Cuba advances in the updating of its economic model

December 26, 2014

Deputies approve important measures for the development of the country, including 2015 Economic Plan and State Budget

cuba advances its economic model for 2015Within the historical context of the return to Cuba of the three anti-terrorists unjustly imprisoned in the United States and the announcement of the re-establishment of diplomatic relations with this country, the over 600 deputies of this Caribbean nation concluded four days of analysis and deliberations on the actions of Cuban society in all sectors with the approval of the principal documents governing Cuba’s economy in 2015.

Gathered for the fourth ordinary session of the 8th Legislature, members of the National Assembly of People’s Power voted in favour of the Economic Plan and the State Budget Law for 2015.

The members of the highest authority of state power also approved the Decision presented by the Parliament’s Economic Affairs Commission on the budget legislation; a Statement in support of the declarations of Cuban President Raúl Castro and a message of thanks to all the parliamentarians worldwide who supported the cause of the Five; and an agreement on the occasion of the recent XIII ALBA-TCP Summit, marking its tenth anniversary and in homage to its founders, Commander-in-Chief Fidel Castro Ruz and President Hugo Chávez Frías.

Updating the economic model – great care needed to ensure fulfilment

Reporting on the progress of the updating of the Cuban economic model, Politburo member and Vice President of the Council of Ministers, Marino Murillo Jorge, noted that while continuing to gradually advance in the implementation of the strategic vision for the development of the economy, great care must be taken in the implementation of the policies adopted in order to ensure the fulfilment of the objectives for which they are intended.

Monetary unification – one of the most important tasks

The Minister of Economy and Planning also highlighted the prioritizing of the program for long-term development, which should be devised from 2015 onwards based on the grounds already assessed.

Referring to monetary unification, Murillo Jorge assured that this represents one of the most important tasks for this term and reaffirmed that this step alone will not solve all problems, but should be accompanied by measures of macroeconomic management that ensure that the currencies meet their corresponding functions.

Measures taken to allow for greater autonomy of socialist state enterprises

The head of the Permanent Commission for the Implementation and Development of the Economic and Social Guidelines (approved at the 6th Party Congress) explained that to allow for the greater autonomy of socialist state enterprises, measures such as the expansion and flexibility of their corporate purpose, the defining of government contracts, the power to market their surplus, and others relating to the linkage of salaries with results and the elimination of administrative limitations for their increase have been taken.

4% growth of the national economy expected in 2015

He also indicated that the plan for the national economy for next year estimates an increase of 4 percent, marking a reverse in the moderate growth rates and slowing trend seen in the economy in recent years. He reported that in 2014, Gross Domestic Product reached 1.3 percent, below the planned figure of 2.2%.

For 2015, over two billion dollars have been budgeted for food imports (polished rice, beans, split peas, oil, powdered milk, cereal, etc.) which require financial and logistical support for their transportation from distant ports.

63% of the state’s expenses for provision of basic services to the population, free of charge

Presenting the proposed 2015 State Budget Law, which was subsequently approved, Minister of Finances and Prices Lina Pedraza, reported that 63% of the 54.854 billion pesos considered expenses are destined to state-supported activities, assuring the provision of basic services to the population, free of charge, at current levels. She indicated that 24% and 25% of these expenses are to be allocated to public health and education, respectively.

US blockade and liquidity constraints undermining foreign capital in the economy

Regarding the implementation of the new Foreign Investment Law no.118, Déborah Rivas Saavedra, director general of foreign investment at the Ministry of Foreign Trade and Investment, reported on progress in the implementation of regulations and those still in the process of application, such as the release of the legal framework regulating this activity.
She outlined the obstacles to the participation of foreign capital in the Cuban economy, such as the negative influence of the U.S. blockade, and liquidity constraints in the country.

Rivas explained that steps are being taken to encourage foreign investment, such as the removal of administrative barriers, debt renegotiation, pre-feasibility studies to facilitate local projects, as well as a promotional strategy to advise those who require information and facilitate the work of parties involved.

The deputies also analyzed resolutions adopted during previous sessions and the ongoing work of the Permanent Commissions. In the case of the latter particular attention was paid to the epidemiological situation of the country; the monitoring of education and culture; the need for the Tax Administration to take steps to prevent tax evasion; losses in the sugar industry; and other issues of relevance to the nation.

Source:Cuba advances in the updating of its economic model   Granma


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