A passerby walks by graffiti with the phrase “Hen has arrived” in Havana’s Cerro municipality. Because of the lack of primary requirements, poultry meat and different foodstuffs have disappeared from Cuban tables. Picture: Jorge Luis Banos / IPS

Paul Luis Brizuela (IPS)

HAVANA TIMES – Cuba’s financial progress projections stay low for a rustic hit by immigration, inflation and low manufacturing, which the bulk will face earlier than they see improved dwelling situations It is simply a part of the problem.

In accordance with the Division of Financial Planning, the Caribbean island’s Gross Home Product (GDP) is projected to extend by 2% in 2022 and by 3% over the subsequent 12 months.

Nonetheless, the Financial Fee for Latin America and the Caribbean (ECLAC) has lower this forecast in half for 2023.

Consultants predict that Cuba will want regular progress of no less than 6% per yr to help its improvement plans.

From January 2020 to late September 2021, Cuba’s GDP contracted by 13% because of the pandemic, the bottom since 1962 because of measures applied by former President Donald Trump (2017-2021). A U.S. embargo has been positioned on the island. – Extra strictly.

Nonetheless, the years prior to those incidents had been characterised by sluggish financial progress and nonetheless fall in need of the specified degree of international funding of no less than US$2.5 billion yearly.

In accordance with official statistics, funding in sectors reminiscent of agriculture, animal husbandry, fishing and development is far decrease than rental actions reminiscent of enterprise providers, actual property and lodge development.

Add to this the decapitalization of most home industries, low productiveness and a collection of financial reforms that, regardless of public settlement and approval in 2011, have both failed or been applied. has resulted in failure.

Individuals use electrical bike lights to play dominoes throughout energy outages. The nation was hit by an influence disaster for a lot of 2022, with energy outages lasting as much as 12 hours in nearly the entire nation’s 15 provinces, however the scenario eased on the finish of the yr. Picture: Jorge Luis Banos / IPS

needs and actuality

Juana Maria Limonta mentioned: “If subsequent yr we take a little bit breather and issues actually begin to enhance, we can have a little bit extra meals, no extra drugs shortages and no extra complications with public transport. might be gone,” a Havana pensioner instructed IPS.

Forex reform started in early 2021, when the financial system was successfully dropped at a standstill because of COVID-19, however the forex elevated in circulation and costs surged amid forex shortages. Nor has the method curbed the partial dollarization of the financial system.

The outcomes of dozens of presidency measures supposed to stimulate manufacturing are but to be seen, particularly in rural areas, which previously had been agriculture and now must import 70% of the meals of a inhabitants of 11.1 million. on this nation.

Electrician Sergio Núñez says he’ll discover an financial restoration. With my wages in Cuban pesos. ”

“I wish to purchase inexpensive cement and different supplies to finish the home,” Núñez, who lives within the city of Santa Cruz del Norte, 45 kilometers east of Havana, instructed IPS subsequent yr. to stay together with his spouse and two kids in his in-laws’ house. ”

There’s a scarcity of greater than 863,000 properties within the nation, and almost a 3rd of the three.9 million properties are categorized as in regular or poor situation, leading to a scarcity of constructing and housing supplies. Availability and worth are complications for a lot of households.

Cuba’s unicameral parliament, the Nationwide Meeting of Individuals’s Energy, was in session from December 12-14, revealing greater than 21,200 new properties accomplished yearly. That is 58% of the deliberate goal.

They hope to have 30,000 properties accomplished by 2023, and at this tempo, the present housing scarcity might be over in 28 years or extra.

“Cuban staff have discovered themselves with very excessive inflation and a lack of buying energy. Evaleny Perez Villanueva defined in an interview with IPS.

In his speech to Congress, President Miguel Diaz-Canel mentioned that inflation, shortages, devaluation and the inconvertibility of the nationwide forex had been macroeconomic imbalances that “will tremendously scale back the buying energy of staff’ and pensioners’ incomes. Lower the dwelling situations of the inhabitants.”

A person walks by means of the streets of the western metropolis of Pinar del Rio after the passing of highly effective Hurricane Ian. He left thousands and thousands in financial losses, damaging over 100,000 properties, electrical and communication networks, and plenty of crops. Western Cuba normally. Picture: Jorge Luis Banos / IPS

robust yr

In 2022, the Cuban financial system has felt the detrimental results of the explosion at Havana’s Resort Saratoga on Might 6 and the hearth on the Matanzas supertanker oil facility between August 5 and 11.

Highly effective Hurricane Ian hit the Pinar del Rio state on September 27, destroying greater than 100,000 properties, electrical energy and communication networks, and crops, together with an essential export crop, tobacco, within the area and elsewhere in western Cuba. did harm.

For a lot of the yr, fixed breakdowns and upkeep of the previous energy crops created an power disaster with energy outages of 12 hours or extra in almost the entire island’s 15 provinces.

In direction of the top of the yr, there was a major discount in blackouts, in parallel with decrease demand because of cooler winter temperatures.

That is an funding and slowly reviving a number of energy crops, with Cuba leasing powerships from Turkey and incorporating gas oil and diesel engines to enhance the nationwide grid. intently associated.

Over 224,000 Cubans emigrated to america alone between October 2021 and September 2022. The primary motive is the financial scenario and boundaries that stop them from pursuing their life plans in Cuba.

The outflow of greater than 2% of the inhabitants, principally younger individuals and professionals, is having a adverse affect on the event plans of the quickly growing older nation.

An impartial employee in a cell phone and pc restore store in central Havana. The most recent information concerning the suspension of personal sector taxes and new licenses for small non-public corporations has sparked outrage amongst economists and enterprise homeowners over obstacles to key sectors in rising meals manufacturing, items and providers. Picture: Jorge Luis Banos / IPS

get to the center of the matter

The 2023 financial plan features a program on macroeconomic stability, which in keeping with the federal government consists of regulatory measures to usher in extra income to fund social providers and packages. and seeks to scale back an estimated common authorities deficit of over P68 million (over US$2.8 million).

Controversial choices embrace the Ministry of Finance and Costs asserting that it’ll set a minimal quantity for calculating taxes (on turnover and private wages) by 2023, altering tax charges to scale back the This consists of asserting that the tax might be utilized to complete gross sales and providers. , Small and Medium Enterprises (MSMEs).

The ministry introduced that corporations reorganized into MSMEs or newly created corporations will not be exempted from tax for six months to 1 yr respectively, as previously.

Nonetheless, it maintains advantages and incentives, reminiscent of tax-exempt income in expertise parks, for as much as 5 years, and for pure individuals importing photovoltaic techniques and units that use renewable power sources, and so on., to take care of them. Did.

Professor Ileana Fernandez, coordinator of the Entrepreneurship and Innovation Community on the College of Havana, and the researcher mentioned, “The lifting of tax exemptions for micro, small and medium enterprises reveals both their ignorance or a transparent need to not help the sector. This goes in opposition to what was accredited only a yr after they had been born, he instructed IPS.

After years of public demand, the federal government introduced in September 2021 that MSMEs might be mobilized to give attention to rising meals manufacturing and different items and providers as a part of plans to revive the financial system post-COVID-19. accredited the institution of

By November 30, 5,895 of those actors (primarily non-public homeowners) ought to have been licensed, creating about 102,000 jobs, however the suspension of recent licenses in current weeks has left economists and A sector nonetheless considered with suspicion amongst enterprise homeowners.

The federal government has beforehand mentioned that MSMEs will complement the financial system and act like all different acknowledged financial brokers, with no setbacks or brakes on the opening up of the non-public sector.

“The tax system has the perform of not solely gathering cash, but in addition offering incentives and disincentives. If you happen to begin a brand new enterprise beneath new strict guidelines, you may assist it get on observe after the restructuring course of. We’ve got to,” Fernandez burdened. of.

Perez Villanueba mentioned that financial improvement during the last 60 years “nonetheless has critical issues, acknowledged by the best authorities, however continues to make use of the identical financial devices to unravel them, and the worth and It simply wasn’t as environment friendly.” Hoarding administration or fines.

“We imagine we have to get to the center of the issue of financial disruption: encouraging manufacturing and eradicating the turf that also exists. They’re greater than monetary; is said to, ”the professional summarized.

Read more from Cuba in the Havana Times

By Editor

Leave a Reply