I'm not going to talk about the chicken that can’t be found anywhere, nor the famous Brazilian rice so demanded and that has almost disappeared, nor the packages of mincemeat, before a second-choice recourse and now pursued from shopping center to shopping center, nor the possible power cuts. Even less those who opportunistically will now try to obtain capital gains from scarcity. Temporarily regulating the supply of products can be an effective palliative for specific situations and you have to use it, but always with the understanding that it has to be temporary. And yes, in the end I'll have to talk about chicken. Much has already been written about this so-called new special period, from the perspective of harsh news and also from others, which are closer to its causes and possible consequences. I only intend to address some issues related to this new situation of economic crisis in the country. The name of the special period "in times of peace" was assumed by the political leadership in Cuba to describe the economic crisis that became fully evident in the early 1990s. It assumed that name that had already been used to define the situation that Cuba could face...

I reread the comments to an article that appeared in Cubadebate and I remembered that magnificent song by Pablo Milanés, because in a great deal of them it was possible to detect the sadness of a group of people who feel that that tireless traveler that is time is dwindling through their fingers. Then, my friend and colleague Pedro Monreal reminded me of the importance of time in macroeconomic management. As I'm not going to do better it than him, I will reproduce, with his permission, his comments about it: There are at least three macroeconomic management concepts related to the "time" variable that should be taken into account:  The "inside lag": the time elapsed between the economic shock and the economic policy response.  The "outside lag": the time elapsed between the economic policy response and its impact on the economy.  And perhaps the most important of all, "time inconsistency": certain policies that seem "optimal" when announced, stop being the appropriate policies when some time goes by.  In fact, one of the possible causes of "time inconsistency" is that the announcement of future policies may affect the progress of the economy in the present, that is, prior to the application...

In a previous work I tried to expose how complex it was to achieve good economic policy designs, with the necessary coherence and consistency, capable of opening the paths of growth and development. Exports are one of those issues that require these policies and urgently need them. An article on the export of coconut in Baracoa and another, a few months ago, on the exports of the Ceballos enterprise have moved me to write about one of the biggest problems the national economy is facing today, the increase in exports. Let's go first to the numbers. Cuba’s exports in 2017 were barely 2.402 billion dollars, half of what was exported in 2014, imports reached 10.172 billion dollars, while the trade balance of goods was negative in 7.770 billion dollars. The Cuban export of services has made it possible to compensate for this situation, but each time in a more restricted way. In 2018, this situation did not change to positive and in 2019, achieving a better balance between exports and imports will rest on the cut in imports. In addition, the "quality" of these exports of goods, in terms of their structure due to technological complexity, is concentrated in exports...

I have written this column driven by the discussions around the papers presented at the Annual Seminar of the Center for Cuban Economy Studies of the University of Havana, which that center has held year after year for more than 20 years and this time with the additional motivation of celebrating its 30 years of being founded. It also coincides with the first 30 years of the beginning of the crisis we call the Special Period. Cuba survived that crisis, heightened by that "small obstacle" that is the U.S. blockade. But surviving the crisis is not developing. They have been 30 tremendous years, of transcendental events, of almost constant marches and countermarches. At the beginning of that Period... changes were introduced that promoted greater decentralization in the state business sector in search of greater efficiency. Foreign investment was identified as a positive ―though unwanted― element for our battered economy; self-employment was given greater openness ―it is true that reluctantly; and the dollar was introduced into the national circulation of currencies, to de facto create the exchange and monetary duality in which a generation of Cubans has already been born and lived. Then we witnessed a first countermarch that led to...

Homo sapiens had achieved it. After much observation, and maybe some luck, they had not only managed to produce fire: they had also managed to keep it lit and could even move it. No other related species had been able to do it. I discovered, thanks to a documentary, that there is a kind of monkey in Costa Rica that is able to use stones to open oysters. They have been doing it for centuries, but they have not achieved the "means" that would allow them to make it easier. Century after century, they continue beating the oysters with a stone. In a region of northeastern India, elephants have learned to knock down the posts of electric fences to get to people's crops and feed themselves (it is a terrible conflict that costs the lives of dozens of human beings every year as well as of elephants). However, despite their ancestral intelligence, elephants have not been able to "produce their own food," and what could be said about beavers and that natural ability to create, for thousands of years, dykes, always with their teeth and legs. But neither have they been able to innovate and get some kind of utensil...

An old recourse to express the strangeness in a contradictory situation is the phrase: "The list and the money don’t tally." That’s what a good friend said to me after reading what was posted on the Cubadebate site about the situation of the country's enterprises. Let's start with what most caught his attention: In the 2011-2017 period, enterprise indicators show positive numbers, most of them on the upswing: net sales (35% increase), profit before taxes (72%), gross added value (51%) and productivity (57%). In addition to the above, there has been a decrease in the number of unprofitable enterprises, which has allowed a considerable reduction in the subsidies due to losses (91%). However, the improvement of the performance of the socialist state enterprise draws attention, compared to the performance of our economy during that same period. It is an obvious contradiction, it can be translated into academic language as a scientific problem, which could lead to many new doctoral theses. From 2011 to 2018, the Cuban economy shows a growth rate that barely reaches an annual average of 2%. Caption: GDP growth rates (1997 prices) Annual rates Average  ----------------------------------------------------------------------------------------------------------------------------- The question is obvious: How is it possible that given that...

As expected, 2019 will be a very tense year in terms of the economy and will also be difficult in political terms. In economic terms, the announced growth target, 1.5 percent as recognized, is more than insufficient for our development aspirations, because Cuba has been dragging very low growth rates for almost five years and the average growth of the last five years is barely an annual average of around 2 percent. There is a kind of vicious circle that needs to be broken. Producing requires resources. As our economy has not been and is not very complementary, a decisive part of those resources comes from imports, to import we need to export, but as we do not export enough we cannot import what is necessary, and therefore we produce little and since we produce little, well, we cannot accumulate enough and this way national investment is barely enough and therefore the levels of production are again low, like exports. Thus, the cycle repeats itself again and again as has happened in recent years. It is what in economists' jargon would be called GDP and exports highly depend on imports, something that has been studied and demonstrated by more than...

At the beginning only 12 chairs were allowed in what according to popular saying was called a “paladar,” taking the name from a restaurant in a famous Brazilian soap opera everyone watched on TV in Cuba and turning it into a generic word that served – and is still used – to call any private restaurant. At the time they were almost clandestine, they couldn’t offer on their menus lobster or shrimps or beef. Later they were allowed to have 24 chairs. They were all “paladares,” from the most famous and most expensive to the most elementary and cheapest; from those born with a certain “gastronomic service know-how and some good chef” to those selling homemade food and with the same “home” treatment, or at times with service know-how that had a genetic combination of state-run restaurant and home dining room. At that time few – or almost none – were born with a business plan, a strategy of positioning in the market, a marketing plan, a “brand” culture, a publicity plan and a studied menu according to their market segment. They were “paladares,” they were the pioneers in bringing to life the “new gastronomic culture,” first in Havana, the...

At the beginning 12 chairs were allowed in what according to popular saying was called a “paladar,” taking the name from a restaurant in a famous Brazilian soap opera everyone watched on TV in Cuba and turning it into a generic word that served – and is still used – to call any private restaurant. At the time they were almost clandestine, they couldn’t offer on their menus lobster or shrimps or beef. Later they were allowed to have 24 chairs. They were all paladares, from the most famous and most expensive to the most elementary and cheapest; from those born with a certain “gastronomic service know-how and some good chef” to those selling homemade food and with the same “home” treatment, or at times with service know-how that had a genetic combination of state-run restaurant and home dining room. At that time few – or almost none – were born with a business plan, a strategy of positioning in the market, a marketing plan, a “brand” culture, a publicity plan and a studied menu according to their market segment. They were “paladares,” they were the pioneers in bringing to life the “new gastronomic culture,” first in Havana, the capital...

It is true that there is a great deal to learn about the economy, not just from China but also from Vietnam and other many countries, including some from our region. But it is also true that we still have a great deal to learn from our own experience. Tourism is perhaps one of those sectors of the national economy from where we can learn the most. Rescued practically from zero since the mid-1980s, without conditions to compete with the major destinations of the region, having lost the “tourist culture,” far from the quality standards of the region and the world, blockaded by the U.S. administrations, with no infrastructure for the sector, without adequate airports (still without them), facing great ideological-political prejudices and with not very friendly migration regulations, tourism “was born with forceps” and grew in a very hostile environment. But today it allows us to reach some valid conclusions for other sectors. 1 – Natural resources are not a curse, they are a great strength Photo: pxhere.com Climate, sun and good beaches, plus a certain territorial diversity, are some of the attributes given by nature. Well-used they can be a great strength for the present and future. Our...

High risk sports (mountaineering, scuba diving, parachuting, all of them) require very clear, easy to understand rules that transmit simple signs and shape the individual and collective behavior of those who strive in those practices; rules that will allow for very wide-ranging margins of action to be able to react to the unexpected but, at the same time, sufficiently powerful to not give rise to fatal mistakes. Exporting, although not a sport, is also high risk and requires the same conditions. Exporting has not been part of the attributes that characterize the Cuban economy; neither is it a basic component of our culture, before or after the Revolution. The paradox is that, despite this, Cuba is a country that has lived off of its exports. The reality is that exporting would have to be “something natural” for Cuban producers since, given our market’s size, any activity that has relatively high production levels exhausts the national market, always small, and there is no other option but to seek foreign markets. It is true that before 1959, not taking into account the “golden triad” – sugar, rum and cigars – we could mention many examples of punctual export actions, without institutional support,...

The following story I’m going to tell was given to me by a good friend, who is already retired and who in the 1960s participated in that huge sociopolitical earthquake. It’s a story buried in his memories, about supposedly coming from nowhere, who made history. It is about events and decisions, perhaps not new, although at times not sufficiently explored. I haven’t asked for his permission to make it public. I’ve barely edited it. He told it to me from his heart, but also based on his concern. He told it to me because he is one of those who still believe that history exists to learn from it and not to live off of it. It is a privilege to have received it directly from him, as well as still also being able to exchange, once in a while, some ideas with one of those protagonists who almost always were anonymous or if not appeared briefly in some news. Here goes a part of his text, without my friend’s permission: “I understand that in our society there are some things that have to be rescued, like the old trades that were lost because of centralization and because of the...

  Reuters’ news again submerged me in that so special relationship between our country and that other one: that during the last 60 years there have been governments set on making of Cuba what others, from Washington, have already designed. This time, private owners have decided to explain to Mr. Marco Rubio that the measures recommended by him are damaging this nascent private sector and in general the Cuban non-state sector. This is not new, others have already tried. In my opinion this is good, that new voices join in, although explaining something is just a part of the equation. The other part is the target. One can explain many times the same matter and have as an interlocutor someone who doesn’t want to listen or understand. Furthermore, I believe it would be good that one of his advisers gets to directly know this country of today, so different in many aspects to the one of some years ago and so much the same as in others. In any case I would like to affirm that thinking that Mr. Rubio recommend and order Mr. Trump to change what he had already decided at his behest is undoubtedly very optimistic. Personally,...

  Since the late 1980s, foreign direct investment (FDI) has been included among the potential resources Cuba has had to boost growth and development. One would have to affirm that FDI did its job and that it did it well in spite of everything and that during all these years it has demonstrated how positive its results can be. If we pay attention to the successive reports on foreign investments appearing in the Business Opportunities Portfolio that the Ministry of Foreign Trade has already been publishing for several years in each Havana International Trade Fair (FIHAV), it is possible to confirm what was previously stated. I call attention to the fact that the exports generated in the businesses with foreign direct investment represent an important amount in the total volume of Cuba’s exports of goods. For example, in 2014 total exports were 4.857 billion pesos (equivalent to US dollars) which is why the exports generated by the IEA represented 65.8{bb302c39ef77509544c7d3ea992cb94710211e0fa5985a4a3940706d9b0380de} of the total. In 2015, when the export of goods was reduced to 3.350 billion, the IEA’s participation in them went up to 68.6{bb302c39ef77509544c7d3ea992cb94710211e0fa5985a4a3940706d9b0380de}, which contributed to the country’s balance of goods. It would be necessary to add other unquestionable...

  The image of Donald Trump throwing rolls of toilet paper to Puerto Rico’s population and the news that the Department of State will appropriate (much more than wrongly) the moneys of many Cubans who paid for their right to an interview to try to get a U.S. visa, made me change the theme of my column of this week, which was practically written. It was my friend Goyo who definitively drove me to do so with an apparently naïve question: “Hey, prof, what’s that about the essence, because I believe there are people who seem to only live in that place?” While after December 17, 2014 the debate in Cuba about relations between our country and the United States became more open and undoubtedly more acute and diverse, after Obama’s visit to Cuba that debate took on colors and tones that were frequently very harsh. For a part of those who participated in that debate Obama had barely introduced some small variation that in no way changed the “last essence” of the already historic and well-known U.S. policy toward Cuba. Others perceived it as the possibility of starting a sort of honeymoon with that large neighbor. Among both positions...

  For many the coincidence of three hurricanes and an earthquake, almost all of them at the same time and in the same region, is the result of what we call global warming and which is none other than the cost of a very irresponsible way of development, a certainly old way, and out of context, that emerged at that period in which homo sapiens still thought their presence in nature barely had minimal effects and that all the natural resources would never be a restriction to their hopes of becoming God. That period in which the “dominion of nature” was the phrase in vogue and demonstrating the capacity of “dominating nature” was one of the keys to demonstrating the power countries had. Making the world’s largest reservoir, or the largest hydroelectric plant, having bigger and the biggest extensions of cultivated land at the expense of every living being, razing thousands of hectares of forests or contaminating hundreds of kilometers of rivers or entire bays, was almost always praised as one more demonstration of the power of homo sapiens. What’s interesting is that all the countries and perhaps also a great deal of the politicians, independently of their ideological creed,...

“And so: yes or no? Do you remember when the fried food stalls disappeared?” Those were my friend Goyo’s welcome questions when he intercepted me after the news about the “temporary suspension” of the granting of permits to a group of activities of the so-called self-employment and of the new regulations about this that at some moment will be issued. For those – like me – who are on the optimistic side of the equation, there are numerous reasons why the non-state sector in Cuba must be better regulated and better motivated. Following I’ll mention some of them: Our entire practice of building socialism has demonstrated – and at the same time allowed us to understand – that they are necessary sectors, in the same way that that practice has demonstrated that the State cannot take care of everything and that, when it does, it generates failures that are more costly than those that are generated in the “non-state” sector. There are persons who maintain that if the practice demonstrates that the theory is not correct, well then what has to be done is rectify the practice. In the end the practice is the criterion of the truth. Its ability...

At the recent first session of the National Assembly of People’s Power, one of the relevant issues was related to the “activity of science, technology and innovation.” This was so given Cuba’s characteristics, its relatively little amount of natural resources – even when the few we have are not well used -, having a highly qualified workforce and because the tendencies of our demographic evolution fully show that our population is aging. Because of all those reasons, the role of science, technology and innovation is decisive. Moved by this topic, I am listing some proposals to use more efficiently the human resources in favor of Cuba’s development. Without good schools and good professors at all levels, we won’t be able to have a good science or good technology or be good at innovation. Schooling is basic, from elementary education – and especially in those three first grades – up to the universities. That is the first thing we have to recover. If today we still have a good scientific plant it is because thanks to the educational policy of the Cuban Revolution we had good schools and very good teachers. By guaranteeing this first step, then it obviously it is...

The growth goal (2 percent) is again becoming a focal point at the recently concluded first half of the year. I’m advancing some ideas about those factors that could have a positive impact on the economy’s growth. Growing a 2 percent over a 0.9 decrease last year and in such difficult conditions is really a very optimistic goal, taking into account the current situation of the Cuban economy and also the persistent structural long-term failures that have not been resolved. To this one would have to add an international environment that doesn’t help. I’m referring to the characteristics of the world economy’s growth as well as the uncertainty that the current U.S. administration generates for the world and especially for Cuba. Our country continues – and it seems it will continue – being a blockaded country, subject to the ups and downs of U.S. domestic politics (Mr. Trump is the palpable demonstration), but that threat must be turned into the opportunity to be able to diversify our economic relations and achieve a more balanced foreign situation. This means a greater opening to foreign investment, a radical modernization of the state sector and the expansion of the non-state sector. There are...

Do not interpret the title as it is, this has nothing to do with the size of the Cuban market, with how decisive our economy is in the world or regional sphere, or with an enormous availability of natural resources or cheap labor force. Nothing of the kind. It is the other way around, because achieving a flow of stable foreign investment, and above all relevant, for the purpose of growth and development, requires that a country (institutions, infrastructure, productive system, a business culture, etc.) make it easier to be able to make an investment in that country. That is why FDI needs Cuba. The incentive behind these lines has been the recent exchange about this issue that has emerged between a group of Cuban economists, especially the work that Miguel Alejandro Figueras sent me a week ago. But I would lie if I were to say that it is the only incentive, the other one that spurred me on to write these lines is the recent approval by the country’s two topmost authorities (the Central Committee of the Communist Party of Cuba and the National Assembly) of three documents that must be the foundations, but also the roadmap and...

The news that the Plenum of the Central Committee of the Cuban Communist Party had approved the documents that have been discussed throughout the country for almost a year is undoubtedly very good news. More than a million persons have debated those documents, which is also magnificent news. The documents approved are “the Conceptualization of Socialist Development of the Cuban Economic and Social Model; the bases of the National Plan for Economic and Social Development up to 2030: Vision of the Nation, Strategic Cores and Sectors; and new modifications to the Party and Revolution’s Economic and Social Policy Guidelines.” The three have been the center of a great effort at interpreting our reality and above all of exercising the projection of the future of the country we want. It is probable – from my point of view, desirable -  that those documents won’t get to meet 100 percent of the Cuban population’s expectations and also that they won’t get to meet 100 percent of the expectations of all Cubans. But it is also true that it is an unquestionable advantage to have today a group of documents of reference for what we want to do and above all that those...

Our entrepreneurial world of today is surprisingly diverse, in the types as well as the size of the enterprises and in the regulatory systems they are subordinated to. We have everything, from the big enterprises to the personal endeavors that are barely enterprises, and from the foreign enterprises to the family enterprises. My friend Goyo, who doesn’t know about enterprises, gave me his own classification, very distant from academia, but also legitimate, and he defines them as follows: wishful enterprises, quasi enterprises, enterprises, non-enterprises, anti-enterprises, superenterprises and omnienterprises. His explanation of each one of them would fill many pages. He doesn’t make distinctions regarding forms of ownership or origin of the capital, it is about what is understood by the matter of “aptitude and attitude,” although appealing to theory we could say it is about matters associated to entrepreneurial culture, leadership and the environment. In fact, Goyo is capable of explaining how some of those existing today in our country have several types of the attributes he has invented; for example, he tells me, there are non-enterprises that are omnienterprises and superenterprises that are also anti-enterprises. We have gotten to this colorful and also mixed entrepreneurial world after a long...

The Cuban entrepreneurial world has experienced a significant diversification in recent years. For some that diversification is the logical way for the Cuban economy to adapt to the new conditions in which it has to live and develop; in the extreme and very extreme are those who think that that diversification is a symptom of Cuban socialism’s weakness which they have already imagined, frequently, a copy of that which we tried to build from the time of the socialist camp and the Soviet Union. In that wide-ranging framework of discussions and diverse opinions, there are also those who attribute a part of the evils afflicting our socialist state enterprises to the emergence and expansion of a non-state sector (cooperative, national and foreign private) brought about by our government as necessary elements of the indispensable transformation. And before this sector emerged and expanded, what was the cause of the inefficiency of our socialist state enterprises? There are also those others who understand that there is no sense to continue endeavoring to maintain a socialist state enterprise sector. And then how are we able to build a socialist society? And of course, there are those who – and now I include myself...

Cuba has no water problems. That affirmation, just like that, in such a categorical way, is by someone some time ago. What called attention is that who affirmed something like this was an educated person, someone who had studied and was a graduate. He said this to me after walking with me one night through the streets of my hometown and seeing the rivers of potable water running through the side of the sidewalks and no one doing anything to avoid it. It was the same person who once speaking about the food rationing affirmed to me that in Cuba there was more than enough food, after seeing the enormous amounts that were thrown out, as waste (leftovers?) in my workplace’s canteen. He was a European survivor of World War II and those conversations took place many years ago, during the time when we also had “more than enough” oil. What to me is almost surrealistic is that so many years later the water continues running through the same streets, the canteen continues generating as many leftovers and for some there is still more than enough oil. I remembered the issue after reading and hearing several weekly news items from...

A few days ago baseball player Alfredo Despaigne batted a homerun that allowed Cuba to classify for the second round of the World Baseball Classic. Despaigne, luckily for the Cubans living in Cuba, has a contract with Japanese teams and the new regulations allow this great baseball player to enjoy a high percentage of the value of that contract and to continue playing in and with the national teams. I believe 100 percent that he deserves it. Some years ago, a magnificent Cuban scientist was able to synthesize a product to produce a vaccine decisive for the immunological system, of course, a discovery that can also be a high-tech export good. In the field of science that was a homerun. Our regulations, however, prevent this scientist and his team from enjoying a minimum percentage of the results of their work. I believe 100 percent that he does not deserve it. Despite this, our science and technology system and those who work in it (I include the Universities) continue working and generating products, services, solutions, improvements that contribute to the country’s development, even when in many cases our enterprises are not interested in those products, services, solutions and improvements. When seeing...