5.5 C
New York
Tuesday, December 5, 2023

Buy now


The ghost of the “special period” threatens Cuba in 2019, warns report

 Miami, .- The economic crisis that Cuba is going through will worsen in the coming months and, if it does not open to a market system, the country could fall into a new “special period”, the severe depression in which the island was plunged into the 1990s, as predicted by The Havana Consulting Group, based in Miami.

In fact, the worsening of the Cuban economy is observed not only in the “scarcity of dollarized stores”, but also in the lack of subsidized products such as bread and eggs, said Emilio Morales, president of this firm. helps to understand the Cuban market and its consumers.

In the report that Efe had access to, it warns that Cuba “urgently needs” to open up to the market economy, “to free once and for all the productive forces and allow Cuban citizens to invest in their own country,” or, otherwise, , the “reappearance of the ghost of the ‘special period'” will become a fact.

If then the serious crisis that gripped Cuba was due to the withdrawal of subsidies received from the former Soviet Union, today the “financial support that the island was receiving from Venezuela is practically insignificant”, given the total collapse of the South American country.

Only by “avoiding the usual dependency on third parties” and undertaking “deep transformations of its economy” will Cuba be able to overcome the crisis on its own, the Havana Consulting Group report said.

In this context, Morales recalled that the Venezuelan subsidy for twenty years “has helped the battered Cuban economy survive,” with the subsidized delivery of billions of dollars in barrels of oil in exchange for mainly medical services.
A commercial exchange between both countries that managed to reach the 8,500 million dollars in 2012 and today barely reaches 2,000 million, which is a drop of 74%.

To this reality we must add the “failure of the economic reforms undertaken by Raúl Castro” about a decade ago and the “decrease in exports of nickel and sugar”, to the point that the production of sugar in 2018 was 16.3 % lower than in 1905, which forced the country to buy it in France.

To these difficulties we must add another negative factor such as the “limits imposed to prevent the development and expansion of the private sector”, whose entrepreneurs took out 2,390 million dollars in 2017.

And the lack of free enterprise, the “non-recognition of private property, the prevalence of the monopoly established 60 years ago and the lack of opportunities to invest and market goods and services that Cubans have” undermine any attempt to revitalize in the medium and long term the economy, says the report.

Another “chronic problem” is the deficit of the Cuban economy, despite the opening of the Mariel Special Development Zone (ZEDM) and its failure to attract capital, which barely reaches 14.2% of the proposed goal since it was created. six years ago.

To this desolate panorama we must add the “stagnation that the Cuban tourist industry has had in general”, with the decrease of the main tourist emitting markets: Canada, the United States, Germany, England, France, Spain and Italy, he indicates.

Thus, air transport between Cuba and the United States. in 2018, it contracted 18.3% with respect to the previous year, a “declining trend that began in the last quarter of 2017”.

In terms of economic impact, this drop in tourism translated into an estimated loss of 1,283 million dollars.

On the other hand, the low rate of growth of the Gross Domestic Product (GDP) “hides a permanent recession”, with a fall to 1.4% in the last five years, according to official figures.

Therefore, “if the Cuban economy has not collapsed has been thanks to Cuban exile”, 90% of which is based in the United States and contributes annually around 7,000 million dollars between remittances in cash and merchandise.

In addition, Cuban-Americans leave millions in the tourism sector of the island, since more than 50% of those who travel to the island are staying in hotels with their relatives living in the Caribbean country.

In the United States, about 2.2 million Cubans live, 90% of whom reside in the state of Florida.

In 2017, the cash remittances that arrived on the island represented 50.8% of the total annual income of the population on the island, said The Havana Consulting Group. (EFEUSA)

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -spot_img

Latest Articles