Cuba is not ready for the fall of the government of Maduro

“We will soon own chickens will become,” complains the Cuban housewife desperate to even buy the currency stores any other meat except chicken. Since in Venezuela the crisis erupted, supply goods retail outlets in Cuba deteriorated sharply and threatens to deteriorate even stronger in the next six months, says economist Omar pérez (Omar Everleny Pérez).

“In the first six months of this year, Cuba has cut imports by $ 1.5 billion, which will immediately affect the population,” says Perez.

The decision on such a sharp decline in purchases of goods abroad is dictated by the fact that the country paid more than $ 2.3 billion in external debt, the revised Paris club and other creditors, as explained by a former Director of the Cuban center for economic research.

“Revised debt hanging in 1986. Lenders wrote off up to 90%, but the remainder is still impressive. How to pay? To restrict the import!” — said the expert.

According to Perez, who is cooperating with the magazine Temas, the Cuban economy begins to show signs of recovery in the macroeconomic equilibrium, but not enough of them.

“From the perspective of macroeconomics there is a change in the trend, but 1% growth is not what it says. The country needs to grow by 5-7% and more than one year, so people felt it,” he adds.

“With the pace of growth to feel the improvement of living standards will be possible only after 30 years. Try to tell the fiftieth person,” says Perez.

In the first half of this year the Cuban economy grew by 1.1% after falling 0.9% in 2016. This result, announced by the National Assembly of people’s power, is made possible, according to Perez, with the growth of tourism 23% and a good harvest of sugar cane, which gave about 1.8 million tons of sugar.

“Tourism changes lives in many places in Cuba. For example, in the municipality of Trinidad, the incomes of non-state tourism sector for the first time exceeded revenues to the state of the company. In 2016, they accounted for 56.9% of all income,” — says the expert.

Consulting group The Havana Consulting Group and Tech (THCG), based in Miami, recently noted the growth of another engine of the Cuban economy is the remittances from abroad. According to published her data, in 2016, their volume increased by 2.7%, reaching the amount of 3,444 million $ 537 million higher than the net income from tourism for the same year, according to official sources.

Perez concerned about the fact that the possible fall of the government of Nicolas Maduro, a strong impact on the Cuban economy.

“Even despite the crisis, Venezuela remains Cuba’s trading partner number one. For two years, as there the problems started, but the Cubans have not taken any measures to protect themselves in the event of termination of trade relations with Venezuela,” — says the expert.

Perez believes that in Havana had a long time to think about sending their highly qualified personnel to other countries with oil reserves, such as Angola or Algeria. “This collaboration will never reach the level of the Cuban-Venezuelan relations, and African countries do not need such number of Cuban doctors, but at least it might soften the blow”, — said the economist.

At low or moderate oil prices, Cuba could buy from other friendly countries like Russia or Algeria, but the chronic problem is the lack of credits, as recognized by the Cuban Minister of economy and planning Cabrisas Ricardo (Ricardo Cabrisas). The Report on the implementation of the economic plan for 2017, he noted that credit usage “hampered” by the presence of a large number of outstanding debts.

Meanwhile, according to Perez, Cuba is trying to strengthen the new arrangements for the production of electricity from renewable sources, but she “needs time and money.” Efforts are also being made to revive its own oil industry, are in decline due to depletion of deposits.

“In the event of termination of the supply of Venezuelan oil crisis will not be as sharp as during the Soviet era. Cuba receives from Venezuela only half the required amount of fuel, while the Soviet Union received 100%”, — the expert adds.

“Cuba should bet on foreign investments,” said Perez, who was suspended from office after a series of critical lectures on the current state of the economy of the island.

“In the economic program said that foreign investment is not a Supplement to internal, and part of them, but in practice, their volume is not growing,” he says.

Despite the fact that the government offers a wide choice of foreign investors within the framework of the flagship project in this area is a Special development zone of Mariel, he still bogged down in the small investment.

Peres is convinced that the country must immediately expand opportunities for private entrepreneurship, which is unlikely, given the recently announced freeze the issuance of new licenses.

“A huge number of workers could get out from under state custody and pay taxes, doing their professional activities. This would avoid to engineers and computer scientists went to Canada or went to work as a taxi driver.”

The expert believes that the state is not interested in the existence of healthy competition, because his ideology still sees the ideal in the big state socialist enterprises.

“And ideology in Cuba is still more important than the economy”, — said sorry to Perez.