The Cuban government declares itself a “war economy.”


Cuban officials, unable to hide the situation, consider the island’s economy akin to a “war economy.” In the midst of a crisis that goes beyond the so-called special period of the nineties, the government of Miguel Díaz-Canel is seeking another set of new measures aimed at promoting the “macroeconomic stability” the country needs. The changes include budget allocations, a single price policy and some regulations and restructuring aimed at “repairing distortions and reviving the economy by 2024”.

At a recent meeting of the Council of Ministers, First Deputy Minister of Economy and Planning, Mildre Granadillo de la Torre, said the measures seek to adapt the 2024 plan and budget to “war economy” conditions. Often used in extreme situations, and authorities apply to a country that ended in 2023, with inflation at 30% at the end of the year, the economy shrunk by 2% and the depreciation of the Cuban currency by more than 50% in the informal market against the dollar and the euro.

However, after a Analysis on X , Cuban economist Pedro Monreal asserted that the use of the term “war economy” would justify greater control by the authorities. According to him, this is used to justify total control, because now “we have to exercise control when we need to plan the most.”

Proceedings were published in the official gazette Granmawith the aim of reducing the fiscal deficit in 2024 “reduction of budget items, based on non-implemented ones; define the requirements of the budget process for using the approved budget, centralize the approval authority; allocate monthly financial resources corresponding to the actual income of the month; calculate the financial impact of the import of non-state forms of administration; of raw materials and inputs for production Provide tariff benefits including exemptions for imports, as well as complete the tax regime for e-commerce.”

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The Cuban government will establish a single price policy, “inclusive and on equal terms for all subjects of the economy,” which includes the state and non-state sectors. Items such as chicken, oil, sausage, powdered milk, pasta and detergents in various media will have the highest selling prices among so-called MSMEs, alleviating the high and volatile discontent of many Cubans. The price of these items in the private sector.

Monreal pointed out that the “most significant thing” among the new measures – the date of their implementation is still unknown – is intended to “postpone and freeze non-essential investments”. “There is no growth or development without investment, and until now the “essential” investments have been in tourism. Will they continue?” he asks. These measures, according to an extended reading, would not only impose more control on the country by the state, but if they find themselves too limited in their businesses, the government will It can also create dissatisfaction in the field.

Governor Miguel Díaz-Canel told the meeting that the country faces “economic problems” that affect the timely distribution of food that every Cuban family receives through a ration system called a fixed grid or electricity distribution book. Across the island many hours of cuts or even inflation are affecting families today to get basic needs. The president emphasized that the reasons for this situation are often “directly related to bureaucracy and the inefficient control we exercise from our organizational structure.”

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