Cuban Government Approves Measures to Boost the Economy

The Council of Ministers approved a set of measures to boost the economy, including a salary increase in the budgeted sector and also pensions, which will benefit more than two million 750 thousand people.

The Council of Ministers, headed by its President, Miguel Díaz-Canel Bermúdez, approved several measures in order to promote an economic strategy based on maximizing the internal capacities and human potential of the country.

The president explained that from the visits to the provinces, the opinion of the population, expositions in congresses such as the one of the Central de Trabajadores de Cuba and addressing the problems facing the economy, aggravated by the hostile policy of the US Government, for a few months, a working group – also attended by academics from the economic sciences – systematically debated the decisions that are now approved by the highest government body in the country.

The Minister of Economy and Planning, Alejandro Gil Fernandez, said that in general the measures “are focused on giving a greater response to the needs of the population and the economy, encouraging the active participation of all actors in the search for solutions and in the confrontation with the economic siege imposed on us by the Government of the United States. ”

The purpose is that the decisions, in addition to stimulating savings, promote development and allow the continued advance of the fundamental issues that generate more favorable conditions for the Cuban economy.

He commented that the measures seek, in essence, to defend national production; diversify and increase exports; replace imports; promote productive linkages; strengthen the state company; advance food sovereignty; promote local development; comply with the Housing Policy; and put science to problem solving.

All of this, he stressed, requires employing methods and work styles that are not formal and bureaucratic and with a comprehensive approach, which will contribute to making the decisions taken by the government more effective.

Gil Fernandez explained that the measures, which will be put into practice in a gradual manner, cover dissimilar aspects such as the increase in national productions; municipal self-supply; local development projects; investments; retail trade circulation; and the promotion of agricultural productions.

The role and preparation required by the cadres at all levels was identified as key. At the same time, he pointed out that it is essential, “to specify the changes that correspond to the country’s institutions, since modifications have been made to the economic model and basically, we continue working with the same structures of the institutions”.

INCREASES IN THE SALARY OF THE BUDGETARY SECTOR AND IN THE PENSIONS

“It is not the final salary increase we are going to, but it is quite significant for the conditions we are in,” stressed the President of the Councils of State and Ministers when referring to the wage increase in the budgeted sector.

The purpose is – he assured – that this decision begins to be applied in the salary corresponding to the month of July, so that before the end of the summer workers receive the first benefits.

In this regard, the Minister of Economy and Planning specified that for the budgeted sector the minimum wage is increased to 400 pesos and the average monthly salary per worker is then raised to 1,067.

“This measure includes one million 470,736 workers of the agencies of the Central State Administration, the local bodies of People’s Power, organizations and associations, and has an estimated annual cost of 7 thousand 50 million pesos.”

In the case of Social Security, taking into account the increases made in November 2018 to the minimum pension, this remains at 242 pesos. The rest of the people who at that time did not receive any increase and receive pensions of less than 500 pesos, will now benefit from the approval of the new measures, which favors one million 281 thousand 523 people, with an annual estimated cost of 700 millions of pesos.

Meanwhile, the Social Assistance will not have changes, noting the increase realized in November of the 2018, when the minimum amount was fixed at 217 pesos.

The Minister of Finance and Prices, Meisi Bolaños Weiss, also explained that the application of the Special Contribution to Social Security for workers in the budgeted sector will be generalized, as part of the principle that we all contribute to the financing of the expenses that support the benefits for this concept. “They will have a tax rate of 2.5% l, those who get monthly income up to 500 pesos and 5% who receive salaries over 500 pesos.”

Likewise, it was specified that the expenses for this salary increase should not increase the deficit of the State Budget approved for the year 2019. In this sense, it is essential to apply saving measures and exercise strict control of the expenses, both of the budgeted activity as of the non-budgeted one; as well as to collect all the income that is generated, taking into account the potential and reserves still present in the economy.

Regarding the business sector, the Minister of Economy and Planning recalled that in 2014 the approval of pay for performance systems was decentralized, training and distribution of salary was linked to compliance with indicators and administrative restrictions were eliminated. Because of this, he said, the average salary increased from 600 to 871 pesos at the end of 2018.

Despite the positive impacts of these measures, the Minister commented that difficulties remain. As a result of this, the Council of Ministers approved the adjustment of the mechanism for the payment of wages in the business sector, maintaining the link with the productive results, which will be implemented as of 2020.

Among the incentives, he emphasized, granting the power to approve the payment systems to the director of the company; prioritize the application of the piece rate payment whenever possible; and to keep as an indicator that conditions the payment for results in the companies the growth of the profits before tax, compared with previous periods.

In order to avoid the inflationary effect of the measure, he stressed, the Ministry of Finance and Prices will provide the necessary mechanisms throughout the economy to mitigate possible price increases.

In this sense, the Cuban President indicated that the ministries involved have to establish observation mechanisms to be aware of prices and where consumption is moving, “this gives us time to rectify any element and prevent inflation”.

He also called for stimulating, for example, the sale of food, materials for construction, tour packages and offers of the Telecommunications Company of Cuba, Etecsa. “In summary, let us all think of new options”, he said.

Diaz-Canel drew attention to the need to be rational in the completion of the templates. The one that is going to be used, he noted, must be the one that more is going to render the most, because the measures are not to throw the money around but to stimulate the one which works and contributes the most.

He also insisted that, from now on, it is urgent to prepare the cadres well in order to avoid erroneous interpretations and to systematically monitor the behavior of these issues.

The intention of the group of measures – he reflected- is to promote the development of the country and deal with the complex situation of the current times. All will not be launched immediately, because they require more analysis and work.

In the coming days, through the various media, our population will receive more detailed information about the scope of these decisions.

En reunión del Consejo de Ministros de #Cuba se aprobaron medidas económicas para superar la actual situación y un incremento salarial en el sector presupuestado. La información al respecto se brindará hoy en el NNTV. #CubaAvanza #VamosPorMås #SomosCuba #SomosContinuidad pic.twitter.com/ldH7QPB6CZ
— Miguel Díaz-Canel Bermúdez (@DiazCanelB) June 27, 2019