• The objective of this Blog is to facilitate access to research resources and analyses from all relevant and useful sources, mainly on the economy of Cuba. It includes analyses and observations of the author, Arch Ritter, as well as hyper-links, abstracts, summaries, and commentaries relating to other research works from academic, governmental, media, non-governmental organizations and international institutions.
    Commentary, critique and discussion on any of the postings is most welcome.
    This Blog on The Cuban Economy is dedicated to Cuba's Generation "A". Although inspired by Yoani Sánchez' original blog "Generation Y" this is not dedicated to those with names starting with the letter "A". Instead, it draws from Douglas Coupland's novel Generation A which begins with a quotation from Kurt Vonnegut at a University Commencement:
    "... I hereby declare you Generation A, as much as the beginning of a series of astounding triumphs and failures as Adam and Eve were so long ago."

CUBA: FREEDOM ON THE NET 2020

Posted on October 15, 2020 by Arch Ritter

Ted Henken

Freedom House, Freedom on the Net, October 16, 2020

A.  Obstacles to Access 5 / 25
B.  Limits on Content 10 / 35
C . Violations of User Rights   7 / 40

LAST YEAR’S SCORE & STATUS: 22 /100 Not Free

Scores are based on a scale of 0 (least free) to 100 (most free)

Overview

Cuba has one of the lowest connectivity rates in the Western Hemisphere, and while the government has significantly improved technical infrastructure and lowered prices in recent years, regular internet access remains extremely expensive, connections are poor, and authorities both monitor usage and work to direct traffic to the government-controlled intranet. The state engages in content-manipulation efforts while blocking a number of independent news sites. Political dissent is punishable under a wide range of laws, including Decree Law 370, which has frequently been used against online journalists.

However, despite heavy restrictions, Cubans continue to circumvent government censorship through grassroots innovations.

Cuba is a one-party communist state that outlaws political pluralism, bans independent media, suppresses dissent, and severely restricts basic civil liberties. The government continues to dominate the economy despite recent reforms that permit some private-sector activity. The regime’s undemocratic character has not changed despite a generational transition in political leadership between 2018 and 2019 that included the introduction of a new constitution.

Key Developments, June 1, 2019 – May 31, 2020

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Continue Reading,  CUBA: FREEDOM ON THE NET 2020

Maker:S,Date:2017-2-2,Ver:6,Lens:Kan03,Act:Lar02,E-Y

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CUBA: U.S. POLICY IN THE 16TH CONGRESS

Posted on October 15, 2020 by Arch Ritter

May 14, 2020

Mark P. Sullivan, Specialist in Latin American Affairs

[A useful and bi-partisan summary of US policy towards Cuba that I missed when it came out in May 2020.  Thanks to Mike Wiggin, of Ottawa Canada, for bringing it to my attention.]

Original Report: Cuba: U.S. Policy in the 116th Congress

 

SUMMARY

Political and economic developments in Cuba, a one-party authoritarian state with a poor human rights record, frequently have been the subject of intense congressional concern since the1959 Cuban revolution.

Current Cuban President Miguel Díaz-Canel succeeded Raúl Castro in April 2018, but Castro continues to head Cuba’s Communist Party. A new constitution took effect in 2019 that introduced some political and economic reforms but maintained the state sector’s dominance over the economy and the Communist Party’s predominant role.

Over the past decade, Cuba has implemented gradual market-oriented economic policy changes, but it has not taken enough action to foster sustainable economic growth. The Cuban economy is being hard-hit by Venezuela’s economic crisis, which has reduced Venezuela’s support for Cuba and increased U.S. economic sanctions, and by the economic shutdown in response to the Coronavirus Disease 2019 (COVID-19) pandemic. Cuba’s economy faces a contraction of more than 8% in 2020. The global contraction in economic growth, trade, foreign investment, and tourism likely will slow post-COVID economic recovery.

U.S. Policy

Since the early 1960s, the centerpiece of U.S. policy toward Cuba has been economic sanctions aimed at isolating the Cuban government. Congress has played an active role in shaping policy toward Cuba, including by enacting legislation strengthening, and at times easing, U.S. economic sanctions. In 2014, however, the Obama Administration initiated a policy shift away from sanctions and toward a policy of engagement. This shift included the restoration of diplomatic relations (July 2015); the rescission of Cuba’s designation as a state sponsor of international terrorism (May 2015); and an increase in travel, commerce, and the flow of information to Cuba implemented through regulatory changes.

In 2017, President Trump unveiled a new policy toward Cuba that introduced new sanctions and rolled back some of the Obama Administration’s efforts to normalize relations. In September 2017, the State Department reduced the staff of the U.S. Embassy by about two-thirds in response to unexplained health injuries of members of the U.S. diplomatic community in Havana. The reduction affected embassy operations, especially visa processing.

In November 2017, the State Department restricted financial transactions with over 200 business entities controlled by the Cuban military, intelligence, and security services; the so-called restricted list has been updated several times, most recently in November 2019.

Legislative Activity in the 116thCongress

The 116th Congress has continued to fund democracy assistance for Cuba and U.S. government-sponsored broadcasting to Cuba. For FY2019, Congress appropriated $20 million for democracy programs and $29.1 million for Cuba broadcasting (P.L. 116-6, H. Rept. 116-9). For FY2020, Congress appropriated $20 million for democracy programs and $20.973 million for Cuba broadcasting (P.L. 116-94, Division G); Division J of P.L. 116-94 includes benefits for U.S. government employees and dependents injured while stationed in Cuba. The measure includes several Cuba reporting requirements in H. Rept. 116-78 and S. Rept. 116-126.

Congress has begun consideration of the Administration’s FY2021 budget request of $10 million for Cuba democracy programs and $12.973 million for Cuba broadcasting.

Among bills introduced in the 116th Congress, several would ease or lift U.S. sanctions in Cuba: H.R. 213 (baseball); S. 428(trade); H.R. 1898/S. 1447 (U.S. agricultural exports); H.R. 2404 (overall embargo); and H.R. 3960/S. 2303(travel). H.R. 4884 would direct the Administration to reinstate the Cuban Family Reunification Parole Program. Several resolutions would express concerns regarding Cuba’s foreign medical missions (S. Res. 14/H. Res. 136); U.S. fugitives from justice in Cuba (H. Res. 92/S. Res. 232); religious and political freedom in Cuba (S. Res. 215); and the release of human rights activist José Daniel Ferrer and other Patriotic Union of Cuba (UNPACU) members (S. Res. 454 and H. Res. 774). S. Res. 531 would honor Las Damas de Blanco, a Cuban human rights organization, and call for the release of all political prisoners.

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OUTLOOK

When Miguel Díaz-Canel succeeded Raúl Castro as president in April 2018, a leader from a new generation came to power—Díaz-Canel currently is 60 years old. Nevertheless, Raúl Castro, currently 88 years old, will remain until 2021 in the politically influential position of first secretary of Cuba’s Communist Party.

In February 2019, almost 87% of Cubans approved a new constitution in a national referendum, which included such changes as the addition of an appointed prime minister to oversee government operations; limits on the president’s tenure (two five-year terms) and age (60, beginning first term); and market-oriented economic reforms, including the right to private property and the promotion of foreign investment. The new constitution also ensures the state sector’s dominance over the economy and the predominant role of the Communist Party.

In 2019, pursuant to the new constitution, Cuba’s National Assembly appointed Díaz-Canel as president in October, and Díaz-Canel appointed Tourism Minister Manuel Marrero Cruz as prime minister in December. Further implementation of constitutional reforms could be delayed as Cuba confronts the COVID-19 pandemic.

The Cuban economy is being been hard-hit by the government’s economic shutdown to stem the COVID-19 pandemic; some observers project a contraction of more than 8% for the Cuban economy in 2020. Moreover, Cuba’s economic recovery is likely to be slow because of the global economic outlook for trade, investment, and tourism. In this environment, reduced support from Venezuela and increased U.S. economic sanctions, which already were negatively affecting the economy, will contribute to Cuba’s bleak future economic prospects.

The Trump Administration’s ramped-up sanctions on Cuba in 2019, aimed at deterring Cuba’s support for Venezuela, have heightened tensions in relations, stymied U.S. business engagement in Cuba, and negatively affected Cuba’s nascent private sector. The 2017 downsizing of the staff at the U.S. Embassy in Havana, done in response to unexplained injuries to U.S. diplomatic personnel in Cuba, resulted in the suspension of most visa processing at the embassy and reduced other embassy operations.

As in past Congresses, there are diverse opinions in the 116th Congress regarding the appropriate U.S. policy approach toward Cuba, with some Members supporting the Administration’s actions and others preferring a policy of engagement.  Although various legislative initiatives have been introduced to ease or lift various U.S. sanctions, no action has been taken on these measures. With the exception of congressional opposition to funding cuts for Cuba democracy programs and Cuba broadcasting in annual appropriations measures, no congressional action has been taken opposing the Administration’s imposition of various sanctions on Cuba.

 

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Welcome to Queueba: WITH SHOP SHELVES BARE, CUBA MULLS ECONOMIC REFORMS

Posted on October 10, 2020 by Arch Ritter

The government hints it may scrap its dotty dual-currency system

The Economist, Oct 10th 2020

Original Article: Cuba Mulls Economic Reforms

LONG QUEUES and empty shelves are old news in Cuba. Recently, though, the queues have become longer and the shelves emptier. Food is scarcer than it has been since the collapse in 1991 of the Soviet Union, which supported the island’s communist regime. Now shoppers queue twice: once for a number that gives them a time slot (often on the next day). They line up again to enter the store.

Once inside, they may find little worth buying. Basic goods are rationed (for sardines, the limit is four tins per customer). Shops use Portero (Doorman), an app created by the government, to scan customers’ identity cards. This ensures that they do not shop in one outlet too often. Eileen Sosin recently tried but failed to buy shampoo and hot dogs at a grocery store near her home in Havana. She was told that she could not return for a week.

Queues at grocery stores are short compared with those outside banks. They are a sign that, under pressure from food shortages and the pandemic, the government is moving closer towards enacting a reform that it has been contemplating for nearly two decades: the abolition of one of its two currencies. In July state media began telling Cubans that change was imminent. Cubans are eager to convert CUC, a convertible currency pegged to the American dollar, into pesos, which are expected to be the surviving currency. If they do not make the switch now, Cubans fear, they will get far fewer than 24 pesos per CUC, the official exchange rate for households and the self employed.

Cuba introduced the CUC in 1994, when it was reeling from the abrupt end of Soviet subsidies. The government hoped that it would curb a flight into dollars from pesos, whose worth plunged as prices rose.

The system created distortions that have become deeply entrenched. The two currencies are linked by a bewildering variety of exchange rates. Importers of essential goods, which are all state-owned, benefit from a rate of one peso per CUC. That lets them mask their own inefficiencies and obtain scarce dollars on favourable terms. This keeps imports cheap, when they are available at all. But it also discourages the production of domestic alternatives. Foreign-owned earners of hard currency, such as hotels, do not profit from the artificial gap between revenues and costs. That is because instead of paying workers directly they must give the money to a state employment agency, which in turn pays the employees one peso for every CUC (or dollar). The rule is, in effect, a massive tax on labour and on exports.

The dual-currency regime is an obstacle to local production of food, which already faces many. Farmers must sell the bulk of their output to the Acopio (purchasing agency) at prices set by the state. It gives them seeds, fertiliser and tools, but generally not enough to produce as much as their land will yield.

A farmer from Matanzas, east of Havana, recently complained on social media that the Acopio, which required him to provide 15,000lbs (6,800kg) of pineapples, neither transported them all the way to its processing facility nor paid him. Instead, they were left to rot. When the Acopio does manage to provide lorries, it often fails to deliver boxes in which to pack farmers’ produce. They can sell their surplus to the market, but it is rarely enough to provide a decent income. No wonder Cuba imports two-thirds of its food.

It is becoming more urgent to free the economy from such burdens. Although Cuba has done a good job of controlling covid-19, the pandemic has crushed tourism, a vital source of foreign exchange. The Trump administration, which imposes sanctions on Cuba in the hope that they will force the Communist Party out of power (and, perhaps more important, that they will please Cuban-American voters in Florida), recently tightened them. In September the State Department published a “Cuba prohibited accommodations list”, which blacklists 433 hotels controlled by the regime or “well-connected insiders”. Venezuela, Cuba’s ally, has cut back shipments of subsidised oil. The economy is expected to shrink by around 8% this year.

As it often does when times are tough, Cuba is improvising. To hoover up dollars from its citizens, since last year the government has opened many more convertible-currency shops. As these usually have the best selection of goods, demand for dollars has rocketed. Banks have none left. Cubans either get them from remittances, sent by relatives abroad, or on the black market, where the price can be double the official rate of one per CUC.

The government is now sending signals that it wants to scrap the economy-warping dual-currency regime. “We have to learn to live with fewer imports and more exports, promoting national production,” said the president, Miguel Díaz-Canel, in July.

But it has signalled before that such a reform was imminent only to decide against it. That is because the change, when it comes, will be painful. Importers with artificial profits may lay off workers en masse. If they have to pay more for their dollars, imports will become more expensive, sparking a rise in inflation. Pavel Vidal, a Cuban economist at the Pontifical Xavierian University in Cali, Colombia, expects the value of Cubans’ savings to drop by 40%. The government has said that it will raise salaries and pensions after a currency reform, but it has little cash to spare. This year’s budget deficit is expected to be close to 10% of GDP. That could rise when the government is forced to recognise costs now hidden by the twin-currency system.

The government may yet wait until it has built up bigger reserves of foreign exchange to help it cushion the shock. It may hope that Joe Biden will win the White House and reverse some of the sanctions imposed by the Trump administration. That would boost foreign earnings.

The economic crisis makes other reforms more necessary. Under Raúl Castro, who stepped down as president in 2018 (but still heads the Communist Party), a vibrant private sector started up. It has gained more freedoms, but at a slow pace.

The government has recently promised faster action. It said it would replace lists of the activities open to cuentapropistas, as Cuba’s entrepreneurs are called, with negative lists, which specify in which sectors they cannot operate. The new rules have yet to be published. The government recently let cuentapropistas import supplies through state agencies, but prices are prohibitive. In July it opened a wholesale market, where payment is in hard currencies. Firms that use it no longer have to buy from the same bare shops as ordinary citizens.

Cuentapropistas have been lobbying since 2017 for the right to incorporate, which would enable them to sign contracts and deal normally with banks, and to import inputs directly rather than through state agencies. The government has yet to allow this. Until it frees up enterprise, Cubans will go on forming long queues outside shops with empty shelves. ■

 

Street Vendor , 2015

State Food Distributer, 2015

State Vendor, ANAP (Asociacion Nacional de Agricultores Pequenos)

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WHY FLORIDA’S CUBAN POPULATION IS SUSCEPTIBLE TO TRUMP’S PROPAGANDA

Posted on October 6, 2020 by Arch Ritter

Opinion by Alexandra Martinez

CNN, Updated 6:32 PM ET, Wed September 30, 2020

Original Article: Cuban-American Susceptibility to Trump’s Propaganda

Why Florida is a battleground state like no other

Alexandra Martinez is an award-winning Cuban American writer based in Miami, Florida. Her work has appeared in Vice, Catapult Magazine, and Miami New Times. Find her at alexandra-martinez.net. The views expressed in this commentary are her own.

 

Alexandra Martinez

On a blistering August morning in 1973, my grandparents, mom and aunt left Cuba. My maternal grandparents had met as a result of the Revolution; my abuela (grandmother) was a volunteer teacher in the literacy movement, and my abuelo (grandfather) was a technician and organizer who helped remove the previous dictator, Fulgencio Batista, and was exiled to Venezuela.

After 1959, he was allowed to return and was celebrated by the Revolution. As the years passed, their living conditions and civil liberties withered. It became abundantly clear that Cuban dictator Fidel Castro would not uphold the rights of the people they had fought for. They spent five years being called gusanos (worms) while my abuelo labored in a forced-work agricultural camp to earn his family’s exit. When they were granted permission to leave, they left behind everything they had ever known: generations of family, their homes, and a bittersweet love for their island. Their only solace was the flickering thought that their young daughters would have a better life.

Today, my 80-year-old abuela lives in her dream home in the predominantly Latino suburb of Miami, Kendall, a house she and my late abuelo built as the fruit of their decades of labor, wistful regret, and trauma after leaving their homeland. Her story is not unlike those of others in Miami’s Cuban-born community, which in 2017 accounted for more than a quarter of Miami-Dade County’s population and six percent of Florida’s voting power, according to 2016 exit polls.

Continue Reading: Cuban-American Susceptibility to Trump’s Propaganda

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TRUMP CONNED MIAMI’S CUBAN-AMERICAN SUPPORTERS WHILE CHASING BUSINESS OPPORTUNITIES IN CUBA

Posted on October 5, 2020 by Arch Ritter

By Fabiola Santiago

Miami Herald, September 22, 2020 05:35 PM,
Once again, the truth about what President Donald Trump really thinks about Cuba has come to light.

He may peddle the hard line to his Republican Cuban-American supporters in Miami, but when he looks south of the city, he only sees dollar signs.

He promises that he won’t do business until Cuba is free of the Castro brothers’ regime — and prohibits Americans from traveling to the island — but Trump and his team have been chasing business opportunities in Cuba for the past decade.

A new el Nuevo Herald report has unearthed more proof of how seriously Trump tried to gain a foothold in Cuba, despite the U.S. embargo that’s in place.

Documents show that the president applied to register his Trump trademark in Cuba in 2008 so he could conduct business and invest in real estate. His plans included not only erecting a Trump Tower in Havana and putting a golf course in Varadero and other possible sites, but building casinos as well.

To do so, Trump hired a Cuban lawyer on the island, Leticia Laura Bermúdez Benítez.

A screenshot of the Cuban Industrial Property Office website shows details of the Trump trademark application — which included beauty pageants.

A screenshot of the Cuban Industrial Property Office website showing details of the Trump trademark registered in Cuba. 

Trump plays both sides

To truly gauge Trump’s cretinous hustler nature, you have to go back to 1999 when he was already courting Cuban Americans with anti-Fidel Castro rhetoric and hinting at a presidential run.

He was betting on an aging Castro dying soon. The way Trump saw it, the wealthy members of the Cuban American National Foundation were going to be the ones calling the shots on the island.

“So what Jorge is saying is that when Cuba is free, I get the first hotel? Is that true? Sounds like a good deal to me,” Trump quipped during a CANF speech, referring to Jorge Mas Santos, who had taken the reins of the influential organization after his father died in 1997.

Ever the Conman: Trump courting the Cuban  American National Foundation – while registering his brand in Cuba.

It was a crass thing to say — and harmful to efforts to democratize Cuba, and not install a U.S. puppet government to service the likes of Trump — but Cuban Americans laughed and later applauded him.

That year, Trump also wrote an op-ed in the Miami Herald slamming Castro, which prompted the Brigade 2506, veterans of the failed Bay of Pigs invasion of 1961, to correspond with Trump and begin a relationship that would culminate with their endorsement in 2016 and again in 2020.
See also: Herald falsely claims as its own, story on Trump and his interest in Cuban hotels disclosed by Progreso Weekly, By Álvaro Fernández Last updated Sep 30, 2020

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THE 2020 FIU CUBA POLL: BEHIND THE PARTISAN NOISE, A MAJORITY OF CUBAN-AMERICANS SUPPORT ENGAGEMENT POLICY.

Posted on October 5, 2020 by Arch Ritter

Read the full 2020 FIU CUBA POLL report here.

The results of the 2020 FIU Cuba Poll suggest the link between political party and Cuba policy preferences among Cuban-Americans is not as clearly defined as it used to be. Put another way, although a majority of Cuban-Americans respond postively to Trump’s anti-socialist rhetoric, most still support engagement policies that help the Cuban people.

To illustrate, when asked to rate Trump’s performance in a host of national issues ranging from his handling of immigration and healthcare to Covid-19 response, responses split along partisan lines, with roughly two-thirds consistently in favor of the Republican president. This was also true when respondents were asked to rate Trump’s handling of “Cuba policy” (66% in favor). But when respondents were asked about support for individual components of Cuba policy without mentioning Trump, political parties or “the embargo,” the partisan lines disappeared and previous trend lines in favor of engagement resurfaced, with U.S.-born Cuban-Americans and recent arrivals leading the way:

  • 56% support diplomatic relations between the U.S. and Cuba.
  • 57% support the temporary suspension of trade sanctions on Cuba during Covid-19.
  • 69% support the food sales to Cuba by U.S. companies.
  • 71% support the sale of medicine to Cuba by U.S. companies.
  • 58% oppose the suspension of visas services at the U.S. Embassy in Havana.
  • 58% support the resumption of the Cuban Family Reunification Program (suspended in 2019).

Support for unrestricted travel to Cuba—for Americans and Cuban-Americans alike—did drop below 50% for the first time since the Bush-era, with cruise ship being the least popular (40%). Yet, 62% favor allowing U.S. commercial airlines to re-establish routes throughout the island, not just to Havana. This suggests that while a majority of Cuban-Americans may now favor some restrictions on U.S.-Cuba travel, they remain lenient on what those may be.
Notably, on questions that define U.S.-Cuba policy in terms of “carrots” and “sticks”, strong majorities supported a combined approach: 68% favor policies “designed to put maximum pressure on the Cuban government” while 66% support policies directed at “improving the economic well-being of the Cuban people.” In other words, the Obama-era view that “U.S. policy should be tough on the government but soft on the people” continues to hold firm. So has the shrinking salience of U.S.-Cuba policy among key election-year issues for Cuban-American voters, ranking below the economy, healthcare, race, immigration and even China policy across party affiliation.
Perhaps the most significant number in the poll is the percentage of newer émigrés who identify as Republican: a whopping 76% of those who migrated to the United States between 2010 and 2015. Paradoxically, these are also the Cubans-Americans who most frequently travel to Cuba, maintain relations on the island and favor most of the same engagement policies that their Republican representatives so ardently strive to dismantle. This contradiction is shaped by too many factors to explore here. The appeal of Trump’s strongman/ business mogul persona and anti-socialist bombast is certainly one of them. Yet it is also true that these migrants harbor deep antipathies toward a Cuban government that did precious little to seize the opportunity for reform presented by President Obama’s diplomatic opening. Their party affiliation likely represents a rebuke of the system they left behind more than a defined ideological orientation. Nonetheless, this should serve as a wakeup call for Cuban officials. Those who arrived between 2010 to 2015 aren’t batistianos. They are a direct product of the Revolution. By continuing to resist meaningful reforms, the Cuban government runs the risk of forging a new generation of aggrieved exiles supportive of U.S. presidents who take a hardline approach against Cuba.

Finally, there are important lessons here for whoever wins the White House come November. Should it be Joe Biden, reversing Trump’s most hurtful measures toward Cuba in his first 100 days will be popular among Cuban-Americans. These include the re-establishment of island-wide commercial and charter travel, lifting remittance limits, re-opening consular services and fully staffing the U.S. Embassy in Havana. For Trump, the FIU poll suggests that Cuba sanctions have a political ceiling, which his policies reached long ago. In a second term, Trump could ease harmful restrictions on travel, remittances, and some trade in pursuit of a “better deal” without losing support.

“The poll estimates about 52.6% of Cuban Americans in Florida are registered Republicans compared to 25.8% who are registered Democrats and 21.5% who are registered independent.” (NBC Miami, October 2, 2020)

Read the full 2020 FIU CUBA POLL report here.

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CUBA ON EDGE AS GOVERNMENT READIES LANDMARK CURRENCY DEVALUATION

Posted on September 30, 2020 by Arch Ritter

Government is forced to act as it faces a dire shortage of dollars and collapse of tourism


Marc Frank in Havana. Financial Times, September 30, 2020.

Original Article: Landmark Currency Devaluation

Cuba is stepping up plans to devalue the peso for the first time since the 1959 revolution, as a dire shortage of tradable currency sparks the gravest crisis in the communist-ruled island since the fall of the Soviet Union.

Two Cubans and a foreign businessman, all with knowledge of government plans, said the move to devalue the peso had been approved at the highest level. They said the devastating effect of the coronavirus pandemic on tourism, a fall in foreign earnings from the export of doctors and tougher US sanctions had created the worst cash crunch since the early 1990s, forcing the government to move forward with monetary and other reforms. The sources said preparations for the devaluation were well under way at state-run companies and they expected the measure before the end of the year. They asked not to be identified owing to the sensitivity of the subject.

The government declined to comment. Scarcity of basic goods and long queues at shops have been a feature of life in Cuba since the Trump administration pushed for tighter sanctions against the country in 2019. The shortages have been exacerbated by the pandemic because Cuba imports about 60 per cent of its food, fuel and inputs for sectors such as pharmaceuticals and agriculture.

The Cuban government has yet to provide any economic data this year but the UN Economic Commission for Latin America and the Caribbean predicts the economy will contract 8 per cent after a sluggish performance over the past four years. Most other foreign analysts say trade is down by at least a third. People queue to exchange money at a bank in Havana.

Cuba operates two currencies: the peso and the convertible peso. The government claims both are of equal value to the US dollar, but neither currency has any tradable value abroad and imported goods, when available, are priced with huge mark-ups when they are purchased in the domestic currencies. The Cuban public can buy the convertible peso for 24 pesos and sell it for 25 pesos, although the government sets different domestic exchange rates between the two currencies in some sectors, ranging from one peso to 10 pesos. For example, in the special economic zone at Mariel near Havana, one convertible peso is exchangeable for 10 pesos.

According to the sources and recent government statements, the peso will be devalued significantly from its current level on paper of one per dollar and the convertible peso will be eliminated. Economists have long argued that Cuba’s currency system is so unwieldy that it stymies the country’s exports, encourages imports and makes it difficult to analyse corporate profits. Cuba’s government has said it will respect the peso’s current rate for an unspecified period to allow people to exchange convertible pesos into pesos. It will convert bank accounts priced in convertible pesos. As monetary reform becomes a reality Cubans face a shortage of hard currency and will once again be allowed to make purchases in US dollars, though only with a bank card. This was last permitted in 2004.

It is legal in Cuba to own US dollars and other internationally tradable currencies, but until recently they were not deemed legal tender even when paying by card. There is a large black market in US dollars beyond the government’s reach in which the American currency has this year appreciated by more than 30 per cent when valued in the local currencies. According to the government there are now more than 120 official outlets which price goods in dollars, selling everything from food and hygiene products to domestic appliances, hardware and car parts, and the government plans to open more.

Many Cubans queue for hours outside dollar shops to obtain the products they sell. To do so, Cubans first need to open an account in which they can deposit cash or wire transfers in dollars or other hard currencies; they can then use a debit card to pay for goods in dollars. There are already more than a million dollar-denominated cards in circulation, according to local reports.

“Now, on top of everything else, I have to also worry about the value of my money and how to buy dollars on the informal market for the card because the state has none to exchange at the moment,” said Jenifer Torres in Havana, who said she had a good job but was supporting dependent parents at home.

Bert Hoffmann, a Latin America expert at the German Institute of Global and Area Studies, said: “Instead of monetary unification — for many years the government promise — Cuba is moving into an economy with two different monetary circuits.” These were “the dollarised debit card shops and the normal domestic economy, in which the Cuban peso will be under strong inflationary pressures”.

The Cuban economy is largely owned and run by the state, which sets exchange rates and many prices. As the cost of inputs increases due to the currency devaluation, state-run companies are likely to increase their prices — fuelling inflation. Alejandro Gil, economy and planning minister, said in July that the crisis was “exceptional” and announced the government would move towards market-orientated reforms and loosening of the Soviet-style central planning system.

Continue Reading

President Diaz-Canel

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EMPRENDIMIENTO EN CUBA: ¿ENFOCADO AL DESARROLLO ECONÓMICO?

Posted on September 27, 2020 by Arch Ritter

ECON. Y DESARROLLO vol.164 no.2 La Habana Jul.-dic. 2020  Epub 19-Jul-2020

Ileana Díaz Fernández1  * 

http://orcid.org/0000-0002-6310-2982

1Centro de Estudios de la Economía Cubana (CEEC), Universidad de La Habana, Cuba.

RESUMEN

El artículo presenta el análisis de la evolución del trabajo por cuenta propia en Cuba desde 1976 hasta la actualidad. Describe las características esenciales de cada etapa con sus avances y retrocesos. Asimismo, se inserta en el debate sobre el papel otorgado al trabajo por cuenta propia en el desarrollo económico del país, a partir del estudio de las regulaciones y los resultados de investigaciones de campo. Por último, se detiene en las normativas jurídicas puestas en vigor en diciembre de 2018 y las insuficiencias de las mismas.

Palabras clave: desarrollo económico; emprendimiento; políticas públicas; trabajo por cuenta propia

INTRODUCCIÓN

En el mundo actual es imposible hablar de desarrollo sin mencionar la innovación y el emprendimiento. Si bien estas dos categorías no significan lo mismo y de alguna manera el emprendimiento es, a nivel de ciencia, el hermano menor de la innovación, no deja de ser cierto que se relacionan, sobre todo cuando se habla de emprendimientos dinámicos.

El estudio del emprendimiento y su debate científico en la literatura es bastante reciente, de finales del siglo pasado e inicios de este. La discusión sobre el tema pasó del análisis del espíritu emprendedor individual al de proceso, que incluye el contexto. Así, emprender es convertir una oportunidad en un negocio, en un entorno, momento y lugar determinado. No hay recetas, solo enfoques conceptuales generales y mucha experiencia práctica.

Cuba, un país que busca el desarrollo, ha elegido diversas vías para ello -en general malogradas- sin enfatizar con la fuerza necesaria en la innovación y mucho menos en el emprendimiento, visto vinculado al enriquecimiento individual y no en su amplio sentido que incluye el intraemprendimiento en empresas existentes. La apertura al trabajo por cuenta propia muestra el espíritu emprendedor de parte de la población, que bien pudiera aprovecharse dentro de las empresas estatales.

El presente trabajo tiene la intención de analizar la evolución del llamado «trabajo por cuenta propia» desde su resurgimiento en los años setenta hasta la actualidad y de interpretar, a partir de la legislación, el papel que se le ha otorgado a este tipo de trabajo en la economía cubana. Para este empeño se estudió la legislación desde 1976 hasta la actualidad, los resultados de investigaciones de campo actuales y sus antecedentes y la estadística disponible.

Continuacion:  EMPRENDIMIENTO EN CUBA

CONCLUSIONES

Una mirada contextualizada de las regulaciones sobre el trabajo por cuenta propia nos indica que, de todas las etapas analizadas, la de los años setenta no direcciona el trabajo por cuenta propia por derroteros coyunturales ni por exceso de población en edad laboral ni por la economía sumergida, sino como parte del sistema de dirección de la economía, como complemento necesario para un desarrollo ulterior. Esto no está expresamente declarado ni en la plataforma programática ni en las tesis y resoluciones del Primer Congreso del PCC; no obstante, el hecho de establecer este tipo de trabajo desde el experimento del Poder Popular en Matanzas pudiera indicar la intención de concebirlo como alguna de las vías necesarias para hacer crecer la economía.

Al analizar la etapa de los noventa el trabajo por cuenta propia es la típica medida para paliar la crisis, por vez primera se concibe como forma de empleo ante el cierre parcial o total de empresas estatales. Ciertamente esta medida junto a otras conocidas como la apertura a la inversión extranjera, el desarrollo del turismo, la descentralización del comercio exterior y la despenalización del dólar, permitieron que creciera la economía. Sin embargo, justo a partir de esos crecimientos comienza a endurecerse la legislación y el descenso en el trabajo por cuenta propia. En todos esos años el enfoque de este tipo de trabajo es coyuntural, para solucionar problemas derivados de la crisis, por lo que no se toman acciones legislativas e institucionales para permitir el su desenvolvimiento a largo plazo.

En la segunda década de los 2000 el trabajo por cuenta propia parece llegar para quedarse y derivar en las pequeñas y medianas empresas privadas defendidas tanto en la conceptualización como la constitución. Pero la ausencia de coherencia, estabilidad y transparencia en la política hacia este tipo de trabajo en esos años y especialmente en las últimas normativas jurídicas de 2018, expresan una intencionalidad ajena a concebirlo como emprendimiento dinámico, que pueda ser el germen de las empresas privadas que se desempeñen en vínculo con las empresas estatales.

La historia del trabajo por cuenta propia muestra que nunca se ha concebido como un actor más con todos sus derechos y deberes como cualquier otra empresa y que, por tanto, no tiene un destacado papel en el crecimiento económico del país. Si importante es hoy que el trabajo por cuenta propia haya creado medio millón de puestos de trabajo, aporte al presupuesto y participe del PIB, mucho más importante sería crearle las condiciones para su sano desarrollo, que propiciaría densidad al tejido empresarial y generaría un efecto multiplicador del cual se beneficiaría, ante todo, el pueblo. La sostenibilidad de este tipo de negocio es un reto, sobre todo en países en desarrollo por no existir la institucionalidad necesaria que incentive el desenvolvimiento hacia negocios dinámicos y de crecimiento.

 

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FORO CUBANO: INDICADORES

Posted on September 27, 2020 by Arch Ritter

COMPLETE DOCUMENT: Foro Cubano – Indicadores

Coordinador:  Pavel Vidal Alejandro

 

Foro Cubano – Indicadores

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NO MORE RUM OR TOBACCO, NOR HOTEL STAYS: TRUMP IMPOSES NEW SANCTIONS ON CUBA

Posted on September 24, 2020 by Arch Ritter

BY NORA GÁMEZ TORRES

Nuevo Herald  News Sanctions, SEPTEMBER 23, 2020 05:22 PM

Trump honors Cuban-American veterans who served in 1961 Bay of Pigs invasion - U.S. - Stripes

Trump with Bay of Pigs Veterans

Americans traveling to Cuba will not be able to buy rum or tobacco as souvenirs, nor will they be able to stay in government hotels, according to new restrictions announced by President Donald Trump on Wednesday.

“Today as part of our continuing fight against communist oppression, I am announcing that the Treasury Department will prohibit U.S. travelers from staying at properties owned by the Cuban government,” Trump said in a speech to honor Bay of Pigs veterans at the White House. “We are also further restricting the importation of Cuban alcohol and Cuban tobacco. These actions will ensure U.S. dollars do not fund the Cuban regime.”

The Treasury Department modified the embargo regulations on Cuba to prohibit imports of rum and tobacco, as well as lodging in hotels or properties controlled by the Cuban government, government officials and the Communist Party, or their close relatives.

The properties appear in a new list created by the Department of State. Travel and tourism companies subject to U.S. jurisdiction will not be able to make reservations at these properties.

The list names 433 hotels and properties, including some “casas particulares” (private rentals) that the State Department determined were not independent of the government, said Carrie Filipetti, deputy assistant secretary of state for Western Hemisphere affairs, in a call with reporters on Wednesday.

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Among the private rentals included is Casa Vida Luxury Holidays, a property advertised on Airbnb that, according to media reports, is linked to Vilma Rodríguez, granddaughter of Communist Party head and former president Raúl Castro.

The measures will deal a harsh blow to Cuba’s tourism industry because the government owns all the island’s hotels. Many travel companies have operations in the United States and will therefore be affected by the measure. Previously, the administration had banned accommodation in hotels run by military companies, but now the prohibition extends to all state-run properties.

Thousands of Cuban Americans who travel to the island every year usually take their families on vacation at these hotels.

“The prohibition on the use of hotels owned by the government of Cuba will also result in fewer airline flights from the United States to Cuba,” said John Kavulich, the president of the U.S.-Cuba Trade and Economic Council.

Filipetti said the restrictions aim at denying funds to the government, which dominates the hospitality industry as well as tobacco and rum production. She added that the policy intends to benefit owners of private bed and breakfasts.

“The Cuban government profits from properties in the hospitality industry owned or controlled by the Cuban government … all at the expense of the Cuban people, who continue to face repression at the hands of the regime,” said Secretary of State Mike Pompeo in a statement. “Authorized travelers should instead stay in private accommodations, or casas particulares, owned and operated by legitimately independent entrepreneurs.”

The Treasury Department also eliminated a general authorization policy for the participation or organization of conferences, seminars, exhibitions and sporting events. Citizens, residents and companies subject to U.S. law must apply for a specific authorization or license for these activities.

Organizations in favor of more engagement with Cuba quickly pointed out that further restricting travel to Cuba could also hurt the private sector the administration officials say the U.S. wants to lift up.

“To continue limiting American citizens to travel to Cuba is to continue to put pressure on Cuba’s growing private sector, which is already hurting from the domestic economic crisis, the impact of U.S. policies, and the effects of the COVID-19 pandemic,” said María José Espinosa, interim president of Engage Cuba.

The new rules will go into effect Thursday, when they will be officially published in the Federal Register.

MORE SANCTIONS TO CUBA

Cuban leader Miguel Díaz-Canel blasted on Twitter the U.S. “empire” and the new measures “that violate the rights of Cubans and Americans. Its cruel and criminal policy will be defeated by our people, who will never renounce their sovereignty.”

In the last two years, the administration has intensified its “maximum pressure” campaign against the Cuban government, citing human rights violations and its support of Nicolás Maduro in Venezuela.

In June, the Trump administration included Fincimex, a company controlled by the military conglomerate GAESA, on a list of entities linked to the Cuban military. Persons subject to U.S. jurisdiction are prohibited from direct financial transactions with these entities.

The United States also suspended all charter and commercial flights to Cuba, except for flights to Havana. It also limited per person remittances to $1,000 per quarter. And it has sanctioned companies involved in the shipments of Venezuelan oil to Cuba.

U.S. sanctions, the coronavirus pandemic, and the decline in Venezuela’s oil aid have plunged Cuba’s inefficient socialist economy into a deep crisis. The population suffers from a severe shortage of food, medicine and hygiene products, and although the government has promised some economic reforms, none appear to be immediate.

On Tuesday, Díaz-Canel complained to the United Nations General Assembly about the increase in the “aggressiveness of the U.S. blockade. … Not a week goes by without that government issuing statements against Cuba or imposing new restrictions.”

U.S. officials have rejected the Cuban government’s narrative and have pushed back on criticism that the sanctions may aggravate the situation of ordinary Cubans.

What the Cuban people are “going through, it’s a serious humanitarian concern. The embargo has specific provisions to allow Cuba to import food from the United States; it has exceptions for food and medical supplies,” said Mara Tekach, coordinator for Cuban affairs at the State Department in an interview with the Miami Herald on Wednesday. Citing Cuba’s long-standing inability to feed its population, Tekach added that “the regime is the one that ultimately is failing its people.“

The sanctions and the unrelenting attacks on socialism have secured President Trump the support of a significant portion of Cuban-American voters.

“The Obama-Biden administration made a weak, pathetic, one-sided deal with the Castro dictatorship that betrayed the Cuban people and enriched the communist regime,” Trump said in the White House speech. “Today, we reaffirm our ironclad solidarity with the Cuban people, and our eternal conviction that freedom will prevail over the sinister forces of communism.”

Filipetti denied that the timing of the announcement was linked to the upcoming presidential election, as critics of the administration have suggested.

“This announcement, just weeks before the presidential election, shows what the Trump Administration’s Cuba policy is really about,” said Collin Laverty, president of Cuba Educational Travel. “It’s about South Florida and it places absolutely no importance on the well-being of the Cuban people, democracy, human rights or advancing U.S. national interests in the region.”

Follow Nora Gámez Torres on Twitter: @ngameztorres

 

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