Cuba’s National Assembly holds session
Cuba’s National Assembly holds session
Correcting distortions in the economy due to noncompliance with the national plan
The National Assembly of People’s Power is the highest legal and political authority in Cuba, authorized by the Constitution to enact legislation, elect the President, approve the President’s cabinet, and elect the highest members of the judicial branch. Its 470 deputies are elected directly and indirectly by the people, in a two-stage process that includes direct multiple-candidate elections by the people of delegates to 168 municipal assemblies, which—with the participation of mass organizations of workers, women, farmers, students, and neighborhoods—nominate the deputies of the National Assembly, who subsequently are ratified by the people in the voting booth. The deputies of the National Assembly are elected to five-year terms, and the current legislature is the tenth that has been constituted since the system was established in 1976. Nearly 56% are women and 45% are blacks and mulattoes; both figures are disproportionately high. With an average age of 46 years, nearly 20% are less than 35 years of age.
The deputies and delegates are not professional politicians. Most continue working in their regular employment, although some have such extensive duties in administration or committees of the popular assemblies that they take leaves of absence from their jobs. The National Assembly, therefore, meets in ordinary session two times per year; with extraordinary sessions called when necessary. The legislative session of July 18-19, 2024, was the third ordinary session of the current legislative term. It thus is designated as the Third Ordinary Session of the Tenth Legislature of the National Assembly of People’s Power.
At the Third Ordinary Session of the Tenth Legislature of the National Assembly, the Minister of Finances and Prices, Vladimir Regueiro Ale, presented a report on the State budget. Regueiro noted that tax revenues—including income taxes, other taxes and duties, and social security contributions—constituted 60% of total state revenues for the year 2023. The State finished the year with a budget deficit of nearly 95 billion Cuban pesos, which was three billion pesos less than what had been approved by the National Assembly. The Minister noted that the level of tax collections foreseen by the 2023 national economic plan was not reached, as a result of restrictions on the performance of the economy due to the blockade. The year was characterized, he observed, by “domestic macroeconomic imbalances, high levels of inflation, and sustained financial tensions.”
In spite of the economic difficulties, 62% of the state budget was dedicated to social sectors, including free public health and free public education, from pre-school to higher education. The system of public health provided 110 million medical consultations and attended to more than eight million hospital patients. A total of 1,445,000 pupils/students were enrolled in the pre-schools, primary and secondary schools, technical schools, and special schools; while 264,000 students were enrolled in higher education. In addition, the State provided social assistance to families in need, cultural programs, and financing of sports activities and facilities.
The Minister of Finances and Prices stressed that priority must be given to the reduction of the fiscal deficit, which is a central cause of macroeconomic destabilization and inflation. Reduction of the state deficit is the key component of the Macroeconomic Stabilization Program, he noted. The fiscal deficit must be reduced by 25 billion Cuban pesos.
Prime Minister Manuel Marrero Cruz presented to the National Assembly a report on the “Projections of Government,” which addressed the distortions of the economy and the steps that are being taken to remedy them.
The Prime Minister reported that in order to increase national production, tariffs on the importation of raw materials and intermediate goods were reduced by 50%, especially with respect to agricultural, animal, and food production, beginning in early 2024. At the same time, import tariffs were increased for finished products, in order to protect national industry.
Agricultural production, the Prime Minister asserted, maintains its tendency of non-compliance with the national economic plan. The key to establishing order and incentivizing national production is the contracting of production by the municipal governments, avoiding intermediaries. “If we do not contract, we do not know the destination of these productions and they begin to be sold at abusive prices.” This process has been going well in the current year, with the contracting of 95% of the agricultural products by the governments for sale to the people at subsidized prices. We are continually moving toward greater contraction by the local municipal governments, which increases their autonomy and empowerment.
The Prime Minister reported on the process of purification on the use of land that has been granted to tenants. Some 388,000 tenants were visited, and 130,000 violations of the terms of tenancy were found. With respect to the raising of large cattle, 98,000 violations were found, and 66% have been resolved.
The Prime Minister acknowledged that the high prices of goods and basic services to the population continues to be one of the principal sources of dissatisfaction among the people. It therefore was decided to approve a new price policy, in order that prices reflect the objective conditions of their production. The prices of six products in high demand are now regulated. The process of price regulation has been developed on the basis of interchange in 4,363 meetings with non-state enterprises, which began on July 8 and is maintained.
The Prime Minister reported that, in only two days in July, inspections were made in 891 enterprises, in which 4,000 violations were found and fines were imposed, in a total amount of more than 13 million Cuban pesos. The violations included the hoarding of goods. Inspectors are going to where the products are sold, and imposing sales at established prices. In addition, fifty-three licenses were withdrawn, and products were seized.
The Prime Minister reported that "the objective is not to close businesses, but to persuade them to comply with what has been established. We will continue with this confrontation” in a systematic form. It should be noted that the population has called for and fully supports such actions by the State, because speculative pricing and hoarding by intermediaries are key factors in inflation.
The Prime Minister noted that the government is updating the juridical norms with respect to the new economic actors, seeking a greater integration of the new economic actors with the state companies. The goal is to defend and strengthen the production chain. The new regulations specify that the owners of the new private companies ought not be family members of the directors of a state company with which it has a relation, nor should they be ex-employees of the state company. The private companies should produce and sell in accordance with the national plan. In addition, the new regulations establish that when a non-state company sells goods or services to a state company, the profit should be no more than 30%. This regulation seeks to correct a situation in which, at times, the profit is double or triple the actual cost of the product.
The prime minister asserted that, in general, new rules will correct the distortions generated by loopholes in the previous rules and by violations of what has been established. This is not, he noted, a crusade against the private companies. “It is not a matter of prohibiting, but of correcting, reorienting, leading and ensuring that each economic actor plays its corresponding role. . .. We ask all that want to open a business that it contributes to the needs of the people, that it be integrated with our state companies,” which are the principal force in the economy.
In his speech at the closing of the Third Session of the Tenth Legislature, Cuban President Miguel Díaz-Canel addressed the theme of non-compliance with the plan. He noted that, in its commitment to opening space for private enterprises in order to strengthen the economy, in accordance with the wishes of the people and the Party, the government did not give sufficient attention to creating a strong and comprehensive system for the regulation of small private enterprises, which already had been operating in the economy without formal recognition. Now it can be seen in retrospect that many of those businesses did not respond to the confidence that the State had placed in them with the honesty and transparency that society requires. Thus, we are now undertaking a confrontation with the lack of control, illegalities, tax evasions, and fraud, in both the private and state enterprises. “This is a battle against illegality and not against forms of property.”
From the beginning, Díaz-Canel noted, the small private enterprises were conceived as economic actors that complemented the state sector, particularly with respect to production. But there has emerged a great distortion, in which a good part of the new economic actors are dedicated to the importation of products that, although they address immediate shortages of the people, do not contribute to the sustainable development of the country. The challenge before us is “to advance at an accelerated pace, in an integrated and harmonious manner, in the development of the main productive processes of the country.” Including the organization of productive processes with efficiency and innovation. “Zero tolerance for those who take advantage of economic difficulties to enrich themselves without contributing! Zero tolerance for the indolent, for the rascals and for the lazy!”
The Cuban President and head of the Party referred to the visits to localities throughout the country that the Party has undertaken, with the intention of demonstrating the commitment of the Party and the government to the expansion of production and to accompany the people in the quest for innovative ways to overcome the consequences of the intensification of the blockade since 2017. He declared that these visits
make it clear to us that Cuba has women and men capable of overcoming the inhumane effect of the U.S. blockade: we have seen cultivated lands that were previously infested with weeds; small factories born from spaces that were previously useless; we have talked with labor groups who are distinguished by a deep sense of belonging, of satisfaction for what is born from sustained effort; and marked by a direction that knows how to propose boldly in these cases, that focuses on solutions and that has banished the word "defeat" from everyday philosophy. . ..
There is an accumulation of potentialities, an invaluable richness in the Cuban's own strengths, in innovative capacity, that innate quality that emerged from the hard times of the [struggle for independence] and that since then has worked all kinds of triumphs. We have a natural intelligence that, cultivated and refined in decades by a Revolution that defends knowledge and thought, can continue to lead us to the multiple solutions that Cuba needs.
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