Cuba announce new measures to boost national economy

Granma, August 8, 2022 — The approval of 75 measures to accelerate the recovery of the national economy was announced yesterday. These actions will be aimed at increasing foreign currency income, increasing and diversifying exports, permanently incorporating the results of science to economy and promoting innovation, among other aspects.

Several of these decisions were informed and explained by Deputy Prime Minister Alejandro Gil Fernández, minister of Economy and Planning, while speaking at the sessions of the National Assembly of People’s Power (ANPP).

SOME OF THE NEW MEASURES

-Identify all possibilities to increase foreign currency income and implement the corresponding actions.

-To promote national productions, industrial and agricultural, to replace imports in tourism.

-To implement a program for the gradual decrease of the budget deficit and to reach the internal financial balance of the country.

-Implement measures to increase revenue collection in the municipalities.

-To resize the budgeted sector, optimizing its functionality.

-To improve the identification, selection, computerization and prioritized attention to individuals, families, households and communities in vulnerable situations, with comprehensive action protocols and a management that favors transforming such condition and stopping the reproduction of negative behavior patterns.

-Continue consolidating the work in the neighborhoods. Evaluate the bonus systems for people in vulnerable situations.

-To promote and speed up the creation and implementation of local productive systems.

-To permanently incorporate the results of science and promote innovation.

– To encourage the delivery of land for self-consumption to workplaces with the possibility of working it.

-To promote the direct concurrence of the productive forms to the market, eliminating the figure of the intermediary in some cases. To demand to the management teams of the organizations about the need of an adequate price formation.

-To increase the breeding of species not dependent on feed, in water ponds on land, for their development and fattening.

-Encourage e-commerce. To authorize the Cuban Post Business Group to carry out this activity in a cross-border way in the import-export modality. Products offered by foreign and domestic suppliers will be commercialized in the country, under the modality of consignment sales.

– To implement a new scheme for access and allocation of foreign currency for state-owned and mixed entities.

– To continue expanding the secondary foreign currency allocation scheme for state and non-state economic actors.

– To encourage the emergence of export-oriented state-owned MSMEs.

– To encourage state-owned companies to use their profits to finance the construction of housing for their workers.

-To advance in the constitution of mixed state-private companies.

– To establish the regulatory framework for foreign investment with the non-state sector.

To promote among the new forms of non-state management the development of dry cleaning services, laundries, light take-out food services and other support services for families.

FLEXIBILIZATION OF IMPORTS BY NATURAL PERSONS ON A NON-COMMERCIAL BASIS.

This measure includes:

-Defining the non-commercial character of the importation of miscellaneous items by their value and weight and by the diversity of the items to be imported, and not by the physical quantities.

-Increasing the quantity of some items allowed to be imported. For example: cell phones, computers, tablets, tires and rims.

-Increase the import limit by shipments from 10 kg to 20 kg.

-Decrease the value per kilogram of import from USD $20 to USD $10, and increase the exemption from 1.5 kg to 3 kg for items to which the value-weight applies.

-Decrease 70% of the customs tax payment (currently 100%, it will be reduced 30%).

FOR ENERGY EFFICIENCY

-To promote the sale of solar panels, both to natural and legal persons.

-To evaluate the feasibility of measures already approved, which have not had the expected results.

– To incorporate new economic actors, high consumers of the non-state sector, in the analysis of the energy councils.

-To increase the production and use of biofuels, biogas, fuel emulsions in transportation, food processing and energy generation, and to increase production in natural medicine.

-To organize the use of state transportation in support of public passenger transportation.

-To resume the productive workshops with the participation of the people, and contingents to produce food where it is appropriate and profitable.

-To evaluate the relevance of reactivating the micro-brigade movement as an alternative to advance in the solution of the needs of the population.

-To adjust activity plans in order to reduce attendance, minimize meetings and reduce expenses.

NEW FOREIGN EXCHANGE MARKET FOR THE PURCHASE AND SALE OF FOREIGN CURRENCY

When announcing this measure, the Minister of Economy and Planning recalled the words of the First Secretary of the Central Committee of the Party Miguel Díaz-Canel Bermúdez, when on the occasion of the closing of the Fifth Extraordinary Session of the National Assembly of the People’s Power (ANPP in Spanish), he pointed out that they were working intensively to establish a secondary exchange system, and then move forward in the recovery of the exchange market, including the purchase and sale of foreign currency to the population.

He clarified that the foreign currency allocation scheme is selective and gradual, and involves the sale of certain MLC capacities to state and non-state economic actors, at an exchange rate higher than 24.

The secondary foreign currency allocation scheme started a few days after the conclusion of the last extraordinary session of the Assembly, and some economic actors already have a level of allocation of resources with which they operate, although it is still limited, acknowledged Gil Fernandez.

He pointed out that the economy has shown signs of recovery, but an illegal market for the purchase and sale of foreign currency has proliferated in the country, and this has an impact since the cost of such foreign currency goes to the prices of the products sold to the population.

In this regard, he indicated that in this scenario an unofficial market cannot continue to grow, which is practically imposing the prices of products and services and of the foreign currency that enters, and which does not go to the country’s financial system.

We are not in a position to support an exchange rate of 1 for 24, as this would imply a level of foreign currency to support that demand, and that would force us to give up other priorities, he stated.

“It has been decided to create then, based on the recovery of the economy, an exchange market for the purchase and sale of foreign currency to the population, with an economically based exchange rate and in which we can work with all foreign currencies, including dollars in cash”.

He clarified that details for its implementation are being analyzed and that the risks and the measures to minimize them and the possible ways to use that foreign currency capacity that is not being part of the national financial system have been evaluated to channel it in order to increase the supply in Cuban pesos.

International travelers will also be able to access that market with differentiated prices at the official exchange rate, which will allow the State to capture the foreign currency that is circulating in the economy, he added.

On the other hand, he explained that the conditions that led the country not to accept the dollar in cash are maintained, taking into account that the prohibitions imposed by the U.S. blockade are still in force. “None of these measures is free of risks nor is it magic, nor does it generate the increase of the offers by itself. ”

But we are taking these decisions because they adjust to reality, in correspondence with our socialist model, they are inclusive, respect the legality of the country, and will allow us to have resources to gradually increase the offers in Cuban pesos to our people, and for the care of people and communities in vulnerable situations, he concluded.