An MP, in the first session of our National Assembly, when speaking, asked about the Law on Enterprises and the response I heard was that it had been assessed that it wasn’t yet approved, or that we weren’t yet at the right time for its approval.
Had he been among us, my friend Goyo would have looked at me sideways and said, very quietly but smilingly: “Hey bro, how does anyone know when the time is right?”
Without a doubt, doing the right things at the right time is a good guarantee of success; whether it’s forming and coaching a baseball team or crossing the street.
Managing a country’s economy is even more important, because in the end, a baseball game can be lost and, if we cross the street the wrong way, we pay for it ourselves, or in a hospital or in some small container.
The same is not true when it comes to a country’s economic strategy and policy, because it is then that the destinies of everyone are decided and the dreams of many can turn into eternal nightmares, making disillusionment a daily way of life.
The data from the first half of 2025 report released by the Ministry of Economy to the Assembly leave no doubt about the overall poor performance of our economy.
Even though we have the good news of the containment of the fiscal deficit and the rate of inflation’s increase, both positive results, their effects on the purchasing power of citizens’ income and on the dynamics of the Cuban productive system are practically nil.
Of the seven prioritized objectives announced by the Minister of Economy in December 2024, few have been achieved in this first half of 2025.
The first of these — continuing to advance the implementation of the Macroeconomic Stabilization Program, with actions that contribute to the gradual reduction of existing imbalances — will remain in the shadows as long as these positive signs related to the fiscal deficit and inflation fail to alleviate the growing needs of the majority of the country’s population.
The exchange rate in the so-called informal currency market remains unfavorable: a few days ago, the 400 pesos per dollar barrier was broken, a very clear sign that the real causes of the Cuban peso’s depreciation remain very strong.
Increasing export revenues, the second of these objectives, has its worst enemy in the poor performance of tourism (81% of travelers and 75% of visitors compared to the same period in 2024) and in the results of this sugar harvest, where the production levels achieved take us back to 1817.
Other sectors, including medical services, also show no significant recovery.
Increasing national production is the third prioritized objective; some productions have increased, but the impact of this increase on supply and prices has been barely perceptible.
Securing resources for defense and internal order is another objective. In the absence of information on this matter, it is possible to imagine that this priority has been met, among other reasons because the Revolutionary Armed Forces’ business system generates its own resources, allowing it to not depend on the results of the national economy.
Gradually recovering the national power system (SEN); the fifth of these objectives shows no signs of achieving significant results despite the efforts made, which include redirecting investment toward the sector and the construction and startup of photovoltaic parks.
Today, the main focus is on generation and its limitations, but the infrastructure associated with transmission is also in a critical state. Without electricity, it will be very difficult to achieve a significant change in the dynamics of our economy.
The sixth objective, addressing social policy priorities — health and education — with a special focus on individuals, families, households and communities in vulnerable situations, seems a daunting task given the continued deterioration in households’ purchasing power, the increase in poverty and marginalization and the dynamics of prices for basic goods and services.
The effort pales in comparison to the accumulated deterioration. The announced pension increase, much needed, will barely cover the purchase of a fraction of a carton of eggs.
Meanwhile, the objective of prioritizing and timely incorporating the contributions of science, technology and innovation for economic recovery — much needed for a country suffering from a permanent lack of resources of all kinds — is challenged by a productive system where the main actor — the socialist state enterprise — does not have sufficient incentives and degrees of freedom to do so in a dynamic and sustained manner.
I draw attention to the fact that science, technology and innovation require financial resources and state investment, because our state-owned business system, the great engine of this battered economy, is exhausted, undercapitalized, tied down by ministerial bureaucracy and relatively far removed from the “world’s cutting-edge technology.”
Foreign investment can be a great help, but it has taken more than four years to introduce changes in the law, regulations and procedures to create a “favorable business environment.”
In a few weeks, we will be approaching the third quarter of 2025. It is already known that in 2024 the negative performance was -1.1%, although this time many of us were surprised by the figure, given the combination of factors that were present throughout 2024.
There is no official information on GDP growth in the first half of 2025, as if hiding it from the public would allow us to change the reality of that performance.
Meanwhile, ECLAC has estimated that Cuba’s GDP will decline again in 2025, this time by -1.5%, a performance worse than that of 2024 and surpassed only in Latin America by Haiti (-2.3%).
The Minister of Economy, in his speech to the National Assembly, rightly described this second half of the year as challenging, as it seems impossible to expect significant positive changes in the conditions he himself defined, which prevent a positive economic response:
- High foreign debt.
- Lack of access to development credit.
- Foreign currency deficit.
- Lack of energy and fuel.
- Shortage of raw materials and inputs.
- Low utilization of industrial capacities.
- Insufficient internal mechanisms and lack of discipline.
- International inflation.
- Geopolitical conflicts.
Undoubtedly, it is possible to add some other “factors” to this list:
- Slowness of decision-making (what’s the status of the Law on Enterprises?)
- Lack of consistency in approved policies (do we finally need a dynamic and complementary non-state sector, or not?)
- Excessive bureaucracy and bureaucrats (will the state apparatus be reduced, or not? When and by how much?)
- Lack of sufficient incentives for joining the formal workforce, whether state or non-state (69.1% of the unemployed are concentrated at the pre-university, mid-level technical and university levels).
- Absence of a monetary market that provides certainty to economic actors.
It does not appear that any of these internal factors will undergo any favorable changes in the next four months.
Uncertainty will continue to predominate in the international context, while the certainty that the blockade and the aggressive policies of the Trump administration could further increase the negative impact on the national economy and our people.
Both are factors about which we can do little or nothing, beyond utilizing the most important characteristic that has allowed homo sapiens to remain at the top of the animal chain: their capacity for adaptation and their ability to seize opportunities, even if they are meager.
The tasks defined for this second half of the year represent a major challenge not only economically but also politically.
One of them is crucial: the creation of an exchange market and the adoption of an exchange rate that makes economic relations between all actors in the economy transparent — that is, the state, families and businesses. How it is implemented will largely determine whether our country can break the trend of continued decline year after year.
I confess I don’t know if this is the “right time”; I don’t know if any of the artificial intelligence algorithms that have been created can give us a clue as to when the right time is.
Almost always, the determination of whether it is or isn’t happens later; perhaps that’s one of the reasons for the delays we fail to understand, but the longer we delay, the higher the economic, social and political cost will be. That’s something we’ve already been able to verify. The facts are there.
