The Cuban Minister of Economy and Planning, Alejandro Gil, acknowledged that the diversion of diesel from the industry to the electricity generation has negatively affected the productive activity from the country.
Gil made these statements in the inaugural speech of the III Economic-Productive Conference of Cuba, an appointment of economists and state and non-state businessmen that takes place until Friday at the Chamber of Commerce in Havana.
from the theater of @Camara_Comercio, @AlejandroGilF He offered the inaugural conference of the III Economic-Productive Conference Cuba 2023, during which he urged to discuss how to achieve the productive chain between the different economic actors.https://t.co/tG9kKdAQFM
— Cuban News Agency (@ACN_Cuba) June 14, 2023
“In recent months we have had to consume fuel in generation, mainly diesel, due to the breakdowns we have had in the thermal plants. And this overconsumption of diesel in generation affects the economy, because it is less fuel that you can use in productive activity, ”he explained, quoted by efe.
Since April, Cuba has suffered a crisis due to a fuel deficit that has resulted mainly in shortages at service centers and long lines of vehicles, sometimes waiting for several days.
The Cuban government indicated at first that these were non-compliances on the part of the fuel-supplying countries and that the effects would last at least through April and May. The situation has not improved and the Executive has not advanced when the situation could normalize.
Difficult decisions
Gil added in his speech that this situation has led his ministry to make difficult decisions in the face of fuel shortages.
“From time to time we call an industry and tell it to stop: ‘Steel production must be stopped’, ‘Cement production must be stopped’,… For what? To try to affect the population less. And we always say when we pick up the phone that we also affect the population. We affect the blackout less, but we are ceasing to produce”, he affirmed.
#CameraNews ll The 3rd Economic Productive Conference is inaugurated, #Cuba 2023, in the @Camara_Comercio. pic.twitter.com/7ghMr5HpZt
— Cuban Chamber of Commerce (@Camara_Comercio) June 13, 2023
The minister stressed that the country continues to consume “a lot of fossil fuel for the generation of electricity” something that is a “limiting factor to economic growth.”
“The economy cannot live like this. The economy has to live on the basis of stable fuel and electricity generation, he pointed out.
He also clarified that there are obsolete productive capacities, which is why they are uncompetitive, and sometimes due to their high energy component they cause losses, but there are idle or semi-paralyzed ones due to lack of raw materials, supplies or parts, and therefore with interrupted workers. , with low salary, write another report of Cubadebate.
Inflation and foreign trade
Gil focused his intervention on import substitution, the export of goods and services to generate foreign currency and the attraction of foreign investment, which he called a “strategic ally.” He assured that Cuba is in a “productive recovery process” after “three years of a very complex economic situation.”
Furthermore, he reiterated according to Cuban News Agencys, the country’s interest in promoting foreign investment mainly with a view to food production, and the promotion of renewable energy sources, since Cuba’s largest spending bill is concentrated in food and fuel.
The island is experiencing its worst crisis in decades, with shortages of basic products (food, medicine, and fuel), persistent blackouts, depreciation of the national currency, partial dollarization of the economy, and high inflation.
The dollar reaches 200 pesos again in the informal market of Cuba
The minister assured that the country suffers a “very complicated inflation in recent years” and that this increase in prices is “one of the most visible problems that the economy has to face and solve.”
Part of the price increase is due, in his opinion, to Cuba’s strong dependence on the foreign market.
Opportunities
“We import more than 20 cents on the dollar to produce a peso of gross domestic product (GDP). We have a very high imported component. We have made a lot of efforts in the plans: we have put it in 17 we have put it in 16 and we never fulfilled it. We end up with a trend of continuing to import more to generate GDP and that is one of the main limitations for economic growth”, he indicated.
The dollar is exchanged for 24 Cuban pesos in the formal market (for state companies and legal entities), but in the informal market it has depreciated up to 200 pesos per US bill. Gil went so far as to ensure that Cuba would not have enough foreign currency to cover an economic growth of 4%, according to him. efe.
Currently, he added, the national supply is “very restricted” and imports do not meet demand, which has some capacity for consumption.
“Today, a very high percentage, I could say that more than 90% of the products sold in our network of stores in MLC (foreign currency) are imported. And in the national currency network, which is sold very little, a good part is imported product ”, he assured.
Cuba’s electrical system will face the summer in “better conditions,” according to the minister
To reactivate the economy, he advocated replacing imports of intermediate and final goods with “efficient” investment in national production -especially in industries with “idle capacities”-, and thus generate added value and employment.
In this way, the offer could be expanded, face inflation and reduce imports. “All of this can be done perfectly. We have the opportunity to resolve it,” Gil said.
