Tag Archives: Economic Reforms


Reuters, April 15, 2021

Marc Frank

Original Article: Pressure to Accelerate Economic Reforms

Retiring Cuban Communist Party leader Raul Castro promised a decade ago he would transform the Soviet-style command economy into a more mixed and market-driven one “without haste and without pause.”

Now, with the Caribbean country in crisis and even the most basic goods in short supply, the party is under pressure to act faster as it convenes this weekend for its eighth congress since the 1959 Revolution.

The April 16-19 congress comes as Cubans battle worsening shortages of basic goods, including food and medicine. An economic crisis has been exacerbated by a tightening of decades-old U.S. sanctions and the coronavirus pandemic.

“I hope that the congress will take a deep look at our internal problems, not to reiterate promises but to quickly solve them,” said Julian Valdes, a government accountant in Havana.

Most experts say reform has been undermined by vested bureaucratic interests and ideologues within the party. They will be reading the tea leaves as new leaders emerge in the all powerful politburo at the summit.

The congress will mark the end of the Castro era as the 89-year-old Raul Castro – the brother of late revolutionary leader Fidel – resigns as party secretary, the most powerful position in Cuba.

President Miguel Diaz-Canel is widely expected to replace him. “If President Miguel Diaz-Canel is given the post of party secretary, it would strengthen his ability to take decisions and it might augur well for more expansive reforms,” said Carlos Saladrigas, president of the Cuba Study Group, composed of Cuban-American business people in favor of engagement with their homeland.

“If, however, someone else is appointed, especially from the ‘old guard’, it would possibly indicate… continuing economic stagnation,” he added.

A long-time European investor in Cuba agreed, saying the government needed to push ahead with reforms to improve competitiveness, including further devaluation of the peso currency, liberalization of agriculture, and greater incorporation of small- and medium-sized companies into the economy.

The pace of that would be dictated by personnel changes announced at the congress, he said, requesting anonymity.

Diaz-Canel, 60, said at a meeting last week on agriculture that “everything that stimulates production, eliminates red tape and benefits producers is favorable.”  That captures the essence of reforms adopted by the party at its sixth congress in 2011 and again five years ago at the seventh congress, but which have stalled amid resistance from some party members and ideological infighting.

The party has previously pledged to regulate and tax, not administer state-owned businesses; allow markets more sway over the central planning system and agriculture; do more to attract foreign investment; and support private initiative.


John Kirk, a Cuba expert at Dalhousie University in Nova Scotia, said there was much more to be done to free up the private sector, agriculture and foreign investment.

“The Cuban government has taken only baby steps in all of these areas, and needs to show greater initiative,” he said.

Over the last nine months, following four years of stagnation and in 2020 an 11% contraction of the economy, the government has made more forceful changes.

It has granted more autonomy to state businesses to earn and spend hard currency and loosened regulations on small private ones. It has also unified its two currencies and devalued the remaining peso, cut utility and other subsidies, and decentralized the pricing and sale of some farm products.

“People do not eat plans,” Prime Minister Manuel Marrero said this month, expressing the new sense of urgency.

That will be the underlying theme of the economic debate at the congress, according to Cuban economist Omar Everleny.

Everleny said Cubans understood U.S. sanctions and the pandemic were partly to blame for the hardships they faced, but also were tired of excuses and foot-dragging by authorities.

“The people demand more concrete actions and results from the party,” he said, using agriculture as an example.  “It is not enough to make an effort: there must be results. Thousands of measures have been taken in agriculture, but the results are not yet on the shelves of the average Cuban,” he said.

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by Tom Arnold , March 28, 2021

In response to crippling economic stagnation, Cuba has passed regulations which hint at a turn towards a more market-driven economy. However, political control over key sectors including education and the media still lies heavily with the state. The most striking policy, which allows thousands of professions to run outside the remit of the state, will change the character of business within Cuba and may lead to increased innovation and interaction with international markets. Could Cuba’s economic liberalisation lead to further political freedoms?

Hints of Change

In 2020, the number of tourists visiting Cuba dropped by 80% and its economy accordingly shrank by 11%. Times are hard for Cubans, with queues growing outside grocery stores and businesses being forced to close. The economic downturn has been lurking for many years. In particular, Cuba has suffered from the Trump Administration’s sanctions, imposed to placate the Republican voter base by designating the Cuban government as a “sponsor of terrorism” from its support for Venezuela’s Maduro. 

In response to economic hardships and US sanctions, Cuba has indicated an intention to liberalise the economy. A strong signal of change to Castroist economic ideas are demonstrated by the Díaz-Canel government’s removal of the somewhat confusing dual currency system in January 1, 2021, previously established in 1994 after the loss of Soviet subsidies. This major change, which led to a surge in inflation and devaluation of the peso, had costly implications for Cubans by placing downward pressure on the purchasing power of salaries and pensions.

A Landmark Shift in Business Privatisation

The currency change is just one part in a series of major reforms. On 6th February, Labour Minister Marta Elena Feito Cabrera stated that the government would allow private participation in more than 2000 professions; a stark contrast to the previous limit of 127 professions. The expansion in private participation means that previously illegal enterprises can now function openly. 

It is hoped that this will unleash a wave of innovation in a wide range of sectors. This could work in tandem with recovery from the pandemic. For instance, there has been encouraging news regarding Cuba’s  own “Soberana 2” Covid-19 vaccine: The government believes that it can administer this vaccine to the whole of Cuba’s population by the end of the year and export the vaccine to Latin America as a source of income.

However, the new private business law does have many caveats: private enterprises lack certain resources and access to supply chains that state-owned enterprises possess. For instance, the government maintains control of all large industries and wholesale shops and monopolises 124 professions, thereby restricting options for obtaining supplies. In the short-term, the large restructuring of the economy will inevitably cause painful effects with bankruptcies and unemployment rising. Yet, in the long-term, opening up may yield positive benefits through increased opportunities for entrepreneurs. The sectors included within the 124 professions remaining under state remit (including law enforcement, defence, the media, education) suggest that Cuba is looking to follow the model of China or Vietnam through the introduction of capitalist economic policies with the maintenance of tight political control.

Could Improved Relations with the US Spur Political Change in Cuba?

One follow-on effect of Cuba’s economic liberalisation could be a strengthening of relations with the Biden administration. Indeed, the recent theme of economic policy changes would require more foreign investments and capital, for which improved relations with the US would be important.

Strengthened ties could have political liberalisation effects in Cuba. The Obama Administration’s relationship with Cuba was emblematic of this trend: Obama’s approach of normalising relations with Cuba, which was designed to “create economic opportunities for the Cuban people”, increased US influence in other spheres of Cuban society. Citizens began to criticise issues such as access to medical care, education, unemployment and domestic media sources while religious leaders and artists started to articulate positions contrary to the official narrative. This suggested that civil society was for the first time open to vocally opposing the political system, despite the government responding with detentions of some dissidents and censorship of blog posts . A similar phenomenon is possible if Havana’s new economic policies leads to a strengthening of economic ties with the Biden Administration.

Is a new Cuba Realistic?

Cuba is ripe for change. The push and pull of reform efforts in recent years suggest disputes between traditionalists and more progressive, youthful factions. In April, Raúl Castro will step down as leader of the Communist party which will see the end of the Castro name in Cuban politics for the first time in over 60 years. This has major symbolic significance: Fidel Castro established the political and economic systems that endure today, such as the characteristics of a one-party state with complete control of the media. Combined with the election of Biden, who will likely take a more lenient approach to Cuba in comparison to Trump, and an array of free market policies in the midst of an economic crisis, it seems a realistic possibility that Cuba could undergo major structural change in the coming years.

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By: Samuel Farber, April 3, 2021


Author’s Note – This article originally appeared in Spanish in La Joven Cuba (Young Cuba), one of the most important critical blogs in the island, where the Internet remains the principal vehicle for critical opinion because the government has not yet succeeded in controlling it. The article elicited some strong reactions including that of a former government minister who called it a provocation.

The New Economic Policy (NEP) introduced by the revolutionary government in 1921 was in fact an attempt to reduce the widespread discontent among the Russian people with measures designed to increase production and popular access to consumer goods. Even though the Civil War (1918-1920) caused great hardship among the rural and urban populations, it was the politics of War Communism, introduced by the Bolshevik government during that period, that significantly worsened the situation. This led to a profound alienation among those who had been the pillars of the October Revolution in 1917: the industrial workers, and the peasantry that constituted 80 percent of the population.

In the countryside, the urban detachments, organized to confiscate from the peasantry their agricultural surplus to feed the cities, ended up also confiscating part of the already modest peasant diet in addition to the grain needed to sow the next crop. The situation worsened when under the same policy the government, based on an assumed class stratification in the countryside that had no basis in reality, created the poor peasant committees (kombedy) to reinforce the functions of the urban detachments. Given the arbitrary informal and formal methods that characterized the operations of the kombedy, these ended up being a source of corruption and abuse, frequently at the hands of criminal elements active in them, who ended up appropriating for their own use the grain and other kinds of goods they arbitrarily confiscated from the peasantry.

Moreover, during the fall of 1920, symptoms of famine began to appear in the Volga region. The situation became worse in 1921 after a severe drought ruined the crops, which also affected the southern Urals. Leon Trotsky had proposed in February 1920, to substitute the arbitrary confiscations of War Communism with a tax in kind paid by the peasantry as an incentive to have them grow more surplus grain. However, the party leadership rejected his proposal at that time.

The politics of War Communism was also applied to the urban and industrial economy through its total nationalization, although without the democratic control by the workers and the soviets, which the government abolished when the civil war began and replaced with the exclusive control from above by state administrators. Meantime, the workers were subjected to a regime of militarized compulsory labor. For the majority of the Communist leaders, including Lenin, the centralized and nationalized economy represented a great advance towards socialism. That is why for Lenin, the NEP was a significant step back. Apparently, in his conception of socialism, total nationalization played a more important role than the democratic control of production from below.

The elimination of workplace democracy was only one aspect of the more general clampdown on soviet democracy that the Bolshevik government launched in response to the bloody and destructive civil war. Based on the objective circumstances created by the war, and on the urgent need to resolve the problems they were facing, like economic and political sabotage, the Bolshevik leadership not only eliminated multiparty soviets of workers and peasants, but also union democracy and independence, and introduced very serious restrictions of   other political freedoms established at the beginning of the revolution.




The Situation in Cuba

Since the decade of the nineties, and especially since Raúl Castro assumed the maximum leadership of the country in 2006–formally in 2008 – economic reform has been one of the  central concerns of  the government. The logic of that economic reform points to the Sino-Vietnamese model–which combines an anti-democratic one-party state with a state capitalist system in the economy–and not to the compulsory collectivization of agriculture and the five-year plans brutally imposed on the USSR by Stalinist totalitarianism after the NEP. The Cuban government’s decision to authorize the creation of the PYMES (small and medium private enterprises), a decision frequently promised but not yet implemented, would constitute a very important step towards the establishment of state capitalism in the island. This state capitalism will very probably be headed by the current powerful political, and especially military, leaders who would become private capitalists.

Until now, the Cuban government has not specified the size that would define the small and especially the mid-size enterprises under the PYMES concept. But we know that several Latin American countries (like Chile and Costa Rica) have defined the size in terms of the number of workers. Chile, for example, defines the micro enterprises as those with less than 9 workers, the small-size with 10 to 25 workers, the medium-size with 25 to 200 workers, and the big size with more than 200 workers. Should Cuba adopt similar criteria, its mid-size enterprises would end up as capitalist firms ran by their corresponding administrative hierarchies. If that happens, it is certain that the official unions will end up “organizing” the workers in those medium size enterprises and, as in the case of Chinese state capitalism, do nothing to defend them from the new private owners.

Regarding political reform, there has been much less talk and nothing of great importance has been done. As in the case of the Russian NEP, the social and economic liberalization in Cuba has not been accompanied by political democratization but, instead, by the intensification of the regime’s political control over the island. Even when the government has adopted liberalizing measures in the economy, like the new rules increasing the number of work activities permitted in the self-employed sector, it continues to ban private activities such as the publication of books that could be used to develop criticism or opposition to the regime. This is how the government has consolidated its control over the major means of communication –radio, television, newspapers and magazines – although it has only partially accomplished that with the Internet.

The government is also using its own socially liberalizing measures to reinforce its political control. For example, at the same time that it liberalized the rules to travel abroad, it developed a list of “regulated” people who are forbidden to travel outside of the island based on arbitrary administrative decisions, without even allowing for the right of appeal to the judicial system it controls. Similar administrative practices lacking in means for judicial review control have been applied to other areas such as the missions organized to provide services abroad. Thus, the Cuban doctors who have decided not to return to the island once their service abroad has concluded, have been victims of administrative sanctions – eight years of compulsory exile – without any possibility of lodging a judicial appeal.

Still pending is the implementation of the arbitrary rules and the censorship of artistic activities of Decree 349, that allows the state to grant licenses and censor the activities of self-employed artists. The implementation of the decree has been postponed due to the numerous and strong protests that it provoked. All of these administrative practices highlight the fact that the much discussed rule of law proclaimed by the Constitution is but a lie. Let us not forget that the Soviet constitution that Stalin introduced in 1936 was very democratic … on the paper it was written. Even so, Cubans in the island should appeal to their constitutionally defined rights to support their protests and claims against the Cuban state whenever it is legally and politically opportune.

At the beginning of the Cuban revolutionary government there was a variety of political voices heard within the revolutionary camp. But that disappeared in the process of forming the united party of the revolution that established the basis for what Raúl Castro later called the “monolithic unity” of the party and country. That is the party and state model that emulates, along with China and Vietnam, the Stalinist system that was consolidated in the USSR at the end of the twenties, consecrating the “unanimity” dictated from above by the maximum leaders, and the so-called “democratic centralism”, which in reality is a bureaucratic centralism.

The Cuban Communist Party (CCP) is a single party that does not allow the internal organization of tendencies or factions, and that extends its control over the whole society through its transmission belts with the so-called mass organizations (trade unions, women’s organization), institutions such as the universities, as well as with the mass media that follow the “orientations” they receive from the Department of Ideology of the Central Committee of the CCP. These are the ways in which the one-party state controls, not necessarily everything, but everything it considers important.

The ideological defenders of the Cuban regime insist in its autochthonous origins independent from Soviet Communism. It is true that Fidel Castro’s political origin is different, for example, from that of Raúl Castro, who was originally a member of the Socialist Youth associated with the PSP (Partido Socialista Popular), the party of the pro-Moscow orthodox Communists. But  Fidel Castro developed his “caudillo” conceptions since very early on, perhaps as a reaction to the disorder and chaos he encountered in the Cayo Confites expedition in which he participated against the Trujillo dictatorship in the Dominican Republic in 1947, and with the so-called Bogotazo in Colombia in 1948.

In 1954, in a letter he wrote to his then good friend Luis Conte Aguero, Fidel Castro proclaimed three principles as necessary for the integration of a true civic movement: ideology, discipline and especially the power of the leadership. He also insisted in the necessity for a powerful and implacable propaganda and organizational apparatus to destroy the people involved in the creation of tendencies, splits and cliques or who rise against the movement. This was the ideological basis of the “elective affinity” (to paraphrase Goethe) that Fidel Castro showed later on for Soviet Communism.

So, what can we do? The recent demonstration of hundreds of Cubans in front of the Ministry of Culture to protest the abuses against the members of the San Isidro Movement and to advocate for artistic and civil liberties, marked a milestone in the history of the Cuban Revolution. There is plenty of room to reproduce this type of peaceful protest in the streets against police racism, against the tolerance of domestic violence, against the growing social inequality and against the absence of a politically transparent democracy open to all, without the privileges sanctioned by the Constitution for the CCP. At present, this seems to be the road to struggle for the democratization of Cuba from below, from the inside of society itself, and not from above or from the outside.

The lesson of the Russian NEP is that economic liberalization does not necessarily signify the democratization of a country, and that it may be accompanied by the elimination of democracy. In Cuba there has been economic and social liberalization but without any advance on the democratic front.


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March 12, 2021 by Arch Ritter

I have just received a copy of our new volume,

CUBA  EMPRESARIAL. EMPRENDEDORES ANTE UNA CAMBIANTE POLÍTICA PÚBLICA, by Ted Henken and Archibald Ritter, 2020, Editorial Hypermedia Del Libro of Spain.  This is an up-dated Spanish-language version of the book ENTREPRENEURIAL CUBA: THE CHANGING POLICY LANDSCAPE, by Archibald Ritter and Ted Henken.

The publication details of the volume are as follows:

  • Paperback : 536 pages
  • ISBN-10 : 1948517612
  • ISBN-13 : 978-1948517614
  • Dimensions : 6 x 1.34 x 9 inches
  • Item Weight : 1.96 pounds
  • Publisher : Editorial Hypermedia Inc
  • Publication Date: November 19, 2020
  • Language: : Spanish
  • Paperback, $21.90

Nuestro nuevo libro sobre el sector empresarial de Cuba, “Entre el dicho y el hecho va un buen trecho” a la venta AHORA a un precio accesible: US $21.90. It can be ordered from Amazon here: Cuba empresarial: Emprendedores ante una cambiante política pública (Spanish Edition): Henken, Ted A, Ritter, Archibald R. M.: 9781948517614: Amazon.com: Books

Some Brief Reviews:

Carmelo Mesa-Lago. Hasta ahora, este libro es el más completo y profundo sobre la iniciativa privada en Cuba.

Cardiff Garcia. Este libro aporta una lúcida explicación a la particular interacción entre el incipiente sector privado en Cuba y los sectores gubernamentales dominantes. 

Sergio Díaz-Briquets. Cuba empresarial es una lectura obligada para los interesados en la situación actual del país. Su publicación es oportuna no sólo por lo que revela sobre la situación económica, social y política, sino también por sus percepciones sobre la evolución futura de Cuba.


Richard Feinberg.Los autores reconocen la importancia de las reformas de Raúl Castro, aunque las consideran insuficientes para sacar a la economía cubana de su estancamiento. 

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Pavel Vidal
Profesor de la Universidad Javeriana Cali

Se requiere más tiempo para que se estabilicen los nuevos equilibrios y la economía reaccione con energía a los nuevas señales e incentivos. Con reformas estructurales complementarias se pueden acortar estos tiempos y potenciar la reacción.

March 04, 2021

No debería sorprender el remezón que la devaluación del peso cubano y salida del CUC están provocando en

  • los costos de producción,
  • los precios mayoristas,
  • el valor de la canasta básica,
  • las tarifas eléctricas y los precios de los mercados agropecuarios,
  • de trabajadores por cuenta propia y
  • de todo tipo de transacciones en los mercados informales.

No debería ser motivo de asombro, aunque sí de mucho análisis, que esté cambiando radicalmente la realidad financiera de empresas estatales, cooperativas, negocios privados y hogares. Se trata de una devaluación de 24 veces de la tasa de cambio oficial y de alrededor de 10 veces de la tasa de cambio promedio en la economía,[1] una de las mayores en la historia de tipos de cambio múltiples en América Latina.

Durante mucho tiempo los economistas explicamos que la unificación monetaria constituiría un choque financiero inmediato con múltiples beneficios, pero que en su mayoría se materializarían gradualmente en el mediano y largo plazo. Nunca se ocultó que era un trago amargo para el sistema productivo, pero que había que tomarlo porque es imposible desarrollar una economía con dos monedas nacionales y múltiples tipos de cambio.

Con estas distorsiones monetarias llevábamos casi tres décadas completas midiendo mal los hechos económicos, sobrevalorando o subvalorando costos de producción, salarios, retornos y riesgos financieros, deudas y activos financieros, minimizando el valor de muchas buenas decisiones económicas y ocultando el costo de un montón de malas decisiones y reformas pospuestas. No todo lo que hicimos antes de 2021 estuvo mal calculado, pero sí una gran parte.

La unificación monetaria representa un choque financiero que produce cambios en los precios relativos a una velocidad mucho mayor que la capacidad de respuesta promedio del sistema productivo. Durante un tiempo las unidades económicas quedan atrapadas en el medio, gran parte de lo que venían haciendo ya no tiene sentido económico, pero todavía no logran entender todo lo nuevo que deben hacer, y cuando comienzan a comprenderlo no tienen la forma de reaccionar en la proporción que necesitan. En correspondencia, las políticas económicas necesitarían trabajar en dos aspectos fundamentales para mermar el impacto de corto plazo del choque financiero: minimizar la incertidumbre y aumentar la capacidad de reacción de las unidades económicas.

El éxito de la reforma monetaria no está garantizado por el solo hecho que la unificación de las monedas y las tasas de cambio oficiales eliminan distorsiones.

En estos dos frentes hay muchas cosas que el propio diseño inicial de la “tarea ordenamiento” ya tiene incorporado, y hay muchas otras que se podrían añadir. El diálogo permanente de las autoridades económicas con los empresarios estatales, agricultores, emprendedores privados, empresarios extranjeros y gobiernos locales será una fuente de información fundamental para corregir y negociar lo que no se previó. Para aumentar la capacidad de respuesta son varias las reformas estructurales que se deben ir acometiendo. En este caso hay recomendaciones elaboradas por economistas como Pedro Monreal, Ileana Díaz, Mauricio de Miranda, Carmelo Mesa-Lago, Omar Everleny, Oscar Fernández, Juan Triana y Ricardo Torres, entre otros.

Es importante subrayar que el éxito de la reforma monetaria no está garantizado por el solo hecho que la unificación de las monedas y las tasas de cambio oficiales eliminan distorsiones. La política económica no puede achantarse y esperar a que se vayan materializando los beneficios de mediano y largo plazo. Tampoco puede caer en la complacencia de publicitar algunos de los beneficios puntuales que se pueden apreciar en el corto plazo, tales como más personas buscando trabajos formales o determinados ahorros en el consumo de los hogares. Son buenas señales y constituyen los primeros ejemplos de lo que se puede lograr con un cambio en los incentivos económicos, pero distan mucho del cambio estructural y el salto de eficiencia que podría derivarse de la “tarea ordenamiento”, que evidencie que valió la pena asumir el riesgo de devaluar 10 veces la moneda en un solo día.

El gobierno tampoco debería prometer y forzar unos beneficios irrealizables de corto plazo, especialmente en lo que tiene que ver con el aumento del poder adquisitivo de los salarios y las pensiones. Las proyecciones contrafactuales siempre son muy especulativas, pero podría decirse que en un escenario hipotético sin pandemia y sin una caída del 11% del PIB, tal vez sí se hubiese podido lograr algún aumento de los salarios y pensiones reales a partir de la redistribución de riqueza e ingresos y de un cambio en la estructura del gasto público. Esta era el escenario de la reforma monetaria en el papel, pero la realidad de 2020 y 2021 ya sabemos que es otra muy diferente.

Pretender que este aumento nominal de ingresos se vaya a traducir en mejoras reales en el contexto actual no es realista.

Entiendo que la manera en que el equipo económico técnico logró “vender” políticamente la “tarea ordenamiento” fue combinando la devaluación de la tasa de cambio con el aumento de salarios y pensiones. Sin embargo, pretender que este aumento nominal de ingresos se vaya a traducir en mejoras reales en el contexto actual no es realista, genera falsas expectativas y promueve incentivos perversos en los entes reguladores y políticos. En un reciente panel en la Asociación de Estudios Cubanos (ASCE) presenté una estimación que apunta a una probable caída de alrededor del 15% del salario promedio real en el sector estatal en 2021. De lograrse en el complejo escenario económico y financiero actual, esto debería apreciarse como un gran logro.[2]

Para esclarecer mi posición, creo que fue acertado combinar ambas acciones de política económica, incluso (y especialmente) en el escenario de 2021. El aumento nominal de salarios y pensiones permite proteger a un grupo grande de hogares de los costos sociales de la devaluación. Pero es diferente presentar el aumento salarial y de pensiones como una protección, a prometer un incremento de los ingresos reales en medio de un ajuste tremendo de la tasa de cambio y de los precios relativos, en una economía que ha visto reducida prácticamente a cero una de sus principales fuentes de ingresos externos por la caída internacional del turismo.

Es este mismo panel en ASCE expuse una proyección de inflación que ubica la tasa más probable para este año alrededor de 500%. Cerca del 300% de la inflación se debería al efecto traspaso, es decir, al impacto de la devaluación de la tasa de cambio sobre los precios. El otro 200% se explicaría principalmente por el exceso de demanda, es decir, el aumento de salario por encima de la productividad. Y es importante anotar que en este escenario ya se reconoce el esfuerzo del gobierno para intervenir administrativamente y controlar el efecto traspaso, tomando en consideración los límites que ha colocado el Ministerio de Finanzas a los precios mayoristas empresariales y los subsidios que se mantienen. En este escenario de inflación de 500% se asume que con estas regulaciones el gobierno podría llevar el traspaso al valor medio que se observa en las economías en desarrollo, según las estimaciones del Banco Mundial.[3] De hecho, si no se considera el efecto de estas regulaciones del Ministerio de Finanzas, la inflación superaría los 900% y el salario real caería un 50%.

Bajo estos cálculos, tanto el objetivo oficial de aumento de los precios promedios en solo 1,4 veces, como el objetivo de aumento del poder adquisitivo de salarios y pensiones parecen inalcanzables este año. Estimular a los entes reguladores y políticos a reprimir la inflación más allá de lo que es posible va a provocar más daño que beneficio, y puede llevar a destruir los mismos resortes que se necesita para la recuperación. Una vez más podemos recordar el fracaso en obtener los 10 millones de la zafra de 1970 y el desgaste que representó concentrar los esfuerzos en un objetivo inalcanzable.

Se puede reconocer la necesidad de regular …los precios de las empresas estatales y de otros mercados donde primen estructuras monopólicas, pero es un error imponer precios donde existen mercados que pueden cumplir esta función sin intervención estatal.

En una economía más descentralizada, con un número mayor de actores económicos y mercados más abiertos y competitivos, la mayor parte de las correcciones de precios relativos podrían confiarse a las interacciones y contrapesos del sistema productivo, pero dada la estructura monopólica y cerrada de donde parte el ajuste monetario cubano, la negociación y la corrección sistemática de los controles de precios es la única vía para compensar parcialmente la rigidez e ineficiencia inherente a la fijación centralizada de los precios. Se puede reconocer la necesidad de regular mediante medidas administrativas los precios de las empresas estatales y de otros mercados donde primen estructuras monopólicas, pero es un error imponer precios donde existen mercados que pueden cumplir esta función sin intervención estatal.

El éxito de la “tarea ordenamiento” no puede medirse a partir de los indicadores de 2021. La tasa de cambio y los precios se han movido en una mejor dirección, pero con una alta velocidad y en un complejo contexto. Se requiere más tiempo para que se estabilicen los nuevos equilibrios y la economía reaccione con energía a los nuevas señales e incentivos. Con reformas estructurales complementarias se pueden acortar estos tiempos y potenciar la reacción.

[1] Tomando en cuenta que la población y el sector privado operaban desde antes con la tasa 24 pesos por dólar, y que en 2021 el mercado paralelo refleja una tasa de 50 pesos por dólar.

[2] Ver panel junto con Ricardo Torres y Carmelo Mesa-Lago en la Asociación de Estudios Cubanos (ASCE) el 16 de febrero de 2021

[3] Banco Mundial: “Special Topic. Exchange Rate Pass-Through and Inflation Trends in Developing Countries” Global Economic Prospects, junio de 2014.

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Republica de Cuba, Ministerio de Trabajo y Seguridad Social


The announcement by the Ministry of Labour and Social Security that some 2000 activities were to be open to small enterprise while only 124 activities were to be excluded from the list gave the impression that this was a major liberalization of small enterprise.  Indeed, this may well be the case, at least to some extent.  But some important areas such as architecture, engineering, accounting, some other professional activities and services to enterprises and are still prohibited.

Journalism is prohibited [110.Actividades de periodistas. (9000)]. This is indeed most regrettable, confirming once again the limits on liberty of expression in Cuba. How this is implemented remains to be seen.  It looks as though it provides a l justification for shutting down the independent bloggers and most notably the producers of the on-line newspaper, “14 y medio.”  If this were to happen, all hell will break loose.

The listing of the 124 activity areas that are prohibited to small and medium enterprise is available at this location:   https://www.mtss.gob.cu/noticias/actividades-donde-no-se-permite-el-ejercicio-del-trabajo-por-cuenta-propia


El Clasificador Nacional de Actividades Económicas (CNAE), está integrado en 4 niveles de agregación que se reparten en 21 secciones identificadas mediante un código alfabético de una letra, subdivididas a su vez en 87 divisiones, 237 grupos, 421 clases, que en total contienen 2 mil 110 actividades, limitándose total o parcialmente algunas de estas estructuras, o solo determinadas actividades, que la propuesta se propone limitar 124 de ellas.

 La lista no incluye actividades consideradas ilícitas para todos los actores económicos o prohibidos expresamente por ley como, por ejemplo: la caza y pesca de especies prohibidas y en peligro de extinción, explotación de las plantas endémicas, empleo infantil y trabajo forzado, entre otras.

 Puede descargar el archivo desde el Menú Descargas de esta página web en la sección Normas Jurídicas en el campo Tarea Ordenamiento o a través del siguiente enlace: ACTIVIDADES DONDE NO SE PERMITE EL EJERCICIO DEL TRABAJO POR CUENTA PROPIA

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Carmelo Mesa-Lago

Original Article: Mesa-Lago 2021 Monetary Unification

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Fecha: septiembre 8, 2020

Autor: Mauricio de Miranda

Articulo Original: Unificación Monetaria

Desde hace varios días en diversos medios de prensa cubanos han comenzado a aparecer argumentos sobre la necesidad de proceder a la unificación monetaria y cambiaria, haciendo énfasis en las consecuencias negativas del establecimiento de una dualidad monetaria en los años 90 del siglo XX. A esto se suman muy recientes rumores, no confirmados, que indicarían la posibilidad de que en poco tiempo se suprima la circulación del peso convertible y la unificación de precios en pesos cubanos de los bienes y servicios que se ofrecen en las redes comerciales estatales, así como una nueva tasa de cambio única que devaluaría considerablemente el tipo de cambio oficial actual de 1 USD = 1 CUP que solo funciona para las empresas del Estado, pero que, al parecer, revaluaría la actual tasa de mercado, también oficial, de 1 USD = 24 y 25 CUP (según se trate si es tipo de cambio de compra o de venta de la moneda extranjera). A estos rumores se suma la existencia de una supuesta nueva escala salarial que funcionaría para el sector estatal y que multiplicaría en varias veces todos los niveles salariales actuales (sin que se diga nada de las pensiones de jubilación antiguas).

Lo curioso es que todo esto ocurra unos meses después que el gobierno cubano decidiera abrir tiendas minoristas en las que se venderían una serie de artículos, considerados de “alta gama”, pero que después se ampliaron a bienes de primera necesidad, usando tarjetas magnéticas, respaldadas por depósitos en dólares u otras monedas libremente convertibles (MLC), lo que ha significado, en la práctica, una nueva segmentación del mercado en productos que se venden en divisas extranjeras y productos que se venden en las monedas nacionales y que, eventualmente, se venderían en una sola, como resultado de la “unificación”. Así las cosas, vale la pena aclarar que toda vez que circulen diversas monedas en un mercado, así sea a partir de la existencia de depósitos a la vista, no estamos en presencia de una real unificación monetaria.

Uno de los problemas de la dualidad monetaria existente ha sido la multiplicidad de tipos de cambio, pero sobre todo la persistencia, durante 60 años, de un tipo de cambio fijo, artificialmente sobrevaluado, del peso cubano respecto al dólar estadounidense, que no refleja las condiciones económicas reales de la economía nacional en relación con la economía internacional y que ha distorsionado seriamente la competitividad de todo el sistema empresarial cubano.

Se puede establecer una nueva tasa de cambio, se pueden modificar los precios y se pueden reformar los salarios y jubilaciones, pero con ello solo se pondrá un orden momentáneo a las relaciones monetarias y a los sistemas de precio y de salarios en el país, pero no necesariamente se pondrá fin a las distorsiones del sistema económico cubano ni del sistema monetario en particular.

La existencia de un mercado, por limitado que pueda resultar, en el que el peso cubano no cumple sus funciones como dinero va a generar una demanda adicional de las divisas extranjeras en el mercado informal, generando opciones de beneficios extraordinarios para quienes operen este mercado informal. Si, como es usual, se persigue a estos actores económicos con medidas punitivas solo se conseguirá aumentar la brecha entre los tipos de cambio entre los mercados formales e informales. Por tanto, sería prudente adelantarse a este tipo de escenarios con la adopción de medidas económicas adecuadas.

¿Cuáles deberían ser este tipo de medidas?

  1. Será necesario definir qué tipo de sistema cambiario va a establecerse. ¿Una caja de conversión como la que determinó la paridad del peso cubano con el dólar antes de 1959 o como la que produjo el establecimiento del llamado CUC? Esto significaría un anclaje nominal del peso con el dólar, en la cantidad que se defina, y la variación del tipo de cambio con las demás divisas, siguiendo el curso del dólar. Esta medida, no evitaría que el país afronte una crisis cambiaria cuando se produzca una nueva crisis de balanza de pagos, lo cual puede ser algo previsible en el caso cubano, si no se solucionan los problemas estructurales, no se alcanza un mayor ritmo de crecimiento económico y no se logra una mejor inserción internacional de la economía. ¿Un tipo de cambio flexible? Podría resultar lo más lógico para que el tipo de cambio fuera el que absorbiera los choques externos y la política macroeconómica no quedara supeditada al sostenimiento de una determinada paridad cambiaria. Sin embargo, en este escenario habría que estar preparados para una depreciación sostenida del peso cubano en la medida en la que no mejoren las condiciones de producción de bienes y de servicios y con las consecuentes presiones inflacionarias.
  2. La realidad indica que tanto el peso cubano como el peso convertible están sobrevalorados, tanto en el tipo de cambio del primero como del segundo, lo cual significa que ambos valen más de lo que deberían valer. El tipo de cambio oficial con el que funcionan las empresas es absurdo y no guarda relación alguna con la realidad. El tipo de cambio de las CADECA, que durante mucho tiempo se ha mantenido estable, parece mostrar signos de sobrevaloración ante la reaparición de un mercado informal con valores que en estos momentos han estado oscilando entre 1,30 y 1,80 CUC por dólar. Esto es consecuencia de dos fenómenos muy concretos: a) la ruptura de la “caja de conversión” que sustentaba la condición de convertibilidad del CUC a una paridad de 1 USD = 1 CUC y según la cual solo se emitirían CUC como USD existieran para respaldarlos y b) la reaparición de un mercado en el que solo se opera en MLC, por lo que la demanda por las divisas foráneas aumenta considerablemente. La sobrevaloración de una moneda nacional desestimula las exportaciones porque las encarece y estimula las importaciones porque las abarata relativamente. Si se adopta un tipo de cambio de partida, de forma administrativa, que no refleje las condiciones reales de la economía, se reproducirán las distorsiones actuales, porque el tipo de cambio es el precio relativo que permite conectar la economía de cualquier país con la economía internacional. Por esa razón, en lugar de adoptar medidas administrativas sería mucho mejor tener en cuenta las señales que ofrece el mercado. Así las cosas, el CUP podría cambiarse a 25 por CUC actuales para efectos internos, pero el tipo de cambio del USD con el CUP que se establezca como nivel de partida, debería considerar esas señales del mercado y, por tanto, devaluarse en lugar de revaluarse.
  3. Para que el peso cubano (CUP) sea realmente convertible debe asegurar su plena convertibilidad interna, garantizando el funcionamiento adecuado del mercado cambiario y permitiendo que la moneda nacional opere de manera plena con fuerza liberatoria ilimitada y curso forzoso en todo el territorio nacional, lo cual cuestiona el funcionamiento de las nuevas tiendas en MLC, fuertemente criticadas por la población por justas razones.
  4. Nada de esto tiene sentido si no se adoptan las medidas económicas necesarias para impulsar la producción de bienes y de servicios. Si no se adoptan las medidas para aumentar la oferta de bienes y de servicios, se corre el riesgo de una espiral inflacionaria, que si se pretende impedir de forma artificial, con los racionamientos o con topes de precio, se manifestará en la forma ya conocida de “inflación reprimida”, que no es otra cosa que la escasez y las colas y la dinamización del mercado subterráneo. Así las cosas, lo más adecuado sería eliminar todas las cortapisas que han impedido el desarrollo de la producción de bienes y de servicios por parte de productores privados y cooperativos, junto a la autonomía operativa y financiera de las empresas estatales. En tal sentido, es imprescindible adoptar la secuencia adecuada y ello significa que lo primero sería eliminar las restricciones actuales al funcionamiento de las pequeñas y medianas empresas (PyMES) privadas y cooperativas, las cuales, en un clima adecuado podrían absorber la fuerza de trabajo que actualmente resulta excesiva en el sector estatal y podría producir bienes y servicios que el sector estatal se ha mostrado incapaz de producir. Para ello es necesario crear el clima institucional adecuado para promover el ahorro interno y la inversión tanto foránea como doméstica, sin restricciones de tipo de propiedad. Esto debería ir acompañado de la modificación de las normas adoptadas recientemente para regular la participación del sector privado y cooperativo en el comercio exterior que son, a todas luces, inadecuadas.

El costo económico y político de continuar despreciando las leyes económicas puede ser muy grave para el país. La política económica debería orientarse a la adopción de las medidas que permitan salir de la crisis y conducir a una ruta de crecimiento sostenido que tenga un efecto positivo en el mejoramiento del nivel de desarrollo económico y social, superando las barreras ideológicas derivadas de concepciones dogmáticas.

Publicado originalmente en La Joven Cuba. https://jovencuba.com/unificacion-monetaria/

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By Sarah Marsh, Nelson Acosta

Reuters, December 2, 2021

Original Article: Cuba’s Looming Monetary Reform

HAVANA (Reuters) – A major monetary reform that will hike prices and state wages in Cuba starting on Friday is sparking widespread uncertainty as the Communist-run island resumes market-oriented changes to its Soviet-style economy after years of flip-flopping.  The reform, announced earlier this month by President Miguel Diaz-Canel, will eliminate a complex dual currency and multiple exchange rate system that masked a host of government subsidies, pegging the remaining peso currency at a single rate.

To reflect the resulting steep devaluation and reduced subsidies, Cuba is raising prices on goods and services ranging from transport to electricity at varying rates. It will also quintuple pensions and wages in the state sector, which employs around two-thirds of the working population, from the current low rates to better reflect the real value of labor.

The measures, which will accelerate the transition from late revolutionary leader Fidel Castro’s paternalistic model, will bring more transparency to the economy and should help raise competitiveness over time, economists say, albeit only if combined with other reforms. Yet the immediate impact of the changes remains a worrying puzzle to many Cubans already struggling to get by amidst the country’s worst economic crisis in decades, one that has spurred a partial dollarization of the cash-strapped, import-dependent economy.

Hours-long queues outside shops amid shortages of even the most basic goods have lengthened as some Cubans rush to buy what they can before the measures go into effect, the value of the dollar on the black market has risen and banks have been overwhelmed with queries.

Private businesses and foreign investors also are scrambling to gauge the impact on their operations and whether they can adjust prices and wages. “It’s going to be tight, so I’m just buying what I can now,” said Sulema Sotto Rojas, a 57-year-old cleaner for a state firm, as she waited in line to buy cooking oil and tomato sauce at one store after waking up eight hours earlier to queue at another for chicken.

While she could actually stand to gain from the monetary reform, her company has still not confirmed her new wage level and the government has been making last-minute tweaks to some electricity and gas rates in response to widespread consternation that they were too high.


The reform is part of a package of measures Communist Party leader Raul Castro unveiled a decade ago to make the economy self-sufficient after decades of dependence on Soviet and then later Venezuelan aid in the face of domestic inefficiency and a crippling U.S. trade embargo.

The government had stalled or even backtracked on some of the changes due to opposition from entrenched bureaucratic and ideological interests, but a new generation of leaders headed by Diaz-Canel has opted to resume them amid the current crisis. That means, however, more short-term pain will be inflicted on an economy that already has shrunk 11% this year in the wake of the coronavirus pandemic and the tightening of U.S. sanctions.

Many state companies working with an exchange rate of one peso to the dollar likely won’t be able to survive at the new rate of 24 to one. The government says it will give these enterprises a year to become competitive, subsidizing them in the meantime, though that could prove too little, especially given the feeble global economy and Cuba’s lack of capital to upgrade its creaking infrastructure.

“If the government had taken structural reforms to boost the agricultural, private and state sectors first, the economy would be in a much better condition to face this,” said Ricardo Torres, an economist with the Havana-based Center for the Study of the Cuban Economy.

The Communist Party has resisted such moves because doing so would reduce its political power, said Pedro Monreal, author of a popular blog on Cuban economics. Now it will have to pay the price, Monreal said, as a wage-fueled rise in demand for goods and services in the absence of an increase in supply will lead to inflation and further hardship in an economy with a flourishing black market.

“This is a purgative we need to take,” said Mauricio Alonso, who rents out rooms in his apartment in Havana. “Obviously it will generate inflation.”


While Cubans are still struggling to figure out whether they will be better or worse off, one thing seems clear: those who have savings in a local currency or who work in the non-state sector, which will not automatically hike wages, stand to lose.

The government has set price caps on agricultural produce and said the fledgling private sector cannot raise prices more than threefold, with anything above that considered “abusive” and violators subject to fines.

Several business owners told Reuters they would need time to gauge the compensatory impact of smaller recent reforms, such as being able to import and export via state companies and to offset all costs against their taxes.

“There are many challenges at the same time,” said Liber Puente, the owner of a private tech firm, who hired a financial strategist to help him map a strategy. The entrepreneur, who wants to keep wages competitive vis-a-vis those in the state sector, said he would hold off on developing other projects until the dust settled, predicting six months of uncertainty.

One important unknown worrying all Cubans is the value of the greenback on the black market, as many basic items like shampoo and cheese can now only be purchased with dollars at special stores or with hard currency on the informal market supplied by “mules” from abroad.

The black market dollar rate has appreciated to around 1.5 times the official rate this year, given that it has become almost impossible for residents to acquire dollars through state financial institutions.

“Already prices are rising everywhere and not because of the currency reform, but because of the lack of dollars,” said Maykel Suarez, who owns a private cellphone repair shop.

The government says the controversial dollar stores, which were opened this year, are a temporary solution to its cash crunch. U.S. President-elect Joe Biden has said he will loosen the existing sanctions on Cuba, and Cuban officials expect tourism and trade to pick up slightly next year.

Havana has also tinkered with some other minor economic reforms over the past year, including allowing firms to retain a larger share of their export revenue rather than depend on the centralized allocation of hard currency.

Economists, though, are urging the government to quickly enact further-reaching structural reforms like the legalization of small and medium enterprises and the liberalization of the ailing farm sector to solve underlying problems.  “I just hope the measures that need to be taken in parallel to this (monetary reform) to increase production and services will be approved in a short time period,” said Omar Everleny, a Cuban economist.

Banco Central
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By Marc Frank

Reuters, December 11, 2020

Original Article: Cuba’s Monetary Reform

HAVANA (Reuters) – The Cuban government announced on Thursday it would start a long-awaited monetary reform in January, unifying its dual currency and multiple exchange rate system in a bid to bring more dynamism to its centrally planned economy.

The reforms were first adopted by the Communist Party a decade ago as it moved toward a more market driven system and closer links with the international economy but foundered thanks to bureaucracy and internal divisions.


For nearly three decades, two currencies have circulated in Cuba: the peso and the convertible peso (CUC), both officially valued at one-to-one with the dollar. Neither are tradable outside the country.  The currencies are exchanged at various rates: one-to-one for state-owned businesses, 24 pesos for 1 CUC for the public and others for joint ventures, wages in the island’s special development zone and transactions between farmers and hotels.  Cuba created the system as part of a package of measures to open up its economy after the collapse of the Soviet Union.

While the system helped Cuba get through the shock of the Soviet collapse, it ended up also hiding the real economic situation.


The CUC will be eliminated. President Miguel Diaz-Canel said it would leave the peso at a single fixed rate of 24 to the dollar, scrapping other more favorable rates in the first official devaluation of the peso since Cuba’s 1959 revolution.


The government has also begun opening stores that sell consumer goods for dollars and other traded currencies, though only with a bank card.

Havana says this is a temporary measure but the partial dollarization will also provide some stability, especially for families who receive remittances.

Meanwhile, state and private companies can now keep tradable currency accounts with up to 80% of their export earnings instead of handing them over to the state.


Devaluation is inflationary, while ending subsidies leads to layoffs, yet the Cuban government says it expects to avoid any “shock therapy” in the economy where the state sets most prices and wages.  Economists expect triple digit inflation, and the government has said the initial devaluation will be accompanied by a five-fold increase in average state wages and pensions even as many state-controlled prices also may rise.

But the wage increase does not apply to around 2 million of the 7 million plus labor force in the private sector, informal sector or who simply do not work.

Meanwhile the government says state-run companies, as a rule, will no longer be subsidized.

Cuban economists estimate around 40% of state companies operate at a loss and though some will benefit with the reform, others will go under. Still, the government says some companies will be given a year to get their books in order before ending subsidies.

The government says residents will be given 180 days to exchange convertible pesos once they are taken out of circulation.


Cuba is seeking to reverse its worst crisis since the fall of the Soviet Union, with growth seen plummeting more than 8% this year by boosting business conditions and productivity.

The country is dependent on imports for more than 50% of food and fuel, plus inputs for agriculture and pharmaceuticals. Yet a combination of U.S. sanctions, local economic blunders and the COVID-19 pandemic have gutted Cuba’s ability to earn tradable currency.

Cuba has been rapidly piling up debt in recent years, while still being plagued by a scarcity of basic goods, from food and personal hygiene products to medicine and fuel.

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