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Greater economic growth
expected in
2015
Council of Ministers reviews 2015
economic plan, state budget, and progress in
implementation of policy guidelines, additionally
approving five new housing related measures
Leticia Martínez
Hernández
“Next year, the Cuban economy will continue to
progress despite the blockade, external financial
restrictions and the international situation,”
asserted Minister of the Economy Marino Murillo
Jorge, during a November 28 Council of Ministers
meeting, presided by President Raúl Castro Ruz.
The
2015 Economic Plan, Murillo reported, is
fundamentally focused on maximizing efficiency;
directing resources toward the recovery of basic
sectors such as manufacturing; expanding investment
in production and infrastructure; and maintaining
social services at current levels.
According to the Ministry’s estimates, growth in the
country’s gross domestic product (GDP) for 2014 will
be 1.3%, well below the predicted 2.2%. The
sugar and manufacturing industries’ failure to meet
projections had a significant impact on economic
growth, Murillo said,
“Growth in the GDP for 2015 is projected as just
above 4%, with which we return to previous modest
rates,” he reported, with the greatest growth in
manufacturing, construction, commerce, agriculture,
livestock and forestry.
Projected for next year is an expenditure of 2.194
billion dollars to import food, 137 million more
than in 2014, with greater imports of flour, soy
beans, wheat and seed potatoes. On the other hand,
purchases abroad of rice, beans and corn will be
reduced, given the greater volumes being produced
domestically.
The
2015 Plan projects the availability of adequate
energy resources to meet the economy’s needs,
without reducing domestic consumption, and the use
of renewable resources to generate electricity
should reach 4.6% of the total.
In
regards to investment, Murillo reported that 7.159
billion pesos are projected, 1.59 billion more than
in 2014, saying, “Investments in production
represent 57.1% [of the total], and 17.7% for
infrastructure.”
Retail sales increased, while the restructuring of
the wholesale market with selected enterprises will
continue, he said.
The
Minister explained that, at the close of 2014,
employment stands at 2% above the projected rate,
fundamentally a result of an increase in the
non-state sectors. Salaries increased 9.1%,
reflecting raises approved for athletes and medical
professionals, as well as in sectors benefiting from
foreign investment, during the last months of the
year.
Employment trends in 2015 are projected to be
similar to this year’s, with the percentage of jobs
in the state sector declining 2.6 %, while non-state
employment should increase 7.4 %, principally as a
result of state restaurant and service facilities
being transferred to cooperative management.
2015 STATE BUDGET
As
2014 draws to a close, as is customary this time of
year, the state budget for the coming period was
presented to the Council of Ministers, and approved
for submission to the National Assembly, where it
will be considered during the month of December.
Lina
Pedraza Rodríguez, minister of Finances and Prices,
reported that a deficit in this year’s budget of
3.406 billion pesos is expected, lower than the
legally established limit.
Among the principal projections for 2015 are an
estimated 6% increase in income, and 10% in
expenditures, for a deficit of 5.563 billion pesos,
she said.
In
2015, measures will be implemented to strengthen
enforcement of economic regulations, related to such
issues as under-reporting of income on the part of
self-employed workers, in sales, services, and
especially housing rentals; misrepresentation of the
number of workers employed by a private party;
evasion of taxes on land transportation; and illegal
economic activity.
Additionally, the Minister reported, policies
providing financial benefits to increase
productivity and efficiency in state enterprises
will continue, noting that these have led to a
significant decrease in budget expenditures required
to cover losses.
Pedraza Rodríguez also reported that in accordance
with the timeline established for implementation of
new tax laws, a 2% tax on wholesale transactions
will be levied in 2015, and provisions for local
development taxes will be extended to all provinces.
IMPLEMENTATION OF NEW POLICIES REVIEWED
Also
becoming customary this time of year is a report on
the implementation of Policy Guidelines approved at
the 2011 6th Party Congress, presented by Marino
Murillo Jorge, head of the Policy Development and
Implementation Permanent Commission.
He
commented, “Extremely complex tasks impacting the
population are being undertaken, requiring continual
training of personnel, in addition to a systematic
process of follow-up, supervision and enforcement.”
Murillo continued, “Partial results are being
evaluated, with a view toward correcting, in a
timely fashion, errors which could temporarily
affect a part of the population, or give an
erroneous impression of the objectives of the
updating.”
According to the report, work continues on the
proposed “Conception of the Cuban socio-economic
model for socialist development” document, and
approved were principles to guide the preparation of
a long-term development program.
At
the same time, Murillo reported, policies and plans
have been approved for several key areas, including
the use of renewable energy resources, attention to
demographic changes, as well as foreign investment
and the portfolio of projects available to potential
investors.
He
said that the most important task now being
undertaken is to pave the way for the elimination of
the country’s dual currency, mentioning that stores
previously operating in CUC are now accepting
payment in both currencies, a practice which will
gradually be expanded throughout the country.
In
regards to the granting of credit to the population,
Murillo reported that, through October, some 378,000
loans were made for a total of 3.23 billion pesos.
Of these, 63% were granted to individuals for home
construction and repair; 35% to small farmers; and
2% to self-employed workers and non-agricultural
cooperatives, and for the purchase of kitchen
appliances.
Despite progress, he concluded, the new policy’s
provisions have not been adequately utilized “as a
mechanism to activate the economy.”
Among other issues, Murillo addressed the
improvement of Cuba’s state enterprises, with
policies being approved to afford greater autonomy
in defining social objectives, commitments to the
state, and sales of surplus production; as well as
linking salaries to performance, and the elimination
of administrative limits on pay increases; in
addition to a new financial relationship with the
state budget.
The
Minister also reported that the creation of 498
non-agricultural cooperatives had been approved, 329
of which had been constituted, while 300 new
proposals are being considered. Likewise, as of the
end of September, more than 476,000 self-employed
workers are registered.
HOUSING RETURNS TO THE AGENDA
The
Council of Ministers addressed the housing issue as
well, and approved measures to contribute to the
solution of this complex problem.
Among these were modifications to regulations
governing subsidies to individuals to construct or
repair a home. New situations have emerged since
these regulations went into effect a year ago,
according to Leonardo Andollo Valdés, second in
charge of the Policy Implementation and Development
Permanent Commission.
From
now on, for example, Municipal People’s Power
Administrative Councils will conduct, as a minimum,
two annual convocations for subsidy requests, in
accordance with funds available. Decisions will be
announced publicly.
Another approved measure legally recognizes
perpetual rights to land where families, left
homeless by hurricanes and other natural disasters,
have been granted permission to build homes. Some
20,000 people, who began construction without
required documents, will benefit and may now request
subsidies.
Likewise approved was the transfer of state housing
being constructed to individual households, who will
undertake finishing on their own, giving priority to
those affected by natural disasters, those living in
shelters, and social cases.
The
Council of Ministers also approved a new policy on
transferring ownership of homes provided by the
state, or basic dwellings built with subsidies,
since cases have been detected in which such
properties have been sold, when the state had
provided them to address specific housing problems.
The
amount of the subsidy provided must be returned to
the state, if the property is sold, or donated,
within the first 15 years after its acquisition.
When
this happens in the case of dwellings provided by
the state, a similar policy applies, and the state
must be reimbursed for the cost of construction, in
accordance with market prices.
Also
approved was the development of a market based
assessment reference, to be used to calculate taxes
levied on sales and donations of dwellings. The 4%
rate will be maintained in both instances.
This
measure comes as a result of under-reporting of
income by property sellers and buyers, who declare a
sub-par price for a home, while sales have been
masked as donations, which constitutes tax evasion,
as well, Andollo Valdés commented.
The
reference will define variables to be used to
determine the value of a home, including number of
bedrooms, type of construction, urban facilities
available, neighborhood advantages, and the
existence of a garage, patio or garden.
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