During a meeting of the Council of Ministers, its President Miguel Díaz-Canel Bermúdez began the gathering by emphasizing the motivation felt: “Satisfaction given the results achieved by our people, and thus the Revolution, in the constitutional referendum, with a resounding YES vote, and massive support for the new Constitution.”
Addressed during the meeting were issues of vital interest to the country’s development, such as the efficient use of water; the growth of exports and foreign investment; improvement of the national auditing system; and the performance of the year’s economic plan, as of the end of January.
As has become customary, participating via videoconference were the principal government and Party leaders in all provinces and municipalities.
EFFICIENT WATER USE AND CONSERVATION
The Council of Ministers approved a new fee system for water and sewer services, which will be implemented gradually, beginning in 2020.
According to Antonio Rodríguez Rodríguez, president of the National Water Resources Institute, implementation of the measures will begin with production facilities and service providers, followed by state budgeted entities, and finally domestic users.
“The new system is directed toward correcting normative gaps associated with supply and services to the population, such as the cleaning of septic tanks; water delivered via tank truck; desalinization and unplugging of interior plumbing obstructions.” What is most important, he said, is promoting efficient practices in the consumption of water in the country.
For the non-metered domestic sector, fixed fees for water will continue as established. Current fees for homes with meters are to be maintained for usage up to 4.5 cubic meters per inhabitant, a figure that is higher than the international standard.
In the state budgeted public sector, where excessive consumption is common, current charges are maintained when usage is within the approved limit, but penalties are added if this amount is surpassed.
For the productive sector, fees are the same for individuals and legal persons that offer services or produce goods, and are based on standard limits for usage in different activities. A fee schedule categorizes users in several groups: hotels, commercial and service facilities, and offices; industry and other productive processes; irrigation of landscaping, fields, orchards, and golf courses; as well as boats and ships.
In these sectors, as well, penalties apply when consumption surpasses the established norm, since the current fee schedule has not been rigorous enough to adequately promote conservation, as an indirect mechanism.
“The new system has as its priority the approval of charges for services that are not established now, as well as all those in the productive sector.”
Beginning the second half of the year, preparative fees will be charged as educational measures, to ensure that institutions and the population become aware of the fees they will be charged once this measure is adopted.
The President explained that the objective is to better structure the distribution of water and related charges, to promote conservation of this vital resource. It is important, he said, to design a detailed communications strategy to support understanding of the issue.
He noted the widespread habit of wasting water, with little consciousness of the consequences. The implementation of the new system of measures and fees, he said, must be accompanied by improved service, including a better supply, metering, the elimination of leaks, and availability of plumbing fixtures.
OUTSTANDING ACCOUNTS PAYABLE & RECEIVABLE
Minister of Finances and Prices Meisi Bolaños Weiss reported on the situation of outstanding accounts payable and receivable as of the end of December, 2018, including those that are being litigated or have court orders pending. The number of such overdue accounts is greater than that of the same period in 2017.
The greatest incidence of this problem exists in the retail and food services sector. As fundamental causes, she cited lack of liquidity produced by undisciplined, poor management, and the failure to demand adherence to contracts signed by enterprises.
She emphasized that measures have been adopted these last few years to eliminate chains of overdue accounts, which must be implemented immediately in work systems to address the situation. Representatives from several provincial governments discussed specific entities that have the most overdue accounts in the country.
This is a battle, the Minister said, that we must face systematically and objectively at the grassroots level, where the economic events take place, to concretize action that guarantees a definitive solution, utilizing accounting and financial indicators as tools.
She reaffirmed, as a principle, that the state budget will not finance decapitalization or lack of liquidity in the enterprise sector, produced by inefficiency, poor accounting, and theft.
Díaz-Canel commented that the analysis has shown that solutions to problems that generate overdue accounts will not be solved with allocations from the stage budget or by seeking credit.
As fundamental elements to be considered to reverse this situation, he insisted on attention to internal control and accounting, as well as consistently conducting a daily reconciliation of sales and cash deposited in the bank.
EXPORTS OF GOODS & SERVICES
Minister of Foreign Trade and Investment Rodrigo Malmierca Díaz presented a comprehensive strategy for the export of goods and services, based on the importance to the national economy of increasing revenue this way.
This strategy has been designed as a coherent, realistic planning tool. To prepare it, a diagnosis was made that confirmed problems that affect the current situation of exports, some of which are not competitive, not technologically integrated, and highly concentrated in specific markets.
He identified strengths and opportunities as well, including the country’s human capital; Cuban goods highly appreciated in the international market; and the potential for exporting services.
Included among the strategy’s objectives are: consistently increasing exports on an annual basis; modernizing national industry with innovation and the promotion of productive chains; and developing lines of exports in each province.
In addition, promote sectoral specialization through export poles, industrial and scientific-technological parks, special zones, and high-tech companies; diversify and expand the export portfolio; encourage the articulation of state entities with forms of non-state management; and ensure quality and safety standards.
He noted that several items have been selected to focus efforts and resources in the 2019-2021 period, such as nickel, sugar, tobacco, honey, coal, rum, biopharmaceutical and marine products; as well as medical, tourist, telecommunications, educational, cultural, and sports services.
Consolidating and recovering sales of traditional goods and incorporating new ones is imperative, prioritizing those with greater added value, but without neglecting any opportunity, even the smallest.
The President insisted that all enterprises have the ability to export; they must identify their potential opportunities, and concretize them. “The main concept with which we must implement the export strategy is to remove bureaucracy, obstacles, and whatever is affecting us in terms of thinking: opening our minds and being more proactive.”
FOREIGN INVESTMENT, CREDITS & EXPORTS
Foreign investment in diverse sectors has been identified as fundamental to development. Thus, on this occasion, the Council of Ministers analyzed the tourism sector’s performance, a priority for the national economy, addressing exports and the use of foreign credit.
Malmierca Díaz noted that the sector has made progress in organization and in finding solutions to longstanding problems in joint ventures, and has consolidated hotel management and marketing contracts with prestigious international companies. He stated that there is currently an adequate representation of the sector in the portfolio of investment opportunities, which includes projects in diverse modalities, and a variety of geographical locations.
Regarding the acquisition of external financing in the sector, he noted the impact of the intensification of the economic, commercial, and financial blockade imposed by the United States government.
Referring to the Comprehensive Export Strategy for Goods and Services, he noted that the main lines of work in this sector are defined for the period 2019-2021, in which diversification of tourist products and markets is emphasized, as well as the generation of productive ties with national industry.
Continued work is needed, the Minister said, with the non-state sector linked to tourism, to ensure that it functions as a complement to the activity of state enterprises; to coordinate a strategy with the Ministry of Public Health to promote health tourism in spas; and increase extra-hotel activities with cultural projects.
Tourism Minister Manuel Marrero Cruz said there is much untapped potential to be developed in new options and achieving greater effectiveness in the promotion of our destinations, as well as in reducing expenses, that can help maximize earnings.
IMPROVING THE AUDIT SYSTEM
One year after the implementation of a policy to perfect the National Audit System, the Council of Ministers discussed the main results and challenges of this decision, which has allowed for the reordering, clarification, definition and strengthening of audits, while expanding knowledge and the support of management in their undertaking.
Comptroller General Gladys Bejerano Portela explained that problems with the completion of staff within the National Audit System have been addressed. In order to reverse the situation, the training of auditors in specialization and professional development courses has been encouraged. We are working with the Ministry of Higher Education, she said, to provide short cycle courses in the auditing specialty, as an opportunity to continue improving professionalism.
She emphasized the protective, preventative role played by internal auditors - a position defined within the new policy - who can contribute to optimizing management and efficient administration, noting as well the need to improve working and living conditions for auditors, with the goal of achieving greater stability and the independence required to carry out their mission.
Additionally, the Comptroller presented to the Council of Ministers two cases of corruption, detected within the framework of investigations conducted of a chain of outstanding accounts payable and receivable in the retail sector - one in the Las Tunas municipality of Jesús Menéndez, in the Commerce and Gastronomy Enterprise there, and the other in the Havana Domestic Commerce Basic Enterprise Unit. In both cases, shortfalls were detected in cash deposited from sales of various products.
Evident in both cases were violations of cadre policy, in terms of recruitment, investigation, selection, and training of personnel; as well as the ethical deterioration of executives, specialists, and technicians who were involved in presumed criminal administrative corruption acts, given the lack of elemental measures of accounting and supervision on the part of those in charge of ensuring that procedures are followed.
The presidents of the Assemblies of People’s Power in the two provinces, where these crimes occurred, explained measures adopted with those involved and steps taken.
Díaz-Canel directed that these cases be discussed in leadership councils affiliated with the Ministry of Commerce at the local level, throughout the country’s Commerce and Gastronomy Enterprise system, in the interest of learning from this experience and preventing the occurrence of similar events in the future.
CONCENTRATED HUMAN SETTLEMENTS
Samuel Rodiles Planas, president of the Institute of Physical Planning, presented an update on concentrated human settlements in Cuba during the period 2012-2018. As was explained, these are groups of 15 or more dwellings inhabited permanently, or not, with homes no more than 50 meters apart, with names that identify them and certain boundaries that differentiate them from others. They may have within their limits, or not, service providers, production facilities, or other installations.
This update was prepared, among other purposes, to provide information for government decision making; for the enrichment of provincial and urban land use plans; and to share national statistical information with respect to this subject.
He said that in some places a reduction of the number of settlements has been planned, associated with the conversion of housing in agricultural production areas, and relocations as a result of damage caused by extreme weather events.
Likewise, spontaneous migration has occurred to gain better access to services and economic development. The most negative impact of depopulation in agricultural areas has been noted in the provinces of Villa Clara and Ciego de Ávila.
The President of the Physical Planning Institute recommended using the update on human settlements in each territory for the analysis of uncontrolled growth and its incidence on areas such as employment, the occupation of undeveloped land, and increased demands on transportation and technical infrastructure.
Díaz-Canel emphasized that the document, along with the Provincial and Urban Land Use Plan, must become standard tools in planning and analysis of different social and economic issues.
PEFORMANCE OF CUBAN ECONOMY
As the final point on the agenda, Minister of Economy and Planning Alejandro Gil Fernández presented a report on the performance of the Cuban economy, as of the end of January.
Among other issues, he referred to the arrival in the country of 1,235 vehicles, as part of investments planned in 2018, including 221 Yutong buses and 504 minibuses, 401 of which will serve as route taxis, to further improve services for the population. In addition, 290 modules were received to assemble busses and freight trucks.
Regarding electricity, it was reported that there have been no service impairments due to generating deficits during peak demand hours.
As of the end of January, projections for tourism have been surpassed by 2%, with the arrival of 489,629 visitors. This represents a growth of 9% with respect to the same period last year. An increase has been noted in arrivals from Cuba’s main emissary markets, including Canada and Russia.
The varied crops and tobacco planting season is moving ahead at a good pace, while production of wheat flour has faced tensions, as a result of mechanical and electrical breakdowns at mills.
In this regard, Minister of Food Industry Iris Quiñones Rojas pointed out that flour production in the month of March should increase, and backlogged orders will be filled.
The President noted, on this point, that there has been a shortage of basic products such as bread, eggs, vegetable oil, wheat flour, and chicken, which has affected the population.
He insisted on the importance of closing the productive cycles related to these products, since an effort is being made to ensure that financing and inputs are available on time, yet problems arise with the contracting of transportation or shipments are delayed. We need a more dynamic economy this year, he said, to achieve an impact on the population’s needs for food, housing, transportation and computerization, just to mention some elements that are important in everyday life.
He reiterated that investment projects will be monitored regularly, and month by month analyses conducted as to what has been completed, and to determine if the impact foreseen in feasibility studies is actually produced.
He emphasized the need to meet export projections, those that are in the plan and those that can be added during the course of the year. “Everyone must determine what they can export and, of course, assure its payment.”
On the other hand, he commented on the attention that must be paid to economic sectors, both industrial and food processing, so that the population is not affected.
In accordance with orientations presented by Army General Raúl Castro Ruz, first secretary of the Communist Party of Cuba Central Committee, Díaz-Canel stressed that short-cycle plantings should be increased to have food more immediately available and continue developing other crops to meet municipal self-sufficiency goals and allow for the unregulated sales of root vegetables.