The Cuban Minister of Economy and Planning, Alejandro Gil, defended this Tuesday the opening of stores that charge exclusively in foreign currency, arguing that without them “the country’s economic situation would be even more complex.”
Gil told the Cuban News Agency (ACN) that “although many do not see it that way, it is a measure of social justice, because it allows us to redistribute currency based on the supply of the commercial network in pesos,” although He recognized that “these are adjustment measures that have a cost,” since they know “that the population cannot fully meet their needs in these establishments in MLC.”
The stores in MLC began to operate in Cuba at the end of 2019, first with offers of electrical appliances, hardware or furniture to capture the “dollars that escaped the country,” in the words of the minister, from people who traveled to nearby countries to buy merchandise and then resold them on the informal market.
The initial objective of the MLCs was to use foreign currency “according to the development of the national industry and maintain a stable level of offers in pesos”
In July 2020, they were allowed to sale of food and toiletries, a very controversial measure because they are the best-stocked stores, but most Cubans charge in pesos and do not have access to dollars. With the implementation in 2021 of the economic reform package known as the Ordenamiento Task, they expanded their sales to clothing, shoes and other items, including strollers and cribs.
Added to this is the growing gap between the official exchange rate, at 24 pesos per dollar, and the exchange rate in the informal market, which is almost in the 100 pesos.
The initial objective of the MLCs was to use foreign currency “according to the development of the national industry and maintain a stable level of offers in pesos,” said Gil, who argued that “nobody calculated that an epidemic would make the situation even more complex.”
For the average Cuban, the entry into force of these measures coincided with the shortage of food and medicine, and queues for hours to acquire basic products, almost always concentrated in the stores in MLC.
In this regard, the head of the Ministry of Economy explained that “there is a group of products that we have to offer in this currency, but if tomorrow we put them in national currency they will last 15 days and then there will be neither currency nor weight.”
He also pointed out that from the sales in MLC “more than 300 million dollars were used to supply merchandise to the trade network in national currency”, but the truth is that these are still out of supply.
Regarding the growing inflation on the Island, the minister assured that the way to deal with it “is associated precisely with the increase in offers by the State, in national currency, which is not achieved from one day to the next.”
Despite everything, Gil insisted on the “temporary nature” of the decision “whose objective is being fulfilled” and reiterated that they will continue to operate depending “on the recovery of the economy and that we can provide the Cuban peso with a real capacity to purchase”.
As for the growing inflation on the island, the minister assured that the way to deal with it “is associated precisely with the increase in offers by the State, in national currency, which is not achieved from one day to the next.”
The 2021 financial year closed with inflation above 70% in the retail market, according to the government, although some experts estimate real inflation (including the informal market) about 500%.
As usual in the Cuban authorities, Gil mentioned among the reasons for the scarcity of supplies the US economic sanctions and the impact of covid-19, and in no case, “a design problem, as many consider”.
Months ago, the Government itself acknowledged before the National Assembly that the “design problems” of the Code and the “difficulties” of its implementation, partly due to the national and global economic situation, generated “deviations”, “errors” and “results”. unwanted”, in addition to “multiple dissatisfactions among the population”.
Gil himself announced last December that there would be a “survey of all the entities that sell in MLC unauthorized“, but this Tuesday he did not provide information on how this process is going, which the minister then judged essential to help combat the rise in prices.
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