The Cuban government announces a package of economic measures that will make life more expensive on the island

Prime Minister Manuel Marrero says that fuel, some electricity and transport rates will rise. The leader acknowledges “difficulties” with prices and that not enough has been done to develop the economy

About to end a year strongly marked due to lack of food or medical supplies, inflation, an unprecedented wave of migration, and a widespread crisis that has affected the daily lives of Cubans, the Government of Havana has announced a package of economic measures for 2024 that will make life more expensive for families on the island in the short term.

During his speech at the second ordinary session of the National Assembly of People’s Power, in its 10th Legislature, the Prime Minister, Manuel Marrero Cruzexpressed that they were dissatisfied with “not having made the necessary progress” this year. After, as is customary, blaming the Cuban situation on economic embargoRegarding the US government’s hold on the island for decades, the remnants of the pandemic and the global crisis, the leader acknowledged that a sustainable increase in national production has not been achieved and that the government might have done better: “We might have done more things. There are still inadequacies and subjective problems that affect the capacity of programs and economic projections.”

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“We need a stronger Ministry of Economy and Planning,” he said. He also added that it was necessary to strengthen the work of the Ministry of Finance and Prices, referring to the “difficulties” in reference to the high prices of products due to inflation and shortages in the country, and “to rectify policies that have not allowed us to move forward.” He also acknowledged that the country is not working to increase the diversification of goods and services, and that the participation of foreign investment in the development of the economy is insufficient.

In turn, the prime minister announced a series of measures such as the increase in fuel prices, electricity prices for certain households or the rise in transport fares. “They will not have a great immediate effect nor will they solve all the problems, but we will move forward with the conviction that it is the right path to improve the current situation,” said Marrero. Cuban Prime Minister Manuel Marrero shakes hands with the country’s president, Miguel Díaz-Canel, (back turned) in a file photo from 2019.Y. LAGE (AFP)

Cubans have been fearing rising fuel prices since President Miguel Díaz-Canel spoke a few days ago of a possible increase in the cost of gasoline. “In what country in the world can you buy nine liters of gasoline with one dollar?” said Marrero, without mentioning low wages in a country with an increasingly weak currency and where the minimum wage of 2,100 Cuban pesos (CUP) is equivalent to regarding eight dollars. The official also clarified that the government will increase electricity rates by 25% for Cuban households considered high consumers, which exceed the consumption of 500 kWh.

As a result of the rise in fuel prices, Marrero acknowledged that transportation rates will increase. In addition, the price of non-metered water, for users who do not have a meter to measure, will be raised to 21.24 CUP, because, according to the official, the current rate of 7 CUP (less than a cent of a dollar) does not encourage savings. Next year, the price of cigarettes and tobacco, the price of liquefied gas cylinders, as well as the price of green medicine (medicinal plants) will also increase in the country.

Regarding remittances, one of the mainstays of the economy and carried by Cuban exiles, he indicated that it was a priority for the country to recover these flows, as well as to increase the income of foreign currency, recover tourism and promote the production of nickel, tobacco and rum. Marrero explained that, in order to encourage national production, the payment of tariffs on the import of raw materials and intermediate goods will be reduced by 50%; and instead, tariff rates on the import of some Cuban products such as cigars, rums and beers will be raised. He also stressed that electronic commerce will be promoted with payments from abroad and that measures will be implemented so that non-state companies can make their imports with payments from Cuba.

The tariff exemption for the import of food, toiletries and medicines, which was due to expire on December 31 and which allows Cubans to import non-commercial items, without limits on their value and exempt from paying customs duties, will be extended once more. However, Marrero added that the Government will work to increase the supply in MLC (Freely Convertible Currency) stores so that Cubans can access the national network of stores. In the former, purchases can only be made with credit cards backed by dollars or other foreign currencies.

To the workers in the health and education sectors, Marrero announced that the payment for night shifts, years of service and amount of work will be increased. The Prime Minister also referred to the migration crisis due to which 400,000 Cubans have left the island in the last two years. He said that in many of the above-mentioned “there are the causes that provoke the exodus of professionals and young people from the state sector to the non-state sector and the tendency to seek life projects abroad.” According to him, the announced measures have the purpose precisely of “restoring the macroeconomic requirements that allow guaranteeing a favorable environment for economic growth, development and the process of socialist construction.”