A country on the verge of bottoming out
Hello, friends. Today I would like to share with you my opinion about a situation that has us all worried. It turns out that the Prime Minister of Cuba announced that in the next year there will be new changes in the economy and he advanced 7 of them, and although there are some that are not so bad, they are not news that will make our day. Since Cuba's economy needs a radical change, all these medium and long term measures are nowhere near the solution.
1- Fuel price increases:
Let's start with the first bombshell: fuel price increases. And if we were already complaining about how expensive it is to travel, now they announce that they are going to increase the price of fuel, as if it were not already expensive enough! The way he referred to this situation, they intend to increase the price of fuel 7 or 8 times, this has been announced by one of the most incompetent and incapable ministers in the history of Cuba.
But this does not only affect transportation, it is also going to hit agricultural production hard. We already know that agriculture in Cuba has been mistreated, and this increase in the price of fuel is only going to make things worse. Since the cost of fuel production will be higher.
There is also a 25% increase in the price of electricity for those who consume more than 500 kWh.
2- Prices are going up in the whole neighborhood: Increased prices of water, cigarettes, tobacco, liquefied gas and transportation fares:
Here comes the second blow: price increases in water, cigarettes, tobacco, liquefied gas and transportation fares. Why not raise everything at once? Public transportation is going to jump thanks to the increase in the price of fuel, in the case of liquefied gas and water are indispensable products that not all the Cuban population has these services, I personally where I live, the aqueduct only supplies just over 60% of the population and liquefied gas 0%, only those who acquire it through the black market can have this product. So it would not be unreasonable to think of offering services to those who do not have it, instead of continuing to increase its value. As for tobacco and cigarettes, in spite of being a vice, Cubans consume a lot of this product and with the economic problems we are going through, they cannot drink coffee either because there is none. Therefore, the Cuban's life will be more complex.
3- Regaining control of remittances
They want to regain control of remittances. It is no surprise to anyone that the government intends to maintain control over foreign currency, something it has been able to do for years. We have already seen previous unsuccessful attempts. Will it be different this time?
4- Imports of Raw Materials, not Finished Products: Good idea or a patch?
Now they are launching the idea of incentivizing the import of raw materials instead of finished products. This sounds good in theory, but in an economy as unstable as ours, I doubt they will achieve anything positive in the long run. They will reduce tariffs on raw material imports, but increase those on finished products. How will this benefit us? I am not so sure. But my optimism in this regard is low, since the unstable economic course and history do not make a large investment in Cuba viable.
5- Tariff exemption is extended.
At least, something positive in its totality: they extend the tariff exemption on toiletries, medicines and food products from abroad. Considering the crisis that still persists, this seems more than necessary. But, of course, let's hope it is not just a temporary patch, which apparently it is, since it has been extended on previous occasions. Personally, it should be permanent as long as it is not of a commercial nature.
6- Referential Value of Housing:
In this one it benefits no one but the government: the updating of the referential value of housing. As if it were no longer difficult to own your own home! Now they want to impose a mechanism to set reference prices according to location. An example of this is: two identical houses will not be worth the same if they are in different locations in Havana.
7- More money for Health and Education
There will be an improvement in the salary conditions of these sectors: an increase in pay. Although I sincerely hope that this increase is not just a drop in the ocean of economic problems we are facing. I imagine that wage improvements must be small because with the exaggerated inflation that exists, if wages are increased disproportionately, inflation would do the same.
These seven changes in the economy will affect us all in one way or another. And while some may make a modicum of sense, the reality is that the Cuban people will continue to struggle with an economy that seems more like an unsolved puzzle than something that benefits everyone. Expect further increases in all prices and the USD.
Reference:
📷 Xiaomi Redmi 9A | 💻 Asus Celeron N4020
Original Spanish text: Translated and formatted with Hive Translator by @noakmilo.
Twitter @bluisdey
Posted Using InLeo Alpha