Cuban Economy: Challenges and Obstacles

Cuba urgently needs to develop its economy and to this purpose the worth of science is essential, as defined by Miguel Díaz-Canel Bermúdez during the closure of the IV Ordinary Session of the National Assembly of People’s Power in its IX Legislature, last December.

The president numbered other challenges to improve the economic situation of the nation: “... we need greater productions, more diversity, and of better quality, with the added value of science and the links that should put us in a position to reduce imports and increase exports, in a sustainability structure at the height of the scientific knowledge and the proven skills of Cubans. We will defend the Economy and Budget Plan for 2020 approved in this session with this idea in mind”.

One of the ways to defend that Plan is from its origins. Therefore in the months of January and February, workers across the country, together with their unions, will what they have to do.

Summoned to these debates by the Workers Central Union of Cuba (CTC), workers in general analyze their potential, reserves, and possible obstacles to achieve the plan at their workplaces. “...achieving a better quality of life depends on all that. The first thing is to generate wealth and then distribute it”, commented on these debates the general secretary for the CTC, Ulises Guilarte De Nacimiento, who also urged:“ You have to listen to the proposals of the workers and have the capacity to make them real, giving themselves the chance to participate. ”

In his travels throughout the country, the Cuban president has repeated the challenges the national economy faces today, knowing that the territories have huge productive potentials, and convinced that Cuban’s creativity is proven in hundreds of solutions which are today applied in several economic fields.

But it’s paramount for the nation to unravel processes that affect the soar of economy. There are productive forces that can be released and revolutionize sectors like the food production, tourism, sugar, information technology, and communications, among others.

To boost all these forces, changes are needed, and that is precisely what the Cuban President has asked for.

In this 2020, Cuba will undergo an improvement in the business system, seeking to create conditions to put into practice issues already stated in the new Constitution of the Republic and in the Guidelines of the Economic and Social Policy, approved in the VI Congress of the Party.

Eliminating Restrains

Boosting and removing obstacles to the economy becomes complex in a country like Cuba, imprisoned by the strong blockade set by the U.S., with technological disadvantage and ways of organizing production far from the current productive environments where advanced technology, the workforce training, the permanent updating of CEOs and access to financial capital are part of the everyday life.

Since 2019 was not the year we hoped for, it proved that Cuba can move further and further in economic matters.

In that sense, Díaz-Canel Bermúdez has emphasized the 28 measures approved in 2019 for the improvement of the socialist state enterprise.

These include the creation of a financial institution that ensures working capital and allows the establishment of productive link structures.

The goals also promote the financing of micro investments that support the increase in short-term exports, as well as allowing entities to have a margin of foreign money in their incomes to assume investments, technologies, and other resources necessary for greater efforts.

All this rearrangement of the socialist business system includes relations with non-state forms of management. It will be necessary to keep creating conditions so they both coexist in an environment of mutual collaboration and eyeing the development of the nation.

Likewise, it’s necessary to define the system of relations between the state companies, 100% Cuban commercial companies, and foreign investment modalities, with the Mariel Special Development Zone.

In this regard, the idea is that companies can retain 50% of the currency from commercial operations with these entities, as specified in the measures.

The 28 guidelines referred to by the Cuban President also include the salary increase for workers, in truly interesting percentages that, in the end, should be reflected in an increased production.

The Chicken or the Egg

Analyzing the management of the Ministry of Work and Social Security, Díaz-Canel said: "How long will it take us to apply the salary increase in the budgeted sector?" And he argued: "... we’ve got ourselves stuck on the debate of what came first, the egg or the chicken."

And he also reflected: “We take a long time to make decisions, and that is a burden of bureaucracy. We don’t consistently implement all the variables to mobilize human resources, to which we must dedicate our thinking. ”

Human resources and wages are also included in the 28 points established as part of the improvement of the socialist state enterprise and the economic development of the nation.

Taking as starting point the fact that it’s the state sector which contributes the most to the economy, it’s clear the need to boost it, like the President stressed.

Tourism, the Big Engine

Despite the blockade and several hostile measures imposed by the Trump administration, tourism still steps forward, and investments in that sector continue, seeking to expand capacities in the main tourist sites. The goal is to reach 4 million 500 thousand visitors.

But the potential could be far greater considering that the global trend has changed with the access to new technologies.

At present hikers want to know places that other friends have already visited, or virgin spots, unexplored before. Social networks are largely responsible for marking the destinations of many tourists.

The Ministry of Tourism goal is to expand the availability of Internet connection in hotels which is a key element in such results.

In this regard, there’s still a lot to do. But the mere fact that tourists can have an Internet connection opens up new prospects for Cuba.

Likewise, the sun and beach tourist also wants to connect with the culture, enjoy good food, visit nightclubs ..., and thus city tourism follows the same trend.

But "Cuban tourism needs more efficiency" to rise to the standards of the most important tourism poles in the world.

This was highlighted by the Cuban President at a meeting of the development program of the Cuban tourism industry, in last July.

At the meeting it was stressed the need for quality in the execution of works and the meeting of datelines, as well as the decrease of imports by the Ministry of Tourism to save resources and improve procedures wherever possible.

Although tourism did not meet the revenues programmed for 2019, it was an engine within the Cuban economy, as the Cuban president has repeatedly acknowledged.

This sector will have crucial importance in 2020, as it has a large program of investments in hotels and infrastructure in all tourist centers of the nation, where city tourism and the interrelation of visitors with important centers that promote the Cuban culture has not been forgotten.

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Several Melia Cuba hotels nominated for international awards

Several hotels run by the Spanish company Melia in Cuba are among the nominees for this year's World Travel Awards (WTA), the firm said in a communiqué.

The report adds that the 27th edition of the WTA, which are considered the Oscars of the world tourism industry, includes six establishments run by Melia Cuba.

In the Cuba's Leading Hotel 2020 category are the hotels Melia Cayo Coco and Melia Cohiba, both five-star establishments.

The Melia Cohiba Hotel is also nominated in the Cuba's Leading Hotel Suite 2020.

As a maximum expression of the All Inclusive modality in Melia Cuba, the hotels Paradisus Rio de Oro, Paradisus Varadero and Paradisus Princesa del Mar are nominated in the Cuba's Leading Resort 2020 category, along with the Melia Las Dunas Hotel on Cayo Santa Maria.

Every year, the WTA acknowledge the excellence of the international tourism industry. These awards are the most famous in the travel and tourism sector.

The voting to choose the winners will continue until January 10, 2020 at https://www.worldtravelawards.com/nominees/2020/cuba.

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Iran’s Multi-Front War against America and Its Allies

Two days before Thanksgiving, as President Donald Trump was preparing his surprise visit to U.S. troops in Afghanistan, Iranian foreign minister Javad Zarif phoned Palestinian Islamic Jihad (PIJ) leader Ziyad al-Nakhalah and met with a delegation from the Taliban. The object of both discussions was to pressure U.S. and its allies: Zarif told the Taliban representatives that Iran wants a full withdrawal of U.S. troops from Afghanistan, and offered al-Nakhalah Iran’s full support for PIJ’s “valiant resistance” against Israel.

Iran’s decisions to push the Palestinians to fight Israel and to encourage the Taliban are part of a regional policy that seeks to evict the U.S. from the Middle East and stir up trouble for Washington worldwide. This is Tehran’s answer to the “maximum pressure” campaign of economic sanctions that the Trump administration has mounted since pulling the U.S. out of President Obama’s Iran nuclear deal in May 2018.

Iran fought its multi-front war against the U.S. in multiple ways. In the Persian Gulf, it twice struck at foreign oil tankers over the summer, shot down a high-tech U.S. drone in late June, and launched drone and cruise-missile attacks on key Saudi oil facilities in September. It is also seeking to use its terrorist proxies in the Gaza Strip to provoke Israel into a wider regional war. In the fall of 2018, Israel accused Iran of ordering PIJ to attack from Gaza. The Palestinian terrorist group has thousands of missiles and fighters in Gaza, but is smaller than Hamas. Its leadership lives abroad and keeps in close contact with Iran, which supports it even though it’s made up of Palestinian Sunni Muslims. (In general, Iran tends to work with Shiite groups such as Hezbollah.) Israel was concerned throughout the summer of 2019 that PIJ might be trying to push it into a war in Gaza to distract it from Iran’s efforts to gain a permanent foothold in Syria and supply Hezbollah with precision-guided rockets. In response, Israel struck a PIJ commander on November 12, prompting the group to fire over 400 missiles over the Gaza border.

Evidence for how important the Palestinian group is to Iran comes from two phone calls that Zarif made after the November 12 battles. Iran’s Mehr News reported that Zarif congratulated al-Nakhalah on November 17. Then Zarif called again on November 25. Iran’s message was clear: Keep the pressure on Israel.

At the same time, Iran was also looking 1,900 miles away from the Gaza Strip, to Afghanistan. In the 1990s, Iran and the Taliban were on opposite sides of the war in Afghanistan, to the point where Iran almost invaded the country in 1998. Once the U.S. invaded to dislodge al-Qaeda after 9/11, Iran began to reconsider its antipathy toward the Taliban. The Islamic Republic now hopes to push the U.S. out of Afghanistan by whatever means are necessary and fill the resulting power vacuum. Secretary of State Mike Pompeo has accused Tehran of being behind a May suicide bombing in Kabul. Peace talks with the Taliban and the U.S. broke down in September, and Trump’s Thanksgiving visit notwithstanding, Iran believes the U.S. is leaving Kabul and hopes to hasten the process.

Israel Prepares For War With Iranian Proxies

As Iran works with PIJ and the Taliban, it also seeks to pressure the U.S. in the Gulf, in Iraq, in Syria, and in Lebanon. In Iraq, it hopes its allies in parliament and among various Shiite militias will force the U.S. to withdraw; militia mortar and rocket attacks have hit U.S. bases in the country every month since May. In Syria, Iran-backed militias allied with Bashar al-Assad’s regime are facing U.S. forces across the Euphrates, and would like to grab the oil facilities that the U.S. is currently protecting. In Lebanon, Iran’s proxy Hezbollah wants control over the choice of the country’s next prime minister.

The Iranian regime is facing maximum pressure from the U.S. and suddenly finds itself squeezed at home, too, forced to brutally crack down on massive recent protests against a large gas-price hike. Its response has been to challenge the U.S. and American allies across thousands of miles of terrain from Kabul to Gaza. While it is cornered, it should not be underestimated.

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Cuba opens shops to capture hard currencies and boost economy

More than ten shops opened today in Cuba to sell goods in hard currencies, as part of authorities' strategy to capture foreign currencies and contribute to the country's socioeconomic development.

According to official sources, 12 establishments are in Havana and one is in the eastern city of Santiago de Cuba, although the plan is to open 77 such shops over the next few weeks.

The new shops will sell, at more affordable prices, large-format TV sets, high-standard refrigerators and automatic washing machines, as well as electrical motorcycles and car parts.

In order to acquire those products, buyers have to open US-dollar bank accounts associated to magnetic cards, although they can also make deposits in US dollars, euros, pounds sterling, Canadian dollars, Swiss francs, Mexican pesos, Danish and Norwegian krones, Swedish kronas and Japanese yen.

Metropolitan Bank Vice President Marina Torres explained a few days ago that some 10,000 people have opened bank accounts for that modality and 13% of them made deposits in cash.

The initiative is part of a group of measures announced last month by Cuban Vice President Salvador Valdes to make trade more dynamic and prevent the flight of capital.

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Cuban government to announce new economic measures

The Cuban government will announce today new economic measures following those adopted in the face of the fuel shortages caused by the tightening of the US blockade that has been imposed on the island for over 60 years.

Local media report the appearance this afternoon on radio and television of Vice President Salvador Valdes Mesa, and the ministers of Economy and Planning, Finance and Prices, Domestic Trade, and Foreign Trade and Investment.

The Minister-President of the Central Bank of Cuba and the First Vice President of CIMEX Corporation will also appear on the Mesa Redonda television program.

Cubavision, Cubavision Internacional and Radio Habana Cuba will broadcast this program at 18:00 local time. It will also be available on Facebook and YouTube.

In September, the Cuban government announced fuel shortages due to the persecution and pressures of the US government against oil tankers, shipping companies and insurance companies, which prevented the normal supply flow to then island.

Adjustments, savings and greater efficiency measures were designed to ensure basic services were not disrupted and avoid major impacts on the population.

President Miguel Diaz-Canel commended the attitude and participation of citizens in the application of such decisions, which allowed, among other results, the saving of thousands of tons of fuel.

Diaz-Canel described Washington's aim to cut fuel supplies to Cuba as a genocidal policy. He also said that some of the measures taken to face this energy situation are 'here to stay.'

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Cuban president evaluates programs of high priority for the island's economy

Cuban President Miguel Diaz-Canel analyzed on Tuesday prioritized programs for the country's socioeconomic development in areas such as transportation, agriculture and tourism.

In a meeting where he was accompanied by several government ministers, Diaz-Canel evaluated the main projects to improve the transportation of cargo and passengers, according to national television prime time newscast.

The report added that the recovery of the railway system with the modernization of workshops and increased technical inspections of vehicles to prevent accidents are part of the plan in this sector.

The president also analyzed investments in tourism and foreign investment, strategic sectors for the development of the Caribbean nation. The head of state called for expanding exportable lines and boosting production in the food industry, according to the information.

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Cuban Economy Will Not Enter Recession Despite Blockade: Report

Despite the recent tightening of the U.S. economic blockade, Cuba’s economy is showing resilience and will not enter recession, instead will enjoy small growth over the coming year, according to forecasts published by ‘Economic Commission for Latin America and the Carribean’(CEPAL) one of the regions leading think tanks.

Cuba’s economy minister Alejandro Gil Fernandez responded via Twitter on Wednesday to the recent report by CEPAL, saying “Despite the worsening of the blockade, #CEPAL forecasts that the Cuban economy will not decline in 2019 and estimates a 0.5% growth, similar to that of the region. We remain focused on improving the quality of life of the people, which is truly the most important task”.

The CEPAL report predicts slow growth across the region, with South America likely to see just 0.2 percent growth, and 0.5 percent across Latin America.

The figures forecasting modest growth for Cuba come despite new economic sanctions announced by the Trump administration. In April the U.S. began enforcing Title III of the Helms-Burton Act, the legislation that formalized the blockade on Cuba.

Title III allows for Cubans in the U.S., whose companies were nationalized after the revolution, to file lawsuits against those who own or do business with those companies today.

So far the U.S. recognizes 5,000 such claims. The aim is to scare away those who seek to do trade with Cuba and therefore damage the island economically.

One U.S. official said that the law is “‘to encourage any person who is doing business in Cuba to reconsider whether they are trafficking in confiscated property.”

Title III, along with the blockade in general, has been repeatedly rejected at the U.N., with only Israel consistently voting with the U.S. on the issue.

Nevertheless, Cuban lawmakers were pleased that the economy is showing resilience despite U.S. attacks. Lawmaker Gil Fernandez addressed parliament, laying out the country’s economic strategy, which he believes is responsible for its stability in the face of adversity.

Fernandez said the main elements of the plan have been to “defend national production, diversify and increase exports, reduce imports, strengthen state companies, advance towards food sovereignty, promote local development; as well as pursuing a social housing policy and investing in science”

Fernandez ended his address stating that Cuba’s economic strategy means that “we can take advantage of our domestic potential and overcome, successfully, the siege to which we are subjected to by the United States, which will not succeed in forcing us down.”

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Cuban Economy Will Go for More, President Says

President Miguel Diaz-Canel on Monday stated that the Cuban economy is going for more despite a difficult international environment and the worsening of the US blockade against the island.

The president participated in discussions of the Economic Affairs Committee of the National Assembly of the third ordinary period of sessions of its 9th Legislature that opened on Monday.

Diaz-Canel announced about this issue that the economy grew more than expected in 2018 and the purpose is to achieve a modest increase despite the Washington-applied economic, financial and commercial siege 'that has not allowed us to deploy in full force.'

In his speech, he said that foreign investment projects are under way for several billion dollars and there are other projects aimed at reducing imports.

He urged to invest more in the Agriculture and Food industries and increase the quantity of cultivable land under irrigation, which is currently insufficient for national needs.

The head of State referred to measures for economic boost that include wage increase to the public sector and reiterated that 'popular wisdom,' was taken into account. It was expressed in direct contact with the population and in forums such as the Congress of the Cuban Workers' Union, bringing together all unions in the country.

  • Published in Cuba
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