The Council of Ministers says it has implemented “very important actions,” but they have not yet reached the population
14ymedio, Madrid, 30 September 2024 — With a fiscal deficit of more than 15% of the Gross Domestic Product, a GDP contraction of 1.9, an official year-on-year inflation rate of more than 30%, a devalued peso against the dollar and a public debt of more than 20 billion dollars, Cuban authorities say that there are “discrete advances in macroeconomic indicators that have not yet reached the family economy.” The Council of Ministers reached this surprising conclusion this weekend, in a meeting to review the progress of the month of September.
The optimism that overflows from the article published in the official press entitled “A Process That Advances, But Not at the Required Speed” is unprecedented in a country that is experiencing its most tense days in recent decades, in which there has been no shortage of galloping crises that pale in comparison to the current one, marked by a constant shortage of fuel that not only prevents families from sleeping and eating, but also prevents industries from producing, transport from moving and, ultimately, having the slightest chance of minimally improving conditions.
The Minister of Economy and Planning, Joaquín Alonso Vázquez, however, said that the Government’s plan to correct distortions and to revive the situation is not going badly. “Although the actions carried out are incipient, we are already seeing how some economic indicators are moving.” The only data that remotely support his words were those of the state and municipal budget deficit, which are lower than expected, for reasons that are not as happy as they seem.
“Although the actions taken are incipient, we are already seeing how some economic indicators are moving,” he said.
The Minister of Finance and Prices, Vladimir Regueiro Ale, said that there is a state deficit of 32.125 billion pesos, 23.249 billion pesos less than planned. But the causes are, on the one hand, the “over-fulfillment of income” and, on the other, undoubtedly worrying but vague, “the non-execution of expenses.” Although he does not offer further details in this regard, the savings may come either from the decrease in the population or from the inability to execute works or programs necessary for the population.
At the local level, the deficit is 2.315 billion pesos, 4.990 billion less than the budgeted figure. There are 54 municipalities, among which Havana and Matanzas stood out, with a surplus. These figures will allow for adjustments in the budget, the authorities said without further details. And that is all the good news.
The Government has reviewed the first two months of the price cap for private companies on six basic products. “Both violations and good experiences have been identified,” it said. The number of inspections carried out is striking: 222,300, from which 348 million pesos were obtained from more than 137,000 fines. From these figures it can be concluded that the average penalty is around 2,800 pesos, barely 8.4 dollars in the informal currency market, an amount that many consider to be insignificant.
Another quantified fact was that of the so-called banking sector, which increased by 4% compared to July, although it is still light years away from the wishes of the authorities, suffocated by the lack of money in circulation. According to the top brass of the Government, there are “discreet solutions to begin to better control inflation and also the exchange rate of the Cuban peso.” This last issue, announced numerous times throughout the year, still has no plan in sight to stabilize either the national currency or the foreign exchange market.
Two facts that make clear the divorce between Cuban society and financial institutions: there are more than 300,000 fiscal bank accounts with zero balances and some 152,000 “non-state management forms” without an operating account.
The official press claims that the ministers discussed the current situation of the country’s main sectors, from the harvest to tourism, including imports, exports, agricultural production and relations between the State and private sectors. However, the state of each of the sectors is not specified, although the state of tourism is public knowledge: catastrophic, with year-on-year counts of international passengers falling almost by half.
Another depressing comment also slipped in. “The link between the national economy and the entities located in the Mariel Special Development Zone is still low, affecting the expected result,” the Government admitted to no one’s surprise. After ten years of development in 2023 , Raúl Castro’s star investment project was born to raise 2.5 billion dollars annually and had barely raised 3.5 billion in a decade.
“The link between the national economy and the entities located in the Mariel Special Development Zone is still low, affecting the expected result”
Manuel Marrero used the phrase ’chapucería’ [botched work] again, as he did last week in Gibara, to criticize local and provincial officials and asked them to “get to grips with subjective problems, each one in their own field, in the tasks that correspond to them and direct them, but also at the community level, which is where problems are first resolved.”
The Prime Minister admitted that the situation is bad due to “the lack of fuel, foreign currency, electricity,” but he urged people to resolve the problems that he called “subjective,” without making it very clear what he was referring to. However, he made clear his belief that at the state level – for which he is responsible – things are not going so badly. “[The Government] has implemented a number of very important actions, the population still does not perceive it, because it has not yet had a direct impact on them,” he insisted.
The meeting also discussed the ’accountability meetings’ that are taking place these days, meetings in which the problems most frequently expressed by the population were the high prices of basic products, the water supply and waste treatment, construction and maintenance of housing and multi-family buildings, the poor condition of roads and public transport and telephone service, although electricity was especially singled out, as expected. This Monday, the Cuban Electric Union again forecast a deficit of more than 1,100 MW, and the days are already piling up on the population, especially outside Havana, where the hours without electricity are already many more than the hours with it.
Meanwhile, the Prime Minister, as if bureaucracy were not his problem, asked officials to give answers to the population when they raise a protest. “These are issues that are there, and what is missing is a response, which sometimes, unfortunately, is not possible; but we also have to explain this with sensitivity,” he concluded.
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