Comments, Economy, In Focus, Latin America, Uncategorized

Strategies to overcome the economic crisis

Cuba is facing a difficult time which is why profound legislative changes are being seen that result in a gradual process of recovery. There are changes in the state socialist enterprise, so that it converges without contradiction with the private sector and diversifies the productive framework.

 

In 2020 Cuba’s Gross Domestic Product (GDP) decreased by around 10.9% and overcoming such things requires time, especially because the circumstances of the United States’ economic blockade and the Covid-19 pandemic continue to affect matters.

That is why the Cuban government has started to adopt strategies. One of them is the incorporation of new economic actors such as micro, small and medium-sized businesses and non-agricultural cooperatives.

Through these new strategies, Cuba seeks to insert itself into the international market, satisfy the population’s needs through growth in goods and services and the creation of new ones that, moreover, will contribute to the transformation of the production sector and the birth of new industries.

Transformations of the state socialist enterprise have also been designed and legislated, some of them related to the redistribution of profits destined to improve the population’s income.

Recently, the Ministry of Finances and Prices (MFP) authorised the increase – from 30% to 50% – of payments for profits corresponding to the second quarter of the year to those businesses that participate in wealth creation as a result of the production of goods and services.

Previously, the same body approved other modifications to the system of financial relationships, allowing financial entities greater freedom to create funds destined for such diverse ends as house building and the redistribution of earnings to research and development.

The OSDEs, a group of organisations that oversee business activity in Cuba, were authorised to use the compensation fund to finance investments and contribute share capital to create businesses, on a repayment basis or not.

The ministry also eliminated price caps on agricultural products for social consumption, medical expenses and expenses related to the family care system, in order to stimulate growth in agricultural production.

This measure enabled the creation of better conditions for price setting and contracting with producers, as well as recognising the current production costs, impacted by the tightening of the United States blockade, the effects of Covid-19 had the global economic crisis, analysts observed.

Exceptions to customs duty were also adopted, such as the exemption from payment for the import by natural persons – for non-commercial purposes – of equipment and parts that make use of renewable energy sources, with the goal of diversifying the development of clean sources and increasing its use in the national electricity generating system.

Other tax exemptions relate to the import of medicines and medical supplies, both for human and veterinary use, as well as foodstuffs and hygiene products. (PL)

(Translated by Philip Walker – Email: philipwalkertranslation@gmail.com) – Photos: Pixabay

Share it / Compartir:

Leave a Comment

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

*

*