What’s Coming in Cuba is Frightening

By Francisco Acevedo

HAVANA TIMES – This week the Cuban Parliament met and addressed the economic problems up to the end of 2023, with figures that are truly frightening.

I remind you that with former Economy Minister Alejandro Gil, all the reports were hopeful, the future was promising, the economy was going to rebound, etc., and that never happened.

Now I don’t know if they will finally come down to earth and in December make a grounded forecast for 2025 because what was discussed is not encouraging at all.

To begin with, the Gross Domestic Product (GDP), the fundamental macro indicator by which economies are measured in all nations, Cuba still does not even reach the numbers of 2019, before the pandemic.

According to the report presented to the legislators by the new Minister of Economy, Joaquin Alonso Vazquez, there is still a ten percent gap compared to that year, which, we might remember, also did not show encouraging figures.

Especially depressed are the sectors of the economy associated with primary activity (agriculture and livestock), with figures over 40 percent below 2019, meaning they practically need to double to match their previous state.

Vazquez assured that in the first half of the year, the country has received 88 percent of the foreign currency the government expected to earn, which translates to 222 million dollars less than anticipated. He also noted that it is “very difficult” to slow the inflation rate in Cuba, which is around 30 percent annually.

The government strategy to solve this gap is the same as always, which is almost never fulfilled. This time they add that they will rethink investment plans to only boost strategic projects for the country, meaning some already approved investments will remain shelved.

The new government adjustment plan is the second in just six months since last December when a package of measures was implemented that included retail fuel price increases of more than 400 percent and interprovincial transport price increases of up to 600 percent. In addition, they imposed price hikes for public services such as electricity, gas, and water. However, so far none of this has resulted in progress, and the more than 1.7 million pensioners and retirees continue to struggle as their pensions do not allow them to survive with the basics.  On top of that, power outages of between 12 and 15 hours daily have become routine outside of Havana, also affected but for less hours.

The oft-repeated slogan “Cuba moves forward and that hurts them,” which we hear so many times on the National Television News and all official media, this time discredits itself, acknowledged by the legislators themselves, and with the exodus of young and skilled people, leaving by the thousands month after month. Talking about growth would be a true utopia, not to mention the lack of resources. Obviously, the other motto of “doing more with less” is also not being achieved.

In fact, the ineffable television program “Con filo”, which cracks the whip against any opposition, said unabashedly that it could not air last Tuesday because Parliament was in session, and they didn’t have cameras or a studio to record. It’s the height of communist economy, where a television program doesn’t even have its own resources available when needed.

A bundle of nerves, as usual when Raul Castro is in the front row or when he has to speak in English, our president Miguel Diaz-Canel summarized the parliament sessions and, among other things, issued a veiled threat to Micro, Small, and Medium Enterprises (MiPyMes), so they know they are being closely watched and if they step out of line, they will be cut off.

A country that imports 80 percent of what it consumes, according to the United Nations, and barely exports, should not afford the luxury of most MiPyMes not producing anything, but rather reselling.

Now a maximum price cap has been set for six basic products. The private businesses will be required to have a separate business bank account, and they will be prohibited from making payments abroad, so I don’t know how they will be able to sustain themselves.

“We are not here to close them down (private businesses), but we have to reorganize,” said Prime Minister Manuel Marrero, who continues to say that MiPyMes generated “distortions” and “negative trends.”

According to him, tax evasion by the private sector in terms of sales taxes reached 50 billion Cuban pesos (around 167 million USD) between early 2023 and April 2024, a third of the country’s budget deficit.

Measures announced include increased fiscal controls, hiring more inspectors, the closure of businesses that underreport, and strengthening electronic payment systems. This, in addition to announcing that there will be a “new company law” in September.

The humorous note at the parliament sessions was provided by the endearing Secretary-General of the Cuban Workers’ Central (CTC), Ulises Guilarte, with gibberish that even he doesn’t understand. He asked: “How do we find a solution to continue improving every day the level of shortages that is present in the population today?”

It’s a task for the Royal Spanish Academy to try to unravel this spectacular nonsense, but perhaps they have already given up on this character, who spends his time going from province to province barking for everyone to work more while he continues in his car and with his refrigerator full without knowing how to change even a light bulb.

“We have almost become accustomed to not being able to meet people’s basic food basket,” he acknowledged, but he continues there as if nothing, because his basket does not fail.

Mr. Guilarte, as usual, ended his string of nonsense urging the population that the resistance exercise they have been doing for decades not only be passive but mobilize to transform this problem.

It seems we are gearing up for a new Special Period (the post-Soviet crisis of the 1990s) because the stubbornness of those who govern this island prevents the changes necessary to ensure its existence as a nation, and which its own people demand.

Read more from Cuba here on Havana Times.