Although the country’s economic recovery, following the devastating blow dealt by COVID-19, will be no easy task, "with the efforts of worthy Cubans and our unwavering decision to resist and emerge victorious, sooner rather than later, we will move forward,“ stated Deputy Prime Minister and Minister of Economy and Planning, Alejandro Gil Fernández, during the National Assembly of People's Power Ninth Legislature’s Seventh Ordinary Period of Sessions.
Presenting a report on the progress of Cuba’s economy through September 30, he pointed out that the pandemic and the tightening of the U.S. blockade have imposed exceptional conditions, to the point that over the last two years, the country’s Gross Domestic Product declined more than 13%.
In terms of income, he specified that in 2020 some 2.4 billion dollars were lost given the two factors, and estimates indicate that 2021 will come to an end with some 700 million dollars less than foreseen in the plan. "In a period of two years, the country has lost more than 3 billion dollars. No matter how much effort is made and how much government management is improved, it is impossible that this is not felt in the daily life of Cubans," he said.
Imports and exports
During the detailed presentation, Gil Fernandez stated that, as of the end of September, income from the export of goods was on the order of 1.344 billion dollars (68.7 % of the annual plan); while, imports reached 5.8 billion, of which 1.348 billion was spent on the acquisition of food, a figure that is not negligible, even though we know that demand was not met.
With respect to exports of goods, items of considerable weight in generating income do not reach the expected levels, including tobacco (91% of the amount projected) and rum (86%).
On the other hand, nickel exports performed well, even though physical production fell short by some 2,500 tons.
Lobster, other minerals, honey and pharmaceuticals are also performing favorably, he added.
Regarding the export of services, he added, "We have reached about 67% of the plan for the year. The fundamental impact is in the tourism sector, in which we projected receiving more than two million international visitors; but the epidemiological situation has prevented us from meeting this goal, and it is already known that the actual figure will be much lower than expected.”
Regarding exports by non-state economic actors– a new option approved last year - the minister specified, "To date, we have 5,312 contracts to conduct foreign trade operations with this sector; of these, 197 are for exports and 5,115 are for imports," adding that interest in these services should increase with the creation of micro, small and medium-sized enterprises and the demand for inputs which will be generated for their productive activities.
In terms of revenue, the Prime Minister reported that 60% of the 2021 plan has been generated, around two billion dollars, with estimates indicating that, by the end of December, 2.618 billion will be reached. This would mean income of some 700 million below the projection, he said.
Agriculture fails to meet production goals
Gil Fernandez described as very complex the national food production situation, caused by a marked deficit in the availability of inputs and fuel, the impossibility of importing spare parts for equipment, and also organizational problems, among other factors.
With respect to the economic plan, he acknowledged that goals in practically all lines of production are not been met. Among these, such important items as rice, 62,000 tons below the plan, corn (-64,000 tons), beans (-22,800), milk (-63.6 million liters), pork (-31.4 tons) and eggs (-54.7 million units). In this regard, he recalled that 63 measures have been approved to boost agricultural activity and achieve a more efficient performance across the sector.
Energy resources
Regarding energy, the Minister stated that national production of crude oil and natural gas are proceeding as planned. However, he clarified that domestically produced crude oil can only be used in the generation of electricity, since it does not meet the parameters for refineries to produce gasoline or diesel.
Gil Fernández also referred to the generation of energy as one of the most complex problems faced in the last few months, the cost of keeping electro-thermal power plants and batteries of generators in operation, at a time when it has been necessary to postpone some maintenance due to lack of financing, with the consequent power outages.
He said that the need to operate of motor-generator sets, due to breakdowns at thermoelectric plants, has increased expenses for diesel fuel and the cost of generation.
"The fuel deficit that we have in the productive arena, in sectors such as agriculture and transportation, is due to the fact that we have been obliged to allocate a significant amount to the generation of electricity," he explained.
Retail market faces a deficit in supply
The Minister reported that commercial circulation of goods and services stands at 67% of the amount projected, reflecting a deficit of supply in the first nine months of the year, estimated at 16.5 billion pesos.
Income from sales by stores operating in freely convertible currency (MLC), he pointed out, has made available more than 300 million dollars to purchase stock for retail outlets in national currency, and the figure has not been higher because the blockade does not allow converting part of the cash collected into usable funds. "We are convinced that if we had not introduced the stores in MLC, the scenario would be much more difficult," he insisted.
The production of medicines has also suffered from the country’s revenue shortfall, he acknowledged, and reassured deputies that progress is now being made toward a gradual recovery.
The state enterprise is the nation’s principal economic actor
Despite the fact that the state enterprise system is considered the economy’s central actor, it must move faster in demonstrating this, the Minister alerted the Assembly, pointing out that, at the end of September, some 1,368 state enterprises were showing earnings and 541 losses.
"There are resource problems, material limitations, but we must get to the bottom of subjective issues, which are not negligible. State enterprises must take advantage of measures adopted to increase their autonomy".
Gil Fernandez reported that employment has increased. "Nearly 200,000 persons have turned to municipal labor and social security directorates and have found positions," adding that this increase must be translated into greater production of goods. The result of all these measures, he insisted, must be an increase in market supply for the population.
He specified that over the last few months, measures have been adopted to compensate for inflation, to provide attention to vulnerable persons, to ensure that they can cover the cost of the basic family basket of goods. Today, some 400,000 Cubans are benefiting from these measures.
The economy under debate
During discussion of the Minister’s report, Esteban Laze Hernandez, president of the National Assembly of People's Power, commented that none of the Revolution’s achievements in the social sphere are sustainable if we cannot develop a strong, invulnerable economy.
Ydael Pérez Brito, Minister of Agriculture, noted that even though the sector faces a severe shortage of much-needed inputs, the 63 measures approved to boost food production have opened the doors for more efficient management.
Manuel Sobrino Martínez, Minister of Food Industry, commented that this sector has the capacity to transform the situation of more than 30 companies that closed the month of September with losses, and ensure that they are not a burden on the economy, adding, "Our entities must make a greater effort to develop local food production and have an impact on municipal self-sufficiency."
Likewise, Minister of Energy and Mines Liván Arronte Cruz explained that a strategy is being implemented to gradually improve the situation of the National Electrical System, and recover 609 MW in generating units, during the remainder of the year, stating "We have a long term strategy, to increase generation with renewable energy sources, and rely less on fossil fuels."
Juan Carlos García, Minister of Tourism, noted that control of the pandemic and progress in vaccination of the population put the country in a good position to generate a gradual increase in international tourist activity.
Minister of Foreign Trade and Investment Rodrigo Malmierca Díaz explained that a new portfolio of opportunities for investors containing projects in all provinces will be presented in November. He reported that despite the tightening of the blockade, pre-existing foreign investments in Cuba has been maintained, and new international investors continue to express interest in our country.
