According to the Prime Minister, private individuals evaded 50 billion* pesos, and 354 sales of ’hidden’ products had to be forced
14ymedio, Madrid, July 18, 2024 — We could not expect anything other than a long list of economic penalties from Prime Minister Manuel Marrero’s intervention this Wednesday in Parliament, in which he evaluated the activity. He did not disappoint. Most perplexing was the revelation that private individuals allegedly evaded 50 billion pesos*, “a third of the fiscal deficit,” he emphasized.
It is not known if the prime minister made a mistake, since the deficit, confirmed that same day, did not reach 100 billion, but that detail is almost a minor matter. “It is not clear how the emerging non-state sector would have been able to defraud the omnipresent Cuban Government for an amount of 50 billion* pesos,” the economist Pedro Monreal, astonished, wrote on X. “If that were the case, we would be facing colossal government incompetence.”
Error or not, it was not the only demonstration of that “incompetence.” In the delivery of land in usufruct, 388,000 tenant farmers have been “purged, 130,000 illegalities being detected,” and in livestock, 107,000 owners have been visited with 98,000 violations found, key data within the sectors that, fundamentally, feed Cubans. The numbers demonstrate the absolute carelessness with which production has been supervised in a country where the State constantly monitors its citizens.
The numbers show the absolute neglect with which production has been supervised in a country where the State constantly monitors its citizens
The urgency to sanction those who sold food with capped prices without complying with the rule is shocking. And beyond: in the face of what the popular imagination calls “the kidnapping of the chicken” – in reference to the MSMEs that chose not to sell it in the midst of the uncertainty about the price – the inspectors have forced its release for sale.
“We’re going where the products are,” said Marrero, who cited the number of forced sales of hidden products at 354 at the established prices. As a result of the breaches of this resolution, which has only been in force for 10 days, 53 licenses were withdrawn and 21 confiscations made.
The Minister of Finance, Vladimir Regueiro, had already anticipated that in less than 72 hours, 400 violators of the price cap would be ‘hunted,’ so it is not surprising that on the 11th, 12th and 13th, 891 inspections were made that found 4,000 violations, whose fines amount to more than 13 million pesos. The authorities said they had 7,000 inspectors, but it is not known how, given the shortage of workers; Marrero said that it could be 20,000. “The objective is not to close businesses, but to persuade sellers to follow the established prices,” he concluded.
Some positive data for public accounts did appear, such as the amount of money raised in tariffs on final products, where the figure went from 108 million pesos to 610 million
Some positive data for public accounts did appear, such as the amount of money raised in tariffs on final products, where the figure went from 108 million pesos to 610 million. In terms of taxes, the forecasts were also improved with 159 billion pesos, 10% more than planned.
But when talking about agricultural production, it is doubtful that there is a properly descriptive qualifier after the previous two were already “the worst in history.” Marrero said the figures for the sugar harvest are not yet known, and he did not reveal the number of violations, but it will soon be released. He did admit that “planned production was not achieved to meet the demand, although it went from 83 days to 150,” and that foreign investment is necessary to “save” that industry.
The Prime Minister also insisted on the decentralization of production, whose hiring amounted to 95% in June, so that each territory better organizes its needs and potentialities.
Another of the issues outlined, although we will have to wait to know more, was that of the future business law, which will aim to “update” the rules for private individuals and “order” relations with the state sector. Although it is impossible to expect a real and necessary revolution, the prime minister cited an important issue, undoubtedly the result of the numerous cases of corruption that are appearing in what the authorities call “chains,” which is nothing other than the usual public-private collaboration in capitalism.
The new regulations will require the verification that there are no family or personal ties between the parties, in addition to the fact that the corporate purpose must be verified and the price must be fair. When the law exists, the important thing will be compliance, which is uncertain if you listen to Marrero’s speech from the beginning. The rule will include, among all the issues cited by the Prime Minister, the profit cap, already in force. “There can’t be more than 30% profit. Today, sometimes up to double or triple the profit is applied,” he said.
“There can’t be more than 30% profit. Today, sometimes it is applied up to double or triple the gain”
In the speech, other general data were provided for housing, care for the vulnerable and crime, the latter with percentage values once again, instead of totals. Marrero admitted that there is still a “high amount of crime, although with a decrease of 10%” compared to previous months, and cases of robbery and theft of livestock decreased by 20%; it is not known about how many or compared to what time. “We have a people of “Homeland or Death”** for which we will continue in combat, convinced that it is possible,” he concluded.
However, the Minister of Economy and Planning, Joaquín Alonso Vázquez, held back his pearl of wisdom for a very long preamble dedicated to the evils of the “blockade.” Alejandro Gil Fernández’s successor restated the already known figure of the decrease in gross domestic product (GDP) by 1.9%, and he divided it by sector. Among those that increased their GDP are tourism, communications, construction and social services associated with culture and sport, but activities related to agriculture (a huge 12.7%), livestock and fishing, manufacturing, sugar production and social services of health and education decreased.
Alonso Vázquez fixed the mess of the official press, which erroneously indicated, days ago, that there were 1.8 million tourists and then clarified that the total was 1,321,900, which leaves the June total at just 147,012 international travelers. The figure harbors another catastrophe, since it is again lower – and for three months – than that of the same month of the previous year (154,590).
Foreign exchange revenues from exports improve – despite the fact that last year, according to Marrero, 63.939 billion pesos were lost in the sale of medical services, the jewel in the crown – fulfilling the plan at 88%, which is 24% more than a year ago. Tobacco, charcoal, seafood and biopharmaceuticals lead, while nickel, rum, sugar, honey and shrimp fall behind.
According to Marrero, 63,939 billion pesos were lost in the sale of medical services, the jewel in the crown
According to the accounts, the largest current expenditure on imports is for fuel and food, but no numbers were given, except for the 900 million dollars that the “forms of non-state management” spent on buying abroad, 622 of which are mipymes. No authority dared to repeat the fanciful data presented last week by the Minister of Energy and Mines, Vicente de la O Levy, who spoke of an “oil bill for the country of more than 4 billion dollars,” without providing any data that would justify that excessive expense.
“It is unsustainable to maintain the importation of 100% of the products that are distributed, which cost the country 1.7 billion dollars annually at current prices, even though there is productive capacity in the country,” said the minister, urging an increase in production. As if all he had to do was ask.
Translator’s notes:
* The value of the Cuban peso against the US dollar is in constant flux; right now 50 billion pesos is roughly 2 billion dollars.
**See ‘Homeland and Life’
Translated by Regina Anavy
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