14ymedio, Elías Amor Bravo, Economist, 8 March 2021 — Cuban Vice-President Marino Murillo, has returned to the forefront of current affairs to talk about what he considers to be the positive effects of the currency unification and exchange. He insists on the same arguments, and of course, it is his opinion, and of course, respectable, but if he had read any of the nearly 2,000 comments from the Cubadebate survey, he should remain silent in relation to economic matters and the Ordering Task.
More or less the same as his leader, much more concerned with burning himself with the state and the evolution of the economy. One has the feeling that Murillo has been left alone, and that he has no choice but to defend himself by attacking. It will be seen if it is successful.
Cubans know that Murillo is not telling the truth when he insists that the currency unification and exchange is a fundamental measure to encourage the development of the country’s productive and business sector. Raúl Castro never imagined that what began to be talked about in the so-called “guidelines” could end like this. In fact, the currency unification and exchange could have been a good thing for the economy, but it should have been done well.
Perhaps for this reason, many are convinced that before, with the two currencies, people lived better, within the precarious scarcity that characterizes the Cuban economy. Even companies that have seen their balance sheets become insolvent from one day to the next, miss the times of the fictitious parity, the dollar, the Cuban peso and the convertible peso.
Nor is it true that in these two months the currency unification has served to highlight the innumerable distortions that existed in the national economy, which were not noticed before, and now, with the Ordering Task, they are identified as problems and conditions are created to solve them. Murillo is not telling the truth on this matter either.
The problems from before have continued, and gotten worse, and the Cuban economy and society, accustomed to living with them, has been shocked to see that the changes could be made and that things could get worse. Murillo should speak clearly, identify what international pressures are behind the Ordering Task, if any, and above all, because the decisions of the Communist Party are put before the needs of the population. With statements of this type he would ensure his political future much more than with what he is doing.
It is also a surprise that all this information provided by Murillo has come out on his Twitter account and then later, the official press takes charge of continuing the dissemination. The order of factors, in this case, may be altering the result, because no one doubts that it is an action by Murillo directed at his colleagues from the Communist Political Bureau which, after the publication of the Cubadebate survey, is possible. The normal thing for a minister with the power that Murillo has had is not to go around entangling with social networks, but to call a press conference or any other formal act, which would surely achieve a quorum of international press delegates.
But again, going back to the core of the information, the monetary and exchange unification of the Ordering Task could have been implemented without the need to muddy the aspects related to subsidies and gratuities, salaries and pensions or price setting. The one that comprises a lot, little squeezes, and the bet on the centrifugation of so many elements in what should be a simple process of currency exchange, has led Murillo to a critical situation because everyone blames him for the failure. Releasing him from his position could be a gift, thinking about what may come next.
If it had been limited to facilitating the circulation of the Cuban Convertible Peso (CUC), with its corresponding collection period of six months, and the establishment of a single exchange rate of 1 dollar for 24 Cuban pesos (CUP), it would have had much more success in reordering the economy, and the results would be much better (for now, inflation need not have skyrocketed in this way). Acting with prudence and rigor, the objective of encouraging the development of the productive and business sector of the country would have been more achievable, without the need to put many companies into insolvency.
On the contrary, the state business system and the majority of private entrepreneurs have been shaken by the regime’s decisions regarding the Ordering Task, making it difficult to transfer production costs to prices and thereby further limiting the productive supply. The general opinion of the companies is that now they are in a much worse situation than before, and the feeling “each man for himself” has spread like wildfire through the weakened Cuban economy. Most people also believe that it is much worse now than it was at the end of 2020.
Murillo is pleased with the rate of collecting the CUCs that were in the hands of the population, because the process is proceeding at a higher rate than expected; to date, 57% of the total has been collected. And why isn’t it going to go fast, when the only thing that people want is to get rid of their CUCs because they are no longer worth anything. Another merit turned into a bungle by a lousy design of the devaluation process that has ended up dragging to the CUP the weaknesses that the CUC had and that are now visible.
And to top it all, Murillo says that an important achievement of the Ordering Task has been the increase in people seeking work and the fact that most find it where wealth is generated, citing that 72% have been employed in the business system. We have already had occasion to comment on this issue. That people have to look for a job, as it is, says little about a favorable economic situation, since it indicates that the economic situation is difficult and all family members have to pitch in and contribute a salary.
This is anything but positive. Especially if half go home without a job, because the provincial directorates have not been able to facilitate the search task. Against Murillo, this increase in the active population, which clashes with the trends of recent years, is not at all favorable, and good proof of this is that less than 35% of those who find employment do so in companies, because that 72% has to be calculated on the 50% who get a position, which is half of those who go to the provincial directorates.
So not so fast. The only labor market result that Murillo cites leaves much to be desired. Higher wages, moreover, are already being driven by inflation and will soon cease to be attractive. For how long can the staff of the bloated state companies be maintained? Murillo does not know. Perhaps because he does not intend to be there when that happens. Nothing more to lose.
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