CubaPLUS Magazine

What is evident for the majority of Cubans today is the lack of supply of food products, medicines and many services, especially transportation and energy, in addition to inflation that erodes income from work and much more for retirees, who lack the least to survive.

We must not forget that we survived a pandemic that is still going on and continues to grow even in industrialized countries. On the Island, not only could it be contained, but its scientists created five vaccines whose effectiveness was demonstrated internationally.

Fidel Vascós, renowned Cuban academic and economist, recently explained at an event of the Economic Society of Friends of the Country (SEAP), that the main thing to change in the Cuban economy is the current highly centralized model of planning and management of the economy, which it limits business management and slows down the initiative of economic entities.

This, he said, determines the very reduced national response capacity in the production of goods and provision of services, fettered by rigid central planning of a very administrative nature.

This system, Vascós points out, worked successfully on the basis that almost the entire economy was based on state-owned companies and was supported by the then-existing socialist camp. At that time only 15 percent of our foreign trade was carried out with capitalist countries. The CAME countries, especially Russia, supplied us with oil, cereals, investments in the industrial sector, accompanied by payment facilities.

Three decades later, now in Cuba there is a heterogeneity of forms of property: state, mixed, cooperative, MSMEs and Self-Employed companies that have to face an outside world governed, in general, by the system of neoliberal capitalism where the market relationships.

Above all, the national agricultural and livestock production that in previous decades had shown progress, based on good practices not dependent on the importation of chemical fertilizers and pesticides, began to be replaced by natural ingredients, practices that were gradually abandoned and the income from exports dedicated to promoting tourism that, although considered the "locomotive of the economy", buried food subsistence and exports of those products that had made their way into foreign markets.

Professional services were positioned among the most prominent exportable items: health, but also engineers, educators and sports coaches. Pharmaceutical advances have also opened up other markets that will not be disposable in the future.

Planning should not restrict or condition

Vascós advises that the State must lead the development of the national economy by creating the appropriate institutional and regulatory framework for the development of the objective laws of the market, taking care that the principles of national independence and social justice are maintained in accordance with our socialist political system.

Several Cuban economists have suggested that an alternative to try to solve the current problems of the Cuban economy lies in the design and application of a Stabilization Plan that takes advantage of the experience of the countries that have experienced it.

In general, a Stabilization Plan includes monetary, financial, fiscal and foreign trade measures conceived as a whole and in their interrelation. Each country adjusts the measures to its own objectives, national characteristics and international conditions. One of the decisive aspects of the Plan consists of receiving strong external financing, which is an important restriction for the Cuban economy due to the blockade that the United States government imposes on the Island.

The academic believes that in order to achieve the much-needed external financing, it is necessary to suppress all the administrative measures that hinder it and promote direct and portfolio investments, as well as short, medium and long-term bank loans from friendly countries. By this I mean China, Russia, Iran, Venezuela, Vietnam, Mexico, Brazil, South Africa, Angola, Algeria and India.

As long as an exchange market is not fully applied, legal persons should be authorized to open bank accounts in MLC so that they respond directly with their bank equity balances, without State intervention, to the obligations they contract in MLC; also authorize the concurrence of foreign suppliers in the domestic market, both wholesale and retail, to expand the offer. Issue public debt bonds in CUP, with attractive and honest interest rates on date, that natural and legal persons, both Cuban and foreign, can buy, which would increase income to the State Budget and reduce the fiscal deficit, among other measures.

Numbers point the way

On the other hand, world trade in 2023 is haunted by more shadows than lights, a scenario marked today by persistent geopolitical tensions, the conflict in Ukraine, the rise in energy prices, and sustained global inflation.

A recent report from the United Nations Conference on Trade and Development (Unctad) warns that these factors are compounded by the tightening of financial conditions, a fact that adds pressure on highly indebted countries.

This issue, expands Unctad, intensifies vulnerabilities in the weakest economies and has a negative impact on investment and international trade flows.