Unification of Dual Currency, but the Economic Future Remains Uncertain

Unification of Dual Currency, but the Economic Future Remains Uncertain

/ Miriam Leiva

Posted on December 27, 2013



HAVANA, Cuba , December, www.cubanet.org – Monetary and exchange rate

unification was addressed by Raúl Castro in his speech at the closing

session of the National Assembly and by Vice President Marino Murillo

Jorge, on December 21, according to the Cuban media. The interest of

calming the population can be seen in the president's assertion that

there will be no affects on those who legally earn income in hard

currency and in Cuban pesos, nor on the cash in hand of the population,

or on deposits in the national banking system.



He also added that "it will not be a magic solution to our problems, but

it will contribute decisively to improving the workings of the economy

and the building of a prosperous and sustainable socialism, less

egalitarian and more fair, which will ultimately benefit all Cubans." It

will begin with legal entities (agencies and state enterprises and

cooperatives) and will continue with natural persons, but currently

plans for its implementation are still be developed.



Meanwhile, Murilla said that in the coming two years the more technical

and complex tasks of updating the economic model will be undertaken. He

confirmed that the CUP (Cuban pesos) will be the only currency in the

country and that in no case would there by any impact on people's

purchasing power, as the financial capacity of the CUC (convertible

peso) will be respected.



He reiterated that the measure will not by itself resolve all problems,

but that it should be undertaken within the "guidelines" (the adopted

measures for updating the economic model), to continue promoting the

development of the state socialist enterprise, unleashing the productive

forces and creating an export mentality.



Undoubtedly, the tasks are immense, as it is almost impossible to

achieve efficiency in a socialist enterprise. First there must be an

effort to overcome all the characteristic deficiencies of the Cuban

system, such as reliability in accounting and respect for contracts,

eliminated in the 1960s as "capitalist malformations." The value of work

must be recovered, through conscious and creative participation of the

workers, which is not resolved by the Labor Code adopted at the National

Assembly session on 21 December.



Increases in production and productivity will be required in order to be

able to adequately reward employees whose salaries don't cover their

basic needs and who feel no incentive to work hard and, therefore, to

consider work as a social honor. The diversion of state resources as

compensation for the poverty level wages or to increase one's economic

level — enrichment Cuban-style — must be eliminated; in short, the

corruption generated by the system must be eradicated.



Unleashing productive forces is an imperative, but how? The straitjacket

of central planning and socialist enterprises, the rejection of market

forces, the restrictions on farmers and the self-employes, and other

problems, prevent it. To day, the measures implemented under the adopted

"guidelines" to update the system have not resulted in increases in the

food supply, which in many components has declined. Manufacturing

production is also falling and the private activities permitted do not

complement the straitened macroeconomics of the country.



We can see that in developed countries and in those that have overcome

poverty, small and medium enterprises (PYMES) carry important weight in

the national economy. The vicious circle of scarcity of products for the

national and international market, and the situation of nothing to

export and the importing of what could be produced in Cuba, continues.

An export mentality could be created, but will it happen? Will there be

solutions in the "more technical and complex tasks" as predicted by the

vice-president?



Miriam Leiva



25 December 2013, Cubanet



Spanish post

25 December 2013



Source: "Unification of Dual Currency, but the Economic Future Remains

Uncertain / Miriam Leiva | Translating Cuba" -

http://translatingcuba.com/unification-of-dual-currency-but-the-economic-future-remains-uncertain-miriam-leiva/