fact, at the first “scientific” meeting, similar issues such as “the design of policies and legal norms for agricultural extension and also for bioproducts” were discussed, but nobody raised the need to return the ownership of the land to those who work it and produce Strange as it may seem, there is not a single jurist in Cuba who publicly defends this need, which the longer it goes on, makes it increasingly difficult to avoid the imminent collapse.

In the same issue of Granma, there is a report of a visit to the provinces of Artemisa and Mayabeque by Machado Ventura (age 89 and serving as second secretary of the Cuban Communist Party). At the time of the visit, recent rains had had a negative impact on the supply of food products to the capital. The problems of Cuban agriculture come from yesteryear, and they no longer respond to the proclamations and messages of leaders such as Valdés Mesa (age 75, Politburo member), Marrero (age 57, prime minister), Machado or himself. All these messages fall on deaf ears and lose their validity because numerous problems accumulate in the countryside that have to do, essentially, with the legal framework of property rights.

The Raulista reforms — implemented under former president Raul Castro — based on the delivery of land under lease, have not served to increase production, because the farmer legitimately aspires to be the owner of his land, and not a mere tenant of the state. We must review the model, and stop talking about nonsense, such as bioproducts, local food production in pots in the cities, the cultivation of pineapple by the local CDRs (Committees for the Defense of the Revolution) and other nonsense that we have heard from leaders of the communist regime.

The issue is that in 2020 there is no pork, nor rice, fruit trees are scarce and vegetables even more so, while state security represses and denounces the road workers for doing their work serving the population, and the markets are empty because nobody moves the products from the fields to the city. That Díaz-Canel tells me that this whole and very real problem has to do with scientific research, undoubtedly of quality, that is carried out in the country. Nada.

If the Cuban leader really wants to undertake the production of food he needs to meet with the independent agrarian producers, who have already created associations to defend their interests outside the communist government. He needs to listen to what they are going to tell him, and he needs to willingly accept their advice, and if he sees fit, he needs to arrange for the adoption of some of their proposals, and things will go much better.

This, and no other, is the dialogue that is urgent in Cuba, and as soon as possible, to avoid the food crisis announced by the United Nations World Food Program.

By meeting with independent producers, he will get first-hand information about what is happening in the Cuban countryside, and not the distorted advice that comes from Machado Ventura or Valdés Mesa.

The Cuban guajiro knows what has to be done to produce more and is aware that, if the accounts don’t balance, it is the fault of the government, which subjects him to ideological obedience, aggressive taxation and local communist control, to prevent him from prospering. The food crisis is not only due to a problem of importing fertilizers and pesticides for the soil, but there is much more, and that even though scientific contributions can help, there are many other things that need to happen to solve the problem of producing enough food for everyone.

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Without The Countryside There Is No Country

Hoeing weeds. (EFE)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, July 6, 2020 —  There are serious challenges in the Cuban agricultural sector for more and better production, and Diario de Cuba has confirmed the discontent in large sectors of the campesino population over the repressive measures being applied by the Communist government.

These measures go beyond the precariousness that exists in the country, and what are considered “illegal” practices in Cuba are accepted practices by everyone who farms in countries where the free market regulates production.

In Cuba, the Government’s denunciations against the farmers have their origin in the terrible and deficient administrative judicial structure of the country, which, far from contributing to tackle the problems, makes them worse in an exorbitant way. There are all kinds of denunciations. The League of Independent Farmers, one of the organizations that promote the campaign, “Without the countryside there is no country”, has offered us some clues. continue reading

If there are problems in the food and feedstuff supply for animals, why does the Government have to sanction and repress an efficient producer who has a surplus and sells it to other producers? What reason prevents a pig farmer from obtaining some income from the sale of excess food that will certainly end up being allocated to other intermediate suppliers or the needs of the business itself? But no. This practice has been repressed by the authorities as a consequence of the denouncements that are multiplying among the producers themselves, pressured by the Communist organization, which at the local level maintains an iron control over operations to prevent them from being profitable and growing.

Another example has been the State’s intervention in harvests. Who said that expropriations don’t exist in Cuba? Far from advancing toward a necessary liberalization of the production and commercialization of agricultural products, the Government, in a return to the Communist norm since June 18, has reinforced centralization and State control over economic activities. In reality, intervention in the harvest of a producing farmer means his ruin and the impossibility of resuming the activity, in addition to the sanctions that can be applied.

Moreover, the Regime uses its communication media to blame the producing farmer as someone guilty of hoarding food and creating hunger. Instead of promoting the social image of the campesinos, as agents charged with sustaining the population in these difficult times, they are converted, in the eyes of the population, into thieves whose goal is to hide the harvests dedicated to Acopio, Cuba’s State Procurement and Distribution Agency. An injustice.

This campaign by the authorities to undermine the social base of the free campesinos in Cuba is provoking the first fears founded on the continuous aggression and the instruments of repression that exert a chilling effect on the freedom of economic participants. A sale of a product at a price which doesn’t agree with Acopio, for example, results in the immediate confiscation of the harvest. And the problem is none other than Acopio’s prices. While Cubans have to face elevated prices in the markets where they make their purchases, the producer is barely paid for his work, and furthermore, the debts of the State, prolonged in time, end up generating problems of solvency.

The League has denounced equally the scant attention paid by the Communist leaders to the needs of the farmers, something so simple as repairing a roof by supplying the construction material that the farmers can’t freely acquire. Rains affect the harvest, but without insurance that covers the damage, the losses ravage the field, and the State doesn’t assume its part of the responsibility. This occurs even with tobacco, a product intended for export that provides very important hard currency to the Government, income which barely reaches the producer.

To these problems are added infestations and infections that can’t be combatted because of the lack of pesticides and treatments that, instead of being produced in the country, have to be imported from the exterior. I don’t know what they are waiting for to advance in creating substitutions for imports. The Government is limited to blaming the embargo, but it doesn’t provide solutions to the problems.

Many of us ask how it’s possible that agriculture in Cuba produces these types of problems. That campaign, “Without the countryside there’s no country” is fully justified, because it looks for a 180-degree change in present conditions, certainly complicated, in those who engage in agricultural activity in Cuba.

The demands for freedom by food producers and the suspension of taxation for at least 10 years to strengthen development have been answered with more vigilance and repression. The consequence is that the shortage of food will increase, and Cuba will approach that food crisis spoken about by the United Nations World Food Program, which the Cuban authorities don’t want to recognize.

Time is running out for urgent changes, and hardship approaches. The problem of food is not going to be solved by planting in the yards of city homes, or in pots or on balconies. It cannot be solved until the ownership of the land is returned to the farmers and the free market in order to decide what they deem appropriate for their production and harvests.

It’s not a matter of leasing more land. Raúl Castro’s formula hasn’t given the predicted results. What needs to be done is to reverse the Communist agrarian reform, which has been a big historic fraud for Cuban campesinos, and which has prostrated the formerly competitive Cuban agriculture, in a structural crisis. The Cuban countryside can return, but it needs support and freedom. And thus, it has to be said very clearly, “Without the countryside there is no country”.

Translated by Regina Anavy

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

Machado Ventura Harangues The Countryside: You Have To Cultivate All The Land

In Cuba, losses during harvest and after collection represent 30% of total production, plus an additional 27% during distribution. (EFE)

14ymedio bigger14ymedio, Elías Amor Bravo, Economist, June 27, 2020 – Machado Ventura, Second Secretary of the Communist Party of Cuba, is relentless. His call for Cuban farmers to cultivate all the land is repeated over and over in the pages of the official Communist newspaper, Granma, which has carried this message for weeks and months.

“The whole land must be productive,” Machado Ventura said in Holguín, accompanied by Valdés Mesa, the First Vice President of the Republic, recognizing the contribution of the credit and services cooperatives (CCS) in agricultural production.

This is one more chapter in the episode of desperation on the part of the Cuban authorities to make food production reach the whole population, and thus avoid the imports for which they can’t pay since they don’t have hard currency, and to remove the possibility of a food crisis that the World Food Program of the United Nations has anticipated for Cuba in a recent report, which has been noted in this blog. continue reading

Machado’s idea of making the whole land productive has a flip side, showing the harsh and harmful reality of the Cuban countryside: the land isn’t fully used at 100% of its capacity. Nor are the rest of the resources and production factors of the Cuban economy used, and the needed capital isn’t expected.

Machado should ask himself why the Cuban economy doesn’t take full advantage of the resources it has, including the talent, entrepreneurial spirit, assumption of risks and innovation, and he should conclude that if this isn’t happening, as it is in most countries in the world, it’s because the economic and social system imposed by the Communist Regime doesn’t allow it. There is no other possible explanation. Harangues won’t do it.

Recent history shows us that when a communist country gets rid of ideological pressures that prevent it from optimizing the use of productive resources, it leaps into development, like what occurred with Vietnam and the reforms of Doi Moi or the countries of Eastern Europe, where a powerful modernization took place once the chains that tied them to the Iron Curtain were broken.

There is no alternative for having an economy function at 100% other than putting resources at the disposition of the productive process efficiently. And thus, Machado ought to listen to, not direct or control, what the National Association of Small Farmers tells him, along with other organizations of independent farmers, who can explain to him why and how to increase food production in Cuba, by cultivating all the land.

And Machado has to stop, once and for all, asking for the impossible.

If he really wants to cultivate all the land, he has to bet on formulas other than those announced in the Granma article.

Agricultural production can’t be increased with the so-called “State productive poles”; this collectivist formula controlled by the State is a failure. The Cuban agricultural sector must have an open road to allow the cooperatives of agricultural production and the CCS to deploy their plans with total autonomy and freedom, depending only on the democratic and free decisions of their members, as happens in Spain, where the cooperative sector is playing a fundamental role in the present crisis provoked by Covid-19, as it always has in moments of economic difficulties.

Also, forget State enterprises, because their results are well known in Cuban agriculture. The lack of incentives and stimuli prevents the land from being prepared, and precisely-determined fixed work is falsely assumed to give results for the Cuban farmer.

And above all, a new legal system must be given to the farmers, so they can have autonomy and freedom to buy supplies, pesticides, tractors and all types of equipment with the resources generated, not mandated by the State.

The State shouldn’t be the unique “client” for Cuban farmers. The only client should be the consumer, who has to have freedom of choice to consume and be ready to pay, and not bother again with the regulated canasta [the basket of rationed basic goods].

Thus, Machado Ventura’s “request” of the State for increases will only create problems for the farmers, and later there will be defaults, terrible wholesale distribution by Acopio [State Procurement and Distribution] and all the evils derived from the State’s intervention in the economy.

Corollary: Cuban agriculture and livestock breeding should be in the hands of private enterprise, as in China and Vietnam, and other alternatives must be discarded because they have no future. And the example is more than evident.

A warning: What Machado Ventura calls “technocratic problems,” referring to the financial matters of the banks with the farmers, is not going to be solved with harangues. Because really, if the farmers need credit to develop their fields, the banks should be in a condition to help them, as they are in other countries. And credit shouldn’t be granted by political and ideological criteria, but with technical methods and efficiency, because it could be a potent stimulus not only for agriculture but also for the development of the Cuban financial system, which needs it. Certainly the term “technocratic problems” cited by Machado Ventura is terrifying.

Lastly, forget about stopgap solutions like the programs of municipal supply, if you want to feed the whole population. These programs end up giving food to people on three or four blocks in the large cities, but in no way can they meet growing needs. It’s not possible for them, by function and scale.

On the contrary, the solution lies in privatizing Cuban agriculture, increasing parcel size, promoting the merger of campesinos’ land without cooperatives, facilitating free choice for providers and buyers and giving the farmers what they want to plant and harvest. Commercial economic relations and private property rights must be extended to the farmers as soon as possible. It’s obvious that leasing the land doesn’t help. Repetitive harangues are exhausting and draining. And what is worse, they lead nowhere.

Translated by Regina Anavy

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Is Cuba on the Verge of a Food Crisis?

The independent agricultural organizations of the Communist Party have denounced the limits imposed by the state when it comes to producing, distributing and selling their products. (S. VAlice)

14ymedio bigger14ymedio, Elías Amor, Valencia, 29 May 2020 — On several occasions, I have pointed out that the crisis provoked by the Covid-19 pandemic is creating serious problems for the communist authorities in Cuba with regards to feeding the population. The lines to buy a quarter of chicken or a bottle of oil generate disturbances of public order, and break with the necessary confinement of the population to confront the virus.

The lack of food in Cuba has been a structural element that repeats itseld as a consequence of a horrible design of the structure of property ownership in the Cuban countryside. Under normal conditions, when the harvests are insufficient to feed the population, the situation is resolved by resorting to emergency imports of grains and poultry, designed to deal with possible famines.

Now, the scenario is different. With no foreign exchange to make such purchases, and considering that other countries may have the same difficulties in producing food, the alarm has gone off, and this is reflected in a note from the United Nations World Food Program (WFP) that has just been dessiminated. This body concludes that “if measures are not taken, 14 million more people could be pushed into poverty and hunger in 11 countries in the Latin American and Caribbean region.” continue reading

Similarly, the agency notes with concern, “We still have time to prevent the Covid-19 pandemic from becoming a hunger pandemic in the small island developing states in the Caribbean.”

Accustomed to receiving positive evaluations on the United Nations human development indicators (which seek, with little success, to substitute GDP as a reference for the economies), the communist regime in Havana absolutely does not appreciate being part of a group of countries identified by WFP for their serious food problems that can lead to famines.

But this time, WFP’s projection has been rigorously prepared, comparing the food security evaluations carried out in 2019 with the analysis of a set of economic indicators after the Covid-19 outbreak, with the results of remote surveys completed in 2020.

Through this comparative analysis it has been possible to assess the impact of the pandemic on access to markets, food security and livelihoods in the different countries. And after carrying out this analysis, the results have not been positive for Cuba.

ECLAC estimates, showing a decrease in GDP of -5.3% for Latin America and the Caribbean in 2020, set off alarms, which, together with the loss of foreign investment, tourism revenues and remittances from abroad, make the situation even more complicated and difficult for the Castro authorities to manage.

In sum, the WFP report warns that the situation that may occur in Cuba, in terms of food security, will not be very different from the one that ends up happening in, for example, the Delmas 32 neighborhood in Port-au-Prince, the capital from Haiti, or in the Dry Corridor of Central America.

By placing Cuba on the same list of countries with food threats and possible famines, such as Bolivia, Colombia, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Nicaragua, Peru, the Dominican Republic, and small island developing states in the Caribbean, the perspective of the communist regime should necessarily change and it needs to do so as soon as possible. WFP warns that hunger in Cuba can reach  the same serious conditions as in these countries, which are usually the usual reference for attacks by the communist regime, considering them “neoliberal.”

In addition, if this were not enough, the report warns of the serious additional effect that the hurricane season in the Caribbean can cause in Cuba, which, as every year, begins in June, and that poses an additional risk for the production of food for the population.

For all these reasons, the Program calls on these countries to provide “additional support for the beneficiaries of national social protection programs and expanding their coverage to more groups, such as migrants and people without formal employment.” However, the lack of financial resources is considered as a negative point in achieving this objective.

For this reason, the report refers to the need to resort to the assistance of international financial institutions and the community of advanced countries, to respond quickly and adequately to the hunger caused by the Covid-19. It is evident that this is going to demand from the Cuban communist authorities a different position than the one they maintain towards institutions, such as the IMF or the World Bank. Will they be willing to do so?

According to the WFP report, it is the responsibilty of these countries to manage this scenario, overcome it and avoid possible food risks to the population, according to the WFP Report. In the official Castro press the authorities’ harangues to farmers to increase production have multiplied in recent weeks, but no measures have been adopted to make the supply of food more flexible and increase.

At the same time, the independent agricultural organizations of the Communist Party have denounced the limits imposed by the state when it comes to producing, distributing and selling their products. The situation in the Cuban countryside has reached a remarkable degree of deterioration and may go further, as a consequence of the effects of the Covid-19.

The communist government of Havana must be aware that, in the absence of efficient policies that allow the country’s organization of productive agriculture to transform, the situation may end up being much worse than it is today. Perhaps the time has come to put ideology in its right place and bet on efficiency and productivity. Time is running out.

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

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Cuba’s Demographic "Winter" in the Times of the Pandemic

The number of births in Cuba in the first quarter of the year, 23,666, is clearly fewer than the number of deaths, 27,269.

14ymedio bigger14ymedio, Elías Amor, Valencia, 29 April 2020 — In the midst of the serious crisis of the Covid-19 pandemic, which, unfortunately, is starting to wreak havoc, not only in health but also in economic terms, the State newspaper Granma presents us on the cover with information that, of course, will go down in the history of journalism professional.

Nothing more nor less than a meeting with President Diaz-Canel is referenced to analyze the demographic dynamics of the country, and to report how population data from the first quarter show an absolute decrease in the population, given that the number of births (23,666) is clearly lower than deaths (27,269) and forecasts say that this trend will continue throughout the year.

Astonishingly, Díaz-Canel left the pressing problem of the pandemic for a few moments and devoted himself to evaluating, according to Granma, “the fulfillment of the program of attention to this important matter, in a context of population decrease, low fertility levels and increased aging.” continue reading

The data and information, drop by drop, were offered by the supposedly “disappeared” Mariano Murillo, who continues as “head of the Permanent Commission for Implementation and Development,” when we thought he had left office. He was in charge of showing the negative and tragic balance of 3,603 fewer Cubans, a part of the natural decrease of the population of Cuba.

They should have already addressed this problem a long ago. As should have Raúl Castro. Because the demographic “winter” of Cuba is not a phenomenon of now, but has been simmering for more than a decade. It is a problem that does not have an easy solution, but rather has very complex structural aspects and, what is worse, it will not be solved with patches and specific measures, no matter how much “intelligent, intensive work, with adequate follow-up, seeking to have more births, to stop the population decrease” is done by the authorities.

How have we gotten to this situation? What is the seriousness of the matter? And what solutions does the problem have?

The official argument is that we have reached this situation because the Cuban population ages due to a high life expectancy, a positive fact if there were a recovery of the demographic cohorts at the base of the pyramid. But since there are not enough births, the segment of the population of Cubans 60 years of age or older has increased to 20.8% of the total population; a figure that during 2020 will continue to grow up to 21.2%.

There is also talk of treatment for infertile couples, which according to Murillo’s data reached a figure of 138,977 couples, who show up at municipal and provincial consultations and high-tech centers, and it the success of this program is outstanding, having achieved, in 2019 and in the first quarter of 2020, 11,678 pregnancies.

Best of all, Granma announces (once again the propaganda reaches the inadmissible) that “to continue finding efficient solutions, around twenty measures are being studied to stimulate the birth rate, which include greater care and protection for pregnant women, for working mothers and fathers and for families responsible for the care of minors. “

The point is that these 20 or 30 measures are not going to solve the problem. In reality, the stagnation of the Cuban population has a lot to do with the terrible state of the economy, the general poverty of the population, the overcrowding of families in houses that are falling apart, the low purchasing power of wages and the absence of freedom of choice.

One would have to wonder who might want to bring their offspring into the world to see them spend their daily existence between ideological slogans and absurd lines to “resolve things” — the terminology used to define shopping for food and other necessities.

This is the main issue, that Cubans have lost faith in the future of their country, and that the youngest, as far as they can, choose the path of emigration to straighten out their lives. If they analyzed the birth rates of Cubans abroad, they would see big surprises.

Díaz-Canel is not right when he says that demographic dynamics is a matter of the greatest complexity, because it is one of those that most impacts the present and future life of Cuba, its economic and social development.

It is just the other way around, as one has to see. It is because of Cuba’s structural poverty, which its government neither acknowledges nor wants to fix, that demographics are sinking without remedy. The causality of economic relations, in this case, is fully justified.

For more than a decade, the Cuban population has grown little or not at all. Those who have tried to solve this problem without reforming the structures of the old and reactionary communist social system have failed. There is no point in “filling” the Constitution with rights for families if there is then no way to exercise them or to put them into practice.

Daycare centers, grandparents’ houses, attention to conciliation, protection of pregnant women and infertile couples, yes, all that is very good as subsidies that fatten the state budget, but the objective must be to improve the living conditions of Cubans, and that depends on economic forces, especially the private ones.

And to achieve this goal of improving the productive structure, unfortunately, nothing new is on the horizon. Next year, Murillo’s data will be much worse. You can be sure of it.

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Blackouts in Sight in the Midst of COVID19

A blackout in the city of Camagüey. (14ymedio)

14ymedio biggerElias Amor Bravo, Economist, April 20, 2020 — Unión Nacional Eléctrica, the state enterprise that has a monopoly over Cuba’s electrical supply, wants people isolated in their homes due to the quarantine as a consequence of COVID 19 to consume less electricity. Let’s go, turn off the lights.

The company declared in the state-run newspaper Granma that there has been an uptick in electrical consumption in the residential sector and that’s inadmissable. They declared, “the consumption of electrical energy accumulated in the first 13 days of April surpassed the levels of consumption compared to the same period last year (1% more and 6.3 Gigawatt hours (gwh)), similar to the electricity consumed in the months of July and August.”

The immediate question is, is there a reason for alarm with this small increase in consumption? Do they lack solutions to this problem?

Well, no. It appears that the entire system may collapse. continue reading

And here’s the worst part. Threats of this caliber, published in the official Communist newspaper daily, don’t do anything more than to raise the anxiety of a society worried by COVID19 and the destruction it could cause on human life.

In any other country in the world, exceptional circumstances like the one we’re living in demand answers in accord with government agencies. But, here there is an electric company that, according to the Communist constitution, is public property, insisting on threatening blackouts if energy is not saved as soon as possible. Nobody can deny that quarantine requires a greater amount of energy consumption to store food products in the refrigerator, to beat the heat, to be able to read and pass the time more comfortably, to work remotely (those who can), and so on.

Why does the least powerful sector, the people confined to their houses, have to reduce their electricity consumption? The same as usual. The production of electricity in Cuba depends on petroleum. There are no renewable energy sources and they’re not on the way.

As a consequence of the fuel shortage, due in part to the systematic reduction of supply from Venezuela, and the difficulties Cuba has in gaining access to global markets due to its nonexistent financial standing, the only solution is to save, save, and continue to save. Sure, turn everything off. Because the alternative is clear, blackouts. And while everyone is locked in at home, in a moment especially complicated like this one, this approaches a Dantesque situation.

COVID19 is bringing to light, one by one, how the measures taken by the communist regime the last few years have been resolute failures. Now it’s the energy plan’s turn. The image of change and liberalization that the communist propaganda machine has wanted to associate with Raul Castro’s reforms is smoke and mirrors. It evaporates while COVID19 wreaks havoc.

The Cuban economy is worse off than in 2008, the reforms have not improved anything, and Cubans have barely experienced and well-being in their standard of living. The Plan 2030 is not worth anything either, the way things are changing and the pace at which they change.

In the meantime, and waiting for all this to happen, the communists are doing the same as usual: sending people home so that the productive sector can reduce electricity consumption. Paralyzing or freezing the economy here matters little, because everything is state-run.

And then, of course, a lot of control or something like that. Precise instructions to the heads of administration to carry out with the utmost responsibility controlled compliance with their energy plans, “by taking daily self-readings of the meters and measures to reduce consumption, depending on the authorized energy-consumption measures.” Instead of concentrating efforts on producing more with less, they create daily scandals about electricity consumption. And then they wonder why the economy doesn’t work.

The last straw is transferring the need to save electricity to Cuban families, under the threat of impending blackouts. This communist blackmail is inadmissible in any society with recognized economic rights, even more so when the current system does not allow for alternative suppliers and everyone must pay their rates to the National Electric Union. It’s the same as with ETECSA — the state telecommunications monopoly — but at least that company works a little better.

Some of the actions that have been established belong to the barracks logic of the communist economy that has presided over Cuba for the past 61 years, such as, for example, “taking advantage of the final heat of the electric stove, once the cooking is finished, and turning it off a few minutes before finishing.” Or even, “turning on the air conditioning, preferably after 10 at night. After 12:00 at night, turn the air conditioner to the fan position” and even “close the refrigerator and avoid opening it frequently,” and others that tell people how to live. It’s unacceptable.

And best of all is the example they cite to save no less than 26 tons of diesel fuel used to produce electricity. Well, according to Granma, that saving, which is certainly important, is achieved “if each consumer in the national territory turns off a 20 watt lamp, which will allow for a decrease in the demand for electricity by 80 megawatts.” 11 million Cubans turning off 20 watt lamps? The truth is that they no longer know what to say. Above all, to justify the unjustifiable.

 Translated by: Rafael Osorio

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

The Communist Regime’s First Measures for Cuban Entrepreneurs: A Small Step

Passengers getting out of a private shared-taxi operated by a ‘botero’ in a time before the Covid-19. (14ymedio)

14ymedio biggerElías Amor Bravo, Economist, March 21, 2020  — Gradually we are learning about some of the measures the communist Cuban government is using to reduce the impact of COVID-19 on the activity of the private sector on the Island, led by the small businesses of self-employed workers.

In particular, apparently the Regime has approved a series of tax, work and lending measures that, generally, resemble those that other countries have adopted for self-employed persons and independent professionals. The details are given below.

The measures have already received positive reviews by some Cuban businessmen on Twitter and are considered “an important support for the thousands of enterprises that right now are completely affected by the world epidemic situation,” says Oniel Díaz, co-founder of AUGE and MP de Kreab in Cuba, which does consulting for private businesses. continue reading

“Furthermore,” he adds, “it was a wise decision for the prime minister to obtain cooperation from the private sector to make it possible for the more than 11,000 tourists who are staying in private rentals to leave Cuba. It’s not a minor detail.”

And, he emphasizes finally, that “cooperation, alliances and dialogue are the tools we have at hand to face together, in addition to this challenge, everything  ahead of us on the national economy front.”

I’m afraid that we must greatly lower expectations and say that with these measures, what’s most probable is that the entire Cuban private sector will have to struggle with an elevated mortality rate for small businesses and establishments. I have the impression that the measures have been designed specifically for the tourism sector, and they haven’t taken into account the fact that self-employment in Cuba is really much more diverse and varied, fortunately. What we need is reflection and a more accurate approach.

I understand that mortality won’t happen, for example, in the case of the high official of the Regime who rents rooms in his residence in Havana’s Plaza or Miramar neighborhoods to foreign tourists, because the income he gets from this activity complements his salary, which is higher than average. And he can even benefit from the fiscal cuts announced, because foreigners are not going to be arriving in the next months and his income will be temporarily crushed. The renegotiation of a loan, for those who are credit-worthy, can also benefit him.

In the case of many retired business people, the impact of COVID-19 and the measures detailed below can be inconsequential if the government keeps their employment and salaries intact.

Those Cubans who bet exclusively on self-employment activity and not only on tourism will have problems.

We are thinking, for example, about the thousand brave Cubans who travel every day with Spanish passports to the duty-free zones in Cancún, the Dominican Republic and even Haiti to bring back every kind of provision to be sold on the island. The brakes will abruptly be put on this channel because of the general closing of borders, and this was the main way for many small businesses to get goods and services. Without this supply, more small businesses will fail, since we can’t wait for the Communist Regime to improve the logistics of distribution in Cuba.

And what can the tenant farmer hope for when he can’t find the supplies he needs for production in the local economy? He has been forgotten, except for his debts with the bank which could be renegotiated. The crops will have to be harvested and brought to the markets, and in a situation of isolation and extreme hygiene measures, you have to ask what will happen to the small business workers who bring the merchandise and food to homes, like the pushcart vendors.

Even the brave taxi drivers (known as “boteros” or “boatmen”) in the Havana tourist zones could benefit from the planned measures for the reduction of income or exchange for credit, if they existed. In this case, the question is that if the boteros not only drive tourists but also a good part of the population, why is adequate public transport lacking? When isolation begins and the demand for national trips no longer exists, the situation will be much more serious. It won’t seem fair to the boteros, and they are right to ask why their monthly taxes aren’t reduced by 50% like they are in the case of food service activities. Why not them, too?

With these considerations, what I want to convey is that the measures of the Cuban Communist Regime are interesting for private tourism and are focused on something less than 3% of the economy’s GDP. The private activity in restaurants and lodging are important, but the reality is that most tourists stay in the hotels owned by the conglomerates of State Security and the Army, and they use the services of these networks.

The rest of the rich and varied private economy of professionals, designers, sellers and providers of personal services, in the spheres described and in others, find themselves abandoned and with an evident lack of response on the part of the authorities, who should be planning as the crisis advances. If this continues, the emerging private sector in Cuba will be pitiful after COVID-19.

Taxation

  • Extend the time for tax payments for businesses that suspend activity on their own or by governmental decision.
  • Reduce by 50% the payment of monthly fees for food service activities.
  • Authorize a reduction in monthly fees for administrators of tourist centers and sites with a high concentration of tourists.
  • Decrease to one single minimum payment the tax on bank accounts.

Employment

  • Protect the salary for contracted workers who continue to work at no less than the minimum wage of the country.
  • Extend the period of authorization for designated workers who fill in for an owner who is out of the country and unable to return for 3 months.

Loans

  • Stop collecting on authorized loans that can be restructured.

Translated by Regina Anavy

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

Cuban Government Begins to Adopt Measures Against Economic Crisis: Trade

A private fruit and vegetable seller with a makeshift cart in Havana.

14ymedio biggerElías Amor Bravo, Economist, 24 March 2020 — Regarding the measures adopted by the regime in Cuba, the state newspaper Granma dedicates space to those published by the Ministry of Internal Trade to prevent and confront COVID19. There is everything, but if you are looking for a headline, it is clear: Cubans are going to have a very bad time.

It is commendable that the regime has decided that hygiene and personal protection in services that handle food is the priority for attention, but this, being important, in Cuba has a second derivative, which is who cares previously about producing food and bringing it to stores and establishments, so long as it is not in short supply and sufficient for the duration of the pandemic and afterwards. And I think this is where the regime’s measures are not sensible.

The health crisis is going to bring about a paralysis of production. This should be the main challenge for the economic authorities. For this reason, these measures of the Ministry of Commerce are aimed only at regulating the activities of the sale of merchandise, food services and hotel accommodations, as well as personal and technical services, during the period of struggle against COVID 19. continue reading

But they do not address the technical-productive considerations, and in the face of an alarm such as the one we are now facing, and with a centrally planned and state-based economy, it makes little sense to approve trade-related measures of arguable impact, such as those announced by Granma, without resolving first question of production.

If the regime wants to face the serious situation it has ahead, must first of all address the ministries related to production so that they will be ableto generate goods and services in large quantities, and also quickly and urgently, if they don’t want the pandemic to end in hardship.

I believe that this matter is important enough to warrant more than just a general consideration, such as “ensuring, in accordance with the availability of essential products, the re-provisioning of the network.” And: “Avoid the concentration of goods in one place, in order to reduce crowds and the movement of goods.”

Unfortunately, Cubans know from their own experience that this replenishment of stocks sometimes takes time to arrive and, in the worst case, it never arrives. The actions to be carried out in this production and logistics area need to be more clearly defined, without attacking the rights of those who work, to provide a solution to meeting the needs of the population.

Granma echoes Cuban President Díaz-Canel’s statements on this point, stating that “a stock-taking of supplies will be made, taking into account what can be use can be made of the supplies dedicated to the activities that will now be stopped.” Granma suggested “regulating sales, regulating lines, avoiding disorders and encouraging meals and home delivery services.”

And it continues, “the productive and service activities that will be maintained and those that are not must be defined immediately; as well as the rapid importation of certain products. At the same time, food production will be intensified and the use of inputs will be frozen in the processes that, due to this situation, will be paralyzed and will be destined for retail merchant circulation.*”

In other words, all of these statements from Díaz-Canel confirm that the economic authorities are still at a very early stage, and certainly late, in addressing the problems of the economy that are going to occur, so one must hope that something could happen. The statist bureaucracy has a hard time getting going.

Of the measures related to trade, some propose that “priority be given to the commercialization of agricultural products through the retail network of state markets, supply and demand, kiosks and carts. Avoid the use trade fairs, with the aim of minimizing the risks due to the concentration of people.”

In this sense, I consider it positive that the regime has decided to maintain all the commercial forms of agricultural products, including the vendors who sell from rolling carts, the carretilleros. Until they are immobilized, if the advance of the pandemic requires it, these sellers will solve many feeding problems, especially for older people with mobility difficulties. It would be good if the regime lowered the repression against the carretilleros and allowed them greater freedom in acquiring provisions to attend to their duties.

Honestly, with these two general measures alone, little can be resolved in relation to supplies. And I am concerned with the measure of “creating conditions in all merchandise sales units so that access to the public is staggered (in correspondence with the unit’s capacity)” and that of “reducing the participation of competitors (self-employed worker-vendors) to 50%, in centers, commercial areas and high concentration services, alternating their days of participation in the week.”

These are measures that seek partial confinement and reduce exchanges and provoke higher average purchases than usual, which can end up creating supply problems, lines, rationing and angry protests by citizens if the products do not appear.

As far as the measures concerning state restaurants, road units and workers’ canteens are concerned, I honestly think they are wrong. Specifically, “the opening of these establishments is allowed, applying only methods of rearranging the tables, placing them with a separation of two meters (limiting capacities to 50%) and the recommendation to avoid crowds.”

If the pandemic progresses, this restored activity will most likely decline completely, basically due to the fears of the population, and sales from home will increase, if there is something to sell, because it should not be forgotten that the problem remains the same: that the goods and services are obtained through the production system.

They have only given a certain priority to the family care system, “with the delivery of lunch and dinner, either at home, or picked up by a relative of the beneficiary, or a representative authorized by the social worker.” However, it is known that all the “freebies” of the regime have experienced a notable decline in recent years, and nothing suggests that this has changed with respect to these meals.

It should be noted that the measures have been more forceful with hotel activity (including recreation, tourism and leisure), perhaps taking into account that tourism forecasts will clearly go down in the short term.

In this sense, “self-employment activities for tourism and recreation purposes have been suspended for the rental of homes, rooms and spaces, to people from abroad, foreigners or Cubans.” Technicians or temporary resident foreigners living in homes that provide these services are excluded from this suspension.

Regarding bars and cafes, state accommodation has been suspended in the interior trade system for tourism and recreation purposes for people from abroad, foreigners or Cubans.

Likewise, activities that generate concentration of people have been suspended, such as popular camping, and all those that take place in theme parks, leisure clubs, wedding palaces, dance floors, workers’ social circles, cinemas, theaters, cabarets, sporting events and others. However, food service and merchandise sales are maintained in compliance with the indications established for these activities.

They have also planned to increase home services for the repair and maintenance of minor equipment and fixtures.

*Translator’s note: Official government speak…

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

The Slow Agony and Death of Fidel Castro’s Currency

Cuba’s two official currencies: the Cuban convertible peso (CUC) and the Cuban peso (CUP).

14ymedio biggerElías Amor Bravo, Economist, 27 November 2019 — The CUC was the fictitious currency created by Fidel Castro during the Special Period to avoid the dollarization of the Cuban economy. A controversial decision that has created not a few problems in the operation of demand and supply.

Three years after his death, the authorities seem to have lost confidence in that currency and anticipate a long and slow agony. A magnificent chronicle by Cuban journalists Luz Escobar and Mario J. Pentón for 14ymedio about the depreciation of the CUC, encourages fears about the way in which the authorities will address the elimination of this currency.

Causing its loss of value, until it dies of starvation. Instead of announcing an end to the fictitious currency, on a transparent and clear date and conditions so that the economic agents having CUCs in their possession know what to expect, the communist leaders have grown tired of the mortgage of the CUC and according to information coming from the island, its days are numbered. But best of all, the pressure of the dollar continues, and even increases in strength. Arango and Parreño already said it. continue reading

At the moment, the depreciation of the CUC is noted, above all, in the transactions that are carried out in the powerful and diversified informal economy that exists in Cuba, whose development and social roots are due to the prohibitions, obstacles and communist interferences in normal behavior of economic agents on the island.

Well, the CUC has depreciated in these informal exchange markets, and citizens are surprised when changing the dollars they receive from their families for CUC that they get a greater amount of currency. In fact, many people are asking their relatives abroad, instead of sending remittances by bank, to bring the money in their pockets. It will not take long to see the Cuban customs searching those who enter the country.

A good part of the convulsion suffered by the price of the CUC is due to the competition of the dollar, which the leaders of the regime have allowed to be used stores in an attempt to compete with private imports (via ’mules’) of household appliances and auto parts.

This fact has meant that the value of the CUC is reduced by 30% in the black market while the official exchange rate is still applied in the official CADECA currency exchanges.

Conclusion, those who receive remittances from the United States now get more CUCs for the same amount of dollars if they change them in the informal markets. Mules that carry cash will see their business grow.

But the collapse of the CUC has very negative consequences on demand and supply, because its loss of value and progressive cornering in the economic system will influence the behavior of the prices of goods purchased with this currency, which are practically all, as there is more variety and they are used in more and better stocked stores.

At the moment, in the shops of the Rancho Boyeros airport it has been announced that payment is not accepted in CUC, so that tourists who arrive with remnants in this currency to make the last purchases should be aware that this practice will be impossible.

In the short term, the depreciation of the CUC will increase the price of the goods that are bought with this currency, or in other words, to buy a specific product, more CUC will be necessary than before. This can have an inflationary impact.

Now, if prices cannot increase, because they are buffered or because there is no market reaction, then the goods will be scarce. The CUC may not even be accepted as a means of payment in some establishments. This would be the final death of Fidel Castro’s currency.

As for the offer, I do not want to think about the problems created in state companies that keep their accounts in double currency, when one of them continuously loses value and the other does not. Reviewing the accounts, re-analyzing the investment plans and calculating the balance sheet and income statement ratios, becomes a very complicated task with the new situation.

Another major loser with the depreciation of the CUC is the regime, the state apparatus, basically because it will not be raising the dollars that previously entered the CADECA network (the official exchange houses) since many people prefer to change their currency in the informal market where they get more for it and also avoid the 10% tax on the dollar in cash.

Cubans will retain dollars for all types of operations, from leaving the country, to buying goods or services inside, a large number of activities.

The steps towards dollarization are being taken. As the government forces people to open accounts in dollars to be able to buy appliances in a series of state stores, by means of an electronic card, the resistance to this procedure will also mean losses for the regime, along with those in the CADECAs.

The appreciation of the dollar and the simultaneous depreciation of the CUC in the informal market is apparently not affecting the Cuban peso (CUP), which is outside these trends, at least for now. But it will soon be affected, despite its marginal role in the economy. The depreciation of the CUC may mean that its exchange with the CUP, currently 1:24, also ends up benefiting the Cuban peso, the historical currency.

Imagine the parity in the exchange and the consequences that this could have on the economy. I do not see how this can be possible if one takes into account, as already stated in another entry in this blog, that the fundamentals of the economy do not give much attention to the CUP. In any case, this is the most complex scenario ahead.

Meanwhile, it will be necessary to see what happens with the most important economic operations on the island, such as the purchase and sale of homes, the rental of vehicles or the supply of inputs by private entrepreneurs. An apartment, with the price in CUC, may experience a price increase, if currency depreciation continues. Conclusion, people will end up conducting operations in dollars or in extreme cases, in CUP.

Therefore, it is assumed that the demand for dollars by the population will increase. A demand that also the authorities of the regime will also have to face with international creditors. The conflict is set. Letting the CUC die is a possibility; however, there is a weak link: deposit holders in this currency have to receive some kind of compensation if the dreaded losses occur.

And given the magnitude of monetary circulation in Cuba, where cash in the hands of the public is as much as 25% of GDP, it will not be easy to drain that liquidity. Monetary unification in Cuba is far from being achieved. The CUC will continue to languish until it finally dies.

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

Government Unveils New Measures to Control Cuba’s Private Sector

According to the State newspaper “Granma,” these regulations were negotiated at the end of 2018 with the entrepreneurs.

14ymedio bigger14ymedio, Elías Amor, Valencia | 6 November 2019 — Cuban entrepreneurs cannot catch a break. The regime does not want the independent economy to flourish in Cuba, not even during critical times like right now, when the productivity of the private sector has clearly demonstrated to be superior to the economy under communist control. Gaceta Oficial just published a new series of regulations that limit, control and stifle even more the individual entrepreneurial activities in Cuba.

Granma says in this regard that the implementation of these rules was negotiated at the end of 2018 with self-employed workers. The opinions and suggestions of the population were also received and the newspaper also refers to letters received in the Ministry of Labor and Social Security. Caution. We already know how these things work in Cuba; it is believed, for example, that an “assembly of several neighbors of a certain block” can serve to form an organ of democratic representation. The field of public opinion in Cuba is far from what we know in the rest of the world.

Granma says that these measures aim to “incorporate new activities, compact and refine the reach of some and simplify procedures.”  And this at a particularly difficult time in which the economy is heading towards a deep recession as a result of the reduction in low-priced oil supplies from Venezuela and the impact of lower worldwide growth on internal activity, a time of special difficulty that does not lend itself to policies of this type. continue reading

Specifically, six new activities have been added to the list of allowable work for the self-employed, namely: operator and/or lessor of equipment for artistic production, casting agent, and artistic production assistant. Nobody knows  what sense it makes to approve occupations in dribs and drabs, particularly where these occupations are already being carried out in the field of the informal economy or independently, and why this anachronistic and interventional procedure is not liberalized once and for all, in determining what private activities Cubans can engage in. Specifically, these occupations belonging to the cultural field represent a small fraction of all employment associated with this sector, which has important potentials in Cuba.

Similarly, the activity of certified translator and interpreter is approved. Interesting. An activity that is questioned in many countries by modern information technologies (electronic devices integrated in the external ear) that can lead to the destruction of employment in this sector, which has to be adapted more to cultural mediation than to administrative work. Once again, and as has been the case in the last 60 years, the communist regime of Cuba, every time it moves, places itself to the rear of world economic activity.

Finally, the activity of commercial fisherman and producer-seller of food products has been approved, which includes the production and sale of sausages, smoked foods, preserves and the like. Apparently they had been forgotten in some previous approval. They love to grab the bull by the horns.

While these activities are approved, the Ministry of Labor and Social Security announced a “new regulation aimed at unifying activities and modifying the scope of those that are related” which, they say, increases “the range of services, which can to be provided under the same authorization.”

Several examples. Starting now, “the activities of craftsman, saddle-maker, producer, footwear seller are integrated, and the seller of artificial flowers is also incorporated, a practice currently integrated to that of florist. Similarly, the locksmith activity can exercise the electronic locksmith activity, and in the case of the water carrier, the sale of ice is allowed.

Once again, it is necessary to insist on the same, why not leave the freelance workers to establish the associations and collaborations that are more interesting and profitable for their businesses? Why does the communist state intervene and authorize processes such as those described, and many others, that are included in the norm published in the official Gazette?

What the Cuban leaders do not understand is that as soon as these “authorizations” are approved, demands for others are already appearing. The reason is very simple: the market, independent free enterprise goes much faster than the bureaucratic dinosaur state created in Cuba by Fidel Castro and now managed by his heirs.

Economic freedom does not require the State to say whether auto bodyworkers can be independent or not of the carriers, or if the repairers of mechanical equipment have to be electricians at the same time, and if the decorators can organize birthday parties.

Reaching these levels in the control of economic activity is nothing more than showing the communist regime’s distrust of free enterprise and the independent work of Cubans. In short, the fear that the economy will acquire sufficient dimensions to stand up to communist political power and demand concessions, as in democratic and free countries.

Keeping self-employment under control, the latest official data is 617,974 people, just over 12% of the country’s employed population, which ensures the regime a dominant role in the economy and society, which is the dominant note of Castroism.

The published rules also incorporate references to vacations that the self-employed person can offer the hired worker and set deadlines for exits abroad (applicable only when the would-be traveler is not “regulated,” and the exercise of said right contained in the Castro constitution is prohibited), limiting the hiring of a spouse, or relatives of first and second degree of consanguinity (children, parents, brothers, grandchildren and grandparents), or relatives of the first degree of affinity (son-in-law, daughter-in-law, in-laws, in-laws). And most surprisingly, an authorization for independent workers to commercialize the result of their work. Amazing.

Regulations have been established for contractual relations between self-employed workers and non-agricultural cooperatives with legal entities, which may be financed in the two currencies in circulation. Measures designed to promote the productive chain of the different economic actors. If this is so, it would not be necessary to regulate anything, and an in-depth liberalization of these agreements would allow private agents to develop the most appropriate formulas for their interests and needs.

Finally, certain tax and fiscal aspects were approved that logically try to obtain more income from the exercise of independent private activity, which limits its growth and consolidation.

Nothing new under the sun. Since the initial launch in 2007 of self-employment, Government action on its subsequent dynamic has been reluctant and hesitant. These measures confirm it. Instead of liberalizing the sector, respecting the economic human rights of Cubans, and supporting independent work and entrepreneurs with a modern and efficient structure, similar to that of other countries in the world, the regime is determined to maintain control with the “carrot and the stick.” Then they say that the problem is the blockade, as they call the American embargo, but even they don’t believe that.

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

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