Cuba lacks dollars to face a new era of scarcity – 14/04/2019

With fear for the future and realism, Cuba getting ready for a lean season. The Minister of Economy and Planning, Alejandro Gil, gave the latest indication of the problems on the horizon.

During his appearance at a special session of the People's Congress (Parliament), he declared that the communist government had serious problems in obtaining foreign exchange and that it would therefore reduce its imports and exports. revise the companies that today have the task of replacing them. of your external purchases.

"Overseas purchasing projects will be reviewed with companies for the purpose of reduce imports and seek solutions to the demands of the national territory "said Gil this weekend during the extraordinary session of the Parliament chaired by the former president and first secretary of the Communist Party, Raul Castro, and by the current president, Miguel Diaz-Canel.

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Preventions have their logic. The island must prepare to face an economic crisis and a shortage arising from the rise of American hostility to the island under the government of Donald Trump and his ally Venezuela, whose free-falling economy makes it difficult to grant Havana thousands of barrels of crude oil at a preferential price, as was the case under the direction of the late Hugo Chávez.

Despite everything, former President Castro opened the umbrella and said that would not reach a situation as critical as that of the 1990sas part of the "special period", the crisis that Moscow experienced after the fall of the Soviet Union, Cuba's main ally at the time.

"Today, we are seeing another scenario in terms of diversification of the economy, but we have to prepare for the worst variant," he said. Many Cubans recollect with regret the period when the collapse of the Soviet Union left them without fuel, with large power cuts, severe cuts in food and a 36% drop in their gross domestic product between 1990 and 1993.

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Currently, the island receives half of its oil from Venezuela with subsidized loan plans while many of their revenues depend on the sale of professional services to that country, but also have increasing revenues from tourism and remittances. "We must be vigilant and aware that we face additional problems and that the situation could worsen in the coming months," Castro added.

Storm clouds have been hovering over the island since the Chavismo crisis, as well as the sharp increase in financial penalties imposed by the United States to demand a change in the island's political model. Cuba also lacks raw materials for its industry and has no money to pay its suppliers.

At times, many state-owned business leaders often complain about communist bureaucracy, while their foreign partners complain that Cuba does not pay their debts.

Minister Gil emphasized the urgent need to replace imports of food and fuel – which this year reached a US $ 5,000 million bill, he said, "so every dollar that goes into that sector is not spent to import products from the outside, fruit towels.

Import substitution is generally difficult for the sector due to low local production, It is concentrated mainly in areas of low added value and problems, even in its circulation.

Although Cuba has never had an abundance of products or brands, the stores seem a little more empty and some products intermittently resemble chicken, eggs, milk powder or toilet paper. Managers of state-importing enterprises – the only ones who operate retail businesses – They indicated that there was a lack of liquidity in the country.

Trump reversed the "thaw" policy of his predecessor Barack Obama in order to put pressure on a change of political model in Cuba, limiting American travel and strengthening the sanctions against the economy of the island by the economic blockade imposed by Washington in Havana.

Sources: AP, AFP, ANSA and Clarín