Re-ordering task in Cuba, one month in

HAVANA, Cuba, Feb 1 (ACN) Price increases, adjustments in service rates, support for vulnerable groups and an increase in job applications at the Labor and Social Security offices, make up the scenario of the first month of the task of monetary and financial re-ordering in Cuba.

On January 1, the convertible peso ceased to circulate in Cuba and a single exchange rate of 24 Cuban pesos for one dollar was adopted for natural and legal persons, at the same time a wage reform was undertaken, prices were corrected and excessive subsidies and gratuities were eliminated.

The salary advance of one thousand pesos to state workers and the advance payment of the increases in the checkbooks of retirees and social assistance pensions, all in December 2020, helped people to be in a better position to face the new prices in force since January 1.

However, the government undertook several measures to control prices so that inflation did not exceed the expected limits. These include the centralization of wholesale prices, the establishment of new ways to value costs and other administrative measures such as the establishment of tops on certain products and services.

At the same time, the social assistance structures worked in record time to diagnose economically vulnerable people who could be affected by the effect of the devaluation. Requests from families in similar conditions were also attended to. As a result of this work, as of January 13, more than 16,000 families had been granted social assistance.

Another trend of this first month was the increase in interest in employment. During this period, more than 38,000 people have joined the labor market, 30 percent of them young people under 35 years of age.

One of the economic actors on which the task of monetary re-ordering has the greatest impact is the socialist state enterprise. The devaluation of the peso against the dollar with the consequent increase in the price of imported raw materials and the increase in salaries put the solvency of several of them under strain.

Long before the beginning of the re-ordering, the government approved more than 40 measures to grant these entities greater autonomy in their management capacity, but they still face the challenge of achieving a productive linkage with the national economy and greater efficiency in their productions.

While other announced transformations among the non-state management forms are coming, the beginning of the monetary order has also meant the solution to important claims of these entities. Changes in tax policy, extension of the network of wholesale markets and flexibility for exports and imports and the linkage with other economic actors, are weighed together with challenges derived from the accelerated and sometimes unjustified increase in the prices of their products and services.

The country's monetary and financial order has coincided with an economic crisis caused by the SARS-CoV-2 coronavirus pandemic. The fall in export revenues and the rise in the cost of imports has led to shortages and a contraction in activity levels. However, the implementation of this measure, the deepest in the country in the last three decades, puts it in a position to resolve the situation and start recovery.

Together with the reorganization, conceived as part of the country's economic and social strategy and its development plan until 2030, there have been other transformations in the national productive structure, such as a decentralization of decisions to local governments and companies, which also means a greater responsibility of these levels to offer employment, products and services and to contribute to a greater welfare of the population.

Although it has been repeated several times, it is not futile to say that monetary and financial order, although essential, does not solve all the problems of the Cuban economy by itself. Right now, the income of the population has increased, but this has not yet had the necessary response in the productivity of enterprises, which entails inflationary risks.

And the fact is that this transformation must be valued far beyond Day Zero, because it is a process that implies important transformations in the productive sectors, the composition of consumption, employment, accounting reliability, the State budget; but which in the end finds its realization with the change in the way in which the country's economic policies are directed, moving from administrative measures to a more financial conduction.