2023 ends with a profound transformation in the Cuban reality, resulting from years of processes that have been modifying the country’s reality.
However, according to the government, the pandemic, the tightening of the lockdown and its own mistakes have meant that economic updates have not met the growth targets set. In this context, the government intends to implement a new “economic rectification”.
According to official estimates, the Cuban economy will end 2023 with a recession of between 1% and 2%. The scenario is marked by the rapid growth of inequality on the island and the acceleration of inflation, which the government estimates will exceed 30% this year.
Over the past four years, Cuba has been going through a deep economic crisis. In 2020, during the covid-19 pandemic, the island suffered a 10.9% drop in GDP. Since then, the Cuban economy has been unable to overcome the critical situation. In 2021 and 2022, although there was slight growth of 1.3% and 1.8%, respectively, these modest recoveries were far from offsetting the loss.
In this context, the Cuban government announced that, in 2024, it will implement a “stabilization program” for the Cuban economy. The announcement was made during the second ordinary session of the National Assembly and was presented by Cuban Prime Minister Manuel Marrero.
The stabilization program seeks to reallocate the resources that the State spends on universal subsidies. Moving from a model that subsidizes products to a model that economically subsidizes specific social sectors. In addition, a devaluation of the exchange rate and increases in energy and fuel prices were announced.
Economic transformations
The stabilization program aims to correct reforms implemented on the island under the name of “ordering tasks” – a planning of monetary and exchange rate reforms – which did not achieve their objectives. Many of these reforms have been discussed for more than a decade, but their implementation was delayed until the start of the pandemic.
“These transformations occurred in a very complex process that coincided with Covid-19 and the tightening of the blockade” says Joel Marill, representative of the Cuban Ministry of Economy at the Brazil in fact. “And its objectives were not fully achieved”, he continues.
“There has been a rethinking of how to continue advancing in this reorganization of the economy, especially exchange rate, fiscal and monetary issues. From a point of view that allows us to generate an environment of growth and economic recovery” he adds.
In 2021, Cuba approved a set of new regulations that expanded the presence of the private sector. From that moment on, the creation of small and medium-sized private companies became possible.
According to the Ministry of Economy and Planning, at the end of 2023, 9,810 small and medium-sized companies (MIPYMES) were authorized to operate in the country. Among them, around 3,600 MIPYMES were created this year. It is estimated that 15% of workers are employed in these companies.
MIPYMES are part of a set of non-state economic forms, such as cooperatives or self-employment, that are spreading in the country. Considering that, in the Cuban socialist system, the state sector – which has different organizational forms – is the only one that can control what the country considers strategic sectors, such as banks, the country’s infrastructure, health, education and defense.
US blockade
“It is necessary to understand that the Cuban economy, although it faces challenges and problems conceptually similar to those of other Latin American economies, is developing in a much more complex context. Above all, due to the impact of the US blockade and its financial siege on the economy” assures Joel Marill.
“This has an impact on almost every aspect of the economy. It weakens the ability to generate wealth and redistribute it in a socially fair way. Of course, this ends up having an impact on the inequality and vulnerability of the Cuban population. The blockade is not Cuba’s only economic problem, but it undoubtedly affects all of the country’s other problems,” he says.
On November 2 of this year, the UN General Assembly approved, by an overwhelming majority, a resolution demanding an end to the economic and commercial blockade that the United States has imposed on Cuba for more than six decades.
The resolution was approved with the positive vote of 187 countries, one abstention (Ukraine) and only two negative votes, those of the United States and Israel – which vote against the resolution every year.
Foreign Minister Bruno Rodríguez, before the vote, defended Cuba’s position, arguing that the blockade “violates the right to life, health, education and well-being of all Cubans”, and described it as “an act of economic warfare in times of peace, which aims to nullify the government’s ability to meet the needs of the population, create a situation of ungovernability and destroy the constitutional order.”
The document approved by the UN General Assembly states that, from March 2022 to February 2023, “the blockade caused damage to Cuba estimated at US$4.867 billion (almost R$25 billion)”, equivalent to losses of US$13 million per day.
The US blockade against Cuba was first discussed at the UN General Assembly in 1992. Every year since then, the UN’s highest deliberative body has demanded that the United States lift the unilateral blockade against Cuba, but the country has not complied. the resolution.
Continuity of Trump’s policy
2023 marks the end of Democrat Joe Biden’s third year in office as President of the United States without any changes to the lockdown. During his presidential campaign, he promised to reverse what he called Trump’s “failed policies that have harmed Cubans and their families.” However, to date, Biden maintains the measures against Cuba that Trump imposed amid the Covid-19 pandemic crisis.
One of the main measures adopted by Trump was the inclusion of Cuba in the list of “countries that sponsor terrorism” drawn up by the State Department. Trump’s decision came just nine days after leaving the White House.
This decision was ratified by the current Biden administration on November 30, when he maintained the inclusion of Cuba on the list.
According to the UN General Assembly itself, “due to its classification as a state that allegedly sponsors terrorism, several companies and financial entities around the world have refused to operate with Cuba for fear of reprisals from the US government.”
It also states that “dozens of banks have suspended their operations with the country, including transfers for the purchase of food, medicine, fuel and materials” and that “more than 50 Cuban diplomatic missions have faced difficulties with the banking institutions that traditionally provided them with services, a situation which affected the functioning and sustenance of embassies and their consulates”.
G77 + China
Despite the US blockade, Cuba managed to maintain enormous diplomatic capacity with the rest of the world and important political support.
In mid-September, the summit of heads of state and government of the Group of 77 (G77) and China, the largest intergovernmental organization of countries in the Global South within the United Nations (UN), took place in Havana.
The event was a major diplomatic victory for Cuba. Official delegations from 116 countries, together with 12 organizations from the UN system, traveled to the Cuban capital to coordinate joint actions on the problems of the Global South.
Despite Washington keeping Cuba on its list of “countries that promote terrorism”, the warning about the supposed “danger” that Cuba would represent did not dissuade more than 60% of countries belonging to the international community from deciding to travel to the island and participate in the event. Nor did it stop leaders from around the world from demonstrating on the island itself against the blockade.
Editing: Rodrigo Durão Coelho
Source: www.brasildefato.com.br
