|
Economic good news for Cuba has eased financial pressure
|
|
|
CUBA grew by 11.8% in 2005. Even if part of this growth is discounted due to the revised methodology which counts public services at an approximate market value rather than cost) used by the Cuban authorities (the EIU estimates 8% using conventional methodology), it is clear that growth was significant.
Total GDP was reported (using Cuban methodology) as CUP 39.1 billion at the end of 2005. While it is difficult to translate this into US$ due to the nature of the dual currency system, the EIU suggests an estimate of US$ 36.3 billion.
Economic growth in 2004-5, coupled with a balance of payments surplus, has enabled the Cuban administration to pursue a more expansionary fiscal policy (see box right) which seeks to address both the fall in real wages and the high levels of underinvestment in the economy.
|
|
|
In addition certain key strategic investments have been made by state enterprises in the oil & gas and nickel sectors. These investments have been matched by the foreign joint venture partners. Additionally monies were set aside to reduce dependence on expensive foreign financing facilities.
|
|
Anti-corruption drive intensifies
Concurrently with a higher level of investment, efforts to confront 'corruption and illegalities' in the workplace have taken on a renewed focus during 2005-6.
On October 16, 2005, the staff of Havana's Cupet-Cimex and Cubalse's Oro Negro petrol stations were abruptly removed from their posts and replaced by social work students from Holguín. This program has subsequently been expanded into Cupet oil refineries, distribution centres and other sectors. This involvement of young people compliments one of the objectives of the 'Battle of Ideas' campaign.
A further sign of the priority being given to economic discipline and control has been the extension of the national network of auditing offices and an increased profile of the Ministry of Audit & Control.
In October 2006, the state newspaper Juventud Rebelde published a detailed critique titled 'The Old Swindle Part II,' which detailed extensive pilfering and skimming in shops and bars. This openness to the problems emphasises the importance attached to trying to find an appropriate solution and the non-acceptance of the status quo. Raúl Castro railed earlier in the year that 'The deadly cancer has metastasised from our kneesup here' [pointing to his chest].
|
|
Infrastructure spending
- Total central government spending is budgeted to increase by 23% in 2006.
- 52 hospitals and many smaller clinics have been extensively remodeled. Significant purchases of ambulances and other equipment is ongoing.
- Plans to construct 150,000 new homes by the end of 2006 and to repair 400,000 more represent a doubling of annual investment in this sector.
- Improvements to the water supply infrastructure ofUS$ 240 million in 2004-5.
- Extensive investment in the electric grid and power generation, including over US$ 800 million in small, diesel-powered generators (see article).
- Significant purchases of planes, trains and buses(see article).
|
|
Salary increases
- During 2005 there were several increases announced in salaries and benefits, especially for minimum wages, pensions and welfare payments (May and June) and those with postgraduate qualifications (November).
- Total state payments for wages and benefits rose by 25.8% in 2005, to CUP 4.26 billion, with the average nominal monthly salary (including bonuses) rising from CUP 354 to CUP 398, the minimum monthly pension from CUP 55 to CUP 164 and minimum social security transfers from CUP 62 to CUP 122.
|
|
|
