Cuban Government Announces Pension Increase
HAVANA TIMES – During his address to the National Assembly on July 17, 2025, Prime Minister Manuel Marrero Cruz presented an overview of the measures implemented by the government during the first half of the year. Among announcements related to pension increases and the approval of a new currency exchange market, Marrero attempted to ease the recent public backlash against the government — intensified by the economic crisis, institutional discredit, and the controversial ousting of the Minister of Labor and Social Security.
Below, El Toque summarizes the key announcements and notable moments from the prime minister’s address.
Pensions: Relief That Falls Short
Marrero acknowledged the “complex situation of pensioners” and announced an increase beginning in September (to be paid at the end of August) for those receiving pensions due to age, disability, or spousal death. The measure will benefit 1,324,599 people, 79% of all pensioners. Those receiving the minimum pension of 1,528 pesos (≈ 4 USD at the informal exchange rate), will see their income doubled.
Although the announcement is intended as a relief, its effects are more symbolic than practical. According to economist Miguel Alejandro Hayes, a Cuban retiree needs 52,000 pesos (135 USD at the informal dollar rate) per month to cover the basic food basket. With the new minimum pension (3,056 pesos ≈ 8 USD), a retiree will be able to cover only 5.88% of that cost. In other words, instead of needing 34 pensions to feed themselves, they will now need 17 each month—still an unattainable goal.
Marrero admitted that this is only a partial solution, as “there are no financial resources” for a comprehensive pension system reform. Paradoxically, during a 2022 appearance on the program Mesa Redonda, then-Minister of Labor and Social Security Marta Elena Feitó Cabrera said that increasing each pension by just 1 peso would require raising the budget by 17 billion pesos annually, making it clear that increasing social spending was beyond the government’s means.
Marrero Distances Himself from the Former Minister’s Remarks
One of the tensest moments of the speech came when Marrero addressed the controversy sparked by the statements of the now-former Minister of Labor and Social Security, who on July 14, 2025, denied the existence of beggars in Cuba and described the homeless as disguised tax evaders.
“What the comrade said does not align with the government’s policy,” stated Marrero, who—like President Miguel Díaz-Canel—opted for damage control and distanced himself from Feitó’s rhetoric. According to the prime minister, following the media storm, the official admitted she had made a mistake and did not feel capable of continuing in her role. Marrero called her resignation a “brave act.”
Limited Acknowledgment of Poverty
Although he avoided using the word “poor,” Marrero admitted that at least 182,000 families—around 310,000 people—receive social assistance due to being in “a situation of vulnerability.” He made it clear, however, that these are not the only people facing economic hardship.
Meanwhile, data from the Cuban Observatory for Human Rights puts the percentage of Cubans living in poverty at 89%. The gap between this estimate and official figures highlights differing criteria and scopes in assessing the country’s socioeconomic conditions.
Where Did the Money for the National Electric System Go?
Another key issue was the National Electric System (SEN). Marrero reported that since November 2024, the government has invested 1.15 billion USD and nearly 15 billion pesos in its recovery. He acknowledged, however, that this might spark public skepticism: “People will say: Where is that money, why are the blackouts continuing?” His response boiled down to saying it’s “a complex issue.”
Experts like Ricardo Torres and Jorge Piñón estimate that fully recapitalizing the SEN would cost between 8 and 10 billion USD and would take a decade—suggesting that the figures presented by Marrero are insufficient to end the island’s power instability.
Etecsa Profits from Rate Hike
In an attempt to justify Etecsa’s rate hike, Marrero claimed the state telecom company raised over 24 million USD in just 46 days. He also noted: “Of every 20 USD that came in before, 18 were illegal.” The measure, which followed student protests in June, reflects the mismatch between the official exchange rate and the informal market rate—385 CUP per USD—which the state has, in certain contexts, used to set prices for goods and services, even while refusing to recognize it officially.
This double standard also appeared in Marrero’s announcement of an upcoming “transformation of the monetary and exchange system,” although he gave no further details.
First published in Spanish by El Toque and translated and posted in English by Havana Times.