Cuba’s Gross Domestic Product (GDP) grew 4%, despite the impact of the U.S. blockade and financial restrictions, reported the Minister of the Economy, Marino Murillo Jorge, during the Council of Ministers meeting, traditionally held at this time of year, in which the performance of the economy throughout 2015 was reviewed.
This result was possible, he said, given the possibility of obtaining cash advances, contracts to secure credit as well as a decline in the price of imports.
He also explained that the contribution of material production to the country’s GDP has increased from 59.3% to 61.1% percent this year.
”All production sectors have grown in comparison to last year, although the agriculture, sugar, construction, transport, warehousing and communications industries failed to meet their plans.”
It was reported that agriculture, livestock and forestry grew by 3.1%, but failed to make their plan by 2%, mainly due to inadequate vegetable, tobacco, milk and rice production.
The sugar industry increased by 16.9%, but failed to meet its planned growth by 5.3%, given low yields and under exploitation of industrial capacities, due to, among other issues, organizational shortcomings.
11.9% growth was reported in construction; however the sector failed to meet its plan by 8%, due in large part to inadequate technical preparation of investment projects.
Also approved during the meeting was next year’s Economic Plan, which includes fully exploiting the domestic reserves of the economy; channeling resources toward activities which guarantee exports and the substitution of imports; prioritizing continual investments as well as increasing those in infrastructure and other strategic sectors, such as the productive sector, which generates foreign income.
For 2016, basic social services will continue to be guaranteed (education, health) at similar levels to those of recent years; priority will be given to the sustainable production of electricity throughout the country and work will be undertaken to improve the efficient use of energy sources.
The plan will be presented in the next period of ordinary sessions of the National Assembly of People’s Power, on December 29.
STATE BUDGET
Minister of Finance and Prices, Lina Pedraza Rodríguez, reported on the performance of the State Budget over the year, with an estimated deficit of 5.7% of GDP, lower than the 6.2% planned in the 2015 Budget Law.
According to the official, income and expenses behaved in accordance with the levels of activity demanded by the economy, but not without putting a certain amount of strain on the state budget.
An increase was seen in tax revenue from the majority of businesses and the self employed, although non-payment of taxes persists.
She noted that in 2015 changes to taxes related to wholesale marketing, financing of the basic family shopping basket and the elimination of subsidies for agricultural supplies were made, with adjustments to purchase prices.
The members of the Council of Ministers likewise reviewed the 2016 Draft State Budget, which will also be approved during the upcoming parliamentary session.
SALARY PAYMENT SYSTEMS
A review of the implementation of new salary payment methods in the enterprise sector was presented by Minister of Labor and Social Security, Margarita González Fernández. After more than a year and a half since its implementation, Resolution No.17 has contributed to an increase in workers’ wages, in accordance with greater efficiency, a more productive work day and a reduction in costs and expenses.
She noted that productivity had increased by 30% by the end of June 2015, as compared to what had been planned. Meanwhile, the average monthly salary rose to 696 pesos, representing an increase of 12% above forecasts.
Furthermore, the amount of unprofitable entities fell from 245 at the end of 2014 to 64 by the first half of the year, while the number of entities paying wages without productive support continues to decline, dropping from 238 in 2014 to 99 by June 2015.
She noted that given information received regarding concerns over the application of the payment system, especially by tourism sector workers, an analysis was undertaken with the participation of different bodies, Central Enterprise Management Organizations (OSDE) and the management councils of the implicated entities.
This latest review of the issue demonstrated that problems are above all linked to the failure to meet targets, deficiencies when drawing up plans, errors in the planning of the wage fund, delays in the arrival of raw materials, breakages to equipment, and failure to apply established norms related to work interruptions.
Regarding this issue, Army General Raúl Castro emphasized the need to precisely measure the impact that strategic measures can have, such as in the case of workers’ salaries, noting that the full range of issues must be considered, given that what is approved will be implemented throughout the entire country, with different situations in each region.
Initiatives can not just come from the top down. We must be on the ground, learning about problems first hand, hearing opinions, rather than waiting for the problems to spring up on us, he added.
The President also reiterated the importance of adequately training those involved in any measure that is taken, for which the necessary time must be dedicated.
The Council of Ministers agreed to maintain the salary cost per peso of gross value added limits, in order to link wages to results.
Modifications to protection for all workers’ up to the very top of the pay scale when targets fail to be met were among other changes approved.
The time payment system will be applied to entities which are authorized to operate at a loss, expect for workers on a piecework system.
Meanwhile, deductions to workers’ salaries - up to the very top of the pay scale - will be applied to entities forecast to make a profit but which make a loss.
THE IMPACT OF DROUGHT
Regarding the impact of the drought, a phenomenon which since 1960 has become increasingly frequent and prolonged, the Council of Ministers adopted measures to mitigate its consequences on the economy, society and environment.
According to the President of the National Institute of Hydraulic Resources (INRH), Inés María Chapman Waugh, “unlike other periods, the current one is markedly affecting water storage facilities which supply the population and the agriculture sector across the entire country.”
At the end of the first half of December, figures show low levels of rainfall being reported over 47% of the country, with Artemisa, Mayabeque and La Habana constituting the provinces most severely affected. Thus far, 137 municipalities have been declared to be suffering from the drought, 37 moderately, 50 severely and 50 in the extreme.
Reservoirs currently have a total of 4,810 million cubic meters of water, representing 53% of their total capacity.
The minister highlighted inefficiency in water distribution, with annual loses estimated at 3,400 cubic meters, 55% through agriculture, 29% in aqueducts (including losses in homes) and 15% via main canals.
Announced among short-term measures to tackle this problem were: updating exploitable and available hydraulic resources, in accordance with the effects of climate change; planning financing for the artificial rain campaign beginning in April 2016; installing irrigation systems with an 85% efficiency rating, initially in basins in an unfavorable or critical state; and reorganizing portable water distribution services through cistern vehicles of adequate sanitary quality.
The actions approved include continuing to reduce losses of water pumped through aqueducts, through reparations to pipelines and distribution networks, as well as plumbing systems in homes and state entities.
In addition, hydrometric coverage (water measuring systems) will gradually be increased as well as the use of a tariff for the state sector and residential areas with meter systems, as tools to regulate the efficient use of resources.
Chapman Waugh noted that the construction of pipelines will continue: investments into water treatment plants will be carried out; the desalination of sea water will be undertaken through renewable energy; and deep underground water sources will be exploited, through studies conducted in Sierra de Cubitas, in the province of Camagüey; Los Arroyos, in Holguín; Valle del Cauto and Maisí, in Guantánamo.
An increase in construction capacities for investment works associated with the building of new pipelines, dams, hydraulic networks and irrigation systems is scheduled for the long-term (2017–2020).
The President of the INRH noted that 29 currently underused reservoirs and another 11 with technical problems will be ready by this period.
These actions, she concluded, form part of a national hydraulic plan for the next five years.
