A man looks at a sign outside a shopping mall showing the types of cards accepted at the establishment, in Havana, Cuba. Photo: EFE.
The government of Cuba has implemented a set of measures aimed at attracting, administering, and controlling foreign currency, especially US dollars, in order to boost domestic production and stabilize the economy amid the ongoing US economic war against the country.
This partial dollarization, which will be applied gradually and will be under constant evaluation, is aimed at increasing the Cuban state’s foreign currency income and promoting productive connections between various sectors of the economy.
As part of the strategy to capture more foreign currency, the government has authorized the opening of commercial establishments that sell products in US dollars, both in cash and through digital transactions. Initially, these stores will be concentrated in tourist areas, but they may be expanded progressively to the rest of the country.
Moreover, the acceptance of US dollars in cash has been allowed in certain establishments, with the intention of channeling these bills, that are currently outside the formal financial system, to the state-controlled system. The government is also working on mechanisms to direct remittances entering the country to the state banking system.
In order to improve the administration of available foreign currency, a new mechanism for the allocation and management of financial resources for all the economic sectors was launched. This resizing of the foreign exchange market is aimed at regulating and optimizing the flow of foreign currency in the economy.
In this regard, the main objective is to strengthen the banking system as a fundamental pillar of the economic strategy. The use of electronic means of payment has been promoted, which allows the state financial system to capture foreign currency more efficiently and guarantee its circulation within the country.
The banking system will keep the Free Convertible Currency (FCM) accounts and their associated cards operational, allowing citizens and companies to carry out transactions in foreign currency. In addition, new financial products have been introduced, such as the Credit and Trade Bank prepaid card, designed to facilitate dollar transactions and boost the economy in the context of this partial dollarization.
Among the most significant advances in economic matters, the government has been able to reduce the fiscal deficit by more than 39% in 2024, a key step for the country’s financial stability. As part of the redesigning of the subsidy policy, an approach based on direct assistance to individuals instead of subsidizing all products is being promoted in order to optimize the use of state resources.
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Other measures
One of the priorities of the government is to increase domestic production, with special emphasis on food production. For this end, financing programs have been implemented for domestic producers to guarantee the availability of raw materials and improve technological infrastructure.
In addition, strategies are being implemented to encourage exports of goods and services, promoting productive linkages between state-owned companies and the private sector. Within this framework, the Food Sovereignty and Food and Nutritional Security Law is being implemented to boost agricultural production and reduce dependence on imports.
As part of the country’s modernization process, the digital transformation of government administration is being carried out, to improve efficiency and transparency in public administration. Actions are also being implemented to address crime and corruption, ensuring better state control over economic resources.
Another central axis of the economic strategy is the strengthening of the socialist state enterprise, promoting its modernization and efficiency in order to consolidate its role as a key player in the economic development of the country.
Although the Cuban government’s ultimate objective is to move towards the de-dollarization of the economy, this partial dollarization phase is being considered as a necessary tool to attract foreign currency, reactivate productive sectors, and lay the foundations for long-term economic stability. The measures will be constantly evaluated, with the purpose of guaranteeing their effectiveness and responding to the challenges of the context of the US economic war against the country.
With the new economic recovery plan, Cuba seeks to strengthen its economy and move towards a more sustainable model, in which domestic production and foreign exchange earnings will ensure the welfare of the population and the development of the country.
(Telesur)
Translation: Orinoco Tribune
OT/SC/DZ
