Category: Elias Amor Bravo

In a snowfall scenario, the snow removal machines, pushed by tractors of private agents, arrive and solve everything with salt. Why does Díaz-Canel think that this problem can be solved by resorting once again to the inefficient collectivism of “communal forces”? Is it that in the communist regime there are no agencies in the budgeted sector that dedicate themselves to these activities in a professional way? They insist that it will be enough with several “brigades” from Havana and Mayabeque mobilized for these operations, but we are very afraid that things will go on for a long time.

On the other hand, it seems that there is a serious hygiene problem, and, therefore, to support the sanitation work, Díaz-Canel will have resources from the Revolutionary Armed Forces and the Azcuba Business Group. With all the hurricanes that have passed through Cuba in 63 years, there should be an emergency force in the army, equipped with the means and competitive training to face this type of scenario. I hope they don’t turn to the young recruits again, as in they did in the case of the recent fire at the Matanzas supertanker base.

But that said, what really mattered to Díaz-Canel was to find out what happened to the more than 33,400 tons of tobacco from previous crops that were still in the drying sheds and warehouses, and he indicated he would be visiting the main producers of the leaf in the area to provide them with support. Careful: That’s money, and, almost certainly, it’s already committed.

Tobacco continues to be one of the main products of Cuban foreign trade, and losing that harvest could be a real misfortune for the foreign currency it provides and which the regime so longs for in order to fill the state coffers. Fortunately, the hurricane has passed at a time when the tobacco production cycle is in the seed phase, although it will almost certainly have damaged the fields, which will have to be prepared again. This will entail extra costs for producers who, in the absence of private insurance or government support, will have to pay for it out of their own pockets.

Granma has recognized that Ian’s passage over the municipalities that make up the Vueltabajo tobacco massif, in which there are more than 7,900 natural (dry) curing sheds made of board and light covering, has caused serious harm to the infrastructure of the principal export of Cuban agriculture. And once again, the only thing that emerges from the news is that we will have to wait to know the extent of the economic damage.

Díaz-Canel has encountered more problems, such as the supply of water to the population and the eternal blackouts, and for this reason, he asked Granma to “raise spirits and recover again from all the building collapses.” Accompanied at the meeting of several ministers, according to Granma, he also received a detailed explanation of the actions that will be taken for an alleged return to normality in the shortest possible time.

Ian’s passage through Cuba has once again highlighted the fragility of the communist economic model that exists in the country, in the face of this manifestation of nature. No one has the slightest doubt that the traces of this hurricane will take a long time to be erased. It doesn’t occur to anyone, except Díaz-Canel, to call on “a popular mobilization to support the collection of debris, recover the organoponics and promote short-cycle crops that provide food in the shortest possible time.” The people aren’t interested in these things. He instills more discouragement with this disorder, and, above all, he should take into account the warning of Sunday’s referendum: the Cuban people have said “enough”!

Translated by Regina Anavy

____________

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

So we have to wait until that time to know what result the communist regime has made up for the referendum vote, which, in advance, will show the support of the population, although with doubt about the exact number. Making a fool of yourself has some costs.

In any case, one has the impression that the result of the referendum will concern Cubans much less than Ian’s evolution. As it should. Depending on where Ian hits, it can lead to the destruction of the productive base, the housing and the infrastructure, which then won’t receive any attention because there’s no money for it. And worst of all, the crops may be lost, so there will be even less food for the population.

Ian could be a serious threat to the regime. The referendum on the family code will go to a better life as soon as the focus of attention is on the hurricane, and above all, the ones that may come later. There’s nothing to rejoice about, but plenty to worry about and take care of, especially the latter, which will be a task for the communist leaders in the very short term.

But there’s another hurricane that has just arrived and is at the gates of the Communist Island. I’m referring to the result of the democratic elections held this Sunday in Italy, which have had a winner in the far right of Mrs. Meloni, whom Díaz-Canel has not yet congratulated for her success. And we are very afraid that he will not do so, which is political clumsiness on the part of the Cuban communists that can lead to a progressive cooling in the economic, commercial, tourist and investment relationship of Italy with Cuba.

Let no one believe that a defiance of Díaz-Canel, however inconsequential it may seem, will be left unanswered. But there is something that should worry Díaz-Canel and his regime about this result in Italy, which won’t be understood in Cuba because they lack a sense of democracy. But it can be explained to them.

It’s simple: 44% of Italians aligned themselves politically with a party or coalition of parties that is at the antipodes of the Cuban communist regime, and those that are closest didn’t reach even a quarter of the electorate. The Italian earthquake supposes that the society of this country has turned politically in a direction that feels, in a majority way, disgust with Cuba’s ideological communist positions. That is, Italy has turned its back on the left, and if Cuba vindicates that position, at the global level, it will suffer the consequences.

The Italian hurricane is going to be felt in Cuba. That’s for sure. Italy represents for the Island, in the trade of goods, about 8% of the total, and in terms of tourists, 3%, although this has seen better times. Cuba recognizes that Italian foreign investment, although no official information is available, is important. There was even a commercial transaction by Cuban doctors recently. Let’s see how all this continues in the face of the next legislature if, as expected, Mrs. Meloni and, in a broad sense, the new Italian society that emerges from these elections, will not be in favor of Italians or the investment capital of their country going to the communist Island. They are warned.

Translated by Regina Anavy

____________

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

Failure to provide the real value without the corresponding deflation is a mistake. ONEI should include nominal and real data in its estimates, as other statistical services do in countries affected by high inflation.

Taking into account this 30% increase in consumer prices, as a measure of the conversion of the nominal variables into real, when comparing the evolution of investment in different components, such as construction and assembly, equipment and others, it turns out that in the first, the nominal increase was 38% (7% in constant values).

In the second component, the nominal increase was 50%, which, corrected for the effect of inflation, was really 20%; and in the third case, the nominal increase of 48% becomes 18%.

This behavior of the three components of the investment results in their distribution or weight in the total to remain almost stable, with an increase in construction and assembly and other components; but the investment in equipment is reduced in terms of participation in the total. This design doesn’t meet the needs of the Cuban economy.

Another surprise comes from the territorial distribution. The data indicate a notable reduction in Havana’s participation in the total, which fell from 63% in 2021 to 56% in 2022. The significant loss of investments in Havana was channeled to other provinces such as Mayabeque, where investment multiplied by five, or to Santiago de Cuba and Holguín, where the increases were lower, but with higher levels. In general, most of the provinces increased their participation in the total, except Havana, where this adjustment took place. It seems that the authorities have wanted to carry out an investment policy that compensates for the deep territorial mismatches that exist.

The publication also offers investment data by economic activity, and again, concentration is highlighted, but with downward and upward trends. This is the case of business and real estate services, which with 33.8% of the total again occupies first place in the regime’s investment preferences. But as happened in Havana, it presented a downward trend, since in 2021, the percentage reached 40.6% of the total. What business services lost was gained by the manufacturing industry, which went from 13.4% to 18.7% of the total, and investment in electricity, which went from 6.9% to 8.3%.

Investment in mining and quarries decreased from 12.7% to 7.5%. Health and education, culture, administration and defense services seem stable in the two-year comparison, and the same is true of agriculture, which still doesn’t attract investment.

The investment design that emerges from this ONEI report points to a scenario of continuity in which little is innovated and what is reversed follows rigid and bureaucratic formats adapted to the interventionist nature of the regime. There is nothing suitable for what the Cuban economy needs in order to prosper.

*Translator’s note:  *The “Ordering Task” [tarea ordenamiento] is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso (CUP) as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency, which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.

Translated by Regina Anavy

____________

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.

And as the Guiteras problem will promptly return, Granma says that “to achieve greater reliability, it will be necessary, as soon as possible, to carry out the proper cleaning of the boiler and eliminate all the defects that limit its efficiency.” (so, what have they done?) and adds in this regard that “the washing of the boiler requires a shutdown of approximately ten days to increase the load to 280 MW and prolong its permanence in the system, without unforeseen exits.” Thus, a shutdown of Guiteras and a return to the blackouts are foreseen.

The regime intends for foreign capital to enter to operate in wholesale distribution, but this stumbles over the legal framework in Cuba. On one hand, there is no guarantee because this activity is subject to control by the regime, and on the other, why dedicate itself to distribution when the problem is that there are not sufficient products or goods?

The two vectors point to a scenario in which no matter how hard the authorities try, they won’t find a foreign distributor to provide the technology and experience that will achieve radical changes in the gray commercial landscape of the communist economy. You don’t build a house from the roof down; you need a solid foundation. As much as Minister Gil tries at the National Hotel to convince representatives of embassies, national and foreign businessmen and officials from agencies of the State, he knows that this initiative won’t go very far; and in any case, if it happens, the government will have a partner subject to communist decisions who, sooner or later, will abandon the business.

Likewise, Gil claimed the new scenario according to which, currently, both the private and state sectors have a demand for resources to produce, backed up by imports, which means a space for the participation of foreign capital in wholesale trade. But in this, he also didn’t tell the truth, since while the state sector agrees to dollar-to-peso exchanges at the rate of 1×24, others, the non-state, must get used to the semi-official rate of 1×130, or resort to the informal market rate of 1×150, and rising.

Gil said that the country has an infrastructure that is above production levels, and this is false, according to the results of 2021, but by disagreeing with it, he refused to accept the technological obsolescence of numerous sectors and companies in sugar, electricity, manufacturing, transport, etc. The minister is wrong to say these things, and the foreign investor is attentive to all this when making decisions.

It’s not surprising that other Caribbean countries, such as the Dominican Republic, benefit from this black hole of the Castro regime, which aims to trap unsuspecting investors so that they place their capital in warehouses or factories whose cost of reactivation is much higher than putting it into operation from the beginning. If you think not, look at the estimate of 255 million dollars to update the electricity sector.

Haste has never been a good adviser in economic policy decisions. In reality, attracting foreign capital to Cuba simply requires another model, another economic structure, another legal framework, and that doesn’t happen overnight. Going around in a vicious circle doesn’t lead anywhere.

Therefore, when the minister declares that he is willing “to make national infrastructure available to foreign investment,” he should clarify how he intends to do it, in terms of what model, with what instruments and within what deadlines, because that being said, in open terms, he will not be able to attract anyone; on the contrary, he will scare off foreign capital. The lost foreign exchange income in the country, which is more than 3 billion in a very short period, will never come within the current framework of foreign investments.

The minister abandons the idea of international investors deploying their structures to produce and generate employment in Cuba, seeing that this is impossible, and therefore, he now wants to make it easier for foreigners to bring products into the country, taking advantage of their experience, their financial facilities, their technology and for this, to take advantage of the communist state infrastructures. They aren’t going to be successful, not in the wholesale trade and much less in the retail trade. There are many countries to attend to first, with promising markets. Cuba lags behind in this international competition, and for Cubans things are getting worse and worse.

As always happens in these business forums, such as the one held at the National Hotel, ministers participate in the road show to present business opportunities to foreigners who then, when studied in detail, end in nothing. The five proposals offered by the director of foreign trade of Havana, Luis Carlos Góngora, surprised the attendees. First, the possibility of wholesale and retail production and marketing of consumer and intermediate goods in the capital, which are in high demand, associated with the activity of breadmaking and pastry, artisanal and industrial productions of candies and other jams, and the processing and preservation of food.

He stressed that there is a market for this, due to the growing number of micro, small and medium-sized companies that are engaged in these activities, in addition to the fact that these products and raw materials are for widespread domestic use, in family food, which also justifies a retail market. And among the products to be marketed, he mentioned sugar, salt and flour, in addition to specific mixtures, gluten-free flour, packaging, fats, oils, yeasts and dyes, among other raw materials.

The business director of the Ministry of Industries, Tomás Oviedo, proposed several areas for foreign investment; for example, the marketing of tires and rubber articles, as well as inputs and equipment related to these productions. The proposal would be in the form of a wholesale marketing company, and the opportunity lies in the high unmet demand, with potential customers such as the ministry itself, MITRANS [the Minstry of Transport], the construction sector or any other branch of the economy that owns automotive transport.

From the chemical industry, there was talk of the creation of a wholesale entity that markets flat glass and items of this material, supplies and equipment for the respective factories, which would  meet the demands of that market, acquire new technologies for the development of this industry and recover and make the most of the capacities already installed.

In the field of agriculture, it was proposed to develop a chain of wholesale and retail stores, no less than five, to offer a variety of products and commodities with national reach, supported by wholesale warehouses. This proposal would be supported by a high demand in the sector for raw materials, tools and accessories, among other things, and as another potential it added the existence of underutilized logistics capabilities, with a network of establishments that are out of stock.

The question that appears in all this list of opportunities is the same: Why haven’t the Cubans done this themselves, and why do you have to resort to foreign capital? Or more importantly, why doesn’t the state do it with its state companies?

On the other hand, it abounded in several conditions and guarantees of operation, such as the “Single Window,” created to accompany investors and facilitate the entire process.

Castroite leaders have thrown in the towel, aware that the communist model can’t go on, except to highlight interventionist nonsense such as the portfolio of opportunities or the one-stop-shop. They speak of a more favorable environment for foreign investment, but they don’t realize that the current times, due to a serious global economic crisis caused by Cuba’s partner, Putin, will bring with it a collapse of markets and financing. It’s unfortunate that Cuban leaders are going to look for investments just when it can become more complicated. Always swimming against the current.

Not even letting businesses operate in foreign currency, which means taking them away from the reality of a weak and increasingly fragmented domestic market, will manage to interest any foreign investor. No one trusts these types of decisions that, at any time when the conditions of the economy change, can be reversed, and then it’s over. This lack of guarantees is what worries many investors.

The eternal bureaucracy is also frightening investors, so, when the flexibility in the requirements for proposals was announced, the reduction in the content of the documentation that is required today for approval, some rejoiced, but sadness returned when it was seen that the required paperwork remained the same and that the multiplicity of partners again casts shadows of doubt.

Finally, no one told Minister Gil and his colleagues that in order to attract foreign capital for business opportunities in the sectors of the economy, something must be done first, and that it’s very important.

And that is to pay off the debts. No attendee said anything about this issue. It’s an annoying matter for those who haven’t paid the Paris Club and other creditors for two years. And so, with that data about non-payment, they want to attract investments? Good luck with that.

Translated by Regina Anavy

____________

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

For those interested in communist dialectics applied to the foreign exchange market, the article will go down in history. Prisoners of the totalitarian ideology that prevents the contemplation of an economy as a continuously growing interdependent market, Cuban communists invent a sui generis definition of the exchange rate, according to which, it “emerges through a market process in which the supply and demand of foreign exchange are equalized, in which agents (households, companies and governments) have free and timely access to hard currencies, in exchange for national currency and vice versa.” Error.

The exchange rate, such as the price or level of production of the economy, arises from the interaction of domestic markets (goods, labor, assets, etc.) with external markets. The economy cannot set the relative price of its currency only with the currencies that go in and out, but with the destination they have in the national economy. Cuban communists are unable to observe this interrelationship, worried as they are about filling the coffers of the state for their own purposes.

And that’s where the second big mistake comes from when they say that “the state can influence in the establishment of a type of balanced exchange over the sources of supply and demand for foreign currency, through exchange, fiscal, monetary and other policies, but its ability to set an exchange rate is limited by the prevailing conditions in the economy.”

The state can say whatever it wants, but if the economy is in balance, which unfortunately doesn’t happen to the Cuban economy, it’s of little or no use for the state to intervene in the foreign exchange market. The only thing it can achieve is to alter the behavior of supply and demand, which is what it has ended up doing. Markets are looking for balance. Governments, with their economic policies, can influence it but not change it.

Therefore, getting the exchange rate right is not playing roulette, but knowing the equilibrium conditions of the economy and getting it to work. This is not the place to give lessons in practical macroeconomics to Cuban communists, but before acting as foreign exchange players they should start by reducing uncontrolled public spending, reducing the expansion of money in circulation, stimulating national supply through structural reforms, monitoring the value of the peso in terms of fundamentals of the economy; in short, doing things that help and don’t distract economic agents.

In reality, the same regime helps Cubans feel especially motivated to acquire a greater amount of foreign currency, by artificially maintaining a 1×24 exchange rate for the economic operations of the state and its companies and conglomerates, as well as another cheaper exchange rate for the general public. That duality doesn’t go anywhere and usually ends badly, very badly.

And if they want to tell the truth, the one thing that led to the birth of the informal foreign exchange market in Cuba was none other than the state, by renouncing its functions. If it now intends to “illegalize it,” this will be a big mistake, since it will reduce supply and increase prices, removing them from any equilibrium option.

At this point, it could be said that the regime’s decision to choose the exchange rate of the informal market for the restoration of official exchange rate operations in Cuba, should perhaps have led to the testing of other formulas such as a possible authorization of money changer as a form of self-employment that would bring to light the activity of the “informals.”

The informal exchange rate, although it reflects the serious imbalances that exist in the rest of the economic markets, is the one most suitable to deal with the supply and demand of foreign exchange for Cubans. The impossibility of the regime to promote its extension to all economic agents (the state and its companies) indicates that it’s not a general rate, but a partial solution, painted with a ridiculously large brush, that won’t result in anything good. Because the informal market is something very different from the cadecas [official currency exchange points], banks and airport offices. Everyone understands that.

On the other hand, charging as the regime does against the informal exchange rate, accusing it of being “impacted by speculative processes and the costs associated with informality” is unfair. It’s an argument that falls under its own weight, from the moment the regime makes it in this relaunch of the official foreign exchange market.

If the agents who attend the informal market feel motivated to exchange foreign currency (divisas) for national currency and vice versa, at the rate that governs operations, it will be for something, but not at all for those speculative processes or costs. This is unacceptable because it anticipates where the sanctions can come from.

Using the informal exchange rate to ensure that, since the relaunch of the foreign exchange market, the operations of buying and selling foreign currency take place as smoothly as possible through the financial system, is a clear interference of the state and the regime in the private activity of a market that has functioned efficiently and continuously since the changes were suspended at the beginning of 2021.

Good proof of this has been that from the beginning, that exchange rate substantially similar to the one that exists in the informal market has collapsed, and there are already places where the peso is quoted at 1×140 and continues to fall freely. The limitation in the number of authorized establishments, the rationing of dollars at 100 per person per day and the organizational clumsiness of the banks have led to long lines outside these  establishments, and the discomfort, protests and anger of citizens. These types of events rarely occur in the informal market, which is preparing to compete directly with the regime.

For those of us who defend the free market economy, attending these first steps in the foreign exchange market in which the regime is powerless to manage its role vis-à-vis private economic agents who operate efficiently and oriented by the needs of its customers, is a formidable spectacle.

Contemplating how the communist giant created by Fidel Castro is defeated by the Goliath of the informal exchange market is great news, which confirms how clueless the Central Bank or Alejandro Gil’s Ministry of the Economy are to face competition with the informal market under the current conditions in which the campaigns of repression and harassment that are supposed to arrive soon have not yet been unleashed. If this scenario were extended to the rest of the markets of the economy, totalitarian communism would have ended decades ago.

Communists are reluctant to maintain an artificially low exchange rate in the market of the population and non-state economic actors, because, as they say in the article, “this would imply constantly injecting foreign currency from other sectors of the economy, which in the medium term would make that exchange rate unsustainable and force the adoption of a new devaluation, which will allow the official rate to be approximated to market equilibrium to continue making foreign exchange operations viable.”

Well, then what do you think is going to happen in a few months with the decision they just made? There will be no choice but to depreciate the peso. Why don’t they wonder how, with the new exchange rate for the sale of dollars, the salary in pesos of an average Cuban has suddenly fallen by more than 400%? It’s true that whoever receives remittances won’t have complications because they will get more pesos, but what about internal inflation? Also, what happens to then 70% of society that operates only in pesos? Too many questions for the regime.

The official exchange market has been born in such unfortunate conditions, that far from fulfilling its purpose, it will pass without pain or glory, being inoperative in a short time. The economy can predict human behaviors with some ease when it comes to “free choice,” something that Cuban communists haven’t understood for 63 years. Failure is coming

Translated by Regina Anavy

____________

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

But really, the exchange rate market is much more than that, and Cuban communists don’t seem to be clear in their note about the true meaning of the exchange rate, which is nothing more than the factor that establishes a relationship between the value of the national economy and that of other, foreign economies.

They talk about the connection of the productive agents with the outside world, both for their needs for input through imports and for the sale of their production through exports. But there is much more to that relationship between internal and external supply than these commercial issues, and not taking them into account is another big mistake. For example, access to financial and capital markets is a matter of primary relevance and doesn’t appear anywhere in the note.

The recommendation, therefore, is that rather than taking into account supply and demand, attention must be paid to a series of variables and indicators that influence the determination and evolution of the relative prices, which are the exchange rates.

And to do this, an exchange rate policy must be designed that is related to and, at the same time, serve the achievement of the rest of the objectives of the national economic policy. The question is, does anyone know what those objectives are and what is supposed to be achieved? We’re in bad shape.

There are few things that are true in the ministry’s note, but one of them, perhaps the most obvious, is to recognize that the market and its exchange rate have an influence on all the prices of the economy. But the influence is much more than that, and as is being seen in Cuba, its greatest effect on prices is inflation, which is pushed upwards, unfairly, depending on the access to foreign exchange by different sectors of the population.

But, in turn, rising inflation deteriorates the exchange rate; therefore, the interdependence between the two poses a danger to achieving exchange-rate stability and controlling inflationary pressures. What came first, the chicken or the egg?

While Cuban communists try to find the answer, the conclusion is that when an exchange market is inefficient and doesn’t function properly, it generates distortions that prevent the fulfillment of the aforementioned objectives, limiting productive capacity, economic growth and development of the country. They should get to work as quickly as possible.

As for the legal or illegal access referred to in the informative note,  of economic agents to foreign exchange, offering security, confidence and transparency, there is a clear commitment to putting an end to the only market that has worked since the entry into force of the Ordering Task* (and therefore, the foreign exchange market), which is the informal one, which began exchange services as soon as the Central Bank, bank branches, official exchange offices and airport offices stopped doing so. Aggression towards the informal market is a real threat that can pose an eventual repression of people engaged in these activities, which would not only be unfair, but also inefficient. Who is going to sell dollars in Cuba?

The note insists on the need to create and develop an official exchange market for the Cuban economy, but this is counterproductive, since it doesn’t seem necessary to remind government leaders that this market already exists. It was defined with a fixed official exchange rate of 1X24 and entered into force on January 1, 2021, with the beginning of the ordering task (it was one of the measures included).

Therefore, recreating what has already been created is a meaningless double back that should be translated into reality, which is none other than assuming the failure of the first launch and announcing this second, which looks like it won’t end well. For now, the regime begins to operate only with an exchange rate, which they say is “economically substantiated” but only for foreign exchange transactions and at only one address for the purchase of foreign currency. The sale is neither there nor is it expected.

The note attributes to the foreign exchange market two functions that, at this point, look like a chimera. The first is to ensure that the national currency allows access to all the goods and services of the economy, and to this end, dollarization is eliminated. This is a difficult issue as long as the regime itself continues to support and encourage the stores that sell in MLC [freely convertible currency].

The minister declared in the national assembly that 70% of the country’s monetary circulation moves in Cuban pesos, while the remaining 30% do so in MLC. Returning to stability positions from these levels can be much more complicated than it seems. Dollarization and stores in MLC are a business for the regime that will hardly change.

The second function is to ensure macroeconomic balance. This is the one sensible thing contained in the information note, but we are very afraid that it’s quite impracticable. The note says that progress must be made in reducing the fiscal deficit and monetary issuance. Perfect, what prevents the communists from lowering the deficit of 11% of GDP reached in 2021, more than double that of 2019?

There is no COVID-19 cost that justifies an expansion of spending of this magnitude, whose objective, as seen, has been to sustain GDP growth by 1.3% in the budgeted sector, while productive activities remained inert.

The note also refers to other functions, such as an alleged resizing of the state sector based on greater efficiency and effectiveness of public spending, and the control of wages without productive support, excessive profits and payments to private individuals, among other factors. It’s hard to believe that the foreign exchange market can be used for all this, but if they say so, let them do it, because it’s necessary to put order as soon as possible in an economy that doesn’t work.

The note concludes by pointing out that the ultimate goal should be to constitute an exchange market for the entire economy with a single exchange rate that guarantees the connection with foreign currencies of the national currency. In fact, this scenario, described in these terms, has not been presented in Cuba in a stable way since 1959.

Before that date, it should be remembered that the dollar and Cuban peso were on parity; that is, they were quoted at the same value. The same regime that started in 1959, which is still in power in 2022, makes no presence of facing this issue.

And they recognize that the implementation of the foreign exchange market is only a small part “of a much larger scaffolding, where no isolated measure alone will bring satisfactory results.” I totally agree. Once again, the lyrics seem well written, but then, as in so many other times, the music is out of tune. What a pity. The foreign exchange market will be another problem in a not very long time.

*Translator’s note: The “Ordering Task” (tarea ordenamiento) is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.   

Translated by Regina Anavy 

____________

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

This circulation of foreign exchange from the private sector to State entities to overcome the problems of shortages in the domestic market of goods, highly demanded by the population and by non-state actors, is a reckless decision, which won’t achieve the objective, no matter how flexible customs procedures and operations become. The first thing that has to be guaranteed is a stable framework for these operations to actually be carried out, without the need for promotion by the State, and here we have one of the evils of the Cuban economy.

The communist leaders were cautious and recognized that “actions are insufficient to curb the complex economic situation, since shortages in the domestic market are maintained, and the expected impact on the development of wholesale trade hasn’t been achieved.” So, what is the point of straining the domestic economic scenario, more than it is, with measures in which no one has the slightest confidence? Who will assume responsibility when in a few months the new failure of these measures is seen?

The idea of transferring the alleged benefits derived from the participation of foreign investment in the development of trade in areas like the access to supply markets, attracting financing, equipment, administration methods or the use of innovative techniques for logistics management, should be based on a prior analysis of the intention of foreign investors to participate in this “business.”

They might be surprised, because it’s difficult for foreign capital to have any motivation to make this contribution. Will this objective be achieved through direct interference by the State? Let them say it, because then foreign investment will leave the country. It’s that simple.

The two ministers should know that the attempt to promote the development of business throughout the country to boost wholesale trade through foreign investment faces the same problem as always: what to trade, and what production of goods and services can be directed to these operations? In addition, doing it with joint ventures is no less complicated, since this entity is the least used by foreign capital in Cuba. Let them wonder why.

The idea that businesses with foreign investment are mainly destined for the sale of raw materials, inputs, equipment and other goods that boost national production, as well as the supply of some finished goods — for example: food, cleaning products or electricity installation systems with renewable energy sources — is part of that obsessive mania of Cuban communists to control and direct foreign capital, a model that hasn’t produced revenue since the adoption of Law 118.

That there are entities that can finance domestic producers who have the conditions to become suppliers, with a differentiated financial scheme applied to these entities, which guarantees the stability of the supply chain, including the authorization to make sales in freely convertible currency (MLC). This creates confusion between the different agents and lays the foundations for a principle of political discretion in decision-making. Not good.

It is also intended to authorize the modalities of foreign investment established in the country for the provision of goods and services, which have the conditions for this purpose, that can be sold in the wholesale trade segment, including forms of non-state management, non-governmental organizations, embassies, business representations and branches in Cuba. It’s a crazy decision, which has very little to do with economic rationality and which falls into this area of “every man for himself” and the Regime’s lack of credibility that we talked about at the beginning of this article. Imagine an embassy in Cuba selling sanitary napkins or toilet paper to small businesses.

Entangling trade with foreign investment through these measures “carries a very high responsibility so that they have the immediate result that the population expects,” Ms. Díaz Velázquez acknowledged.

On a theoretical level, the minister believes that sales in MLC will increase products available in pesos and, with this, it will be possible to counteract the increase in inflation and stabilize supply. The problem is that this cycle has been in operation for more than a year and has not yielded any results. So, what reasons are there to expect that it can be different now? None. The figures for the sector are the same. Nothing has changed and will not change, so any transformation is impossible.

Cuban trade, modern, competitive and efficient before 1959, has become a useless waste after 63 years of communist domination. It’s probably one of the most inoperative and unfair trading systems in the world, with an aging, underutilized and deteriorated infrastructure, and without incentives to improve supplies. There is a lot lost, because the communists eliminated intermediaries and commercial agents from the beginning. Recovering trade goes beyond putting patches on foreign investment.

The Regime’s obsession with prioritizing the State market and interfering in the businesses that may arise to boost national production, achieve productive chains and offer goods and services to the population, leads to the very disaster of measures that lack experience in other countries of the world. Far from unblocking operating conditions, this will make them more confusing by authorizing only certain foreign investments and prioritizing what has to be done based on political and discretionary decisions, the worst thing that can happen to an economy.

And in the midst of this national environment of widespread shortages suffered by Cubans, the leaders who participated in the Roundtable came up with the idea that it’s necessary to export however and as soon as possible. Export what? Apart from the fact that the State has a monopoly on foreign trade, which implies absolute control of this activity and the execution by State entities of export and import operations, which “has not been renounced nor will it be renounced,” as one of the communist leaders said, in case anyone had the slightest doubt, there are still “risks” from applying these measures, because of that obsessive mania of the Cuban communists with everything that has to do with economic freedoms.

________________________

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

Translated by Regina Anavy

____________

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

Much of the responsibility for this situation lay with the communist regime in authorizing wage increases without concurrent increases in productivity, which increased the amount of money without increasing the availability of goods and services. Inflation produced from this situation became the economy’s response to very serious errors in terms of wages and pensions.

Therefore, the reduction of cash in circulation, through moving money to banks seemed an option to be developed. Unfortunately, there is no information available on what percentage of monetary circulation continues to materialize through cash in the hands of the public, and what percentage flows through banks, but it’s estimated that the former can be around 80% of the total. The interest of the regime is to control the latter, where higher value-added products and services move. They believe moving to magnetic cards makes it easier, or so they think. It remains to be seen if they succeed.

The second reason is in the DNA of the communist regime. Banks are an instrument of party and state control. They inform, control, and handle customers’ personal information at will. There is no level of protection for personal data in Cuba as in other countries of the world. Cuban banks are empowered to ask customers about the origin and/or destination of the funds they are going to dispose of, a practice that breaks with the elementary principles of bank secrecy.

So, having most of the productive money in the “banked” economy, allows the regime to tighten its control mechanisms over the banks in question. This is one of the aspects that causes widespread mistrust among Cubans towards the banking system, regardless of bank runs, confiscations and other similar practices in these 63 years of communist rule.

The truth is that the leaders want to get away with it, and in recent years they have done their homework regarding how to shift the economy to banks (versus cash), paying salaries and pensions by transfers in a large part of state companies and agencies in the budgeted sector, thus breaking the dependence on the “cash envelope” that was the main monetary link of the population. But is that payment by transfer enough for people to use payment, debit or credit cards?

As always happens with these things, the communist regime wants to impose, through resolutions, economic behaviors that don’t exist in reality, and, as a result, instead of achieving the objective, it ends up encountering the most absolute rejection of the measures imposed by economic agents.

This time the same thing is going to happen, no matter how much the state press supports the campaign. Cuban communists don’t quite know that before imposing a mandatory legal framework, you have to take a moment to see if what you want to regulate already exists in reality. They don’t. They throw themselves into the dry pond and then crash. Resolution 123/2022 of the Central Bank of Cuba (CCB) will be a good example.

The rule is redundant, and, so to speak, it says things that are already known. For example, everyone knows that the power of the Central Bank is to “exercise the regulation and surveillance of the country’s payment systems and dictate the rules of operation, in order to ensure that they function efficiently, within adequate levels of security for participants and the general public.” But is it really dedicated to it or is it just print on paper? Is there a study that reveals the efficiency of the Central Bank in ensuring the proper functioning of payment systems? I don’t know of any.

The relevance of the bank card in its different modalities, which the resolution has opened to the maximum, should be based on a prior knowledge of what percentage of Cubans use that means of payment and, above all, which segments of society, and going a little further, what they use the card for. And more importantly, the state of banking technology that allows operations with plastic money should be investigated. That way no one would get surprises.

The resolution refers surprisingly to “participants who act under license as issuers, payment transaction processing centers and payment card acquirers” as if they want to convey the idea that in addition to banks there may be others that issue cards. It may be causing a real proliferation of plastic money that ends up generating more problems than solutions. The procedure is also simple, if other standards within the Cuban communist regime are taken into account.

In this sense, the concern for the prevention and detection of operations in the fight against money laundering, financing, terrorism, the proliferation of weapons and the movement of illicit capital boasted by the regime should be extended to all types of banking operations and not just cards.

This will be a process to follow over time, because it has just begun. The Cuban communists’ objective of ’banking’ the economy is hampered by the logical and justified fear of citizens of the banking system, and what is even worse, the scarce tradition of Cubans’ relations with their banks. A tradition that was broken in 1959 with the confiscations and expropriations of funds, deposits and all kinds of financial operations of Cubans in the banks that existed in Cuba at the time. Wanting to erase all that with the stroke of a pen, as if it hadn’t happened, will not be easy. There are still many of us left to remember that dark episode of our history.

*Translator’s note: The “Ordering Task” is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), leaving the Cuban peso as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures related to different elements of the Cuban economy. 

Translated by Regina Anavy  

____________

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

Cubans who need foreign exchange know where and how to get it without having to resort to the state.

So this first day of the process of exchanging currencies to the new rate with the 1×120 dollar has been normal, and it has passed without pain or glory, with the population going to carry out their currency exchange operations for cash in CUP, cash deposits on magnetic cards in CUP and cash withdrawals in CUP from foreign exchange accounts, as well as transfers from foreign currency accounts to accounts in CUP, all without large crowds or stridency despite the fact that all operations had to be carried out at windows. Everything is very quiet, and yes, by paying commissions in the form of a commercial margin that, in the informal market, many recalled, are not usually charged or are not so high.

The official press referred to the fact that the cash in Cuban pesos available in bank branches and exchange offices to meet exchanges was barely used, despite the fact that the regime had made strenuous efforts to guarantee the conditions and availability of cash in Cuban pesos in response to the advertised foreign exchange purchase service. Which, if you think carefully, is another miscalculation, because what Cubans are looking for are dollars and not Cuban pesos, which happens to be the weak currency, so that those who have dollars keep them, except in exceptional cases, waiting for their value to rise, which it will. The banks and chains were really empty this first day and will continue to be so until the sale is announced, and then we will see.

The exchange rate of 1×120 didn’t attract dollar owners. Perhaps because it isn’t the rate they deem appropriate (it stays at 110 with the commissions), or because the information from the informal market and social networks tells them that in the not-too- distant future they can achieve rates of 140 and 160. Some ads in the independent digital press already establish this rate for exchanges on credit.

The peso comes out very strong with this rate of 120, and once again, the regime will deny the obvious to Cubans, as in the Ordering Task* when it launched the 1×24 rate. It’s a shame, no matter where you look, that the regime is cornered in its exchange rate policy by a free and efficient market of supply and demand, which Cubans use satisfactorily and which is expected to continue to function, despite the veiled warnings of Minister Gil.

With no show to present to the state media, and with Cubans reserving the dollars for when the peso drops lower, the initiative of Minister Gil, who has given so much to talk about, starts off on the wrong foot, and we know what that means for the communists. They are like children who protest and make a lot of noise until they have the toy they crave, but once they get it, they forget about it and leave it in a corner of the attic. The same thing can happen here, and it would be for the best. Let them forget about the state exchange market, and let economic freedom and the informal market work. Cubans and everyone else would appreciate it.

*Translator’s note: The “Ordering Task” [tarea ordenamiento] is a collection of measures that include eliminating the Cuban Convertible Peso (CUC), thus leaving the Cuban peso (CUP) as the only national currency, raising prices, raising salaries (but not as much as prices), opening stores that take payment only in hard currency, which must be in the form of specially issued pre-paid debit cards, and a broad range of other measures targeted to different elements of the Cuban economy.

Translated by Regina Anavy

____________

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.

So the communist regime wants to do this immediately with the exchange business of the informal market, and for this, it has decided to allow the purchase of dollars in cash, although it still doesn’t authorize the placement of those dollars on a card in MLC [freely convertible currency] due to its impact on greater purchasing power that cannot be met under the current conditions. The minister doesn’t have them all with him. And of course, as it couldn’t be otherwise, the blame is on the ’blockade’ [i.e., the embargo] imposed by the United States, which he described as “an anomaly in the financial functioning of the country that has not moved a millimeter and doesn’t allow taking that step that would be favorable for the population.”

There is so much distrust posed by these measures, that Gil warned that the entry into operation of the foreign exchange market this Thursday will not affect the business system, where the 1×24 exchange rate is maintained, so that “the imports that enter do so with that rate, as well as the exports that are generated in the country.”

Señora Wilson, president of the Central Bank of Cuba, also present at the Roundtable, reported that rules have been established that facilitate the implementation of exchange market measures through the repeal of decrees 17 and 37 of 2021, and 62 of 2022, since they established a single exchange rate to operate in the national economy, and the publication of a new one, 63, which will allow different exchange rates to be established.

Based on this legal framework, Resolutions 126, relating to the issuance of several exchange rates, and 127, which establishes the purchase of foreign currency by the banking system, which is going to be implemented first, are issued. Specifically, the latter resolution establishes that banks and non-bank financial institutions will not accept US dollars in cash from natural and legal persons for deposits in bank accounts but only for purchase, justifying this decision by maintaining the conditions of the ’blockade’ and the difficulties in operating with dollars and exporting them in foreign trade operations.

Less optimistic than the minister, she acknowledged that “this foreign exchange market will not solve the problems of the domestic economy. The foundations must exist, for which we are working on new measures to provide the country with foreign exchange and the goods and services that lead to economic stability. This will allow us to go to the final objective, which is to establish a single exchange rate that allows balance in the economy and where the national currency is the currency with which everyone wants to do business.”

As of August 4, people can make the sale through transfers they receive from abroad, through accreditation to an account in national currency. Also by means of freely convertible currency accounts, with request for transfers to CUP (Cuban peso) accounts. Likewise, it can be done in cash.

The national currency will be received through deposits in CUP accounts, so that the margins are more favorable, since that is what they are promoting. Also through the delivery of cash, which will have a less stimulating margin. She added that, due to the situation of the economy, there is a very high demand for cash, but anything that is not issuing more banknotes and favoring electronic transactions will be encouraged. Likewise, she pointed out that these operations will be, for the time being, at the counter, and ATMs will soon be included as an option.

Where will this type of exchange be implemented? It will be in all provinces, in key municipalities, and, to the extent that demand allows, new conditions will be created. The service will also be provided at airports, hotels and tourist centers. The branches where this activity will be carried out will be published on the website of the Central Bank of Cuba.

At this point, the president of the Central Bank indicated that they have “considered the exchange rate of 120 CUP to 1 dollar” and that “this exchange rate is not the equilibrium rate of the economy, it’s the one for the beginning of this market.” The fixed exchange rate system established in the ordering task has passed to a better life.

Commercial banks will be guaranteed a margin for buying and selling, in accordance with an international standard. These margins are aimed at encouraging non-cash transactions and the purchase of non-dollar currencies. Specifically, a range between 2% and 9%. These margins, in the case of the purchase of foreign currency in cash and at airports, improve compared to the previous exchange rate of 1×24. Excessive margins will offer incentives to operate in informal markets that will surely refine the costs of their operations so as not to lose competitiveness.

The trading margin conditions of the operations are harmful. “If you go to the bank tomorrow and sell a euro, the bank would be giving you 119.69 CUP. For the dollar, the margin is 8%. If you sell a dollar to the bank tomorrow, you will receive 110.40 CUP.” The competitive advantage is in transfers from abroad; here the margin for the purchase of the currency will be zero, as well as for purchases or withdrawals of international cards and transfers of foreign currency accounts to CUP at the exchange rate of 1×120. For cash withdrawal through currency accounts, there will be a trading margin of 1%. For currency cash deposits in CUP accounts, it will be 1.5%, and the dollar will have a greater impact.

The president of the Central Bank reiterated that the foreign exchange market starts with the purchase operations, but at a certain time the sale will have to be implemented, because then it wouldn’t be a market. She again pointed out that the objective of the Central Bank is to defend the country’s national currency and try to ensure that all transactions are in that currency. And she recognized that, at the time, there was no choice but to implement a trade in a currency other than the peso, but that must be corrected, because it has brought distortions in the economy.

She concluded by pointing out that, in order to achieve the equilibrium exchange rate that the economy needs, it’s necessary to “produce goods and services that encourage the population to buy in the national currency and discourage the need to acquire freely convertible currency to meet their needs.”

Minister Gil was convinced that the exchange rate chosen, 1×120, offers a “reasonable guarantee so that there’s an incentive to sell the foreign currency to the state and the state can buy it.” All people who have foreign currency “can legally exchange it at an economically based exchange rate, which guarantees a return in national currency that, today, gives it a purchasing power above what those who have a salary receive. This creates a distortion in relative prices.

He also insisted that with this measure the prices of the ’regulated family basket’ (within the rationing system) or the prices of stores in Cuban pesos are not increasing; there is no growth in the price level of the economy at the level of the new exchange rate. And he stressed that “no one can say that he had to increase prices because at the Roundtable they said that they are going to buy dollars at 120 pesos. That has no impact. We are talking about buying foreign currency and giving Cuban pesos in return.”

The minister was convinced that to the extent that foreign currency can be captured, invested in the economy and offers increased in pesos, decisions can be made in the ordering of the markets, increasing offers in national currency. Some of these decisions were cited only in passing, when he referred to the concern about the control of the public deficit and the tax evasion that injects liquid into the economy that heats inflation. The minister’s distrust led him to say that “this isn’t a magical measure. It’s an indispensable measure. It’s a step in which we have to continue moving forward and incorporate the sale,” an argument that reminds us, a lot, of the Ordering Task*.

He recognized that the exchange rate of 1×120 is not equilibrium, nor market; it’s only for buying. When buying and selling operations begin, an exchange rate will be sought that balances supply and demand, and certain limits will have to be placed on the sale. Bad business. If the minister wants to manage and put limits on market action, he will obtain the worst possible result. Achieving the equilibrium exchange rate is the result of the action of supply and demand, with the state keeping its hands off the process.

The minister said that with these measures it’s possible to achieve a society with the greatest possible equity and social justice and mentioned that people who don’t have dollars or euros to sell be given national currency in return. In his opinion, “if the socialist state captures these currencies, they are reinvested in favor of society.” An erroneous conviction of which he has long experience. Finally, he recognized that this measure is taken to “give legality to the foreign exchange market, putting its feet on the ground with an objective vision of reality and looking for ways to capture and channel those currencies according to society.” If instead, he had supported the informal market for its consolidation in the economy, the result would be much better.

He concluded by pointing out that immediate effects cannot be expected. The measures try to address the lack of foreign exchange, look for a mechanism to channel the currency according to offers in national currency and tax the objective of recovering the purchasing power of the Cuban peso. All this is to achieve an economy that operates in national currency in all its transactions and to have the ability to buy from a salary, from income. And by the way, end the informal exchange market, one of the few spaces of economic freedom and efficiency in the Cuban economy. It is another thing for him to understand this.

Editors’ note: This article is reproduced with the permission of its author and was originally published in Cubaeconomía.

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

Translated by Regina Anavy

____________

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

And, of course, like everything in Cuba, if you want to understand something, you have to go to the Law, which with its 210 articles and eight chapters establishes the structure, functions and prerogatives of each of the components of the so-called “people’s power,” which, as Granma points out, “is manifested daily in the actions of the delegates and voters as the foundation of the Cuban political system.”

Precisely, one of the most important changes to Law No. 132 was the right of members of the people’s councils to carry out controls on local production and service entities, as a “potential regulatory mechanism against illegalities and violations that usually occur in state and non-state institutions,” involving the citizen himself as an engine of the changes he needs around him.

Granma reviews the experiences on this topic: Are the controls effective? What results have they had? How can they improve?

Popular controls are welcomed by the communist organization as a tool to respond to the demands of the people, an idea that is here to stay. Delegates ensure the proper functioning of the entities that operate in their constituencies, but what Chapter VII of Law 132 proposes is to involve people more in transforming their environment.

So, although previously only delegates participated in the so-called control and audit, anyone who can contribute “to evaluate, show, suggest and thoroughly review the administrative work of public and private entities, even more so if they have been pointed out by the vox populi, are now invited.

Every month, three popular control exercises are carried out, which are approved at the end of the year so as not to leave any area or sector without going through the filter of citizens and analyzing topics such as water supply, the situation of schools, grocery stores and medical offices, the sale of liquefied gas, the production of bread, the marketing of agricultural products and the so-called coleros. Hey, did anyone hear blackouts? It’s incredible.

The communists are exultant. Every time a control is announced, service specialists, retirees, community leaders and anyone who wishes are incorporated into the group, forming a conga line with a complicated rhythm, which ends up being deadly for some state and non-state entities, when the report is prepared with positive and negative signs and a plan of measures is required in response. Those responsible, as one can imagine, have little desire to continue.

Therefore, when agencies fall behind with the requested response, and others don’t immediately adopt the suggested decisions, some other, tougher measures are taken. In some cases, the focus is on the workers of the institutions under control, in a clear exercise of bridging those responsible for them, which leads to a further deterioration of the situation. Popular controls add fire to conflicts where the problem could be fixed with a little good will. You can see the Castro inspiration behind all this.

What is the communist regime looking for with these controls? Perhaps that the grocery stores are painted, renovated; that the culture of commerce wins, as Granma says. Let’s see: if there is nothing to sell and the grocery stores are empty, all the rest remains. That’s where popular control should begin if it wants to be of any use. There is the impression that the regime wants to fuss over popular controls to keep people entertained, away from the main concerns about blackouts, inflation or lack of food. If this is the case, it’s not strange that they talk about achieving even greater systems of controls, because according to them, credibility can be lost, and in this case, there is even the authority to request support from the president of the Municipal Assembly.

One can now imagine that all this is another waste of time within the day-to-day life of Cubans. Granma recognizes the problems that these controllers of people’s power have when certain entities located in the municipal council cannot be controlled because the scope of their work is provincial, and, in these cases, alleged negligence cannot be punished. Or the need they say to review the communication mechanisms, because, although the opinion of the delegates is that most people know when, how and where the controls are carried out, practice shows that this is not the case.

That is why, to finish filling the agenda, the leaders say that it’s necessary to take more advantage of traditional socialization methods (meetings, offices with voters), or to create new ones (social media channels or groups, informal opinion leaders) so that more people know and participate in these demonstrations of popular power. They have no remedy.

*Translator’s note: Marrero blamed doctors and other healthcare workers in Cienfuegos for the handling of the pandemic (in 2021)

Translated by Regina Anavy

____________

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