Given the difficult situation, adjustments to the 2020 Economic Plan were necessary. Photo: Julio Martínez Molina

Despite the economic contraction in 2020, we remain committed to achieving the growth projected for the second stage of the National Plan for Social Economic Development, for the period 2022- 2026

Early last year, before the COVID-19 pandemic hit, the world economy was already experiencing a global contraction, largely due to the commercial and financial tensions that had been brewing, to which the U.S. government contributed, given its hegemonic pretensions.

The impact on vulnerable economies was amplified, especially in Latin America and the Caribbean, as a result of structural problems that have historically existed. Inequality in trade relations reached new heights.

The emergence of the pandemic aggravated the underlying economic crisis, exacerbating its harmful effects, resulting in a re-composition of the international economic framework. In this scenario, the most adversely affected, as to be expected, have been nations with the most fragile economies.

According to the International Monetary Fund (IMF), the concurrence of these many adverse factors produced a 3.5% decline in the world economy last year, the largest since the middle of the last century.

The Economic Commission for Latin America and the Caribbean (ECLAC), placed our region’s decline at 7.7%, considered the worst economic crisis in the last 100 years, resulting in a strong negative impact that has been felt in the economic, productive and social arenas.

At the end of last year, ECLAC estimated that 2.7 million companies closed in the region, with unemployment reaching 44 million, 18 million more than in 2019; with some 231 million people living in poverty, close to the 2005 level, while extreme poverty reached the 1990 level when the figure of 96 million was reported.

The Cuban economy, of course, has not been exempt from the impact of the pandemic, which has led to a sharp decline in the country's foreign exchange earnings, mainly from tourism and traditional products such as tobacco and rum.

In addition to the impact on income, the country has made expenditures of more than 2.6 billion pesos and 170 million dollars to combat COVID-19.

No expense has been spared in this battle, nor in ensuring the standard family food basket, basic goods, and services to the population, including electricity, which, with great effort, has remained stable. All this, amidst the ironclad, escalated economic, commercial and financial blockade imposed on our country by the U.S. government.

The blockade, as has been explained on numerous occasions, constitutes the main obstacle to our development, and to achieving the economic growth that the country needs. The economic damage caused in the period between April 2019 and March 2020, amounted to 5.57 billion dollars.

The increase of more than 30% in food prices, including freight costs, given the need to make such purchases in distant markets; restrictions on travel to Cuba from the United States; the inability to export high demand products such as rum and tobacco to the U.S. market; restrictions on relations with businesses in other countries, given the extraterritorial reach of U.S. sanctions, are some of the most notable effects of the blockade. Added to this is the pressure exerted on shipping companies to prevent the arrival of fuel.

In the midst of the pandemic, as Cuba is making an enormous effort to protect its people and offers its help in solidarity to the world, the blockade has only been tightened.

Given the difficult situation, adjustments to the 2020 Economic Plan were necessary, while maintaining the country’s principal priorities, especially the battle against COVID-19 and the production of basic goods and services for the consumption of the population.

During the Council of Ministers meeting on April 29, 2020, when plan modifications were approved and directives to begin work on these and the 2021 budget, President Miguel Díaz-Canel Bermúdez stated: "We cannot be satisfied with adjustments to the Plan and 2021 planning, because we are facing a world crisis. In this difficult context, we must come up with something different, and prepare a social-economic development strategy, reaffirming that we cannot continue doing things the same way.

"We must evaluate how, we can implement a group of measures in the Conceptualization of the Economic and Social Model that remain pending - in a more rapid, decisive, organized manner.

"It does not mean improvising, but rather introducing, into economic schemes and development policies, the new actors and practices that have been approved in the Conceptualization, the Economic and Social Policy Guidelines, and in the bases of the Economic and Social Development Plan through 2030.

"Everything we do now will also support us on the road to the next Party Congress.

"In the midst of this problem, is when we must be more innovative, when we can make more progress on issues that have been postponed. We must have courage and do different things. Doing the same thing, we are not going to solve anything; we are not going to make more progress."

From that moment, work began on the strategy to boost the economy and confront the world crisis caused by COVID-19, giving continuity to the guiding documents approved at the 6th and 7th Party Congresses, and of the foundations for preparation of the National Plan for Social Economic Development through 2030, of which our people have been well informed, including the release of a special tabloid.

Progress is being made on a set of measures that will allow the implementation to advance more quickly of measures approved in the Conceptualization of the Cuban Economic and Social Model of Socialist Development, and the Economic and Social Policy Guidelines of the Party and the Revolution for the period 2016-2021, as well as in overcoming obstacles that hinder the achievement of better results and allow different economic actors to work together more harmoniously.

Included among the socio-economic measures implemented to date, with the greatest impact and depth, implying important transformations to achieve the proposed development objectives, are:

-Implementation of the monetary re-ordering process, essential to the development of the economy and to impacting several key areas of the strategy.

-Approval of new measures to strengthen the socialist state enterprise, in terms of greater financial and management autonomy, as well as increasing incentives for production and exports.

-Improvement and expansion of self-employment, providing the economy with new sources of employment and greater vitality, diversification, and competitiveness.

-Approval of a policy supporting strategic management of local development, to strengthen municipalities, with the necessary autonomy, as the economy’s fundamental unit; and promoting local development based on the national strategy, as an endogenous, participative, innovative process, articulating the interests of all actors: municipal, provincial, sectoral and national, etc.

-Gradual implementation of a new decentralized, more flexible system of access to hard currency for enterprises, following the concept that financing is not only allocated centrally, but that funds move naturally based on relations between economic actors, and greater autonomy is achieved in the management of this currency.

-Approval of a new policy for the commercialization of agricultural products, providing greater flexibility, conceiving the participation of various actors under a regime of legality, and the introduction of incentives for production, storage and distribution, to contribute to increased production.

-Facilitating export/ import operations for non-state forms of economic management, by providing foreign trade services through specialized state-owned companies.

-Improvement of mechanisms within the enterprise sector to compensate workers, providing the option of flexible pay in addition to the basic salary, via the application of pay-for-performance systems, with no reference to limiting or directive indicators, as well as the distribution of earnings to the workers.

-Wholesale and retail sales in freely convertible currency (MLC), an essential mechanism under current conditions, along with the elimination of the 10% tax on USD in cash entering the banking system.

-At this time, work is underway on the implementation of a set of measures intended to promote increased agricultural production.

-Despite the complexities of 2020, development has not been abandoned. Major investment projects were completed, including the completion of 47,400 housing units and 2,000 new hotel rooms for tourism. Similarly, progress was made on projects related to food production and water distribution. The country's first bioelectric plant was put into operation, and 29 new foreign investment projects were approved.

-For the year 2021, the Economic Plan projects a process of gradual recovery, with controlling the pandemic as a key factor.

-The investment plan is increased by 22% compared to 2020, with 60% of the resources concentrated in prioritized sectors: defense; food production; pharmaceuticals; tourism; renewable energy; housing; cement, and steel production plants. Also, the completion of 44,000 homes is projected.

Despite the economic contraction in 2020, we remain committed to achieving the growth projected for the second stage of the National Plan for Social Economic Development, for the period 2022- 2026.

Toward this end, the government has organized a working system to advance in the implementation of the National Economic and Social Development Plan through 2030, with six macro-programs, reflecting the six strategic axes defined therein. These are Government, Institutionality and Macroeconomics; Productive Transformation and International Insertion; Infrastructure; Science, Technology and Innovation; Natural Resources and Environment; and Human Development, Equity and Social Justice.

These six macro-programs are, in turn, aligned with the objectives and goals of the 2030 Agenda for Sustainable Development, promoted by the United Nations.

In his concluding remarks at the 6th Congress, Army General Raúl Castro Ruz, first secretary of the Party Central Committee, stated:

"Leaving all chauvinism aside, I believe that Cuba is among the small number of countries in the world with the conditions to transform its economic model and emerge from the crisis without social trauma because, first of all, we have a patriotic people, who know they are powerful, given the strength represented by their monumental unity, the justice of their cause and military preparation, highly educated and proud of their history and revolutionary roots."

One look is all that is needed to see the enormous failure of neoliberal policies and the inability of capitalist governments to protect their own people. Hunger and social inequality are on the rise in Latin America.

In Cuba, blockaded and besieged by the empire, we have problems, shortages, long lines. We are not satisfied; we know we can and must do better, but no one has been or will be left unprotected, abandoned to fate.

It is imperative to continue eliminating obstacles, many of which are subjective, and depend on our efforts; to encourage and motivate the productive forces; create greater complementarity among different economic actors, to make the most of our own potential, and to work – united - in the construction of an increasingly just, inclusive and prosperous society, to which greater economic efficiency is key.

Taken from Granma