updating the cuban economic model, anec

UPDATING OF THE CUBAN ECONOMIC

MODEL

ASOCIACIÓN NACIONAL DE ECONOMISTAS Y CONTADORES DE CUBA

GDP INCREASE WILL BE 3,1 %, AGAINST 3,4 PLANNED IN 2012

ALL ACTIVITIES GROW EXCEPT CONSTRUCTION

REST OF MATERIAL PRODUCTION GROWS 4,5 %

SOCIAL SERVICES MANTAIN SAME LEVEL

PLAN FOR 2013, 3,7 %


CUBAN ECONOMY

NATIONAL BUDGET

TOTAL EXPENSES: 46,0 BILLIONS PESOS

EDUCATION: 19,2 %

SOCIAL SERVICES : 11 %

PUBLIC HEALTH: 15,1 %

CULTURE AND SPORTS: 4,3 %


CUBAN ECONOMY

BLOCKADE HAS INTENSIFIED, LOSSES REPRESENT OVER 1 TRILLION DOLLARS

PROHIBITION OF THE USE OF THE US DOLLAR

TORICELLI AND HELMS-BURTON ACTS

SECTION 211, OMNIBUS LAW

ING FINED OVER 600 MILLION DOLLARS

FLIGHTS FROM EUROPE TO CUBA, MEXICO AND CANADA


EXTERNAL FACTORS

EURO CRISIS

WE PAY MORE FOR IMPORTS AND GET LESS FOR EXPORTS

TOURISM HAS DECREASED: SPAIN 20 %, UK 16 %.

WEEKLY FLIGHTS FREQUENCIES FROM MADRID HAVE DECREASED IN THREE

NEW REGIONAL INTEGRATION POSSIBILITIES: ALBA AND CELAC


EXTERNAL FACTORS

COMMODITY IMPORTS AND EXPORTS PRICE VOLATILITY,, HAVE ORIGINATED A LOSS OF 10 BILLION DOLARS BETWEEN 1997 AND 2009.

FOOD PRICES HAVE INCREASED SINCE JANUARY: WHEAT 42 %, SOYA 35 % AND CORN 27 %

2012, FOR THE SAME VOLUME OF IMPORTS WE PAID 1,700 MM USD AGAINST 1500 MMUSD IN 2011, IN 2013, 2000 MMUSD

FINANCIAL SPECULATION HAS INCREASED 3 TIMES IN JUNE-JULY


EXTERNAL FACTORS

HURRICANES FROM 1998 TO 2008 BROUGHT LOSSES OF 20 BILLION DOLLARS

ECONOMIC LIMITATIONS SINCE 2005 TO FACE BALANCE OF PAYMENTS DEFICITS

LOW PRODUCTIVITY IN ENTERPRISES

LOW EFFICIENCY IN AGRICULTURAL AND INDUSTRIAL SECTORS

DECAPITALIZATION OF PRODUCTION FACILITIES AND INFRASTRUCTURE


INTERNAL FACTORS

A SOCIALIST ECONOMY WHERE PLANNING TAKES PRECEDENCE OVER THE MARKET

THE POPULATION SCIENTIFIC AND CULTURAL POTENTIALITY

THE TOURIST POTENTIALITY OF OUR COUNTRY DUE TO ITS NATURAL CONDITIONS AND OUR HOSPITALITY

THE GUIDELINES APPROVED BY THE 6Th. PARTY CONGRESS AND THE NATIONAL ASSEMBLY


STRENGTHS

ORIGINAL GUIDELINES 291 100

MANTAINED 94 32

MODIFIED OR INTEGRATED TO OTHERS 197 68

MODIFIED 181 62

INTEGRATED TO OTHERS 16 6

NEW 36 12

TOTAL GUIDELINES 313 108

CANTIDAD %


UPDATING OF THE CUBAN ECONOMIC MODEL PROCESS

163 000 MEETINGS AND 3 MILLION CONTRIBUTIONS

NO POLITICAL CHANGES, NO ECONOMIC REFORMS

UPDATING OF THE CUBAN ECONOMY TO CONTINUE THE ROAD TO

SOCIALISM

MAINTAIN THE BASIC CONQUESTS, IE SOCIAL SERVICES

NOT TO LEAVE ANYBODY UNPROTECTED


IRREVERSIBILITY OF SOCIALISM

SOCIALISM IS EQUAL RIGHTS AND OPPORTUNITIES FOR ALL CITIZENS, NOT EGALITARIAN TREATMENT

DRAFTED AND APPROVED FOR 2012-2015 WITH 55 GOALS

STUDY AND INTRODUCTION OF NEW PROFOUND POLICIES OR MEASURES, MORE COMPLEX AND WHICH LEAD US TO THE MOST PROFOUND TRANSFORMATIONS


ECONOMIC DEVELOPMENT STRATEGY

STARTING POINT: 313 GUIDELINES

MAIN MEANS OF PRODUCTION ARE STATE OWNED

PRIORITY TO THE DEVELOPMENT OF PRODUCTIVE FORCES

TOTAL PRIORITY TO THE AGRICULTURAL SECTOR

DEVELOPMENT OF SECTORS WHICH GENERATE INCOME: TOURISM, BIOTECNOLOGY AND PHARMACEUTICAL PRODUCTS

NEW TAX SYSTEM


CONCEPTUALIZATION OF THE SOCIAL AND ECONOMIC MODEL

DIFFERENT FORMS OF PROPERTY ADMINISTRATION: STATE OWNED THE MOST IMPORTANT

THE POPULATIONS MAIN INCOME SHOULD BE THEIR SALARY

CONCENTRATION OF PROPERTY WILL NOT BE ALLOWED IN NON STATE PROPERTY ADMINISTRATION OR OWNERSHIP


GUIDELINESPRINCIPLES

ONCE THE CONCEPTUALIZATION HAS BEEN FINISHED WE MUST ELABORATE A LONG TERM PROGRAM

IT SHOULD HAVE FIVE YEAR PROYECTIONS AND YEARLY PLANS

MACRO ECONOMIC AGGREGATES SHOULD BE DEFINED: GDP, POPULATION AGEING, SALARY REAL PURCHASE CAPACITY,MORTALITY RATE AMONG OTHERS

IT WILL DEFINE THE NEEDS FOR FOREIGN INVESTMENT AND THE VALUE CHAINS IN PRODUCTION


SOCIAL AND ECONOMIC DEVELOPMENT PROGRAM

PLANNING SHOULD CONTEMPLATE ALL FORMS OF PROPERTY

ADMINISTRATION AND TAKE INTO ACCOUNT THE MARKET

DECENTRALIZE THE LEVEL OF APPROVAL FOR INVESTMENT PROYECTS

SEPARATE STATE FUNCTIONS FROM THE ENTERPRISE FUNCTIONS

DECENTRALIZATION OF MANAGEMENT DECISIONS AT THE LEVEL OF THE

ENTERPRISES

BETTER COORDINATION BETWEEN THE PLAN GOALS AND THE SCOPE OF

FISCAL AND MONETARY POLICY

INTEGRAL STRATEGY TO FACE POPULATION AGEING


SOCIAL AND ECONOMIC DEVELOPMENT PROGRAM

PRICE POLICY:

WHOLESALE AND AGRICULTURAL PRICES ARE LINKED TO THE NEW MARKETING POLICY

FULFILL STATE CONTRACTS AND SELL THE SURPLUS AT MARKET PRICES

THIS YEAR 57 % OF AGRICULTURAL PORDUCTION WERE SOLD TO THE STATE

PRICES SHOULD TEND TO MOVE CLOSER TO WORLD MARKET PRICES


UPDATING OF THE CUBAN ECONOMIC MODEL

CREDIT POLICY:

RENEGOTIATE STATE ENTERPRISES DUE DEBTS TO BANKS SO AS TO FACILITATE NEW FINANCING

RISK ANALYSIS

TRANSFER THE EXTERNAL CREDIT CONDITIONS TO THE INTERNAL ECONOMY WHENEVER POSSIBLE. LIQUIDITY INCREASE

INCREASE AND DIVERSIFY CREDIT OFFERS TO THE POPULATION AND NON STATE PROPERTY ADMINISTRATIONS

47 000 CREDITS FOR OVER 300 MILLION PESOS HAVE BEEN GIVEN TO THE POPULATION SINCE LAST DECEMBER



STATE ENTREPRISES:

THEIR EFFICIENCY ARE THE KEY TO THE SUCCESS OF THE MODEL

NEW SYSTEM OF RELATIONS BETWEEN ENTREPRISES, OSDE AND MINISTRIES

GOVERNMENT BOARDS WILL BE CREATED

THE ENTREPRISE PLAN WILL BE APPROVED AT THE OSDE LEVELS AND WILL CONTAIN ONLY A LIMITED NUMBER OF INDICATORS

WIDEN SCOPE OF ACTIVITIES

THEY WILL HAVE THE NECESSARY FACULTIES



STATE ENTREPRISES:

DEPRECIATION WILL NOT BE CONTRIBUTED TO THE NATIONAL BUDGET

A FUND IS CREATED TO FACE FINANCIAL UMBALANCES AND CREATE A RESERVE FROM PROFITS TO INCREASE WAGES

THEY WILL OPERATE ONLY IN CUP

THE SELECTED ENTERPRISES WILL RECEIVE TRAINING IN 2012

THE EXPERIMENT WILL BEGIN ON JANUARY 2013



LAW DECREE 300 HAS BEEN ENACTED

LAND GIVEN IN USUFRUCT WILL INCREASE TO 13,4 HECTARES, OR UP TO 67 IF YOU HAVE OTHER LAND IN UBPC OR CPA

HOUSES CAN BE BUILT

THE USUFRUCT RIGHT CAN CONTINUE FOR THOSE FAMILY MEMBERS WHO ARE WORKING THE LAND

THE USUFRUCT IS FOR 10 YEARS, CAN BE EXTENDED FOR SUCCESSIVE SIMILAR PERIODS


AGRICULTURE

NEW MARKETING POLICY IN HABANA, ARTEMISA Y MAYABEQUE

TO MAKE MORE FLEXIBLE AND TO REVITALIZE SUPPLIES AND SALES TO THE POPULATION

PRODUCERS WILL HAVE DIRECT ACCESS TO MARKETS

STATE OWNED AGRICULTURAL MARKETS WILL BECOME COOPERATIVES


AGRICULTURE

1 MILLION 770 THOSAND HECTARES, 496 000 IDLE

1989, 540 WITH A FAVORABLE SITUATION, 1122 THAT MAY SOLVE THEIR PROBLEMS AND 327 TO DISSAPEAR OR MERGE

116 MILLIONS OF WORKING CAPITAL INCLUDED IN THE NATIONAL BUDGET WILL COVER A PART OF THEIR ACCUMULATED DEBTS

THE REST UP TO 332 MILLIONS WILL BE PAYED BACK THROUGH A 5 % TAX ON GROSS SALES BEGINNING IN 2013

BANK DEBTS WILL BE RENEGOTIATED UP TO A MAXIMUM OF 25 YEARS


UBPC

THEY ARE EXONERATED FROM PRESENTING A TAX DECLARATION AND PAYING TAXES FOR THE FIRST FIVE YEARS

DEBTS WITH THE TREASURY FOR 7 MILLION 800 THOUSAND PESOS WIL BE CANCELED

THEIR CCOPERATIVE STATUS IS RATIFIED AND THEY WILL WORK UNDER THEIR OWN RULES AND GENERAL ASSEMBLY

HOUSES CAN BE VALUED AND SOLD TO THE PARTNERS

PRODUCTION NOT CONTRACTED WITH THE STATE CAN BE SOLD FREELY


UBPC

PREFERED FORM OF NON STATE ADMINISTRATIONS

STATE PATRIMONY FACILITATED FOR 10 YEARS IN USUFRUCT, LEASING OR LOAN

LEASING EXPENSES ARE DEDUCTIBLE FROM TAXES

MEMBERS ARE PAID ACCORDING TO THEIR WORK

THE ASSEMBLY MANAGES AND THEY HAVE LEGAL PERSONALITY


NON AGRICULTURAL COOPERATIVES

222 HAVE BEEN APPROVED ON AN EXPERIMENTAL BASIS, SUCH AS AGRICULTURAL MARKETS, PERSONAL SERVICES, GASTRONOMY, TRANSPORT

GRADUAL PROCESS AND AFTER RESULTS A NEW GENERAL LAW WILL BE ENACTED FOR COOPERATIVES


NON AGRICULTURAL COOPERATIVES

GIVE MORE FLEXIBILITY

GENERALIZE IN THE WHOLE COUNTRY THE LEASING OF PREMISES FOR PERSONAL AND HOUSEHOLD SERVICES, 1045 UNITS WITH 3556 WORKERS

1183 GASTRONOMY FACILITIES WORKERS WILL BE LEASED, OF UP TO 5 WORKERS. 14 % OF THE GASTRONOMY NETWORK

NOVEMBER 2012: OVER 395 000


AUTONOMOUS WORKERS

NICKEL

TOURISM

BIOTECNOLOGY AND PHARMACEUTICAL PRODUCTS

TOBACCO

COFFEE

SUGAR

OTHER TRADITIONAL PRODUCTS


EXPORTS

MAIN EFFORT FOOD PRODUCTION STRATEGIC GOAL URBAN DEVELOPMENT OF AGRICULTURAL PRODUCTION CREDIT FACILITIES REDUCTION OF FISCAL CHARGES IN COMPARISON WITH OTHER

ACTIVITIES PRICE INCREASES FOR AGRICULTURAL PRODUCTIONS


SUBSTITUTION OF IMPORTS

NEW PRODUCTION FACILITIES: CIENFUEGOS REFINERY AND GNL PLANT. PETROCHEMICAL FACILITIES

SPECIAL DEVELOPMENT ZONE IN THE PORT OF MARIEL

RAILWAY FACILITIES

OIL EXPLORATION IN THE GULF OF MEXICO

SUGAR AND RICE PRODUCTION INCREASES


INFRASTRUCTURE


INFRASTRUCTURE

UPDATING THE INVESTMENT PROCESS

FACILITATE THE PARTICIPATION OF FOREIGN INVESTMENT WITH THE FOLLOWING OBJECTIVES:

• ACCESS TO ADVANCED TECHNOLOGY

• MARKET ACCESS

• MANAGEMENT SKILLS

• MIDDLE AND LONG TERM FINANCING

THE MORE YOU EARN THE MORE YOU PAY

BUDGET LAW CAN BE UPDATED YEARLY

GUARANTEE INCOME REDISTRIBUTION

BETTER COORDINATION BETWEEN THE PLAN GOALS AND THE FISCAL AND MONETARY POLICIES

GRADUAL REDUCTION OF THE LABOR FORCE SALARY TAX FROM 25% TO 5% IN 5 YEARS

EARMARK INCOME FOR LOCAL GOVERNMENTS


NEW FISCAL LAW

ADD NEW PRODUCTS TO THE CONSTRUCTION MATERIALS BEING SOLD TO THE POPULATION IN CUBAN PESOS WITHOUT SUBSIDIES

110 MILLION HAVE BEEN GRANTED TO NATURAL PERSONS WHO LACK LIQUIDITY SO AS TO UNDERTAKE CONSTRUCTION ACTIONS IN THEIR HOMES

CREDITS TO THE POPULATION MAINLY FOR CONSTRUCTION NUMBER 47 000 FOR A VALUE OF OVER 300 MILLION PESOS


ACTIONS WITH IMPACT ON THE POPULATION

FLEXIBILITY FOR THE PROPERTY TRANSFER OF AUTOS

FLEXIBILITY FOR THE PROPERTY TRANSFER OF HOUSES

THE POLICY FOR UPDATING THE WORK CODE HAS BEEN APPROVED AND IT WILL BE SUBMITTED TO THE NATIONAL ASSEMBLY NEXT YEAR


ACTIONS WITH IMPACT ON THE POPULATION

INSTITUTIONAL MEASURES

IMPROVEMENT OF MANAGEMENT SYSTEM AND GOVERNING BODIES

• REDUCTION AND MERGING OF MINISTRIES

• REORGANIZATION OF MINISTERIAL FUNCTIONS

• REORGANIZATION OF THE LOCAL GOVERNMENTS OF POPULAR POWER


SUMMARY OF MEASURES TAKEN

INSTITUTIONAL MEASURES

JURIDICAL REORGANIZATION

• 7 LAW DECREES APPROVED BY THE COUNCIL OF STATE

• 3 DECREES APPROVED BY THE COUNCIL OF MINISTERS

• 66 RESOLUTIONS AND INSTRUCTIONS ISSUED BY THE CORRESPONDING MINISTRIES

• PROCESING AND DRAFTING OF SYSTEM AND SUBSYSTEMS RULES

MASAS MEDIA COMMUNICATION WILL SPREAD INFORMATION ABOUT THE WHOLE PROCESS


SUMMARY OF MEASURES TAKEN

updating the cuban economic model, anec

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