Thursday, July 30, 2020

Cuba Continues Reforms

Cuba is loosening restrictions on small businesses as it seeks to stimulate a state-dominated economy effected by events in its ally Venezuela, the United States sanctions and the pandemic. 

President Miguel Diaz-Canel, however, speaking earlier this month, said the country faced an ongoing international crisis and would implement a series of reforms to increase exports, cut imports and stimulate domestic demand. The economy is forecast to decline this year in tandem with the region, or a bit less than 10 percent. The government admits it has little foreign exchange to buy food, fuel and other supplies from abroad, where the peso is worthless. Cuba faced a liquidity crisis even before the coronavirus pandemic shuttered tourism and hit other revenue earners.

The measures include more autonomy for state companies, farmers and local government, dollarisation of some internal trade and, Diaz-Canel said, "the improvement of the non-state sector, with immediate priority in the expansion of self-employment and removal of obstacles."

The non-state sector, excluding agriculture, is composed mainly of small private businesses and cooperatives; their employees, artisans, taxi drivers and tradesmen. All are under the rubric of self-employed, numbering 600,000 before the pandemic left an estimated 40 percent tied to the tourism industry and public transportation without work.

One obstacle already removed regards the right to import and export, albeit through state companies.

"We want to put all forms of management on an equal footing," Foreign Trade Minister Rodrigo Malmierca said.

COVID-19 pandemic has worsened shortages of food, medicine and other goods and led to long lines at retail outlets.

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