Dr.C Juan Triana Cordoví

Dr.C Juan Triana Cordoví

Havana, 2021. Photo: Otmaro Rodríguez

Closer to the horizon

Although it seemed that the list of activities not allowed as a modality of self-employment in Cuba looked faraway like the horizon, today we can practically reach it with our fingertips. In short, when the regulations in this regard are published, it will be known how much the Cuban business fabric can be diversified and effectively enriched under current conditions. The history of self-employment has been with us since the late 1970s, when the first resolution that allowed such activity was issued as part of the “rectification of errors” announced in the Programmatic Platform of the Communist Party of Cuba (PCC). This document was the foundation that anticipated the first of all the PCC congresses. This story has been told over and over again for decades, especially since the 1990s, from multiple perspectives,1 with greater or lesser depth, from quite different and sometimes irreconcilable political and ideological positions: from the almost absolute naivety of understanding the event as “the solution” to the country’s problems to the one that has identified it as part of the problems and dangers, and even as the confirmation of the distancing of official policy from the essential foundations of the Revolution. The U.S. administrations, especially...

Container terminal in the Mariel Special Development Zone, in Cuba. Photo: @ZEDMarielCuba/Twitter/Archive.

Multiply or divide…

The devaluation of the official exchange rate of the Cuban peso against the dollar, the wage reform and the administration of the management of the prices of some goods and services have become a combination that doesn’t always produce the desired effect. At least, so far in this process of structural adjustment of the national economy called reorganization task. We know from the macroeconomics and microeconomics books that any devaluation must generate positive incentives for the efficiency of the system as a whole; on labor productivity and on exports. It should lead to improvements in all three, though not in the short term. We also know from the macro and micro books that any devaluation produces a short-term effect on prices and generally pushes them up. This effect, in economies where there is an adequate dynamic of substitution of production factors (capital, labor, land and know-how) and where the supply is sufficiently elastic and varied, should serve as a containment of the expected short-term “price-effect” term. In universal economic thought, Alfred Marshall and Leon Walras defended different points of view on the role of quantities and prices in this necessary adjustment process. It is also true that those analyzes were...

Photo: Otmaro Rodríguez.

Aftershocks of the earthquake

If anyone ever doubted the telluric nature of the exchange rate and monetary unification, this week, the first after the famous Day Zero, has been enough to show how intense the earthquake is and will continue to be. If the aspiration is to produce the effects that a devaluation should produce in the real economy, well then, it will be necessary to prepare for the many aftershocks that have yet to appear and that will necessarily occur. What is happening today in the economy and society, and even the way in which people begin to perceive the advantages and disadvantages of the happiness of living with a single currency, affects the pocket, the stomach and the mind. And they do so with a depth never seen before. The “intensity of the earthquake” is associated with many factors, but there is one that should be highlighted. Currency distortions are not the product that dollarization was adopted one day, back in the 1990s. They come from further back, since our country kept the exchange rate of the CUP with the US dollar unchanged, something that happened in the early sixties. They also go back to the fact that the tax system was...

Photo: Ailen Maleta

Cuban economy in 2021: beyond the numbers

Four days ago, during the sixth regular session of the National Assembly of People’s Power, in its ninth legislature, Deputy Prime Minister and Minister of Economy and Planning Alejandro Gil Fernández reported that the GDP had decreased by 11% in 2020 and that a growth of 7% was proposed in the plan for 2021. Reaching this goal would seem like a not so difficult task from a mathematical perspective (the comparison base is very low) but that is only pure appearance, especially if it is taken into account that the reasons why it decreased in 2020 will not disappear, as least for a great deal of next year, even if at some point the virus vaccines will do their job. The others, the structural ones, which have determined that the growth rate in recent years barely reached 1.6%, remain, some have even deepened and have made our reality even more complex, much has been said about both, although it is never too much. *Caption:  GDP performance Annual rate Ave. Ave. Gov goal Trying to grow in the short term and at the same time advance in a strategy approved more than four years ago and that, if we take into...

Río Júcaro Ferry, one of the catamarans that transport passengers between the ports of Nueva Gerona, Isla de la Juventud, and Batabanó. Photo: Victoria newspaper.

The Island of Treasures

I came to the Isla de la Juventud for the first time on a plane, with my mother. We were picked up in an olive green “jeep” and taken to the Vanguardia de la Habana Secondary School in the Countryside. At that time, it was common for a junior high school in the countryside to have one hundred percent promotion. We were going to see my father, who at the time was the deputy director of the Vanguardia de La Havana and who had not come to the capital for a while for work reasons. For me, it was fantastic to arrive at Isla de Pinos, later baptized as Isla de la Juventud, for several years worthy of being Isla de los Cítricos (citrus fruit), and always Isla del Tesoro. I got there thinking of that last name. Much later I learned that the Isla de la Juventud was not actually Isla del Tesoro, but the Isle of Many Treasures. Nueva Gerona, Isla de la Juventud. Colonized by the Spanish, recolonized by the Americans from 1898 to 1925, recovered by Cuba, a territory of Caymanian and Japanese emigrants and also many Cubans from so many parts of the Big Island,...

Photo: Javier Arrizurieta

Strategy and development

Eleven principles, sixteen key areas and more than 370 measures is, without a doubt, an enormous effort in favor of the purpose of “preparing an Economic and Social Development Strategy, where it is ratified that we cannot continue doing things the same way.” The process of drawing up this group of measures has been one of the most expeditious we have seen. “On May 10, the Prime Minister’s instructions were issued to all the agencies, thus working on the design of the measures... on July 14, the Strategy was presented to the Political Bureau; on July 16, it was approved by the Council of Ministers and, that same day, our people were informed in a general way about its scope and content in the Mesa Redonda television program. Later, a tabloid with the information was published.” The Minister of the Economy recalled this while rendering accounts in the recently concluded session of the National Assembly. The reasons for the urgency are well known. On the one hand, the delay in putting into practice a group of measures approved several years earlier in the governing documents for the transformation of the national economy and its impact on the country’s economic development,...

Photo: Alex Heny (Archive)

Foreign Direct Investment and organization

The past week has been one of the most interesting in recent times, for everyone, but especially for economists. The explanation offered  about the “organization” task by the head of the Implementation Commission and the subsequent clarification of doubts and comments on the subject, was, in my opinion, one of the best public explanations I have heard, not only to understand the complexity of the task at hand of the present government, but also on how the national economy has functioned and functions, or rather, how much distortion of all kinds and institutional failures exist today in the functioning of the national economy. After listening to both programs, it is possible to express with amazement, rather than with certainty, eppur si muove. It is also true that if we don’t carry out this task, if it isn’t done correctly, or if we continue to delay it indefinitely―with the risks that this implies and with the restrictions we have today―, that even erratic movement of our economy can take us anywhere, except where we want. It is also true that despite the effort to foresee everything, or almost everything, because the economy implies communicating vessels, because it has a direct social...

Photo: Diario de la República

The food we need

The production, distribution, marketing and sale of agricultural products monopolizes the attention of almost everyone in our country. Of course it is, it takes up a great deal of our day, of our mind and it also empties a good part of the pocket Consequently, in recent weeks several documents on this problem have been made public. They, with their differences, contribute to the understanding and possible solutions of this matter that has accompanied us for so many decades. Since July, the Council of Minister approved the National Plan for Food Sovereignty and Nutritional Security, one of its priority objectives being: “to facilitate the organization of local, sovereign and sustainable food systems that integrate the production, transformation, marketing and consumption of food and which must produce decisive synergies with territorial development strategies,” something, without a doubt, strategic for our country. A recent feature article highlighted the deep crisis in our livestock sector and the alarming number of dead cattle in these first months of the year. Too much food wasted. Animal food is one of our great weaknesses. In Cuba there is a whole debate on how to guarantee animal feed, which agrees that importing cannot continue to be the...

Photo: Otmaro Rodríguez.

Our other war

A good friend sent me a few weeks ago a speech that has circulated mainly on social networks and is attributed to the President of Uganda, on the meaning of COVID-19. It is perhaps, as she told me, the most instructive of all the ones I’ve read. In one of its parts he states: “The world is at war.… A war without guns and bullets, a war without human soldiers. A war without borders.” Without a doubt, he is right. What I learned by reading and watching many war films, especially World War II and specifically the Great Patriotic War, the one that the Soviets won against German fascism and that today many interpretations intend to forget or relegate to the background is that the vanguard, being decisive, can only be truly successful if it has a powerful rearguard. Those great tank battles, where the Red Army literally crushed German armored divisions, were only possible because the rearguard produced the steel, the bronze, the engines, and finally the tanks. Without a powerful rearguard, it would have been very difficult for the Red Army to take Berlin. Cuba is also waging this new war. It does so every day and every...

Cheese. Macro

And then there’s cheese

For many years, when you left Havana and headed west or east, or when you came back from the west or east, it was very rare that at some point during that journey you didn’t run into “clandestine” vendors of “illegal cheese,” who half hidden by the roadside would check that the coast was clear of any car of the Cuban highway patrol and then they would quickly show and offer their product: fresh, rich, really tasty white cheese made from cow’s milk. I don’t know how many travelers in these last 30 years, along those roads, have resisted buying white cheese, the kind that was only possible to get in those places because in our official market, either in the still known today as grocery stores or later in the stores in foreign currency, then stores in CUC and now in both foreign currency and in CUC, it was practically impossible to find fresh white cheese. Or what is the same, the national state industry was never able to meet the demand for white cheese in the country, nor the demand for other types and qualities of cheese. It was and is illegal to produce cheese for sale outside...

Agricultural market in Santiago de las Vegas. Photo taken by the author, August 23, 2020.

Of empty stands and trucks that don’t come in

The images of the agricultural market in my town, Santiago de las Vegas, this Sunday, August 23, 2020 have nothing to do with those of just a year ago, when all the stands were in use and the variety of products, despite being summer, made it possible (as long as you had money) to leave more or less satisfied, although with a black hole in your pocket. My town is one of those peripheral municipalities of the province. It is located to the southwest of the bay and is like a bridge with the other two neighboring provinces, Mayabeque and Artemisa. Watch out, geography matters. In fact, part of the lands of my town and my municipality are among the most fertile in the country and have the privilege of an underground water reserve like few other territories in Cuba. Good land (of the best), water, and a special microclimate that in its time allowed it to have even strawberry crops. Added to this is the advantage of having one of the only two agricultural research institutions that Cuba had before 1959, the Agronomic Experimental Station of Santiago de las Vegas (today INIFAT), founded by Cuban scholar Juan Tomás Roig...

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