Cuban government declares it is in a “war economy” | International

The Cuban authorities, unable to cover up the situation any longer, consider that the island is in a “war economy”. In the midst of a crisis that surpasses the so-called special period of the 1990s, the government of Miguel Díaz-Canel is now resorting to a new package of measures to promote macroeconomic stability, which includes budget cuts, a policy of equal prices and regulations and adjustments aimed at “correcting distortions and restarting the economy in 2024”.

At a recent meeting of the Council of Ministers, Mildrey Granadillo de la Torre, First Deputy Minister of Economy and Planning, said the measures aim to adapt the 2024 plan and budget to the conditions of a “war economy,” a term often used in extreme situations and that the authorities are now applying to a country that closed 2023 with inflation at 30%, an economy contracting by 2% and a devaluation of the Cuban currency of more than 50% against the dollar and the euro in the informal market.

Cuban economist Pedro Monreal explained in an analysis in X that the use of the term “war economy” would justify greater control by the authorities. According to him, the term is used to justify total control because now “we need to plan the most and exercise the most control.”

The measures published in the official newspaper grannyinclude a reduction in “budget items with the aim of reducing the budget deficit in 2024.” The government also announced that it would centralize decision-making on the state budget.

The Cuban government will also implement a policy of equality and equal treatment that “includes and employs all economic agents on equal terms,” ​​which includes both the public and non-public sectors. Various media have reported that the selling prices of products such as chicken, oil, sausage, powdered milk, pasta and detergent will be capped, which would alleviate the dissatisfaction of many Cubans in the face of the high and fluctuating prices of these products in the private sector.

Monreal pointed out that “the most striking thing” about the new measures – for which no date has yet been set for implementation – is the intention to “postpone or even paralyze non-essential investments”. He also stressed that “without investment there is no growth or development, and so far the most important investments have been those in tourism. Will they continue?”

President Miguel Díaz-Canel said at the meeting that the country is suffering from “economic difficulties” that are affecting the timely delivery of food rations that each Cuban household receives through the so-called supply book; citizens are also facing constant power outages lasting several hours throughout the island and rampant inflation that limits families’ access to basic necessities. The president stressed that the causes of this situation are often “directly related to the bureaucracy and the inefficient control that we exercise from our institutional system.”

Sign up for our weekly newsletter to get more English-language coverage from EL PAÍS USA Edition