Economy

Cuban government declares “war economy”, deepening austerity measures


On June 30, the Cuban government announced that its economic plan and budget for 2024 will be adjusted to conditions of a “war economy [economía de guerra].” The announcement of an economic war footing and the deepening austerity measures are a response to the profound economic, social and political crisis gripping the island, the result of decades of embargo and sanctions by US imperialism and the inability of the Cuban state to effectively counter them. 

Cuban Government Cabinet meeting on Economic Projections, March 5, 2024. [Photo: Presidencia de Cuba]

Speaking at the meeting of the Council of Ministers in which these measures were announced, First Deputy Minister of Economy Mildrey Granadillo de la Torre, said they are intended “in essence, to correct macroeconomic imbalances; increase the attraction of foreign currency to the country through different means and concepts; incentivize national production, with emphasis on food production; and organize the functioning of non-state forms of management.”

No different from other capitalist states in the region, the bourgeois nationalist regime in Cuba finds no other solution than cheapening labor and embracing the diktats of global finance capital to attract investments, relying today primarily on Spanish, French, Chinese, Canadian and Russian capital.

According to a report on the meeting in Granma, the official newspaper of the ruling Cuban Communist Party, the government plans to reduce “budget items with the objective of reducing the fiscal deficit in 2024.” Such decisions are to be “centralized,” that is, made at the highest levels. Though the newspaper gives no solid figures, the depth of the cuts is indicated by the statement that the government intends to “postpone or even paralyze investments that are not essential at this stage.”

Granadillo said, “a single, inclusive pricing policy will be established on equal terms for all subjects of the economy, which includes both the state and non-state sectors.” Although the precise meaning of this has not been officially clarified, reports suggest price caps will be imposed on chicken, powdered milk, pasta, sausage, soybean oil and detergent, based upon import costs. 

Recognizing that the widespread legalization of privately owned businesses has created opportunities for siphoning off state resources, the government has instituted a measure “to limit the profit in purchases of products and payments for services and inputs carried out by the state sector to the non-state sector.” This policy, which already took effect as of July 1, limits profits to between 15 and 30 percent, with the higher figure reserved for “high technology and innovation companies,” according to the Cuban News Agency



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Financial World News @2024. All Rights Reserved.