Cuba welcomes 2021 in victory, introduces new monetary policy

On Jan. 1, the 62nd anniversary of Cuba’s revolutionary victory, the government is implementing a sweeping economic policy with reorganization of the monetary system to promote more efficiency and greater production. It comes at a crucial time when the U.S. blockade and the impacts of COVID-19 are creating deeper difficulties for the Cuban people. Cuba’s socialist system enabled the people and government to weather the storm of 2020 and save lives in a way that U.S. capitalism could not and did not do. The most telling example is Cuba’s unified effort to overcome COVID. Only 145 people have died from the virus, just 1.2 percent of the per capita COVID death rate in the United States. And Cuba’s outstanding internationalist medical workers went to dozens of countries to help beleaguered peoples in their crisis. The “Economic Ordering Task,” approved by the National Assembly of People’s Power with 110 resolutions and detailed in 1,021 pages, was published on Dec. 10 in Cuba’s Official Gazette. Its general outline was presented in the media weeks preceding its publication. The central feature of the monetary overhaul is the elimination of the dual-currency model that has been active for years. The plan includes a significant and much-needed increase for all state workers’ incomes and retirees’ pensions. At the same time, it establishes higher retail and wholesale prices, including for goods, services and utility rates, due to devaluation of the peso and as a truer reflection of costs to ensure financial stability. A return to one sole currency and unified exchange rate of the Cuban national peso will favor national production like agriculture over imports, especially since imports will become more expensive. But certain imports like fuel for electricity and transport cannot be replaced with sufficient national production. Therefore, the increase in electricity rates for the public. The complexity of the plan — in the midst of constant recalculations of the damage done to the economy by the blockade — requires a careful balance between raising salaries and prices without causing inflation, and motivating the workforce with higher salaries, to then generate enough production, wealth and development. It is a greater challenge with the lack of spare parts and raw materials. The plan offers favorable terms to foreign investors, like majority participation in tourism, biotechnology and wholesale trade, but not in mining and public service. Read the full article: https://www.liberationnews.org/cuba-welcomes-2021-in-victory-introduces-new-monetary-policy/