On July 16, the Council of Ministers approved an economic strategy in order to counteract the effects of the economic crisis that Cuba is undergoing, exacerbated as a result of the new coronavirus pandemic, and to boost the economy: “Economic-social strategy for boosting the economy and dealing with the world crisis caused by COVID-19.”
As announced in the Mesa Redonda television program by Minister of Economy and Planning Alejandro Gil, this strategy “is aimed at eliminating the obstacles that operate in the economy, but maintaining and defending the concept of planning.”
For Cuban economist Tamarys Lien Bahamonde, nine fundamental aspects can be identified in the strategy proposed to face the crisis:
- Centralized planning;
- Import substitution;
- Regulation of market mechanisms. (For non-economists, planning is usually geared toward correcting market distortions);
- Complementarity of multiple economic actors: “self-employed,” cooperatives and the state sector;
- Revitalize domestic demand;
- Autonomy of the state business sector;
- Implement key aspects of the resizing of the non-state sector. (It is not yet clear which ones exactly, although ideas such as the possibilities of exporting and importing appear among the changes);
- Competitiveness (is encouraged through savings, efficiency, and motivation for work); and
- Active environmental policy.
The implementation of measures contained in the “Economic and social policy guidelines,” approved after a wide popular debate in April 2011, during the 6th Congress of the Communist Party of Cuba (PCC), has been a demand from economists, various actors of the economy and in general of Cuban society. Almost 10 years after that decision, the Council of Ministers has approved returning to the path of some of them.
We are publishing the second part of the answers given by renowned economists to OnCuba’s questions regarding the recently approved strategy.
What is your opinion regarding the new economic strategy proposed by the Cuban government?
David J. Pajón Espina: The circumstances of COVID-19 have accelerated and increased the magnitude of the crisis in Cuba, made up by the postponement of domestic reforms and by an increase in the actions of the current U.S. administration aimed at fundamentally restricting access to foreign currency and fuels, and this has finally led to the approval of the announced reforms. In general―without going into details of synchrony, coherence, absences and uncertainties regarding the implementation―they seem to be heading in the right direction. Although some measures are forced by the current objective context, the need for many of them far precedes the pandemic and responds to proposals from the academia, popular desire and to a certain momentum from the government itself. The strategy suggests a certain transformation of various substantive components of the Cuban economic model (ownership/management, incentives associated with appropriation, policy design), and an intention to solve structural problems such as the poor performance of the agricultural sector, and the distortions of the current monetary/exchange scheme.
Pavel Vidal: Very positive that the crisis has served to resume structural transformations (cooperatives, business autonomy, marketing in the agricultural sector and small and medium-sized enterprises (SMEs)) and to know that economic policy is not going to focus solely on short-term issues associated with financial emergencies. It is important that the reforms gain momentum before the U.S. elections. If Biden wins, it will be easier for him to promote a rapprochement with the island and a lifting of the embargo with a Cuba that is reforming. The country gains credibility in renegotiations with the Paris Club, other creditors, and investors.
Ricardo Torres: It should be recalled that the bulk of what is announced can be divided into two parts. On the one hand, it is about implementing what had already been approved in the 7th Party Congress, and which had been relegated. It’s a pity that only a crisis of this proportion has finally convinced more than one. On the other hand, there are several measures that derive from the current economic situation, which has been aggravated by the COVID-19 pandemic, but which did not start with it. Factors such as the Venezuelan economic crisis, the U.S. sanctions, and the inadequacies of our model and the “update” come together in this case.
It’s too early to do an in-depth analysis. Only areas of transformation have been outlined, except for decisions related to the use of the USD. The success of such a program depends on the effective implementation of decisions. That has failed before. The authorities must be on the watch out for various groups that can torpedo the necessary transformations. Time will tell, but great expectations have already been raised.
Oscar Fernández Estrada: The set of announced measures tries to sweep away once and for all the obstacles that anonymous wills had cemented to the economic reform, initiated by Raúl Castro in 2010 and later ratified in two widely participative PCC Congresses. The president and his government team have taken up the Update and have made clear which is the design of the country that they are going to defend: the one that corresponds with the document on the conceptualization of the economic and social model and with the Constitution of the Republic. Although it is still premature, I think I notice that among the Cuban economists who interact in the public space, a large majority have welcomed these announcements as a whole, although there is some skepticism about the scope.
Anamary Maqueira Linares: The economic strategy to be implemented by the Cuban government is part of the reform started in 2010 in the framework of the updating process, which is rooted in the 1990s, and stopped due to inconsistencies in implementation, internal and ideological contradictions, and reviews of the initial set of economic and social policies conceived in the guidelines and approved by the 6th Party Congress and which had its point of backing down after Obama’s visit to Cuba in 2016. I say all this to point out that the policies comprising the strategy have been there waiting for a long time and unfortunately they come at the worst possible moment, where the consequences of the economic crisis unleashed by COVID-19 require rapid results, which can have negative effects on the implementation and articulation of policies. Having said this, I believe that the strategy points in the right direction, although it is insufficient, since it lacks the explicit principle of equity, although it doesn’t completely disregard pre-existing inequalities. I believe that its success will depend on the consistency that is achieved in the implementation.
In your opinion, what are the measures that will have the greatest impact on the Cuban economy? Why?
David J. Pajón Espina: First, the mere indication of change and the reunion of policy proposals with the boldest commitments of the reform endorsed in previous program documents and popular consultations. Here is a signal for the people in general and non-state forms in particular, also for foreign investors, trade partners, creditors, among other stakeholders.
Specifically: the combined effect of the announced measures to expand the spectrum of activities of the non-state sector and enhance its work. The non-state sector managed to expand remarkably since 2010 in a context of notable restrictions from internal engines and external alliances based on trust between the parties, a similar response can now be expected with the availability of other support mechanisms and regulatory flexibility, fostering a quantitatively and qualitatively superior contribution to growth and development.
The autonomy of state-run enterprises constitutes another area of transcendental importance, we will have to wait to see the true scope of said autonomy, the reaction of administrations adapted to stagnant vertical practices, and whether there will be real modifications to the incentives of senior management and workers who promote the use of autonomy in terms of business opportunities and productivity dynamics.
The creation of dollarized circuits and the elimination of the tax will generate greater access to the currency by state enterprises and the government. This should allow maintaining a supply in the dollarized sector, and obtain (undeclared) margins to supply other markets and boost national industry. The sustainability of the scheme will depend on prioritizing compliance of the commitment with the providers of the dollarized circuit, to which the other mentioned objectives are chained.
Pavel Vidal: There is a dilemma, in the short term, dollarization is probably the measure with the greatest positive impact, but it deepens the dual monetary system, which is the main impediment that the economy has for its competitiveness and long-term productivity. The spaces that are promised to non-state forms, to the market and to business autonomy could boost the long-term growth potential.
Ricardo Torres: The answer to this question depends on what is considered most important. If the emphasis is on reducing the balance of payments pressures through the attraction of foreign currency, then everything related to the sale and import of items in dollars is the most important thing. That is a short-term issue.
But if what is decisive is the transformation of the productive structure, increasing productivity and improving external competitiveness, then the main thing is the deployment of all forms of ownership, their combination and the restructuring of the state enterprise. In this logic, attracting convertible currencies is a means to weather the storm, and facilitates that other process, which is in the longer term.
Recall that partial dollarization was already attempted in the 1990s, and since the attracting income approach prevailed, limiting changes in other areas, the results were not very good. We are seeing that today. Perhaps something new that the current proposal has, unlike that one (pending implementation details), is that dollarization allows the acquisition of capital goods for all forms of ownership (as proposed). This is potentially a good idea that requires agile and effective implementation.
Oscar Fernández Estrada: The main repercussions at the political level―due to the uncertainty it introduces among the lower-income sectors―have been monopolized by the opening of wholesale and retail commercial channels in freely convertible currency, which in practice represents the advance of a partial type of dollarization. However, when comprehensively evaluating all the aspects of the so-called strategy so far revealed, key elements appear that, if implemented without intermittencies or setbacks, would create very beneficial economic dynamics and better conditions to take on the enormous challenge of correcting monetary distortion with minimal social costs.
On the other hand, the promise of flexibility, simplification and expansion of private work also accumulates headlines, as well as the long-awaited formalization of micro, small and medium-sized enterprises (MSMEs).
However, the crucial element for a true relaunch of the economy as a whole lies in the transformation of the paradigm of “central planning” briefly outlined by the minister of economy, and which is closely related to what we teach from the discipline of Planning in Economics careers in our country. “Centralized planning doesn’t mean centralized allocation of resources,” said Alejandro Gil. And he is right. This erroneous equivalence has constituted a formidable deformation for the socialist economy of transit, reinforced by an at least static and myopic interpretation of political economy. Rather than claiming a notion of “planning” aspiring to extinguish the spaces of commercial exchange, what it’s about is to advance in the construction of the widest set of instruments that allows the conscious driving of these markets by the social aggregate. But, in addition to the will of the official leadership, unearthing the roots of this distortion requires an evangelical-type deployment or practically a literacy campaign.
To this conceptual repair is harmoniously adhered the declared objective of integrating horizontally―through observed trade relations—an economy that until today has been riddled with spurious watertight compartmentalizations that derive from the vertical modes with which it has hoped—or been able to—to manage life. The intention now to fill the huge gaps in the productive fabric, promoting development and integration between all possible forms of ownership, management and organization, constitutes the second piece at the heart of this reform.
Anamary Maqueira Linares: The effects of the measures on people’s lives can’t be measured by the isolated impacts of the measures, but by the way they are implemented and complemented. There is an obvious objective of raising foreign currency due to the disappearance or drastic reduction of the main sources such as tourism and the sale of professional services abroad, a clear commitment to emigration and its links, and to a sector of the population with a wider access to freely convertible currency. If the planned cycle in relation to this measure is successful, that is, if the foreign currency attracted by sales in stores in freely convertible currency is used to maintain a “decent” supply in stores in national currency, part of the redistributive objective would already be achieved. As these are the measures whose effect is most immediate, and which most directly affect redistribution, I believe that, together with the elimination of the tax, and the transformation of the agricultural sector, they constitute the policies with the greatest impact in the short term.
However, the measures related to structural changes are those that will have the greatest impact in the long run, and those that form the basis of the Cuban economic model in the future, beyond the lining that the policies related to the more immediate implementation of foreign currency stores represent. Those measures are the diversification of the business fabric—say, the establishment of SMEs, the diversification of non-state forms in general, and the transformation of the state enterprise; the reform of the central planning system and the establishment of a single monetary and exchange rate regime for the entire economic system.
What are the main obstacles?
David J Pajón:
- The excessive gradualness in the implementation of the announced measures.
- Lack of incentives by the bureaucracy in charge of the implementation, from managers and workers of state enterprises, from the state enterprises designated to deal with the demand from non-state productive forms and individuals.
- Ideological rigidities or entrenchment of institutions and structures in “comfort zones” that prevent an agile deployment of the announced measures, their evolution and deepening.
- Historical propensity for discretionary management of funds intended to honor commitments with creditors. If it were reproduced in the new dollarized circuit, it would lead to the collapse of the proposed scheme.
Pavel Vidal: The main obstacles will be institutional and will come from the forces that put up resistance to the changes in the bureaucratic sector and in the National Assembly itself. That is why it is important that this time the reform is not fragmented and slow, that it manages to deliver results early and on a broad base.
Ricardo Torres: I see obstacles in two specific areas. On the one hand, an economic crisis of these proportions is a very challenging environment for restructuring enterprises and creating new ones. Financing is not abundant, therefore, investment will be modest, which always makes it difficult to create jobs and improve income. And uncertainty greatly complicates decision making.
But the biggest obstacle is internal. It has to do with the opposition of various actors, some more slyly, others more directly. The authorities directing the process must be on the watch out for attempts to collapse this transformation. A good part of that opposition is in the public sector itself.
Oscar Fernández Estrada: If the president―as we hope―manages to overcome the enormous bureaucratic obstacles that Raúl Castro had repeatedly pointed out, the main challenge will be in the re-founding of the institutions. The new economic model that is outlined supposes a totally different system of rules, with actors behaving in new ways. To achieve the same objectives, public agencies would have to transform their procedures and find new “hows,” new instruments to design, implement and evaluate their policies. But there is much to be unlearned. The institutions are not going to do it by themselves. The central government must identify this among its highest priorities. You can’t implement a change that doesn’t have institutions ready to lead it.
For example, emblematic sectors such as agriculture have demonstrated their inability to produce new and creative solutions in an extremely critical context, probably due to distortions in their design or parallel subordination. We should have already learned that increasing the number of leaders who visit the field doesn’t increase food production. On the other hand, implementing adequate incentives that make it possible to close the production cycles with rational benefits for the actors would reduce the deployment that daily informs us of those higher verbal forms that “call,” “urge,” “call” and “exhort,” without the exhorted reacting as needed. No evidence is required. The economy must be conducted―the socialist too―mainly with economic mechanisms.
Anamary Maqueira Linares: Assuming as data the adverse context in which it is carried out, the main obstacles of the strategy are in its implementation (as has been demonstrated in previous moments). In other words, the roadmap of the processes that imply the implementation of said strategy is vital in view of the risks of lack of coherence and complementarity due to the urgency of obtaining fast results. This translates, among other elements, into risks of increasing social inequality if the redistributive cycles are not closed, for example.
From the very design of the policies, an important obstacle is related to the mechanism of access to foreign exchange earnings of those non-state entities that manage to export. The explained mechanism is complex and the fact that the exporter can’t freely access the currency obtained by this means is a disincentive for the producer. While it would not be necessary for these producer to have their dollars under the mattress at home, they should have some mechanism (savings accounts in foreign currency, for example) to have access to their dollars if they want to travel abroad or use them in another way not involving the national economy. That mechanism has not been described yet, and should be studied. A third obstacle will be the response of the U.S. government to the new strategy. As has been denounced from different instances, inside and outside of Cuba, the economic blockade of the island constitutes the most important external limitation for the development of the Cuban economy, and its effects are real, beyond any discursive hyper-pondering. Especially the economic and financial persecution of the Trump administration has been unprecedented, and it is to be expected this will continue and that it will react to this new Cuban strategy.
What urgent measures would be missing, in your opinion, in addition to those taken now?
David J. Pajón:
- In the face of an in-depth review of the deficiencies around the attraction of foreign direct investment (FDI), to rethink the role of the employing agencies and their leonine margins, eliminate the forced assignment of the subordinate role of worker for Cubans in the different forms of investment of foreign capital, promote the association regulation and establishment of ownership rights for foreign capital flows interested in negotiating with the domestic private sector.
- Development of a broad spectrum credit policy.
- Updating of fiscal requirements and progressive scales currently applied to the self-employed.
- Transformation of existing mechanisms for equal allocation through rationing. Definitely, the reality and the new measures increase inequality in Cuban society, so the variant of universal allocation that was once valid must give way to the granting of a greater volume of resources to those who need it most, by limiting access to those who don’t require it.
- New mechanisms need to be made explicit to facilitate access by the most vulnerable sectors of society to the new circuits, and a future plan that encourages their mobility towards higher welfare standards. For the time being, it seems to be assumed that the proposed measures and their potential to generate resources and vitality for the economy as a whole, will raise the well-being of society through unclear automatisms.
Pavel Vidal: The system of hiring the workforce for foreign investors has not been mentioned yet. Employing agencies must reformulate to no longer be a tax collection entity.
Although it is no longer possible to think about a unification of the currencies, since we are going to live with the USD for a good time, at least a correction and unification of the exchange rates should be attempted.
Ricardo Torres: I think we have to finish defining what is meant by “fundamental means of production” and make decisions accordingly. This has to do with the restructuring of the state enterprise and the differences between ownership and management. I understand that not everything can be addressed at the same time, but it would be wise to start considering the advisability of eliminating treatment differences for state enterprises. What has been done in these decades is to create parallel operating frameworks, which some justify since the more general framework is unfavorable. If so, what needs to be changed is the general framework. Partial dollarization contributes to segmenting the economy. And segmentation is not a good long-term idea. The modification of the monetary and exchange environment has to be accelerated to limit this problem.
By the way, I listened with perplexity about the creation of state MSMEs. I don’t know what the logic of this approach is, but at first glance it seems like an unnecessary mistake that can cause a lot of wear and tear. The State admitted that it could not and did not want to manage small-scale activities, in most cases, of little systemic importance. Many cooperatives and self-employed workers emerged from that reasoning. It seems like a concession to the most conservative sectors. On a small scale, there is no effective separation between ownership and management, which is why private ownership is the option that can best work. Cooperatives could also be considered, or communal ownership (which has never been recognized by our legislation).
A medium-term problem is what will happen when some of those enterprises are no longer so small, and don’t meet the MSMEs’ requirement. Will they grow or continue to operate? Will they be forced to become a joint stock enterprise and sell a part? To whom, to the State? Will a capital market be created? It seems futuristic, but it is good to think about these questions, because growing is what many of them will do, if everything announced is implemented with reasonable effectiveness.
The other issue that was not mentioned is the tax code. The current one is obsolete, since it imposes a maximum quota of 50% of the additional net income, when it exceeds 50,000 CUP per year, that is, 4,168 CUP per month. To many it seems very high, but that is 162 CUC per month. For the owner of an expanding business it is very little. That has to do with the impractical idea of giving personal income treatment to a business; and on the other, the false notion of inequality. It is essential to correct this.
Let’s see the serious distortions and the perverse incentives that our model generates. With the recent decision to adapt the tax treatment to seafarers (I have nothing against), we have a scheme that treats much more favorably the income that is generated mainly outside the country (seafarers, artists, athletes) than those that are produced as a result of domestic productive activity. And then many people are surprised by the “importing mindset” and the scarce national production. Well, in part, that’s the result of those tremendous distortions.
Also, I didn’t hear anything about social policy. It is urgent that Cuba be recognized as a much more unequal society than what we are willing to admit. And this has consequences for the design of social policy. You can’t continue treating everyone as equal, when they don’t have similar economic conditions.
Oscar Fernández Estrada: It is very difficult to assess the scope when only the first statements are available. Overall, it seems like a rational, all-encompassing, comprehensive course of action that aims to eliminate a large part of the absurdities that have been dragging down our economy for too long and discouraging the individual and collective efforts of many people. However, I consider it important to point out a missing element. Although comparative practice has demonstrated the government’s genuine and historical concern regarding the social impacts of each of its economic policies, the focus of social policy can’t be subsidiary to it, nor can it be reduced to the essential but insufficient universal coverage. Embedded in the economic ones, it is necessary to promote the deployment of focused social policies that take advantage of this relaunch of the reform to produce advances in the empowerment of less favored social groups.
Anamary Maqueira Linares: The strategy is the restart of a pending comprehensive reform already approved, which I repeat, seeks to obtain urgent results to help face the difficult situation of the current crisis, but many measures are lacking to think and act in accordance with the fact that despite the fact that the current situation was aggravated by the COVID-19 crisis, its causes lie in the historical structural deformation of the Cuban economy.
What is urgent is to do what is planned, and do it well. However, I would add to the urgency a policy aimed at care, with specific fiscal support for caregivers. For this, it is necessary to create a commission or group that studies what would be the possible actions that in the short term can be applied in this regard. It would also add a measure of flexibility in customs policy, which in the face of the reopening of borders allows importing a certain amount of food and basic need items free of cost, something that was also implemented a few years ago. Other issues that I would add, which are perhaps sidelong in the strategy announced so far, but that need to be explicitly included or explained are: 1) the possibility that the balances in freely convertible currency will be transferred to dollar savings accounts; 2) the increase in interest rates on dollar accounts; 3) the establishment of export promotion centers that proactively look for exportable productions in the non-state sector and link these producers informing them about their real possibilities of inserting their products abroad; 4) the establishment of a wholesale market for inputs and capital goods for private farmers in national currency.
Much remains to be done in addition to all that is outside of what is considered urgent.
Regarding the private sector, what are the measures with the greatest impact and what would be the next necessary steps?
David J. Pajón:
- The recognition of micro, small, and medium-sized enterprises with the capacity of association of private and state ownership stands out.
- Relaunch of the creation of cooperatives (which already had the potential advantages of legal status, a certain theoretical capacity of association with foreign capital, access to credit facilities), apparently in its “spontaneous” variant.
- The expansion of activities and the flexibility of their content. It remains to be seen how it is implemented, but it should move over time to the creation of a relatively short list of prohibited activities, and to welcome new activities stemming from innovation in the non-state sector, thinking about their tax treatment and indirect regulation, instead of the propensity to prohibit.
- The possibility of accessing wholesale markets and certain foreign trade channels. In the future, the possibility of direct access of non-state forms should be considered, maintaining the use of state foreign trade enterprises as an option and not a requirement.
Pavel Vidal: What has been proposed as a policy for this sector is good to start. It remains to be seen how it is implemented.
Ricardo Torres: On paper, several very interesting proposals were made regarding the private sector. Hopefully as a result of this the term “non-state” is banished, it seems to me there’s an excess of negative definitions. What is at stake is whether the private and cooperative sector will continue to be perceived as “necessary evils” or will be fully integrated into the national productive landscape. Much remains to be explained in terms of the details. Very little was said about agriculture, the constitution of MSMEs, or the imports by the self-employed and cooperatives through state enterprises.
Regarding the latter, which is potentially very important in guaranteeing access to means of production, I have serious doubts about the ability of foreign trade enterprises to comply with this task. Today they have great difficulties in servicing a small number of large state enterprises. And the hairy rentier hand appeared again. A percentage for the service, and another to cover the expenses of those enterprises. What all that does is to fuel the inefficiency of the state enterprises. Payments must be on the basis of competitive prices for services provided under certain standards. The fundamental collection must be through the tax system.
If the private and cooperative sector is tied to the inefficiency of the state enterprise, we are not going to get very far. Nor was anything said about stimulating competition, and gradually leveling the rules of the game.
Oscar Fernández Estrada: When talking about the private sector in Cuba, some think only of the owners of restaurants and bars. But the potential for unfolding manufacturing, for knowledge production, or for professional services is immeasurable. The expansion of the range of activities that can be undertaken independently will undoubtedly have a considerable impact, not only in terms of jobs, but also an increase in the supply of final goods and services, as well as essential intermediate consumption solutions for the vitality of the great state enterprise. Formal recognition of those who decide to form enterprises will grant them legal security and will stimulate long-term projects, generally less rentier and more productive. Furthermore, building an ecosystem of competition and cooperation where each actor can deploy initiatives to fulfill their role constitutes an urgent need.
Anamary Maqueira Linares: The measures with the greatest impact in the non-state sector are associated with those that have been widely discussed and demanded by various social sectors: the expansion of self-employment, which I hope will eventually translate into the elimination of the current list and the establishment of the activities that CAN’T be carried out; the establishment of SMEs with their respective legal framework; the relaunch of non-agricultural cooperatives and the establishment of a wholesale market in freely convertible currency for the non-state sector. The next steps should be aimed at fine-tuning the mechanisms of the design of the implementation of these policies and to include policies aimed at prioritizing, through incentives (fiscal, credit, training), the participation in this sector of specific groups that are known beforehand to be underrepresented, for example, women, groups with diverse sexual orientation and identity, and racialized groups, just to name a few.
What can be expected in the short and medium term?
David J. Pajón: This has been the first announcement by the authorities, we must give time to the implementation processes to try to better assess their real effects. For the time being, in terms of expectations, it may be attractive for a notable area of society, considering that more than 30% of active workers work in the non-state sector. Although domestic demand may be insufficient, and there are diminished reserves for the restart of activities or new investments, the non-state sector will begin to react and propose new ideas as soon as the current regulatory framework allows it, which will accelerate at times of reopening of borders and arrival of tourist flows and the diaspora.
On the other hand, if the currency sales circuits are properly managed, they can maintain a certain level of supply in the stores, guarantee final consumption and supplies, and guarantee the authorities a source of currency with a certain stability.
This has been a first approximation. The authorities still have a lot to explain about their plan, and about pending issues in terms of social policy aimed at vulnerable sectors. On the other hand, beyond its implementation, success will lie in maintaining an open-ended and evolving reform, with an eye on production, growth, development and increasing social inclusion.
Pavel Vidal: It will depend on the degree of comprehensiveness and speed of the changes. The final objective of all these changes must be clarified, the model to which they aspire, defining a schedule and convincing that there is no going back.
Ricardo Torres: If everything that was announced is implemented, the rest of the year will be very busy. Overcoming this crisis will require these and other coherent steps. It was said that the Development Plan until 2030 will be announced soon, with only 10 years left. Based on this, other elements of analysis will be available. The overcoming of the crisis must not be divorced from the transformation of the model.
The next few months will be tough. The world economy is in serious trouble; we are heading for the worst recession since World War II. And our economy is very vulnerable. We have to wait for the evolution of tourism, but the forecasts are not good. Perhaps it is worth rethinking the very development strategy. However, a better structure of incentives for production in all the actors must pay off.
Oscar Fernández Estrada: The undeniable popular enthusiasm that accompanied the debates of the 6th Congress of the PCC and the beginning of the Updating in 2011, was followed by a deadly bewilderment with the pause and dismantling of most of the advances of that process, whose political high point was in the contradictory restrictions imposed on the exercise of self-employment less than a year after the Conceptualization was approved. That cost is already economically and socially unrecoverable. It’s not impossible for an episode of this nature to be repeated. Although everything indicates that circumstances have once again tipped the balance towards defending the reform.
Minister Gil referred to this when he stated: “I think that we have matured a group of concepts as well, that it is possible to implement them more quickly now…all we are doing to face this scenario is what we say is here to stay. This is not now and we go back later, rather, we’ll always go forward.”
Let’s hope that those anonymous wills that from a certain power have opposed the sovereign will, now endorsed in the Constitution, and even the will of the higher leadership force explicit in its governing documents, will then join the immense task of rebuilding this stubborn socialist economy that survives despite all the blockades.
Anamary Maqueira Linares: The expected effects will depend on the implementation of the strategy. Among these effects I can mention a greater visibility of the segmentation of demand that already exists in the country in the short term, and therefore of inequalities. In the medium term, it is expected that the elimination of the dual monetary and exchange rate will be carried out, as well as controls of the inflationary process that the part of the economy that doesn’t operate with planned prices already experiences, so as to stop the inflationary spiral. In other words, it would be expected that the measures put a ceiling to inflation and prevent such a spiral. I would also expect a diversified, heterogeneous, more overlapping business fabric, with more expeditious, complementary and dynamic productive relations.
Pavel Vidal: Doctor in Economics and Professor of Economics at the Pontificia Universidad Javeriana in Cali, Colombia. He has been an analyst in the Monetary Policy Division of the Central Bank of Cuba.
Oscar Fernández Estrada: Doctor in Economic Sciences, was director of the Teaching Planning Department of the Faculty of Economics of the University of Havana. He is co-author of several books on the Cuban economy.
Anamary Maqueira Linares: Candidate for a Doctor in Economics from the University of Massachusetts, Amherst. She has a Master in Development Economics from FLACSO Ecuador and a BA in Economics from the University of Havana.