Cuban President Miguel Díaz-Canel Bermúdez led a meeting of the Council of Ministers October 30, addressing issues related to economic and social affairs of the nation, including foreign investment, taxes, the state of accounts payable and receivable, progress of the Economic Plan, the Mariel Special Development Zone, Housing Policy, the Urban Management Plan for the cities of Havana, Guantánamo, and Baracoa, the 13th National Internal Control Audit, and the creation of an institution destined to perpetuate the memory of the historic leader of the Cuban Revolution, Fidel Castro Ruz.
As usual, Party and government authorities of different provinces and municipalities participated in the debates via videoconference.
FOREIGN INVESTMENT IN CONSTRUCTION
The contribution of foreign investment to construction, one of the sectors with the greatest impact on economic and social development, was described as strategic and offering great potential.
Minister of Foreign Trade and Investment, Rodrigo Malmierca Díaz, noted that though already present in the sector, foreign investment must play a more active role in order to substitute imports, increase the country’s constructive capacity, and export quality products and services.
Today, five businesses sponsored by the Ministry of Construction are in operation: two international economic association contracts, and three joint ventures. In addition, the latest Portfolio of Foreign Investment Opportunities includes 14 projects, four of them in the Mariel Special Development Zone.
Malmierca pointed out that shortcomings in the preparation of directives and technical-economic studies; the still insufficient capacity of specialist Cuban consultants to assume all the projects in the preparation phase; the repeated changes in investors in the conception of projects; and delays in the submission of legal documentation, are among the main obstacles to advancing in this area.
The Minister also referred to the negative effects of the country’s dual currency system, which distorts economic results. In addition, there are problems with supplies, both domestic and imported, and impediments to establishing productive chains.
As decisions already taken to address the difficulties, he mentioned the priority attention afforded projects that contribute to the substitution of imports, and make possible the increase of exports; as well as improving the training of managers and specialists of negotiating teams.
In this regard, Díaz-Canel explained the habitual checks he conducts on the development of foreign investment in the country, and the decision to regularly evaluate its impact on different sectors of the Cuban economy, as part of the Council of Ministers agenda, on this occasion focused on the construction sector.
The President reiterated the importance of foreign investment, particularly in the infrastructure the island requires for its development. He commented on problems that still persist with feasibility studies, and with investments that do not meet the expected returns in the planned timeframe.
It is necessary to plan from the beginning, he stressed, so that these investments are linked to the national industry, in order that they also facilitate the development of other branches of the economy.
ACCOUNTS PAYABLE AND RECEIVABLE
The state of outstanding accounts payable and receivable was also analyzed by members of the Council of Ministers, who stressed the urgent need to address manifestations of a lack of control that lead to the diversion of resources, as well as the failure to demand payments that has led to rising debts between enterprises.
In order to delve into the causes and liabilities, the situation of several chains of defaults that concentrate the largest amounts of debts between enterprises in various sectors was reported, a detailed analysis of which will be included in each meeting of this leading government body.
Deputy Minister of Finance and Prices, Meisi Bolaños Weiss, listed as the main causes of these non-payments: shortcomings in the records, control and reconciliation of accounts; indiscipline in the depositing and destination of cash for sales of goods and services in the retail and gastronomy sectors; the poor management of inventories; and the lack of demand in fulfilling economic contracts that do not always play the role established by the country’s norms.
As a result, a set of measures was unveiled to reverse the situation, which includes the presentation of a proposal to transform the financial status of retail commerce and gastronomy enterprises; as well as the undertaking of regular analyses of the debt chains in all business entities.
The Cuban President emphasized that things that are done badly must be addressed, with greater rigor demanded. Today, measures are taken and solutions sought that damage the State Budget and do not solve the decapitalization of companies with a lack of liquidity. We must solve the structural, organizational, and control problems, otherwise resources are wasted, he stressed.
We must delve into problems, he added, establish accountability on each Management and Administration board, in addition to advancing, among other issues, in extending access to the formal banking system, to reduce the use of cash.
TAXES: EVERYBODY’S BUSINESS
Since self-employed forms of work were expanded and made more flexible in 2011, the number of taxpayers in this sector has risen from 150,000 to 590,000, contributing to the tax system managed and controlled by the National Tax Administration Office (ONAT).
In the last five years, state income has grown between 1 and 8%. The income resulting from the application of taxes, fees, and contributions constitutes 74% of the total, which validates the tax system as the main source of income and redistribution of wealth. Income from the state sector is just over 85%.
However, Bolaños explained, indiscipline and tax evasion persist due to underreporting of income and irregularities in the justification of expenses in non-state management models, as well as the illegal undertaking of activities.
“There is no perception that the collection of taxes is a responsibility and also a duty to society, which involves citizens and institutions,” she stressed.
In legal entities, she reported, 98% of payments are made, while in the case of individuals it is 85%.
To counter tax evasion, the Council of Ministers approved several measures aimed, among other aspects, to increase the withdrawal of licenses and closure of establishments; apply fines more rigorously, with maximum importance placed on evasion and illegal activities; make cases of tax evasion and the corresponding sentences public; conduct systematic operations to identify illegal self-employment; and increase fiscal control measures to combat the underreporting of the values of sales and purchases of cars and homes.
At this point, Díaz-Canel noted that the approach encompasses a re-ordering in all areas, not only that of non-state management, and is part of the same struggle in terms of control and compliance with the law to ensure an organized society.
PROGRESS IN THE ECONOMIC PLAN
Minister of Economy and Planning, Alejandro Gil Fernández, presented a report on the estimated fulfillment of the 2018 Economic Plan, which maintains the projection that the growth rate will be slightly higher than 1%.
He explained that planned income levels in activities such as tourism, sugarcane harvesting, and mining were not met.
He reiterated that the drafting of the Plan for 2019 has as its premise the reduction of imports of products that can be obtained in the country, for which it is necessary to use all internal reserves.
“We need to adjust expenses to the revenue that we have available, and work to increase exports and ensure that adequate return on investments is achieved, the only way to develop through our own efforts,” he concluded.
HOUSING POLICY IN CUBA
Cuba’s Housing Policy was presented as part of the Council of Ministers meeting, based on the current situation of the country’s housing stock and aimed at shaping the strategy to stop further deterioration in the first place, and in the second, ensure total recovery and solutions.
Minister of Construction, René Mesa Villafaña, explained that recovery of the housing deficit is estimated to be achieved in ten years, with the first five years prioritizing housing exposed to climatic effects and in precarious conditions.
The policy envisages the largest number of actors possible participating in construction works, including families in need of housing, organized to resolve their situation through their own efforts with the support of state subsidies; professional state construction organizations; the agricultural and non-agricultural cooperative movement; work centers, with real possibilities of participation; and the country’s state enterprise system.
The Minister explained that the priority cases for housing and construction materials will be based on social and labor merit, taking into account first the victims of extreme weather events, and subsidies for the construction of basic housing for family units willing to undertake the work themselves.
Priority will be given to people living in precarious conditions and in coastal settlements, as well as those with more serious housing needs, regardless of the causes, starting with solving social cases, and those of families who have spent the longest periods living in shelters.
He added that different technologies and materials will be used for the construction of homes, such as the Gran Panel, Sandino, and Forsa systems, and other more traditional forms of construction using concrete blocks, bricks, masonry, and different types of wood, including palm tree timber.
The Policy establishes that the value of the homes will not be subsidized by the state, and that beneficiaries must assume the payment, which can be made in as many monthly installments as necessary, based on the per capita income of the family unit.
The General Urban Management Plans for the cities of Havana, Guantánamo, and Baracoa were also presented at the meeting by the President of the Physical Planning Institute, Samuel Rodiles Planas, who argued that these “have a time horizon through 2030, identify the problems and potentialities of the territory, propose urban planning models and their determining factors, formulate action programs and define urban regulations.”
The aim is to direct the development of cities that are more organized, environmentally friendly, sustainable, cleaner, and with better road infrastructure.
Díaz-Canel called for everything that is planned to be undertaken in accordance with these Urban Plans, and those that will be approved in the future.
MARIEL SPECIAL DEVELOPMENT ZONE
The Council of Ministers gave the green light to the Mariel Special Development Zone business and development program, which has among its strategic premises the creation of a business environment that offers all kinds of competitive services in terms of quality and prices.
This was presented by Ana Teresa Igarza Martínez, director of the Mariel Special Development Zone Office, who added that the Zone will attract “investment projects linked to information and communications technology, with the aim of increasing the portfolio of these services in quantity, quality, and at competitive prices.”
It will also favor the insertion of a qualified workforce, including young talent; the development of projects linked to the construction materials and systems industries, in any of the investment modalities; as well as those aimed at electricity generation from renewable energy sources.
Igarza noted that the Office also follows the State Plan to address climate change. Hence, the activities of concessionaires and users must be environmentally friendly.
Finally, she clarified that “all economic actors with their own legal capacity can participate in investment projects, under any modality provided by law.”
NATIONAL INTERNAL CONTROL AUDIT
The Comptroller General of the Republic of Cuba, Gladys Bejerano Portela, announced aspects of the 13th National Internal Control Audit, running November 1 through December 12.
The goal, she said, is to evaluate compliance with Cuban enterprise system regulations, as well as the control and use of inventories. Likewise, contracting will be investigated, as well as outstanding accounts receivable and payable, the use of fuel, and payments to self-employed workers.
Inspections, audits, and special checks will be made in 370 business groups, companies, basic enterprise units, hotel complexes and establishments.
The Audit envisages the participation of 2,442 auditors, including 230 supervisors, as well as more than 1,141 university students of different specialties, professors, and institutional experts.
The Comptroller explained that the auditing and verification programs that will be applied are available to all, because “our interest is to promote self-control and training.”
NEW INSTITUTION DEDICATED TO FIDEL
A historic building in the Havana neighborhood of El Vedado is being prepared to house a new institution with the mission of studying and spreading the thought, work, and example of Comandante en Jefe Fidel Castro Ruz.
The good news was presented by Alberto Alvariño Atiénzar, head of the Office for the Preservation of Documentary Heritage - Palace of the Revolution, who recalled that “The National Assembly of People’s Power approved Law No. 123 on the use of the name and figure of Comandante en Jefe Fidel Castro Ruz, where the use of his name is authorized as an exception to designate an institution constituted for the study and dissemination of his thought and work.”
To that end, a working group was set up - approved by Presidential Decree in February of this year - in charge of preparing the proposal and bringing the new institution into action.
Alvariño Atiénzar explained that it will be a public political institution, equipped with the latest technology, that stimulates interactive information and, given its purposes, will focus on children, adolescents, and young people, without excluding the rest of the public.
Among its main functions will be the promotion and development of outreach work, meetings, and competitions; the development of academic events, teaching, research projects, as well as the edition and production of books and other publications; working relationships with other national and international institutions linked to the figure of the Comandante en Jefe; and contributing to the confrontation of enemy campaigns aimed at distorting the life, work and figure of the historic leader of the Cuban Revolution.
At present, efforts are underway to get the institution ready by the end of next year.
The President of the Councils of State and Ministers highlighted the sense of ownership and dedication of all those involved in this beautiful project, which has made it possible to overcome any obstacle and advance in its establishment.
In offering conclusions on the meeting, Díaz-Canel referred to issues that have been subject to governmental analysis in recent months, including visits to provinces and the importance of solving the problems detected there; active participation in the commissions and debates of the National Assembly of People’s Power; the priority that foreign investment, exports, and import substitution must be afforded; the linking of the tourism sector with other sectors of the economy through productive chains; computerization and social communication processes; and the attention of agencies and entities to non-state management forms, as a complement to our economy.