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Montevideo, May 24th 2022 - 05:50 UTC

 

 

Cuba to further open its economy and eliminate double currency system

Tuesday, November 16th 2010 - 22:40 UTC
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“If state companies loose money they will be closed” said Minister Murillo “If state companies loose money they will be closed” said Minister Murillo

The Cuban government admitted it will have to amend several laws and decrees before implementing a plan of updating the Socialist economic model, the official Granma daily reported this week. This includes eliminating the double currency system.

The announcement follows the government’s release of a document on “economic and social guidelines” intended to lead the island’s economy out of its current shambles and lack of production to a situation where it can cut its ever growing dependency on imports from food and the most basic elements to energy, plus attract foreign investments.

The plan was presented by Cuban president Raul Castro with the support of the dominant Communist party of the island which debated for several days.

President Castro warned delegates about the delicate situation of Cuban production and recalled his recent statement that if Cuba does not fix its floundering economy the whole revolution will “fall off the cliff”.

During the meeting Economy and Planning Minister Marino Murillo mentioned as an example of productivity agricultural cooperatives which are allowed under current legislation but are not extensive to cooperatives in industrial or service sectors.

“There are things which do not work currently under state control formulas, and we should make proper laws for them,” Murillo said.

Participants also discussed the way to unify the country's currencies.

Cuba has two currencies: the Cuban convertible peso (CUC), equivalent to 1.08 U.S. dollars, and the national peso (CUP), valued only 1/24 of the CUC, or 4 US cents.

The Economy Ministry said restructuring of the economic model should proceed by abandoning the dual currency. But “the dual currency will be solved only by producing efficiently for the real economy” warned Murillo.

On the liquidation of state enterprises with repeated losses Murillo said “it is not possible to keep a company with losses for 10 years and then have the state, the rest of the community pay for the bloated expenses”.

However he was quick to point out that “we are not reforming the economic model as some foreign media want to see”.

Since taking office in 2007, Castro has repeatedly called for restructuring of the Cuban economy and better use of human and material resources to improve the economy which also demands “improved work habits” and “less corruption”.

The first phase of the new measures include relocation of half a million government workers and the opening of small private business after 42 years of state control over the economy.

 

Categories: Economy, Latin America.

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