- May 25, 2020 -
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Miami
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Pedro Monreal

Pedro Monreal

Photo: Otmaro Rodríguez.

Establishment of SMEs in Cuba could increase GDP between 1.5 and 1.7%

At a time when it would seem that Cuba is approaching the “peak” moment of the COVID-19 health emergency, attention is likely to start shifting towards managing the economic recession that the country has entered in 2020 with an estimated decrease in the Gross Domestic Product (GDP) of between 3.7 to 4.7%. (1) The economic measures adopted to mitigate the economic impact of the COVID-19 could be maintained for some time, with possible adjustments, but it is the measures related to promoting the economic recovery that should occupy the spotlight. This has not been a “normal” economic crisis and, consequently, one would not expect a “normal” recovery either. The recession is not primarily due to a “failure” of demand but to a “supply shock.” The Cuban government had to take deliberate action to stop the operation of the economy―as in many other countries―since social distancing measures required interrupting a relatively large part of production and services. Supply and capital flows from abroad have also been affected, which have had the effect of “disconnecting” circuits from the national economy. The economic recovery in 2021 should take place progressively and unevenly across sectors. Tourism, which from “locomotive” became an “accelerating” factor of...

Photo: Otmaro Rodríguez.

Towards a public-private strategic alliance in Cuba?

On February 27, the University of Havana organized an interesting event between entrepreneurs and municipal deputy intendents under the theme “Governance, based on a public-private strategic alliance in Cuba.” The inevitable question, what will come next? is difficult to answer, especially since the information regarding the meeting is still very scarce. The Facebook page of the Red de Emprendimiento de la Universidad de La Habana (Entrepreneurship Network of the University of Havana) has only reported on the event in a general way and the only other information that seems to be available is that provided on his Facebook page by Oniel Díaz, a well-known entrepreneur who participated in the event and who was informing about the exchange in real time. Let me extensively quote the data provided by Oniel Díaz: “This is undoubtedly a different morning. The municipal governments of the capital and a group of entrepreneurs sit together in one same place to discuss public-private alliances. An increasingly relevant reflection. An event organized by the Entrepreneurship Network of the University of Havana and the Center for Public Administration Studies of the UH.  What has the government said so far at the meeting? -Recognition that there is resistance to change when...

Photo: David Garten.

Investment by Cubans living abroad: a late invitation?

In the last few days there have been interesting exchanges on the Internet about whether Cubans living abroad (CLA) can invest in Cuba. The government clarifies that Law No 118 on foreign investment does not limit them. It is also clear that the CLAs have invested without having to have recourse to this law. Therefore, we must start by recognizing reality: for some time now non-resident Cubans have invested in Cuba. The most prominent place that has now been given in the official discourse to the notion that Cuban citizens with permanent residence abroad are not limited to invest is, without doubt, a public policy action that is welcome, but, in some sense, could be understood as an invitation that’s come a little late. Although there are no precise data, enough fragmented evidence is available to state that part of the family remittances received in the country are devoted to creating and expanding legal private activities and cooperatives. For CLAs who wish to invest in businesses in Cuba, there are different ways of associating with residents (family, friends, or simply partners) to transform remittances into investment. These non-resident Cubans are not recognized as investors, but that is what they are....

Photo: Kaloian

Statistics on private work in Cuba: an ideological pirouette?

According to the 2016 Cuban Statistical Yearbook, private work represented 24.8% of the total number of employed people in 2016. However, according to the 2017 edition of the yearbook, private work in 2016 was only 19.2%. In absolute figures, according to the 2016 edition, that year the number of private workers was 1,139,200, but the 2017 edition had reduced the figure to 882,300. What happened to the 256,900 private workers that are missing in that last figure? In a "subtle way" they were reclassified as cooperative members. The reason is that starting with the 2017 Statistical Yearbook, it was decided to not report the number of members of the credit and service cooperatives (CCS) as private sector workers, as had been traditionally done, but are now reported as cooperative workers. The figures were revised backwards, so that in the 2017 edition of the yearbook there is a new series of data between 2014 and 2017 that has transformed the private producers, who are members of the CSS, into cooperative members. However, the data prior to 2014 are not compatible with the new series, since they list the number of members of the CCS as workers in the private sector, as...

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