Cuban Economic News

Here we track information and ideas related to the evolution of the Cuban economy.

2011: Cuba recibe un 7,6% más de turistas  12/26/2011 Cubahora 

Amplían facilidades de arrendamiento a particulares (+ Gaceta)  12/26/2011 Cubahora: "A partir del primero de enero del 2012, y de forma gradual durante ese año, trabajadores de las empresas provinciales de Servicios Personales, Técnicos y del Hogar podrán arrendar locales y áreas como trabajadores por cuenta propia, de acuerdo con una nota publicada hoy por el diario Granma."

Anuncian rebaja de precios de materiales de la construcción  12/23/2011 Cubahora 

Inter-American Dialogue consults the IISC - Predicting the future: What will happen over Cuba in 2012?  12/20/2011 IISC: Washington-based forecasting.

Entra en vigor mañana política crediticia cubana y otros servicios bancarios  12/19/2011 Cubahora: "A partir de mañana entrarán en vigor el Decreto-Ley 289, tres resoluciones complementarias del Banco Central de Cuba (BCC) y una instrucción del Ministerio de Economía y Planificación, con el objetivo de ampliar la política crediticia cubanay otros servicios bancarios."

El cuentapropismo con voz de mujer  7/8/2011 IPS: "¡Café! ¡Las jabas, aquí las jabas! (bolsas) ¡Queso crema del bueno...! Las voces, todas femeninas, se confunden entre el ruido y las ofertas habituales en cualquier mercado cubano. Elisa, de 64 años, estuvo entre estas mujeres hasta que fue multada por comercio ilegal. "Lo pagué caro", dice."

Starting My Own Business in Cuba  6/22/2011 Havana Times 

Cuba’s High-Flying Corruption  6/16/2011 Havana Times: "Some of my colleagues are complaining that the scalpel isn’t cutting everything as deep as it should, but for me what’s particularly interesting is that the government has in fact decided to apply surgical techniques to the problem, and they’re doing it publically. It seems that corrupt politicians will no longer be dealt with as “miscalculating comrades” who always deserve a second chance. Now such individuals are running the risk of being tried and convicted as common criminals."

Myopic policies hurts local economy  6/6/2011 AfroCubaWeb 

Cuba planning to drill deep-water oil wells in the Gulf of Mexico  4/7/2011 Global Research 

Pequeños propietarios cubanos podrán vender al Estado  3/30/2011 Cuba Debate 

Más de 83 000 cubanos solicitaron licencias para Trabajo por Cuenta Propia  1/7/2011 Cuba Debate: "Más de 85 000 personas, la mayoría sin vínculo laboral, han solicitado licencia para el Trabajo por Cuenta Propia desde finales del pasado octubre, reporta hoy el diario Granma. Hasta el cierre del pasado año se habían otorgado 75 061 nuevas licencias para el Trabajo por Cuenta Propia y 8 342 se hallaban en proceso, desde que fuera aprobada la ampliación y flexibilización de esta actividad."

Cuba’s Economic Paradigm Shift: A Work in Progress, Norman Girvan and Alissa Trotz  12/20/2010 Norman Girvan 

The self-employed sector - Much more than an alternative  9/24/2010 Granma: "Increasing the opportunities for self-employment is one of the decisions which the country is making in terms of restructuring its economic policy, in order to increase levels of productivity and efficiency. It is also an attempt to offer workers another way of feeling useful in terms of personal effort, and to distance ourselves from those concepts that almost condemned self-employment to extinction and stigmatized those who decided to legally join that sector in the 1990s. On August 1, the approval of a tax system of taxation for the self-employed sector was also made public, in line with the nation’s new economic scenario. Whoever contributes more, will receive more is the principle of the new tax regime that will help to increase sources of income to the state budget, and achieve an adequate redistribution of that income to society."

Cuba unveils private sector expansion plan  9/24/2010 Reuters: "Many are expected to get start-up money from relatives living abroad, especially in the United States." [US Cubans are largely of Spanish descent.]

The rationalizations: A first look  9/22/2010 Progreso: "Can a private sector capable of assimilating and maintaining a workforce that large be developed in Cuban society? Several factors will determine this, among them the facilities available to secure credits and supplies, the creation of wholesale warehouses, and the official regulations that rule them. The absence of any of these items would undermine the effort to open and energize the economy."

The Cuban Model, Not Working So Much  9/14/2010 Atlantic: "Last week, there was a bit of a kerfuffle on the international Interwebs about Fidel Castro's statement to me that the "Cuban model" doesn't even work for Cuba anymore. Fidel himself said, in speech last Friday, that I had misinterpreted his statement, that it was American-style capitalism, and not Cuban-style socialism, that was failing."

Cuba to cut 500,000 from state payroll  9/13/2010 Financial Times: "Better accounting would be demanded of businesses, and the way they were taxed would be changed. As well as taxes on income, the self-employed would pay a sales tax and 25 per cent social security tax for themselves and each employee, the sources said, while co-operatives would pay a tax on profits and social security."

Agreed, We Need a Different Model  9/11/2010 Havana Times: "In an interview granted to the US magazine The Atlantic, Fidel Castro was quoted as saying “The Cuban model doesn’t even work for us anymore.” At no moment did he speak of socialism, but of the “model.” The interpretation of this by an academic taking part in the conversation was that Fidel was referring to the high degree of State involvement in the economy. This factor precisely characterizes “State socialism” or “real socialism,” which has failed everywhere as it maintains a concentration of ownership (but in the hands of the State) and the wage-labor form of production – a model that Lenin himself termed “state monopoly capitalism.”

Fidel says econ remark 'misinterpreted'  9/11/2010 Press TV 

Fidel: 'Cuban Model Doesn't Even Work For Us Anymore'  9/8/2010 Atlantic 

Alerta roja contra la corrupción - Patricia Grogg entrevista al politólogo ESTEBAN MORALES  8/17/2010 IPS: "IPS: Usted es muy conocido por temas sobre Estados Unidos, las relaciones de Cuba con ese país y el racismo. ¿Qué lo llevó a escribir sobre la corrupción, un asunto que, según sectores oficialistas, alimenta "campañas de desprestigio" contra el país si se ventila públicamente? EM: Escribí esos artículos porque creo que son los peligros de ahora. Y tengo un lema: en medio de la situación que hemos vivido estos años, creo que quien quiera ser revolucionario tiene que tener su propia guerra, librar sus propias batallas y correr los riesgos que sean. En caso contrario, que se quede en su casa, bajo la cama. Eso de que el enemigo va a aprovechar las cosas tampoco me inmoviliza, porque el enemigo no nos va a resolver el problema, sino al contrario. Soy de los que piensa que a veces es más saludable que seamos nosotros mismos quienes reconozcamos nuestras deficiencias a que sea el enemigo quien nos las lance luego a la cara, o nos las guarde, que es peor."

Cuban capitalists must wait for change as Fidel Castro returns to the fray  7/24/2010 Telegraph, UK 

¿Mudos o protagonistas?  7/22/2010 BBC Mundo: "Sin lugar a dudas Esteban Morales se metió en un terreno en el que cosechará mucho odio en las alturas pero también el respeto de la mayor parte de sus compatriotas de a pie, no porque les haya revelado un secreto sino por el valor de publicarlo. La escasa reacción entre los intelectuales comunistas a pesar de lo arbitrario de la sanción contra el profesor va a dar nuevos bríos a los "excomulgadores", sobre todo si creen que la medida sirve como acción preventiva para proteger sus intereses personales. Pero también podría convertirse en un bumerán ya que coloca a los militantes e intelectuales ante la disyuntiva de regresar a la seguridad del silencio o convertirse en protagonistas en la construcción de una sociedad mejor, asumiendo todos los riesgos que eso implica."

El misterio de la Santísima Trinidad  7/12/2010 Kaos en la Red: de Esteban Morales - "Pero los verdaderos corruptos no son los que venden leche en polvo, ni siquiera los que venden bienes duraderos a las mismas puertas de los supermercados, sino los que desde sus cargos en el gobierno y en el estado, controlan y abren los almacenes. Son esos, los que debemos remover de los cargos estatales, pues son los que de verdad manejan los recursos del estado y las posiciones cómodas, que a veces les facilitan a sus amigos. ¿O de donde salen los colchones, televisores, aires acondicionados y otros productos duraderos, que se vocean y venden a las mismas puertas de las “shoppings”?, ¿de donde salen esos productos, duraderos? Se trata del propio funcionario estatal corrompiendo hacia abajo. Porque nadie importa esos productos, ni compra la leche en polvo en el exterior, ni disfruta del poder como ellos, de abrirles los almacenes a los delincuentes."

Where Corruption Begins  7/10/2010 Havana Times: by Erasmo Calzadilla "However Morales, without perceiving it, wanders past another deeper cause of the corruption when he asserts that corrupt bureaucrats can do more harm, because they are “within the government and the state apparatus, which really manage the domestic resources.” Didn’t it occur to the professor to wonder what an official is doing —be they honest or corrupt— managing “domestic” resources without being under the direct control of those who produce these resources? Corruption didn’t begin the moment the manager misappropriated wealth, but a little before, when surplus value was expropriated from the workers and a law protected that act."

Corrupción en las altas esferas del poder de la isla  7/4/2010 Clarín, Argentina: "Cuba está viviendo una dura lucha interna dentro de los estamentos de poder entre intelectuales que denuncian graves casos de corrupción y funcionarios que intentan mantener a toda costa un sistema del que se están favoreciendo personalmente con enormes cantidades de dólares… El caso Morales ya inunda los blogs en Internet, particularmente los leídos por los funcionarios cubanos y los disidentes “socialistas”. En cambio, tuvo menos repercusión entre los exiliados en Miami."

Corruption: The true counter-revolution?  4/21/2010 Progreso: by Esteban Morales - "Without a doubt, it is becoming evident that there are people in positions of government and state who are girding themselves financially for when the Revolution falls, and others may have everything almost ready to transfer state-owned assets to private hands, as happened in the old USSR. Fidel said that we ourselves could put an end to the Revolution and I tend to think that, among other concerns, the Commander in Chief was referring to the questions relative to corruption. Because this phenomenon, already present, has continued to appear in force. If not, see what has happened with the distribution of lands in usufruct in some municipalities around the country: fraud, illegalities, favoritism, bureaucratic slowness, etc. In reality, corruption is a lot more dangerous than the so-called domestic dissidence. The latter is still isolated; it lacks an alternative program, has no real leaders, no masses. But corruption turns out to be the true counter-revolution, which can do the most damage because it is within the government and the state apparatus, which really manage the country's resources."

Investors sticking it out in crisis-prone Cuba  12/17/2009 Reuters: "Investment projects number 258, similar to 2008."

El 70% de los suelos cultivados de Cuba están amenazados por la erosión  11/17/2009 EFE 

Cuba orders extreme measures to cut energy use  11/11/2009 Reuters: "In documents seen by Reuters, government officials have been warned that the island is facing a "critical" energy shortage that requires the closing of non-essential factories and workshops and the shutting down of air conditioners and refrigerators not needed to preserve food and medicine."

Carta de Felix Sanchez sobre la canasta básica  10/31/2009 AfroCubaWeb: Esta carta sobre "la canasta básica," el necesario de cada dia, circula de nuevo en Cuba en octubre, 2009 y fue escrito en 2006.

Missing their chance  10/28/2009 Cadena Habana: "Health care also suffers the consequences, because heart diseases are the first cause of death in the United States. The lives of many US citizens could be saved if they had access to Cuban drug Ateromixol, commonly known as PPG. It is the best anti-cholesterol drug available in the market, according to a study conducted by Geneva University. It is cheaper and more effective than the ethanols and steroides available in the United States."

Cuba's declining trade betrays depth of its crisis  10/20/2009 Reuters: "Business between Cuba and four of its top five trading partners has declined sharply this year in a reflection of the communist-led Caribbean island's deep economic crisis, trade reports from the countries said. Reductions in exports to and imports from Cuba ranged from 20 percent to as high as 50 percent, according to the reports from China, Spain, Canada and the United States. In descending order, they are the top traders with Cuba after Venezuela. Numbers were not available for Venezuela, which is the leading economic and political ally of Cuba's government and supplies the island with oil."

The demise of the free lunch  10/8/2009 Economist: "The government is also organising thousands of public meetings across the island to discuss a wider ten-point plan that proposes an end to the monthly ration of free staples and a host of perks, such as free wedding cakes. Instead, the focus is on creating incentives to work harder by raising wages, and thus productivity. All this reflects the ideas of Raúl Castro, who after almost half a century as defence minister replaced his elder brother as Cuba’s president last year and who has been much franker in discussing the country’s economic failures."

Cash-strapped Cuba says toilet paper running short  8/7/2009 Reuters 

Cuba Suspends Communist Party Congress and Lowers Projection for Economy  7/31/2009 AP: "Cuba on Friday suspended plans for a Communist Party congress and lowered its 2009 economic growth projection to 1.7 percent _ nearly a full percentage point _ as the island's economy struggles through a "very serious" crisis. In a closed-door meeting of the Communist Party Central Committee, officials agreed to postpone indefinitely the first congress since 1997, which had been announced for the second half of this year. The gathering was to chart Cuba's political future long after President Raul Castro and his brother Fidel are gone. Instead, top communists will try and pull their country back from the economic brink."

Cuba ponders reduced state role in economy  7/28/2009 Reuters: "Cash-strapped Cuba should consider putting more of its state-run economy in the hands of producers, as President Raul Castro has done with agriculture, the country's top economic commentator said on Tuesday. Ariel Terrero, during his regular Tuesday appearance on state-run television, did not call for private management, but suggested that sectors such as food services and retail could perform better if they were run in a new way."

Raul Castro says Cuba must put land to better use  7/26/2009 AP: "Raul Castro said Sunday that the global economic crisis means tougher times ahead for Cuba, but the country has no one to blame but itself for poor farm production that leads to frequent shortages of fruits, vegetables and other basics. In a speech marking Revolution Day, Cuba's president said the island can't pin all its problems on Washington's 47-year-old trade embargo. He implored Cubans to take better advantage of a government program begun last year to turn unused state land over to private farmers."

UN praises Cuba's ability to feed people  11/14/2007 AP: "A U.N. food expert hailed Cuba as a world model in feeding its population, some 18 years after the collapse of the Soviet Bloc ravaged the island's economy and sparked widespread hunger. Jean Ziegler, who has been the United Nations' independent investigator on "the right to food" since 2000, spent 11 days in Cuba on a fact-finding mission, meeting with top officials and chatting up farmers, state managers and ordinary Cubans waiting in line for food allotted by ration cards. "We haven't seen even one malnourished person" - a rare feat in much of poverty-stricken Latin America, Ziegler said Tuesday. "The right to being fed is the priority, without a doubt.""

Dual economy could trouble Cuba's future  11/17/2006 Miami Herald: "Cubans say the unequal system is the single most exasperating issue facing them. So much of the economy runs on the dollar that the typical family here needs greenbacks to buy everything from razors to bedsheets to shoes -- items largely available only at government stores that price their goods in dollar equivalents. Yet the average worker earns 250 pesos a month -- about $10. ''In Cuba, money is worthless,'' said dissident Lizette Fernández who left Cuba in August and now lives in Hialeah. ``You get soap two times a year, and when you run out, you have to go to the dollar store, where it costs 75 (U.S.) cents. There is virtually nothing you need that you can buy with Cuban pesos.'' Before she left Cuba, Fernández helped kick off a campaign demanding that all government establishments sell goods in a single currency -- pesos."

Cuba's military puts business on front lines  11/15/2006 WSJ: "Cuba's Revolutionary Armed Forces rent rooms to tourists through Gaviota SA, the island's fastest-growing hotel conglomerate. They sell premium cigars, peddle consumer goods through an island-wide retail chain and serve lobster dinners at the Divina Pastora restaurant in Havana's landmark Morro Castle. The military also has a say in allotting nickel mines and leasing offshore lots for oil exploration. The University of Miami's Institute for Cuban and Cuban-American Studies estimates that soldiers control more than 60 percent of the island's economy. The military's economic role will likely become even more critical after the death of Cuba's ailing 80-year-old leader, Fidel Castro, who is widely believed to be dying of cancer. Although Mr. Castro has steadfastly opposed economic reforms during his 47-year communist regime, his younger brother and anointed successor, Raul, has shown a deep interest in free-market experiments in the past. As defense minister since the 1959 revolution, he has frequently looked to the military as his laboratory."

U.S. embargo cost Cuba $4 billion in 2005  10/1/2006 PL: "The U.S. embargo on Cuba cost the Caribbean nation more than $4 billion last year, double the tally a year earlier, as tougher U.S. rules took a bigger bite out of the island"s recovering economy, Cuban officials said Monday. Cuba saw sharp declines in the number of U.S. visitors and Cuban-Americans coming to see family because of Washington"s tighter rules on travel to the island. Restrictions on money transfers and packages meant less cash and fewer goods arriving in Cuba for friends and family, Cuban authorities said. Despite rising U.S. pressure, Cuba"s economy posted robust growth in 2005: roughly 12 percent, according to Economy and Planning Minister Jose Luis Rodriguez."

Cuba's economic fate up in air  8/28/2006 USA Today: "Kirby Jones, president of the U.S.-Cuba Trade Association, says Canada and European nations have more than 300 joint ventures with Cuba in telecommunications, oil and energy, mining, port management and other sectors. "This is not the Cuba of old, when everything was under Soviet Union domination," he says. "This is a brand new version, a mixture of capitalism and socialism." Raul Castro could continue in that direction, some economists and scholars say. Initially, he might unveil small, cosmetic reforms to polish Cuba's image and win over his people. He might let Cubans start thousands of small businesses in trade, agriculture and tourism, as the Castros allowed in the mid-1990s. One scenario: Cuba copies China, a blend of authoritarian state control, manufacturing, mass-market consumerism and high-tech development. "At best, Raul will try the mini-China model," says Antonio Gayoso of the Association for the Study of the Cuban Economy and a former economist in Cuba's finance ministry. "At worst, he and the military will continue the repressive control they have now.""

Flow of funds to Cuba holds steady  5/26/2005 Miami Herald: "Cubans living in the United States still send an estimated $460 million a year to relatives on the island despite restrictions tightened by the Bush administration last summer, according to a poll released by a Coral Gables firm Wednesday. But a portion of the Cubans on the island who receive the cash transfers believe they are getting less money, according to a separate and less scientific survey conducted inside the island by a Washington-based think tank. The assumption: That Fidel Castro's government is taking a bigger bite of the remittances, one of the key sources of income in an island where the economy was devastated by the 1990s collapse of Soviet subsidies. ''Now that it is clear to them how much money is arriving, [the Cuban government] is now getting a higher and higher percentage of that money,'' said pollster Sergio Bendixen of Bendixen & Associates."

Experts question sense of revaluing Cuban peso  4/5/2005 Miami Herald: "Cuba's recent strengthening of its currency is designed to close the gap in the purchasing power of those who earn only pesos and those who receive U.S. dollars from abroad, analysts say. But the peso's revaluation makes no economic sense because the communist-ruled island's economy is not strong enough to back up the 7-8 percent increase in the value of its currency, the experts added. When coupled with a government decision in November to charge a 10 percent fee on all dollars converted into pesos, the changes amount to a 17-18 percent strengthening of a currency that is not accepted anywhere outside Cuba."

Private taxis eliminated from Havana Capitolio  5/4/2004 Havana Journal: "Eusebio Leal. In spite of his title, perhaps suggesting quaint stories and dusty archives, Mr. Leal has in recent years become quite a powerful man, especially around the old city. His brief extends to urban renewal, preservation and beautification of buildings and public areas of Old Havana, and the promotion of tourism, one of the primary sources of hard currency for the government. As a result of his office’s involvement in tourism, Mr. Leal controls a sizable budget in hard currency, deriving income from some government-operated tourist enterprises and employing the moneys in urban renewal. Although Mr. Leal’s office gets high marks for some of its preservation work, ordinary citizens resent being displaced from their homes, or as in this case, their place of business."

Cuba economy flat as tourism booms and sugar crashes  5/5/2003 Reuters: "Cuba's economy has stagnated so far this year, despite a surge in tourism that has helped to compensate for the near collapse of the Communist-run Caribbean island's sugar industry, government sources said Monday."

St. Mary’s students in Cuba to study its economy  3/17/2003 Express News, San Antonio: "Fourteen St. Mary's University students are in Cuba this week examining the island's economy in the wake of 40 years of socialism, isolation and the recent influx of U.S. tourists and business interests. The students, members of a semester-long School of Business and Administration course studying the nation, will spend 10 days in and around Havana."

Cuba: New Slowdown For Motor Of Economy  1/13/2003 Black World Today: "The Cuban government continues staking its bets on tourism as the new engine of the economy, even though its goal of drawing an annual two million visitors was frustrated for the third year in a row in 2002. Arrivals were down five percent last year from 2001 levels, with a total number of 1.7 million foreign tourists. But a slight increase in the past few weeks has local authorities breathing easier."

Castro has chokehold on private sector, scholars say  11/21/2002 Miami Herald: "But scholars at a conference on Cuba's economy said Wednesday that the Castro regime has never allowed the private sector to flourish. It has choked businesses with red tape, forced them into illegal survival strategies and condemned them to a provisional and tenuous existence. ''These enterprises face a very insecure future,'' said Ted A. Henken, a professor at Tulane University who wrote a doctoral thesis on Cuba's experiments with self-employment. Fighting off economic collapse after the fall of the Berlin Wall, the Castro regime in mid-1993 permitted some Cubans to create their own jobs. It said Cubans could seek licenses to work in any of 117 occupations, including bicycle taxi operators, street vendors, artisans and other categories. With time, the list of occupations grew to about 160 categories of self-employment. By 1996, some 209,000 Cubans were self-employed. The number has since shrunken to about 150,000 people, a sign of the mistrust the Castro government feels toward the sector, the scholars said."

La pobreza golpea a los orientales  1/13/2002 El Nuevo Herald: what they fail to mention is the disastrous impact of the Guantanamo US Naval Base on the economy of Oriente: it takes up the best deep water port in the Caribbean for US fantasies.

Havana: the Dynamics of Local Executive Power  1/1/2002 Capital city politics in Latin America: democratization and empowerment: by Joseph L Scarpaci