Friday, December 27, 2013

Unification of Dual Currency, but the Economic Future Remains Uncertain

Unification of Dual Currency, but the Economic Future Remains Uncertain
/ Miriam Leiva
Posted on December 27, 2013

HAVANA, Cuba , December, – Monetary and exchange rate
unification was addressed by Raúl Castro in his speech at the closing
session of the National Assembly and by Vice President Marino Murillo
Jorge, on December 21, according to the Cuban media. The interest of
calming the population can be seen in the president's assertion that
there will be no affects on those who legally earn income in hard
currency and in Cuban pesos, nor on the cash in hand of the population,
or on deposits in the national banking system.

He also added that "it will not be a magic solution to our problems, but
it will contribute decisively to improving the workings of the economy
and the building of a prosperous and sustainable socialism, less
egalitarian and more fair, which will ultimately benefit all Cubans." It
will begin with legal entities (agencies and state enterprises and
cooperatives) and will continue with natural persons, but currently
plans for its implementation are still be developed.

Meanwhile, Murilla said that in the coming two years the more technical
and complex tasks of updating the economic model will be undertaken. He
confirmed that the CUP (Cuban pesos) will be the only currency in the
country and that in no case would there by any impact on people's
purchasing power, as the financial capacity of the CUC (convertible
peso) will be respected.

He reiterated that the measure will not by itself resolve all problems,
but that it should be undertaken within the "guidelines" (the adopted
measures for updating the economic model), to continue promoting the
development of the state socialist enterprise, unleashing the productive
forces and creating an export mentality.

Undoubtedly, the tasks are immense, as it is almost impossible to
achieve efficiency in a socialist enterprise. First there must be an
effort to overcome all the characteristic deficiencies of the Cuban
system, such as reliability in accounting and respect for contracts,
eliminated in the 1960s as "capitalist malformations." The value of work
must be recovered, through conscious and creative participation of the
workers, which is not resolved by the Labor Code adopted at the National
Assembly session on 21 December.

Increases in production and productivity will be required in order to be
able to adequately reward employees whose salaries don't cover their
basic needs and who feel no incentive to work hard and, therefore, to
consider work as a social honor. The diversion of state resources as
compensation for the poverty level wages or to increase one's economic
level — enrichment Cuban-style — must be eliminated; in short, the
corruption generated by the system must be eradicated.

Unleashing productive forces is an imperative, but how? The straitjacket
of central planning and socialist enterprises, the rejection of market
forces, the restrictions on farmers and the self-employes, and other
problems, prevent it. To day, the measures implemented under the adopted
"guidelines" to update the system have not resulted in increases in the
food supply, which in many components has declined. Manufacturing
production is also falling and the private activities permitted do not
complement the straitened macroeconomics of the country.

We can see that in developed countries and in those that have overcome
poverty, small and medium enterprises (PYMES) carry important weight in
the national economy. The vicious circle of scarcity of products for the
national and international market, and the situation of nothing to
export and the importing of what could be produced in Cuba, continues.
An export mentality could be created, but will it happen? Will there be
solutions in the "more technical and complex tasks" as predicted by the

Miriam Leiva

25 December 2013, Cubanet

Spanish post
25 December 2013

Source: "Unification of Dual Currency, but the Economic Future Remains
Uncertain / Miriam Leiva | Translating Cuba" -

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