OFFICIAL VOICE OF THE COMMUNIST PARTY OF CUBA CENTRAL COMMITTEE
Economic Minister, Alejandro Gil Fernández, presented the report on the 2018 Plan and budget implementation to members of the Economic Affairs Standing Committee. Photo: Jose M. Correa

GDP growth in 2018 is fundamentally related to the dynamics of sectors such as transport and communications, manufacturing industry, commerce, as well as public health, culture and sports, according to information offered to members of the Economic Affairs Standing Committee, who also learned of this year’s budget execution estimates, and the projections for 2019.

According to Minister of Economy, Alejandro Gil Fernández, this year there were decreases in the sugar industry, agriculture, construction, together with mining and quarry extraction activities. Consequently, non-fulfillment of sugar exports was reported, and planned import levels were not reached either, which undoubtedly affects activity levels.

Fernández also referred to the high level of indebtedness with which the economy operated, due to the non-payment of restructured debts, a matter that will also have an impact in 2019, since such financial strains can not be resolved in the short term.

Regarding the investment plan, he informed that it will remain around 85%, a figure influenced, for example, by the incompletion of works linked to renewable energy sources. Plans were for 4.5% of power generation to be obtained through these sources by the end of the year, but the figure has barely reached 3.5%.

Agreed freight transportation goals were also unmet, while passenger transportation has surpassed what was planned, although this is still far from meeting the demand.

Retail trade maintains levels similar to those foreseen; however, these also fall short of those required, since shortages of basic products have occurred at various times of the year.

As for tourism, Fernández noted that a total of 4,750,000 visitors to the island is estimated, below the planned 5,100,000.

Despite the strains described, the measures implemented in the second half of the year yielded some positive results, the Economic Minister acknowledged, which were directed toward ensuring greater rationality in terms of imports and hard currency spending, reducing fuel consumption, and the use of all stocks to guarantee the main activity levels.

The favorable outcome became evident, he emphasized, in the execution of prioritized programs such as those relating to railways, Santiago’s multipurpose terminal, together with the expansion of telephone lines and Internet access.

Likewise, items such as cigars, lobster, shrimp and rum saw positive export results, while production plans for rice, beans and pork were met.

The Minister also noted what has been achieved in the recovery of food warehouses, in water supply networks, and state housing construction, without overlooking the works of the Tarea Vida environmental program and the Mariel Special Development Zone.

Although it is still not possible to cover the demand, the national packaging and containers industry, the production of roof tiles, lighting, kitchenware and assorted toiletries, all demonstrated favorable results.

Although modest, the Minister stressed, these results have been achieved despite the intensification of the U.S. blockade, which has resulted in losses of 4.321 billion dollars over the past year.

THE COST OF A SOCIAL BUDGET

The financial strains affecting the fulfillment of the 2018 economic Plan and projections for the next year also invariably accompanied this year’s budget execution, and influenced the drafting of the State Budget for 2019, as Minister of Finance and Prices, Lina Pedraza Rodríguez, noted.

However, despite the budgetary challenges, financial demands were met to sustain basic services for the population, the productive sphere, the implementation and continuity of social policies, as well as the recovery efforts following Hurricane Irma and other events.

ESTIMATED 2018 BUDGET

  • Gross income of 57.722 billion pesos, related to the increase in state gastronomy services, Cuban medical services provided abroad, and the contributions of non-state management forms.

• Total spending of 66.421 billion pesos, influenced by defaults in investments.

• Fiscal deficit of approximately 9 billion pesos.

Regarding the State Budget for 2019, Lina Pedraza reiterated its social vocation focused, as always and despite all financial strains, on the maintenance of basic services for the population, social policies, defense, domestic order, as well as the comprehensive development programs of provinces and municipalities
DRAFT STATE BUDGET FOR 2019
• Gross income of 60.020 billion pesos: The state sector participates in 85% of this income. Tax revenues represent 74%. Enterprise profit contributions represent 21%.

• Spending of 65.957 billion pesos.

• Spending of 38.711 billion pesos for budgeted activity. Education and health represent 51% of this.

• Territorial contributions of 1.358 billion pesos for local development.

SOCIAL SECURITY BUDGET:

  • Gross income of 5.437 billion pesos.
    Spending of 6,670 billion pesos.
  • A total of 1,661,000 pensioners.

SOME TAX MEASURES FOR 2019

— Extend idle-land tax to the provinces of Artemisa, Mayabeque and Matanzas.

—Implement the collection of personal income tax from athletes hired abroad, and seafarers working on foreign vessels, in accordance with the approved policies.

— Gradually implement the financing of current non-budgeted activity expenses from municipal budgets.

— A contribution to the State Budget from enterprises with income exceeding plans by more than 20% will be regulated.

In general, Lina Pedraza stated, it is possible to improve the budget result based on planning. It is essential to maintain rigorous and efficient compliance with the projected figures, mobilize reserves that generate the greatest contributions, ensure greater rationality in the use and destination of budgetary spending, and involve workers in the control of these processes.

ACCOUNTS THAT CAN NOT BE IGNORED

Deputy for Boyeros, Víctor Manuel Gutiérrez, questioned as to how much longer the issue of the mismanagement of inventories is going to be a talking point. He urged the adoption of measures to transform this reality. He added that a deeper analysis of the quality of state-built housing is also required.

Jesús Martín Casanova, deputy for Sancti Espíritus, also referred to inventories. He stressed it was time to review purchase management and the quality of inventories, as in some cases, although abundant, the deterioration of stocks means they fail to respond to expected activity levels.

He also noted that talk of improved accounting is scarce, an issue for many entities. The reliability of accounting systems impacts all figures under discussion.

Ana Teresa Igarza, deputy for Bauta, drew attention to the importance of productive chains, noting that in order to achieve these, enterprises must be competitive. While national entities are sometimes linked, chains are not established with foreign investment, an important market niche that we do not take advantage of. A demanding market of course requires good planning, but can also contribute very necessary hard currency to the country, she noted.

The role of unions in explaining to workers the reasons for financial strains and involving them in meeting plans was addressed by Ulises Guilarte de Nacimiento, member of the Party Political Bureau and deputy for Guanabacoa.

Bringing to successful completion all that is projected is our main task, according to Esteban Lazo Hernández, president of the National Assembly of People’s Power, and it is our responsibility to ensure control and oversight.