Without a doubt, this has been a very hard year. For everyone, for the entire Cuban people, who have seen their income and services, from transportation to electricity, cut even further and, therefore, perceive that day-to-day life is going in the opposite direction to prosperity.
For the government as well, which has had to face more restrictions derived from that fatal combination that is the blockade and partly as a result of it, but not only because of it, because of the poor performance of the economy.
For the “economic actors” it has also been a bad year: they continued to be locked in a regulatory cage that is difficult to understand. Especially when it is recognized that an enterprise law is not necessary — again postponed — so that state enterprises can do countless things. This is absolutely true, if state enterprises were given what they have needed for so many years.
But well, 2024 has passed, after three total power disconnections and endless partial disconnections located territorially. And yes, it is always good to review what has been done and what has not been done, what has been planned and achieved and what has not been achieved, its causes and also, why not, what has caused it; and I am not talking about people, but about institutions, that is, about policies and instruments, about their coherence, their consistency, their sequence, their opportunity according to these times.
I have no doubt that the government apparatus has worked. However, as stated in the Prime Minister’s report, the necessary results are not achieved, something that also happened last year and the year before.
All the effort made has not allowed the people, all of us, to feel any improvement. The GDP, for the second consecutive year, will be in the red again, and the availability and access to essential goods and services has worsened, despite the dozens of programs that have been implemented.
So, several questions arise: have these programs been effective ― effectiveness understood as the ability to achieve the expected effect?
If we look at the evaluation of the 2024 objectives made by the Prime Minister himself, then we would have to say that the balance is negative and, therefore, we would have to answer that no, these programs have not been effective.
The other question also arises: why continue to insist on doing what does not work? Are these last three years of “results” not irrefutable proof that there is much to change and that continuing to delay some measures because it is not the right time ― for example, the law on enterprises ― causes many more costs than the “risks” of implementing it?
It is true that several of the necessary and very urgent measures are complex and require technical knowledge for their execution and also have a “political” interpretation — from making debt swaps, often and wrongly identified as “transfer of sovereignty” — to that other one approved now and which has to do with eliminating obstacles that discourage foreign investment flows.
These and others have been delayed so long that the costs have been enormous and we all pay for them, while the responsibility is diluted like a spoonful of salt in a glass of water.
But well, 2024 has passed. Without a doubt, forensic macroeconomics remains to be done.
It’s better to think about 2025. The government’s projection is to grow 1%. It means starting from an economy that in the last five years has exhibited a negative growth rate; always good news, even if that GDP growth barely has a real impact on the situation of Cuban families.
For this year, the priority objectives of the economy have been defined as follows:
1- Continue to advance in the implementation of the Macroeconomic Stabilization Program, with actions that contribute to the gradual reduction of existing imbalances.
2- Increase the country’s external income.
3- Increase national production.
4- Ensure resources for Defense and Internal Order.
5- Gradually recover the national electric power system (SEN), based on the implementation of the approved government program.
6- Address the priorities of social policies, health, education, with special attention to people, families, homes and communities in vulnerable situations.
7- Incorporate with priority and opportunity the contributions of science, technology and innovation in the recovery of the economy.
There is a considerable similarity between these objectives and the strategies defined for 2024.
Even today, for a considerable part of the Cuban people, the Macroeconomic Stabilization Program remains a kind of water basin from which some measures drip from time to time, but unfortunately it is not possible to know its full magnitude, nor what its goals, deadlines and sequence of measures would be. It is complex to do something like this, but it would help everyone.
The second objective is decisive, because Cuba needs MONEY, and part of that money has to come from foreign trade. A 10% growth (968.9 million dollars increase) of total exports has been planned, of which 658.9 million correspond to goods (67.9%) and 310 million correspond to services (33.1%).
Exports of nickel plus cobalt and rolled cigars seem to lead the increases in exports of goods. In both cases, the challenge to reach production levels that guarantee such exports is considerable if we take into account the cuts in inputs and power, which we will still have in 2025. But both are established markets and the evolution of the prices of nickel has shown a certain stability between 15,400 and 16,200 USD/ton, while cigars, at least in its premium segment, remains a dynamic market.
The surprise is that the plan is to export some 30,000 tons of sugar, counting on an increase in sugar production of 299.800 tons of raw sugar, after several failed harvests.
Income from the export of medical services in 2025 will grow less than 1% compared to the estimate for 2024; tourism is expected to grow by 10.5%, and income from airport services will reach a growth of 17.7% in line with an expected increase in tourist arrivals to the country: 2.6 million visitors, a 17% increase compared to the estimate for 2024.
It is good to remember that tourism has been systematically failing to meet tourist arrival forecasts, linear occupancy levels remain very low and income per tourist is not much better than in previous years, for well-known reasons. The upcoming presidency of Donald Trump casts uncertainty on the performance of the sector, which, combined with the shortcomings in quality and infrastructure, makes it apparently difficult to meet such a forecast.
In this way, exports of goods will be decisive in meeting expectations of increases in export income.
There remain the possible flows of investments that could reach the country. We have delayed for more than five years the radical transformation of the procedures to attract and facilitate business with foreign capital. The fear of risk has been stronger than the unquestionable external financing needs of our economy.
The withholding of profits from investors and non-payments to suppliers have been a kind of scare away investments and investors. Ending these practices is in the hands of decision-makers and it must be done quickly. To this we must add the other risk: the one that comes from the persecution of the U.S. administration, which will surely increase with this new administration.
It would be a strategic mistake to let time run without offering incentives to foreign investors ― including Cuban emigrants ― and to national investors.
The blockade is one of the greatest obstacles that we must face; to ignore it is to deny evidence that is demonstrated day after day. The blockade and Trump’s measures and the next ones that he will surely impose, make us compete at a disadvantage. They turn the Cuban market into an insecure destination, subject to the whims of a third power, moreover the world power, raise the transaction costs of any operation and, consequently, make our products and services less competitive. It is impossible to deny this, unless ideology takes precedence over reality.
But, even so, we can do much more. There is significant room for improvement. There are people willing to do things and take risks, and they have shown it. Let us combine these strengths and seek to multiply them.